EBC22 | Tokenization of Everything

[Music] you can hear me okay excellent um guys you'll get my brownie points for staying uh second day after two nights out at three o'clock in the afternoon so i love you thank you for this i really appreciate it but you're here for these incredible guys so um put your phones downs and your laptops down because you really want to listen to them and you'll want to ask to ask them questions i'm sure of it my name is maya santamaria this is my second in person ebc um actually the first one was meant to be in this building when it burned down almost was the third one um but i remember because we did have a panel discussion about tokenization of things and we were barely starting to come into grasps with what it meant but we managed to have a whole panel of discussions with that mentioned regulation so i was just listening to the feeling influencers and their mentioned regulation this is the rule we're not going to mention the word regulation now panel discussions this is rule number one and rule number two is you all have to smile because fiction's taken and i really want to have a very nice picture of this kind of discussion so that's bad enough about me um if that's okay i would really like you guys to enter yourselves for just a minute i know everybody can find you online on linkedin but um i have had the pleasure to meet all of you and some of you i know a bit more and i know you're cracking people and uh i know your personalities don't shine through as much as they do in real life and clinton so please um introduce ourselves for 30 seconds please and your companies hi i'm thomas i'm an ecosystem manager at the hyperledger foundation and the hyperledger foundation is an open source collaboration focused on developing and frameworks libraries and tools for deployment of enterprise great blockchains and we are a collaboration under the linux foundation thanks thomas greg hi i'm greg chu i'm the ceo and founder of qpq some of you will have seen us in the hallway outside uh we're developing something we refer to as the internet of economics which is really to transform where we are today into a a single substrate that everybody can transact upon everyone can add value to and that everybody owns we're starting that by uniting all of the blockchains bringing them together consolidating them to create a truly interoperable layer zero um one dlt so look out for that it is probably i think the biggest news since the the crypto white paper for ethereum in 2014 we're now talking about the ability to scale blockchain to really be able to make it operate and function for the purposes that it's intended excellent thanks hey guys um jason from century invest uh we have a wallet exchange whatever you need for crypto we make it so we on board token coin and user and so uh make sure that all the tokens all the coins can enjoy with the market and user at the same time hi i'm bill fair my involvement with uh crypto started in 2010 when i bought a beer at nola's bar in palo alto and sat next to four student minors that were talking about something called bitcoin and today i'm vice president of polyswarm a cyber security company built on using a blockchain and a token thanks thanks a million bill um very good um i love you guys i just want to say i apologize for the lack of diversity in this panel um it wasn't meant to be i'm very diverse darling i have a whole series of personalities here i did try [Applause] excellent um listen let's kick off uh the tokenization of everything um just a tiny example for the like real amateurish no no i think but um bill you have a blockchain around your neck could you tokenize that uh sure i mean you can tokenize anything tangible or intangible uh it's the notion of um of being able to um you know when the internet started we we decentralized information right blockchain and crypto is really just an evolution of what we've been doing for since since 1996 97 where now we are going to tokenize information and provide um a way to transact and put value on all that information that we've had on the internet has been decentralized and we've decentralized a way to put value to it and you can do the same thing with tangible things like a shirt or a blockchain blockchain around your neck you can assign a value to anything sure i don't agree fundamentally you can't tokenize anything because who owns the thing who's custodying the asset what about all the data that pertains to that asset there are things that we can tokenize and that they can have their own value independent of any other data but actually when we start thinking about things like your shirt or get more serious your car your house bonds equities ip a shipment of goods a shipment of oil something that's still in the ground i mean how could we for example enable the developing world to capture the fact that 62 percent of the world's agricultural land is in africa how do we give them something that allows them to to monetize that so if we start to and we're doing this we're actually working on something that takes us way beyond tokens talks about data rich digital assets the first thing that we did with it was actually an esg sandbox in london city of london and we're actually working at the moment with the company in the uk big commercial farming operation to map out all of the land they have i think what three words are involved as well map all of the land out into three meter by three meter chunks and then you can begin to talk about everything that comes out of that land everything that goes into it so carbon sequestration nitrate sequestration the production of foods from that but you can extend that to the whole wide world however it doesn't change the fact that you still have serious amounts of data that pertain to that thing that tokens only point at right well tokens are a way to provide to transact the value of it particular like what property's doing in palo alto they're tokenizing real estate right well they're using the legal system