Automatically transcribed, so names and technical terms may be misspelled. The audio is the record.

The Colorado Equals Security podcast is your local source for regional security news, local events, and interviews with key individuals in the region. Now here are your hosts, Robb Reck and Alex Wood. Welcome to Colorado Equals Security. This is the newscast for episode 82 for September 3rd. Alex, it's Labor Day.

It is Labor Day. What are you doing in New York? Well, I'm, I'm not actually in New York right, right now. Right. But it's Labor Day and you're in New York.

On Labor Day, I am in New York. This, we just, we broke the third wall.

When you guys are listening to it, it is not actually the time. We're not recording this live as you're listening to it.

So actually, if it is Labor Day, then you are listening to this and it is my mother's 70th birthday. Oh, happy birthday, Mom. Uh, it is also my 15th wedding anniversary on the 6th. Wow. So pretty well there.

Uh, yeah, you know, not too bad. So we're, we're taking a little trip, going to New York. Um, spending some time there. We're going to see, uh, Harry Potter and the Cursed Child on Broadway, which should be exciting. Uh, nearly 6 hours of Broadway show.

Wow, that is a lot in, in 2 parts. But yes, uh, should be exciting. Going to Statue of Liberty. Um, you got tickets to get up there? Uh, we can't get to the crown.

We did not get there early enough, but we can get in and, and see some stuff. Just feet? You can go just to the feet. You can climb up. We can get to Ellis Island.

We can see the feet. Um, you know, maybe get up under her dress, but, but not all the way to the crown. Wow. Is this thing on? Hey, let's do a little bit of a housekeeping here.

Uh, we, we do have a reminder that there's a Slack channel. You can join us with, with, have some good community and conversation out there. You can get onto the Slack channel by going to colorado-security.com and clicking the Slack channel button. Also on colorado-security.com, we have a mailing list, so you can enter your email address there and sign up to the mailing list. We will send you show notes for each episode.

And we want to remind you to rate us and review us and subscribe to your favorite podcast listening place. If you're, if you're an Apple person, you can do the pod— the iTunes Store, or excuse me, the podcast app on the iTunes Store, right? That works, all that. Yeah, if you're somewhere else, then figure it out. Exactly.

And finally, we have a Patreon campaign. So if you're interested in a little bit more support for Colorado Equal Security, you can become a patron of ours. If you sign up for the $10 a month or greater level, we'll give you a shout out on the show and a free t-shirt. Gotta love those shirts. Exactly.

Alex, if you right now you're hungry, you're hoping to go get some delicious Italian food, but it's important to you that you eat inside of a cable car. Okay. There's very few options for you in Denver, and it's about to get even lower. Yeah, I was gonna go out to dinner and have dinner at the Old Spaghetti Factory, and then I realized they're closing. Well, good news is you should probably do it now.

Oh. So they are still open. They're actually open until September 16th. This is the Spaghetti Factory that's there on 18th Street downtown. There for 45 years.

That's pretty crazy. Um, I can remember it being there as long as I've been here, which is not 45 years, but, um, you know, probably half of that. And, you know, going down to Lodo before the explosion down in that area, and you had the old Spaghetti Factory. It was a fixture in the area. So it's kind of sad to see that close.

I'm disappointed to see it go. Of course, um, there, there is still the Old Spaghetti Factory in Broomfield, and they say that they're looking at putting another one somewhere in the metro area after this one closes. They just couldn't come to terms on the lease. But if they put a new one, then wouldn't that be the new Spaghetti Factory instead of the old Spaghetti Factory? Let's not blur anyone's minds any further.

Okay, sorry. Next, Colorado ranks number 1 in the best economy states. Finally, we're on the top of the list where we should be. Exactly. So this is looking at a couple of factors, one being unemployment.

Where we have 2.7 at the time of this survey, 5-year annual GDP growth rate, which is also coincidentally 2.7, which was 4th best on the list, and a 5-year unemployment growth rate of 2.4%. So that's good stuff. We— that's all good. We came out top of the list. On the bottom of the list, the lowest ranked states are Louisiana, Alaska, and West Virginia.

I guess we will not go there. Just a reminder where not to go. Next piece of news, Apple has acquired a Colorado startup, and this is really all around what looks to be a play for them getting into augmented reality glasses. Yeah, so they acquired a company out in Longmont, and they make holographic lenses. It's Akonia Holographics.

So this is pretty cool. Um, that company currently holds more than 200 patents. Um, and this is projected for Apple to use it for either glasses or some other kind of augmented reality device. Yeah. Or something having to do with them taking over the world.

I'm, I'm pretty sure they haven't taken over the world yet. Um, next on the list, uh, Senator Cory Gardner helped introduce a cybersecurity bill that deals with automatic sanctions for cybersecurity attacks unless the president says no. So it's pretty cool. Basically, if we do see a nation state has impeded or in any way attacked the United States, there would be this automatic sanction. And then on a case-by-case basis, the president would have to say, you know, don't implement those sanctions.

Yeah. I mean, it's sort of interesting. I'm not sure exactly why you would need the let's do it unless you say you don't, as opposed to, um, let's do it when we think it's necessary. I think it puts some more pressure on the president, right? That, hey, and also the other nation states know that there is this kind of default action that would impact them.

And then if the president is, let's say the president seems for some reason to, to not be willing to enforce things against one certain country, then maybe, you know, it would be really obvious when these things should be going into effect. You know, I could see where that might come in handy. This is all hypothetical. Hypothetically, we don't get into things like this. Exactly.

Next, if you want to talk about laws, we have a couple of stories here about the new Colorado security law. We have— we did talk about this a couple of weeks ago. I think it's especially relevant because as you listen to this, this law is now in effect. It is now the law of the land. Yeah.

And I think it's funny looking at some of the details in these 2 articles, you know, talking about how the law is very strict and Um, you know, all the things that people have to do to comply with this. Um, and yes, while it is a little bit more strict than some of the laws, the strictness really comes in the, uh, the notification time period, right? So it's a 30-day notification time period for a breach. Um, other than that, you know, we're implementing provisions that I think are fairly sane and pretty normal compared to a lot of the other regulations that are out there. Yeah, I, I bubble it down to 3 things, you know.

One, If there's a breach, you have to notify within 30 days, and that includes notifying the consumers and the attorney general. You have to have a security program in place to properly protect data, and you have to have a data retention or data destruction policy as well. Those are the 3 things, right? These are not crazy requirements, right? One of the things that was interesting in one of the articles was they noted that it doesn't seem like any Colorado companies have have asked any of the enforcement bodies about these laws.

So either people aren't paying attention, yeah, or they really don't have a concern over complying. Well, I think that if, if they're big enough to have been paying attention and know it's coming, then compliance is no big deal. But there's this huge swath of companies that have no idea that this law is coming, is going to impact them, and those folks are certainly not going to be ready. Yeah, I think the other thing, and I'm not sure if it was mentioned in either of these articles or not, but this, as we mentioned in the last time we talked about this, the new regulations do affect public organizations. So government entities, which previously were not held to the same standards as private entities.

