BBW24 – Day 3 – DePin: Where Blockchain Meets the Physical World

so hopefully you guys will learn a lot today as we talk about deepin uh I think the first thing we'll do is just let I'm going to let the panelists introduce themselves let them tell you a little bit about themselves and maybe you can also tell us what was kind of your introduction your first introduction to deepin Jeff why don't we start with you sure so hi my name is Jeff outo I'm a chief executive officer uh excuse me Chief experienced officer at yam and yam is a deepin that is built to help solve the problems of cloud gaming we were able to stream uh high-end games to anyone's uh Ur to any URL on any device so so that's a problem that we're solving my experience with um deepin was actually having the the our CTO explain to me what it was that he built um before he even before I even really fully understand what I was getting involved with um so your your introduction was your company yeah pretty much yeah sorry and my experience is I just been I've been in video games for 24 years actually my first game shipped on the GameCube so back in the day I've been at this long time absolutely I had a GameCube too John how about you good nice to see everybody here uh John xanos I'm partner at digital ubiquity Capital we do two things we invest in projects that deploy internet fiber internet structures in the municipalities in Canada and the US uh West Hollywood Nova Scotia as examples and at the same time we're investors in startups and early technology companies and we're integrating blockchain into our solution set to execute transactions between the customer our operation as the developer and the subcontractors that are building the network for us uh my exposure has been early in distributed compute and uh before it was deep and shared compute and uh storage infrastructure and have a long history in a shared Telecom in infrastructure which is how all phones work yeah all right uh Matthew thank you for doing double duty today back-to-back sessions I appreciate it why don't you talk W you I don't think you need to introduce yourself again but you just in case there anyone new so I'm Matthew Schneider the CEO and founder of Building Inc and we tokenize construction data and Commercial Real Estate assets and what was your initial inter so my exposure to deepin was inadvertent we had a vision of building smart cities and the way that smart cities interact how they're formulated is that you have buildings that form a network you have buildings become nodes which is essentially what a dpin network is and so we started envisioning that perhaps with a mix of renewable energy smart Building Technology iot and Smart City philosophy that buildings could begin to interact with one another and you see a lot of these use cases in deepin emerging whether it's energy could we trade energy between buildings instead of just relying on centralized utilities or compute could we have data centers or servers within buildings and have that engagement awesome yeah so I'm uh Chris marili founder of Mars Rock we're a web 3 Consulting and strategy firm um I'm I I found out about deepin in my boredom of Co in 2020 uh Joe who was supposed to be on this panel but couldn't unfortunately due to covid uh he had messaged me in a telegram group and started talking to me about um this new project where you could spin up Linux servers put them on their Network and they will reward you for the compute which is essentially uh decentralized AWS which is what I called it until I think 2023 or 2022 the the term dpin which is decentralized infrastructure physical infrastructure networks came about so I guess my first question Jeff to you you know how would you explain deep into someone who's maybe unfamiliar with it and maybe even unfamiliar with blockchain in general yeah well I had to do this with my wife so I out here so really what it it means is you you if you take the essential server which is what an Amazon server is that's all combined into one big building and that's a massive building it takes a lot to construct it takes a lot of um energy to run it they're running a AC units and those kinds of things it's it's a it's a heavy investment so what a dpin does and I I talk about my case it's just EAS easiest for me I'm not super technical but what we do is instead use gaming computers around the world to act as that Amazon server we just link them all together through our Network so if you have a gaming rig at home for our in our case and this works differently some deepens work off of phones and some work on other systems but if you have a gaming rig at home and you hook yourself up to our Network we use your computer the same way we use Amazon what it helps for uh in again in our case is that the cost comes way down because again we're not having to build the building and then run the AC and and maintain it but the other part of it is for our for games you need to have a really fast uh connection between the person who's using it and the network itself so one of the problems that Google St they tried to do cloud gaming and and um and they failed because the latency was so bad the end user was too far away from the server and it would just not not reach them in time and the game would be laggy but when we're using a node like someone's gaming rig around us the latency is super low because we find our orchestrator finds a node closest to the end user so that's a use case again I I apologize if it sounds like I'm Shilling my project it's just the only way that I really know how to explain what a defin does it finds equipment around the world and uses that equipment ties it together into one big Network um but again it can be done off of phones just some software you don't have to have a hardware attachment to it uh helium is a good is an example that kind of ran early people know what that is but yeah I think helium is a great example of a basically a decentralized iot network there you go um you know you're doing a decentralized gaming Network which what one of the things I love most about deepin is that it's can span all Industries and so um yeah and Chris just add