in an llc on a let's say a house or an apartment building and then they're tokenizing the access the the they're tokenizing the llc right so you can now have own a portion of a house or an apartment building by buying the token and the token only is assigned to one llc the llc is registered with the county to pay the taxes on the real estate so you can do it you can do that just about anything when it comes to a token like this chain or my shirt you're really talking about identity and security and how do i you know make sure that's the thing that's tokenized but you can really assign a value to anything that's what that's what fiat does after all no fiat's a means of reducing something to a base value but fundamentally you still haven't dealt with the problem you've got an llc so who controls the llc where's the paperwork pertaining to that llc the thing of it is you just can't get away from this issue tokens point at assets they are not in of themselves assets now that does not mean that things cannot be tokenized so for example one of the projects we're talking to they're going to use nfts to track chemical changes in a process that's a good idea that's a good use of tokens it's good use in this context but saying that you can transfer a piece of land doesn't work but you could tokenize transactions you could tokenize property i think you're kind of saying there's the same thing but coming from different angles all right no no let me kick it let me kick you let me put myself in audience point of view all right so tokenization you just talked about the data you talked about the payment think about it tokenization is unifying it so each unit if we tokenize it the first one we're going to talk about the payment token then security token the data token it's all different things but you guys all mix that up together as a tokenization is this that no let's go with the one by one tokenization for everything tokenized first with a block or shirt that's the unit so there's the money part right the transaction and payment so payment token now you talk about token with the data or more sophisticated things that's next level so let's go with the first one so people want to know tokenization is for everything is that possible yeah it is possible in a way but not for everything right so first layer the moderator question was is that tokenizable yes then we'll finish it there let's let's don't don't kill him doesn't mean you should there's a victoria there's a potential moderator there adjacent for the future [Laughter] greg anything else you want to say no i mean look you you just because you can do things doesn't mean you should it's not absolutely i can jump off a cliff but i should not yes and to jason's point um everything could be tokenizable or could be or will be but doesn't mean we want to yeah right let me go with one thing when you use your credit card some other countries have a reward point it's a point right the point in certain period later is enough to change to money or enough to buy something else what's difference between token and that reward point we need to know that first right see tokenization for everything in business is possible but tokenization for every single project no man guys come on i like i said security token payment token but the world ninety percent of the token is looking at the payment part i don't know why because that's more profitable it's closer to the market maybe dude number go up yes yes uh if you look at the coin market capital coin gecko you will see two thousands of tokens and every day there's more than 100 tokens coming out since 2017 they've been tokenizing everything but did they really tokenize it they talked about it token came out but tokenization never happened but like and i know obviously you're a markets man it's all about making money and i appreciate that there's a business to be made here but uh why does tokenization just have to be about the markets just about the money what about tokenization for democratization for example fractionalization in a different way maybe just to increase access or liquidity you have any thoughts on that yeah well that's what property is doing i mean that's what they're doing with real estate right so now you can you know you before in real estate or currently in real estate you have to have a lot of money to buy an apartment building in manhattan right millions and millions of dollars but if the guy that owns that billing and tokenizes it using property then people all around the world can own a piece of that and as it goes up in value they can sell that token on an exchange and rep and realize that real estate appreciation whether they're in africa or here that's pretty cool putting to one side the let's pretend version of tokens and look at the question the question was is there anything else that we can do with tokens there are shared loads of things we can do with them the example i gave of that company that's working with one of the biggest chemicals companies they want to have a process of certifying all of the chemical reactions have occurred so as they occur it generates an nft that's a useful use of tokens it it injects that capacity to not have to trust the chemicals producer because there has been a consensus that an event has happened there's a record these are useful means of of doing these things we we've we've had our this is our second event the first one was very slap dash turned up the day before it kicked off really not an awful lot better this time because we're still catching up on things but we have about 90 projects talking to us at this stage and all of them i'm delighted to say have real uses for dlt not one of them is about a white paper that says number go up and to the moon okay very interesting i agree with you greg that it's uh it you can basically tokenize everything if you want to but do you need to do do you want to do it and when you're mentioning fractionalization um we have a member called bondi value who fractionalized the