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Join Viktor, a proud nerd and seasoned entrepreneur, whose academic journey at Santa Clara University in Silicon Valley sparked a career marked by innovation and foresight. From his college days, Viktor embarked on an entrepreneurial path, beginning with YippieMove, a groundbreaking email migration service, and continuing with a series of bootstrapped ventures.
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Join Viktor, a proud nerd and seasoned entrepreneur, whose academic journey at Santa Clara University in Silicon Valley sparked a career marked by innovation and foresight. From his college days, Viktor embarked on an entrepreneurial path, beginning with YippieMove, a groundbreaking email migration service, and continuing with a series of bootstrapped ventures.
Why Web3, Crypto, and Blockchain Still Struggle in the Real World
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22 MAY • 2025
50 mins
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In this episode, Viktor talks with Vlad Trifa, founder of Zimt and co-founder of EVRYTHNG (bought by Digimarc), about the challenges of applying Web3, crypto, and blockchain in real-world systems.
With a background in IoT, supply chain tracking, and digital product identity, Vlad shares practical lessons from working on blockchain projects outside of the lab. They discuss what often goes wrong when these technologies are used in enterprise environments, and where they might still be useful if done right.
Topics covered include:
- Why many blockchain projects would be better off using a database
- The disconnect between crypto culture and enterprise software expectations
- What DAOs are designed to do, and why they often fail
- How tokenomics influences system behavior and project outcomes
- The problems with wallet UX and self-custody for regular users
- Practical use cases for NFTs beyond digital art
- What decentralization actually means for users and developers
- The technical and operational limits of current blockchain infrastructure
Vlad also talks about his work building blockchain systems for supply chains, how upcoming regulations like the EU Cyber Resilience Act may affect the space, and what kind of changes are needed for Web3 to be more reliable and useful.
You’ll also hear:
- Why crypto infrastructure is still hard to scale and secure
- How token distribution often leads to trust and governance issues
- What Web3 can learn from open source and traditional software development
- Where blockchain, IoT, and AI might start to overlap in the future
This episode is for developers, product teams, and anyone trying to understand where Web3 stands today, and what needs to happen for it to move forward.
Transcript
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Welcome back to another episode of Nerding out with Viktor.
Today I'm joined by my friend Vlad Trifa.
Welcome, Vlad.
Hey, Victor, what's up?
Hey, buddy.
I am super excited to have you on and same time we've been.
Yeah, we've been trading emails for a while.
For a while about this particular episode.
And in today's episode, we're going to dive into all things crypto, all things Web3 and I guess with your background in supply chain and with your background in IoT, there will be a natural overlap between those areas.
Maybe we'll start with a quick intro like Vlad, tell the people, who are you?
How did you get into this place in the first place?
Sounds good.
So, yeah.
Hi, everyone, I'm Vlad.
I'm an engineer by training, so I studied actually AI machine learning way before it was trendy and robotics at EPFL, that's what I did in my master's.
So controlling robots, fake brains, digital brains.
So that was very cool.
Then I worked in Japan on robots on that.
So that's really the space I come from.
Decentralized machine learning. Over time,
I did a PhD with my friend Dominic.
You also know very well we worked on a topic which was the Web of things.
And our observation was that IOT was cool, but there were a bunch of protocols, a lot of technologies that didn't really speak to each other, didn't really integrate.
So the vision of the Internet of things wouldn't happen unless we could bring all of those devices and protocols on the same layer.
And that kind of gave birth to our research topic, the Web of Things.
We can go a lot deeper later on in podcast.
So I don't spoil.
I think the book is right up there somewhere signed by Dom himself.
Well, I hope it's on top so you can easily reach it when you need it.
Obviously the book is now 10 years old, so a lot of things have changed from those days when we wrote it.
But anyway, and after that we built a company with dumb as well called Everything.
And we're one of the First Digital Cloud SaaS for managing digital identities for products.
So, you know, digital Twins, as it's trendily called.
We did that for a bunch of years and were helping a bunch of brands initially, a lot of connecting devices, so very IoT.
And then it naturally evolved towards dumber products.
And by dumb I mean just a QR code or maybe NFC RFID tag attached to a physical product for supply chain traceability.
As you mentioned, anti counterfeiting consumer engagement and many more.
So I did that for a few years.
Then around 2016 I got the crypto bug or blockchain.
I started discovering obviously Ethereum.
It was very interesting, a lot of new projects, exciting things happening and I joined the startup as Chief Product Officer, essentially CTO and CPO.
So I was managing the entire engineering team called Ambrosis and what were doing was using blockchain, building a blockchain that is adapted to supply chain trustability IoT sensor.
We did a bunch of projects in that space for a few years and in 2020 I started my own company called Zimt Cinnamon because it's warm and exciting.
But essentially the idea was we started as a product company, so we're doing a multi blockchain bridge again.
We can go in more detail what exactly that means.
And then it naturally evolved into a bunch of projects and for last few years we've done almost more custom projects rather than purely product.
And yeah, I mean that's how I came to him.
Nice.
So obviously there was a lot of overlap with Ambrosis and with what you were doing.
Everything.
Which is now part of digimark.
Exactly.
In terms of, in terms of like what you're trying to solve for what I'm really keen on, like a lot of the crypto stuff is really interesting and really theoretical.
In the Ambroses world, you try to kind of merge these two and actually use it for the real world.
Yeah.
What like how did customers like you speak at the big brands?
Like everybody like, oh, we have a crypto, we have a web3 or crypto playbook.
But like very few things actually make it to the real world beyond the prototyping power thing phase.
Right.
How did you, like, how did that work?
Like how do you actually play out what are some success stories around that where actually it was actually applied and deployed.
Yeah, sure.
So I mean around that time when we started, that was late 2017 when we launched the company, a lot of companies, especially medium large companies, were very interested in, in crypto because it was really the trend, it was the AI of 2018.
Right.
So everyone was exploring, hey, blockchain sounds cool.
Not everyone did get it or what exactly it means.
And everyone was doing a lot of innovation projects around the technology.
And one of the first complex things around it was that the technology itself is fairly complex.
Right.
Even today it's hard to understand.
You require quite some technical skills in order to, to play around with that.
You didn't have you know, it was not JavaScript in your browser with three lines of code and off you go, right?
You had to manage, issue wallets, you had all the security aspect of it, how do you manage keys, how do you issue them securely?
And most of those problems are even not solved today, right?
And I think one of the main questions many brands had was like, okay, well, sounds like a new way of doing computing.
It's more decentralized, supposedly more secure.
But all I read in newspaper is people getting hacked and scammed.
So how does that fit and why do I need to use that?
I mean, what does it bring to me?
And I think the whole vision of crypto in general is that when you have a bunch of companies working together, not necessarily trusting each other, they would like to have a neutral third party, neutral ground essentially to start sharing and exchanging data with the ability to prove that data at later point, for example, if there's an audit or something, you want to show that, yes, on that date I received that shipment, for example, and I can prove all the data and that's why I approved the logistics provider to deliver it, for example.
So they were very much exploratory projects to try to understand how blockchain can add value to those projects.
And we've explored things from consumer experience, we've explored things around sensors, so essentially tracking data during shipments, for example, for insurance or quality purpose.
It was very much both hardware, both real world data, so very IoT, but also process so very much enterprise systems and so on.
So we've covered a lot of topics.