one thing because I was excited when we got out of the terminology of calling it decentralized X and starting called deepen because of the P because what we're talking about physical infrastructure I think we all come from a technical pseudo technical background or field but when you think of any asset that can be shared and then blockchain enabling that fractionalization so rewarding the supplier and rewarding the consumer that's how you can think of Deen much more broadly and when you think about embedding blockchain to enable that just simplify it to contracts that are automated that execute without people in between them right that's what we're doing yeah it's a great example where suppliers people are flying the the computer in your case probably GPU for gaming it's actually the full computer yeah the full computer the full rig so they're getting rewarded and then the consumers uh are being able to get access without needing a full full one of the big upsides is we decentralize the revenue these D pins allow people to instead of giving all of our Revenue to Jeff Bezos or some Central you know um billionaire we actually can put that Revenue out in the Stream in the local economies through the node operators right yeah so let's move from the gaming industry to the real estate industry and this is one of the things I said I love about deepins is because it spans why don't you talk about your experience and and what you're looking to do with building as far as setting up a a real estate deepend right right so it goes back to creating this network between buildings and the use case that we're most excited about is trading energy so for example a building could be equipped with a solar panel and so it is collecting energy on its own maybe as a cost-saving metric uh or because they want to be sustainable but they're going to collect that energy they're going to store it well what happens when they have an excess of energy perhaps their neighbor needs it and now they could actually trade that at a competitive price to a neighboring building and what this does in the big picture is it creates resilient infrastructure because if we're all dependent on something that is centralized and there's an issue in the center everyone is affected negatively and so there is a an interesting future that we could see where we're creating less dependency on centralized forces especially in real estate which when there's blackouts we're all affected when the internet is down we're all affected and and creating these things that now control our daily lives and making them more resilient for whatever that might be it could be climates it could be War could be accident or human error uh in addition uh the compute portion um we envision that as commercial real estate buildings become more dependent on artificial intelligence they're going to need somewhere to compute all of that um in addition we could also say storage they going to have to store all that asset data somewhere and if they could do that locally it's far more cost effective than sending it out everywhere cool you know so I think we've touched on it a little bit but John maybe you can go into some of the advantages for both providers and consumers when it comes down to deepins what what are the what are they getting out of it yeah so you know this is an important question like we don't do decentralization just because it's a fun idea right there has to be some real net benefit uh one of them is resiliency right uh if you're doing something that's very dependent on resiliency having that model distributed has value Telecom Network falls into that category uh compute storage iot all those things and even just real estate models in general the other thing is sovereignty right like what things you want not necessarily in the hands of one individual right and probably the best example there is helium vers starlink right where Elon months unilaterally decide I'm helping Ukraine I'm not helping Ukraine I am helping Ukraine so you know there's a value in the model being designed to allow for sovereignty for all of us to have a bigger voice in what we use and depend on um the other thing is transactional efficiency like we live in a world where we still have people in between the exchange of money and exchange of contracts if anybody's bought a house you know that's a big exercise on multiple fronts getting the money sending the money signing the contract closing the contract doing the closing uh we're using blockchain in a way to say in a simple example we're building a thousand miles of fiber Network we hire somebody and we're going to pay him for tasks completed mile my mile now one way to do that is have somebody go out say a Mile's been completed call my bookkeeper my bookkeeper sends them money the check gets cash the bank gets involved the other way to do it is set up a smart contract use a stable coin the data comes in one milees built the contract says okay that has been satisfied check the box X dollar of stable coin sent to contractor X in their wallet no fuss no mus now we're far away from being able to do that at scale without concerns and anxiety but technology-wise we have no reason not to do that like we can do that today anything else you guys want to add no this is good yeah I think I you know to me some of the biggest advantages you mentioned resiliency is incredible one for decentralized systems I think everybody here probably knows if aw East AWS Amazon East goes down outside of Virginia half the apps on your phone basically stop working right so decentralized networks actually help fix this problem you know what I would have add one thing to it because of the increased efficiency all the costs of again I go back to the the AC unit cost and that the to power and and run one of those large Central servers is expensive and it it impacts the environment like massively the the the cost of having doing all that maintenance where instead you put it individual homes the way that you know some of these systems do that you don't have those same kind of um overrides yeah I think that's a great advantage of it and uh you know a lot of cases you're