So government entities, school districts, other things like that now have to comply with the same regulations in Colorado as private entities. So That is, that's a big deal for them. Um, yeah, so moving on, our next story here, we have a story about a, a judge in Loveland, Municipal Judge Jerry Johnson, who is, uh, looking to enforce a zero tolerance, um, policy around cyberbullying. Obviously, we, we hear all kinds of stories, you know, just in the last week heard about a 9-year-old who committed suicide due to, due to bullying. I don't think it was cyberbullying, but due to bullying.

And, and cyberbullying is apparently becoming a much much worse thing these days. So this judge is basically going after zero tolerance for kids around cyberbullying. It— you and I were talking about this. What does this exactly mean? It's not really clear.

Yeah. And, you know, I understand the rationale behind zero tolerance, right? It's you don't want to give people leeway so that they could potentially be more lenient on somebody when it should be— they should be punished. But I also don't like the fact that there isn't any leniency. Right.

So Um, you are talking in many times here about children. So kids make mistakes. Kids don't always know what they're doing. Uh, cyberbullying is horrible. Any kind of bullying is horrible.

Um, but I'm not sure if zero tolerance is, uh, necessarily the right way or not. Yeah, I do think, you know, there's, there's some interesting things in the article here and other folks might want to take a look. Um, they, they, we do point out that we're the 9th highest state in the nation around suicides. With 179 suicides by, I guess you'd call it kids, but between 10 and 24 years old in 2016, which is the most recent year we have data for. We gotta do something, you know, and this judge is trying, you know, trying to identify a real obvious place.

I know, I would like to think you do this in addition with education and giving the support you need for folks who are being cyberbullied rather than just, you know, zero tolerance for the offenders. Whether this is the best way or not, clearly her heart is in the right place trying to make a difference and, and help with the problem of cyberbullying. So that's great. Yeah, that is good. Next on the list, the Denver Business Journal released their 2018 Fast 50 finalists.

Alex, were there any security companies on the list this year? Well, Robb, I'm glad that you asked. There was one security company, InteliSecure. They were on the list. What does InteliSecure do again?

They secure Intels. I love it. That's good. It's a well-named company. Yeah, exactly.

So they do DLP and managed services, other things like that. Yeah, DLP and managed SIEM. I think we've had a couple of those guys on the show in the past. Also consulting. They have a pen testing practice, other things like that.

But congrats to those guys. Steven Fruelzer, the CEO over there, and Jeremy Whitkop and Misha, who we've had as co-hosts on the show. Congrats to all you guys. Next, we have a press release here from Webroot that Digital Shadows Searchlight has integrated with the Webroot Intel service. So now customers of Digital Shadows are getting the Webroot threat intel as a part of that service.

So good for Webroot. You know, as we have said previously, they seem to be going more with partnerships as opposed to direct-to-consumer products. So again, they're taking their threat intelligence that they built and putting it in other products. Doesn't it seem like it's been more than a quarter since we heard that they've, that they've had, you know, 18 consecutive quarters of double-digit growth? You know, we're just starting September here.

September is the, the last month of the quarter. So I'd imagine not too long we should hear another article about them. It feels like it's been a while. I wonder if they missed a quarter. I sure hope not.

I'm not, I'm not trying to cause any rumors. Right. But we'll see in October. Right. If there's another story that says, hey, 15, 16, 17, whatever number we're at, consecutive quarters of double-digit growth for Webroot.

Yeah. All right. Uh, next, uh, Coalfire had a blog about, um, taking over a GitHub repository. So this is actually sort of interesting. When I first read this, I saw it and I thought, oh, this is not going to be very interesting.

And then I started reading it and, uh, Slurp, which is an open source tool to look at AWS, um, S3 buckets, figure out if there's permission problems. Someone developed that, put it out on GitHub, and then essentially abandoned it. And then they deleted the account for Slurp. This researcher at Coalfire realized, hey, I can go into GitHub and recreate the repository and essentially take over the assets for this project. And there's links all over the web to this GitHub account.

So anyone who wanted to go to Slurp would go find a link that's been, you know, that was dead, this guy can put up a new, a new version. And I think the gist of it is he could replace it with whatever code he wanted, right? It could look just like the authentic Slurp with malicious code built in. And it's just a really good example of the challenge you get with GitHub where when you delete something, there's no protection about somebody else coming up behind it and creating it again and really replacing it. Exactly.

So there is definitely reuse that can happen in GitHub. So if you have a project out there, it may be a good idea just to make it go dark as opposed to deleting it. And also, if you have deleted things in the past, maybe you should go take a look and make sure no one's taking it over. Yeah, and there's a couple of blog posts from Ping Identity this week around MFA, and the first one's about the integration between PingID, which is Ping's MFA solution, and YubiKey. And Yubico makes the YubiKey, which is the hardware token that You know, it's a nice USB form factor that you can plug in to be that, that hardware token.

They're just talking about the integrations of it. I personally was a little interested in talking about this, this article this week because it gives me an excuse to mention that Google just released their, their kind of YubiKey competitive product they call Titan, which is a USB key that they use for, for multifactor. That is really the only other one. It's basically YubiKey and now, and now Google's that are going to go head to head in this market. Yeah, so it's pretty cool.

Um, I have a YubiKey myself. I use it for second factor authentication on some stuff. So, uh, definitely a cool solution and glad Ping is doing that. Um, Robb is pulling out his YubiKey on his keychain. We can, you know, I'll pull out mine as well.

We can, we both have YubiKeys. We can, uh, share YubiKeys. Hey, look, there it is. It looks very similar. Uh, the other Ping blog, uh, talks about 5 preventable breaches and the case for using MFA for each of those.

So they give 5 potential scenarios here that could have been prevented by using MFA. So these are all based on real scenarios. In some of them, they talk more specifically about the actual scenario, but it's talking about 5 sort of typical kind of scenarios and how if MFA would have been enabled, that they could have been prevented. I think at this point the, the solution is you should have MFA on all the stuff that matters. You don't have to put MFA everywhere, just the places that you care about security at all.

Yeah, that's fair, right? Right. So not quite everywhere, but, but mostly everywhere that matters. Yeah. Yeah.

All right. That's the end of it for news. Let's go ahead and go over to our Slack message of the week. First, I want to say thanks to Andre Gaeta. Andre, we really do appreciate your continued support of this and being the sponsor of the Slack message of the week.

And this week we want to recognize Chris Abbey. Chris has been a big contributor on the Slack channel for a long time, and he asked a great question this week in the jobs channel. His question was to the group, and I do believe it was for a friend of his, not for him, but he was asking, do people think that taking a job doing security in the cannabis industry would have a negative impact on that person's career, you know, for their next jobs, right? Yeah, and there was definitely a good discussion around that. Definitely an interesting question, right?