But what we observed ultimately is that the pitch, the sales pitch around blockchain was, hey, there's this new technology, it's a lot more complex, it's a lot more unproven, it's a lot more untested in production.
It's safe if you know what you do.
Otherwise it's super unsafe.
It requires you to start sharing a bunch of data, but not necessary.
So it was a very complex business pitch.
And I think the ultimate question any buyer had was like, okay, sounds very good, cool, exciting.
But where's the dollar sign?
At the end of the day, you're telling me it's more complex.
It's going to take me a lot more time to put that in place.
Most of the software, most of the infrastructure in that space is very early stage, experimental, hasn't been, you know, thoroughly tested and there are still hacks happening because there are bugs or whatever issues in production.
So it's going to cost me a lot more and what exactly does it bring to me?
So it was nice from a R and D perspective, but I think over time for it to be successful and especially successfully used in enterprise context, one, it requires all actors.
If you're working with a bunch of suppliers, if you have a way to getting them to use the same technology as you start using that in production, then it kind of fulfills its promise.
But that requires a huge system change and evolution.
That's not going to happen and so not if you have large companies working with each other.
And second, the regulation aspect and around 2020 EU was very exciting.
They've been doing a lot of work for the last few years pushing standards that require company to disclose more information.
Obviously all the work done with digital product passports is just an example.
So there has been a efforts but it takes a lot of time for those to actually get real.
And I think when they will happen, they will not require a specific technology.
They will not say you have to use Ethereum or you have to use blockchain.
They will just say you need to have a secure way of sharing that information, storing it and so on.
So I think it's been a lot of excitement, but I've seen very few projects actually catching up at scale beyond a few exceptions, of course.
Yeah, I mean the realities for most of the hype, blockchain stuff, the reality is you're better off with just a database.
Exactly.
Like the reality is that you, it's much more performant.
You actually know what you're doing.
It's a, it's a known quantity.
Right?
Yeah.
And I guess the other thing I like to address there or call on there is like I had a lot of conversation with doms about this because obviously he was working with a lot of crypto stuff around, well at everything to like make that native in that platform.
And I guess one of the biggest, I guess in particular if you work with enterprise entities is that there's a lot of like to call it gap is probably an understatement, but the gap between cultures in the crypto world and in like the real world is order of magnitude.
Right.
Like there's a.
I know now we call it vibe coding, but back then like there's a lot of YOLO coding.
That was the word.
Like a lot of these like projects, like I'm not gonna say that Ethereum and Bitcoin, Those more mature L1s are unstable because they are, they know what they're doing.
But if you look at the smaller Project like they, I mean I've been just looking at some of these projects myself over the years.
Like you could tell these projects are not built by people who are good software engineers in general.
They're definitely YOLO coding this stuff.
And like networks go down all the time.
Right.
And if you are ambrosis and you're selling a service to your Fortune 500, you are liable to their outages.
Exactly.
You're probably going to go out of business.
Yeah, right.
Yeah.
And that's exactly the expectation.
I mean especially larger companies, when they contract a piece of software, hardware, whatever it is they contract, they give you the responsibility of making sure it's done well.
And if there is a problem, they can point the finger at you.
And essentially one of the nicest way to describe blockchain technology is it's essential finger pointing as a service technology.
Right.
I mean that's the best way to describe nothing.
That's a good example for that.
But to your point, it's very much what, what has happened in beginning.
A lot of that tech was built, you know, by people who were 20 year old.
They never really studied computer science.
So they just learned many of them from Scrat computer software, essentially watching YouTube videos, which I think is great.
A lot of young people got into the space, they wanted to build smart contract and they learn everything from scratch.
And what you see a lot is many of those projects or engineers invented very new solutions which, you know, for decentralized or distributed consensus, which actually were solutions that were solved 20, 30 years ago in classical distributed systems.
Right.
And that's a very interesting example.
They can of reinvented the wheel and if they had known, if they had all theory, things would have been a lot faster.
But look, I mean the reality is that the requirements they had and their objective was hey, let's make something cool.
Their audience were not enterprise.
Most of that software was not built with the constraints of enterprise in the first place.
And I think there have been blockchain projects, Hyperledger is a good example, which were developed by more tradition engineers, much more seasoned enterprise developers.
They knew very well the constraints and they build that.
But I think this is where you're facing the clash of the two worlds, right?
On one hand you want things that are completely predictable, centralized, you know, safe.
But on the other hand, the whole point of crypto is being decentralized.
So a lot of those enterprise blockchain projects, they were just databases that a company had full ownership over.
So it was just a glorified over engineered database for what they were needing because they were not sharing that info externally.
So they might exactly, as you said, have used just a trad MySQL and then call it a day.
Right.
Wasn't the IBM that actually had a blockchain service was just append only MySQL database?
Pretty much, yeah.
I mean at the end of the day this is what it was.
I think that there were lots of very interesting innovations that came.
I think there were also lots of real world limitations around crypto that made it very slow for those project and technologies to get adopted.
And I think there was the clash of users which wanted Crypto, which wanted NFTs, wanted very trendy things for almost fun and enterprise were like, well everyone is asking for that and you know what, we can actually sell digital shoes and clothing for almost the same amount as physical goods without having to produce them.
So that was a very interesting business model.
Right.
Nike was very heavily involved into that and that played very strongly towards culture, what people wanted.
But that was ultimately a very small niche of users.
And most brand fans, they didn't have much to do with crypto.
They didn't really want a digital thing, they wanted the physical product.
But yeah, well, yeah, there's a lot unpacked there.
Like a lot of people come into crypto because they want to get rich, quick scheme, right?
They want like, oh, let me buy, let me spend 500 bucks and tomorrow I'll be a millionaire, buy a Ferrari.
And that's.
It worked.
Yeah, it's been working and the flavor of that has evolved.
And I think when you think about it, one of the main use cases of crypto even today is essentially, you know, I call that a massively decentralized role playing game where you have a bunch of people banning on each other essentially how if I can do this marketing plot and make it sound like this project is going to be successful and if I get enough people to buy it, then they all buy that, I dump and I move on to the next thing.
And well that's called Ponzi scheme normally.
But yes, I call it a game, you know, a decentralized casino, let's call it that way.
But yeah, I mean unfortunately that's been where a lot of the traction has happened.
Although if you look at around 2019, a lot of enterprise projects have been growing in that, you know, let's use blockchain for supply chain for logistics.
And few of those project reached, you know, sufficient traction and revenue to be positive, I think a lot of the funding went into that space.
That funding paid the development of the project, of the tag, some of the product promotion of that.
But most of those projects were essentially subsidized, so they didn't really fly financially.
Yeah, I mean, don't get me wrong, like I, I'm very bullish on the whole decentralized play.
And I mean I, I'm fundamentally like a believer of the whole, like particularly in fintech, right.
Around decentralized payments.
And it's just there's a bit of a dichotomy around like yolo coding and fintech or DeFi.
Like you can't YOLO code things if you're actually banking people.
Like that's they're mutually exclusive.
Right.
Like you need to be a reliable systems that are well architected.
And I mean to be fair, like Bitcoin, Ethereum and solana and the L1s, like they are robust these days, I would argue like they are not YOLO projects anymore.
But there are a lot of it out there.
But all right, so there's all interesting things there.
So when you were selling this to the Web three to the enterprise world, it was really a technology mismatch.