actually reusing existing Hardware right right A lot of people have extra Hardware in their house the there's de pins that can use regular gaming Rings there's de pins out there for phones there's deepins out there for servers I would think there's a deepin almost out there that if you have a piece of Hardware you could probably find a deepin you can hook it up to and one rewards which will actually extend the life of compute hardware and reduce the environmental impact of it um so uh here's another topic that gets me excited about deepins because they're so pervas and they can do so many different things Jeff I'll I'll address this to you because I think you might be doing it but can deepin networks leverage other deepin networks yeah absolutely like in our again keep going back on my own case every time but uh but we do the um for our system our deep in is to do the streaming of the video but we have we rely on a decentralized storage system to hold gain data and hold game files so certainly we partnered up with a lot of other defends and there's there are piggybacking going on from deep into to deep in I think that's true because not every piece of equipment can do every piece of the the important piece of the puzzle or can't do it as efficiently as you would want it to to do yeah I think it's good to give some examples like uh I'm not sure what storage nwor you're doing but obviously the the bigger one is the biggest one is called filecoin right right and they're a they're a distributed storage network if you have extra storage you can connect your storage to the filecoin network and you can say it's actually quite nice you have if you have a you know 500 gigs you could say I only want filecoin to have 250 gigs and then you get rewarded for that for the amount of time that you have it there so I'm assuming that's kind of like what you're doing with with yours is that you build you use another decentralized storage Network to address the needs for storage so again you don't need a centralized place to keep very similar yeah great um and then uh so you know Matthew I'm curious to know a little bit about um commoditization of resources and how we drive Revenue through that how do you how do you think D pins need to go out in the market and get those customers to then drive that Revenue well first it's going to be quite difficult because you're going up against a a cartel called Energy you know uh whoever provides that it could be Wii energy or whoever they're not exactly Keen about everyone you know having their own source of energy and they poof out of existence and we just have our own new economy that pops up so getting this out to Market is going to be a challenge it might even take a crisis uh but I think if we can demonstrate perhaps an a potential use case would be serving an area that's completely unserved if if a major energy provider utility company is not already out there then it's not their territory and perhaps we could say well let's let's introduce an an alternative energy model commoditize it and allow them to set up solar panels in this little Community trades with uh amongst each other that might work that might work work it it's it's difficult to say though I mean we're we're seeing in other sectors that the institutions are still pushing back against it I mean think about the financial institutions they even have an incentive they save basis points when implementing the technology and they're still not doing it so in something like energy where it's not in their best interest to give power to the people literally oh that's great I got to use that we we don't know how soon that could be implemented John anything you want to add about the challenges yeah I I think you know first we have some baseline challenges of adoption awareness regulatory framework and as we all know this has hurt the crypto space and blockchain broadly so let's assume we make progress of those challenges over the next five years because if we don't then we have a much bigger problem so then we get into a way of thinking about adoption and I think we have two paths to go down one is we find Green Field ex examples and actually demonstrate a better way to do thing and and I 100% agree with Matt that's a longer term because you have to find the Green Field you have to overcome resistance you have to actually execute you have five years of demonstrating success and capability and then you convince somebody else to follow suit the other way is embedding these Technologies into problems that are already distributed but maybe haven't been fully automated and certainly haven't Incorporated blockchain the classic example that we could think of is is helium right because they're not saying destroy Verizon and buy hilum they're saying we're another way for you to get capacity on the network and we'll pay you a little bit as you make a note available the the other option is in iot right there's very traditional models and there's models that are starting to pull up that allow for some distribution of value if you're bringing information to a municipality in their iot Solutions May maybe traffic maybe Smart City maybe Energy Efficiency so I think our best path for adoption is managing these two pieces uh one is Green Field so you're a company attacking a new problem set probably in the gaming space um or solving a problem that already exists but applying a better approach to it and I think if you guys are wrestling with startups or new ideas you got to figure out which swim Lane you want to be in because it's hard to be both and then attack the problem I think the advantage to just fixing kind of being embedded in quicker to Market less overall upside Green Field you're hoping for you know a home run ba Bases Loaded so if you're able to do that go to it just recognize they're going to be a lot more outs so you got to decide what you want to do yeah and then I had something else I was curious about to kind of play off of that is Jee I'm wondering like what did it take take or what what is it taking to bootstrap a dpin and and and launch it and maybe compare about that compare it to like how you might do it with