So it's, you know, there's some risk reward there, right? A, a, an industry which, while legal in Colorado, is still not a completely legal industry in the country. Yeah. You know, would that hurt you in your career? I don't know.

Potentially. You can imagine trying to go get a job for a federally chartered bank after working there and the bank just doesn't want that risk. Right. I think it was an interesting conversation. And, and there was actually some folks who gave some really good examples.

Examples of people they knew who had run into challenges of it and, and talked a lot about the immaturity of the cannabis industry and how much they really could use good cybersecurity folks. Yeah, so thanks to Chris for starting the conversation, and thanks to Andre for sponsoring the Slack Messenger of the Week. Awesome. Let's go ahead and jump over to events. As a reminder, we do have a calendar of events on the website, colorado-security.com.

Click over to security events and see what's going on here through the end of the year. And the first event, which is looking out a little bit still, we are co-sponsoring the Ballard Spar Colorado Cybersecurity Summit, which is happening on the 18th of September. This is a half-day event at the Ballard Spar offices. Going to have a good lineup there. Looking forward to having people there.

Check out the website for more information on that. You going to be there, Alex? I will be there. You going to be wearing your Colorado Equal Security gear? Well, I mean, I'm going to be now that you said that.

The shirt, the, uh, my shorts. I know where you're going, but I will be wearing my Colorado Equal Security shorts.

Not the thong though. Definitely the shirt. Uh, so next event, uh, we do have a SecureSet Hacking 101 event on September 6th. On the 7th, uh, Colorado Springs Cybersecurity First Friday social and Mixer is happening down in the Springs. On the 7th and 8th, we have a 2-day CCSK training done by Cloud Security Alliance.

I did— I believe it's done by Muhammad Malki, our friend over there. I believe so. Uh, on the 10th, InfraGard is having a training. You have to be an InfraGard member to participate in this, but it is on identifying, investigating, and interrupting targeted cyber attacks, an instructional course for government employees. So you have to be an InfraGard member and a government employee.

It's a pretty, pretty good opportunity though for those who it's relevant for. ISSA Denver has their September meetings on the 11th and 12th, and I'll tell you, the, the— if you're looking for an excuse to come see the Ping office, we're going to have the downtown meeting on the 11th. That's Tuesday evening at the Ping office, and you can come, come see where I work. Uh, if you want an excuse to come see the Pulte office, this isn't it because the DTC meeting on the 13th is at Microsoft. Well, there you go.

Um, CTA on the 13th is having their Insight Series, Blockchain Explained: What You Need to Know About Blockchain and Beyond. And beyond, huh? And beyond. Uh, also on the 13th, SecureSet is doing their career conversations with Laura Baker. On the 14th, SecureSet is doing a beginner's intro to capture the flag, the extended mix.

I like that. All right, let's go ahead and jump over to jobs. We do have a couple of jobs here at Ping. I am hiring a cloud security architect. We're looking for someone to help us with the architecture and documentation and requirements for security within our AWS environment.

Also at Ping, we're hiring a— it's on the website listed as an SRE manager, but it's really a kind of a NOC/ SOC manager, the person who's going to manage that 24/7 monitoring function for us going forward. Awesome. SomaLogic is hiring a VP of Information Security. Is that SumoLogic? Is that what you said?

It says SomaLogic on here. I don't know SomaLogic. Do you? Um, I, I only know them because this was sent over to me as a good-looking opportunity in town. I don't know the company though.

Awesome. But it is SomaLogic. Dish— speaking of a company we know— Dish Networks is hiring a Senior Leader in Cybersecurity. This looks like it's reporting directly to the So yeah, also an interesting position. Comcast is looking for a senior director of software-defined network security products.

Holy smokes, huh? Yeah, that seems like a cutting-edge kind of position. Yeah, pretty neat. Uh, PDC Energy is hiring a security analyst. ICF is looking for an insider threat analyst.

That sounds fun. PWC— I mean, a lot of acronyms. PDC, ICF, now PWC. PWC is hiring a cybersecurity incident response director. RC is looking for a content manager of information security.

RC being Red Canary. That's not really abbreviated, but I think, you know, with the theme, I should call them RC. I think that this is a kind of a product marketing type of a role, but I'm not positive. Take a look on the website. Looks interesting to me.

We have a couple instructor roles here. SecureSet is hiring a network security instructor here in Denver. And then University of Denver is hiring a faculty director of computer science professional programs in the Ritchie School of Engineering and Computer Science. Man, that's a mouthful. Yeah, so I did read through this one and you need a PhD and you got to be super, super smart to do this.

And so I'm sorry, this isn't going to work for me. I don't think it's going to work for me either. Ding. Well, with that, that is the end of our news this week. We have a feature interview here with Sasha Shtern.

Sasha is an entrepreneur who's investing and advising in blockchain and that whole next generation of what can we do with cryptography in the open distributed world. And previous to that, he was an entrepreneur in much less— more mundane things. And we're going to get to learn about that. I'll give you a little hint. He is the owner of Denver Bath and Granite.

All right. Not the transition you expect, right? Is he tracking all his stones through the blockchain? You'll have to listen to find out. Ooh.

All right, well, that's it for this week. Have a great holiday and enjoy New York. Thanks, Robb. All right, see you guys next week. Hi, this is Colin Mariner, VP of Data Center Operations at HomeAdvisor.

This is Colorado Equals Security for Colorado security professionals by Colorado security professionals.

Welcome to Colorado Equals Security. Today I'm sitting with Sasha Shtern. Is it Shtern or Shtern? Shtern, you know, for star. All right, Sasha, this is our first time getting to meet, and I'm really excited to dive into the work you've been doing in blockchain.

And, you know, you've certainly been a part of Colorado trying to move toward one of the centers of excellence for blockchain, I think, in the— really in the world. But before we do that, I have a question. What was the first bathtub you ever sold? First bathtub sold, it was an acrylic tub for 2 people. Really roomy.

A 2-person tub. A 2-person. Yeah. What'd that thing run for? What'd it cost?

Uh, I think it was like $1,500 shipped. Nice. Like delivered to your house, including freight. Did you sell any of those? What do they call them?

The, the, the claw-footed— what? Uh, no clawfoot tubs. Clawfoot tubs. Um, so this was somewhat early 2000s when, when clawfoot was not in vogue. Okay.

But, um, today I think we'd— if I was in the bathtub business, we'd be selling more bathtubs. Yeah, so, so I love, you know, when I do these podcasts, I love to get a little bit of flavor outside of the normal stuff. And it's really cool, you know, the first business you ran was selling bathtubs on eBay. And how in the world did you get into that? Well, my, my dad and my cousin were selling— were building a few homes.

