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Jan. 7, 2025 - The David Knight Show
58:14
INTERVIEW Komposite — A Fix For Blockchain Limitations
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All right, and joining us now is Noam Kamnensky, I think, if I pronounced that correctly.
Maybe I got close.
Like I said, I'm going to refer to you mostly as Noam, so we'll not struggle over the last name.
But I wanted to tell you, it's very interesting, your project here.
And I think a lot of us have much that we don't know about blockchain, but one of the things that you say is that you did a press release about a white paper that would bridge Web 2 to Web 3. So let's start with that, and then we can talk about your organization, or you can tell us about your organization if you want to.
Again, it's Composite with a K, K-O-M-P-O-S-I-T-E dot org.
So if you'd like to tell us about your organization first, then we can talk about Web 2 to Web 3 bridging and what those two things are.
So tell us a little bit about Composite.
Yeah, thank you, David.
So, my name is Noam, and nobody really knows me.
So, I am an entrepreneur.
I'm an inventor.
I have patents.
I have, for the last 47 years, I'm 52, been a tinker and someone that makes...
That breaks through barriers to get where I want to, right?
That's good.
And I was in Shark Tank a few years back, and that exploded for me with a product called Bambooey, right?
This one here.
And I made partners with one of the sharks, and my business exploded.
We were in all kinds of platforms.
We started getting copied.
Then after that, I said, if I get copied, I need to make a product that is uncopyable.
So I started, I made the next product, had five patents, I waited for them, and then I brought them out.
The hair ties that look like telephone wire that women use, I am the employer.
And then the next thing I know is big corporations, billion-dollar corporations are suing me to invalidate the patents because they, and they sell millions of dollars and they don't want to pay me.
And I said, The system is rigged.
The system is rigged.
I learned through, there's a book called The Art of War by Sun Tzu.
It's a must-read if you're in politics or you are in business.
And I came to the conclusion that that was a whole bunch of bleep bleep, right?
I don't know if you can say bad words here, right?
And so for a few months I was really not in a good place and I decided to make a product that was uncopyable.
That I could build an organization or business where not only would I sell to just the first time to a customer but it could have repeat business because that's the major issue.
And I came to the conclusion that IP property, things that have to do with art or have to do with creators, has a better protection than patents, for example, that you have to defend claims and stuff like that.
So I created Unimos, which are different characters, which Disney, with all his...
Protections and stuff have created a very strong legal network.
And then I went into blockchain.
I knew nothing about blockchain.
You have to understand.
The reason I know so much about blockchain is because when I went into blockchain, I said, I don't get it.
You were talking to me like everybody should know about this, but I don't get it.
So that's how I started, right?
And I went to a point that I created...
Unimos, and I created all kinds of security labeling in order to marry collectibles with the blockchain to make them unmutable, to make them uncopyable, and to allow anybody that's an artist, organizations, brands, enterprises to be able to marry their products to something that will make it And counterfeitable, right?
Well, first I did the Unimos, like I was saying, we call it the House of Unimos.
And then I said, you know what, they're going to copy this from me.
So I'm going to make it possible for other people to be able to do what I'm doing, right?
So that's where the idea of composite came.
And it comes from the idea is that it marries the digital with...
The physical, right?
That's why it's a composite object, really.
And we put a K because you need to have something unique, right?
And so that's how the idea came to be.
I have a brother who is a genius mathematician and knows about algorithms and math, high math and stuff like that.
And it took about two years to develop.
The idea was clear, but you have to develop a path that will allow a deployment worldwide and allow for a very solid.
A project.
And that's what happened.
About a month ago, we finished the paper.
It's completely readable by layman people, except the math, of course.
And the idea of Composite was that any organization or any person that is an artist or even creators can go there, have their own node, and have a network within a public network.
Right?
Now, you told me that you want an explanation about what blockchain is.
And I'm going to give you a few definitions so that you can say, I hear all about it.
The buzzwords, crypto, blockchain, you know, Ethereum, Binance.
What do I care?
Right?
Well, you do need to care because this is the revolution.
This is going to change the world.
Okay?
So, let's start with the basic principle of why is it called blockchain?
Right?
Really simple.
It means there's a chain of blocks, and by blocks it means a whole bunch of transactions together in a block that it says, okay, this is the block, that's how many transactions we have, and now we're going to make it into part of the chain.
And what happens is this, let's say, network, let's call it a network, right?
It brings out a block that is the final number of transactions, and decides to put it on a chain, and they add cryptography at the end of both sides of the block, so that information cannot be changed.
That's what it means.
It's a block of transactions.
Okay, and it's on a chain.
Second word is crypto, right?
They use crypto like it's money, but really it is, right?
It represents, so in this let's say network, let's call it networks, Ethereum and Bitcoin are the most famous ones.
We have Ripple, we have all kinds of networks, but let's just make it simple.
Crypto stands as shortening for cryptography.
The idea of cryptography is to put in codes and letters and stuff that has a special key that if I send a message, it cannot be deciphered by anybody once it's transmitted and the person that receives it can have a key and they can decipher the message.
It was used in World War II between the Allies and the Russians.
