Blockchain Innovation & Publicly Traded Crypto Companies
In this episode of Cryptonews Podcast, Matt Zahab interviews Dan Wasyluk, co-founder of Syscoin and CEO of Blockchain Foundry.
They talk about Syscoin, Blockchain Foundry, the instability of stablecoins, Syscoin NFTs, and much more.
0:38 Blockchain Foundry
3:44 Syscoin and Blockchain Foundry
12:50 The instability of stable coins
15:23 Consulting other companies
22:22 Syscoin vs Bitcoin and Ethereum
28:40 Using energy from Bitcoin mining to mine Syscoin
34:25 Syscoin NFTs vs Ethereum NFTs
45:00 Rapid fire questions
47:06 Best places to learn about crypto
The episode initially premiered on June 7, 2021.
Matt Zahab: 0:07
Folks, today's guest is a blockchain vet with almost 10 years of industry experience. Went headfirst into crypto back in 2013. A couple months later, in August 2014, he co founded the syscoin public blockchain. Present day he's the CEO of blockchain foundry, the world's premier blockchain based business solution consulting and design firm. I'm very pleased to welcome to the crypto news podcast, Dan Wasyluk. Dan, welcome to the show.
Matt, thanks so much for having me.
Very excited to have you on board today. Candidly, and full disclosure, I am an investor in the blockchain foundry publicly traded on the Canadian Stock Exchange. Folks, if you are in Canada and have access to a tax free savings account or a Registered Retirement Savings Plan, highly recommend. Dan that is a great way to kick that off. Why did you guys choose to go public and Canada?
Yeah, so really, it was really just a byproduct of the composition of our team and where everyone was located geographically, you know, prior to the company coming together, we were really just a decentralized group of developers working on this syscoin protocol. And as we realize the potential for forming a company to help organizations better leverage blockchain technology, we started to realize kind of where everyone was, and realized, the majority of people were in Canada, and then that kind of naturally led to forming the business in Canada just for tax purposes. And also just for the reason that that's where most people resided.
Nice, I love that. It's always nice, having a couple hopeful to be whales and unicorns on the Canada side. So I'd love to see that.
And it's interesting, because Canada, based on my experience is also much more open to innovative companies going public, you know, going public in the United States is a very time consuming, costly and arduous process. Whereas going public in Canada, there were, you know, avenues available to us, that allowed us to accelerate that process, and also do it at a lower cost. And I think that's a big benefit to Canada's innovation ecosystem as a whole. Right? You know, like, now Canada has a lot of these really innovative blockchain companies doing work on you know, on their soil. And the US is missing out on that just because of how difficult to make things for companies like us.
Very well said. The Canadian Stock Exchange called the CSE is very welcoming, especially with emerging technologies like blockchain, there's a couple incredible companies cypherpunk Holdings, to name one, you have blockchain foundry, and many others. But once you graduate, you get to the TSX V, once you pass the 50 cent, stock mark, and then once you get the $5 mark, and you become blue chip, then you're on to the TSX with the big boys and Big Girls Club. And once you do that, then you get access to the hedge funds, the P firms, the family houses, so on and so forth. And that's when you can really go to that next level, but a shout out Canada great job on that front. So you are currently the CEO of blockchain Foundry and also co founded the syscoin public blockchain, which has been two incredible investments in two incredible companies. Many people want to know how each of these companies sort of intertwine and what is the synergy between them?
Hmm, yeah, so it's a good question. You know, we started syscoin back in 2013, it really publicly launched in 2014. And the idea there was to enable businesses with a set of predefined, hardened smart contracts, so that they could easily combine those contracts kind of like building blocks, and use them in a way that they're very familiar with through a set of standardized rest API's. And essentially, leverage those in different and unique ways to to derive value. As we rolled out syscoin and saw how companies were struggling to leverage the value that was contained within it. We saw an opportunity to essentially develop a business that not only helped those companies to operationalize their blockchain endeavors, but also, you know, take learnings from those consulting engagements where we're helping organizations to operationalize their blockchain vision and spin those off into potential blockchain products. And so, you know, what's really exciting for me is finally, this year, we're at a point where, you know, we've got a very strong consulting pipeline, consulting as a service is going fantastically. We've just raised some cash. And so now we're in a position where we have some very solid product directions to go in. We're fully funded up to go after those products, we're just sort of stabilizing the consulting division to make sure that can continue to grow and succeed in parallel with us going after product. And right now, all of our product aspirations are very focused on leveraging aspects of what syscoin brings to the table in conjunction with the larger token ecosystem. So integrating with things like Bitcoin, Ethereum Matic, and other, you know, major platforms that that users are leveraging.
