 Live from Toronto, Canada, it's theCUBE. Covering Global Cloud in Blockchain Summit 2018. Brought to you by theCUBE. Hello everyone, welcome back. This is theCUBE's coverage in Toronto for the Global Cloud and Blockchain Summit part of the big event also happening for two days, Wednesday and Thursday, the Blockchain Futurist Conference here in Canada. I'm John Furrier, Dave Vellante. Our next guest is the founder and CEO of DigitalBits.io as well as FuseChain and a serial entrepreneur and also the mastermind behind this inaugural event, first time at Cloud Blockchain Conference, has come together bringing the two communities together. Al, great to see you, thanks for coming on. Thank you for having me and thank you for coming to Toronto, Canada. It's our pleasure, certainly as you know, we love Cloud, we cover all the big Cloud shows. We're dominating that market in terms of coverage and access and we just started covering Blockchain in 2018 with theCUBE, although on a silicon angle, since 2011 with the written word in journalism. But this is interesting. You are the brainchild behind this event and I want you to explain why you came up with this event idea because this is the first time that you got two worlds coming together. You're bringing the Cloud DNA and that could go back to like classic networking and think of big hosting providers, the exodus and the equinox of the world, the big plans who built, these guys are the same guys who built YouTube's back end and Facebook, large scale network guys with this new emerging Blockchain world because there's some connection points and it's super important and no one's ever done that before. What's the motivation behind a Cloud and Blockchain summit? Well, I mean, if you think of the internet, all of that data, all of that traffic, substantial majority of it is flowing through data centers, infrastructure providers globally. And within many of those data centers you have Cloud providers, whether it's Cloud computing, SaaS software as a service Cloud providers, you name it. And now we have upon us this emerging technology, Blockchain technology, many are referring to it as Web 3.0 and I'm obviously a big believer in that this is the next evolution of the internet. We had internet 1.0 in the 90s, we had Web 2.0 with social, sharing economy and so forth. And along the way, each step you had of your first movers, your willing followers and then the unwilling followed. It's been that powerful, the last two occurrences that we saw with the evolution of the internet. Web 3.0 is that next thing. First movers, willing followers, the unwilling. Every time you have this, something very innovative, obviously there's a big engineering or initially starts amongst community of engineers and then it starts to go mainstream. Obviously a lot happens in between conception and it going mainstream. And if we look at the 90s, Linux played a substantial role in the acceleration of innovation. It really extracted, it took a different approach to really leading open source. And- It took down some proprietary incumbents. You know. Absolutely, absolutely. And free and open source software, but it still needed to be supported. Which version of Linux should enterprises embrace? And at that time, it was very important with what we saw merge with things like Intel, IBM, Dell, HP and so forth, getting behind organizations like Red Hat and their version of Linux, known as Red Hat Enterprise Linux. IBM put a billion dollars into it. Yeah, exactly. So with regards to that, it was all about the hardware validating, right? These trusted vendors to the enterprise. And them kind of validating a company like we're endorsing a company in effect like Red Hat, really helped provide a guiding light to the enterprise. Now it's not about hardware, it's about the cloud, right? Cloud computing providers and so forth. And it's, you know, in that ecosystem, it's not just AWS, it's not just Microsoft. There are many data center providers that have built a cloud computing offering that are supporting substantial financial institutions, substantial organizations within healthcare, space insurance and many, many other industries. So they play a very important role in supporting an enterprise with their implementation, integration and consumption of technologies, including new and emerging technologies. And so as we have sort of before us, this emergence of blockchain, what I was finding, obviously having lived in the cloud and infrastructure community for a number of years with the last company I had founded, know a lot of the key stakeholders. And even though I'm all in on blockchain, you know, I've popped in every now and then in that world. And what I found was two different extremes. You had CTOs and even CEOs of cloud computing organizations and others within those organizations, totally, you know, high get it factor. And you had the other extreme, multi-billion dollar cloud computing organizations, you know, data center organizations, where, again, the leadership team is still trying to figure it out in some respects, not fully paying attention yet. And I saw that this is definitely emerging. You know, again, you'll have first movers, willing followers and the unwilling, they're all going to get there, but it hadn't gone there yet. And so with regards to this event, I saw a huge opportunity to