bond exchange so it's a first regulated bond exchange in the world and you can get a bond for as little as uh one thousand dollars uh because otherwise you would have to pay um it's a high entry barrier so we'd have to pay 200 000 for for getting to the market so i see a value um in this sort of tokenization um another problem that i see with tokenizing the assets in the in the physical realm is that often you do need to have some sort of a bridge right because we are always saying you can tokenize it you know it's transparent you can you can um you can um you know it's traceable and so on but there is a difference between the the recording the asset transfer or the recording of asset transfer meaning that uh there has to be some sort of gateway um to ensure that this is really transparent and secure uh transaction i'm not saying it's impossible at all but something that we should keep in mind if we're talking about tokenizing everything in the physical realm yeah i mean look when you think about tokenizing something let's take a house okay i i don't know how it works in most countries but in ireland we have the land registry office they have a listing of all the houses so your house has a whole pile of data that attaches to it the registration of the house is with the land registry office unless they say that you own that house you don't own it take a car again same thing there's a bill of materials there's an entire pipeline of data that came together to bring that car into existence as a legal entity on the roads of your country i don't know who the regulator would be in different places sorry to be using that bad word but you know you know what i mean the registrar the registrar okay so uh what we've done we actually looked beyond tokens and there's still a token involved because you need the token to pass through the distributed ledger layers but what we've done is we've attached all of the data all of the creation data all of the life cycle data to that token by a mathematical duality so they're always staying in sync and that means for the first time we are actually able to transfer whole assets so i could sell you in my car you would be extremely happy i call her matilda she's quite old but you know she works and you would actually be able to drive off having the ownership records automatically update with the registrar this is how we really get into the digitalization of the economy tokens have their role they are the piece that moves through the dlt layer but that's the limit of their role because otherwise we're just back to the same state of having assets that remain in custody you're re-entry you're re-incorporating third-party trust all over again and actually you're re-establishing exactly the same barriers to opportunity trade emancipation that have always been there so if you want to talk about democratizing this is how we democratize we remove the gateways the people who hold the bridges and the gates and say hey we control this we control trade no create a common substrate recognize how assets can be processed properly created and established and then they can move and people can begin to finance what they have they can begin to trade in ways that you know the older days can you trade guns for better yes you can can you establish a currency by the reference to the oil in the ground the coal in the ground can people begin to take their natural resources in their countries in these third world countries and use that as a base for creating a new currency yes can we just stop there because i i really like the um um the concept you introduced to the discussion of the digital economy and obviously the tokenization that would bring me back and it's obviously i think very noble to think about all the extra examples when you talk about third world countries and land and so forth let's just take a quick pulse i'm just looking at the audience here um i can't see everyone what i'll see most how many of you actually resident in spain you put your hands up okay quite a few of you um how many of you have crypto assets i wouldn't say cryptocurrencies okay quite a few of you how many of you are happy about the new tax rules about holding a crypto currencies in spain right um right the point the point making is we are here because we obviously want to understand with this technology we obviously believe in this technology but at what point there is a barrier to be passed in terms old tokens just because it happened to be on a blockchain become taxable or become regulated or i mean there's a huge stop forward i said it so i can penalize myself but like i see the intent but i see the obstacles is what i'm saying you know we're going from taxing gains to taxing taxing just holding an asset for example like so from a tokenization perspective how would that ever work whether it's for goodness or not look what you're talking about is i always push back at the idea that regulators are there to protect incumbent interest because i never thought that was true but i have seen instances of it recently so i was sent a questionnaire by a leading government in the continent of europe who asked the question how would we protect incumbent interests and my response that i actually did send in was this is a little bit like the sled pullers union complaining about the rapid adoption of wheels but here's the thing the more that those actors try and protect those incumbent interests the more they kill them because this is not the progressive dot dot dot state this is a like it's like a torrent and at a point the more you build the walls and you fail to join the torrent the more you become crushed by it and i think there has to be a good dialogue between the forthcoming digitalization economy and the incumbent actors i think they have hugely profitable futures they're just not doing what they're doing now look the example i give people is uh who here remembers the film the mission okay very small audience for uh the mission uh so the mission was a film in which