Can you talk about some of the companies that you've consulted for and the incredible projects that you've helped build with them?
Yeah, it's been a really interesting spectrum of projects. You know, it's not like most industries, where you know, if you're consulting or farming or something, you're always growing crops. Blockchain technology has such a wide variety of applications and use cases that we work with clients ranging from, you know, stable coins, all the way through to identity. And then furthermore, into the space of like file security and, you know, ensuring files aren't modified. So like, an example of one client we work with is load. They're very successful silver and gold back stable coin that exists on this coin blockchain. They also have a third token called the load token. It's actually currently a hyper ledger token, but it may make its way to a public blockchain down the line. We're working with the team to try to enable it on syscoin. And that's some what the new notary technology in syscoin 4.2 helps to deliver. But for load, what we've developed is a Full Wallet ecosystem, a series of different sort of token services. So we've developed a gas station for them, which allows users to exchange their stable coins for syscoin to essentially, you know, cover gas network fees, we've developed a virtual debit card system for them, where users are able to remit their silver or gold stable coins, which are AGX and AUX respectively, for dollars and have those dollars loaded onto a debit card. Then they can use that debit card, of course, anywhere they want out in the world. And then we also developed a method for the load community to purchase these tokens using credit and debit cards. So now load has kind of fully comprehensive ecosystem. And really, the push that we're working with them on now is additional new features that add more value to that ecosystem. And working to get our tokens listed on further exchanges to help enable that community with even more liquidity. So you know, stable coins, that's one use case, a very disparate in different use case, but still in the blockchain space, and something that we've helped or an organization with is identity, you know, decentralized identity or self sovereign identity is a big area that blockchain foundries involved in were one of the founding members of the decentralized identity Foundation, which is actually an initiative that was started by Microsoft, and has since grown to I mean, there must be over 50 companies in the working group. Now, if people are interested in what that's all about, please visit identity.foundation. It'll tell you all about it. But basically, you know, decentralized identities self sovereign identity is all about putting personally identifiable information back in the hands of users who own that information, and giving them better sets of controls through which to expose that information to third parties in ways that did not lead to information leakage, right. And so a really simple example of information leakage is when you go to a bar and you present your ID to the bouncer to show that you're of age to enter the establishment. All that the bouncer needs to know is that you're of age, right? So the only need to know your birthday, but you hold up a card that has your picture, your home address, your sex, your age, your weight, and all of that is now information that's been leaked. That is not really necessary for the bouncer to know but they have that information now. And so decentralized identity is all about creating a technology that allows for you to expose just your birthdate to that bouncer in a trusted way so that the bouncer knows that it's valid and is attested to by a government organization who issued that identifier without leaking those other aspects of your identity, like your address or your eye color, or your height, etc. And so there's actually, you wouldn't know about this from just kind of the outside of the blockchain space, but from the inside, this is a huge movement. And I think it's something that mainstream users will start to get exposure to within the next two to five years. We know pilots that are starting within the next 12 months around it, they involve, you know, 30 plus organizations. And it's really exciting because the company we worked with, in this particular engagement was a major Canadian financial institution. And because of the gravitas an institution of heir size has, they've been ble to really develop a robust cosystem around the ecentralized identity platform hat we help them to build out. nd I think that users in Canada ill soon start to actually get xposure to that system. And ou'll definitely recognize it nce it starts getting, you now, marketed through press and tuff. So those are just two, ou know, really simple examples f clients we worked with, but ery, very different use cases n terms of how we've leveraged lockchain technology to, you now, provide value to them. In ne case, it's stable coins, and ou've got hard assets in entralized bank accounts that re now reflected on a lockchain ledger. In another ase, you've got a very new type f identity movement, alright, elf sovereign identity, and I'm orking to create infrastructure hat enables mainstream users nd other organizations to everage that technology.
best spiels we've ever had on the pod. Thank you for that. There are probably probably 100 different avenues I can take that spiel to. A couple points I want to touch on Firstly, the bank or the financial institution that you spoke about, can you divulge who that was?
I'm not at liberty to name them yet. We're trying to hopefully do some more work with them here in the near term, and you know, be able to be a bit more specific with who they are. But at this stage, just due to their size, and their goals in the identity space, which are very wide ranging, they are trying to keep keep a lid on it.