They wanted the buzzword, but they really wanted was a database.
Yeah.
Or a website or an app or a game or something.
Or loyalty.
Right.
And I mean one thing I guess we need to cover as we dive into this world is because of daos or decentralized autonomous organizations, which is I guess a kind of a concept that really just came out of the web3world.
Like how do you do like governance, I guess in this world, like maybe like we start there, like what's a dao?
What should people know?
People who are not like deep down into the rabbit hole of crypto and.
Web3 now of course, so obviously a dao that's a decentralized autonomous organization.
Right.
And the idea is to think what's the future of a group of people or a group of stakeholders that want to build together a project.
And that goes away from the very traditional vertical pyramidal structure of today's project where there is a big boss and above the Boss there's the VCs and you have all the class structure of power.
And the idea of a DAO was that, well, you know what if this project, the technology, the ip, everything that a project is delivering is actually shared between a bunch of people.
Decisions are made in a more, let's say democratic way where everyone has Some voting power depending on that.
And the idea was to use tokens to represent a voting share or a slice of ownership into that.
And I think that vision is very exciting.
Obviously it started very early in Eth.
Ethereum days with the first big dao that actually got hacked.
And that led to the split of Ethereum chain towards Ethereum, what we know today and Ethereum classic, right?
So you had already those ideas which were very ambitious and should I say outrageous, but I think they're very powerful because it means, you know what, if you're working on a project, why don't you have a slice of that?
And I think if you think about the future of work, I can totally imagine a bunch of contributors that are just freelancing, adding bits and pieces to multiple projects and getting rewarded and having a say beyond just a salary in those projects.
And that's how it started.
Right, but isn't that's what you're describing there, that's no different than being a shareholder in a company and you have voting.
Right?
Fair enough, fair enough.
But I don't think if you look especially startups, you can only be especially super exciting, super hot startups.
It's very hard to become a shareholder on that.
I mean option one is being obviously a founder or very early employee or a vc and that's it.
And if you are just a developer, if you just want to spend a few hours on a project, you have zero way of getting into that and you have the whole legal apparatus around it.
You need to have an agreement, you have to have the sale, you have the whole inefficiency around building a company, managing a company, shareholder, signing, all of that process.
That is very painful, complex and that limits the liquidity if you want around the project.
And I think crypto and daos are way to make this space a lot more flexible where you can say, you know what, look, here's a project for every X amount of whatever way you want to measure the performance of a freelance developer.
You're like, you know what, if you get those five tasks, every issue has a certain amount of tokens bound to it.
As soon as you have a release that pass all the tests and contribution, you get that amount paid.
And I think that's a very interesting model where you're not bound, you don't have all the heavy lifting around it that makes it hard for you to join and collaborate on several projects.
But you're right, I mean it's the same idea.
But I think crypto has a lot more to offer than traditional shareholding, which is very, I would say antique inefficient.
But as you say, there's a reason for it to be that way, which is protecting investors and employees and so on.
But yeah.
What, what makes for a successful or like a failed dao, like in terms of structures?
Because there must be like a lot of mistakes have been learned and been made and like some are success stories or not.
Like what are the, from your vantage point, the, I guess.
Well, how do you best describe a successful one?
Like what are the foundational pieces that needs to go into successful dao?
Sure, good question.
I think you have to look at the project first.
I mean, what's the purpose of that project?
Is it to build a commercial app or game or something?
Or is it to be something much more fundamental such as a tool or a new layer one potentially, what is the purpose and how is that project going to succeed?
And I think when I started in crypto, it was obviously 2016, 17, that was really the early days of, you know, invest ICO boom, right?
So invest into new project.
There was a lot of gambling, there was a lot of sweet talking marketing, but everyone had this feeling that hey, there's new gold rush.
I can bunch, I can buy a bunch of tokens in a bunch of projects.
I think that idea is interesting, but you need to have some sort of assurances of knowing if you're buying some tokens in a project, what you're getting exactly.
Do you have a slice of ownership of the project, so potentially some revenue or some dividends, if you want to call it that way.
Do you have simply voting power, but you don't own any of the potential revenue associated?
So I think that first question, what is the project?
What is the outcome of that project?
Is it just to deliver a public good or is it to deliver some sort of revenue in some form or another?
And I think that's the first objective, the first component, which I think is fundamental.
You need to have a very clear objective.
We are building the new X and that new X is going, not X, the company X, the variable.
Right, but you are building.
We want to build that and we want everyone to participate into it because we need some funds, we need to hire a team, we need to get this developed.
That's a very important thing, a vision, an objective of what you want to build.
Second.
Okay, well, let's assume there's a token.
Most daos are essentially mapped by a token.
And most of those many projects have several Tokens, not just one.
There's a governance token which supposedly has no inherent value beyond voting.
But a lot of those actually have a certain value.
They're tradable.
There is an inherent value in the token itself because there's a market around it and some speculation, and it's not necessarily tied to any sort of valuation or future profit.
And I think that's a second element.
I think a lot of the way those tokens are structured, they're trying to navigate regulation in different countries because they don't want to be classified as a security, they want to be seen as a utility token.
But a utility token has an increasing price.
So there's a lot of unclarity, there is a lot of complexity around regulation.
And for someone who is not in that space, it's very hard to know if you know, are you even allowed to buy that token?
What do you need to do that?
I mean, do you have to declare?
How do you declare?
You have all those complex legal tax things that you have to solve.
So that aspect, the regulation is another very important aspect.
A third ingredient, which I think is very important is the way those tokens are created, minted, how they are split, why they're split that way, and not only have full transparency, in my opinion, around that, but also explain.
Okay, well look, is it a fair split or do you have like the early team, okay, you, we make a project, you get 40% of the tokens, I get 40% and the VC gets 10% and the last 10 is dropped on through an ICO or TGE token generation event.
How is that done?
I think the fairness around that and in a way representing why early builder of the project might legal allocation, the transparency around that and having a fair launch, I think is very fundamental.
Because if you have a project upfront where the founding team have a huge amount of tokens and therefore a huge amount of voting power, then essentially means whatever nuggets or pieces of tokens you have virtually zero voting power because half of the network will always decide.
So that's some of the ingredients.
Yeah, I mean, there's a lot to unpack.
Like one of the things, like you basically also kind of go back to the analogy of shares.
Like you're basically describing common and preferred shares.
Right.
That's essentially like you're recreating the same vehicles where you have different powers based on what share you have.
I think that's, there's an interesting parallel there.
To start with the second one Is like we've seen this in numerous projects, I think you called it with like how much the founding team gets.
Because there have been so many blockchain projects where like a astronomical amount of shares percentage wise have been issued to the founding team.
Disguised as different types perhaps, but a different type of token.
But, but that's something that I think the transparency part is for an ecosystem that at least try to be all about transparency, it has a lot, to a great degree not been.
Very transparent or fair I think in a way.
Right, yeah, no, I think you're right.
I mean, you know, the question is what do you value the most?
I mean if one of the founders has, during his Ph.D.
came up with a very exciting new IP and he brings that into the project and gives it, that's fair, that's just one of the very fair way to compensate.
And I think that's one part which is the team, some of the advisors and you know, not even full time employees do get a huge amount of tokens just because they bring some credibility, some name.
That has happened a lot.
Fair enough, whatever, you know, they can decide.