uh this conquistador goes to to the new world and uh it's robert de niro plays the conquistador he's got all the equipment to fight a 15th century battle in europe you know the helmet the helm the sword everything and jeremy irons plays this jesuit priest who basically has a cross a pair of pajamas and a sword and of course jeremy irons can go straight up the top of this mountain he's got no problem whatsoever but robert de niro's entire journey is dragging this huge weight of armor and equipment with him which he doesn't need it's irrelevant to the new world 18 minutes correct come on yeah okay so the point of it is when he gets when he gets separated from that that's the point at which he actually can climb and this is the same thing that many of these incumbent institutions are failing to understand that the things they think are their assets today are actually their liabilities and they need to cut them loose and embrace the future that does not mean helter skelter that does not mean number go up is okay but it does mean that there is a viable future here that involves proper dialogue on all sides thank you so much jason i can see you wanting to put in i'm gonna buddy just a little bit i'm from korea and uh japan is right next to us actually japan start this taxation on crypto but when we start in asia first what should we text first profit area or holding area now first problem is the profit area when we enter when we lose a lot of money are we going to pay back or are we going to give them a discount on the next shift next year so it's really hard to make the index of taxation so we come up with a 20 with a v82 so 22 on profit in every three month so they just check each exchange not the wallet exchange so they need to government must attack the centralized institution to see the how much they gain or how much they lose first but second part is not only the gaining and losing part crypto volatility is just so up and down they cannot settle where to taxate it so they pick the point say okay i'm gonna text it now but six months later it went down so low should i text it or not oh i i put like 10 taxation rule in the this snapshot area but six months later went 10 times up should i text it more or less so government doesn't even know where to text it now holding part again in future way out there five years later or whatever when government kicks in with a cbdc and everything all digitalized all crypt is welcome then maybe they can text it for now they cannot let's say one example 2017 i let's say i purchased 1 million dollar worth of bitcoin so 2022 i'm gonna get the heavy tax you know what i'm gonna do i'm gonna send it to you and hey greg i trust you send it back to me then index change i don't have to pay tax so taxation whatever your society your community is going to do to you doesn't really has nothing to do with tokenizing everything no no no no no no actually here's living here there it goes and tokenization is not really uh good for us actually because it's transparent now there's no tax cut we have to pay the full amount yeah i mean that's a good that's an interesting subject but again maybe it's not really on top tokenizing everything but there's i think there's a big need for privacy and privacy coins right i mean there's a need to not be transparent right a lot of things wouldn't have ever happened throughout human history if the king knew that it was these guys were talking about it right there's a there's a cost to being transparent that's why these people are working on privacy coins there's a there's a bunch of projects that are doing that some that are pretty successful and you sure it threatens governments but it's also you know it's they're well it's it's this is we're not talking about tokenizing everything as a company who are largely staffed by people who were in gchq and the nsa how do you really square with the idea that uh total secrecy is a good thing well if george washington benjamin franklin were using facebook and the fbi could listen to what they were talking to or king george could listen to what they were talking to i don't think there would be an american revolution or america as you know it today would still be my question what i'm asking is you're saying that there's a need for a privacy token i think there's a need for even though a lot of bad things happen in private you know like on signal or apps like that sure bad guys are doing things that shouldn't be done and it's bad and governments would say hey we should have visibility all that we're only going to go after the guys that are doing child porn or blowing up buildings anything else we won't look at you know unless you're talking about overthrowing the government or something like that again there's a need for society for mankind to have private conversations and not have anybody look in on it and actually crypto provides that i i don't know how we went from organization to uh privacy to tax but uh i did promise you an interesting uh panel discussion this afternoon so there you go um i think this is obviously it's all interesting and it's clearly it it speaks up to your areas of expertise right um the point of bringing in the taxes i was hoping to really draw out was we all want this tokenization we all want and can see the good but the reality is if we are slapped up with the tax that we didn't want in the first place we might not accept it so jason you mentioned five years i mean we first started talking about tokenization of everything right here at the epc two years ago um yeah we're moving you know certainly nfts did not exist in the mainstream like they did two years ago but we're not quite there yet and there are some obstacles and i was just trying to to draw those out for for the audience when i uh got invited to this panel uh first thing that i was gonna say was tokenization uh we gotta go to the first step when we make a token uh you gotta know how that token comes out from i mean we have a mainnet coin with a block producing and when