Kevin Garber: [00:00] This week on the "It's a Monkey Podcast."

Tim Lea: [00:02] Ethereum basically have created a platform to enable smart contracts to happen. I'll just give a quick thumbnail of what smart contracts is, or are should I say. If you think of a vending machine, if you put your money in, you look for your product, you pick it. You get your sweets out. That's the end of the transaction.

[00:24] The actual vending machine itself carries out all the programming in the background, which is basically an if/then statement. If you put your money in, then the food comes out. Essentially smart contracts are very, very powerful vending machine. It's probably the best way of saying...

Kevin: [00:39] And programmable vending machine. That's the really interesting piece.

Tim: [00:41] Absolutely, especially when it comes to looking at things like the Internet of Things and those types of other technologies. I'll give you an example, just so your listeners can get an idea of where this is coming in.

[00:55] Back in October, November time last year, the CBA and Wells Fargo bank looked at a transaction -- this was very well publicized -- where there was cotton that was going from Queensland in Northern Australia across to China.

[01:11] Now, once the actual product hit a certain longitude and latitude, there were sensors on the boat that picked up they'd gone through that latitude, which meant they were in Chinese waters. That then enabled a smart contract. If/then. If we get passed this longitude latitude, then money will be leased.

[01:38] [background music]

Kevin: [01:38] Good morning. Good afternoon. Hello, wherever you are in the world. We're recording this podcast on Friday, the second of June. It is June already, nearly halfway through the year. Isn't it fun how time speeds up as you get older with each year? Interesting that.

[01:55] You are listening to episode number 95 of "It's a Monkey" podcast. We talk about everything related to tech, startups, entrepreneurship on the show. We've got a great show coming up with you now, for you.

[02:06] Now, last week we mentioned that Bitcoin had hit an all time high of around 2,700, 2,800 dollars, around that. I thought I'd drag in somebody who is the author of the book about Bitcoin and the Blockchain called "Down the Rabbit Hole." We had an extensive fascinating chat to him about what's going on in the Bitcoin space, what's happening with Blockchain.

[02:27] Because it's such a convoluted technology, we like to revisit this every now and then because it's quite difficult for us mere mortals to get in the know, to understand all the different building blocks of the Blockchain and Bitcoin.

[02:40] That's a great extended long form chat that we had with Tim Lea earlier this week in our Sydney downtown studio. As always, we like to touch base on some of the tech news that's happening. With me as usual, probably for the last time in person for a little while actually, is Kate Frappell. Kate, thanks for joining us.

Kate Frappell: [03:00] No worries, good to be back.

Kevin: [03:01] Kate is going to be off to Canada, going to be working for us from Canada for a little while. We'll still be doing the podcast. We're probably going to take a two week break, while Kate goes and get settled across the pond. We'll be playing some very interesting repeats.

[03:18] We've had some great interviews over the last few years, so will play some repeats for you. Then we'll kick it off and Kate and I will do the podcast at the opposite ends of our Skype line.

Kate: [03:29] It will be an interesting experiment, but I think it will go well.

Kevin: [03:30] I'm sure it will. Kate, in the news, interesting...Ex-Twitter and ex...Is it Google engineer?

Kate: [03:41] Apple designer.

Kevin: [03:42] An ex-Twitter engineer and an ex-Apple designer have made a camera app for the Apple iPhone, when they realized that the Apple iPhone actually has the potential to essentially be a professional camera.

[03:59] They've created an app that allows you very detailed calibration of a lot of camera features. It's only three bucks or so on the app store. Tell us a little bit more about this camera app.

Kate: [04:12] This app, it's launched now. Three dollars to start with, but there is a possibility that it will start rising. It's intended to sit beside the current camera app. If you think of the current app as to take a quick snapshot of something on the go, or as a reference, this new app called Halide, I think that's how you would say it, is more professional photography.

[04:40] It's there for if you want to take a really good photo, and you've got time to stop, tweak the exposure, and make it a really good piece of photography.

Kevin: [04:48] Now with Android, I've actually got this. I got a pro mode built in where I can fiddle with everything from white balance, to the aperture size, the speed, etc. Does that not come native with Apple, or do you have some sort of pro mode with Apple as well?

Kate: [05:13] Apple mostly rely on their apps. There are apps were you can make those tweaks and they've got those capabilities, but inside the native app. A little bit like they have the flash and...I forgot what it's called now but the focus, AF, I think.

Kevin: [05:30] Auto Focus?

Kate: [05:32] Auto Focus. That might be it, yeah. They've got things like that and you can tweak the lighting, but not full on editing capabilities.

Kevin: [05:40] I think Apple try to make their products very idiot proof. Don't they? So they don't like to let you get under the hood very easily, but android on my HTC, I've got a pro mode whereas every now and then and exactly when I do have a little bit of time, and I'm trying to take a nicer photo, I can't fiddle with the aperture, the timing, the ISO.

[05:58] Sometimes, you can actually get a nice result. You can actually take the raw, very high-definition version of the photo as well.

Kate: [06:07] Yes. On the new one, there is a high-definition option as well on that pool. There's even a filter that you can change, black on white, sepia, and there's a timer as well. It's called basic features, but not editing capabilities.

Kevin: [06:21] I got a notification yesterday that HTC is releasing a brand new phone, which is going to be interesting because they released a new one, I think, last year. It's interesting because they've put the camera very much center.

[06:35] Camera and audio they've put very much center of the new HTC, where the camera...You can for example just squeeze the phone and it brings the camera app up, and then I think you squeeze it again and it takes the photo.

Kate: [06:47] Wow. Interesting.

Kevin: [06:49] And very high quality audio speakers as well. I'm an HTC fan, been using HTC for ages. My phone is not that old, but I'd be interested to see how that actually works.

[07:02] Also, the latest processors and all sorts of bits and pieces. HTC is still in the game and I like the fact that I've got a nice, fat, external sort of SD card as well. Looks like 80 gigs or something. It's basically empty. I don't need such a big one [laughs] , but put some music on there and you can...I think androids supports up to one terabyte, something crazy.

[07:29] I think they're only just starting to manufacture those that big. It would really be interesting when those exist. You could carry the whole of Wikipedia literally on your phone!

Kate: [07:41] In the way you do. You've got Internet in your pocket.

Kevin: [07:44] But even without the Internet, you know, you could carry interesting things and movies and...But yes. Streaming is definitely...What we forget as well is we in Australia, it's relatively cheap bandwidth. I know we complain a lot, but in other countries like India or Africa, it's really expensive. To have things local and to have light bandwith version of apps is very important for us.

Kate: [08:09] Useful.

Kevin: [08:10] A little bit less so. On Spotify, I have a few albums that I have saved locally onto my phone and actually comes in handy every now and then, when I'm in a plane or camping or something like that, and I've got these few albums. I actually do find myself using it.

Kate: [08:26] I'm similar as well. I've got a few that I can listen to offline on Spotify, which is good because long story short I just changed my phone to prepaid before I go overseas. Now I don't want to chew through all my prepaid data. [laughs] . I'll just play my saved songs.

Kevin: [08:43] That was the new camera app for iPhone and it's called what? Halide?

Kate: [08:50] Halide, yes. H-a-l-i-d-e.

Kevin: [08:53] Yep. It'd be worth it if you are an iPhone person to have a play with that.