really put something out there, allow it to ultimately take a life of its own. And there's a new organizer that's going to be coming forward and driving the ship with this event. But ultimately, there needed to be a forum, not just here in North America, but in every corner of the world, the Global Cloud and Blockchain Summit, providing this opportunity for that convergence and for both communities to really share knowledge and accelerate, fill that gap. And I saw it, it's there, it is there. There's amazing things being spoken of on stage as we sort of are sitting here, with leading innovators and so forth from both sides. There's an amazing keynote today by Anthony Diorio, one of the co-founders of Ethereum, founder and CEO of Decentral and Jax, really helping support the event today and making a contribution was, his talk was phenomenal. So that's kind of the thought behind it. And it's, here we are. I want to pick up on something you said for our audience. I mean, for guys like you, Al, that are deep into it, you understand this very well, but you talked about Linux and how essentially the web was built on Linux. So if you were a Linux developer back in the day and you wanted to invest in Linux, you didn't have a vehicle to do that. You could put your time in, you could maybe join a company and maybe get some stock, but there was no way to directly invest in Linux. But today there is with blockchain and crypto economics, you actually can, whether it's tokenize your business or participate, you could buy tokens and so it's a whole different incentive structure. And many in our audience are sort of new to this, kind of the unwilling, if you will. And that's an amazing new way to create capital structures. And very powerful. I mean, prior to this tokenized revolution that we're seeing here, it was a cool open source project as an entrepreneur, or sorry, engineer, you wanted to kind of be a part of this, contribute time. And quite often you would ask your employer to permit you to have 10%, 20% of your time to commit to these projects, or maybe you would even ask for that in your job interview. And you'd maybe get the thumbs up. And so your employers in effect subsidizing your time to really contribute to projects and code that you're very passionate about. But if they got busy, economic cycles and what have you, and it's like, you know what? We need you to 100% focus on your day job. All of a sudden that community that opens up to me is losing perhaps a very valuable contributor, right? And there was really no way for that direct incentive from that project. And that's really what this is now. Projects can be created. You can think of some blockchains like an operating system, you now have to use the Linux comparison. Now, let's say a operating system can have its own incentive reward or compensation structure to really help attract engineers and other valuable contributors to not just give birth to a project, but help make it sustainable. And eventually maybe you're quitting the day job and because it's able to be free open source and providing an enlightened self-interest. I'm getting some messages here, direct messages. Listening to you talk, want to share that with you. One says, one guy says, hey Al, what's the deal with the different blockchains? How do I tell? So I'm not an unwilling, I'm a want to believe. I'm like, I'm not at the front end, but I just, what do I pay attention to? And there's so many different chains. You got people promoting certain things. I don't know whose stats are real. You got two kids in a garage, just did an ICO. So the question is what, essentially, what's the difference in all these chains? What do I have to look for? Is it latency? Who's solving these problems? What's the big deal? And how do I determine better chain from another chain? Are they all going to work together? What's your thoughts? Things are moving incredibly fast right now and it is difficult to keep up to speed. Maybe it was just Bitcoin at one time and won one chain to focus on. And then there was a theorem in all these others and now there's many, many more. So ultimately it is about information, staying current with that information, doing your due diligence, but you really need to have a community that you're a part of, that you can kind of share in your evaluation and monitoring of what's new and emerging. So community is important. Very important, very important. Really, you know, to say trusted advisors, trusted peers, and you kind of take a collective approach at this. Nonetheless, we're in this pioneering era. Mass innovation happening. What's winning today may not necessarily be continuing to win tomorrow, but you really need to maintain a discipline and take a peer approach to stay in current with it. In terms of public chain, private chain, they're all going to play a role and they are playing a role in different use cases. There's clearly a use case for private chain within enterprise, within a trusted circle of supply chain participants where maybe you want to bring some efficiencies to all of that, but what's- So use case drives the chain. But public chain is a phenomenal phenomenon and among other things that we hear a lot about it's giving birth to the ICO, this new way of capital formation that is unbelievably awesome. The world has never seen anything like this. Explain