But I think the other element that skews is obviously the VC role into that.
And especially if you look at the large L1s that have come up in last few years where VCs come in at a very nice huge discount month way before the project is launched publicly, they come in, brings a lot of attention, a lot of noise.
Six, nine months later, boom, massive drop on token holders and that's an easy 2, 3, 5, 10x4 for VCS.
Right?
It's a no brainer for them to put 100 million one of those projects because everything is there, it ticks the boxes.
Innovative Team X, Google X, whatever coming in on board, they're super cool, they're going to reinvent the new Ethereum, whatever you name it and then those projects drop and they're left on their own in a certain way.
So I think this long term incentive and making very clear why you want to keep those tokens, the fact that they don't want to sell those tokens for a very long time, that's an important point.
But at the end of the day, especially VCs, they're in to make money, right?
They're not doing that for, for the good of humanity to a large extent some might disagree but at the end of the day, and that's fine, you know, I mean that's totally what, what they're up to, you know that up front.
But the question is it an easy dump on market?
And then I don't care, good luck to the project.
And some projects fly, develop very well.
Many others tank.
As soon as you stop adding fuel to the project is just tanking, disappearing, team moves on.
And I think that's very unfortunate because a lot of those projects had genuinely very cool use cases or very cool innovation, or invented all sorts of very cool paradigms for building those systems, but they disappear.
And I think a lot of those projects need to be linked to some real world use case.
And some of it can be, you know, it can be just an open source developer tool people are using.
There is a community, there's an organic community of people using, building, contributing to it.
That's great.
It does not have to generate revenue as such.
But if there is usage, that's more than valuable in my opinion to do those kind of projects.
Yeah.
So utility more than anything, right?
Yeah.
I mean that brings us tokenomics, which is like the core cornerstone of how to actually make something sustainable.
I guess people not familiar with the concept of tokenomics maybe do a quick introduction to what that means.
Really?
No, absolutely.
So I mean tokenomics is the science, or let's say the art of designing incentives essentially in a system and designing a token.
So as we mentioned, most projects, especially in crypto will have one or several tokens.
They might have a limited quantity or they might not be capped.
And you can print more and more of those over time according to different rules.
So it's about considering all those tokens because if you can control tokens, you can control incentives in the system.
Right.
Who gets what when and under what conditions.
And if you can do that, then you can ultimately control people, users, developer, team members, behavior.
You can steer them to behave a certain way.
And I think when you look at it from a web to Web two perspective, you look at all those traditional huge websites, you know, let's say websites to book a flight or a hotel or something, I'm not going to drop names.
But you look at the incentives they have.
Their incentive is to make money.
So they will not necessarily want you to cancel your trip because that means less commission.
So the incentive is in those traditional things might not be aligned with the well being of customers at the end of the day.
And I think that's a big failure of Web2 systems where the incentives are very strongly aligned.
Some of them are better than others, no question.
But ultimately they need to make money.
They need to make a commission.
So if there's no journey, if there's no trip, there's no commission.
It's as simple as that.
And that's unfortunate for the users and the main fuel of that platform.
Same for social media.
Right.
I mean you don't really care much about the well being of people or kids or whatever they do, as long as you have engagement.
So from that perspective, anything goes.
So coming back tokenomics, if you can design a system that is a lot more interesting, you can change, you know, you can program essentially the incentives of users and the way people use your platform.
And I think that's essentially why, I mean it's an art, because you have best practices and there's no one single way it really depends on use cases of projects.
And you know, there are lots of things we can go in detail about that.
Yeah, like we definitely seen a big shift over the last five years as Crypt has become more mature, I guess moving from like, I mean bitcoin miners were probably the big fund that brought into the mainstream.
Right.
Mining bitcoin today is essentially pointless unless you're like where electricity is cheap or free, more or less.
But subsidized.
Well, exactly, like Iceland or China essentially.
Although the place where it's viable these days.
Right.
But then moved over to proof of stake.
It's kind of like where we are right now largely.
Right.
So tell me more about what that transition, how that, because that's part of the tokenomics as well, is like incentivizing people to not dump and give them.
So maybe that's a good transition into that.
Yeah, no, so that's a very good point.
So obviously if you look at bitcoin the way it started initially, anyone could just join the network, have a laptop running and you could mint some of the early bitcoins.
And that was very profitable even way before it was worth anything.
And I think that was very interesting.
But when people realized that, hey, actually there is value here and the bigger machines I get, the more power I have, the better for me.
That pushes everyone out of the market.
Right.
And exactly as you said, you might have the like two huge gigantic mining pools that are meaning 80% of the supply.
So it doesn't feel to me very decentralized, distributed, fair.
Right.
And I think that was the main argument.
Everyone can, can participate and of course there are all sorts of ways you can circumvent that.
And you can imagine.
Okay, well now every node in the network can have up to a certain Amount.
So the idea of proof of stake is that you would put certain amount of tokens, you would lock those into the system for a certain period time, you know, maybe fixed so you can unlock them anytime.
Those are design concerns.
But the idea was that you would lock those token, promise not to dump them or do nothing with them, and you would get extra benefit.
And I think that's interesting.
But again, I mean, if you go with the idea, you know, one node equal one vote, then what prevents me from buying 100 nodes?
You're just shifting the problem.
It's maybe more complex, but you're exactly at the same place.
So if someone has 20% of tokens in circulation, they have 20% of voting power.
And that's exactly the same thing with shares in company.
That's always the same thing.
I mean there was a project I think by Sam Altman, right, which was Worldcoin, where the idea is you would get your retina scanned and for every scan you would get some amount of token, which is interesting, very creepy, but very interesting.
And I wouldn't do it.
But you know what, it works.
And that's maybe a system that's trying to be fair.
But again like with voting, you can get someone's vote, you can say, look, I'm gonna pay you and you go and vote for my project.
So it's, it's a hard problem because it's not necessarily a technical one.
It's more a governance and power one at the end of the day.
And I think proof of stake, there's a lot of flavors around it, there's a lot of variation.
And I think the idea of locking a token so you don't dump is very interesting.
But as soon as you have staking, as soon as you have locking, and especially if you, by locking your token you get an extra percent of revenue, you're communicating to the market that essentially it's some sort of security.
And I think the whole debate around what is a security, what isn't, is, is very delicate.
And it's a, it's what I was saying, you know, at the end of the think a lot of those of people in those project, they want to make, some want to make easy money very quickly, huge amount.
But many others would just want to have something better than their bank is offering.
You know, maybe a 5% on a stable thing is good enough for, for many users and I think, you know, is data security, Is your bank account a security?
If you, if you use the same Principle.
I mean you'll locking money there and you get a percentage in return.
How is that different from having a token, you know, obviously leaving aside what's behind it.
Right.
But as a principle, it's essentially exactly the same thing.
So, so yeah, no, I mean the opposite locking is because you're avoiding people listening, dumping.
Right.
And that's really what you try to hedge against.
Right.
Like these massive fire cells.
Yeah, maybe I'll jump, I'll add a project we did a while back around.
Interesting.
From a tokenomics perspective, I think that can give you an example.
So we built a project a few years ago called Double Cream.
Project is offline.
That was very much an early stage idea.
But what we wanted to do is to create, you know, the stock photo marketplaces.
Right.
IStock, you take this as an example and I think it's a very good illustration of what I mean by democratization.
