🎤 Interviews Katya Michaels

How We All Go Into Space: Aliya Prokofieva Has Mission Under Control

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U.Today spoke with Galaktika’s CEO about why it’s worth reclaiming our passion for space travel
How We All Go Into Space: Aliya Prokofieva Has Mission Under Control

Aliya Prokofieva doesn’t look like the usual suspect for the founder of a private space initiative, but upon closer inspection, it’s evident that this destiny was inevitable. Having grown up among the astronauts, engineers and sci-fi writers who were part of the community at the famous Pulkovo Observatory, she caught the space fever as a child and carried it, with purity and dedication, to the establishment of her company Galaktika.

In the last few decades, the incredible advances of technology are showing us more and more than anything is possible, but it seems we tend to be over-focused on the way new tech can improve our screen resolutions and scrolling speeds. Aliya intends to shift that focus where it belongs– space, the final frontier. U.Today spoke with Galaktika’s CEO about why it’s worth reclaiming our passion for space travel, not only for the opportunities it will create in the space cities but for the way it can change human society here on Earth.

Drops of Jupiter in her hair

U.Today (Katya Michaels): Aliya, in the last couple of years you have become a prominent player in the private space development industry, but I wanted to start at the beginning – both your mother and your aunt were astrophysicists?

Aliya Prokofieva: Yes, that’s correct. My mom was not only an astrophysicist, she was also chief constructor for the Pulkovo Observatory, one of the biggest and oldest observatories in Russia. She also worked on the observatory in Norway’s Spitsbergen and many others.

UT: That must have been a strong influence on your path as a woman in tech, having these amazing role models.

AP: Of course, although as a child I didn’t dream of being a scientist or an engineer. I am more interested in culture and society, specifically the way scientific discoveries can serve humanity. From the beginning in this industry, I have been more focused on creating something that will help people, that will endure after I’m gone and contribute to sustainable solutions that will be applicable all over the world.

UT: Did your mother also believe that it was possible for humanity to colonize space in your lifetime?

AP: You know, it’s interesting – my mother was born, grew up and worked in the Soviet Union. When she was 19, Yuri Gagarin became the first man in space.

It was 1961 and everybody really thought, both in the Soviet Union and the US, that people would be living in space by the millennium.

There was this absolute confidence that the next decades would see massive and fully scaled space development. Not only my mother, but many scientists and engineers in the Soviet Union thought that this would be a reality. If you were to ask some of the old NASA guys who remember those times, they would say the same. So, my childhood impressions were a melding of the engineering facts of space exploration and the romantic-scientific idea of the imminent reality of life in space.

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The nearness of stars

UT: I feel like the archetype of the romantic scientist is a uniquely Soviet phenomenon, in many ways exemplified by the sci-fi works of Strugatsky brothers, and that it doesn’t really have parallels in other cultures… Do you think that’s true?

AP: I don’t believe it’s unique, because international sci-fi authors like Isaac Asimov and Arthur Clarke were at that time writing the same kinds of stories as Arkady and Boris Strugatsky. However, what really is different about the Russian approach to space is the background philosophy.

Space was first explored not for the explicit purpose of scientific discovery but approached as a source of spiritual development for humanity.

The philosophy is called Russian Cosmism. It’s a phenomenon that appeared at the end of the 19th century, counting among its proponents such distinguished writers as Dostoyevsky. It was not about technology – Cosmist thinkers explored what space could mean for the human soul and eternal life, in a metaphysical way. In fact, Konstantin Tsiolkovsky, one of the founders of cosmonautics and space travel, was inspired by the philosophy of Russian Cosmism to work on his scientific and engineering discoveries.

Swapping space travel for VR

UT: What do you think happened since the 1950s to the way space travel is viewed? It seems that humanity was dreaming of flying cars and space cities, and instead got smartphones and virtual reality. Kids used to dream of being astronauts and now they want to be Instagram influencers.

AP: I think that the main reason for the change is the fashion for particular heroes – what we are shown in social media, in films and so on. Although I don’t agree with you that kids don’t dream about being astronauts. I know lots of young people, both in the US and in Russia, who are really passionate about space and would like to have access to more information and opportunities.

I suppose what I’m trying to do is create a fashion for space – for going there and being connected with it. That’s why I decided to create this community and this space movement.

It’s not so much about technology, but about creating a real community of people who will be supportive to each other to make space real. That’s my mission.

Space playground

UT: Do you meet with a lot of skepticism? How well informed are people generally in terms of the realities of modern space technology?

AP: Generally, people think that space is something that is very far and not relevant to them. They are taken by surprise when I tell them that we are actually all living in space, already. We have the technology, but it doesn’t have the mass reach of cars or airplanes. There isn’t enough information out there, and it’s part of my mission to educate people. I mean, if you and I were chatting in the 1950s and I’d tell you that it would be possible to converse on video from any location, over any distance – you’d think I was crazy. The same thing is happening with space development, it’s just a question of greater scale.

UT: A big part of what you’re doing to make people more aware of the possibilities of space is an educational initiative here on Earth. Could you elaborate on that?

AP: That effort is in two parts. One is a virtual community platform which is a combination of social networking, project collaboration, an incubator, and a funding structure. It will also give users access to lectures, educational materials, films.

The second part is a space city prototype on Earth, an edutainment format that will be a mix between Universal Studios and the Guggenheim Museum. We are currently creating multimedia and interactive materials for the project. The goal is to make visitors really feel what it would be like to live in space.

UT: Where would this center be located?