Okay, no problem. Stable coins. Another thing you brought up. Last week, we had the crypto crash of I guess that would have been may 18, which, you know, it's not really a crypto crash. But in hindsight, it was the largest dip we've had in quite some time. In regards to stable coins, you had $USDC, which I believe had the 89 cent mark, which in theory should never go, you know, center to over or under $1. For those at home, a stable coin is backed or $USDC and $USDT is back to the US dollar. Therefore, it should always hover around that $1 mark, to us is a very easy onboarding ramp to know from fiat to crypto, and has a multitude of other properties and utilities. But in regards to that, and what happened last week, can you explain why $USDT and $USDC really took a hit?
It happened with BUSD too and I'm not familiar enough with how those tokens are managed by their issuers to really speak intelligently about why they would have dipped below their stable coin value. My only hypothesis would be that there was just so much buying or selling activity happening in the stable coin space that the price dipped below what it should have been, but I do wonder why the sort of market makers behind those tokens weren't able to hold them closer to their stable coin gunnery, but without really talking to the issuer themselves, it's hard to turn to really understand why they didn't hold it.
Good to know. I saw that question a million times on Twitter and me personally, I didn't know the answer to that either.
And you know, in previous big crypto movements, it's happened as well, where are those those stable coins have dropped a bit below their stable value, but typically it's in those fast high volume movements, that those kind of, let's call them irregularities, will come up and and typically they are more of like a blip rather than a dip. You know, last night look, most stuff is back near, you know the 99 cents dollar mark and it actually got it, you know, looking at like a one hour chart it was back within that range pretty quickly. But yeah, it is interesting that it did even dip so outside of it.
So going back to blockchain foundry, if I am an investor and I are disclosed that I am. If I am an investor in blockchain foundry, I guess what I'm asking for is to give me the pitch but before I asked for the pitch, to my knowledge, you and the team help consult and help these companies create amazing products and services within the blockchain and crypto space and in return, you receive a chunk of equity inside companies and then as those companies grow, blockchain foundry grows, is that correct?
That is how we try to structure our consulting agreements. It's not the case that every consulting agreement can fit that structure. But that's how we try to start the conversation.
Gotcha okay. If you had 30 seconds to pitch me in an elevator, what would that sound like?
So the pitch is changing. If you'd asked me that question, you know, let's say, a year ago, it would be very services based and talking about how we can help you realize your blockchain vision. And that still is the case, you know, blockchain foundry is still one of the premier, Canadian blockchain, consulting and development service providers, and our consulting practice is busier than it's ever been. But really what we're focusing on this year is products right. So developing, you know, I will say that blockchain foundry is the company developing the pickaxes and shovels in a gold rush, right, where the gold rush is the rush to buy these tokens or hold whichever tokens you think are going to have the most value in the future. We're trying to build infrastructure that allows for those tokens to be compliant, that allows for those tokens to be easily managed and audited. You know, when you have major companies like, I mean, we deal with this problem ourselves as a public company, but I know, lots of other major public companies like PayPal, crypto square, etc, that have crypto on their books. And all of those organizations need a way to report right? And so we are very focused on a product direction that is more infrastructural, using blockchain... like providing the tooling that exists in centralized finance to make that whole world go, but developing those same tools for the decentralized finance space. And so you've probably read about some of the innovations that were developed in syscoin in 4.2 Lux. Notary being one of the major ones. And that feature is really all about regulatory compliance. And we have a whole product platform coming that is built on that feature. And it allows for token issuers to develop rule sets for their tokens, whether those be gamified type rule sets almost smart contract like functionality, or if they are just simple rules, like a blacklist of addresses that cannot interact with their token, all of those rules are stored off chain, and that allows for no incremental cost to either organizations or users when additional rule sets are applied. And it allows for regulators to come in to the platform validate that token issuers are enforcing a certain set of rules. And then validating that various transactions have, you know, what, what sets of rules, various transactions have had executed on them. And that type of tooling is really critical for these types of tokens to remain compliant right? And similarly, we are, like I mentioned building products that are more geared towards helping companies to account for crypto on their books. Right now, the process that's used for that is very arduous and non comprehensive, and the solutions that our products will bring to market will not only make it much more frictionless, but also remove any costs related to validating asset holdings as they pertain to blockchains and also make the process much more seamless end to end between auditors and companies. And so blockchain foundry is really a company developing a blockchain infrastructure for what we believe will be a future where multiple decentralized systems are used to provide users value that replace today's centralized systems. That's not to say that we're slowing down on consulting, our staffing consulting. Our consulting, really we've just refined the criteria by which we select clients to consult for ,that better align with that product vision and that long term goal.