Kate: [08:58] It's quite good.

Kevin: [09:00] Another story out of Google actually. Google have finally released a new Smartboard, Smartboard being something traditional, like the traditional whiteboard, but using collaboration and networking features. What is it called?

Kate: [09:17] Google Jamboard.

Kevin: [09:18] The Jamboard. It's like a medium sized white board that you can write on, draw on, and you can get two-way interaction from remote people. It's also a touch board as well, right?

Kate: [09:32] Yep. It's 55 inches and It comes with a pen and touch input. Really easy to write things, erase things, and it hooks straight into the Google Suite so all your docs and spreadsheet images, you name it, you can pull, drag, and resize everything on the whiteboard.

Kevin: [09:50] And that's really cool. I think Google are getting more into the enterprise type of space and this is obviously a very side project for them.

[09:59] It cost about $5,000 US, which for a company is not actually that much. We've got a Smartboard here that...I'm actually sitting in the studio/boardroom where I'm staring straight at this whiteboard and it's a smart whiteboard, where people can log on remotely and watch us right on it.

[10:19] We can save a snapshot of what we write into a file, into a JPEG, but it's only one way, so they can watch the board. Our remote team can watch the board, but they can't contribute to the board.

[10:33] Whereas with this Jamboard, it is actually two way. You can sit with your tablets, watch it, and you can write on there. I'd be interested to try that though to see in reality if it works well or if it's a bit clunky.

Kate: [10:46] How easy it is to navigate around would be a good test.

Kevin: [10:49] Of course, with the remote work really becoming more mainstream, I know there's a lot of companies that have...Yahoo, Marissa Mayer famously ended remote work. IBM has also cut back on remote work, but these big companies are a little unusual because the smaller and medium sized companies are moving the other way.

[11:12] They're actually giving more flexibility and more remote work that suits everyone in terms of being able to hire from different locations, and sometimes even have what they call Follow-the-sun teams.

[11:26] Where for instance, in the technical world, if you have a reliability team, they "follow the sun," so it follows your users that are online, and just to check everything's working.

[11:37] There's a variety of benefits or tools for remote work are incredibly important. I know for ourselves, that we are always looking for tools that help us even capture or maintain a culture with the remote team is hard, and a two-way whiteboard is great. One thing I didn't see, could you pop up video stream of someone into the board? Because that would be really cool.

Kate: [12:07] I can't say I saw that on the video, but I wouldn't be surprised. I think you would be able to pull stuff in like that.

Kevin: [12:13] That makes a lot of sense, because one of the issues with remotes is sometimes if you've just got someone's voice, it just feels like [laughs] there's just a resource that's a voice. Who's the person behind that voice?

[12:25] We're trying to, with our team, just have photos and videos and so we've got a sense of each other. We want to try and not lose that sense that there's people behind all this work, not just faces and not just slack names as well.

Kate: [12:43] Definitely. On a bit of a side note, it's interesting from a business point of view, so Jamboard support and management is $600 a year, on top of the 5K.

Kevin: [12:53] 600 for what are you paying for?

Kate: [12:55] Support and management.

Kevin: [12:57] 600 a year?

Kate: [12:58] Yes. Its $300 a year for early customers, but $600 a year for everyone else. On top of that, you also need to have access to the Google Suite plan.

Kevin: [13:09] Which you pay for?

Kate: [13:10] Which you pay for as well. It's an ongoing cost that they're making money out of as well. It's not a one off product.

Kevin: [13:15] Look, Google's been trying too for a while to get more into the subscription side of business. Their ads business is very risky. All their money is coming from these ads and apparently...

Kate: [13:26] Ads are on the way out. [laughs]

Kevin: [13:30] Ad blockers and...Look, this is a whole other discussion about the philosophy of ads in our culture and in our society, but does anyone consciously enjoy ads? Consciously, right?

Kate: [13:45] No. [laughs]

Kevin: [13:45] Subconsciously, we benefit from it because if we have a targeted ad and we discover something we didn't know about, we've benefited from it. That's the argument, but consciously, do we enjoy seeing things trying to be shoved down our throat? No.

Kate: [14:00] No. I like ads for things when I've actively sought for one. For example, like now the Jamboard. I'm like, "Oh, I want to know more about the Jamboard," and so they present me with a video ad. That's what I want to see, right?

Kevin: [14:15] The context is everything.

Kate: [14:16] The context is very important. Yes

Kevin: [14:18] If you're trying to do work and get throughout the day, and you get a pop up for this Jamboard you are like, "Oh!"

Kate: [14:23] Go away." Yes, definitely. I like watching ads especially clever ones. Do you know Audi?

Kevin: [14:29] Sure.

Kate: [14:29] The supermarket? At the moment on TV, they've got a series of ads and they're really funny. Myself and John are in the office always laughing at them, but they're some ads I'm like, "Yeah I like it." If I came across them online, I would find them entertaining, but I wouldn't want them shoved in my face.

Kevin: [14:47] Yes. The Silicon Valley has been criticized that the fact that there's these fantastic products, Facebook, Twitter, Google. And what are most of these super smart people working on? How to do better at ads?

[15:02] Some people say that's, when we've got these are the huge challenges of environmentalism, political challenges, and war and peace, that these super smart minds are working on ads. That's a topic for another day.

[15:18] The targeting aspects of Google and Facebook are so great that I would rather have ads on Google and Facebook than other indiscriminate, untargeted ads as well, which is even more annoying.

Kate: [15:32] Yes. You've almost become accustomed to having ads in certain places. It's like on Facebook, I don't mind them as much. The re-targeting does bug me a little bit, but I expect Facebook to have a ton of ads now. If I'm browsing medium and an ad came up, that would really annoy me. [laughs]

Kevin: [15:51] Interesting. Anyway you're listening to Kevin Garber. I'm the CEO of ManageFlitter and ManageSocial. ManageSocial is in very, very early alpha for a handful of people. We're still working very hard at it, but watch this space if you are Twitter and Instagram marketer.

[16:07] I'm with Kate Frappell, who's my co-host, who is the design lead at ManageFlitter and ManageSocial. We're going to take a break, and then we're going to chat to Tim Lea who's the author of "Down the Rabbit Hole," a book about Bitcoin and Blockchain.

[16:21] It is a nice, lengthy, meaty interview, so we're going to leave it at that. We're not going to do a post-mortem of that interview, because it does go on for quite a little while.

[16:29] The following two weeks, we're going to play repeats, and then Kate and myself are going to be back on board with some new podcasts. Thanks so much for joining us. Stick around. We're going to be back with the super great interview after this break.

[16:58] [commercial break]

Kevin: [16:58] You're back with It's A Monkey Podcast. Now, we chat about everything relating to tech, economy, startups. Probably if you are a regular listener to this podcast, you'll hear me going on a little bit about Bitcoin and Blockchain.

[17:29] We first spoke about Bitcoin and Blockchain quite a few years ago on this podcast when James Peter, the co-founder of ManageFlitter was still working with us. I remember at the time, I really had absolutely no idea what it was all about.

[17:43] I still basically have no idea, but just maybe a little bit more, but we're lucky enough in Sydney to actually have a Bitcoin/Blockchain expert that's actually written a book, Down the Rabbit Hole, which is all about Bitcoin and the Blockchain, and the changes that it's bringing.

