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Aug. 2, 2017 - Clif High
38:20
clif interviews Reggie Middleton ~ part 1
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Time Text
Well start us off now.
We're kicking in to record and we've got our first hundred frames so we're good.
Okay everybody, this is the 2nd of August.
It's 10 in the morning here for time stamping purposes.
This is my interview with Reggie Middleton and damned if I know how either one of us ended up here.
I don't do these things as a rule and he's got better things to do with his time.
Welcome Reggie.
How are you doing today?
Fine.
Good to be here.
Well, like I was saying, I don't know how we ended up here, but let's do some stuff for the guys who read my reports and watch my videos, which is to explain some of the technical aspects of this, but I'm not talking the software technical aspects.
I'm talking the business case technical aspects.
And so the very first thing I'd like to do is let's try and make Tone Vey's head explode.
Okay, so Tone has this issue, and I'd like to go back to refresher memory.
One second.
Yeah.
There happens to be a fire short coming by.
Sure, no problem.
No problem.
I'm out in the woods, so we're much more likely to be heard of Elk or something.
So anyway, Tone has this issue with an understanding about what it is you do on a business case that just seems to be nagging at him.
And it's based around a particular, we can use a particular example you used, which was the $100 exposure to IBM stock.
And Tone seemed to not understand how this would work, that he would have to commit capital to a contract if he wanted to buy $100 worth of exposure to IBM and then allow the market forces to provide someone on the opposite side.
We're correct in understanding this, right, in terms of how Veritasium would work.
Yes.
And I would be shocked, Tone.
You know, I love you, Tone.
But I'm shocked that you have this understanding because you actually traded with the Alpha and the early beta version of Veritasium.
You know, we did it in person at the Bitcoin Center across from the North Stock Exchange.
So maybe you forgot.
No, no, I don't think it's that.
What I think annoys him or what I don't think he really grasps is how a market dynamic would develop around such a concept.
And so when I see Tone and I hear his interviews and so forth, he's somewhat perplexed as to how that might work.
And my thinking is that what he's considering is the goofy bastard like myself who might decide to make a contract or an offer to purchase exposure to some equity, but I might do it in such a way with the terms and conditions that it's highly improbable that anybody would ever take the contract, and thus my capital would just kind of sit out there.
And so if I'm correct in understanding how Veritasium would work at a ingrained organic social engineering kind of a way, I'm assuming that the production of these smart contracts would naturally narrow everybody down towards a very realistic understanding of the markets in the process of getting away, doing away with the market makers who basically will take any kind of wild ass bet anyway because they know who's betting on each side and they're going to make money off of both.
Now, in this case, then we'd get rid of a lot of the extraneous garbage in the markets just using the Veritasium smart contract approach to purchasing, say, $100 exposure to IBM.
Am I understanding that correctly?
Yes.
And also, this can be put to bed with an explanation of how the market currently works.
I think those who are approaching it from Tone's perspective, and I understand where Tone is coming from.
We actually had this discussion before.
They're thinking of the hub and spoke retail model where you have a bid and that bid is exposed to 10,000, 100,000 market participants with a market make in between.
Okay, those are not large transactions.
Actually, the vast majority of large transactions are always done over-the-counter.
Basically, peer-to-peer without the peers having full contact with each other.
So through an intermediary.
The same goes for the cryptocurrency markets as well.
If you have, say, 400,000 Bitcoin a move, you're not going to move it through Bittrex.
Okay, because the mere fact that you attempt to move it moves the market and provides significant slippage.
You find a seller who's interested in buying the package hole, the chunk hole, and you negotiate an over-the-counter transaction.
The issue is when you negotiate the over-the-counter transaction, it's done through an intermediary who takes a significant chunk.
Outside the cryptocurrency world, you have the same thing.
Goldman Sachs has hedge fund A. Hedge fund A wants to buy Pacific Northwest electricity exposure through XYZ, a vehicle.
Okay, so Goldman Sachs finds someone who's a natural producer of such electricity exposure, let's say utility in the Pacific Northwest.