traditional non dpin methods perhaps using AWS or Google Cloud computer something like that what what are the differences there yeah again I I'll use myself as an example because it's just easier for me but we do run our demo on AWS I think the challenge is you've got it's a chicken and an egg right you've got the demand for your product or your service excuse me demand for your service and then the the supply of your Ser of the business IAL components that enable that service so in the case of us the service we have is cloud gaming um and you can do that on Amazon right now and that's what our test net is built off of but that's too expensive to run you know concurrently that's the reason why we're building our our system to go into the individual node level that individual deepin you know where every gaming computer has a deep has a node already that means we have to quickly sell that many nodes out into the market to cover everything we have on the Amazon which is again very you've got some spin up there to do so what we're doing and I think with what a lot of systems will do is they'll go to a second a mid layer right and have that mid layer stand up the mid layer in our case is you know much cheaper than Amazon but not as not as inexpensive for us to run as that individual ndes so trying not to jump from step one to step three immediately is I think what the struggles that people will come up with and and having again using ourselves as example having some samples of the product the games on a network um that we can manage to maintain while not having the massive cost of having that first layer solution so they having that second layer solution being inexpensive enough and and hosting some things proving the case that there's a supply um or there's a a demand for that kind of service and then having the supply step into it and then always kind of balancing between that second and third layer it's great it's good good experience all right I have one last question and then we'll take some audience questions but if if maybe each of you could kind of answer this question and give me your opinion how do you see deepend evolving uh alongside the other you know kind of crypto narratives that are out there rwa nfts defi where do you where do you see it it's fit in the marketplace Place Matthew why don't we start with you I I do believe that it's going to stay because anything that engages the real world tends to stick around I think where we're getting a lot of trouble in the crypto space are the things that don't actually exist they're imaginary they're they're figments of your imagination it's a meme coin for example however what we are seeing a lot of interest in is something that solves a real world problem and I can't believe it's taken us this long to figure that out that we have to solve problems using technology so if we can apply deepen in again there's so many different use cases but if when and where we apply dpen I do think it's going to stick and I was reading something I don't have a statistic to back it up so no Source but deepin might be the fastest growing sector uh in crypto right now you know it no one knew what it was what is deepin but now it's it's a huge conversation starter because it's could radic iiz or radically transform what our cities and society looks like yeah um my my view is it's the only part that matters it's a little bit extreme but this make believe Financial system is going to be under pressure for a number of years I know many of us have probably participated made some good money maybe lost some money but adding value is proven to be difficult at a global scale now there are countries that don't have functioning monetary systems and they hugely benefit from this Argentina comes to mine simply put it's not US Canada it's not even Mexico right um but simplifying how you decentralized infrastructure the capital ey very broadly defined has been around for a long time I loved your example Chris you mentioned it the other day about Linux I was an early uh participant in the Linux foundation for open source software this has been a long-term problem how do you get people participate in open source projects which are shared projects creating something that's decentralized but compensating them accordingly for the effort to be honest blockchain solves that elegantly and that's what we're applying here some physical asset or electronic asset or compute asset that is better shared than centralized right and all you you have to read is any you know article in the New York Times of the globe the BBC that we're all scared about three companies controlling the lifelines of all technology right Microsoft Amazon uh Google right so the idea that you can create a gaming Network where many people are contributing compute where you can create a telom network where many people are contributing capacity which is why I think if we look five years out the thing that's happening in blockchain crypto world will be dpen because it allows An Elegant technology to be applied to really relevant physical problems as Matt said that's a great answer John I think you the first deepin maxi I think I met yeah Maxi yeah absolutely Jeff yeah so I've been to um a number of conferences this year and the amount of side events and talk that happened around deep and it just grown and grown and grown it's just it it seems to be taking over uh and again maybe we met at a deep day at consensus right and how many side events were going on around deepin in in Austin that year it was it's massive and I'm going to sing for next week same thing there's side events for deepend all over the place there's we're partnering with a chain that's solely focused on doing deepend Peak is a a network that only only um looking at or or knowing that the real value of um deepen is just a a basic part of what blockchain was supposed to do right and I keep on going back to the idea of decentralizing Revenue putting Revenue and this works you know extremely well for for places in the world that that aren't the US right that are having where individuals are having a hard time reaching to re reaching Revenue but the idea that