Love that. That was a little longer than 30 seconds. It's very well done now. No worries, it's a long elevator. What can you do? CN Tower in Toronto. It's like a three minute ride up. Want to just take a quick break to shout out our main sponsor of the crypto news podcast and that is a big thank you to our friends at coinpoker. Folks, you've heard me talk about these guys many times in the past, I absolutely love them. They are the premier blockchain based technology platform that was developed by an incredible team poker lovers and sports gamblers. Coinpoker uses $USDT as the stable coin and main in game currency and $CHP as in game fuel. Then I spoke about stable coins. $CHP was pretty much a stable coin during the crash of may 18. Barely lost any of its value and is still kicking strong to this day. Absolutely love to see that. Coin poker is also incredible in regards to the transaction super quick, super fast. $USDT Ethereum, Bitcoin or $CHP, all on the platform and no KYC which is incredible. One of the best parts, quick two minutes sign up, you're up and running your dance and you're off to the races, huge promotions as they give away 1000s in fiat every single week. And again, my favorite part is probably the mobile app. Whenever I'm on the go, I can whip up my phone play a couple hands of Texas Hold'em, bet on some gt sports games, it's playoff season, playoff basketball playoff hockey, you have the Belmont Stakes coming up, you have Champions League, you have Euros in the summer. It is sports heaven season and the sports book app on coinpoker.com is the place to go. That was coinpoker.com. We love you guys appreciate you. And folks, please do check them out. They are awesome. And back to the show with Dan. I have so many questions about syscoin and I know you've touched on it a couple times throughout the first half of the show. But I think a good place to start would be if you could explain sort of the differences between syscoin and Ethereum. And then if you could also explain the differences between syscoin and Bitcoin.
Yeah, so syscoin and Ethereum. So syscoin is a proof of work blockchain that has a hybrid proof of work proof of stake sort of setup that are through a masternode layer which is used to help accelerate transactions and provide additional services to the network. Currently, syscoin supports fungible tokens, non fungible tokens and fractional non fungible tokens. So it's going to also has a notary feature which we recently released and allows for pre transaction compliance. Currently syscoin does not have a Turing complete Ethereum virtual machine. But we are working on an improved version of an Ethereum virtual machine for later this year, essentially.
Sorry, Dan, can you can you explain what that is?
Yeah. Ethereum virtual machine is basically like the engine that allows for users to write and execute custom smart contracts, typically written in solidity. So a lot of what you see on the Ethereum network relative to things like decentralized exchanges, yield farming, staking, decentralized finance, in general, all of those things are flash loans, etc. Those are all powered by an Ethereum virtual machine running a smart contract. And so to bring similar capabilities to syscoin, we are working on our own virtual machine syscoin. However, the virtual machine that we're working on syscoin is a bit different than the direction that Ethereum is going. We're much more focused on using zero knowledge proofs for enabling scalability and speed within our virtual machine implementation. Whereas last time I checked, Ethereum was more focused on optimistic roll ups, which have their own benefits. But, you know, we believe that the zero knowledge side of things is going to be not only more secure, but also faster to execute with lower computation costs. So that's a big differentiation sort of how we are going after the virtual machine model versus how Ethereum is pursuing it. And also Ethereum as a blockchain is an account based model for keeping track of your token balances you know, so it's kind of like almost like a big database where like, my address has one and your address has zero. And if I send you a token an ERC 20 token, you know, my account goes from one to zero and your account goes from zero to one. Syscoin is a what's called a UTXO based blockchain. UTXO stands for unspent transaction output. It's actually the exact same way that the Bitcoin blockchain secures and tracks its value. And we actually had previously switched to an accounting model but then switch back to UTXO, because we found not only were there security improvements with UTXO, but UTXO also allowed us to implement some more advanced functionality around the asset layer that syscoin provides that otherwise would not be possible with just pure account model. And so that's another big feature that was released with syscoin 4.2. In terms of how syscoin compares to Bitcoin, syscoin is probably more comparable to Bitcoin and Ethereum right now, syscoin has a token layer like Ethereum has, but again powered by UTXO rather than account. And like Bitcoin, syscoin uses UTXO, but Bitcoin does not have a native token model, whereas syscoin does. Syscoin is proof of work, just like Bitcoin. And what's actually unique about syscoin is that the way that syscoin blockchain is secured is through a process called merged mining, where proof of work created by Bitcoin miners is reused to secure the syscoin blockchain. So Bitcoin miners have the opportunity to mine Bitcoin and syscoin at the same time without expending any additional energy, and securing both chains. And that approach has led to, not only is syscoin's independent environmental footprint being very minimal, because there's not a large ecosystem of miners expending computation power solely on syscoin, right? They're already expending the computation power on Bitcoin and we're basically allowing them to recycle that power to help secure syscoin. And by doing that, we've also enabled syscoin to become one of the I mean, the second most secure chain on the planet, right now, if you look at coin wars and sort the blockchains by hash rate, you'll see that syscoin is the second highest hash rate of any blockchain on Earth right now. And we expect that to continue to grow because that is being driven by Bitcoin miners adopting syscoin in helping to further secure the syscoin chain. I think right now, syscoin is running at around something like 18% of global Bitcoin hash rate, that might be a little higher or lower, it fluctuates a little bit. But that results in us, you know, having the second highest hash rate, even higher than that of Ethereum. So that's a little comparison.