Yeah, the Russians and also the Nazis, right?
Incredible, incredible technology.
The Enigma machine that everybody is familiar with.
You've seen the movies.
And there's a key of 256...
Character that is used by Visa and MasterCard and things like that, that they do it for encryption, but it's also used in blockchain where they put it at the end of the block.
And what that happens, how is that important is because now that block that is created, that is entrapped between encryption and together with another block, now it cannot be changed.
And this is what makes blockchain different.
There's another term called decentralization.
This is a decentralized network.
What does that mean?
Okay, when you have any organization, let's say you have Coca-Cola or you have the government or you have even your own organization, right?
Everybody has a central server, right?
And from that central server, all the information flows in and out, right?
It goes in and out.
And that gives one organization...
The power of changing things or controlling information, right?
And what happens when Bitcoin came to be about 16 years ago, they created sort of like a program.
Let's make it simple.
They created a program that will allow for a network without a central server.
Let me explain.
They made a program that will allow for different computers to connect and work together in a process without a centralized control, let's put it that way.
And all that blockchain is, or this decentralized network is, is a ledger.
As you heard it, it's just something that writes information.
David owes Noam $100, right?
Noam owes his kids $20.
And everybody can see it.
So if, for example, I say I had $100 and I paid $100, I cannot do the transaction twice.
I cannot say, I paid David $100 and now I'm going to pay, you know, pay...
Trump.
Let's say Trump.
I pay him a hundred dollars.
Because they will verify on the blocks of information that the transaction already happened.
Everybody can see it.
And by consensus of the whole, when they look at that transaction, they say, no, this cannot happen.
Because the information is incorrect or because it shows there.
And let me jump in here, because we talked about cryptography and encryption and things like that, and that has been a long-standing definition of the word, and we think about things like the Enigma machine that was being used by espionage and intelligence agencies to hide information.
I think that's part of where the confusion comes in when people think that the blockchain is private.
They hear the crypto Well, okay, so let me just explain just a little bit more.
So what happens is all these nodes that have a ledger, they all have the same final ledger.
Which is in a blockchain.
The final one, right?
The ones that everybody approves.
And so it made it transparent.
Everybody could look at the transaction and by making it transparent and immutable, meaning that it couldn't be changed, now you could build trust between parties that might not have trust between each other because the information could not be changed.
Does that make any sense?
Example, when you have a bank, right, something could happen that maybe they don't have enough money in their ledger or whatever, but they don't tell anybody.
The people that are going in and out, you know, doing transactions, they don't know that that bank might not be solvent for like, you know, two or three years because it's centralized.
So the idea was to stop the manipulation.
Right.
In Bitcoin, the original idea of Bitcoin was to transfer value.
If I lived in Florida and I want to send to a friend in Japan money today, I have to go to my bank account.
I have to do a wire, charge him $45.
He goes to my bank.
He goes to a transitional bank.
He goes to an international bank.
Then he goes to the Japanese main bank.
Then to his bank.
Three days later, he's on his account.
He still cannot get it because he has to prove he's him.
He has to show his cards, he has social security, maybe even his blood type these days.
And then they charge him another $45 and it takes another three days just to get it.
So six days to transfer $100, they are charging $45 to me, $45 to him.
He only gets $10.
It would still be that $90 if you transfer more money, but I'm just giving you an example.
So the idea of Bitcoin was that I have, within the network, I have a wallet.
And I sent him a piece of Bitcoin or a Bitcoin at the time.
He gets it within a few minutes, and that's it.
There's no intermediaries.
There's no government agencies.
There's no bureaucracy.
It's done.
It's simple, and it cuts the middleman, and it cuts all those fees, and it cuts the control.
And that was the idea when it started, right?
And it was worth very little.
He had games so people can collect the Bitcoin, right?
And then what happened is, The manipulators of the stock got involved and started manipulating it and started doing stocks and bonds, and it started going up and fluctuating, and it went from 10 cents to 10, to 100, to 1000, and it has different cycles.
And then people, instead of using it, they started holding on to it.
Oh, this is worth something, so I should keep it.
So the purpose, what Bitcoin was designed for, stopped being the purpose, and now it was just gather.
Create these coins, which really are tokens.
By the way, Bitcoin, Ethereum, and all the other things that are called tokens are exactly that.
You go to a casino, they give you a casino token that says this is $100.
It's the exact same principle.
It only supposedly works only on that network, right?
The exchanges is what allows you to change one for the other.
So the purpose that Bitcoin was there to transfer...
Transfer value went away and it became value itself.
And then the organizations and the financial institutions that were supposed to subvert or go around started getting into it because everybody's into it.
And now no longer is decentralized and it has different centralization points like an exchange.
You go now to Coinbase and you buy it, you put money, you know, they call it fiat money, regular money.
And then you have to wait six days until you get it.
You cannot touch it.
They do CMYK, which they wanna know all your information.
So at this point, what it was created, the purpose of the decentralization, the purpose of blockchain and what Bitcoin was created has been subverted, right?
That's an excellent explanation.
And I think it's basically, I haven't read the book yet, but I think it's what Roger Ver was talking about when he talked about hijacking of Bitcoin.