It puts them together and they do the transaction, but they're both exposed to Goldman Sachs' balance sheet and they pay Goldman Sachs' fee, which is usually significant because that's what takes that 60% of gross revenues in terms of compensation and bonuses.
What Veritasium does is it creates a facility where these two can deal directly without the Goldman.
And so it takes up the Goldman portion.
Right.
Now, and as I would understand it, because we're dealing with software here and the Ethereum network has an exposed layer, such as like Etherscan gets at, then in your Veritasium approach to the same kind of transactions, they would be exposed, although we're talking distributed and no spoken wheel.
Nonetheless, a piece of software could be easily crafted.
There would simply be like a broadcasting kiosk that says, hey, I know about this contract for Pacific Northwest electricity exposure.
Any guys out there interested?
And so it's not as Tone would imagine that these contracts, once let would sort of languish for lack of exposure.
There's a variety of ways to do it.
This becomes very complicated because now you have regulatory issues on a federal and a state level.
Let's push those to the side.
You know, with no offense to regulators, this is more of a business model discussion and not a regulatory discussion.
Correct.
At an abstract level.
Right.
So you can create an audit matching book and publish and market the audit matching book.
You can use current agents who put two parties together.
Okay, but they don't rely on that balance sheet and they don't act as a middleman or a principal at all.
So again, you're taking the Goldman portion out of play and you simply have a matchmaker who could take a fee outside the system.
Or you can have a full-blown exchange.
And that full-blown exchange can have Google-style intelligent searching algorithms that allow you to find bespoke combinations.
Most of the transactions in terms of size are over-the-counter, like I said earlier.
But most lay people and retail investors are unexposed to this type of financial transaction.
They're used to buying 100 round lots of IBM or around lot of IBM, et cetera.
They don't see the esoteric deals like a CDO of XYZ mortgage-backed securities with Swapshin embedded.
Right, right.
And so scenarios.
Yes.
Yeah.
So, but basically the large over-the-counter trades, although I'm certain some of them read my reports, probably the vast majority of the people that are reading mine are within the retail sector.
And so that's the understanding that I want to piggyback off of, because a lot of them just don't get it.
And they have this idea that Tone had expressed earlier, which was that these things would basically languish because there would be no market maker involved.
And of course, Tone has this idea that central authority or officialdom is better than distributed, you know, and he thinks Google is like the end-all-be-all and this sort of thing with databases at all.
But, you know, we'll let his head explode around that later on.
So let me jump in because I'm going to put a real word example.
This was my hedge fund roadshow week.
So without exposing which funds I visited, you know, it's obvious I walked to them or took the train to them.
So then the New York City area, but we have one fund, roughly about $15 to $16 billion, assets and management, AUM, a big fund, another one with over 20.
Okay.
These funds, I sat down, and these funds will not do a deal under $100, $150 million unless it's very, very advertising.
And then they'll go down to maybe $20 million.
But they usually won't touch anything under $20 million.
I think $100, $150 million is a sweet spot.
When they do these deals, these deals don't go through anything that looks like what a retail investor would experience.
They're pure over-the-counter, over-the-counter basically means they're dealing directly with another buyer-seller on a one-to-one basis.
Very rarely, even one-to-two, a three-to-two, a three-to-one, one-to-one basis.
And they go through an intermediary, like the big investment banks.
And of course, my pitch to them was we can do the same thing without the intermediary.
Basically, you know, the Veritasium business model.
This is how business is done on the macro monetary level, the large, the big boys.
And more business is done this way than the retail, no matter which way you look at it.
The more commissions are driven from the retail transactions because the retail buyers and sellers are, in general, in general, less sophisticated.
What we're looking to do is cut the cost for everybody.
On the retail level, we cut costs in terms of transaction fees.
On the macro level, the big boy level, we're doing the same.
Not that we mean global macro, but in terms of big deals.
Most people, because again, they don't see these transactions, they think of them as pie in the sky or one-off.
But this is what makes their hedge funds $15, $20 billion, $13 trillion, not $15 trillion, $1, $2 or $3 trillion, et cetera.