That's incredible. Thank you for that. And I learned a ton in that two minute spiel there. But how did you guys decide to allow Bitcoin miners to also make money and make cake off of mining syscoin and also contributing to the syscoin hash rate? Like, why isn't this public knowledge? I guess that's a better question. Why isn't this public knowledge because I didn't know about this until I did research for the pod?
Yeah. So that's the thing, you know, it is public knowledge, but maybe it's just not well communicated by our team and we could do a better job of that. But when we started syscoin, the thinking was, and remember syscoin started back in 2014, when you could count the number of blockchains on you know, your hands right now, there's 1000s. But you know, we were looking at the evolving sort of Bitcoin mining landscape and this was when Bitcoin was just moving from CPU and graphic card mining to asix right? application specific integrated chips, which are basically machines that can only mine Bitcoin, that is all they can do, they can't do anything else. And so, there was this, essentially arms race for hashing power having on Bitcoin and we weren't sure what the uptake of syscoin would look like. And it's really critical when you launch a blockchain to have a diverse network of miners in order to really secure it in a properly decentralized way. You know, if you only have one or two miners, it's really easy for those one or two miners to collude and, you know, do bad things to the network, right. And so, we were trying to think of a way to guarantee that syscoin would have its own, you know, diverse network of miners right out of the gate. And that's where merged mining just made sense. There were so few blockchains, people who are already mining things like Litecoin and Bitcoin, were looking for ways to repurpose that power or make more use of that power, since there was an arms race going on, and whatever power they had was quickly being obsolesce right. And so when we initially launched syscoin, it was actually first merged mined with Litecoin. It used to be a script based algorithm coin, and Litecoin it uses the script algorithm. And so we were merged mined with them. But then, I think around syscoin 4.0 or might have been around the 3.0, we switched from Litecoin to Bitcoin, because we just saw that Litecoin is still around, and it's a great project and all that but Bitcoin was really where all of the innovation was happening at a protocol level, things like mast and taproot, which are technologies that are being developed for Bitcoin that will allow it to have greater smart contract capabilities. That kind of stuff was happening in segway, you know, just like all of the innovation was happening in Bitcoin and Litecoin was just not really innovating and just kind of stagnating and people are continuing to mine it. And so we switched our blockchains proof of work algorithm from script to Sha 256 so that we can not only leverage bitcoins hash rate that was continuing to grow, thus giving us better security, but also so that we can leverage all of these really innovative features that are coming into bitcoin that are going to continue to drive it as one of the top coins in the market and being able to bring those technologies into syscoin and leverage them there as well. You know, if we had continued to stay with script, it would have been much more difficult to be bringing in changes from Bitcoin while also keeping up to date on whatever Litecoin and script is doing. And so we decided to just go whole hog with with Bitcoin because that's where the innovation was happening and we're very focused on syscoin being a leading platform for actual money transfer and value execution, and we saw Bitcoin is doing that too. And so it just made sense to follow Bitcoin, and one also thing that people probably don't know about syscoin, but is very different than other other tokens that follow Bitcoin, is the syscoin protocol follows the Bitcoin protocol extremely closely. So, you know, each release of syscoin is up to date, if not just a few code versions behind the latest version of Bitcoin, whereas a lot of these other coins that started from Bitcoin, or were influenced by Bitcoin may have taken a snapshot of the Bitcoin codebase, two years ago, three years ago, but are not really in the practice of keeping up with bitcoin. And that's difficult, you know, I mean, Bitcoin is doing a lot of very innovative stuff. If you look at how many commits or code changes are going into their code base on a daily basis, it's massive, but our team is really committed to making sure that the technology and innovations available in Bitcoin are one to one available in syscoin and taking that further through our work with you know, notary NFTs, zero knowledge proofs and the EBM so that really syscoin can you know, should be a top coin in the end.