AP: Currently we are thinking Switzerland, a location with an area of about 30,000 square meters. We would also have an area nearby for a Mars or Moon safari theme, where visitors could test real equipment. Hopefully, this kind of science center will demonstrate that space is not something distant or fearful, but engaging and fun.

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Off-world equity

UT:  Private space initiatives get investments from the big players, but when will it be possible for everyday, small-scale investors to get into the space game? What kind of returns could they hope to see and in what kind of time frames?

AP: We are in the process of creating tools that will make that possible. It’s something that I have often faced during my space journey – the financing problem in the market. Space companies are either very small startups or established giants like Space X and Blue Origin.

As a result, many great minds don’t have access to financing because most investors think space technology is really remote and risky.

In fact, space investment can be less risky than many IT startups or real estate projects.

Space technologies can be used both in space and on earth– to name just one example, solar panels were originally a space technology and are now a major part of sustainable solutions on Earth.

In our project, the fund structure is a combination of classical venture capital and investment capital instruments, accessible for institutional and large private investors, with a cryptocurrency crowdfunding framework. I discovered that there are so many people who are interested in making their impact on the future of space exploration, whether through intellectual contribution or financial investment.

We also feature different investment categories, with short-term returns within three or four years, midterm returns in five to seven years, and the long-term over ten years. Our management team can work with investors, linking different projects and bringing stable returns of at least 25-30 percent within two years, and those are conservative figures. We are implementing Blockchain and smart contracts to make these investments safe and transparent.

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May the forces be with each other

UT: We’ve been discussing private companies, but of course there are government space programs as well. Do you think private and government sectors will combine efforts? How will they work together?

AP: I believe everyone will join forces. Even now, NASA and the European Space Agency are very supportive of private space initiatives. The future will favor projects that join together public and private efforts–  governments can provide the infrastructure, and private companies contribute a solid business approach since they are understandably motivated by returns on investment.

UT: What about collaboration between nations? When you talk about your project in Russia and in the US, do you feel that there’s a remaining competitive feeling left over from the Cold War? Or is that completely in the past?

AP: I think that in general it’s gone – as you are well aware, what you read in the newspapers is usually someone’s biased agenda. In the space technology, everybody understands that countries should be supportive of each other. What I find interesting is that people are really prepared to collaborate and create joint projects, such that every country’s and every company’s competence is employed to the fullest for the common good.

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Making Marvel comics real

UT: One of the most fascinating questions about space colonization is how it will change human society, both in space cities and here on Earth. You have written about relative autonomy of space colonies as the variable that will determine community development. The first stage is a very demanding survival mode– do you think modern residents of developed countries, used to comforts, are ready for those kinds of sacrifices?

AP: I see that people are searching for something interesting, and their reaction depends on how information is presented to them. If you focus on details of technology development, financing issues and challenges that astronauts face, that can get boring and seem like it’s very far away. When you show how space directly affects people’s lives, show them space as a source of inspiration– their eyes light up.

This is especially true when they realize that they can influence this process– intellectually, financially or by direct participation. It’s like making Marvel comics real! If they can be a part of it, they are eager to step up to the challenge. The space colonization endeavor is really a new, unprecedented type of collaboration.

I think people are tired of the emptiness of social media. What’s the point of showing off and getting a few thousand followers, if that’s all that will be left after you’re gone? What they really want is to make an impact on the future of humanity and the planet, something that will last for generations.

The space city itself is more than a technological challenge. On the one hand, it’s a new economy that will provide a unique professional opportunity for every field– medical, engineering, technical, entrepreneurial, cultural. On a different level, it’s a metaphor for a new era in human evolution, a new purpose for people’s lives.

Independence from Earth

UT: You wrote that at the later stages of increased space city autonomy, these city-states will gain independence from Earth governments. Do you believe this will be a seamless process? Won’t the mother countries fight to retain their space colonies?

AP: I believe, and this is one of my goals as well, that there will be a shift in the mindset. We are still living in a very competitive society, but transitioning to a contributing society. We are used to saying, ok, these 100 acres are mine and these are yours. It’s amusing when people try to apply this dealing to space, which clearly belongs equally to everyone.

I hope that countries will be united in space, regardless of religion and politics, but the way this will turn out depends on us  – whether we’ll be entrenched in colonies separated by borders, or sharing space as human beings who are citizens of one community.

Don’t panic

UT: What is your personal dream of space?

AP: My personal dream is to inspire every human with the vision of life in space and to build the first space city. I want to make space travel as easy and approachable as buying a ticket from New York to London.

UT:  What are your favorite portrayals of space life in books or movies? Something that really reflects the way you imagine space.

AP: Actually, I am currently writing a script for my own space film, as well as a fiction book about a girl’s space journey. What I don’t like about most sci-fi movies is that they portray space as a harsh and hostile environment, while it’s a source of great inspiration and value for humanity. My favorite ones are still Star Wars and The Hitchhiker’s Guide to the Galaxy. They are closer to my idea of how life in space could be – not always friendly, but exciting and adventurous.

Here, you can listen to the Technotopia talk with Aliya Prokofieva.

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⭐ Features Yuri Molchan

Is Tron Merely Another Pump and Dump Project? An Interview with Crypto Chico, ‘Truth Lover’ and ‘I-Dotter’ Regarding Crypto Projects

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Tyler Swope, also known as Crypto Chico, shares his personal vision of the Tron project on the particular case of the BTT ICO that happened on Binance the other day
Is Tron Merely Another Pump and Dump Project? An Interview with Crypto Chico, ‘Truth Lover’ and ‘I-Dotter’ Regarding Crypto Projects

On Wednesday, Jan. 30, Tyler Swope, nicknamed Crypto Chico, published a YouTube video claiming Tron and Binance plotted to grab some money by launching the BTT token on Binance Launchpad. U.Today prepared a news story, reporting this untypical point of view regarding Tron, Binance and their CEOs.