And these funds are very large.
If you Google BlackRock or Fidelity and take a look at the assets and the management, you see trillions of dollars, not even billions, but trillions.
So this is where the money is, and that's where we're starting.
And we're looking to trickle down into the retail.
Okay, it makes perfect sense to go that way.
And I'm sure a lot of the guys at the retail level have sent coins in the ICOs.
They've sent a few coins to their cousin Roberta.
And so basically, they're doing the over-counter kind of thing without the mass involved.
And so they do have exposure to that.
They understand.
They think of it in terms of how middle-class retail investors see these things.
Them sending coins to their cousin Roberta, they think of as somehow being black or gray market.
And so their view of the larger thing, that there's basically a very large gray market that runs everything on top of their little retail sector, is going to be news to most of them.
But I do understand what you're saying, having worked at that level for those people.
So getting back to the, just to put this part of it closed, getting back to the $100 exposure to IBM stock, say that I actually wanted to get the stock.
And my goal was not to have a trade that ended in six months that gave me a profit or a loss, but I wanted to actually have those damn stock certificates in my hand.
Veritasium can accommodate that as well, correct?
Veritasium can accommodate it theoretically, but the facility that we built, the software application that was actually built and that ran as a beta for several years, doesn't do that.
What it does, it gives you exposure.
It's a derivative system.
Okay, so it gives you exposure to the underlying that you want.
In doing that, it allows you to get exposure to any underlying that has a data fee that both parties agree that is accurate, shall I say, to be more precise.
Or both parties agree that they'll use, accuracy aside.
Okay, so let's say then that in that case where I actually wanted to get it and I wanted to write a smart contract, I could say that I would be willing to settle for basically the stock certificate numbers, which would fundamentally be their unique ID to a particular share of IBM stock.
And so that way Veritasium does not actually have to hand me the paper certificate or anything and could deliver the stock certificates.
But even in the case of where you want IBM exposure and not real stock, how do you know the guy on the other side is able to actually validate or pay up?
So in this sense, it's money to money, correct?
And so you're just agreeing that you're betting on where IBM will be at a particular point in time, and both people put their money into the contract, walk away, and let the contract settle it, correct?
Right.
Yeah.
Okay.
All right.
So go ahead.
So I'm clear on it.
What I was going to say, so under those circumstances, then this derivative market is basically open-ended.
And you could even use it if you wanted to for strict betting.
You know, the first human to land on the moon will have four fingers on one hand, something like that.
However outrageous you want it to be, but you always have to put in those real world things, such as the expiry date, the capital has to be actually enclosed in the contract and thus is locked up, et cetera, et cetera.
Correct?
Okay.
That's correct.
The parameters have to be filled.
Once it comes to data only, I don't want to call them wagers, but that only transfers of value.
You can do anything.
The reason we chose financial services because it's low-hanging fruit.
Basically, the industry is overpaid.
So that fix that 60% gross revenue line item that goes to compensation is a structural deficiency in the business model.
That's why we ran after it.
Let's not confuse that with a limitation that this is a financial services product or endeavor.
This is a value product endeavor.
So any industry where value comes into play is sought after, required, or is traded, is Veritasium capable.
And that's where we're going.
The stock certificate trade.
If you want to trade physical, any physical item, you bring into the equation counterparty credit risk.
So if you want actual physical certificates and you want delivery or even access to a physical certificate, you need to use a depository institution who would hold the physical certificates.
Now, and then at that point, Veritasium becomes basically a superior form of an escrow service.
Exactly.
An automated smart contract with an escrow.
And so you could, if you wanted, do a contract to buy a house.
As long as all parties agreed and put it in the contract, no worries.
As a matter of fact, I have a scenario.
We went through this when I discussed it with the National Association of Real Estate Professionals.
I think that was a thing that was organization where you create a smart contract for the transfer of a house for the smart contract and include it.
The insurance, the mortgage purchase agreement, title clearance, et cetera, et cetera.
And everything is automated.