you can make money from the equipment that you already own and that money that Revenue again that value goes immediately into the local economies is just one of the the best benefits of having the deepend narrative taking hold and and getting a a real traction like it is ex excellent okay I'm out of questions so let's take some questions from the audience we got a microphone right here right up right up front so where do you see most of the dpin action being built on L1 L2 wood chains yeah right now currently yeah so that's a good question I think I'll I'll take my first shot and and let it to the panel but uh I think going back a few years most deepend were building their own L1 and you know Jeff had just men mentioned Peak there's a couple of them iot um and a few of them and then there's even salana people are building on salana and I think that is helpful for a lot of D pins to not have to deal with building and maintaining their own L1 helium famously built their own L1 it constantly went down it constantly stopped working it was a major issue for the node operators they they migrated from their own L1 over to Solana which was no small task but I think it's you know you have to make the choice if you're a dpin whether you want to do your own token or launch it on another one the more newer D pins that I'm seeing are are typically picking another chain to launch it on what do you what do you guys think well data was another one that was that was early on a deepen as well but yeah again you see Rise of chain like Peak I think what exactly what you said they were were trying to do the on Layer Two or or helium's case but moving to a layer one that's specifically designed for the Steve PID is probably the smarter move yeah I I just add I think the you know the main thing is stability security and reliability of the L1 and there's many options there right some Enterprise E some not I think in parallel the other big question and we were just chatting about this is what are the token economics you want associated with it and I I personally think the most important element there is you want to behave like a stable coin um we were just literally talking about this that you don't want a lot of variability where you're paying your extended Network I know for the stuff we do we can't couldn't tolerate it I don't want to pay Chris five tokens Friday and maybe a month from Friday 15 tokens because the market moved right I I'm going to transact fundamentally a US dollar stable coin related uh which is good for the work you're doing internationally because most countries want that stability in their currency or at least at an individual level if you get paid you want to be able to buy whatever at that value so I'm less concerned about which L1 to your question specifically on the attributes of the L1 and the attributes of the token economics and for me we would shy away from anything that had VI wild variability the economics because it makes it harder for that token to be transactional in the building of a network or transacting in iot in buildings any other questions no oh right here I'm Calvin thank you guys for the discussion I think the idea of your computer earning revenue for you while you're not using it is very attractive um however I believe it's accurate to say that the majority of nodes operate at a net loss uh most token issuance schedules favor the earliest adopters so I was wondering if you guys have any ideas about how to adjust the E economic models to incentivize becoming the 500th or 5,000th node on a network knowing that in general the more nodes you have the more capable and secure your network is yeah this is an excellent question and I think you've really hit on something that maybe is a little bit of a a plague on the industry the more nodes you have the you have to divide up that Revenue right yeah it's a chicken and egg thing I was talking about and you got like the the the thing to do is look at to see uh is there a demand for as much Supply as they're going to make available and I know in in our case we talk a lot about the idea that we don't want to put more nodes out there than we have demand for because it's just undervalued so people who have been dedicated to giving us our work fortunately video games are not going away they don't it's a dominant form of entertainment so we just know it's always there and again as we talked to game studios they all want to get on to that but you're right that is there's there's been plenty of um notes that been stood up and the first few buyers are very happy and everybody else is unhappy and it's like but like I mean we see that in our industry all the time a little bit too much right The nft Craze the me m coin craze we we we get out over our skis far too often and it's it's coming upon the studios that are starting into the deep in space to not to learn our lessons from the the previous you've gone too far and just be patient and cautious and don't don't buy into the hype don't feed into the hype I would say two words scale and predictability like right now all of this is nent so no matter what you're doing some amount of speculation and which means if you're number one you should make some money if you're number two you're definitely not going to make as much money if you're number 30 you're at risk and hopefully if you're number five million and one the the network has stabilized or the asset I I'm a believer that ultimately we're going to take speculation out of this model therefore the trans transactional value of the token will become very stable and then in that case you're not worrying about kind of getting screwed all you're worrying about is adoption and I think that's the metric we should all worry about because if adoption doesn't occur then you're just who's in line first and who's in line Second is you know it's the don't get eaten by a bear just because I run F faster than Matt argument so so um that's an excellent Vision to end on we're we're out of time I did want to thank cubic labs for putting this on this has been a great three-day event so thank you very much if you guys have any other deepin questions hit us up