And so I had a supply of bathtubs because they needed to buy them for this project. And the way I got familiarized with with eBay actually ties into my crypto roots. When I was a— my dad built up a large stamp collection, and when I was a kid, I helped— not when I was a kid, but when I was in junior high, I helped him. Yeah, so I suppose I still was a kid, but I helped him trade stamps on eBay. And the reason he accumulated such a large stamp collection was because he used stamps to hedge against the Russian ruble.

And that, that's what a lot of people in— is he living in Russia? Is that— no, but my family immigrated here when I was a kid in '92. And a lot of people in the second world, there's a lot more folks in Russia and in China that collect stamps just as a hedge against inflation. So, but that was after he moved to the States that he was still collecting stamps as a hedge against inflation? He at that point had, had a lot of stamps and was more like trading stamps.

I think it was a little bit more of a hobby. He still owns a big stamp collection. The untold story about eBay is that much what Amazon did to bookstores, eBay did to all these collectible shops. And one of the best early use cases of eBay was a place for trading cards and stamps and coins, these little things that you could easily ship around. Yeah.

Well, so I do, you know, I want to hear your whole life story, but let's finish off with this bathtub. Business. So you started selling bathtubs on eBay, and it sounds like it went well enough that you kept doing it and you expanded. Talk to me about that. Yeah, bathtub business was great up until the recession, and then we had a warehouse full of bathtubs that nobody wanted to buy, and that was pretty painful.

2008, 2007, you know, by the time it was really— it took until like 2009, 2010 for things to really catch up. And then we, we really had to figure out something different. And that business over time evolved into much more of a manufacturing business. The company's called Bath and Granite in Denver, and Bath and Granite is a place where people go to remodel their kitchens and baths and then has in-house a stone fabrication plant. Really?

Yeah. And you're, and you're still an investor in that, is that right? That's right. Yeah, so I own Bath and Granite, and that was a place for me to really learn business and a way for me to engage with the entrepreneurial community in Denver. So do you still do operations there, or you're just an owner who gives some advice here and there?

Closer to the former than the latter. I'm sorry, closer to an owner that gives advice here and there. We've got 2 really smart guys there that run the business most of the day-to-day, and I help out once in a while, but they seem to think I get in the way more than I help out. Fair enough. So let's back up.

You know, we started with, with bathtubs on eBay, but take me back further. Where are you from originally? My— I was born in Uzbekistan, former Soviet Union. Yeah, and there was— was it Soviet Union at the time? I'm guessing you're somewhere around that.

Yep. Okay, and then there was a There were 2 people in Boulder, a husband and wife, that helped relocate Jewish families from Central Asia to Boulder, Colorado, and I think they relocated something like 250 families. They were called the Americans for Soviet Jewry, and so that's how my family ended up in Boulder when I was a little kid. Okay, so you're as close to native as just about any of us around here. You've been in Boulder for a long time.

Where did you go to school? You went to school in Boulder. Did you leave for college, or what'd you do? No, I never left, and the more— you know, I'm on a plane now like once or twice a month, and the more I leave, the more I love the Denver-Boulder area. I spent one semester at CSU, and then transferred to CU Denver, and I've been in the downtown area since then.

So that's great. Really going on 12, 13 years now that I've been in the downtown area. Sure. Just kind of bouncing around the different neighborhoods. Okay.

So you got out of school, was, was the— or were you still in school when you started doing the bath stuff? Yeah, yeah. I've really been an entrepreneur, wheeling and dealing kid almost all my life. So the bathtub business really started when I was in high school. Okay.

And I ran that through college, and I got a degree in finance. While a lot of people were cramming for accounting tests and things like that, I was actually learning how to run a business while being in business school. It was actually super helpful for me. Yeah, I was getting a formal education while I was getting the very informal education. So, you know, fast-forwarding just a little bit so we don't run out of time before we get to the main thrust of blockchain, it seems like a pretty significant left turn to say, you know, you had your your bathtub business that turned into Bath and Granite, and how did you get interested and get involved with, you know, this new technology of blockchain?

Yeah, so I've just always had a fascination with monetary policy, and I also wanted to make a lot of big bets in emerging technologies. So first I just got enthralled with this idea of a pseudo-anonymous character The guy's name Satoshi Nakamoto. Nobody even knows if it's a guy or if it's a group of people. Japanese pseudonym, but writes in perfect English. And then this person is able to conceive of a system that since launch has been— has had 100% uptime, has seen limitless number of attacks, and has been able to sustain all of this.

So it was just kind of crazy how it came together. And the story pulled me in as much as my interest of monetary policy. This idea of how does money get made? How do governments print money? What are the rules that govern that?

What are the economics that govern that? So it's really interesting to get your perspective on this because you're, you know, you're coming in from the opposite direction, I think, of most of the listeners. You're coming at it from an interest in financial policy and, you know, macroeconomics maybe, and we're probably coming at it from the technology side, right? It's a cool technology. Yeah, it's a cool set of things that, that one could conceivably do with this new technology.

Yeah, so I sort of backed into the technology and had to figure out how does this technology really work, because we have this digital money, but these are 2 really antithetical ideas. Digital makes things easy to copy, but for money to have value needs scarcity. And in the past, we always did this with a trusted third party, with PayPal, with the bank. And now we can do this. Now we have money that can't be copied.

Well, I think, you know, as we talked about before recording, it would be worthwhile to spend a few minutes describing, you know, kind of giving a baseline. What is blockchain? And you've talked— you're now kind of talking about Bitcoin on top of blockchain, and, and maybe just get some definitions and terms. And if you don't mind, yeah, that'd be great. So the easiest way to start to understand blockchain tech is to understand cryptocurrency, and the easiest of which is Bitcoin.

So Bitcoin is digital money, and the Bitcoin system created this really novel method of consensus. So when we use PayPal, we have PayPal— the core of PayPal's technology is a ledger. It's probably pretty simple. The complexity of that ledger is integrating it with the banking systems, the legacy banking systems across the world, and securing that ledger. And that's doing the kind of work that you do.

But the ledger in and of itself probably isn't that complicated. It's not that different than what you see on a lined book in somebody's back office for an accountant. Yeah, exactly. Debits and credits. Debits and credits probably, you know, could be conceived of as a spreadsheet.

Yeah. So Bitcoin flipped this idea of a private ledger that's top secret somewhere at PayPal onto its head and created a public ledger. That said, anyone can create a copy of the ledger, anyone can interact with the ledger, but no one can manipulate the ledger. And if no one can manipulate the ledger, well, who can write to the ledger? Because PayPal is the only authority to write to the ledger.

So Bitcoin created this really novel idea where there's a math problem, and the math problem takes 10 minutes to solve and adjusts for difficulty the more people there are solving it. Makes it more difficult if there's more people, correct? Yep. The more compute power dedicated to solving the math problem, every 2 weeks it adjusts to make it more difficult. And there's been downward adjustments as well.

So there's a race to solve the math problem. The math problem is such that it's very difficult to solve, but very easy to prove that it's been solved. Prove the solution. All the miners are racing to solve the math problem. The first one that Solves it, says, aha, I've solved it.