That it was set up as a, you know, transactional thing and has been hijacked as an asset.
And, you know, as you point out, the big institutions have essentially hijacked it and subverted its purpose.
And it's an excellent explanation of that, yes.
The three largest owners of Bitcoin.
I believe it's the Chinese government, the American government, and BlackRock.
BlackRock, yeah.
They govern everything.
The world government.
Yes, yes, yes.
If you are a public organization.
And Germany was really stupid selling all the Bitcoin they had.
So that explains what blockchain is.
But blockchain is sort of like a tool that is a multipurpose.
And crypto and the use for financial is just a little sliver of what it can produce.
The idea...
Is to create a decentralized work.
Okay, so Bitcoin, so let's go back.
So Bitcoin, the purpose of Bitcoin was to transfer value.
Then the second network that came to life was Ethereum.
Right?
There was a guy called Vitalik, and he was obsessed with Bitcoin.
He loved Bitcoin.
He had a magazine about Bitcoin.
He went to all the things when he started.
And then he said, why don't we use this same network to not just transfer value, but transfer work, like a contract?
Like, if you do certain things, then because it's so open and it works so well, you can get paid or a contract gets done.
And that's how the contract system started to work.
He wrote something, he presented, and some people invested.
It was only about $15 million that he got in, I think it was an ITO. He didn't even give any tokens at the time, just a promise of the token, right?
And they started working on this.
And that is the second largest network that exists, that is...
That is huge.
It wasn't just for value, but it was for transfer of work.
And it could be used, for example, in transportation.
If I receive the goods of this, then payment should happen, right?
And the Ethereum network started working.
You know, it was marvelous.
All the new people, what they call us geeks, right?
In the movies and stuff, they were all excited and nobody else was, right?
And then what happened is there was a big, like, clog on the system.
When CryptoKitties came out in Canada, there was these, they're called NFTs, where you see I don't know, when you see different characters.
Yeah, the NFTs, yes.
Little kitties.
We're not going to go into that because that's a little long explanation.
But this organization, so many people wanted it that when they needed to transact on the Ethereum network where the contract was, okay, I give you this image and this number and you give me Ethereum, right?
So many transactions needed to happen.
That it delayed the system for six minutes, then it created a glut on the market, and it made the price of the transaction go up, right?
Which made them realize that the network was not productive or stable when these gluts happened, right?
Eventually, they started, you know, many years later, they created Ethereum 2.0, which now they have 64 different networks working.
It's still finite.
But the problems of blockchain in general is that they can only produce one block at a time.
No matter how many nodes you have or how much work is happening, no one node, I mean one block, yes?
One block at the end is what they produce.
They're all competing against each other, right?
And whoever gets that first gets paid.
So all other, like for example, Bitcoin has 65,000 nodes, about, right?
All of them are competing to make a block.
Only one block at a time comes out, so only one node wins and gets paid.
All the other energy and all the other work done by the other ones is wasted.
That's why they say they waste so much electricity and energy, because it's an arcane system created.
To bypass the financial institutions that has grown and it wasn't designed for huge growth.
It is not designed to take the transactions of the world.
And that's what I mean by Web2.
Web2 is all the other regular businesses that are in the internet because everybody's on the internet these days and they have an organization.
But blockchain cannot take those transactions or those contracts or usage because the transactional...
Process is too expensive.
So the next thing happens, and that's called layer one.
It's layer one because it's the basic blockchain.
So other companies come and they created a layer two, right?
Where they use the basic network and they solve issues that that network has, but in a layer two problem.
Example.
I'm not going to talk about companies, right, because I'm not shilling other people, but the point is that let's say that a transaction in Ethereum has gone to $600 for one transaction.
Let's just say that happens and nobody wants to do a contract for exchanging something that costs $30.
You know, ownership or whatever for a $600 price.
It's stupid.
So it's counterintuitive.
So what the second layer does is they say, okay, come and do a transaction with us.
We're called blah, blah, right?
Whatever.
And we'll take 1,000 transactions or we'll take 2,000 or 5,000.
And then only then do we will put that as a transaction on the blockchain.
So you divide 600 by...
5,000 or whatever, so the transactional cost goes smaller.
It's fractionalizing it, right?
But the real issue is that it has a basic problem.
The blockchains have a problem of scalability, security, and...
And price, okay?
It cannot be used by the regular folk.
And by not being able to use by the regular folk, enterprises, organizations, libraries, DMVs, or whatever the case may be, it defeats the purpose of using decentralized computing to solve different issues.
So here is where his composite camp comes.
Composite will allow, in its first stage, to have three million nodes.
It's scalability and change of how we're going to change the paradigm, how it works, is each cycle will not just give you one block.
Example, you have Bitcoin, they're all processing the next Bitcoin, right?
And 65,000 different nodes are competing against each other.
This is the most inefficient.
Computer in the world, okay?
It is the paradigm of inefficiency, right?
And the second paradigm is that whenever there's a glut for transactions, the price goes up dramatically because the purpose of that is because supply and demand, but really the purpose is to have people remove transactions so they can actually do the transactions that they can actually afford to do.