If you look at those marketplaces, you know, iStock, they, some of those, the largest one are a billion plus a year revenue.
So it's huge, it's massive.
That was before Generative AI.
Now I think they felt some of the heat.
But first of all, they had a bunch of participants and they were taking huge commissions.
And I'm talking 80% of every sale of your solo goes to that them.
And it was like really?
Yeah, that's huge.
Massive.
And very few had more than half.
So you know, Getty, selling your image for 500 bucks, you get 100 bucks.
Well done.
But that's if your photo sells and you get a percentage of it in the best case.
And many creators go there, put a lot of photos, they don't make anything.
It's very untransparent.
So you don't know exactly when your photo is sold.
You have very little saying.
And I worked with a buddy of mine who had a communication agency, they had a bunch of contracts, a bunch of platforms they were using for their ads.
They were giving those platform huge amount of money.
Like I'm talking 2, 300 grand a year just to buy stock music, stock images, footage for the project.
And that's it.
They didn't know who was getting the money.
They just had to pay.
Every single platform had a very different set of licensing.
So if you buy from iStock, you need to have this type of license if you want to share it in print.
And it was very complex from a licensing perspective.
Very inefficient.
And they didn't get anything so the idea of a project was to turn that on its head and say, well you know what, the main actors here are the creators.
They are the one that should get the biggest chunk of the slice.
So we tried to gamify that and we're like, well you know what, everyone who participates on the platform, for every piece of content they upload, they get an additional slice of the revenue.
There would be a revenue share where even if your stuff doesn't sell just because you participated to the platform and you provided sufficiently good content, you'd get a very small chunk, maybe symbolic, but you still get something out of it.
You'll have a lot more transparency, a lot more control.
And the more you're successful, the more you sell, the more benefits you get.
Maybe much more fine grained analytics and insights and obviously a bigger commission that gets to you and maybe your content gets more and more promoted.
And you can think of something like Instagram where the entire monetization is owned and controlled by the company.
And the only monetization beyond ads, same for YouTube and those content sharing platforms.
The entire monetization is very much a black box entirely controlled by the company.
They decide how much to give to you and why couldn't that be more democratized, more transparent?
So you know exactly what do you have to do?
Maybe you don't get much, but you know that if I upload better content and I get more and more reviews or likes on my stuff, then I should get a bigger chunk of monetization.
So yeah, that was just an example of how we spend a lot, lot of time on thinking about the economics.
How do we need those tokens?
Why shouldn't we as the platform owner actually get 20% of the supply?
Because we didn't provide 20% of the content and things like that.
So there's a lot to explore.
I think the area of tokenomics for me still very early on, there's a lot to explore, but it has to be done with the objective of your platform and how you want people to behave.
And there's so much to be explored there.
Yeah, I mean I guess that's a, a good segue to NFTs.
Yeah.
And I think at least my, my take on NFTs does.
I, I love the underlying principle of it.
Yeah.
The application of JPEGs I find utterly pointless.
But that's a different story.
Right.
I find, I find the technology on the other hand super interesting.
Right.
So maybe for those who have been living under a rock for a while, what's NFTs and.
And what I guess bringing people up to speed on what that is and.
And stock there if it's dead or not.
Yeah, very good.
So obviously NFTs were very popular I think in 2000 and 20s that when they became a huge thing.
And the idea was to create a digital representation on a blockchain.
If you look at tokens, which we mentioned a lot tokens are fungible, which means one of your ethereum is the same as my Ethereum or it's like money.
It's exactly the same.
You, you can fractionalize, you can have 0.1 Ethereum, 0.001 and so on.
So it had the same property as money.
All the tokens are the same.
The idea of NFT non fungible token was that you could create a set of tokens which are not inherently fractionable.
You can fractionalize them later, but that's a separate debate.
But they.
And you could control how many of them you could create if you can create more or no.
Or if you can create more of them.
And that regulates an NFT at the end of the day are a smart contract that gets deployed on a blockchain that says we create a new collection.
There are X amount of tokens in that collection.
Every single one of them is numbered.
And then you have rules about how can they be transferred, who can, you know, who can anyone can own them or you need to have some special conditions that are fulfilled and so on.
And obviously the most popular thing around that were, you know, cyberpunks for example.
You had a lot of those very popular collection which was essentially digital art.
Every single one of them had both a unique ID and it was provable that it's an id, it's one, it's part of that collect and it had an image or some content associated with it.
And I think the best analogy to think about it is you can have a fake Rolex in the real world, but you cannot have a fake NFT digitally.
And I think this is a very powerful element because even if you have very good counterfeit watches, they look the same.
Nobody really knows.
You cannot really prove unless you have the certificate.
But even then the certificate can be faked and so on.
While here you have a digital representation that guarantees and using the same principle as blockchain, essentially that proves you own that specific nft and then you can imagine.
I think what was the most exciting thing around it was the community building around those projects.
I mean Bored Apes is the best Example where it was like the new Flex, right?
I mean, why have a Ferrari when you can have a bored ape?
And I think the whole community, people loved so much that thing that they created parties, swag.
And if you could Flex, show that you have one of them.
It was like the ultimate thing, right?
And if you think about it, okay, well, I have that, but some people got hacked, some people got robbed out of a jpeg, right?
Because at the end of the day, what exactly do you own?
What is the thing you own?
Well, you own a token.
And a token, essentially, especially from a generic standpoint, is a placeholder that is owned by someone on a blockchain and can be transferred when and how and price.
All of that can be managed inside a contract or externally.
And if you look At NFT marketplaces, OpenSea was the first and largest one.
They were this kind of ebay for selling your nft.
And I think there's a lot of very exciting stuff around it.
Exactly as you said, there's so much that can be done with it way beyond digital JPEGs.
I think digital JPEG is just the tip of the iceberg and oversimplifying.
But if you think about it, London, right?
You live in London, you have all those private clubs.
I think we've been to one, right.
So you go there and if you, if you can prove that the membership of that club is an nft, you get a lot of advantages around it, or you know, golf course or even for your kids, going at school lunch card can be an nft, things like that.
But going back to the whole.
That could have been a database.
That could have been a database.
Yeah.
There is absolutely no utility in that for that society being decentralized.
Yes and no.
I think, I think it's exciting because if you look at projects such as Bored Ape, there was.
There is a big company, let's call behind it, that is fairly centralized.
And you could argue that, you know what, it doesn't have to be a decentralized thing.
It's a company that owns it.
And I think that's even more when we use the example of club or loyalty points for Lufthansa or whatever, Air miles, right.
There is zero reason for it to be decentralized because they own those points.
Loyalty points have existed for, you know, air mines have been around for decades and they still work as a decentralized database.
And what would be the reason for that to be decentralized other than they have an inherent value that could be taken out of the system and you can do things with it.
And I think this, it's almost more a programmability integrability argument that than decentralization per se.
And I think that is the only and main reason for it to be more decentralized that hey, I can take it and I can come up with a scenario, do something with it that was not intended design or even allowed by initial maker.
But many of those companies don't want you to play around and gamble with their tokens and things like that.
But yeah, I mean I guess going back to your Rolex example I think that's far more palatable to me where you would have a ledger of I own a Rolex.
Here is a validity I can validate.
This is real.
Yeah, because that's, I guess that I, I, that restorates a lot more with me than a jpeg.