[17:58] I've dragged him back to the studio fresh off the plane from the States, where he's been at a cryptocurrency conference. We're going to talk all about that as well.

[18:06] I'm happy to say again, because he's been on the podcast a couple of times. There's been so much going on, I said to Kate, who is my co-host and co-producer, that we just need to talk about Blockchain again and Bitcoin.

[18:15] There's just too much going on. Tim Lea who is the CEO of Veredictum and is the author of Down the Rabbit Hole. Thank you so much for popping into the Sydney studio.

Tim: [18:25] Thanks for having me in Kevin. I'm a bit jetlagged from having flown in from the States yesterday, but it's all good to go.

Kevin: [18:33] It's a big flight. Now Tim, before we get into the juicy stuff about what's been going on, I've got a little surprise for you. We've spoken a little bit on this podcast about a person called Jimmy. He's this mystical person that we get.

[18:49] We dragged him into the technological revolution kicking and screaming. Jimmy's worked with me for about ten years as an internal accountant and we talk about all sorts of bits and pieces.

[18:59] I actually handed him a copy of your book because I've been saying, "Jimmy, check out this technology and this book is great. It demystifies it." Jimmy has been popping in every now and then to me and has been talking about concepts from your book.

[19:11] I thought I'd drag Jimmy into the studio and we'll talked to Jimmy a little bit about your book. He can give us a little bit of a insight as almost a non-technologist and an outsider, so to speak, about his perception about the Blockchain as well as in particular about the book. Jimmy Shimwell, first time officially welcoming you on the podcast. Thanks for joining us.

Jimmy Shimwell: [19:38] Thank you. I think it's good to be here, but we'll see how it goes.

Kevin: [19:42] [laughs]

Jimmy: [19:43] I appreciated Kevin loaning the book to me or giving it to me, whichever way it is. I found it interesting and to discuss the book briefly, I think what is a very complex process was very well described.

[20:02] What I liked about your book was that not only was it detailed, but not so detailed that you got bored. The examples you gave were really good because they brought it to life. It showed what was happening like this silk road, dado, those sort of things.

[20:22] To explain aspects to actually show what would happen under certain circumstances as an example, not an actual event, and a wide range of topics that you covered. For example, getting funding for start-ups, how that's progress, and all of the related items.

[20:41] The interesting thing for me over all, I guess, was that I thought Bitcoin was it, but it isn't. It's the Blockchain. I mean, Bitcoin just happens to be an application that...Or process that's been put on to that underlying fundamental whatever you call it.

[20:59] I'm not IT. Kevin said something like it more or less. [laughs] I'm a dinosaur when it comes to that part of the world. One of the things that sort of came through to me quite often was where this is all going to lead, particularly from a social and financial point of view.

[21:20] By the social aspect, what I mean is the seeming difficulty that governments are going to have to control what's flowing through it. How they can overcome that. I get that there's a lot of people that want to reduce control almost to non-existent.

[21:40] I personally, coming from the old school, see that as a negative. I think humans haven't got to that point yet in our development where we can be trusted. I really believe...

Kevin: [21:53] That's exactly why we need the Blockchain. That's the exact reason.

Jimmy: [22:00] No, but underneath that, is if people get into that and then there's no control over them...

Kevin: [22:05] They manipulate it.

Jimmy: [22:06] Yes, that's what I mean. Certainly, peer on peer is fine, where you deal with somebody and you getting that agreed and tested, and you know that it's factual. When you get hold of it and somebody makes use of it, I use the silk road. The difficulty they had, they we're actually lucky seemingly getting hold of that, getting hold of the underlying troubles in the Silk Road.

Kevin: [22:30] You know what's so interesting, Tim, and this is why I wanted to bring Jimmy in to talk about this because a lot of the analogy is made that the block chain is analogous to the Internet in 1995. I wanted to bring Jimmy in and it's interesting because it's been an enthusiast's territory up until now, but a total technological outsider with all due respect, Jimmy...

Jimmy: [22:55] That is true.

Kevin: [22:58] Is starting to get their head around these technologies.

Tim: [23:02] I'll just take on board one of Jimmy's points, which I think is very, very valid about governments wanting to try and control this. I don't think they will actually control it per se. I think they'll embrace it. We're already seeing a number of nations looking at setting up digital cryptocurrencies. Even Australia is looking at it allegedly. One of the...

Kevin: [23:23] Estonia, right? They're always on the cutting edge, Estonia. I'll go visit their place.

Tim: [23:28] Funnily enough, Dubai. I was speaking at a conference in Dubai literally a couple of weeks ago and what they're doing there...They are deliberately trying to take over from Estonia but that's a much wider issue. The power of a digital currency from a governmental point of view is you can see when money is being spent in real time.

Kevin: [23:50] You can imagine the statistics you can pull from that.

Tim: [23:51] Precisely right. That data you're going to get from that in terms of controlling the economy, you can say, right, the money is being spent on cars, the money is being spent on houses, or it's being spent wherever it's being spent.

Kevin: [24:05] How's this? If suddenly all this cold and flu medication one week starts getting spent. Google helps with this as well. You can see health trends.

Tim: [24:11] Precisely. You can actually judge and you can plan a whole economy on the basis of digital data coming from the currency. I think in terms of controlling, they will have a nightmare trying to control it, but they'll embrace the technology. That's the way that I see it.

Jimmy: [24:28] I probably missed that government would be able to see what was happening. I saw the whole lot as subterranean, i.e. a deal between two people, or a conglomerate, and that one had to be within that process to be able to even see what was going on. If data can be withdrawn from it by an external party that shows what's happening, then a lot of what I said gets taken away.

[24:57] I saw it as being totally subterranean, not accessible, and therefore open to things like the silk trade and other things. Silk Road, I mean. That's where I was a little bit reticent about.

[25:13] I see the fantastic advantages of this and where it's going and a host of things. Provenance, as an example. The inet or something? The thing net? What do you call it? It's the development of things rather than...

Kevin: [25:31] The Internet. The Internet of Things.

Jimmy: [25:33] Internet. IT. You know, that seems to have unlimited potential.

Kevin: [25:38] I think also, where you talk about subterranean -- Tim may have a greater insight into this -- is when you say countries are potentially developing their own digital currencies.

[25:50] Bitcoin is anonymous or quasi-anonymous, but a country can craft their own programmable money, for lack of a better word, that does provide insights to a certain degree of transactions that differs to Bitcoin. Is that correct? Am I correct in saying that?

Tim: [26:05] Absolutely. That's their aim. Obviously, it's not going to happen a week on Tuesday, but in the medium term, that's where a lot of countries are heading. The Philippines is looking at it, Estonia as you quite rightly highlight. Dubai, even Australia is looking at it. It's going to happen in the medium term.

[26:25] In the very short term, some of the major banks are actually working with the cryptocurrency community, such as Ether. Ethereum for example, is actually working with Banco Santander. They're creating a currency for example, called [indecipherable] where the digital currency is actually backed by Banco Santander's money.

Kevin: [26:46] I've said this. I've got a friend that works in finance and their operations are at a boutique investment bank, but they're very well connected. I keep on saying to him, through your connections in Australia, even just a wallet that's aligned with a bank. I don't know why it hasn't happened. It is the most obvious thing in the world.