We have gotten in touch with Tyler Swope and asked him to clarify his position regarding Tron and their marketing strategy in particular.

‘I swear to tell truth, the whole truth and nothing but the truth’

U.Today: Why are there so many crypto communities on Twitter who have a negative opinion about you?

Tyler S.: They have negative opinions on me cause I tell the truth of what goes on in crypto, and the truth hurts the most.

‘Tron is nothing but a pump and dump scheme’

U.Today: Tron has been making a lot of progress recently, having taken on several big games, including TronGoo (formerly EtherGoo) and MMORPG KuaiXiYou. It has managed to advance from beyond the top-ten list of crypto assets inside it pretty quickly, raising its market cap.

On dappradar.com many of the top ten dApps, those that show a great cash flow, are Tron-based, and none are powered by its rival Ethereum, for example.

Is Tron Merely Another Pump and Dump Project? An Interview with Crypto Chico, ‘Truth Lover’ and ‘I-Dotter’ Regarding Crypto Projects

Still, in the video about BitTorrent you poured some harsh criticism on Tron and Binance, along with their CEOs. What is the reason you are publicly criticizing those projects?

Tyler S.: Because it was an obvious pump and dump, marketing ploy and I would like the public to know this.

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‘Justin Sun is no relative of mine’

U.Today: How are you connected with the Telegram channel ‘TRON (TRX) Announcements’, which posted a link to your video and claims that they know what indeed is happening with Tron?

Tyler S.: I have no connection to them and never heard of them before in my life before 30 January 2019.

‘Crypto market is irrational’

U.Today: What do you think the future of Tron is, in light of your video regarding the BTT ICO? Does it have any chance of reaching the list of the top-four coins in 2019, as Justin Sun promised?

Tyler S.: No, I don't believe it does, but who knows, this market is irrational.

‘Deceptive marketing tactics’

U.Today:  How can Tron be so popular with the community and dApp developers if you claim that Tron’s code contains a great number of bugs?

Tyler S.: They used deceptive marketing tactics and any good developer is not building on Tron. I used open source tools SonarCloud and SonarQube, you can check for yourself.

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🎤 Interviews Alexander Goborov

Crypto Commerce and Its Future: Interview with Uphold’s CEO, J.P. Thieriot

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With the world of Blockchain ever evolving and changing pace, a top level executive lays out his vision for what the future has in store for the crypto market
Crypto Commerce and Its Future: Interview with Uphold’s CEO, J.P. Thieriot

J.P. Thieriot is the CEO of Uphold, a cryptocurrency platform offering a multitude of services, which was launched in 2015. A graduate of Yale University, before going crypto, J.P. Thieriot managed a number of companies in the tech sector, as well as real-estate and agriculture, including Estancia Beef, one of the largest grass-fed beef companies in the United States. Today he agreed to sit down with us to discuss where the crypto business is at, as we’re approaching the New Year.

Why Crypto?

U.Today: Mr Thieriot, tell us a bit about yourself please. You have a substantial amount of experience in many business sectors. How did you find yourself doing what you do today?

J.P. Thieriot: My first exposure to Bitcoin came as a result of having investors’ funds trapped in Argentina in 2013. Despite statements from PWC stating that a given LP’s account was worth $X, attempting to take the money out of the country meant the LP would receive $.5X. It was a perfect example of how a third world country can use monetary games in pursuit of short-term gains, while ultimately thwarting real value creation and holding a populace hostage to incompetence. We tried every conceivable (US legal) way of getting the funds out. That’s when I came across Bitcoin. Unfortunately, we didn’t take the plunge. Seemed too precarious. BTC was at around $15 at the time!

U.Today: Tell us about the company you are currently heading. What services does it offer exactly?

J.P. Thieriot: Uphold is a global digital money platform. We have about 1m users. In some respects, this side of our business could be compared with Coinbase, i.e. not exactly an ‘exchange’, with direct links to legacy money networks like US and EU banking through rails like ACH and SEPA. Where we’re very differentiated is in having a big lead over everyone in the context of our open APIs for third party digital money applications. We do not just ‘list’ tokens like an exchange, we are deeply integrated into some of the ecosystems of the companies behind the tokens, like Brave-BAT, DASH and Cred-LBA. 2019 will be the year that some amazing utility tokens emerge from the rubble of hundreds of silly ICOs. I’d like to think Uphold will be an integral part of those likely to be the most successful.

U.Today: Uphold recently received close to 60 million USD from Greg Kidd, a former Ripple executive. Are you now partners with XRP?

J.P. Thieriot: We have a large XRP community on Uphold. They are passionate and active. We try to make them happy. Certainly, there are a number of possibilities with Ripple down the road.

The DLT Business Today

U.Today: In addition to yours, there are many companies based in San Francisco, among them Kraken, Coinbase, and Blockchain Capital. Has Silicon Valley now conquered the crypto world as well?

J.P. Thieriot: Digital money is an Internet phenomenon. It stands to reason that ‘Internet’ geographies would concentrate Blockchain companies in the early going. Ultimately, I imagine regulatory regimes will skew the array. Hopefully, the US will be able to maintain a light hand and perpetuate its early advantage over other regimes.

U.Today: What do you think it takes to “make it” in the DLT world as an entrepreneur? Is it about the savviness, i.e. the know-how, or simply the right attitude, i.e. being the go-getter type?