Pass or fail or XYZ.
If failed, then the contingency method.
And you can theoretically start from the beginning and go to and close on a property in less than 24 hours.
You know, from the time you decide to hit start, automatically driven by the smart contract.
Any process fails, like somehow the mortgage doesn't clear, title doesn't clear, et cetera.
There are fallback mechanisms.
This can all be done via a smart contract with all capital escrow within the contract through Veritasium platform.
And you can condense that 24-hour period down to literally a few minutes as long as everybody has their ducks lined up in a row.
And so this would also, of course, extend to art and naturally as well, precious metals even.
Right.
And of course, costs go down.
Any situation where value is needed, transferred, sought after, or required is Veritasium Fodder.
And so let's talk about a really ripe place for that.
I've got this friend of mine who has a lot of hair, unlike myself.
This guy's name's Bix Weir.
And he's always hot on the idea that Veritasium is going to come along and pull the rug out from underneath the commodities exchange markets, which are highly manipulated, hugely inflated, and in which the middlemen rake money off of both sides.
And so is this a Veritasium target as well?
Something like the silver exchanges?
Well, I don't want to name who the direct targets are before we get too close to it.
But let me just reiterate my spiel.
And you can figure it out.
Any industry where value is transferred, required, sort of, or needed is Veritasium worthy.
Commodities are interesting because you can both digitize them and have physical transfer.
The vast majority of value transfer and commodity markets are the derivatives, basically forwards, futures, options, et cetera.
So seldom in terms of actual cash flow or actual value transfer are the physicals transferred.
They're basically bet and minute, I won't say manipulated, but you catch your hand.
They're basically rated on using derivative contracts.
And that's the vast majority of financial markets right now.
Back to the stock certificate example.
Very few people buy and sell stocks.
They buy and sell stock derivatives.
They just don't realize it.
If you don't have the actual certificate in hand, you bought a derivative.
You bought something that gained its value or its value is represented by the physical stock certificate.
So the only way you actually buy a stock is you get a stock.
If you haven't got a stock, you bought a derivative.
And that goes for anything, not just stocks.
The only way you have gold is if there's some relatively heavy yellow metal in your hand when you collect that, you want to go with a derivative.
And so since really the markets that are used to control the price of the physical delivery are, in my I'm using the language, manipulated and are all around derivatives, then to a certain extent, anything that comes along and disrupts their derivative flow is going to be as disruptive as my friend Bix Weir hopes to the underlying physical price action.
But I'm not asking you to make any kind of a prediction on that.
But I would like to take you from deep in the ground with all these hidden reserves and stuff out into space.
Because one of the things that occurred to me was that, well, maybe Veritasium is the first one of these First, tokens to start being space-based because I was thinking, oh, well, way back when, when I first heard about the contracts and the way you were going to structure them, first I thought, oh, they'd be great to write in C. C code would just be so cool for that.
But in any event, the other thing would be for negotiating satellite transponder use and contracts where sometimes you need an extra 80 minutes on the transponder that you're just not using.
And it happens to be aimed at a particular region.
You could have a smart contract and say, hey, I've got these 80 minutes free.
They're at this cost.
Let's see if anybody wants to use them.
That kind of thing.
Any thoughts on moving into that at all?
I mean, it sounds like a very good idea.
It's very similar to the sharing economy idea that we've come up with.
We fleshed out a sharing economy.
We actually were that close to buying an electric vehicle company.
We're very different from the typical ICO.
I'm just as willing to buy an opportunity computer code or expertise as I am to build it.
Depending on what it is we're buying, it's also a more efficient method and quicker route to our destination.
So the purpose of buying that was not just to have an electrical vehicle company.
I'm not going to go into any detail as yet, but it enables us to embed the Veritasium infrastructure and business logic in the vehicle.
And basically, you have Uber meets eBay without the centralized Uber server and corporate system.
This allows peer-to-peer ride sharing.
Just like you have with Lyft Uber, et cetera.
That exact same business model can be applied to Airbnb's business and could be applied to the satellite business with radio sharing minutes or auctioning off spare minutes.