And as a right to the person that solved it, they have the authority to write to the ledger. So all the transactions that get generated in Bitcoin go into a temporary memory called— Bitcoin calls it the mempool. All the transactions hang out there, and when I choose to send you Bitcoin, I volunteer a transaction fee. So PayPal dictates the transaction fee. In Bitcoin, everybody can volunteer however much or however little they choose to pay.

The more they pay, the higher priority they are, is that— Well, so the miners have this economic incentive. The blocks are limited in size. In Bitcoin, they're limited to 1 megabyte. So if there's more transactions in the mempool that can fit in a 1 megabyte block, which transactions will you choose to process in your block? The ones that pay the highest fees, because the miners get to collect the fees, right?

So Satoshi engineered this really interesting system. He also created rewards. So early on, there was no one using Bitcoin to send money to one another. So the rewards, they started as 50 Bitcoin. If you mined a block, you'd get 50 Bitcoin just as a reward on top of all the transaction fees.

And something like every 2 years the reward halves, but the transaction fees increase proportionately. So it started at 50, then it went to 25, and I believe now it's 12.5 Bitcoin. And that is also what throttles the, the inflation of Bitcoin. That's how new Bitcoin gets created. So the number is going to continue to halve, and then it's gonna plateau around 21 million.

Yeah, so that's the total number of bitcoins that will ever exist, is 21 million. That's right. So the total number of bitcoins that will ever exist is 21 million. That is the Bitcoin system in a nutshell. So some other guys said, this, this system is really cool to track this static information, but what if I could, into this similar type of system, insert little pieces of code.

And that was the Ethereum Virtual Machine. The Ethereum Virtual Machine has a Turing-complete programming language that, that you can write software that will exist into perpetuity. Now, that software is limited in its capabilities. We call those programs smart contracts, and those smart contracts can can execute all sorts of little tidbits of information. In my view, that is the future of blockchain technology.

That's the interesting stuff. Yeah. So this— I've always— I'd love to dive a little bit more into smart contracts. The idea of a contract that automatically executes upon some condition being reached, right? I'm going to pay you this amount of money upon title being handed over to me for this home.

It's all programmatically handled. What I always struggle with is how a contract, how a smart system is able to evaluate the truth of a condition. What— yeah, how does it know that now I now have my title or whatever? That's a, that's a great, great question. So on your specific example, the governor of Colorado has set up a blockchain council.

I'm actually working on the smart contract working group of the Blockchain Council. So I'm asking the right guy. You're asking the right guy. One of the things that we need in Colorado is a way to programmatically query the state database with public— that contains public records to say, was the title transferred? And if it was, then money should be exchanged, and therefore we eliminate the need for an escrow service because we can wrap an escrow service in a very simple smart contract.

A better way to The more immediate use cases would be those that can depend on sensors. So we can create a use case that would say my self-driving Volvo will pay your self-driving Ford a fraction of a penny when it passes it on the highway. In other words, your car will let my car pass, and a sensor would be able to tell us— because I'm in a big hurry, I'm willing to pay more to get there faster. Exactly. I could create my own HOV lane, right?

We can imagine a world where mesh networks make economic sense, where my phone will pay your phone a fraction of a penny to relay a signal off of its radio instead of connecting to a central tower. So this is where the Internet of Things blends in with transfer of value. Mm-hmm.

Lastly, there's a system called oracles. So oracles are supposed to be truth tellers that interact with the outside world. There is— some oracles can be programmatic oracles, so program— rather, electronic oracles. So we could say I will pay you if it rains tomorrow. Well, we can both agree that the Weather Service or the Weather Channel, whatever, is going to be our chosen oracle.

But if it's, I will pay you if the Broncos win the Super Bowl, then which source are we gonna trust? Do we go to ABC, Fox, who knows? And there's companies that are popping up that are gonna be that oracle service provider. And some things are not so binary.

So kind of an interesting bad use case, there's a decentralized predictions market having been created. So it's completely decentralized, there's no way the government can shut it down. And this would be a very nefarious use of blockchain tech. I can create a predictions market— well, this idea of predictions markets are that you can If people have a vested interest in betting one way or another, if they've got some skin in the game, then they will bet more accurately. They'll research more thoroughly.

They'll use insider information. So economists have done some experiments. If you get meteorologists to predict whether or not it's going to rain tomorrow, they'll predict with one level of accuracy. But if you give them each $100 to bet which day it'll rain in the next week, you'll get another higher, a better level, a higher level of accuracy. Now here's a real use case for it.

How would a predictions market have shown us different results in the most recent presidential election than exit polls would have? Maybe if we had a predictions market in place, we would have known, well, Donald Trump is going to clearly win. And instead we were relying on kind of these biased sources that really had no incentive to tell the truth, right? There's kind of a lot of punditry. You're trying to incent— you're trying to incent better behavior to make the world more forecastable, basically.

Well, that's one— well, yes, so one potential use. Yeah, or you could just bet on the Broncos game, or you can have nefarious uses for them. That's where I was going. What if I said I will create a predictions market on whether or not Robb will live past December 31st, 2018. Okay, and I will put $100,000 to say that he will survive past that date.

Then suddenly the person who takes the other side— well, the person that takes the other side now has a strong incentive to make sure you don't survive, right? Right. And if I can do that anonymously in a marketplace that can't be shut down, yeah. Then there's potential negative implications there. So I do want to— these use cases are very interesting.

And as we talked about ahead of time, I want to dive into more what the practical implications and uses of blockchain are. But I still want to understand, like, to what degree are you involved? I know you're involved in this on the governor's blockchain advisory group, and I'll let you talk about that. But how did you get involved? And what did that What did it look like as you started getting involved?

Were you just investing in Bitcoin or going to meetups, or how's that work? Yeah, so first I'd like to answer your question as to what the Blockchain Council is doing. Okay. I believe we have a really unique opportunity right now to where Colorado can be to blockchain tech what Pittsburgh is becoming to autonomous vehicle research. Really what Silicon Valley became to internet tech.

We just have this unique opportunity. We've got some, some companies here that are doing really interesting work. We've got a very enthusiastic community, and we've got a lot of just interested stakeholders. So if— what can we do in Colorado to give it this fertile ground to say, if you are an American, you want to experiment with this technology, or if you want to create a business using this technology, the place to do it is in Denver or Boulder or Colorado Springs. I got involved first just researching this, like, fascinating story kind of coming out, reading up on it, then buying Bitcoin, then getting involved in the local community, which, which originally was like 6 of us.

And there's a really smart guy by the name of Kent Barton who started Ethereum Denver. I showed up to his first meetup, and then he asked myself and one other guy to help him organize the meetup. And for a couple years, we kind of like subsidized this community with pizzas. We also started another meetup called Rocky Mountain Blockchain, which was all things non-Ethereum.