Tim: [27:06] It's already happening. It's right in the development labs right now, but it's absolutely happening. You can bet your bottom dollar. CBA here in Australia have got their own innovation labs and obviously they keep their cards very close to their chest.

[27:21] I understand what they're doing, but I would lay money that they're working deeply on something like this. They would be fools not to. It's the way things are going to go. There's no question about that.

Kevin: [27:32] I think his name is Ian Nureyev, the CEO of CommBank. A few months ago, at a talk actually said, "If we don't as an industry innovate very quickly, we are not going to exist in a few years." They know it.

Tim: [27:45] It's going to be death by a thousand cuts, where little bits of all their businesses, the most profitable bits are going to be ignored.

Kevin: [27:52] Jimmy Shimwell, thank you very much for joining us. Jimmy is an internal accountant at ManageFlitter, and he is the philosopher-in-residence as well, I would say. Kate, would you agree philosopher in residence is a good title for him?

Kate: [28:07] Yes.

Kevin: [28:07] Philosopher-in-residence, and Jimmy seemed to enjoy the book about the Blockchain, Down the Rabbit Hole, Tim's book. I know I keep going on about it but I used to say this about the Internet, I used to say this about Twitter. My track record is relatively good if my ego says. It's a good place to start, Down the Rabbit Hole.

[28:26] I've bought a ton of books on cryptocurrency and Bitcoin, and Tim's is one of them as well. Jimmy, thanks so much for joining us on the podcast. Now that we've broken the seal, we may drag you in every now and then, especially for your more philosophical opinions some day.

Jimmy: [28:40] It will have to be not related to IT.

Kevin: [28:42] [laughs] Thanks, Jimmy.

Jimmy: [28:44] OK, thanks.

Kevin: [28:44] Tim, let's get into the hard and the juice of this. You've just come back from New York. The last two weeks have absolutely mad. We spoke about on last week's podcast where Bitcoin hit a new high. I think it peaked at about $2,800 US for one Bitcoin. Obviously, Ethereum's gone mad as well. We can talk a little bit about Ethereum which has just burst onto the scene.

[29:08] What I love most about Ethereum is it was created by a 23-year-old Russian kid, which is just so much what the spirit of the new technology has been about since the Internet, that it just gets right disrupted from the side by someone that just out of the blue, then just changes everything.

[29:26] You have big organizations shaking in their boots about technology created by a 23-year-old. The floor is yours. I also want to chat about the...

Tim: [29:38] The ICOs? The initial coin offerings?

Kevin: [29:40] ICOs. A lot of people have been asking me about the ICOs. Let's first talk about the last few weeks, about Bitcoin, about Ethereum. What's going on that it's suddenly has just gone on such a bull run? The cryptocurrency side of things.

Tim: [29:58] It's really interesting. I was at Consensus, which is the world's largest Blockchain conference in New York. There were about 2,700 people there. It's up from about 1,500 last year. It was manic. The whole place was just buzzing. Phones were buzzing left, right, and center with new notifications of the highest on Bitcoin, the highest on Ethereum, all this type of stuff.

[30:22] You're right at the epicenter of 2,700 people who are total crypto enthusiasts and Blockchain enthusiasts and who were living, eating, breathing crypto. It was just crazy.

Kevin: [30:34] Were the Winklevoss twins there? They live in New York and they've been trying to get a cryptocurrency ETF or something.

Tim: [30:42] They tried to get an ETF approved four times now. I mean, I went to a number of the regulatory sessions, and in New York the regulators are way behind so many other regulators worldwide.

Kevin: [30:52] Is that right?

Tim: [30:53] Yeah, absolutely.

Kevin: [30:53] That surprises me because the startup conferences I've been to in New York, they've always got representatives from the state and from the city pushing for New York to be at the cutting edge and to getting the smartest people from around the world moving to New York.

Tim: [31:06] New York itself is full of incredible bright people. I met so many interesting people, I was there, but the regulators as a whole...I'm comparing to say, Singapore, the UK, and here in Australia, where for example, we got a sandbox where you can actually, within certain confines, not just Blockchain, but other technologies, you can play with Fintech services.

[31:26] They haven't anything like that in the States, for example. I was at this panel where they had four really high-profile lawyers in New York.

[31:37] It was almost as if we're starting to talk to the regulators a bit and there's a little bit of engagement, whereas here, in Australia, last year one of the Fintech meetup groups, the guy that coordinates that had five of the regulators in a room talking to 300 startups.

Kevin: [31:55] Interesting. At least New York, maybe they have been a little bit distracted with the last two years at politics.

Tim: [32:04] The politics undoubtedly has had some influence, but in New York, they try to implement what is known as the BitLicense, which was to try and regulate the Bitcoin exchanges and the whole Bitcoin environment.

[32:20] To quote a number of people within the industry there, it's been a farce. A lot of people refuse to even deal with New York State now. They actually deliberately set up the accounts and anybody has got a New York State IP address, they can't get access to a lot of services.

[32:37] It's backfiring. The biggest challenge is that innovation and regulation are always going to be completely in juxtaposed positions. Regulators are always way, way, way behind the innovation.

[32:50] When it comes to regulation with ICOs, as you're talking about, the majority of the initial coin offerings, the ICOs, were token sales. Most of the ICOs will not enable people from the States to actually buy into the ICOs.

Kevin: [33:06] Of course, another factor that pushed all of this ahead was Japan lifting its eight percent tax on using Bitcoin as a currency for day-to-day transactions?

Tim: [33:17] It's the same here in Australia with the double taxation. That's now being lifted. The other regulators around the world are far more ahead as compared to the States in general terms. That really came across.

Kevin: [33:31] Surprising, we had Anil Dash on a podcast, a New York-based entrepreneur and commentating. He actually worked with the Obama administration on tech. One of the things that he said is that the tech literacy in Congress is frighteningly low.

[33:47] He said "frighteningly low," and he said that's a real, real issue and, if I'm quoting him correctly, he did say, "The current administration is even worse," so that's a problem.

[33:59] Let's talk a little bit about Ethereum because a lot of people hadn't heard of Ethereum before the last couple weeks. Compare and contrast a little bit the differences between Bitcoin, Ethereum, and how does the Blockchain common to both, and what's the different use cases of both?

Tim: [34:17] Let's start with the Bitcoin. Blockchain is the technology that underpins Bitcoin. That's the easiest way to say that. Bitcoin as a technology is absolutely amazing.

[34:28] The more I have written about it, the more I have researched it, the more I talk to people about it. If we ever knew who Satoshi Nakamoto was, he'd be up for a Nobel Prize for economics or something.

Kevin: [34:37] What's the latest on Ethereum by the way? Group of people? Isn't Marc Andreessen... [laughs]

Tim: [34:47] In the book, I said look at some of the theories. My favorite one, if I'm brutally honest, they talk about Satoshi, in Japanese means wisdom, and they talk about Nakamoto, meaning middle. I think it's the middle of the Roku Islands is where Nakamoto as a word comes from.

[35:04] The idea is middle wisdom implies Central Intelligence Agency. Some people think it could be the NSA and the CIA. Personally, I think...

Kevin: [35:14] Are they that smart, with all due respect to them?

Tim: [35:17] They do a lot of stuff. Just ask Snowden, who's in Russia at the moment. Personally, because Satoshi Nakamoto, whoever he, she, or they is, still have a million Bitcoins held, which has never been moved.