The auction offices, when you have 80 minutes, you know, might be convenient to one.
You aggregate the spare minutes and you have an entire market.
Okay.
This market has the efficiency of peer-to-peer capital markets, which is basically the gist of our entire venture.
And you have a vast improvement in efficiencies.
That improvement in efficiencies gives much more supply to the market and makes demand more transparent in terms of price discovery.
So it brings costs down, it brings availability up, and it brings to it, introduces a much cleaner, clearer marketplace.
Of course, it pisses off a lot of people who would get paid from opacity.
And that's going to be once the big boys jump into the space, that will be our largest competitor group.
And that will be those who benefit from opacity and attempt to eliminate transparency.
We are the antithesis of that.
We benefit from transparency because transparency brings more activity, brings more use of the underlying platform, which is us, and that's what we want.
And we actually can't fail, we don't benefit.
Opacity hurts us because opacity prevents people from using a platform.
Even if they do use a platform, they don't use it with full faith and effort because they can't see how price is discovered.
Sure.
We're all for transparency.
The blockchain is perfectly fitted for our business model.
Yeah, no, it's ideal for what you're after.
And I understand your statement that it's not technology that changes the world.
It's the technology allowing, facilitating entirely new business models that change the planet.
And that's where we're at now.
So let's deal with both transparency and the fact that you're not like an ICO, not like some of these others, because there's a lot of confusion around, well, and I understand it.
I'm just voicing some of the emails I get.
They say, well, you know, Reggie doesn't have a white paper.
And my response is, well, you know, BMW doesn't have one.
General Electric doesn't have one.
They're companies.
They're doing stuff.
Pretty much the case, correct?
You were never intended to be a community kind of a thing where the white paper had to introduce you.
Well, I'll start this from scratch.
A white paper, technically, is an academic thesis.
A lot of what people are calling white papers in an academic thesis.
Okay, number one, a lot of white papers that see your marketing documents.
And that's as I see it.
I'm not trying to cast dispersions, but that's how I see it.
Before the ICO, we had a demonstrable product.
So instead of reading a white paper, whether we had it or not, you always download the product and use it.
It's just that simple.
We never did bother with the white paper.
We don't see it.
Look at all our major competitors.
Go to JP Morgan, ask them for their white paper for their product for their white paper for investment bank, citibank, et cetera.
And if it's really, really, really important for you to see something complicated in law, we have multiple patent applications, you know, all together about 140, 150 pages, which blow from technical specificity, most white papers out of the water.
And most ICOs don't have any attempt to protect IP.
The difference is, I'm not putting ICOs down, I'm not trying to big us up.
The difference is we started this as a for-profit entity, a business.
And so the first thing we need to do is get to business.
White papers are ideal for trying to build an open source platform that's community-based, okay, without having the actual stuff needed to operate.
So what you're trying to do is you have a dream, you want to build the dream, you want the community to participate.
The white paper is perfectly suited to gain interest and educate for that.
We want to benefit the community, but we also want to make large structural changes in the way things are done.
And we want to do it as a for-profit entity.
And that's where we are.
Sure.
Perfect sense.
Yes.
There are some very significant media concerns that are big mainstream media concerns, not small cryptocurrency concerns, that are harping on things such as not having a white paper.
They actually had the nerve to say that we've had a few experts check your GitHub and we think that you're a scam.
They actually use these words with business partners and clients.
Oh, okay, which is disturbing.
That's not the sole role of a journalist.
And it's even more disturbing because the experts, so-called, that they had to investigate it didn't seem to understand the simple fact: you need a password to get into our GitHub.
It is private.
Okay, and we've had code running longer than most ICOs out.
Okay, but I'm not going to get into whose code is bigger contest.
It's a private GitHub.
You know, it's proprietary.
There's no white paper.
We had a product.
And the vast majority of the value add is a mixture of software engineering, software development, financial analysis, global macroeconomic analysis, and strategy and consulting.
So we're more like Microsoft meets McKinsey meets Golden.