So I'm now really mostly an enthusiast. I have a venture fund, and we are invested in, in one blockchain project right now called Market Protocol. They're creating a protocol to help trader trading companies trade derivatives on blockchain. So this is actually pretty exciting use case. So Market Protocol allows oracles to plug in.

Their oracles are financial data service providers. So we probably shouldn't dive too deep, but someone in Mozambique will be able to get price exposure to Apple stock denominated in Ethereum using Market Protocol. That's a pretty big expansion of the financial system. Yeah, we don't really think about a lot of these problems, but like if you live somewhere outside of the US and you want to buy Apple stock, yeah, how do you do that? Or how do you at least get the price exposure to Apple stock?

It's pretty challenging. Yeah. Okay. Yeah, I mean, my, my first impression when I think about what, what we use blockchain for is that for the most part, we don't need to be using a distributed ledger for most of those things, right? We just need to use a secured ledger that we can trust and, and that that what we get from blockchain may be exercising a new technology that could have— with a use case that could have been solved a different way.

And that's what I'm trying— still trying to get my arms around, is where are there places that you're solving problems that couldn't be solved previously? Like, I mean, the stuff you're talking about with, you know, I'm paying— one car is paying another to pass it— you could solve that with existing technologies. You don't have to use a distributed ledger blockchain to do that. So Ford and Volvo could form a consortium and they all agree on one, one database to use. And there's lots of examples that we could find of those things happening outside of blockchain.

So is it just making it easier? Because, because it's— I don't even know if it's all that much easier when you're having to implement the technology in both, in both sets and all the sets of manufacturers to make it work. Yeah, I would say, what if Ford and Volvo don't want Tesla to be part of the consortium, right? This is where we run into problems that blockchain can solve, which is opening up, eliminating barriers, because we don't need to trust in one organization. We don't need to trust in one technology.

We— it's the notion of trustless innovation. But I don't know how Speaking of money, right? You familiar with with Venmo and you're familiar with Zelle Pay maybe? Yes. So Venmo is now purchased by PayPal, but let's talk about before it was part of PayPal.

Yeah, yeah, absolutely. So the third-party payment system we could do peer-to-peer. I could pay you money for lunch and and we integrated with the banks using ACH, which wasn't isn't a very pretty way to do it because it takes a long time for money to move. And then the banks came along and said, "Hey, this these Venmo people are taking business that could be ours." They create their own network between the banks. They make it go faster than Venmo can do it by, by, you know, really innovating.

And they really in a lot of ways have kind of pushed Venmo out of that. But their consortium doesn't include all the banks, right? Their consortium only gives these benefits to their banks and other ones kind of can get into Zelle Pay, but without, without the enhanced speed that you might get if you were one of their banks. So I think, you know, in any place you look, you're gonna see these same paradigms. Do you use the, the state, you know, these open standard, or do you use the proprietary one?

And the people who have the, the pole position to say, hey, I'm gonna implement it into my product the best way, the Volvos and the, and the Fords, they're always gonna try and push for their proprietary stuff. Yeah, so let's use, let's use money as the first use case. Sure. Truth is, here in the States, My bank does a great job, and I've got dozens of solutions, everything from Visa to Venmo, and I really don't need digital money. Yeah, you don't need to improve my life.

But that's a very US-centric view of the world, and we do trust our institutions. The original bet on Bitcoin for me was that central banks will continue to make mistakes. Mistakes due to bad data, mistakes due to ineptitude, mistakes due to corruption. And as they continue to make those mistakes, there will be a flight to safety. Mm-hmm.

In the past, that flight to safety was precious metals. In the future, I believe that flight to safety will be digital currencies. Because digital currencies have all the features of precious metals, only they're easier to hide, they're easier to transport.

It's pretty easy to shake someone down of the gold rings or their gold tooth fillings or whatever, and we've seen that in history. So it's very easy for me to send you $5 for lunch if we are in a different place in the world, it probably isn't that easy. And we don't have this trust in our institutions. So a lot of people ask me, what will be— what's— which cryptocurrency is going to be the winning cryptocurrency? And the winning cryptocurrency is probably going to be the same cryptocurrency when you see Venezuelans using the same cryptocurrency as the people of Turkmenistan.

That will likely be the winner. And so the question is, do you believe in the— we will live in a future where things will be more globalized and there will be one borderless currency? Or do you think in the future we will live in a more isolated state where each country continues to have its own money system and its own banking system? With its own barriers. Yeah.

I mean, and I don't know that it's necessarily one or the other, right? I think that there's room to have both, a more global world, but you're not gonna get rid of monetary policy across all countries. Correct, but we've seen countries basically shut down their money system in favor of dollars. So right now people are talking about Venezuela dollarizing, that their only savior is dollarization of the bolivar. They've had hyper, hyper inflation.

I think it's like a million times inflation in the last couple years. And Zimbabwe just adopted the dollar. So it's either gonna be the dollar, which might be reviled in some places of the world, or something else. And the bet is that that something else will be cryptocurrency. Yeah.

What about the limitations we have right now with transaction time, you know, to get— especially for Bitcoin, right? Bitcoin transaction time, is it still trending up? Because it's a significant amount of time from when I try and do something to when it's actually processed, right? Yeah, the capacity of the Bitcoin network is increasing, and it's substantially faster than it was. The network really got clogged up for a period of time there, and it wasn't really an issue of transaction time is a question of transaction fees.

In other words, if I'm sending you $4 for a coffee— yeah, suppose you're a merchant and I send you $4 for a coffee. You will receive that $4 in like 3 days, 3 days when, when the bank settles with Visa, right? And can you wait my $4 to get it via Bitcoin? Probably. If I'm buying your house and I want to use Bitcoin, I'm probably gonna put like a $20 transaction fee on it, and you'll have the money in 10 minutes.

Problem is you don't want to put a $20 transaction fee on a $4 transaction. So it depends on how important the payment is. Now that's Bitcoin, and you know, there's, there's not a lot— there's a lot of folks that prefer other cryptocurrencies that don't have the limitations that Bitcoin does. Bitcoin is by and large positioning itself as this immovable force and a store of value. It is the digital gold.

Yeah, it's not necessarily the fastest, not the sexiest, but it gets the job done because it's the most widely adopted. If I need to send you a small quick payment, There's lots of cryptocurrencies that work great for that, better for that. Yeah, I don't want to— I don't want to stop this interview without having talked a little bit about security, right? Clearly you talk about, you know, if Bitcoin is the digital gold, you know, why do robbers go after banks, right? Because that's where the money is.

They're gonna keep going after our digital currencies. Where do you see security as a discipline fitting into Bitcoin, Ethereum, other areas? And, and where would you say there's opportunities for us to get better? Yeah, so first, the important thing to acknowledge is that cryptocurrency is much safer from a security standpoint. Because much safer than what?

Than a bank. Because if I rob the bank, I rob everybody's accounts at the bank. If I— if someone steals my keys, they steal my Bitcoin. So I mean, I'll push back on that. You know, the exchanges we've had recently that have been popped and people have lost lots and lots of value, you know, has devastated communities of users of cryptocurrency.