Kevin: [35:35] One thing I've wandered, they released a white paper. That's how this all started?

Tim: [35:39] Correct, in November 2008 originally.

Kevin: [35:42] Is there no reverse engineering how this white paper was released and where it was released?

Tim: [35:47] They've got an email address for Satoshi Nakamoto, but he went completely offline in 2011.

Kevin: [35:53] So they would have covered their tracks?

Tim: [35:55] Yeah, completely. The theory is it could be a number of people, a variety of people. Bearing in mind, there's a million Bitcoins, which in today's value is...I've got to get my...

Kevin: [36:05] It's a million times 2,000.

Tim: [36:08] It's about 2.2 billion of actual cash, just waiting for somebody to hack if they really wanted to. It hasn't been touched, ever since day one. There are two core theories that are going around. One theory is that he's died and the keys have been lost, or just the keys have been lost because...

Kevin: [36:26] [indecipherable]

Tim: [36:26] Yeah. That could be an interesting idea. The theory is that the private keys have just been lost or the actual person who is Satoshi Nakamoto has passed away and they can't find the keys.

Kevin: [36:40] We'll continue explaining the Bitcoin versus Ethereum. Ethereum could be created by...I think his name is Vitali?

Tim: [36:49] Vitalik Buterin is his name. It's in tandem with others. There's a foundation.

Kevin: [36:54] Sure, but spearheaded by him. He's a 23-year-old. There's no doubt that this white paper could have been written by one very incredibly smart individual.

Tim: [37:03] Absolutely. In terms of writing white papers, we're writing a white paper right now for our token sale in July. It takes a lot of work and it requires a lot of different parties to get involved.

[37:15] Vitalik Buterin and his team are incredible. There's a company in New York called ConsenSys, with a Y, that is ran by a guy called Joe Lubin, he was one of the original Ethereum foundation members and creators.

[37:33] They are pushing it much more in a commercial direction it seems to be. There's rumor that Vitalik himself is going to take himself back from the limelight to concentrate just on the product.

Kevin: [37:44] Let's just backpedal to get...If people still don't quite understand the Ethereum piece, Bitcoin is built upon Blockchain technology, and it is a cryptocurrency or as I like to say, it's programmable money. I know that's a little bit of an oversimplification, but it does have elements of that. How does Ethereum and Ether fit in to that?

Tim: [38:08] Ethereum basically have created a platform to enable smart contracts to happen. I'll just give a quick sum there of what smart contracts are. Basically, if you think of a vending machine, if you put your money in, you look for your product, you pick it, you get your sweets out. That's the end of the transaction.

[38:29] The actual vending machine itself carries out all the programming in the background, which is basically the if/then statement. If you put your money in, then the food comes out. Essentially, smart contracts are a very, very powerful vending machine. This probably the best way of saying it.

Kevin: [38:46] Programmable vending machine.

Tim: [38:47] It's programmable.

Kevin: [38:46] That's the really interesting piece.

Tim: [38:49] Absolutely, especially when it comes to looking at things like the Internet of Things and those types of other technologies. I'll give you an example just so your listeners can get an idea of where this is coming in.

[39:00] Back in October, November time last year, the CBA and Wells Fargo Bank looked at a transaction -- this was very well publicized -- where there was cotton that was going from Queensland in Northern Australia across to China.

[39:16] Once the actual product hit a certain longitude and latitude, there was sensors on the boat that picked up they've gone through that latitude which meant they are in Chinese waters. That then enabled the smart contract. If we get past this longitude, latitude, then money will be released. That was an incidence of a smart contract being looked at for trade finance.

[39:39] The actual transaction, instead of it taking three days for money to get internationally, the monies were affected in about 35 minutes, I think from memory. Don't quote me on that.

Kevin: [39:48] Do you think Blockchain technology, Ethereum, it's very similar to the Internet of 1995 where today, most people...My co-host and co-producer, Kate, is sitting here with me and uses the Internet every day.

[40:01] Now, I would bet my bottom dollar -- and I don't mean to put Kate on the spot -- but Kate doesn't know what TCP/IP is. Heard of the word? No, haven't heard of the word. The Internet in 1995, you'd probably be hard pressed at least not to hear of the word.

Tim: [40:16] I'd agree.

Kevin: [40:17] Is the Ethereum and Blockchain revolution going to affect everyone that basically in a few years no one will actually even know what it's about?

Tim: [40:28] Exactly right. Nobody cares how the waterworks work. All they want is the water to come out of the tap. It's going to be exactly that same idea, that there'll be lots of services being offered. You won't know that the Blockchain is in the background, but it will be. It'll take away trusted entities all through the economy.

Kevin: [40:49] The example that you gave, the smart contract of cotton being sold and distributed and delivered, for some people, it may sound like something that's actually quite boring and not relevant to them. Can you give us something...

[41:01] [laughter]

Tim: [41:04] A lot of the use cases that are being developed within financial services, realistically speaking. There are lots of...

Kevin: [41:12] People like spinning logos and they like cats.

Tim: [41:15] I know. I can't think of a cat on a smart contract. I don't know. We are working on royalty distribution for a film and video. It's still a little bit business-to-business in terms of the smart contracts, but it's the idea. As soon as money comes in for a film or a video, by smart contracts, it automatically spits out the money to everybody that's been involved.

[41:39] For example, this can often be the case if you've got a rock band, for example. It's produced a song and maybe there was a bass guitarist that played the licks, there was the drummer, this type of thing. They will actually have a percentage as the royalties coming in.

[41:53] A smart contract will enable as soon as the song gets royalty from being played on the radio, then bang, the money gets distributed to all the artists that had played. That type of thing is another example. With cats and dogs, I'm just trying to think...

[42:06] [crosstalk]

[42:06] [laughter]

Kevin: [42:06] Bitcoin and Ether, which is the coin, so to speak, the cryptocurrency on top of Ethereum, in a way, only loosely related to the technology that's underpinning it. What we need to do as well, we don't give any financial advice. We're not qualified to as well. People need to trade a little bit carefully in this world.

[42:28] I've had a lot of people that called me when they saw that Bitcoin just went from $800 to $2,800, but it's still a bit of the Wild West out there, right?

Tim: [42:39] Yes. In a past two years, Bitcoin has risen by 800 percent. That's insane. I'm happy because I've got some Bitcoin, but it's absolutely insane.

[42:49] When I was at the Consensus Conference, and there was actually another conference the day after called The Token Forum, which was dedicated to looking at initial coin offerings, which I know we're going to touch on the second, they had a waiting list of 250 people to get into a room of about 150 people.

[43:06] It just gives you an indication that it was really hotting up. There's a lot of new money that's coming to the Bitcoin and into Ethereum over the past three month, because the cryptocurrency market capitalization has doubled in the past three months.

Kevin: [43:19] It's still small enough to be manipulated, right?

Tim: [43:21] Yes, It's still small. I did take some indication, some numbers just to put it into perspective. The cryptocurrency market literally, as of today, is worth about $84 billion. If you think that's probably, I don't know, the size of Google or Apple are, but it's probably about the size of...

Kevin: [43:38] Twitter is about 10 billion, and then the smaller end of things.