that. Well, capital formation dynamic. Yeah, so, I mean, the traditional way, as we, you know, whether it's in Silicon Valley or any other part of the world, you have an entrepreneur that, maybe they haven't had a big exit where they can fund their own next venture on their own. You know, smart, intelligent people with a brilliant idea and they're doing that friends and family round, right? The due diligence checklist isn't that long. It's like, you know what, love my son. He's the smartest kid on the planet. You give him a few dollars and a few other friends and family, start this new emerging entrepreneur. And if that gets, you know, there's evolution there. Things are picking up traction and so forth and maybe you're doing an angel round and there's this sort of structured process that history's sort of defined for us. And then from an angel round, you have this early stage company emerging and new milestones being reached and then maybe there's a venture, you know, a series A venture capital round and what have you. And then you have the, you know, the series A, the series B and so forth, right? The typical approach to things. Very regimented, you know, Silicon Valley has been a dominating force for the venture capital community and in that form of capital formation. But the dynamics are different than the venture capital. Yeah, so I've just sort of, that's the way that we've always sort of known, right? Many, many early stage companies, the process they go through, many, many meetings, behind closed doors and so forth. Colk and Dagger, Black Box, how's it work? This whole concept of crowd sourcing, who's, you know, still beholden to the financial systems that are up there. How do you really foster community out there and raise maybe a few million dollars? So it's easy to raise money now? It absolutely is. I mean, you have this new meeting of exchange where you have cryptocurrencies like Ether and you're basically sharing your idea with the world and then all of a sudden saying, hey, you know, here's our token economics, we'd like to raise some capital and then whether it's minutes, hours, or even weeks, you have capital coming to you from different corners of the world and it's coming to you in seconds. Highly efficient, you have this sort of universal, these universal currencies now emerging and it's an amazing sensation and it's a new form of capital formation and with capital formation, you have innovation. So I believe we're just going to continue to see this, an acceleration of innovation globally happening and not just in certain pockets of the world now in many, many corners of the world. I mean, what's happening in Asia is absolutely phenomenal in the blockchain space as well. It's not just interesting here in North America. In fact, in some respects even more interesting depending on how you look at it. Describe what's happening in Asia. You guys talked about this last night on the fireside chat. Well, I mean, some of the publicly available information is that you could just simply see on many of the cryptocurrency exchanges out there an insane amount of volume, you know, more so than any other corner of the world. And so you have a very active investor community up there, trading community, token buyer community and what have you. And where are the pockets? Very healthy. So was China and then things shifted sort of to Japan? Well, maybe where the centralized exchange is happening, but I think it's still a lot of the same people. It's not like it got shut down in the country and those people just lost their desire there. They just found an alternative means to continue to participate, but you know, South Korea, it's phenomenal. You have Hong Kong, you have Japan, you have Singapore among many of the pockets, but then there's, you know, it's everywhere. You're meeting people from Vietnam, Thailand, India, they're all the very active investor community and utility token buyer community. And it's very healthy and it's, yes, you have a correction every now and then in this market, but you have that with any sort of new exciting innovation, but it continues to thrive up there. It's phenomenal. And you're seeing one of the main uses of Bitcoin to buy alternative currencies. That's a huge, sucking up huge amounts of oil. It's an easier currency to, I mean, in a matter of seconds or minutes, you can have a currency go from a bedroom in Florida, you know, here in Toronto to a project in Singapore or vice versa, you know, without going through a bank. So getting some more questions from the crowd. You want to reach us, tweet us either direct message or tweet at Furrier, at D-Valante. Happy to take your questions for the guests, but one says, do we buy now? Second was does China, there's this sidestep, the tariffs of China, Japan, U.S. thing, obviously outside the United States with the world power on the United States, but now that power is shifting. You see China here in Canada, a lot of crypto DNA here. So interesting, your thoughts on buying on the dip or crash or have we look at it? And then the international dynamic with China and Japan and others. So, many are seeing it as a dip. I mean, the reality is, if this is a new form of capital formation, it doesn't have, it does share similar characteristics, nonetheless still to traditional early stage investment in venture capital in many