J.P. Thieriot:

Perseverance first. Execution second. Blazing insights a distant third. Building the right team is also critical... I have a pretty dim view of humanity :), specifically in that I’d choose to work again with perhaps 10% of the people I’ve worked with.

After four years at Uphold and many purges and reorganizations, we’ve arrived where that number is, for the first time in my work experience, inverted. 90% of the people working at Uphold today are rock stars. Work hours don’t exist; the creativity, initiative, and energy thrown at every problem is unbelievable. It feels more like (an ideal) family than a workplace. We all believe we are doing something important and exciting, and we’re unlikely to come across a similar opportunity in our lifetimes.

U.Today: Are you a believer in decentralization? It seems that this is how the Blockchain got started in the first instance. Yet, according to some, this domain has now become very centralized, from pegging to market dominance by a select few. What are your thoughts?

J.P. Thieriot: ‘Decentralization’ has become the buzzword du jour. Yesterday it was ‘Blockchain’. Obviously, these are novel and important facets of our burgeoning ecosystem, but it’s funny to me how people can get religious and sanctimonious around these banners. The idea here is that an Internet of Money has become possible… ne inevitable.

Decentralized and Blockchain technologies, methods and protocols will likely have a lot to do with the evolution and outcome; however, being theologically absolute, really about anything, strikes me as ridiculous. The Internet is decentralized; Amazon, Google and Apple are not. For this industry to jump the rails into the mainstream, particularly given how money is regulated, is going to require clusterings of human beings doing things like support and marketing for quite some time.

I’m not sure a pure peer-to-peer network, serviced by a distributed automaton is either possible or desirable. In the meantime, the more distributed, less concentrated, more collaborative things become, the better, i.e. less risk, higher output.

U.Today: While some networks openly attack one another, Ethereum and EOS being the prime example, others prefer to unite instead. Uphold is part of Universal Protocol which attempts to do just that. Is it a union created simply in order to increase profits, or is it more than that?

J.P. Thieriot: The UPP is an industry utility, the purpose of which is to mitigate a number of the current restraints on the growth of our ecosystem. We’ve identified those restraints as: 1) the lack of a common language, 2) the lack of conventional user safeguards, and 3) the lack of products built for mass adoption.

The question about Ethereum and EOS goes to the first of the above factors. It does nothing for the benefit of the ecosystem when competing protocols throw mud at each other. It debases outside opinion, puts a grin on the faces of the ossified naysayers—the Dimons and Buffetts of the world—and perpetuates confusion and uncertainty among potential new entrants.

UPP’s purpose is to usher in the next 100 million users of crypto. We can do this by disrupting a hidebound legacy financial system that has been a festering backwater in terms of innovation, soundness, fairness, equal access, and transparency. Bickering amongst ourselves is a destructive waste of time.

Ongoing Crisis and Predictions

U.Today: We simply cannot not ask about the current Bitcoin crisis. Does it complicate business, or can this low tide be treated as an opportunity to dig out whatever gold was left buried in the sand?

J.P. Thieriot: Speculative bubbles always form around the advent of revolutionary technologies. This technology happens to relate directly to money, and it has benefitted from significant Asian participation on the trading front; ergo, the ups and downs are likely to be super-charged.

We’ve been expecting a shakeout. There’ll be a lot less noise in the market. Meanwhile, nothing will deter the inexorable march of the coming Internet of Money.

U.Today: With so much on the market today, what is it that the customers are after exactly?

J.P. Thieriot: Quite simply, quantumly wider and more convenient access to better financial products and services.

U.Today: Can you make any predictions for the future? How is the market going to be different in, say, five or ten years from now?

J.P. Thieriot: 2019 will be the year of “The ICO is dead, long live the STO”. The first real utility tokens will start to show their stuff, foremost Brave’s BAT token. The general market will remain below the $200b mark as the weaker offerings perish and very few strong projects accumulate value. In five years, we will be well into the process of tokenizing/digitizing every single traditional asset class in existence.

In ten years, the use of banknote cash will at least have diminished by 50% from today’s levels… And my guess is―because one way to look at BTC is as a shorting of the monetary system’s status quo―BTC will be above $25k.

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Let’s Talk Stablecoins: Interview with the Co-Founder of Cred and Former GM at PayPal, Dan Schatt

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With many HODLers and crypto enthusiasts looking for investment advice, insights from a top expert in the fintech field, Dan Schatt, are sure to come handy
Let’s Talk Stablecoins: Interview with the Co-Founder of Cred and Former GM at PayPal, Dan Schatt

Dan Schatt is the Co-Founder and President of Cred, former General Manager of Financial Innovations at PayPal, and a bestselling author of Virtual Banking: A Guide to Innovation and Partnering. Earlier this week, we sat down with Dan to talk about the crypto market in general and stablecoins in particular.

From Mainstream to Crypto

U.Today: Hi Dan. You had a solid career in mainstream finance, including a leading position within PayPal. Why did you decide to go crypto?

Dan: I became interested in the Blockchain technology and crypto space in 2012, back when I was working at PayPal. While PayPal hoped to become the Internet of Money, my “Aha” moment was that crypto would become the Internet of Value, eclipsing PayPal in every way, i.e. Blockchain would prove more secure, transparent, and allow for the tokenization of all asset classes. It is unbelievable to me how quickly we’ve moved to a legally permissible, tokenized version of the US Dollar!

I believed crypto would also attract a larger developer community than PayPal could ever hope for. You just can’t compete with a world computer or a non-inflationary world currency that can be used by anyone with Internet access.

I later published a book in 2014 called Virtual Banking, with a chapter on Bitcoin and crypto. I’ll never forget my interviews with Wences Casares, who really opened my eyes to the power of Bitcoin.