Tim: [43:42] 84 billion is not massive, but what you've eventually got to be aware of, and anybody getting involved in Bitcoin, and Ethereum, or other cryptocurrencies, is that people have been in this for a long period of time. There are people who have bought Bitcoin for a dollar maybe back in 2010 and those are now worth just insane amounts of money.

[44:04] You've got what is known as whales in the marketplace. They actually push the price up, and they push the price down...

Kevin: [44:11] Who are these people?

Tim: [44:13] These are people who have actually just individually mined Bitcoin over the last five, six years.

Kevin: [44:18] If you would have bought $100 worth of Bitcoin in 2010, it would be worth something like 4 million or a hundred million...

Tim: [44:23] It's something insane. What happened at the Consensus Conference and the Coin Summit, and there was also a thing called the Ethereum Summit on the Thursday beforehand, everything was just consolidated and concentrated into this week of sheer, pulsating cryptocurrency space.

[44:47] The prices were just going crazy and it was at that point I looked to the charts and said, "Hang on a second. This is just can't go up," because whenever you see a parabolic rise in any cryptocurrency, you know there's going to be a parabolic fall directly after if it goes up that insanely.

[45:04] When it got up to 2,800 -- and indeed in South Korea, it was trading at $3,000 -- you just say, yes, it's got value from its network effect but that's way over the top. Myself, like others, hedged a bit, just thinking, "Hang on a second, this could be a bit concerning."

[45:21] I sold out a sum and then transferred into US dollars. The key thing is that then plummeted by about 30, 35 percent in the space of about a matter of hours.

[45:31] You know it just happens, whenever there's any hint of any bad news, bad news in stocks and shares and anything else like that normally pushes the price down. The whales get behind any bad news and they push it down further, because they know that anybody getting in around now is going to be fairly fresh money and they know...

Kevin: [45:53] They'll panic easily.

Tim: [45:54] They'll panic because all markets are driven by two primal features. One is fear, and one is greed.

Kevin: [46:00] If you can be fearful when others are greedy...

[46:02] [crosstalk]

Tim: [46:03] Warren Buffet, that's what he says.

Kevin: [46:07] It is so true. I had a friend, I love him, he's a good friend of mine, and he wanted to buy some cryptocurrency and I said, "Be careful." As he bought, it started going down, and he said, "Whenever I buy something, it goes down." It's because it's people getting on the hype cycle.

Tim: [46:25] That's the fear of missing out. It's the greed. "I don't want to miss out," and then of course it plummeted by 35 percent. Like others, I waited until it bounced back a couple of times to make sure that it came back up.

[46:37] I bought in. I was about 1,800 just on the way back up, and luckily it was about 2,200. I'm not saying I'm a guru. Far from it. I just...

Kevin: [46:46] No one's a guru, that's the thing. No one can beat the market. As I said to another friend the other day, there's probably about 10 people in the world that can consistently beat the market, probably the guys that own the 10 biggest hedge funds. Ray Dalio and then those people. Everyone else can't beat the market [laughs] and if you think you can, good luck with that one.

Tim: [47:08] It's one of those things. If anybody is going to get involved in cryptocurrency markets, quite honestly saying, this is not an investment advice, just only play with what you can afford to lose.

Kevin: [47:21] A lot of people ask about the mechanics of buying cryptocurrency. It is a bit of fun to be in this game, so yes, play with what is absolutely meaningless money for you. Don't put grandma's [indecipherable] in that.

[47:33] You need an exchange where you can actually exchange normal fiat money into cryptocurrency. Often, these exchanges have a hosted, in-the-cloud wallet attached to it.

Tim: [47:52] Yes. One has to be very, very careful because 30 percent of all exchanges have been hacked.

Kevin: [47:58] I saw you posted that on the Sydney startups group, and I've been telling everyone that stat. I'm saying, "Buy it but remember, nearly half of these online wallets have been hacked, which means you could lose everything."

Tim: [48:12] If you think about the reality, most of those cryptocurrency exchanges had been set up within the past two to three years, so they are new starts. As a result, they won't have a lot of capital behind them to actually either recuperate losses or put the infrastructure in place.

[48:28] Absolutely be very, very cautious with the exchanges. That said, I personally use a US exchange called Poloniex.

Kevin: [48:39] I've heard of that one because they do ether as well, right?

Tim: [48:43] They've got about 130 different cryptocurrencies that they have. They've put some very strong security measures in place, so there's a minimum amount that's actually connected directly to the Internet. Lots of it is in cold storage.

[48:57] The same with the company called Bittrex. These have both got very good reputations. Of course, they could get hacked, so...

Kevin: [49:04] You don't know whether they're going to impact on...We have an online company, but unless you people that are working with that infrastructure every day, you actually don't know what the quality of the security is.

[49:16] Online security is almost can be considered just like real world security. It can always be better, it's only as strong as its weakest link. You can have all the security in the world and if it's an inside job, it means absolutely nothing.

Tim: [49:30] That's absolutely right, because one of the things about the Bitcoin and the Blockchain in general is that we're becoming our own banks, because we've actually got the private keys to our cryptocurrencies. What that means is if somebody gets your private key, that's like you leaving an open wallet on the table.

Kevin: [49:49] This is an interesting point as well because you can have a wallet in the cloud which is on one of these services, but you could also have a wallet on your own computer in a way you become responsible for the security.

Tim: [50:02] Absolutely and there is dedicated malware out there looking for private keys. You've got to be very careful. It's quite ironic because a lot of people who own a lot of Ethereum or Bitcoin actually puts their private keys on a bit of paper and put it into a safety deposit box in a bank. I find it so ironic, that the technology disrupts is actually protected by the technology that's trying to disrupt.

Kevin: [50:31] There was an article in the Sydney Morning Herald this week. I'm sure you saw it, about some chap that threw away a hard drive a few years ago and he's realized that it had some Bitcoin sitting on there and it's...

Tim: [50:42] You hear so many of those stories. The very, very first ever transaction was for two pizzas for 22,000 Bitcoin, which in today's money would be worth $450 million or something.

Kevin: [50:51] That's an expensive pizza. [laughs] I believe that there is a USB wallet that is very secure, has got all sorts of interesting features where if you lose it, you can transfer it to another USB key. I'll just actually bring up the name. I'll confirm a name of that product. I haven't actually tried it myself, but that's an interesting angle as well.

Tim: [51:12] Trezor is probably the biggest one. I haven't actually got one myself yet but I'm about to get a hold of one.

Kevin: [51:20] It's called the Legend Nano.

[51:24] [crosstalk]

Tim: [51:24] That's another one. There are few brands coming out.

Kevin: [51:27] If you are wanting to buy a few crypto currencies, get to understand a little bit of the difference between the different wallets and how you have to look after them just like cash. It's even more important than just your email address. It's actually cash sitting there. Treat it as which.

[51:44] Don't assume that these companies are all created equal. In Australia, I use CoinJar. I haven't got into the Ether game yet. There was another Australian company someone recommended to me that does Ether as well...

Tim: [51:56] I use BTC Markets. I know the guys there. Again, all these exchanges, it is caveat emptor that they could get hacked. I'm not saying they will, but they could. Ensuring the cryptocurrency space is not for the fainthearted. It's not for those that don't have an element of risk appetite, or at least understanding the risks I think is probably the key way of saying it.

Kevin: [52:22] Look, I mean that's why people love property so much because there's a psychological benefit of being able to see your investment in that. In theory, at least in the big cities, it can't really just go poof and it's gone.