So we solve this in two ways.
Okay.
Number one, when we have all our nodes, we're going to have a node, which is going to call a clerk node, that will separate and do pre, we call it protoblocks, that will give...
Transactions to do to different groups, we call them cords, within the blockchain.
So the blockchain, if it has, let's say, 10,000 nodes that are verifying nodes, and we have, let's say, 1,000 transactions of the sort, we can separate them into 10. 10 cords of 1,000 nodes, let's say, for example, right?
And each cord will actually verify a block.
So, it will divide the work between, and everybody will be working, and everybody will actually get a gain.
Everybody that has a node will actually get paid, and it will divide the work intelligently.
Now, they say, but that can be attacked security-wise.
It's true.
But we devise a node chaotic algorithm sequence that nobody will know.
Who is going to be or where they're going to be or when they're going to be with mathematics and algorithms and stuff like that.
But at that point, we changed the paradigm that all the network needs to work on one piece of work, right?
So everybody will be productive.
So the result at the end, right, is will be at one point you can have one block.
The next block on the change could be 10 blocks.
The next one could be 75. It could be three.
So it will be dynamic.
It will work horizontally.
And vertically.
And at that point, you resolve the problem of the glut of the productivity.
Now, what will happen?
What are we going to do in our block when we have too many transactions and not enough nodes?
We're going to do something that is counterintuitive.
We're going to lower the price of transactions.
Right?
So the nodes are going to get less money for transacting, and we're going to encourage them to put more nodes.
Because the nodes that you need for our network is any computer.
Anybody with a computer can have a node.
Because the idea is that we want to add more processing power to the decentralized blockchain.
We want them to be able to...
We want to make the biggest, hugest computer in the world available for different people fractionally.
Does that make any sense?
So by lowering the price of transaction, it will increase the amount of...
Now, if I have two nodes and I'm making half the price, I'm going to put two more.
I'll put my other computer, my wife's computer, my daughter, and then what will happen, the amount of money I'm making will be the same, and what will happen is we'll increase the amount of nodes, and then by proportion...
You'll have much more capacity.
At that moment is when you need to increase your capacity.
That's why we do it.
And more people are going to want to transact because it's cheaper.
And then when this increases there and proportionally there's less transactions than the notes available, the price goes up again.
So everybody that increased their notes now are going to, again, They double the nodes, and now it doubles again.
I don't know if it's going to double, but it will increase back to the original price, and now we have made the network grow.
So those are the moments of pain.
That we decided to change how things work in order to grow the network.
Because in order to grow to 3 million nodes, you know, you have to do it somehow.
And that way we don't lose the customers saying, oh, this is a crappy network.
It takes 20 minutes and it charges you $400.
No, no, no.
This is fast and it's cheaper.
And that's how we will grow the network.
And what will happen when you have 3 million nodes using the token, it will become the biggest Amount of people dealing with this token.
So it will be the most used token in the world.
It will basically eat all the other networks up.
And whoever owns that token from the beginning will be part of, we call it the decentralized economy.
And ideally, we want to make that token that can be used for anything.
Right?
We would like to have nodes that, like Louis Vuitton wants to do a node in the network.
They will be able to have their network that they control within the public network, and they will be more transparent, but they will also be able to protect their products better.
I'll give you an example.
Okay?
Really simple example.
I created these characters called Unimus.
Right?
That's how the principle started.
Then I go and I make...
I make like a pin or a charm.
This is just for kids.
I made it for kids, right?
This is like a little, right?
And I put it in a package.
I put it in a package.
And then I put a label.
We call it a K-Link.
Not a label, but this is going to be stuck to it.
It's going to be metallic, right?
It's security.
I studied how money is made just to do Unimus, right?
You have cover security.
You have to use, like, infra-UV light.
You have hologram security.
There's a thing called intaglio, right?
We'll have what they use in the $100 bill where this changes color, right?
It's only done with security.
And then when it goes through the process, It will print a QR code.
Can you see that there?
Now, when we make this, that is when this will become married to the blockchain.
Let's say this is in a package, right?
Somebody has it, because that has, we call it an NFT today, right?
But it will be married to this.
And this will be unique.
And it will be under ownership in the blockchain, right?
Because everybody will know.
We make it born.
We do the transaction.
It shows on the block.
And it says it belongs to the house of Unimos.
Now, when a customer buys it and they buy, let's say, five of them, right?
And they buy it and they get it.
When they go in their app and they go clicky, you know, clicky, clicky, they transfer ownership to them.
Now, by doing that, it changes.
Completely the paradigm of ownership because now you own it as a physical object and you own it in the blockchain or digital, let's call it a title, and also digital form, right?
And now I can prove that it's mine.
I can show the provenance if I sell it to someone else, right?
It goes to the parent company because they verify it.
And what happens now is when somebody has a bag or a hat or something, And somebody wants to own it, they just have to go on the enterprise company, like app, and they click on it, they can prove that they are the owner.
And counterfeit at that moment, because the buyer becomes the inspector, it becomes the lead.
Does that make sense?
Yeah, that is.