Exactly.
And it's business vision.
And so let me frame this for some of the people that are watching this because there's a misconception that all these tokens and coins are like Bitcoin was, where it was a community effort or some of these other coins.
And so these coins are in fact a sort of a shared distributed resource.
Whereas your tokens and your effort, as I tried to tell people, it's not at all like Bitcoin.
It is not a community-based sort of thing.
And where Ethereum, in my way of thinking, is like the rails for a train for a railroad system.
You're the locomotive pulling all of the stuff and doing the actual work on top of the rails.
Or put another way, more modern, perhaps, although still antiquated, Ethereum is the fuel, and you guys are the engine that are going to burn that fuel and get you into space.
And so it's just a different paradigm.
But you run into the mainstream, and so you're running into the propaganda arm of the same people that are trying to stop all the disintermediation.
The people that have a vested interest in this are fighting back.
We see it in a lot of coins.
And I'm a paranoid conspiracy nut, so I see it everywhere.
But anyway, I think I've actually got evidence of some of it.
From an analytical perspective, and we started analyzing and valuing, which is very difficult valuing as in getting a US dollar value for a particular token or unit, we had to create a new valuation framework because gap accounting doesn't work as currently applied.
So Bitcoin, Ethereum, Dash, those are platform tokens.
Veritasium, Economy, entities like that, populace, we are entity tokens.
So a platform token is usually run by a foundation, a not-for-profit foundation.
Forget legal legalities.
I'm talking about actual business purposes, a foundation, and it's openly ran.
Even though many who attempt to create these platform tokens still have economic gain as their goal, the economic gain comes from the increase in value of the token, primarily.
Now, many, if not most, of the platform tokens usually have a for-profit arm sitting on top of it.
Ethereum is a perfect example, and I don't want to spill the beans for too many, so please don't be mad at me.
And I'm going to leave it at a short announcement.
But Ethereum was very successful that I was not doubtful when I first found out about it at their initial announcement in Miami in 2014.
But it was a very ambitious project.
They pulled it off for the most part.
They've reached a better stage and moving past the initial beta status.
But it is not-for-profit.
They benefit from increasing the value of the token.
And now there's a for-profit arm called ConsenSys that basically does a lot of consulting and a lot of incubation.
And ConsenSys, it's a for-profit arm that works with or on top in a conjunction with the platform and the platform, the platform token.
So we have Ethereum, which is a platform token model, and then we have an entity on top of it.
Now, ConsenSys is not an entity token because they don't have their own token, but they're a for-profit entity.
Not only is there nothing wrong with it, it is good because it introduces real business acumen, real business thinking to what was initially a group of mostly software engineers and developers.
I'm not trying to talk down on software engineers and developers, but you need diversity in your business and your business model.
To make this real for a software engineer or developer, would you have a lot of confidence in a software platform and software applications built primarily by investment bankers and accountants?
No.
Absolutely not.
So look at how difficult it is to conceive of a useful, productive financial application built solely by software engineers and developers.
You need diversity.
Our team is diverse.
We have attorneys, we have intellectual property, a hat intellectual property specialists.
We have global macro guys.
We have traders.
We have financial analysts.
We have forensic accountants.
We have biz dev guys who are very good at what they do.
Deeply connected in Wall Street, deeply connected in politics, deeply connected in solving concerns.
We have financial engineers, we have architects, and we have developers.
So while we don't have anything and we're hiring and we're growing, I do not put all my eggs in developers or in traders or in anything because that's not how a business is run.
I feel that the mindset of many people who want to pursue ICOs is that if the dev does this, if the dev does that, there is no business or industry in the world where people think the developers are be-all end-all of an organization.
It's usually management.
Now, management may have to focus heavily more heavily on one side of the business, depending on where you are in the business cycle.
Such as if you're a software startup, then software developers have a very, very strong role to play.
As you become more mature, then you have to go more into marketing, business development, business management, operations, et cetera.
But until everybody has more of a business-minded mindset and not that of a software development engineer, I will consider the ICO market immature.