U.Today: Please tell us a bit about your present company that you, as we understand, also co-founded. What does Cred do exactly?

Dan: What is the best possible loan you can get, other than a free friends and family loan? Probably a home equity line of credit. The problem is most people can’t get a home… Replace the home with crypto and that is essentially what Cred has created: the world’s first Crypto Line of Credit (C-LOC™). We allow people the ability to use their BTC, ETH and XRP as collateral and get cash. Cred has amassed over $300 million in lending capital to provide liquidity against crypto assets. We are set to revolutionize the lending industry by merging an established global lending network, a diverse fintech team, machine learning, and the power of the Blockchain technology.

U.Today: It seems that education, among other fields, is moving onto the Blockchain. The UC at Berkeley now has its own Blockchain, and your company is somehow connected to it through a third entity, is that right?

Dan: Yes! Cred and Blockchain at Berkeley, are two of the founding members of the Universal Protocol Alliance. Howard Wu is Cred’s Chief Scientist and a Founder of Blockchain at Berkeley, the largest US University Blockchain associated in the United States. They have an incredible amount of talent coming through their program and we are lucky enough to benefit from their thought leadership when we created the Alliance, which is dedicated to bringing important pieces of infrastructure to the crypto community and act as a bridge for the next 100 million users of crypto.

Stablecoins and the Current Market

U.Today: What are your thoughts on Bitcoin’s collapse last month? Did it come as a surprise to you? Where does this situation leave us now?

Dan: I guess it all depends on your time horizon. I’m a big believer that crypto assets will become the preferred store of value and means of exchange in the future. As a store of value, just look at BTC and gold in 2011. Gold is down roughly 30% since 2011 while BTC is up ~118,000% but is still just 1% of gold’s market cap. And how many times has BTC “collapsed”?  

Price volatility is massive at this time because wealth is highly concentrated and institutional involvement is still limited. This will evolve as the Internet did. Development of infrastructure and practical applications takes time… You can’t rush a pregnancy to 1 month by adding 9 doctors. It will still take 9 months.

U.Today: Let’s move on to stablecoins. Certain critics claim that some of them, e.g. Tether (USDT), are a disguised form of centralized fiat currency since they are pegged against the USD. How would you rate this assessment?

Dan: For the last few hundred years, governments have legitimized fiat currency by backing it with gold. Eventually, as trust grew in government currencies, there was no longer a need to connect it with gold. The same is now happening with crypto stablecoins. Will it matter at some point if they are “backed” by fiat? Probably not. At some point, the trust will be in the finite supply, greater transparency, stronger security, increased utility and ability for it to travel as far and wide as the Internet. Governments will eventually work to tokenize their own fiat currencies, but there will always be demand for a store of value or means of exchange that cannot be controlled by any government.

U.Today: Do you think businesses should strive to move away from governments? Then isn’t there a dissonance pertaining to how this ideal can be achieved with stablecoins which by default rely on central banks?

Dan: Governments and businesses will increasingly be pulled in a direction by the Blockchain, i.e. a path toward more transparency, inclusion, and the democratization of financial services. It will become increasingly difficult for governments to close their borders, impose capital controls, and attract talent if they do not support crypto. And, crypto communities need to leverage some of the valuable components of the existing financial ecosystem—the role of professional custody and basic investor safeguards—because inheritability and token recoverability are needed if we are to provide crypto services that will appeal to the next 100 million users.

U.Today: For better or worse, do you think the demand for stablecoins is bound to increase since they seem to demonstrate more stability during crashes?

Dan: Absolutely, but not just because they are stable. They will ultimately be used as a better means of exchange, remittance vehicle, and as core component in automated commerce.

But, not all Stablecoins are created equal. They’re more likely to be ‘stable’ if they are pegged 1:1 and verifiable on-chain, and can allow for anyone to review how the value is substantiated, not just a professional auditor.

The Future Talk

U.Today: What are your predictions for 2019? Will we see more widespread adoption of stablecoins? If yes, do you see it as a positive thing?

Dan: We are building to deliver practical use cases. There are many examples of this: an Argentinian who needs to get out of an unstable fiat currency, or a Turkish expat looking to make a remittance more cost effectively. Stablecoins can deliver on these use cases. I may live in a country with an unstable currency, and I’d like to move into something stable as soon as I can. I may not have access to a US bank account, to buy USD, but now I can buy a better version of the US Dollar. There are now lots of opportunities that broaden the use cases and bring more people in… So yes, a very positive thing!

U.Today: Some claim that DLT is the future of commerce: the fintech sector will change the global economy, drastically reshaping how we do business. Your thoughts on this?

Dan:

Commerce needs more than a distributed ledger to function. Cred, for example, is providing low cost credit to be used in commerce. Others are providing core banking services such as payroll for crypto companies. The future of commerce involves a host of next generation financial services. How those ingredients are combined with DLT is the secret sauce.

U.Today: Finally, what advice would you give to those who are thinking about entering the crypto world? How should one behave in order to succeed in this still largely unexplored domain?

Dan: Keep your ear to the ground and listen for real problems that need to be solved. The more specific, the better. Tools and infrastructure are still needed to allow crypto to go mainstream. Think years vs. months. We’re headed in the right direction, so make sure not to get caught up in the hype cycles, whether crypto is on the way down, or on the way up!