[52:34] Whereas with cryptocurrencies, or even with shares...I mean in Australia we had HIH, people lost everything. Shares can just literary go poof too.

[52:45] That's why regulation is so important. There's a time and a place for governments. I think making sure that these markets stay above board, liquid, and legitimate is incredibly important, because then we can all do exciting things on top of the markets, but without that, it's impossible.

Tim: [53:02] I would actually agree with you. A true statement to this are the initial coin offerings because those are...

Kevin: [53:10] Well, let's talk about these because these have been popping up all over and I know in the startup world, one of the biggest challenges is getting capital for your startup. It either comes from your own back pocket, it comes from sweat equity, or it comes from external investments. Now there's a whole new world of raising for your startup.

Tim: [53:29] It's amazing. It's incredible as a structure for...I's not going to work for every business, I have to say that, front end. These things called initial coin offerings or token sales that they're, strictly speaking, beginning to be dubbed as, are neither debt nor equity.

[53:50] You can raise significant amounts of money without it actually being debt which you have to pay back, or it is equity. It's neither of those two.

[53:59] I will give you an example with Ethereum. We spoke about Ethereum before. Ethereum is the cryptocurrency that powers the Ethereum network, which looks at administering smart contracts as we just talked about earlier on. Every time a smart contract is carried out, you pay a small bit of Ether, which is their cryptocurrency coin.

[54:19] The idea is the more successful the platform, the more of those Ethers are required, and the more the prices rises . As a result what you have actually got is cryptocurrency that as the platform is being developed gets better, and better, and better the price, with reasonable expectation, will rise.

[54:41] From that particular point of view, initial coin offerings, they raised about $18 million in November 2014, and those cryptocurrency coins at that time were issued at 35 cents, and they're now was about worth about $220, in two and half years. It's just insane growth. What actually happens is with initial coin offerings, it's just like crowdfunding, but for block chain based platforms.

[55:08] For example, if you think of traditional crowd funding structure, maybe there's a new mobile phone, new creation, whatever it might be, people actually pay money upfront to get the mobile phone, the organization that is selling them then arranges to get those produced, and maybe get the product in 12, 18 months' time.

[55:25] With crowdfunding, you've got that lead time. There's may be 12, 18 months before you actually get the product, so it's a bit of leap of faith.

[55:33] With the cryptocurrency space, just like Ethereum structure where the token or the cryptocurrency coin is being used to power that platform, what happens is people buy the token upfront. The combination of everybody buying all those tokens gives enough money to develop the platform.

Kevin: [55:55] Does it have to be platform based business.

Tim: [55:58] Essentially, the majority are. The token can represent a digital asset. For example, there are 820 cryptocurrencies around. A couple of those are actually backed by gold or ones backed by US currency. The token can be presented by an asset behind it, but the majority are based around platforms.

[56:24] I'll paint an example. We're developing a decentralized anti-piracy and distribution platform for the firm and video industry. What we are trying to is to bring together all the creative community to help us solve a problem that affects the whole creative community. What we are doing is...Have you heard of SETI. SETI out in Berkeley?

Kevin: [56:46] Sure.

Tim: [56:45] The Search for Extraterrestrial Intelligence. They beam data out into space. Data comes back. They don't have the processing power to process it all. They put it down to about three million people around the world, those guys run a bit of software in their computer, and the data is then processed and sent back to Berkeley.

Kevin: [57:02] Then they hand over the info to the NSA.

[57:04] [laughter]

Tim: [57:04] They'll quite possibly get rewarded Bitcoin from there. What we are doing is creating the SETI for searching for pirated content. Individuals will run a little bit software on their computer, use a bit of their surplus bandwidth.

[57:20] When they find pirated content, they then get rewarded via cryptocurrency, which will be VENTANA, which is the name of the coin that we're launching. The idea is that we are actually rewarding people for finding...

[57:31] [crosstalk]

Tim: [57:31] Yeah. For finding pirated content, but it's all software driven. You don't have to do anything. It's just committing bandwidth and computing power like Bitcoin. Bitcoin is produced by lots and lots of computer power, lots and lots of electricity.

[57:45] Providing you can get a Bitcoin in which is worth more than the electricity it cost you to produce, you are making money. That's the same structure that we are looking at. Other initial coin offerings do a similar type of thing where there will be a reason for the token to exist.

Kevin: [58:02] Say there is someone living in a country town and they all decide that they want an E-commerce site that just sells healthy food because it's hard to get healthy food in the town.

[58:12] One person says, "I'd like to create and E-commerce to site to make healthy food available in woop woop. I could go to Kickstarter and do something and get some money to create this for the town. Is this funding structure...Could it be fitted into that type of model?

Tim: [58:31] Not really, because you can do that with traditional structures. You just create a website, you put up Whole Foods, there you go. There's cash, you got a standard E-commerce site. With what we are doing, we are also creating distribution platform for people to actually enable white-had BitTorrenting.

[58:52] The idea is instead of people putting up a video, and it's illegal and everybody's sharing it, we want to do a white hat version so that people can get rewarded for making available some bandwidth.

Kevin: [59:03] It's almost when there is a benefit in creating their own ecosystem and own currency that is only useful in that network...

Tim: [59:10] Absolutely. For example, it might be that people might get a cent for contributing part of their bandwidths to enabling, I don't know, let's say, "Silicon Valley" from HBO, which I'm a big fan of the TV show, for actually helping to distribute that to a whole network of people.

[59:28] If you do a cent in the traditional reward mechanism, credit card fees are 35 cents a pop. You can't do it.

Kevin: [59:37] They would get many cents in this, let's just call it, V Coin?

Tim: [59:42] Yes.

Kevin: [59:42] Through some exchange eventually, if they want to.

Tim: [59:46] This is the key thing. The major difference between a crowdfunding and structure like Kickstarter and an ICO token sale. Normally, between three to four weeks after an initial coin offering has happened, the cryptocurrency token are available on the cryptocurrency exchanges to be bought and sold against Bitcoin. The market defines the value.

Kevin: [60:12] So there's liquidity quite quickly.

Tim: [60:14] There's liquidity very quickly. Instead of waiting for your mobile phone for 12, 18 months, you can actually sell your tokens if you wanted to or you keep holding them. The market will determine the value against Bitcoin.

[60:29] What you see in the market with cryptocurrencies in general...We'll talk about a Ethereum specifically. That's relevant to what we've been talking about.

[60:37] When Ethereum announced what is known as the Ethereum Alliance, where they are bringing in 200 major corporates to work with them, companies like Samsung, for example, they are working with Ethereum. The price just rocketed. Immediately that implies, if you got a major...

Kevin: [60:56] It's confidence.

Tim: [60:58] It's confidence. It's a major company coming in to say, "I support this currency." If that's the case, the platform itself is going to grow, and the price will therefore grow.

[61:10] You've got these dynamics that are going on that...It's very similar to an equity. You're buying into an equity in any market, you've got to look at the core features of the company that's actually there.

[61:28] Whether it's, I don't know, Telstra in Australia, as in telecoms, essentially, you might have see that they've done some amazing stuff in this new technology, and the price starts to rise. It's exactly the same mechanics driving the fundamentals of a cryptocurrency coin.