they have a main net running they have a capacity to make the token that's why ethereum has an erc20 and there's a trc-20 there's a bep 20 there's you you hear all the tokens name but when you look at the project and look at their token type do you really know why they use that token because i've been reviewing over uh four thousand companies four thousand white papers i'm with a exchange listing process i'm seeing every single project and we talked about tokenization we always talk about the bright part but we need to know why we are making a token first token is built on zero base backed up so it's not security so we're not supposed to so we make something so instead of having some asset he and i get together hey let's make 1 trillion token today we can make it hey go go go to the exchange and hey guys how about 10 cent i'll give you 2 million then it's gonna be 10 cent 1 trillion token in the market just one white paper no marketplace no user needed you have exchange you have a tech not not even tech you have a you have knowledge then you can actually tokenize something so i mean from this point on i wish ebc will make this start and you guys will see why ether token why tron token why be uh binance smart chain token first thing is they want to get listed early and fast right erc20 is we also call ethereum's ico coin because ico boom happened with ethereum and it's easy easy adaptability let's go back to tokenization why are we doing it first is getting the fund out of the people from the public so the public can use it in certain ways so it's our job all the engineer all the owner must make a market ready and let people purchase the token not only trading and usually use it in the market if we start doing this then government will like it tokenization will be welcomed everywhere and then tokenization is easy because it's easy to transfer and all the marketplace will say okay now i will trust oh you can pay with that token with this token then regulation will be oh we don't want to talk about the regulation but regulation will be there to guide it that's what government will do but us we will enjoy it so easy payment easy purchasing will happen like tokenization with a shirt block whatever food pizza if that happened then payment is ready now let's talk about utility part now the whole market ecosystem must be controlled by blockchain and within the blockchain token will be used to make that ecosystem platform run then tokenization is good [Laughter] go on greg i go on no no it's okay i think i've made this point already um just know um back to you is that because his answer is mostly based on ethereum and no it's it's no because um you know what me making up a token and then somebody else buying it and thinking that it will go up number go up to the moon this is the greater full game and i get very angry about this because i actually think what they're doing is taxing despair and they're destroying hope on that high note um look the vast majority of people everywhere in the world this isn't restricted to the third world this is here present right and now today amongst this room most people are economically disenfranchised we have no ability to participate in the economy to the extent that others do this is what we're really trying to change making up spurious assets that don't really exist on a number go up basis is just finding that pain and turning it into somebody else's profit i have lots of bad words for that and experience so as a former trader i 100 now it comes from from experience as well and and knowledge um yeah i mean i i agreed with the first half of that um i mean going back to democratizing and how that's really changing power and and human behavior in the world just take a look at icos i mean i think probably a lot of people in this room realize that up until uh icos and crypto if you want to do a startup you have to go to pal you have to go out to california to silicon valley where 85 of the vc is located in a very small area by a very small group of people and that's how you get your money for your startup you don't get it in barcelona you don't get it in africa icos and crypto changed that you know i met four guys really i met four guys a16 zed and all of their cronies are still the ones steaming into the nfd world pretending that a bored ape is sure but i met i met four guys four guys in korea in 2018 that did uh did an ico with ethereum when ethereum was five dollars and when i met them in 2018 ethereum was 800 and they had 400 million dollars they'd never gone to stanford or mit they've never been to the united states they've never been to palo alto and these guys had energy they had an idea and they were gonna and they had the money now the power no and they were gonna do this startup that's pretty significant that changes the power from basically the white men in palo alto that have been running things for years when you know where you can't even invest in amazon before it's public unless you have a high net worth in the united states you can't make money unless you're already rich so people probably know that already too so but so icos crypto has changed that so just think about the significance of that because money is power so these four these four guys in their 20s in korea have a lot of power now and maybe what their idea is and their startup will be will change the world actually exactly same thing happened to my friend but opposite way he did the ico [Laughter] 2017 and he collect all the ethereum and he followed the rules just correctly and plunge happened without even starting his business ninety percent is gone so i i mean crypto was that dangerous and ic was i know it is giving i mean life's dangerous right yeah life's dangerous but not that look i i think it's something really special now that we can have daos where less than one percent of the dell controls the dell we can have icos where every one of us gets the ability to be completely screwed by people with lots of money in california who pretend