You just brought up NFTs. I know you're a big NFt guy yourself. And syscoin has the capabilities to launch secure NFTs on the blockchain. I'd love if you could explain sort of the difference of an NFT on syscoin and an NFT on Ethereum.
Yeah, so an NFT on syscoin is different than an NFT on Ethereum because NFTs on Ethereum are driven by smart contracts as well. And so there are a few different flavors of NFTs on Ethereum and there might be more to come. On syscoin, the concept of NFTs is a bit more defined, because we don't have full smart contracting capabilities yet. You know, we looked at what was happening on Ethereum and the properties of NFTs there that were valuable and we brought those same properties along with some, expanded capabilities over to syscoin. And we implemented them in such a way that the costs would be significantly lower than what's happening on Ethereum, even at scale, right. And we also tried to make sure that the NFTs would integrate with our notary service, because I'm not sure if you've seen but there's a lot of discussion happening in the regulatory space around fractionalize and NFTs and do those constitute securities or not. And because of the notary technology that we've developed in syscoin, whether or not those NFTs that are fractional are considered securities or not, is somewhat irrelevant, because blockchain foundry will be providing products to the market that help for issuers of those fractional NFTs to ensure that they remain compliant by using our products, and working with regulators to show them you know, how those products are being deployed. And so we are really expecting some large regulatory opinions to start being issued both around stable coins and around NFTs. And we really believe that with the notary technology, we've positioned syscoin to be, you know, one of the very few options that's going to be available to people to continue operating their offering, like their stable coin, or their fractionalized NFT.
Dan, sorry to interrupt, please go into those changes. Our whole audience is very curious to hear about this.
You mean, the regulatory changes?
So there's actually, in Canada there's a big forum happening tomorrow actually on Canadian regulatory changes that are coming in both the stable coin space and the NFT space. And so I'm gonna hold off on saying anything specific there until I'm sitting in on that workgroup tomorrow, so I'm gonna get more information on kind of what their current thinking is. But essentially, you know, I know that they're looking to enforce greater controls around stable coins, beyond just like a simple whitelist and blacklist type thing, which is pretty much what today's version of compliance looks like. And then with fractionalized NFTs, it seems like they might be leaning towards just blanket dubbing those securities, like if you're doing a fractional NFT, it's a security no matter which way you cut it. If you're doing a normal NFT then the test, you know, there's like a test for if it's a security? And if that becomes the case, you know, they say all fractionalized NFTs are securities, then issuers of those fractionalized NFTs are going to need solutions like what blockchain foundry is developing in order to continue operating without anyone of various regulatory bodies SEC, OSC FINRA, coming down on them and essentially shutting them down.
What does that test look like? What's the quantifying test in regards to Yes, this is a security or no, this is not a security.
So traditionally, it's been the howey test, but I'm not sure if in respect to NFTs and fractionalize NFTs if these regulatory bodies are devising like a new test specific for the NFT sort of use case or if they're just going to be applying the howey test to NFTs. The way that they're talking about fractionalize NFTs it certainly seems like they're just running the howey test on them. And they've pretty clearly failed the howey test making them a security,
Can you talk about the howey test?
So the howey test is a multi point evaluation framework to determine if an asset is a security. I don't want to go through all of this specific points because I don't want to get any of them wrong, but I encourage users to Google howey test I think it's h o w e y. And you'll see the list of criteria that is used to form an opinion on if a token is a utility token or a security token. Usually the main points of the howey test are, is there are a promise of potential profit with this token? Is the token exists purely for speculative purposes? Or does it serve some actual functional purpose within a system, thus making it a utility token? Like those are two of the major criteria from the howey test, but there are a handful of additional criteria as well.