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🎤 Interviews Alexander Goborov

Bitcoin ETF, a Tail Wagging the Dog: Interview with the Founder of Virtuse Exchange, Ras Vasilisin

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With Bitcoin ETFs being considered for approval, the CEO of Virtuse Exchange, Ras Vasilisin, explains what it might spell for the crypto market
Bitcoin ETF, a Tail Wagging the Dog: Interview with the Founder of Virtuse Exchange, Ras Vasilisin

Rastislav Vasilisin, a native of Slovakia, is the founder and CEO of Virtuse Exchange, a crypto exchange platform based in Singapore. With many years of experience as a trader on Wall Street, Ras sat down with U.Today to talk about the current crypto market situation in general and Bitcoin Exchange-Traded Funds in particular.

Trading and Exchange Platforms

U.Today: Hello Ras, you are now the CEO of a crypto exchange platform. Why did you leave the life of a traditional New York trader behind?

Ras: My personal trading adventure kicked off 23 years ago in New York as a stockbroker on Wall Street and later as a financial analyst at Mitsui. However, I got bored with the capricious corporate lifestyle and together with a friend of mine decided to move back to Prague in 2001. Five years later, I co-founded a brokerage company, which became a predecessor to the Virtuse Group.

U.Today: Nowadays, there are quite many crypto platforms around. What is the attraction of creating one? How challenging is it really? How is yours different?

Ras: After 12 years as one of the largest carbon emissions traders in Europe and China, we decided to bring commodities to the crypto world. Commodity trading had been traditionally the domain of large banks and institutions. Incumbent exchanges are largely exclusive, requiring chunky collaterals, fees, and extensive prior experience in trading. We decided to change that and make the space more inclusive for everyone, not only for the 0.1% of the world population.

There are many challenges associated with running a platform like that, of course. The main ones are rooted in technology, regulations, and liquidity. The tech hurdle we solved by developing our cutting-edge platform with the smart contract for multi asset trading. Liquidity is being facilitated by the world’s top market makers. And the compliance issue we solved by applying for the first crypto-commodity exchange license in the world, residing in Singapore.

In one sentence, Virtuse Exchange is a crypto exchange that bridges crypto markets with trillions of dollars worth of financials, commodities, and physical assets. We facilitate trading of all these assets on one platform, with minimal incremental investments and deposits. In reality, an investor can invest into oil, silver, or coffee with as little as one Bitcoin or Ether. Naturally, no banks or intermediaries are involved.

U.Today: It seems that Asia is currently leading the world by the number of crypto exchange platforms, in terms of how many there are and how big they are. What is the reason for that? And, of course, you chose Singapore, which is in Asia, as Virtuse’s home. Not a coincidence?

Ras: I relocated my family and Virtuse Group’s HQs to Singapore 4 years ago in order to stay near to China, our largest emissions market. Singapore is the 3rd most favorable country for ICOs in the world, and thanks to the light touch on the regulations from MAS, ICOs are able to thrive in Singapore. Since I had already lived in Singapore previously, it was an obvious choice for me in terms of where to launch the platform.

Bitcoin Exchange-Traded Funds

U.Today: What are your exact thoughts on Bitcoin Exchange-Traded Funds (ETFs), which you seem to be quite critical of?

Ras: There’s definitely an enormous market appetite for Bitcoin exchange-traded funds. Bitcoin ETFs are inevitable, but potentially harmful in the long run.

Over the last decades, Wall Street has perfected the art of leverage-based financialization. Global banks and large hedge funds effectively created several times more financial claims to commodities than there are underlying assets, which distorted the price-discovery mechanism.

Sadly, the financial engineering has already infiltrated the Bitcoin markets too. Thanks to the Bitcoin futures and many other exchange-based leveraged products, we can detect the effect of financialization of Bitcoin. Daily liquidity for synthetic versions of Bitcoin is already approximately $15 billion, which is three times more than Bitcoin's daily spot liquidity of approximately $5 billion.

As we move closer to the date of the potential Security and Exchange Commission's approval of ETFs, there is a legitimate uneasiness in relation to what leverage-based financialization might bring to the crypto market.

U.Today: You have said before that a Bitcoin ETF could become absolutely disastrous. Could you elaborate on that?

Ras: Let me take a step back and clarify. It is no secret that the Bitcoin price reached its peak on December 17, 2017, when CoinMarketCap recorded the aggregate price of Bitcoin standing at 19.535.70. Coincidentally, this was the very same day that CME (Chicago Mercantile Exchange), the financial giant, had their Bitcoin futures trading launched.

I warned at the time that artificial Bitcoins in the form of futures are artificial cash settled IOUs (debt acknowledgments) without the physical delivery of Bitcoin. All the institutional money flowing into this “fake Bitcoin” has not been affecting the price of Bitcoin positively. In fact, it’s been affecting it in the opposite way mostly, since this flow dilutes the highly cherished scarcity by artificially creating Bitcoins.

U.Today: How much capital exactly are we talking about here?

Ras: It’s a huge amount. In the third quarter of this year, Bitcoin futures average daily volume rose 41% and open interest was up 19% over the second quarter, according to the CME website. In Q3, on average 757,950 paper Bitcoins were traded per month. Which is about 3.6% of all Bitcoins ever in existence. That amount doubled from the first quarter. The average daily volume on the spot is about $6 billion.

Introduction of cash settled futures in other assets caused the same market price to decline. Take the gold market for example, although numerous other examples can be used.

U.Today: The gold prices were also influenced by CME in this way?

Ras: Gold markets have been in steady decline since 2011, from the peak price of roughly $1,900 to $1,230 /oz. CME runs COMEX, which is the derivatives market where gold futures are traded. COMEX through its clearing banks provides margin trading and on average issues 360x more paper gold than physical gold. It makes Bitmex’s 100x leverage with its socialized losses look like child’s play.