that a board ape actually has some value oh dear and excellent um never a dull moment with these guys uh listen we have five minutes to go and i really like to um ask the audience for questions i really appreciate you've actually stuck with us uh so late in this tuesday afternoon after two long days any questions for any of these amazing panelists please put your hands up we'll bring a mic anybody no questions whatsoever sorry i can't see oh someone up there jiva mike you want to come down how do we see is there a particular question for anyone how do you see the role of perpetual capital the role of venture capital in tokenization come on down take the mic come on come down don't be scared i don't eat people i i may be fat but i don't need people anybody else has a question [Applause] thanks greg you lost your mic so thank you very much my question about the um role of venture capitals i mean and we have a lot of icos in 2017 um big venture capital they bought a lot and then they resolved to the people and so on um how do you see the role of the venture capital actually for the market for the stability of the ecosystem and to really believe what does mean organization the role of venture capital should be to actually help businesses build grow to uh find the right pathways that take them forward um what we're seeing with that particular community is more about how to create the maximum amount of fomo so that number can go up and to the moon right i mean anyone whether you're making pizzas or you know apes you want you want people to buy it and be excited about it that's just it's called the economy you're making money um but your question i mean something of value in the first very good yeah so the the vcs are still doing their jobs and all that i'm just saying the power what crypto has done is allowed a shift in power you know so these guys in korea or the or the guys in africa that i know or the guys in japan or the guys down in puerto rico they're doing things that they couldn't do before you know they just didn't have access and that's that's pretty profound really all right i'm going to just add just one one light thing really quickly all right the economy and all this trading uh platform is very honest actually money comes in they never go out and it'll go up and money drained and it goes down up and down is always there so who's gonna make the continuous injection happen that's the company and venture capital will help to speed that up right so companies role blockchain company crypto company must generate profit generate interest so that more people come in and put their money down so that tokenization whatever that token price will go up yeah let's say be careful about this okay because when we're talking about a company uh that company produces something and it has a revenue sheet it has a balance sheet all of these things are happening and what you're actually buying is the company's potential to earn money today and so many years into the future when you're looking at projects that have a number go up philosophy what you're actually looking for is the greater fool that will buy the next piece at a slightly higher price and allow that speculative curve to exist but actually i was going to end my statement with this uh this is kind of dangerous statement so at the end tokenization is great yet we need to get away from the fiat money so real true economy money part we depend on it so you think about the bitcoin e3 what are all the tokens we go back to money indexing isn't it so if token itself has a value we can do something with it then token will gain the power but token needs to have a value that's the point now i've got the microphone [Applause] [Laughter] so look uh very simply uh i was at a conference last week in zurich um not as a sponsor attending and there were some people there from the esg community and they were talking about wouldn't it be amazing if we could tokenize a tree and that we could actually start to make trees into an exchangeable value and to my point if you have all of the data that proves that tree exists and you can continuously prove the existence of that tree then yes you could actually do this but then you're talking about having a token in the dlt layer and data that pertains to the tree that proves that tree exists attaching to that token and that's not what happens that's what we're making happen next year but it's not what happens now you're confusing the audience again now i'm not talking about the data i'm just going back uh uh this year and probably next year i'm gonna come back and i'm gonna give you guys the probably new set platform token trading token will be separated and i'm gonna create not just metaverse but certain place with a smart city concept tokenized blockchain driven only token driven area where you can purchase coffee we can or you can purchase food everything so tokenization will have that kind of new set instead of the existing traditional economy this is a promise that we're going to see next year jason so we're all coming back to see this next year it's on camera we're all done very good i'm really sorry times is up i know there's a question there um greg and jason have booths outside just go outside grab them ask us questions unless you want to have it now do we have time i see daniel going no no no no no no sorry i'm really sorry can i can i just ask the question and then just so yeah talk about it um so if we go down the route of we can tokenize everything and if i for example tokenize my shoelaces and who do you think should enforce my claim to my shoelaces that's the point i've been making yeah okay there's a there's some really incredible lawyers in the audience fight drug keem i think he was here that question although i'll be able to answer for you so make sure he's getting where he's up i'll find him if not i'll tell you where he is um sorry a bit applause for the audience you've been really engaged thank you so much thank you and to them thank you guys till next year