That's interesting.
It kind of weds the physical world to NFTs or something, in a sense, right?
Exactly.
We were creating this before NFTs came to be, but then that was a brilliant solution.
So what happens now, companies will come into Composite, will be able to create all of their products, whether it's for distribution, to show how it goes from the factory to the right distributor, or how it goes from farm.
You know, people that are organic, they want to see which It can be that precise.
And each enterprise that wants to be part of the blockchain will be able to control all of the items and products or whatever services they are, and they will be using the public.
You understand?
Because that's really what it is.
And everybody gets paid in tokens, back and forth, back and forth.
So what will happen?
It will become the biggest transactional blockchain in the world.
It will change the world as we know it, because it is the next step of the internet where you get counterfeited, you get scammed, you get all kinds of things.
And, of course, counterfeiting and stealing intellectual property, that's always been a big part of the China price.
And, you know, you have situations where people will set up a factory there, and they will counterfeit, let's say, a brake pad.
That was one that was a pretty famous example I saw.
And they replicated everything about it.
I mean, you could not, even the people that, the original owners and the people who designed this thing, they could look at the package, and it's a knockoff.
That is absolutely perfect, except for the fact that the brake pad is like made out of paper instead of other.
So when what happens is somebody puts it in, they think they're getting an original part, and they get some cheap imitation, and somebody has an accident because the brake part is not a real brake and it's defective, then the other company would even get sued.
So I could see that people would do something like that in order to verify that their stuff was genuine because counterfeiting has become so sophisticated.
That happened to me.
That happened to me.
I told you at the beginning of our podcast, I'm an inventor.
I'm a producer.
I've made dozens of products that have been on stores.
A company, even your own factories, will take your product, your label, and sell it bootlegged from the back.
Or they will take your formulas and they will put another label and sell it to your competitor.
They have no scruples.
For them, it's...
For them, it's stupid not to do it.
Why not?
It's business, but when it happens to them, then they don't like it.
As a matter of fact, I believe there's a law in China that they force citizens to steal intellectual property.
Wow.
That's how China...
It advances technologically because of intellectual property stolen in industry.
It's called company espionage.
So it's a kleptocracy.
It's not a communist country.
It's just a kleptocracy.
Well, you know, they might not ever sell to me again telling you these things, right?
But that is the problem.
We use China as the capital or the country to do production because truly it is much cheaper, right?
And when they wanted to make one world, the idea is that they wanted to make one world government, right?
And let's not get started on that, like a complete other podcast.
They wanted to have no barriers.
So they want you to produce this in China, sell it in America, have a great amount of production.
Profitability.
And they started taking industry and companies out of America because...
And nobody cares, sort of, right?
Why do we want to deal with Americans there?
The workers are a piece of crap.
Let's just send it to China and we sell it to them, right?
And that's what's been happening for decades.
But it is affecting the big companies.
It's affecting the little companies.
Do you know that counterfeiting is about $1.8 trillion a year?
And it affects everybody because it makes prices higher.
And people, like you say, they buy a trade card that is bad.
But what about when some of the products inside here could be counterfeited?
What about if you have works of art or, well, intellectual property is not a problem.
It's everywhere from health, from pharmaceuticals, all the way down to $0.99.
You will bring a product to them to manufacture.
The next thing you know, they have your sample in a trade show in Germany saying, we can do this.
That's right.
And it's only going to get worse because it's not just the...
The counterfeiting and everything and the currency manipulation.
But, of course, they're being given a huge advantage in terms of energy costs.
And so all manufacturing is going to continue to go to China unless they address some of these fundamental things.
And there's nobody even talking about addressing those fundamental things.
So it's going to be an issue of, you know, manufacturing is going to happen in China.
You've got to find a way to push back against that counterfeiting.
I've been in China almost 45 times.
I used to go do it twice or three times a year.
And I was marveled by how something came and then it got adopted nationwide.
Like it was there for hundreds of years, right?
But one of the things that I noticed the China government did, which I thought was good for them, not for us, was that when they found an industry that they wanted to make sure they did well and somebody could do it, they will give them the money and they will give them the The research.
Wink, wink.
You understand what I'm saying?
Yeah, that's right.
Here's the plans.
Here's the plans.
Exactly.
To do this.
Now, I'll give you a perfect example that I know happens.
Do you know that cleaning pad that is called Magic Eraser?
Yeah.
You know that thing?
Yeah.
Okay.
It's made out of melamine.
It originally came from Germany.
And the reason it's like that is because it was used as a fire retardant in construction.
Because no fire can go through.
Right?
Yeah.
About more than 20 years ago, I think, I remember I was doing a carpet cleaner.
I used to sell in fairs and exhibitions and stuff like that.
I told you, I was a thinker.
And this customer of mine that was from Korea brought this before the Magic Eraser existed and said, oh, this is great for cleaning, and this and the other, and showed it to me.
So it's amazing.
And they were sent on the dollar, right?
They were sent.
He bought a whole container.
He brought it from Korea, right?
Yeah.
The Koreans were buying them from Germany, saying that it was for construction.
They were taking the big buns Did I froze?