And this all comes at the expense of the gold investors. The large banks and brokerages can technically create 360x more gold out of thin air, while an average retail investor has to come up with hard cash to buy gold at full price.

Bitcoin ETFs might eventually be leveraged in the same manner as the futures contracts. The same financial engineering dynamic as this year might be played out next year, too. This will most probably take the wind out of the sails in 2019.

U.Today: Is there any space left to be optimistic about these funds at all?

Ras: Yes, there is.

The first reason is that HODLers can resist the aforementioned pattern simply by keeping their coins outside of the financial system. Unlike gold or silver, most of the spot holders in Bitcoin markets are already storing their coins away from the system, making it hard for financial institutions to borrow it.

Due to the hard-to-borrow nature of Bitcoin, the magnitude of the impact of ETFs, futures, and other Bitcoin derivatives might be smaller than with commodities derivatives that are mostly settled in underlying assets. Nonetheless, cash-settled derivatives have a lot of potential to affect the price of the underlying coins.

The Crypto Wrap-up

U.Today: We’d better keep our eyes peeled then. But let’s shift our focus. You do a fair bit of travelling attending forums and giving talks. Anything in particular that stood out for you this year?

Ras: I’ve been extremely pleased with the turnout at the largest crypto events in Asia. The tremendous amount of entrepreneurial talent, energy, and funds that are still being poured into the space is mind-boggling. This market has an enormous potential to disrupt and transform the entire economy, particularly financial, healthcare, and government ecosystems.

U.Today: How do you see the future of the crypto market and, perhaps more importantly, Blockchain and DLT in general?

Ras: I believe the DLT and crypto are alongside inventions like the steam engine, computer or Internet, one the most disruptive technologies in history.

Blockchain is set to fundamentally transform the way business is carried out in industries all over the world. I would encourage everybody to start paying attention right now.

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Tech Has Sat on Its Hands Long Enough: Digital Asset Trade Association Speaks Up for Blockchain

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Perhaps it’s time for the tech community to stop waiting for Blockchain technology to speak for itself and take more definitive action.
Tech Has Sat on Its Hands Long Enough: Digital Asset Trade Association Speaks Up for Blockchain

As regulators step up their vigilance and take stringent measures against crypto companies that fail to comply with securities standards, many in the crypto community agree that regulation clarity is the most urgently needed ingredient for bringing stability and growth to the crypto market.

Recently, decentralized exchanges are taking their turn under fire, and while the amount of regulatory action is intensifying, regulatory confusion has not been resolved – if anything, it’s increasing.

Given how essential the resolution of this impasse is becoming for the crypto space, perhaps it’s time for the tech community to stop waiting for Blockchain to speak for itself and take more definitive action. But what forms can such action take?

Brent Cohen, Head of Product at Element Group and co-Founder of the Digital Asset Trade Association (DATA), is one member of the community taking concrete steps to shape the legal discourse around Blockchain and its applications. Having already achieved significant success with crypto legislation in Wyoming, DATA is bringing together enthusiasts, experts and legislators to come up with a common language and best practices that will facilitate the adoption of this technology.

U.Today (Katya Michaels): Advocating for supportive Blockchain and crypto legislation is not your day job. Why did you think this was important, but also feasible, to do?

Brent Cohen: There is a long tradition, both in the United States and elsewhere, of citizen lobbyists who take important issues to their representatives. Uber and Airbnb came to market, disrupted everything and then when the regulators came and shut them down, they went to the users and said – go lobby city hall. So, there are good recent case studies of technology innovators calling on their enthusiasts to lobby for change.

It's also very clear that the crypto world is up against major forces in the banking industry, which is legitimately concerned about a threat to its cash flow. Banks are investing in Blockchain and hedging their bets, but they also like the status quo, and the status quo is set up traditionally to help incumbents.

The Blockchain world is a disruptive force, and we just couldn't let this big of an opportunity go by without engaging directly in the political sphere. It was a business imperative drawn on recent history and a recognition that tech has sat on its hands for a very long time and let government push it around a little bit. Or perhaps, we think that we're outside of the realm of government influence, or that we're on the right side of history.

How does blockchain work?

All of those may be true, but it's not a good way to operate, especially when you're dealing with money, which is very regulated. So, we had to jump in and create something. An opportunity was presented to us in Wyoming, we got some laws passed there and we've just been carrying the ball forward wherever we can all around the world.

UT: Clearly, financial institutions have a lot of lobbying power and endless funding. How can an association like DATA compete?

BC: The key message is always going to be jobs and revenue. It's always going to be about being an innovator, because that attracts business and creates a climate that leads to more innovation and investment. At the grassroots level, you can get governors and state legislators to put money into accelerators, into tax breaks, incentives to energy companies. There are lots of ways you can create a conducive environment at the local level without having to rely on a federal government or an international body.

Having said that, it doesn’t stop at a state line or a country border. The global regulators, and there are more than we care to think about, have no consensus on how to handle this emerging field. That is one place where DATA can clearly play a convener role to bring regulators, legislators and the industry together in conversation, not just in the United States, but around the globe.

UT: California recently passed a bill that redefined electronic signing and electronic transactions to include Blockchain. What is the average policymaker’s level of education and awareness about this technology, in your experience?

BC: There is an old phrase “a mile wide and an inch deep” – well, it’s a mile wide and maybe a millimeter deep. It's just general principles and hearsay and a lot of bad information. When I hear US senators, mayors, congressmen talking about how crypto was used by global terrorists and drug runners, I’m thinking – yes, so is the US dollar and in a much bigger way.