Whereas as far as I'm aware, I've never heard of a bank that lost the money of their folks. It's FDIC insured. They're not getting hit. Okay, so a few things. First of all, correct, exchanges have been hit.

But let's, let's keep in mind exchanges aren't just banks, right? So the future of technology, if they're, if they're storing cryptocurrency on behalf of their clients, they're effectively a bank. They're an uninsured bank. And exchanges for some period of time were really the Wild West of banks. And, you know, it's kind of like banking in Colorado probably at the turn of the 20th century.

There's probably bank robberies all the time.

So that doesn't make me feel it's more secure. That's correct. It's not more secure. But if you hold on to your own keys, it is more secure. And there's lots of ways to hold on to your keys.

But right now you need to be somewhat technically savvy to hold on to your keys. So the future of security for the cryptocurrency world is providing tools that are much user— more user-friendly for people to store their keys. Hardware wallets are the first step in that. Can you describe what that is? Yeah, a hardware wallet, think of it like a USB key that is seeded with a word or a series of words.

And that key plugs into the USB drive on your computer. It authenticates transactions on behalf of you for your wallet, but there's a firewall between the private key and whatever application is seeking that authentication. So it's supposed to be impossible to get to extract the private key out of the USB key. The only way you can recreate the private key is with that seed. And presumably that seed is either memorized by you or it's locked in a safety deposit box or under— in your underwear drawer, wherever you see fit.

So from a security and usability perspective, please jump in if I get something wrong here. The hardware wallets are fantastic from a security perspective. But in order for me to be able to make a transaction, I have to spend my money or, or get money either way, I assume I have to have that hardware wallet plugged in and available online in order— otherwise I can't do a purchase or a sale, right? I have to have it. Yeah.

Now hopefully the hardware wallet will become something like my mobile phone in the future. And it's on my body regardless. Yeah. And in the event my mobile phone is stolen, I will reseed another hardware wallet and withdraw all the money before the thieves can. And maybe I have 2 hardware wallets, one for my day-to-day spend when I want to buy lunch with you, and the other one where I might keep my savings.

You keep, you know, $1 million in your, your, your real one, and you keep $1,000 on the day-to-day spending. Yeah, and you can see how that would actually solve a real, a real problem for the huge proportion of the the world that is unbanked. They just don't have access to a bank. And I could see— I could even see using an exchange for the $1,000 of normal spending here and there, right? Because, because, you know, the exposure if that exchange is hacked is pretty low, but you still have your, you know, the majority of your money in a place that you trust.

Yeah. And as the exchanges become more sophisticated, I'm sure their security practices are getting much better. And I think the exchanges are also in the process of coming up with insurance schemes, much like FDIC, so that collectively they are protecting one another in the event that one of them does suffer a loss. I was just thinking that earlier. It makes a lot of sense for all of them to get some trust in the market and what they do.

Another thing I hear commonly in listening to security podcasts about this is there's a species of malware that looks to do it whenever it goes into your clipboard and will replace what looks like a Bitcoin wallet address with another one. Yeah. So because, because, you know, they're so— you know this better than I do— they're so long and complex that you can't memorize them. And it's always going to be a copy, copy paste function to make a payment. Yeah.

So it'll replace a wallet with the one, you know, going to the bad guys. Have you heard of this? Is this something that's— yeah, yeah, this is— I think Most people early in the scene have heard of that and were warned, you know, make sure you remember the last 4, you know, copy and paste, but also look at the last 4 characters, make sure they're the same. And I would just hold this akin to the technology being still quite raw. I don't type in an IP address when I want to visit a website anymore.

There's name services that exist. Likewise, there will be name services for crypto addresses in the future so that when I want to send cryptocurrency to you, it'll be rob.eth or something like that. So the Ethereum name service already exists. I'm sure all of us, all of us security guys on the backend are thinking, well, yeah, there's DNS poisoning. So, so when you type it in, if I, if I got you to translate it to the wrong thing, it goes the wrong place.

And obviously, to your point, it's about immature technology, and I'm not, I'm not here to suggest that you were gonna solve all the those problems today. But, but, you know, it's gonna, it's gonna be cat and mouse the whole way, for sure, because that's where the money is. And that's why we need guys like you to continue to secure these systems. Yeah. You know, we are, you know, we're a little bit over where I thought we'd be right now, so I want to get maybe another 10 minutes or so with you to talk about the Colorado scene.

You know, you mentioned we think, you think we have a really good chance to be kind of the global, or at least a national spot for blockchain tech. Talk to me about what's going on here right now. What are some of the cool things happening? You know, we've— we're gonna be talking to the new CEO of the National Cybersecurity Center down in the Springs who's focusing on blockchain, and I'm sure you know way more about it than I do. So share what you think is interesting going on in town.

Well, we, we just have an enthusiastic group of people here that love the technology. Yeah. That group culminated in what we think is probably the largest blockchain hackathon in the world, February of this year. We're going to hold it again February of next year. I think we had something like 1,200 participants from something like 20 different countries come to Denver for a hackathon.

What was it called? It's called ETH Denver. ETH Denver. Yep. ETH Denver.

So it was on South Broadway, I think. That's right, yeah, at the old Gart's Sports Castle. We put that on the— we had that on the show's calendar. Yeah, so that would be an example of community. When Kent, Corey, and I got started, there were really 2 meetups.

There was East Denver meetup, and then there was a Bitcoin meetup. And today, if you go to meetup.com, you're really gonna see another meetup every day of the week, which is really why I've stepped back a little bit from the meetups because there's just a lot of folks that are really engaged and enthusiastic and they've got different meetups for everything blockchain related. You don't need to keep driving it at that point. We don't need to keep driving it. We also have an entrepreneurial ecosystem and there's lots of companies blockchain related or blockchains specifically.

In northern Colorado, there is an exchange called Radar Relay. In Denver, we have one of the largest exchanges, ShapeShift. In Denver, we also have the largest Bitcoin lending company called Salt Lending. Oh yeah, we've talked about that. Yeah, and we've got folks I think we've got more of the military folks in Colorado Springs now doing things like forming the Colorado Cybersecurity Center, centering some stuff around blockchain.

Yeah, so there's the business community. I think the next step is— so there's 2 next steps. One next step is we need to make policy, legislative policy, and also just rulemaking policy that's very friendly to blockchain startups. So, for example, if you are a crypto exchange, are you going to be regulated the same way a money transmitter is or a bank is? And if that's the case, then they're probably not going to open up in Colorado and they're not going to open up in the States at all.

So, there needs to be some sandboxes probably made for companies that are doing below a certain transaction volume. For them to be excluded from certain rules. We also need to get the— we need to get the educational community on board. I would love it for someone at CU to be able to get a master's with a focus in blockchain, master's in computer science with a focus on blockchain. It really is greenfield.