[61:43] That's the big difference between the crowd funding and a cryptocurrency structure. There is liquidity literally within four to six weeks of putting your money in.

Kevin: [61:57] Any other examples out there that people are doing it successfully, and what the...

Tim: [62:02] Today literally, the first of June, there was one that raised $35 million in 30 seconds.

Kevin: [62:10] Talk us through the mechanics of what money flowed where, what money didn't flow where, and who now has what.

Tim: [62:19] Basically, under normal circumstances with an initial coin offering or a token sale...Those are both euphemistically the same. I don't like the word ICO I have to say, because it sounds like it's too much a regulated structure. Basically, people would generally pay upfront for the tokens in either Ethereum or in Bitcoin.

Kevin: [62:44] They will start with some investment instead of token.

Tim: [62:47] Yes, absolutely, they'll be supporting an ICO or a token sale through Bitcoin, or through Ethereum. Then the Bitcoin and Ethereum is then transferred over to the parties that are running the initial coin offering, and then via small contracts. In other words, if/then.

[63:05] If the value hits a certain amount that they say they need, then the ICO actually happens. Let's say there's a threshold where they say, "To get this to work, we need $5 million." Let's just say that for random numbers.

[63:21] If they hit $2 million only, then the smart contract says, "If it's less than $5 million, then the money is back," less perhaps an escrow fee or something like that.

[63:31] If it goes over $5 million, then that money is then committed. The cryptocurrency coins or the tokens are then issued. Then once those coins are formally issued, and they then get put on to the exchanges, that's when you have the liquidity event.

[63:48] Super, super interesting. I've got a video, a five-minute video introducing ICOs. I did a NASCO for the Australian Financial Review a couple of weeks ago. Happily, I'll flick with the details. You can make those available to your audience if that's something you might find useful.

Kevin: [64:03] Well, if you're listening and you are interested, we've probably either drawn you in or push you away. [laughs] Probably one of the two, because it is a little bit mind-bendy.

[64:14] I know I keep saying this. It reminds me so much of the early Internet where we were trying to understand how the pieces fit together. I was trying to buy books on the Internet. Sometimes, you'd see a big fat book, and it would just have not much tangible knowledge.

[64:28] It's similar with Blockchain and Bitcoin. You're learning bits and pieces everywhere to paint this big picture of how this all fits together.

Tim: [64:36] I would urge anybody to at least look into this space. Whether you decide to get involved or not is a different matter. If you understand what you are doing, and you have an element of risk tolerance, then the capital growth can be very significant.

[64:56] Ethereum has gone up by...Well, literally, it's gone up by 500 percent in the past two and a half months just through all these relationships that are being set up. This is not investment advice at all.

Kevin: [65:06] Don't do it. [laughs]

Tim: [65:09] Absolutely. I would say educate yourself absolutely on anything that you can in relation to the cryptocurrency space. It's not going away.

Kevin: [65:18] Well, particularly if you're listening and you're an entrepreneur, or wannabe entrepreneur, just as the Internet opened up opportunities that we couldn't even dream of, you look at all the jobs today where that's a social media manager, web developer, Sist admin, you could go on and on, content marketer. All these jobs did not exist. All these businesses did not exist.

Tim: [65:38] Even if you think of Google, you think of Uber, you think of Skype, you think of Airbnb. They could not exist without the Internet.

Kevin: [65:45] If you are a wannabe entrepreneur early on in your career, I would literally just...This is the space.

Tim: [65:51] I would absolutely agree with you. I'm old enough and ugly enough to have got involved in the Internet way back in February 1995.

Kevin: [65:59] February. You remember the month, right?

Tim: [66:00] I remember it was February the 12th, 1995 at 2:16 PM in the afternoon. I went into an Internet provider on the South Coast of England and connected via a 14.4K modem. Do you remember those things?

Kevin: [66:10] I remember those well. [laughs]

Tim: [66:11] I connected on this concrete block that was called a monitor in those days. There was a picture of a painting from a local art gallery, 10 kilometers away, came up one line at the time. This is where the Blockchain is right now.

[66:27] I've been involved with it for two years. I rode the wave of the Internet. The Blockchain is going to be 10, 20 times bigger than the Internet.

Kevin: [66:36] I totally agree. We were talking. We have a ManageFlitter Twitter chat once a week. Yesterday, there was a threat that went on about Internet nostalgia. I said to one of the people, "Do you remember when we used to...Internet was so slow, we would switch off images on our web browsing to try and..." [laughs]

Tim: [66:53] This thing is really interesting. What was the first browser you ever used? Was it Netscape?

Kevin: [66:58] Mosaic. It was pre Netscape.

Tim: [67:00] Well, Mozilla was one of the very, very first. Mosaic as well.

Kevin: [67:04] Well, Mozilla is what Mosaic ended up being.

Tim: [67:07] That's right. The creators of Mosaic and Mozilla were the guys behind this ICO that closed today. It was called [indecipherable]

Kevin: [67:15] It was a Marc Andreessen's crew?

Tim: [67:17] No, no, no. I forgot the guy's name.

Kevin: [67:19] Marc Andreessen was the creator of Mosaic and Netscape.

Tim: [67:22] The guy behind this created JavaScript. He was the CTO. He created a lot of the tech, underpinning it. This is the one that raised $35 million in 30 seconds. I'm going to keep going on for hours about this, but let's...

Kevin: [67:41] It's interesting. I'm still marginally frustrated because I don't understand that in incompletion all this technologies. That's why I'm listening to podcast and audio books, and buying books.

[67:53] Actually, Princeton has free online course on cryptocurrency. They're not running it actively anymore, but the sequence of lectures and the course notes are all there. It's through Udemy .

Tim: [68:12] Right, it's [indecipherable] .

Kevin: [68:13] If you're looking for a good way to learn it, you can go to the Princeton course.

Tim: [68:20] There are lots of YouTube channels that look at the whole set of cryptocurrency models. One that's particularly good. Obviously, "It's A Monkey" it's the best podcast. Make sure you stay with this one.

[68:31] There's one called Crypt0 with a zero at the end. He's actually an actor out of L.A. He puts four videos a day out on the cryptocurrency space. It's really worthwhile checking out I'd say, but obviously, "It's A Monkey" is the only one...

Kevin: [68:47] [laughs] Don't worry about that. There's room for us all. Tim Lea, the CEO of Veredictum is also the author of Down the Rabbit Hole, a fantastic book that even our known techie internal account, and Jamie gave it the big thumbs up.

Tim: [69:04] Thanks Jimmy. You are a man and a half.

Kevin: [69:07] Thanks so much for joining us. We're going to drag into a few months again, because no doubt, the space moves very, very fast. I was excited to see also when Tim and I met I didn't even know you were a ManageFlitter user.

Tim: [69:21] I'm a regular user. For promoting Twitter for an upcoming token sale, it's going to be used 20 times over.

Kevin: [69:32] We've got to get you on our new platform, ManageSocial. We've started bringing on a couple of people, which has Twitter and Instagram.

Tim: [69:38] Oh, right. We're early adopters. We'll take on anything. I'm very happy to test it out for you.

Kevin: [69:40] Let's do it. I really appreciate your time this morning.

Tim: [69:46] Thanks Kevin.

Kevin: [69:47] Look forward to having you back.

Tim: [69:48] Awesome, thanks.

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