respects. Not every startup succeeds. In fact, you know, over 90% traditionally don't make it. Even if they make it to series A around they may not make it to a B round, right? And so the fact that you have, you know, some people were kind of referring to the Wild Wild West, I don't necessarily see it that way. It's just finding its way, right? And it's going to get to a mature state. I think people look at the bubble and they think Wild Wild West, but the interesting thing about, you know, we talked about this off camera last night around international is, and this is, no one really knows what the standards will be. This is going to be a completely different landscape than anything we've seen before, whether it's standards or execution. And I hear the argument all the time of, oh, it's unregulated, certainly the United States is taking a more regulatory approach. You know, the SEC essentially scaring straight everybody and saying- Well, they're trying to figure it out. Oh, and they're trying to figure it out, but also they've kind of slowed things down in the process, but that being said, it doesn't, it might not have to be formally regulated because you mentioned Linux, the role of self-governing communities is very interesting dynamic. No one's actually said and said, no one's actually analyzed what a regulatory regime globally would look like if you factor in kind of the open source concepts with self-governance because communities are very efficient and we got money involved, it could be even more efficient. That's called a marketplace. But you know, people have disposable income and they decide what they want to do with that disposable income. You go to a restaurant, you go buy some groceries, you invest, you maybe buy some commodities, right? And where we put that money, that the value we have that we wish to exchange for something else, some of it goes into some regulatory worlds and some doesn't. I don't want to go buy you some commodities at the grocery store. I mean, it's a free and open source trend, free and open transaction. There's no KYCAML per se. But that food's got a shift, but the food has to get to the supermarket. My point is, marketplaces exist. It doesn't require regulation. That's my point. That's my point. Or additional red tape, right? But where we put other capital does, so whether you're buying a share certificate, early stage investing, yeah, there's SCC files. Who regulated Linux? Who regulated Linux? I mean, it was self-coverting in a lot of ways. It was a benevolent dictatorship with Turbles. But the capital formation was different in the Linux industry. It was a more traditional path that you just described. And so that those were... But what I guess what I'm saying is that, you know, have a token, some token could represent a commodity, some token could represent a security. So there needs to be that distinction and a framework of clarity so that we understand what needs to be regulated and go in that path. And so I think that's kind of part of finding its way over the past 12 months or so is this distinction. Some countries have, we're very quick to say, hey, here's a framework like Switzerland. That clarity here has taken a bit of time. In the US. I think they should let things foster and incubate a bit because you don't know the gestation period with real technology. And I think I'm cool with community-oriented governance because people will lose some volo to cash, some will gain, but that'll all sort itself out. And with good community involvement, it'll happen faster. I just find that a better path. I mean, some people can't stay with that tension. They overreact. Some people can handle the risk, but you got to see how it plays out at some level. You do, you definitely do. But there was also an opportunity for self-governance. You have with, there's the regional internet registries, right? So you have Aaron Wright in Europe and so forth. If you want an IP address and so forth, it's a self-governing body that defined policy and how these things are going to be disseminated here in North America. The government kind of stayed out of that. That's a good one, the DNS system. Absolutely. I mean, this is valuable. You have national security with internet, but it's how IPs are disseminated, it's self-regulated. So at the end of the day, if the community doesn't decide to say, hey, some of these things will, let's define self-governing bodies and if they could play a great role in it all, fantastic. Otherwise, maybe the government steps in. If that's the type of country it is where they like to engage. Al, everyone's reimagining new opportunities with blockchain and crypto. You certainly got a good venture with digital bits. We'll certainly have a conversation later here this week about that. Congrats. I know you got to get back in for a panel and then you're going to go on now. So thanks for coming on. And congratulations on the inaugural Global Cloud and Blockchain Summit. Looking forward to talking more about it. This is theCUBE here live in Toronto for coverage of the Global Blockchain event here with cloud. And then tomorrow kicks off the big show here, the Blockchain Futurist, about 2,000 attendees. That's going to be really about connecting the dots of the future. theCUBE will be there as well. Stay with us for more live coverage after this short break. Thank you.