It looks like I froze.
Can you hear me?
Yeah, you did freeze.
I still got you, though.
Yeah, you're back now.
You're back now.
So, the big buns, like, they look like huge buns.
They cut them in pieces, right?
Because construction was so cheap and they would sell them for 10 cents and anybody could sell it for a dollar, right?
And then the Germans caught up to them and said, hey, you cannot do that, right?
So, what we're going to do now is we're going to do a gray color one.
A gray color one for construction, and the white one, we made a deal with Procter& Gamble or whoever, they're going to sell those pads, right?
And then for a while, you see in the black market, the gray pads being sold for clean as well.
Anyway, now, 10 years go by, China is trying to copy it, and the sponge that they have is full of bubbles, and it doesn't clean as well, and it folds apart, right?
I mean, this is a great product to sell because it has...
It gets destroyed as you clean it, and you have to buy another one.
It's the perfect product, right?
It's a planned obsolescence right there, yeah.
Exactly, obsolescence, that's where I was looking.
So then what happens is China, from one day to another, they had the perfect sponge, and it was like the German one.
And that only happened, and I'm telling you, only happened because of corporate espionage.
Does that make sense?
Yeah, absolutely.
And my camera, there we go.
There we go, you're back.
Maybe this camera's Chinese and it's going against me.
Anyway, so, but do you see what I'm saying?
Just overnight they found the plans.
That's right.
We just thought of that overnight.
Why did I think of that before?
Oh, TikTok.
It must be TikTok.
It must be TikTok.
Yeah, that's right.
Anyway, so that is, it's built upon them.
They use other people's R&D to improve the products that they are doing that other people want to buy.
And a third world country or a country in the Middle East will buy their sponges, which are half or one third of the price.
And it serves a purpose, right?
But enough is enough, right?
This mega machine that eats up entrepreneurs and innovation and research and development and patents and ingenuity, enough.
The artists, the entrepreneurs, the creators, the innovators, the companies that spend billions of dollars on research and development now have an opportunity to be part of Composite, have their own node, and have all of their customers be within their network.
They are part of the network, and every product can be proven.
I'll show you how effective this is.
Likes Louis Vuittons, okay?
Whose wife doesn't, right?
And there's all kinds of bags.
Hermes is the most expensive one.
They're absolutely not how they sell.
But it's all about status, right?
I have my Louis Vuitton bag, right?
And so imagine if a Louis Vuitton bag had a security link within it that shows that that bag is original and it belongs to the person.
Now, she wants to sell it, right?
Or people see it, right?
And they can go with their phone and do click.
And it shows it belongs to her.
It gives a recognition.
If she bought it second-hand, because the problem in the second-hand business is where the most counterfeit happens, right?
You go to eBay.
You want to buy a second-hand bag.
It looks just as good.
You think it's good.
It's a great price.
You buy it.
Boom.
You get it.
You want to fix it in the store and say, this is counterfeited.
You are a thief, right?
That's what they will say to you.
But you didn't know that.
But imagine now you have a label and the company itself, like Louis Vuitton, they have a very fine note on the network and you...
You want to sell it.
You don't use eBay.
You use Louis Vuitton's secondary market.
Now, because it's on the blockchain, they can make money because it's We're on the code in every transaction of that product for the rest of the life of that product.
So I can use Louis Vuitton to put it on the market.
Somebody buys a second-hand one.
It's cheaper.
It doesn't matter, right?
Louis Vuitton is the one that verifies as the correct bag, the transaction transfer.
That's how they become sort of like an escrow company.
It doesn't matter.
They're losing maybe $100 billion So what happens is the customer now, the customers protect the brand and they become the counterfeit experts and they defend it.
And what happens, somebody buys a counterfeit now that wants to show that they have the bag, knows that other people are going to see that that's not real.
So now it forces and it takes away the The demand for counterfeit goods.
Does that make any sense?
Oh, yeah.
Oh, absolutely.
That's a great idea.
Sorry.
No, I think in your example there, the fact that the people who have been defrauded with the counterfeiting that's going out there, not only do they have a way to stop that, but they also have some way as part of the confirmation network to get some small fee off of each of these transactions.
I think that's a great idea.
It's a small fee for the seller, but it's a huge fee for the brand because now he has a new revenue stream that he didn't expect, that he missed.
It's a revenue stream that is in the billions of dollars for, let's say, luxury goods.
But what about, look, let's take another example.
Do you know that Ferrari in 1979, right?
I don't know the exact.
I'm just paraphrasing here.
Just understand.
I don't know which is the year, but I remember seeing it.
That one of the years showed that Ferrari made 100 or 200 cars.
But if you look at how many cars are listed for that year, there's 500 cars.
Right?
So it can be applied for the DMV. The DMV could use this system, have its own node, and produce driver's licenses.
It could be applied for food verification that is really organic and who it really came from.
It could be applied for, like, example honey, right?
We all try to be a little more healthy, and supposedly honey is better than sugar and all these other sugar additives.
But do you know that honey, when it comes from food, They do that in the US too!
So what about if you can verify that you are getting the right thing?