Right?
Because then you can say this is a real one because here's a serial number and correlating that with a digital ledger that can somehow tie a fiscal good together.
And I think those use cases are a lot more interesting to me like where you're actually bridging the fiscal world and the real world like supply chain kind of going back to supply chain.
That's a lot more interesting to me than JPEGs.
Right.
That actually solves a real world problem.
Yeah, you're very right.
But I think that's actually a bad example of something decentralized because if you take a company such as Rolex, they are notorious for being very close.
They have very little transparency around it.
You have no idea if you want a Rolex you have to go and order and wait.
I don't know.
There's a lot of internal stuff and the last thing they want is people breaking out doing something with the stuff they didn't intend to.
And I think that's the perfect example of why they would never do projects around nft, especially a company like that.
If you take smaller brands that are a lot more modern I would say or a lot more experimental.
Many brands are exploring the idea of having a digital certificate of authenticity, especially brands around fashion clothing.
So we've done quite a few projects in the past around exactly this.
And I think the better example of why it would make sense is if you take garments and especially not necessarily high end luxurious, super expensive stuff.
But, but middle layer, you know, Patagonia is the perfect example you have where there could be a resale value to that element.
Maybe you're tired of it you want to buy a new one or you want to get rid of some of that stuff?
I know you'll never sell it.
I wouldn't either, but.
But if you wanted to, you would go on ebay, you would go on those marketplaces.
The brand has zero visibility of what happens to that thing, where is it, who owns it, what they're doing with it.
And especially they have zero where of monetizing the fact that you resolved it.
And I think that is a much more interesting use case we did for a client.
Back in days, I was RFID retailer who was selling those things to brands.
That was in a context of zimt, not everything.
But the idea was that, well, if every one of those project could have a digital identity, I can start reselling my sweatshirt one or several marketplaces and the product itself becomes the hub to all the services it offers you.
You know, oh, you have a Patagonia, then you have 20% off at this adventure park or you have 10% of your next flight booking.
You can imagine all those scenarios that are way beyond what Patagonia marketing team could do on their own.
And that's a lot more exciting there.
It makes a lot more sense where you want people to play around the digital identity of that short.
Not just play around, but monetize.
And that's an added value.
Certain service that actually can bring them.
Every time you resell it, they get 5% of commission, 10 for the marketplace.
We've done 5% for the brand without them doing anything.
And at the same time, they get a lot more transparency on which item is when.
Anytime.
That's a whole.
That's a whole Pandora.
But that's an interesting use case.
Yeah, that's an interesting one because like you could have like a charitable donation off a cut.
Yeah, yeah, that's.
That's interesting use case.
Right, yeah, I get that.
I like traceability side of it as well.
Like, you know, it's an authenticity piece rather than a knockoff from China.
Yeah, yeah.
I mean, you know, the whole traceability thing, this is what I was doing with them at everything for ages.
And that's also a lot of what we're doing at Ambrosis as well was, you know, can we provide digital identities for physical products?
Counterfeiting, anti counterfeiting specifically makes sense for a certain type of goods.
And there were lots of things associated with digital identities from products.
I mean, obviously warranty, you know, resell or repairs.
You have all those services that you can layer on top of of It, Yeah, there's so much value that a brand could add and I think, I would argue that it's a brand's responsibility to give you all of this value to you as an owner of that, of that brand.
And I think brands that are, don't, that are not doing it today are missing out a huge opportunity.
And yeah, I mean as a buyer buyer, I expect my product to come with anti theft for example built in.
So if someone steals your luxury watch, they should not be able to easily resell it because it's locked.
There is a digital object on a blockchain somewhere that is locked and that cannot be sold.
That's kind of like what Apple is doing with their phones, right?
If you mark us as stolen, like you can't activate the phone, which is why like there is no resale value for stolen iPhones essentially these days because like they're used.
That's great.
And every brand should do that for any product they do.
You know, it's not always the same value but the entire experience is as much part of the product experience as buying and unpacking it.
And I think there's so much missed opportunity that many brands are not leveraging on today from you know, simply loyalty.
I mean most loyalty today days still, oh, you buy that stuff, I'll give you 10% off for your next discount.
Is it as good as it gets?
Can't you do something more exciting?
Can't you do something more personalized to my taste, to my community, to the way I use that product?
There's so much missed opportunity that brands are not leveraging and that value will differ substantially whether the product is just clothing or an electronic device or whatever it is.
From a sales side, is it too like, because you could define buyer Personas around ownership of items, which is kind of interesting.
Cool.
Let's talk a bit on the legal side of crypto because I think that's a lot of is around that.
I mean maybe we can start with a KYC hell, which is basically what we're living in today, right?
There is, there is a, there is I guess a, a built in conflict between people who are pro crypto and regulators essentially.
Like which is I guess the big boys, like the coinbase of the world are trying to bridge that gap.
But if you look at the OG crypto world, very libertarian, very kind of quasi anarchistic worldviews.
Right.
Whereas if you want to bring this in the new world, there's a Built in conflict.
Like how do you view that, that shift playing?
Because there's a little bit, a lot of development around the last few years about this, right?
No, totally.
I mean, I think that's always been the major debate.
And that's why bitcoin was born in the first place, right.
I mean, if you look the OJs, they were in it for the vision and most of the big OJs today, they don't touch anything else than bitcoin.
Bitcoin is the gold and the only thing worth buying in terms of digital assets.
And that's it.
And think I respect and value that perspective.
I don't necessarily adhere to it, but I think there is a very clear reason why they did it in first place.
It had a lot to do with anonymity, although you can argue that every single transaction is visible.
So as soon as they link a wallet to a physical person, all of that is gone.
You have a lot of issues around it.
That's why they invented money.
More hidden ways of doing transfers and stuff.
So a lot of exciting things.
But the ultimate debate is really about freedom.
You can, it's your money, you do whatever you want versus state is the original vision of I live in the woods and do whatever I want and no one asked me what I'm doing.
And, and I can trade physical stuff.
And that's the whole point of paper payments.
At the end of the day, you can still buy coffee today in some place, but some others it's only digital.
So as soon as you start doing digital payment, there is a piece of information somewhere that you bought X on that day that might not have value today, but it's just a matter of time before companies can use that.
Right.
I mean, I mean if you look at Scandinavia, which probably lead in the world of like undoing or removing cash from circulation, which to me is dystopian.
Yeah, because.
Because to your point, it may not be leveraged today, but it's not a far leap from a social credit system like in China where you say, oh, actually we, you can't actually buy a.
Coffee because you can't do anything.
You know, you can't go on the train, you can't leave your house because your smart door might not allow you to.
Right.
So I think this is obviously the biggest danger around that.
And look, I, I'm not saying that money should be the traditional financial system need to be ended.
On contrary, I think it's there.
It has a lot of value for investors and for consumers.
And I think we don't want to remove those protections, especially when it comes to people who have worked their entire lives, they have some money saved aside, you want to protect that at all costs.
Is the system doing a good job around that?
You could argue yes or no.
But that's a different debate from having money that is untraceable, that allows you to buy a coffee without people knowing that you like coffee or cigarettes or booze or whatever you're into.
Right.
So I think that is the ultimate debate.
Banks, obviously, they don't necessarily liked it in beginning because like, how are we going to make money if we're not, you know, if everything becomes transparent?