Now, a lot of technology comes from academia, right? Presumably internet had a lot of roots in academia. Blockchain tech did not. Bitcoin did not come out of academia. And I think, as far as we know, as far as we know, and I think academia is at risk of really falling behind.

That aren't our large academic institutions— we need them to step up if we want to say Colorado is going to be the future. Yeah, if you're gonna start a blockchain-based startup, you need to know that Colorado is where you're gonna find very niche talent. The talent and the support from the government and the vent— I assume the venture backing as well, right? Is there venture funding here available in Colorado for this stuff? Yeah, I mean, there's venture funding available for everything.

There's more venture funding on the coasts, but at the end of the day, As a VC myself, I think that if you've got a really strong background, a really strong plan, great team, you're gonna be able to raise money around whatever it is. Yeah, if you want to hustle hard enough. I don't think there's— I don't think there's a shortage of capital. There's also not a shortage of ideas. It's a shortage of strong operators that are willing to capitalize.

It's hard to find the talent Yes.

Another Colorado-focused question. I believe, I might get the details not exactly right, but I think in the last week or two I saw a story where Colorado, I'm not sure who it was, someone shut down 3 different ICOs or didn't approve 3 different ICOs here in the Denver area. Are you familiar with what's going on there? I'm not familiar with it, but the issue is that ICOs. Could you maybe just— yeah, so you can— so there's this idea of a utility token.

So think the most commonly used analogy is a workout, an exercise gym. You're going to— suppose you're an entrepreneur wanting to build a gym. What if you pre-sell memberships into your gym before before you've built your gym. And so you would use the proceeds of those early membership sales to— I'm sorry, let me get more specific. So I'm building the next workout gym, and I'm gonna tell you memberships are gonna be $100 a year once the gym is built.

But if you buy a membership today, I'm gonna sell it to you for $20. Okay. And maybe I'll sell 1,000 memberships that way and raise $20,000, use that money to build the gym. Mm-hmm. It was like Kickstarter.

Yeah, but your membership units are tradable. You can resell them, and as the gym's getting closer to being built, maybe they're worth $40.

Maybe the day before— the day before the gym is built, they're worth $99, right? Presumably. And maybe I proved to be an incompetent builder and 2 months after I told you the gym was gonna be built, it's now worth $19, right? Are these securities? I think that is yet to be defined, and we've got a working group within the Blockchain Council that's working on that.

What it really is is pre-selling capacity. Yeah. And that hasn't been defined. These are tokens, they're tradable, they have some kind of worth to someone, but they're being used for fundraising much like a security would be used for fundraising. Is it a currency?

Is it a security? Is it just physical property? What is this asset? Mm-hmm. The regulators basically said, well, it's probably a security, and the industry has come back and said, well, that's a very stifling definition.

Definition, and not helping us. Yeah, and of course the regulators are trying to protect consumers from what they believe to be potentially nefarious activities. The regulators are, yeah, they have a tough job, and they're trying to maintain a balance. Yeah. Well, this has been fantastic.

We've covered a lot of topics. I wanna make sure, is there anything that you wished I'd asked that I haven't asked you yet? No, there's a lot to talk about in this area. I definitely understand the skepticism from your community around this topic. We also joke, you know, is someone blockchainifying something that has no business being blockchain?

And if I can substitute the word blockchain with database, it probably doesn't need blockchain, right? But there are some very potent use cases within the public sector as well as the financial sector. And when you start talking about outside of the United States, where we were— we have a lot of trust in our institutions in the US, rightly so. Not always, but rightly so. We have a lot of trustworthy institutions.

When you start getting outside of the United States is where I definitely hear where you're coming from, that there are countries where you just can't trust those. Yeah, even in the US though, think about the 2 2008 crisis where the financial crisis had all sorts of causes for it, but one of the things that catalyzed it was fear of the murkiness of the assets. People don't really know what's inside of these CDOs. Yeah, and the beautiful thing about blockchain tech was that when it's used in that type of financial scenario, that it's very transparent and easy to audit. It's easy to audit for regulators, it's easy easy to audit for investors and consumers.

So those types of sophisticated financial products, presumably in the future, would be much safer than they are right now, where it's kind of like siloed off and nobody really knows what's out there. And the regulators are supposed to make sure that, that companies are maintaining the right risk levels, but who knows if they actually are? Yeah, in a blockchain world where databases are more transparent, we can think of ways to prevent something like the 2008 financial crisis in the US. That's obviously a pretty compelling case if we can accomplish that. Yeah.

Yeah. So it's not all phantomware, but there is a bunch of that too. Well, there's a lot of promise, and we're still yet to deliver on all the promise, Which makes sense. We're early in the technology adoption curve here. The, the big success for blockchain right now is Bitcoin, and I think everything else we're still trying to figure out.

How does it— I would argue Ethereum is also a huge success. You think so? The currency or the smart contracts? Well, they're tied to one another. The Ethereum virtual machine needs a currency to pay for for compute capacity.

So if you're a miner on the Ethereum virtual machine, you're storing, but you're also computing.

So, but what aspect of Ethereum would you say is a huge success right now?

So Ethereum is the platform on which everything else is being built now. Not everything, but, but I am yet to see smart contracts change the way business is done or change people's lives. If you're seeing it, I'd love to hear about it, but I haven't seen it yet. I am seeing glimpses of it. So I recently was pitched by an entrepreneur who is building a ticketing system that will be very heavily rooted in smart contracts that will allow the issuers of, call it, a concert ticket to either block scalping or to take a cut of the scalper's transaction.

In other words, I will sell you a digital ticket. That ticket is transferable. It's a token. But if you transfer it, I will take a portion of your sale proceeds. So it'd be an example of a smart contract that's not that complicated.

Yeah, that can be adopted in the near future. And anyone that's used a ticketing system or had to interact with scalpers would hopefully see the value in that. So totally see the value, but as of right now, I don't have that, right? These are, these are all ideas that are enabled by the creation of the Ethereum platform, but as of yet it's not hitting— Yeah, so part of the challenge is that the development tools don't— there's not enough development tools that exist, there's not enough developers, there's also not enough capacity in the network. So a lot of things have to mature.

So this is— I think this would be like me in 2001 describing Netflix to you. Mm-hmm. We're— we can't stream video that well yet, but But we know that we're going to be able to as the capacity— it's going to be a game changer. It's going to be a game changer. So that's what I'm here to tell your community now is that we don't know what the use cases are going to be, but we can see that they will be game changers.

Awesome. Well, Sasha, thank you so much for your time. It's good for all of us to get to hear a little bit more about what's coming down the road. Thanks for having me. All right.

Learn more about the Colorado security scene at colorado-security.com. Where you can see information about local security groups, a calendar of upcoming security events, and learn more about Colorado Equals Security. Reach out to Alex and Robb by emailing info@colorado-security.com.

Until next time, remember, Colorado equals security.