So it is applicable to everything, but what's more important, the network scalability can grow without affecting the security of the transaction and the block.
And that's what Composite does.
I'm trying to make it real to regular people because it says, what the hell is blockchain going to affect me?
Well, listen.
In 10 years, every transaction will be through blockchain.
AI. Oh, AI. What about if somebody takes your image?
How many videos online do you have?
Oh, I don't know.
I've been doing this for years.
I don't know.
I have no idea.
A few thousand, okay, let's see.
Okay.
Let's imagine somebody takes one of your videos, takes your face, right, and then puts it in the next, I don't know, terrorist attack.
And then it shows you or saying something unthinkable, right?
Or doing something unthinkable.
And they say, unless you pay me a million dollars or $300,000, we're going to publish this and you're going to be on jail or you're not going to be able to be online anymore, right?
That's right.
In composite, we also want this technology of authentication that can go right on the image or on the code of a person, of a video, or voice, music, let's say, or a contract.
And that way, whatever videos you take out, you say, this is me, right?
And whatever videos, it's not you, now you can say...
It's verified or it's not verified.
Imagine if now...
And that's going to be a big problem because it's gotten so good and so quickly.
It's advancing that people aren't going to be able to tell fakes from the real thing.
It's happening.
Absolutely.
When they talk about voice or image or people moving and all the rest of the stuff, anything can be faked.
Yeah, I mean, it happened like 10 years ago, they had Morgan Freeman, a system, you know, saying, you should turn right or you should turn left or whatever, right?
You know what I'm saying.
Right.
So it's applicable.
And what's wonderful is that it's at the beginning stages.
And what's happening here, David, is that...
We were going to make a foundation.
I'm making this into a foundation because if you don't do it for profit, it works better because you don't get attacked as much.
And we were going to do a foundation in Zak, Switzerland, which is what Ethereum did.
Then we were going to deploy it internationally and then the US could have been involved with it because it no longer is centralized.
Because when you start a blockchain, it's centralized.
You need a body that creates the program.
Mm-hmm.
And so what we're looking for is to do it here in the US.
We would like to do this blockchain in the US enough, enough bringing technology and work outside of the US.
It should be here.
We, we, we should be, it should be great.
And why not?
Right.
And so we, we want more clarity when Trump said that he will do no capital gain taxes in any blockchain products that are done here.
Right.
What does that mean?
What does that mean?
Can I do a foundation and then do an ITO? Because in order to start a blockchain you do a thing called an initial token offering, right?
You do tokens at a discount.
That brings money in and so you can do development, right?
But the problem that when you did that in the US, when it all started with blockchain, the SEC came and said, no, no, no, no, no, no, no.
This is not a blockchain.
This is a security because you're asking money for something that is going to go up in price.
Does that make sense?
Oh, yeah.
And it looks like that's going to be a lot of deregulation.
Let me ask you this, though.
We're talking about being distributed and having millions of nodes there.
This is something that's going to run on people's...
Is it going to be an app or something that people would download?
They call it a client, but let's call it like an app.
It's a program running using the processing power when the computer is not being used for transaction, for processing.
So people would be able to do, kind of as their computer is idle, they would be able to do a little bit of, in a sense, kind of like mining, essentially, in a distributed way.
Yes, exactly.
The difference with mining in Bitcoin is that they're doing a process where they're trying to get, in order to make a coin, you have to find a prime number.
A prime number is a number that it can be divided by itself and by one, I think.
Yes.
So it started as one, three, five, seven.
That's really easy.
That's why the Satoshi...
He has the first million or two million numbers in his account.
He's never used them, right?
Because it's easy.
But what happens is the numbers become bigger and bigger and bigger, and eventually they're the size of a 20-story building, and in order to find the prime, you need a lot of processing power.
So that's what mining is called in that case, right?
And also, you have transactions where you change transactions.
That's another way that the miners make money.
But in this case, the purpose of the composite node is to do transactions of work for the world, right?
If a company wants to transfer ownership of this or wants to ship that or the other, then the processing power will happen within other nodes.
So it's basically...
The computer grows, so the capacity grows, so the productivity grows as more nodes get involved and more computers, so it will become like the largest decentralized computer where you can access to do work.
And it will be...
So, what will happen is that someone that maybe lives in the Appalachian Mountains and has an iPad and has a computer and has,
I don't know, something goes on the TV and goes to work and he could put those Items or computer chips to work and get trading tokens.
And the idea is that those tokens could be used for anything.
Eventually, the supermarket will have its own node and you can come with that token and buy milk or coffee or whatever the case may be.
Or you can pay someone else, but it could be used...
As something that is working for you, right?
And if you get early on the system, you can collect more tokens.
And as they go up in value, we're going to try not to make them go to $100,000.
I'm sorry, but it's impossible to make it utilitarian that way.
But then what will happen is it will allow you to gain some.
When life doesn't seem fair, where all you have to do is you can use those computers, the computer processing power, and add it to the network.
And that's what we want.
We want everybody to make money.
We want the people that have nodes to make money.
We want the people that, at the beginning, they get tokens and the ITO to make money.
We want the enterprises to be part of it and definitely control and not lose so much money.