And let's go to that too, because a lot of the people that are on the outside buying into it are unsure of what they're buying, really unaware.
And as you point out, there's those kind of things that I described as train rails that where the value is really the network effect itself.
So if you've got a coin that's launched and it gets no network traction and it was intended to be simply a platform for something else to run on top of it, then it'll never gain the network effect.
The coins will not go up.
Your value proposition is bringing value via new business.
And you're not attempting to grow a network effect.
Therefore, you are not like, and it's unfair, whether it's alt media or mainstream, to try and do a comparison between your kind of activity and any of the other community network value-based platforms.
Okay, well, let me fine-tune that message.
I mean, I'm glad you brought it up.
Okay, we can benefit from one user using our platform.
One decent-sized user benefit, we can benefit.
Okay.
Two decent-sized users, we benefit by unit sales, the revenue derived from unit sales of that one user times two.
So we benefit twice as much.
But realistically, we benefit more like 2.1 times as much because there is a network effect there.
Okay, but it's minimal.
Okay.
We benefit from the network effect, but that is not our sole value driver.
Sold value driver is basically selling a product, okay, which is a software token, consulting and advising on that product, teaching the buyer how to use that software token to the best of their ability and to solve a specific problem that they have or even a general problem.
Now, the more of these users that buy the tokens, okay, the more revenue we get from unit sales, the more revenue we get from advisory and consulting, but the more value we get from the network effect.
Okay, to explain this in a more layman's perspective, and I've done this in other videos, but it seems to work because people got it finally, so I'm going to use it here.
Think of, I think Electronic Arcs is the company that makes EPA Grand Theft Auto, but whoever makes it, you have a Grand Theft token, right?
They sell one copy of Grand Theft Auto.
They get paid, whatever, $50, $60.
Okay, that's good.
They sell two copies, they get paid $100, plus those two members can now play with each other versus playing with themselves.
The first guy who bought it, maybe enjoys Grand Theft Auto a lot.
He has a lot of fun.
The second guy who bought it may enjoy it, but now they enjoy it even more because they can play with each other.
They sell 500 copies of Grand Theft Auto.
Now you have a potential community and they can play a lot with each other.
The value of Grand Theft Auto goes up.
The Grand Theft Auto software is the same as the Veritas token, a piece of software that was sold.
A lot of people confuse this piece of software token, which is Veritas, with some type of security instrument, such as a stock for a dollar lock or a common stock.
Hence, they think the more stocks that you buy, the more dilution that you have in some imaginary pool of earnings.
Hence, the less valuable the individual stock is.
That's the antithesis of the fact.
The truth of the matter is, the more the software tokens sold, the greater the network effect and the greater the interactive value derived from hedge fund A versus hedge fund B using it versus Family Office C versus Sovereign Nation D versus pension fund F versus X Y Z individual users on a much smaller basis that get to intermingle and rent contracts XYZ between everybody else.
This is a whole community.
So we get to benefit from each unit sale from a revenue perspective.
We get to benefit from each consulting and advisory revenue stream.
And we get to benefit of the network effect of everybody dealing amongst each other, peer-to-peer, without any central repository, third party, or authority or authority.
So we have multiple revenue streams and multiple value drivers.
Of which the network effect is one of them.
When you put all this together, it is in our best interest to sell as many tokens as possible because the more tokens we sell, the more valuable everything is.
Unlike a pure platform token, we do not fail if we don't sell a whole lot of tokens.
You know, we succeed if we sell enough tokens to break a profit.
Okay?
Right.
This is a hybrid model.
And it is, I think, the wave of the future, particularly if token sales truly take off from a business perspective and not just from a small niche of software developers and engineers, et cetera.
Did I articulate that clearly?
Oh, yeah, yeah.
No, no.
That's just perfect because it segues right into the view that we get out of my data sets, which are a large aggregation and are pointing to a future where we'll see diminishment to the extreme of the paper debt model, and all of that wealth will flow through the vehicle of ICOs into the new science fiction world that we're all building here.
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