California State Capitol

It's up to us as an industry to counter some of that misinformation, just by showing what we're doing. Let's talk about the best practices, the fact that we are KYC and AML, that we are trying to follow all the relevant guidelines from whatever regulatory body we're working with.

What DATA wants to do is create a framework for understanding the space, for fostering dialogue and consensus among all the parties involved. It's not going to be controlled by any one entity or any one fund. It’s a democratized grassroots organization, which we think will have wide support.

KM: Does advocating at the state level turn out to be a good entry point into wider legislation? As states lead the way, perhaps their decisions will form the groundwork for the federal policy?

BC: Absolutely. Here in the United States there have been three forces shaping the industry: The first is regulators who, as we've just described, don't necessarily have a deep understanding of the space. The second is legislators who are called into action by constituents or by business. The third is courts, specifically plaintiffs’ attorneys and others that may come to bear as the industry goes through its continued corrections.

All of those are out of our control. The only thing that we can do is mobilize our supporters. And the best pressure point is at the state and local level, because you can bring in local business leaders and talk to local legislators who are directly accountable to those.

It's a little harder on the national level – not to say that we're not trying there, and we certainly haven't abandoned talking to all the relevant regulatory agencies, but the states are where the action is right now. We have other players in the industry – Digital Chamber, Coin Center and others – that are working very heavily at the national level, doing a great job of educating and informing.

UT: Are there significant geographic differences among the states in the level of openness and acceptance of Blockchain technology?

BC: Oh, sure. Some states are more technologically progressive, like California, Washington State, New York State. Wyoming is one of the best states in the country to do business right now. There are lots of good reasons why Wyoming wanted to be in front, not the least of which is the small population. How can they generate revenue in that state?

They can bring in this sort of growing business – as a result of their passing Blockchain legislation, company registrations are way up. The University of Wyoming has a big Blockchain lab. I mean, they're all in.

There are other states that need a little encouragement. Perhaps there are just no native players in the Blockchain ecosystem in their states. So, we're being strategic on where we deploy our resources.

UT: What is the best way to deal with getting resistance or a blank stare in response to lobbying efforts?

BC: People tend to glaze over unless they are deeply engaged in our space, so we need to find things to talk about that are relevant and commonly understood: privacy, business, jobs, whatever is of interest to the audience. Once you've reached common ground, you work towards resolving areas of disagreement. I think everybody agrees that there are bad actors in this space. How do we as an industry police ourselves?

UT: You and some of the other board members of DATA come from a background of PR and marketing. Do you feel that a lot of this work is about the proper presentation of the subject?

BC: Without question, it's all how you frame the issues. If I go into a deep dive on Blockchain technology, forget about it, you lost them. It's like me going into a deep dive on how email works or how your credit card works. You whip out your credit card, you pay somebody, you don't think about how the money gets pulled from your account.

So, we have to abstract the technology from the use case. When we're talking about utility tokens, for instance, I explain that a utility token is like going to Chuck E. Cheese’s and buying a bunch of tokens. You can only use those tokens at Chuck E. Cheese’s. You've paid cash or used a credit card to buy those tokens.

Chuck E. Cheese's

Now, if you take those tokens away and you have them in your pocket at home, they're of no use to you unless you have a friend who is going to Chuck E. Cheese’s. That friend may want those tokens, so you can give them to him, or you could sell them to him, and that’s the secondary market. But the primary use is at Chuck E. Cheese’s.

It’s really about explanation. We have too many words that mean the same thing. Every time I see somebody pitch a crypto business, they spend the first three to five minutes defining terms. Just to have a common vocabulary would be progress.

UT: Some terms, like ICO, have acquired a bad reputation.

BC: ICO, crypto – these are words that have loaded meaning to them. Blockchain is definitely preferable because it's benign. It doesn't have any value associated with it, good or bad. A digital ledger technology is another way to describe it. I'd rather just get past all of this and call it digital assets. We're dealing with digital assets in a tokenized universe.

And what does that mean? What are the technologies, what are the processes, what are the regulations that need to be enforced? From the consumer point of view, they don't care – they just want it to work and they want to be protected. If there's a problem, they want to know that they can go to somebody and complain. That's a challenge in a decentralized world, because there's nobody to hold accountable. How do you handle governance and maintain a set of rules in a decentralized space? It's complicated.

UT: This is a relatively new initiative – DATA has been around for about a year. How has the community responded? What are you hopes for the near future?

BC: The immediate support for Wyoming by the crypto community was overwhelming. A call went out and it was answered – people flew to Wyoming and testified. We've managed to keep a good chunk of those people engaged over the period of time it's taken us to set up the nonprofit, to file documentation with the IRS, to get a bank account, lose that bank account because we're a crypto company, and then get that bank account reinstated because we explained – no, we're really a trade association and we're accepting all of our dues legitimately, we've got a paper trail.

We have a board – the founders of DATA that are scattered around the globe. The industry is very supportive, and the regulators are very supportive, surprisingly. They want a conversation, they do want people to come in and not just say “we've got a problem,” but come up with solutions.

UT: Maybe they're relieved to have an intermediary that speaks both languages.

BC: They would be very happy. There is a need for an industry body to speak on behalf of the industry to regulators, to set good standards, determine best practices. The greatest support we've gotten is from the attorneys, the lawyers that are actively working around the globe in this nascent space. Bringing the legal profession into this is critical. The fact that we were able to tap into some of the best minds in the industry around the world, have them donate their time just by asking them – it’s very gratifying. It also showed that they feel the need to convene. People out there in the space are raising their hand saying – pick me, because I want to be involved in this conversation.

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