Hey, if governmental agencies want to get involved and use it as well, it's great because it adds transparency.
Do you understand that?
It shows that they're not so close and not showing everything, and it gives people more trust.
It allows to give more trust because it's a little bit more transparent.
That's a great idea.
People get a chance to make some money there, but the key thing is...
Coming against the fraud that is just so rampant everywhere.
That's a great idea.
So you're setting up composite.org.
That's where people can go to learn more about it and follow your progress, right?
And you're kind of looking for some more clarity to see what's really going to happen with the Trump administration.
They made a lot of talk about deregulation of crypto.
So you're looking to see exactly where those lines are going to fall.
Actually, can I interject something?
I got the number from David Sash, which is going to be the crypto, the blockchain, AISR. And I did call him and I did send an email.
I would like some clarity because I... I don't want to take this to Switzerland and not give it access to Americans.
I think Americans deserve to make...
Tons of money, and this network is going to be the largest network in the world, and it should be American.
It's what I think it should.
And I would like help on this, because nobody's giving me any answers, and this is going to continue.
But if I have to take it to Switzerland, I will, because it still is going to be able to use once it's deployed.
But most people gain when they get...
Early on, at the onset of something.
You know, if we all have bought Bitcoin when it was $10, just $1,000, we'll all be millionaires, right?
Right, that's right.
A lot of people like that.
Yeah, yeah, yeah.
So they can go into my, I have handles, I am in LinkedIn.
I'm sure you're going to, hopefully you show on the show.
I'm in, so LinkedIn for business.
I have X for conspiracy theories, which I'm one of them, and that's fine.
I have Instagram as well, right?
If you want to contact me, my email is really simple.
My first name, Noam, N-O-A-M. Is all that stuff on composite.org?
Exactly.
Composite.org.
We'll grab some of that and we'll put it in the video so that people have that.
I appreciate that because anybody can contact me.
People that would like to be miners, people that would like to be part of this, even developers.
People that are good developers, even if they get paid $400,000 a year, if any developer...
Well, it sounds like a great idea, and certainly I sympathize with you having seen how your work was stolen, and it's a great solution to keep other people's work from being stolen.
Thank you so much, Noam.
Krasniansky, is that correct?
Did I get close?
Krasniansky, but you chopped it up nicely.
Okay, you chopped it up nicely.
I'd have to practice a little bit more.
Today I got kind of close on the Canadian Prime Minister's name, or Conservative Party leader's name, I should say.
So we work at these things.
No, not Trudeau, but Pierre Polyev, I think is the way he pronounces it, the head of the Conservatives that would like They'll likely be Prime Minister if they win.
But nevertheless, sometimes names can be challenging, but this is a great challenge that you've taken on, and it looks like a great idea.
And again, folks, it is composite with a K, composite.org, and we'll have the information there so that you can contact Noam and ask about things.
So listen, also, David, I just want to let you know that blockchain, it looks like it's murky, and it's just for young people, and you don't really know.
So, in the future, I had to learn everything from top to bottom.
I've studied more blockchains than most people will know.
I've read more white papers than you can imagine.
And you did a great job of explaining it.
Yes, yes, because I have a brother that is an academic, right?
And he's a genius mathematically.
But when he wrote the white paper, I said, I don't understand this.
So, I had to...
You can see me.
Explain to me like I'm an eight-year-old.
I don't understand this!
I don't understand this!
So if you ever want to put me again on your show and ask me questions, or people want to reach out and say, I don't understand this, and you want simple, down-to-earth answers that are applicable to anybody's daily life.
You're welcome.
You're welcome.
I'll be more than a pleasure to come again.
That's great.
Thank you so much.
And do we have any questions there for him?
No, we didn't have any questions today.
So we'll let people digest this, and they'll have the contact information there to get to you.
Thank you so much.
Very interesting.
And as I said before, I think one of the best explanations I've seen of the blockchain, the history of this.
Thank you so much for what you're doing.
I wish you the best of luck.
And maybe we'll have this interview one day.
It'll be...
It'll be gold, and we can put that, we can put a QR code on the composite chain there and say, look, I interviewed this guy who was getting started.
Thank you so much.
And you know what?
If you ask me to interview me at that point, I will always say yes.
Thank you so much.
Thank you.
Best of wishes to you.
And folks, thank you for joining us.
And Progress Retort, thank you very much for the tip.
I appreciate that.
We'll get to the comment and the other comments.
We'll get to those tomorrow.
No more time in the program.
Thank you for joining us.
Have a good day.
*Dies in the background* Hello, it's me, Volodymyr Zelensky.
I'm so tired of wearing these same t-shirts everywhere for years.
You'd think with all the billions I've skimmed off America, I could dress better.
And I could if only David Knight would send me one of his beautiful grey MacGuffin hoodies or a new black t-shirt with the MacGuffin logo in blue.
But he told me to get lost.
Maybe one of you American suckers can buy me some at thedavidknightshow.com.
You should be able to buy me several hundred those amazing sand-colored microphone hoodies are so beautiful.
I'd wear something other than green military cosplay to my various galas and social events.
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