Right. Very quickly, last question on NFTs here. What do you think the future of NFTs look like? You've seen a bunch of FUD in the NFT space, or the last couple of weeks, maybe even a month or so. Earlier on this year, they were the hottest thing since sliced bread and then they've cooled down quite a bit. And a lot of people spent a boatload of money on NFTs that have decreased in value quite substantially. Now, what does the future that look like? Do you have any Dan hot takes or anything?
Yeah, I honestly think the future for NFTs is really bright, to be honest with you. Um, I think that there was a kind of a hype phase, which is typical with new technologies. But I think that they'll follow a pretty similar sort of technology adoption curve where there's a pop and there's a bit of a drop and I can say that Blockchain foundry is working on very serious NFT endeavors. But we're focused more on like the long term play with NFTs which we don't necessarily think is just like one off NFTs that are sold for millions of dollars, like once a week, we think that NFTs can become a much more democratized sort of user level thing that can be used to provide digital collectibles to users at an affordable price but at a much higher volume, and give those digital collectibles some really unique capabilities and integrations like pulling them into games or providing users discounts or benefits for holding a specific NFT. I also think that there needs to be more systems in place for validating the creators of NFTs in order for them to gain more traction. You know, I'm sure you heard about the fake Banksy and NFTs that were created and people spent 10s or hundreds of 1000s of dollars on just to realize that they were created by some guy in his basement, not actually Banksy. So I think that just like the token space or the ICO space of 2017 needed more regulatory guidance and infrastructure in order to evolve and now enabled DeFi and all the great stuff that's happening in that space now, NFTs are in a similar kind of space. I mean, in 2017, we had NFTs but it was mainly crypto kitties, and it was kind of a passing fad that people didn't really pay attention to because the focus is really on the ICOs. Now, NFTs have gotten a lot more popular, there are new flavors of NFTs on Ethereum like ip 11, it's 1155 or 1195. Sorry, if I got the numbers wrong with so many that I get confused sometimes. But now that NFTs are really coming into the mainstream conversation, I think that there's just a lot more infrastructure that needs to be developed for them both for holding them, for validating them, and for shopping for and transferring them. But that's coming along and blockchain foundry is one of the teams helping to build that infrastructure. And I think they have a really bright future. You know, like when I see these games, both on consoles, and on mobile, like Android or iOS, that have these in game goods you can purchase for essentially fake currency, and the in game goods are just completely fake as well, that's where I see a huge opportunity for NFTs. You know, when I'm buying an in game, I don't know sword or something. If that sword becomes an NFT, and there's only 15 of them available, and they have some special powers something in the game, that creates a lot more value and engagement than just having an unlimited number of those swords available and you can only pay for them in the made up currency that the game uses. Now those swords can exist outside of the game users can trade them and then use them within their own game and it takes on a whole nother sort of life of its own beyond what today is very siloed right, to the game itself, and only game.
Well said there, Dan, this has been a treat. Couple more questions then we're going to wrap up here. A couple of rapid fire questions. When will Bitcoin hit 100k?
No, I think Bitcoin hitting 100k is, let's see, we're in May right now. I mean, I think that it's probably going to happen within the first two quarters of 2022. Um, I think that through the rest of this year, we're going to have some volatility and then be fighting our way back up towards that 100k mark. And I think we'll see Bitcoin breaking it early next year.
Who is Satoshi?
I honestly, you know, I think that Satoshi was really a group of developers. But I do think that... the name is is escaping me right now. But the individual that was working with Craig Wright, and who passed away was really the... Do you know? David climbing, that's the name I'm thinking of? I think he was probably had a major contributing role in the development of Bitcoin, but I don't think he did it by himself. Um, I think he worked with a group of other cyberpunks kind of thing to develop it. And now that he's passed away, you know, we may never know.
Hal Finney? No Hal Finney?
I think he was part of the group, you know, him and Nick's Davo and some of those other names you hear suggested as potentially being Satoshi. I think that they, you know, there's proof that a number of them were early miners and so they obviously must have had some touch point with the creating body of Bitcoin. Or they were just super likely to stumble upon it in the, you know, very niche forum that it was being discussed in the early 2009 period. But I think it was a group, you know, I don't think it was just an individual.
Dan, this has been incredible. I guess one last question for the newars. The newer people, the newbies and the rookies, coming to the space. What resources, YouTube channels, blogs, articles, Twitter accounts, where do you recommend new people coming into the crypto space, who really want to learn and be a sponge, be that fly on the wall? Where are the best resources for them to learn?