And I think banks are not now very heavily, I mean for last five years they've been heavily investing, developing, exploring that.
And if you think the more extreme vision of that, which is, you know, essentially state or you know, fiat backed digital currency, that's essentially the opposite of crypto because it's money that is entirely traceable.
We know exactly who owns what and it's programmable so you can very easily prevent person X for sending above a certain amount, or you can create any type of rooms and have a very dictatorial control over who can spend what when and so on.
And that is a scary vision.
But if you think about it, I mean if you look at most payments today, we're doing already that with credit cards.
Right.
So there's no reason for it to be decentralized in that respect.
But I think the big important period is that we still have cash as an option.
Yeah.
And that's where I think, and I'm very much pro cash because of pro anonymity.
Yeah.
But I'm also not really living my own preaching here because I 99 of my spending is credit cards.
Of course.
Right.
Especially if you buy stuff online then.
Right.
Yeah.
So we need, where I would hope we're moving is where crypto becomes a viable alternative to MasterCard and Visa.
That's where we really want to go to.
But I feel like we're moving in the opposite direction in terms of that to many degree in way.
Right, you're right.
I mean the point, what I think is nice is that you have a bunch of tokens and anyone can decide which one has more value for what they want.
I think the point, if you look at crypto the first time you look at a bitcoin transaction or you do one, you and you're like hey, I've sent digital money from A to B.
That's not a wow, that's not a chat GPT moment, if you see what I mean.
It's like, I've seen it before.
It's called credit card.
It's called.
It's not a new bitcoin pizza.
Yeah, you know, a very expensive pizza.
But it's not something new that you haven't seen before.
It's like, okay, I got it.
Well, I transferred digitally some money from A to B.
And the point I'm trying to make is that is something that has existed before, that has a lot of convenience.
You can use that in many places.
But that should not.
That is if you look at a truly decentralized or Monero or other projects that are trying to be fully transparent, go in the opposite direction.
And then you compare central bank digital currencies, they're the opposite direction.
I mean the whole central bank is.
Well, it's like money with a huge USP for the person printing it.
They have full control over that.
And it's like, well, instead of Visa owning it's the state owning it, which can better or worse depending on where you stand.
But I think that is the, that is the problem around that because, you know, it's a smart contract that is fully controlled by one major entity.
Yeah, it's the state, fair enough.
But they can DEC any single time what gets transferred or not.
And if you look at some of the stable coins, there's a lot of stuff happening.
Some of them are essentially feasible.
I can just go and you have, you know, $500,000 or USDC in some place and I can entirely freeze that.
So how is that different from a bank?
How is that different from that as opposed to something that's inherently unfreezable?
You know, and I think the point is there is always the debate between the currency itself, the system, the ethereum.
You can do whatever you want with your ETH tokens, but there's a whole system around it that bridges that eth to the actual physical world, which is on ramp, off ramp, which is payment providers and so on.
And I think as long as you stay in that system, then you can imagine having you.
I want to buy the very nice screen behind you.
I'm just going to send you 0.01 ETH or whatever price you're willing directly to you.
As long as it stays in eth, you don't have to cash out.
That's Fine.
And I don't see alternatives in the future.
Then there will be those two systems in parallel working where people will just use a digital currency, whichever it is, to do day to day transfer in a untraceable way.
But all of that will remain in that system.
So it will be visible, but it will not have to bridge the real world because you're not going to take it out to buy a house or a box of milk or X.
Yeah.
And I mean this kind of also kind of parallel conversations like self custodian versus using one of the big platforms.
Right.
Because you could argue that unless you are a self custodian, you actually don't control your crypto in the first place.
Exactly.
But, and that comes back to what we're saying at the beginning of the discussion, which is it's very hard to self custody your thing.
I mean you have to have not just the tech skills of a CTO but also the mindset, the paranoia of thinking okay, where is my key?
Did I have a backup?
What if my house burns down?
You have to have all these chief security officer mindset and hat and reflexes just for security.
And I think that's a big problem is that you have those two extreme streams.
Fully self custody on the paranoia, fully self managed versus oh, I have all my money on Coinbase and that's it.
Or digital assets.
And I think there's a big opportunity for something in the middle that will Satisfy let's say 80% of mainstream users which is something like an Apple maybe building in a wallet that is fairly self, you know, self owned.
They still have some access, they could reset some things via more complex things, but they don't have access to your funds and only you can do that.
A combination of hardware security on your phone.
So I think there's a big gap and I think just as it happened with QR codes and that's something we observed at everything in the beginning everyone had to install a QR code scanner.
Which one?
It was complex and as soon as Apple announced and obviously Android did it first, they built into the camera app the ability to scan QR codes that 10x, the ability of people to start using that Covid.
Yeah, Covid on the radar, right?
Exactly.
But I think we need to have those Covid moments for crypto and I think until we reach the place where most people can safely self custody stuff without risks, then we might see a whole new level of adoption and progress.
But I think I'll give you an Example of last few weeks I've received a bunch of job offers and they all look the same.
And it's like, hey, we're looking.
We have this very exciting project.
We need a cto.
And it's very elaborate because you have recruiters reaching out to you and they're like, look, we have this, we're building this NFT marketplace.
Here's a piece of code.
Run it on your machine and give us some feedback.
Right?
And you look at it like, sure, that's what I'm going to do.
And it's very well done, it's very elaborate and I can totally imagine people falling for it for that.
But obviously install you have to test approving some.
You're like, dude, who is going to do that?
But a lot of people I think are doing it and you have all those scams that are becoming more and more elaborate that it's very hard to seed out essentially.
And I think that's the major problem is like I think the technology we're using every day, the tools, the platforms, the browsers, that's where I'm putting finger.
Need to act as this gatekeeper, need to protect users from doing obviously dumb stuff.
But you know, technology and hackers evolve a lot more quickly than, than the gatekeepers can protect you from.
Yeah, yeah.
I mean going back to the whole like wallet problem, I think, I mean I've been saying that for a long time.
I think app with Apple Pay and Google Pay, like I've, I'd be surprised in five years Apple hasn't A started killing Visa and MasterCard and B, kind of introduced their own like internal tokens.
Yeah, right.
Because why wouldn't.
I mean that's a very good point.
Because at the end of the day even Apple Pay, and so they are ultimately just bundling your Visa, MasterCard inside their thing.
Why not have their own thing?
Why not say oh, we want to have 30% out of every transaction instead of 2%.
Right?
Well, yeah.
Or I mean, or they would just completely undercut the market.
Right, because why wouldn't they?
Yeah, and I mean they, because you raise some good points there.
Like if you want to self custodian crypto today it is a tremendously difficult problem and it completely out of reach for 99.9 of the audience out there.
Right.
And, and when I talk about like recovery, like how many stories have you seen in the news about people like lost their thumb drive with like 5 bitcoins on that, like there is no recovery for that right, there is no.
And for the vast majority of users there, that's just not going to happen.
Right.
You can't imagine your, your mom or like trying to figure out that, right, that's just not going to happen.
They just like, what number do I call to get my money back?
Yeah, but there's no number and there's no money back.
Right?
You know.
No, you're right.
I mean, I think that is a major problem that is not really technical.
That is, I mean there is a huge technical component for sure, but the problem is social first and foremost and it's about understanding what's happening.
And I think for me, blockchain was really one of the first technology which is very complex to explain.