So, man for learning? You know, I really think it's a challenge in today's market, because there is so much noise and really sorting out the signal from the noise can be a challenge, particularly when a lot of these journalism outlets are not necessarily always promoting the signal, a lot of times they're promoting noise. You know, and so I always recommend when people are hearing about either concepts or a specific platform or technology, if it's a specific platform and technology, read the white paper, search for its symbol on Twitter, see what people are saying about it, get in their discord, get in their telegram, talk to the developers, see if the developers are anonymous or not, you know, all those kinds of things. If you're getting into a DeFi project, learn about what rug poles are, and how the risks that can be associated with some of those projects. And then when it comes to just like general research and stuff, what I like to do is I like to go to the information sites on these projects that are kind of, they're token projects, right? So if you're looking for information on layer one protocols like polka dot, syscoin, Ethereum, Matic, those are ones where you just kind of have to watch the crypto news and then dive in. But then once you're focused on a platform, like if you're looking for what's the next great token that will be launched on Ethereum. What I like to do there is go to something like uniswap and look at the tokens list and see what tokens are experiencing lots of liquidity and volume, and then use that as sort of a guide for what tokens to maybe investigate. Yeah, that's how I discovered scheibe, for example, which is kind of a Dogecoin wannabe. I don't necessarily think there's a lot of huge tech going on there but it's where I first was exposed to it and then was able to do some, you know, research on it using Twitter and Google, like I mentioned, saw what they were trying to do. And you know, even though I don't think ultimately that it's like a tech project, I thought that there was enough entertainment value in it that people would likely play with it and so I made a small investment there and, you know, that worked out pretty well. So those types of things, you know, are what I would encourage people to think about too, you know, it's like, sometimes the right investment is not necessarily technology based, you know, it's not like some of these projects are developing Earth shaking technology. Sometimes it's purely a speculative will people find this entertaining? You know, an incumbent to Dogecoin, which has become this, like Elon Musk's kind of pump and dump coin. I thought that the timing was right for something like that. And, you know, the market kind of indicated that it was. Of course, then you have Vitalik accessing the 5% they airdropped to him and the team thought he would never touch them and that definitely caught some waves. But um, yeah, sometimes figuring out what to invest in is not always just purely based on technology. Sometimes it's just based on like, passing trends that you just got to identify and decide you want to speculate on.
Incredible. I love the humble brag to end it too. Oh I invested and 100x money not a big deal. No I'm just inferring that. Dan, this has been incredible. I'm gonna have to listen to this two or three times over, I learned an absolute shitload during this pod. I'm very grateful for that. So thank you very much. Before we let you go, can you please tell our listeners where they can find you on social and online? You syscoin and blockchain foundry?
Yeah, no problem. So blockchain foundry you can find at blockchainfoundry.co. You can also find us at blockchain foundry.com but we haven't launched our new website yet. So use blockchainfoundry.co for now. syscoin, syscoin.org has great information there, everything from information about the protocol to different projects using it to how to join the discord and become more involved with community. You know, syscoin also has this unique concept of masternodes and so if you do happen to accrue 100,000 syscoin, you can stick those in a masternode and essentially be staking them and be earning, you know, anywhere from 8 to 15% ROI per year on that. So that's another cool thing to be aware of for syscoin holders. And then for myself, you can find me on Twitter as blockchain Dan, and then I am on GitHub as DWasyluk, and you can find me on our discord as Danisphere, and I'm always happy to chat with BCF shareholders, syscoin token holders, talk about blockchain technology. I'm really a technologist at heart. And so, you know, even though I'm CEO of DCF, I'm still all about the technology. And so I you know, I love talking with people about it, talking about ideas, and just interacting more with people in the space.
Dan, you're the man, really appreciate you coming on. This is incredible. I hope you had a blast and a 100% non negotiable you will definitely be on for round two. So get your popcorn ready and stay tuned for that one.
Awesome, Matt, thank you so much for having me. I had a great time and I'm looking forward around 2.
100%. Folks this was Dan Wasyluk from blockchain Foundry and syscoin. I learned a crazy amount during this pod and I hope you did as well. If you enjoyed this one, please do subscribe. It would mean the world to us. We do launch on Mondays, Wednesdays and Friday mornings. Every single Monday, Wednesday and Friday. We got a brand new episode dropping and we hope you enjoyed this one. I certainly did love you all appreciate you all. Hope you have a wonderful rest of the day and we will see you in a couple days. Have a good one. Bye.