How is that different from a server?
You know, especially to someone who is non technical.
I mean, it's very hard to understand.
I mean it's a, especially when you show a wallet up, it's like, hey, look, I'm here, I have my nft, it's in my phone.
It's like, yeah, you just shown me a website.
No, it's actually a decentralized website.
Who cares, man?
You know what I mean?
And I think that's it.
Like, oh, you showed me a jpeg.
Yeah, I mean, yeah, but that's decentralized, but in fact it's not.
And I think, you know, coming back to what you were saying before, I mean a lot of those early NFT projects, the JPEG has disappeared because they didn't store that in a proper way.
They were using projects such as IPFS and the JPEG is gone.
So imagine spending a few millions and just have a four or four when you're trying to see and that's happening.
There are projects doing that because they crash.
And I think if you look, I mean that's coming back to your very early statement around yoloing those technologies.
When you start scratching the surface of many of those projects, you start being shocked at how, you know, how basically primitive many of them are.
I mean, to give you a perfect example, when we started in 2017 at Ambrosius, we create essentially a fork of Ethereum and we adapted the variety of things.
The consensus, we made it proof of staking, which it wasn't back, back in the days.
And were using validators, right?
So running the nodes and nodes have two purposes.
One is the network part which is synchronization, making sure every node has the same view.
But the other, it's also a Gateway, an RPC gateway where you can query the state of the network.
And as we're scaling up, we started from the web, two apps were building, we started querying those nodes and we realized that were getting, you know, sometimes bad performance.
We're like, well, how do I scale a node?
And we talked to the team, we're very closely working with the team who are doing the validators.
Like, hey, how do I scale that stuff?
Like, what do you mean scale?
Well, I mean, I started having a few thousands requests per second and it's crashing.
Like, well, that's not a use case we had.
Okay, good.
But I need to load balance that stuff.
I mean, it's a server I'm querying.
I need to have super good performance and consistency.
Like, yeah, but just run several of them.
You're like, well, that's not exactly load balance because every single one has a different URL.
You could argue that you put, you know, you centralize that and so on.
But the problem we're having when we're running several validators is that they had inconsistent views of the network.
So you'd query the same endpoint, what is the status of transaction X?
If it was routed to Node 1?
Node 1 say, yeah, transaction is all good, man, it's done.
You'd redo the same query a second after and it gets routed to another node and say, well, that transaction has not been yet included.
Like, dude, I mean, I cannot build an enterprise or scalable system if you don't solve that problem in the first place.
And I think this is what, you know, this was actually a very challenging thing.
How do you scale down?
How do you get consistency?
How do you get performance?
And that was back in the days.
It's obviously much better nowadays.
And you have very good cloud services that are taking care of that problem for you.
But you're essentially moving the decentralized part back to a company that is offering this gateway as a service for you.
So how is that better than AWS or any of the things trying to get rid of in first place?
Yeah, I was chatting with somebody last year about when Solana moved to their validator systems.
And like, I was speaking with a company that hosts miners essentially.
And like, that's all they do.
They host miners versus crypto projects.
And they were struggling to get Solana miners working because of the resource footprint they required.
Like, you can't, like, yeah, Solana specifically.
Yeah, yeah.
So that was like really challenging.
And going back to your point, like comparing that to like credit cards.
Right.
Visa does about 8,000 transactions per second based on my preliminary research.
Right.
Like we are far off of that in crypto.
Maybe there are some roll ups in L2 that can do that, but like it's.
Yeah.
And consistently doing and can face peaks when they happen I think, I mean those are traditional problem we've solved, we've been solving for last 20 years in traditional web stuff.
And I think the reality is that you just can't in today's world move to a fully decentralized web because all of those systems are fully independent of each other connected.
So you need to first and foremost provide excellent state of the art Web two experience.
Bridged to Web three in the back.
But it's hiding away the complexity, the fact that you have various chains with very different programming models and paradigms and languages and primitives.
You want to abstract all of that away, provide a top notch experience, but also do it in such a way that is reasonably.
I wouldn't say decentralized, but it's reasonably secure and gives you more and more control and offers both models which is, hey, you just want to play around, build a prototype.
Well, here's a simple web to API.
You don't need to do anything that is Web three.
You just write a few lines of GS and you integrate that API and boom, you have wallets and stuff.
It's fully centralized because we provide that service and we own and manage and do all those keys for you and you don't even see the keys.
Which is fine for many use cases, especially prototyping, building stuff quickly.
And that's actually what we start doing at.
That's how we started my first company at Zim.
That's exactly what we're doing is like hey, you can build web3 apps without any single knowledge of wallets or validators, anything.
You just have an API and you build a hello world app in minutes.
But at the end of the day, if you do that first you're losing the trust element, which is okay for prototyping, but it's not okay as soon as you want to scale and then you have the issue of well, I have different blockchains I have to integrate.
You have to run those bridges.
And bridges are, you know, not always hard to scale, to secure, to operate and especially to govern.
Govern to make sure they're done in a proper way, you know.
All right, Vlad, before we wrap up, what should people be excited about in the world of web3 and crypto today?
Very good question and obviously one that many investors are asking.
So I think from my perspective is the convergence of those different fields.
You have the IoT world, traditional devices, very centralized, very physical.
You have the AI which is the main horse pushing the entire market and evolution and you have the whole crypto.
And in my view those three things will start merging more and more.
As the world is being and will be more and more driven by AI.
There will be a huge need for trusting the devices, the data, the algorithm and the different LEGO bricks of those systems.
And I think this is where crypto becomes very interesting because when you will have devices or pieces of algorithm or tools that are autonomously going to connect to each other, build upon each other, you need to have the ability to trust the system.
Is, am I speaking to the right API?
Do I have access to that data?
Should I have access to that data in first place?
And as I was saying before, blockchain is ultimately a finger pointing technology.
So you know exactly what data has been used to take a business decision or a physical network decision.
I think as you have more and more IoT devices that are going to be automated as well, we're looking at the grid, we're looking at most machines.
More and more of those things today are being driven by computers anyway.
So it's just a matter of time before they're fully AI driven and there's no human in the loop.
And I think that will be a crazy time and we need to make sure we get the fundamentals right and I think the intersection of those.
So projects that are combining all three are for me the area I'm super excited about.
One that I'm really exploring and I think this is where we'll see huge danger if it's not done right, but massive societal change and opportunities that are going to emerge.
Amazing.
Yeah.
For my take on it is that when there is little attention drawn to crypto, that's when the real innovation happens.
When the, when we're in the boom cycles, that's when, not when you should be paying attention because that's not what.
That's when, not when the real innovation happens.
Yeah, that's when the Lamborghini traders are coming in and they want to.
Exactly.
Bug and buying random tokens just because there are exciting marketing campaigns around it.
But I think you're right.
I mean for me, even deeper than that is all the evolution of traditional web to business models that we've covered.
For me, we've always said we can think of a decentralized Uber or decentralized booking or whatever it is.
I haven't seen those projects come to life because a lot of the pieces of the puzzle were missing.
But I think now, especially using AI to develop those processes and tools and services, that's going to boost substantially a space where more and more people can participate and you'll have a lot of innovation, I guess.
Good stuff.
Thank you so much for coming on a show, Vlad.
I really did enjoy this.
Awesome.
So thanks so much.
Cheers.
And cheers.
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