{"url": "https://www.youtube.com/watch?v=h-rr_iA3Qog", "page_url": "https://www.youtube.com/watch?v=h-rr_iA3Qog", "title": "Stellar: Building a Common Financial Platform - The Future of Money & Technology Summit 2014", "show_or_channel": "Adjy Leak", "date": "2014-12-02", "duration_s": 3775, "type": "panel", "speakers": ["Greg Brockman", "Jed McCaleb"], "confidence": "medium", "notes": "Future of Money & Technology Summit 2014 panel on Stellar (Stripe was a Stellar backer). Uploaded by a third-party channel (Adjy Leak); no official copy found; Brockman share of speaking time unverified.", "people": ["greg-brockman"], "id": "2014-12-02_adjy-leak-stellar-building-a-common-financial-pla", "audio_duration_s": 3775.3173125, "worker": "jc-w17", "transcribe_s": 172.2, "model": "large-v3", "segments": [{"start": 0.43, "end": 45.14, "text": "Yeah, we can wait another minute. Yeah, why don't we have another minute or two? Yeah, okay, sure. Yeah, let's start in like a couple minutes. Yeah, we'll get people. It's basically the other one ended. There's only this many people. We're going to have a group study. Yeah. I think everybody's getting caught. This one ended. Mm-hmm. Oh. So people are operating. All right, well, I'm going to start."}, {"start": 48.43, "end": 371.06, "text": "Seriously. Okay, I think we're going to get started now. I'm Dan Rosen from Commerce Ventures. I'm the moderator for this panel, and this is the panel on Stellar, building a common financial platform. So if you're expecting something else, that's what you're going to get. We actually have an awesome panel here, so I'm excited to be the moderator. And I'm going to let Joyce, Greg, and Jed introduce themselves, and maybe we'll just start with Joyce and move down the panel here, and then we'll jump into some questions."}, {"start": 371.63, "end": 401.2, "text": "Hi, everybody. I'm Joyce Kim. I'm the executive director of Stellar Development Foundation. And prior to Stellar, I was an attorney. I focused on mergers and acquisitions, venture capital financing, was also an entrepreneur. That's what made me leave the law, so it was a decent move. And I did two companies, my first one of which was ultimately acquired by a subsidiary of Korea Telecom. And then I became a venture capitalist right before joining Stellar."}, {"start": 401.52, "end": 430.43, "text": "Hey, everyone. I'm Greg Brockman. I am the CTO at Stripe. So I've been building Stripe for about four years. And, you know, I spend a lot of time thinking about and kind of working on and talking about and building and a lot of just sort of work on where payments is going. And, you know, I think ultimately Stripe really is about supporting all of the innovation that's happening. It's about not what people are doing today, but what people are going to be doing five, 10, 20 years from now and trying to make that happen."}, {"start": 430.43, "end": 458.4, "text": "And I think that Stellar is a really interesting embodiment of kind of where everything is going. And so really excited to be talking to you guys about that today. Hi, my name is Jed. I'm the CTO of Stellar. Prior to that, I made a large file sharing site called eDonkey2000. Ran that for a few years and then discovered Bitcoin and made Mt. Gox and then sold it to the guy in Japan who proceeded to run into the ground, unfortunately."}, {"start": 458.4, "end": 487.39, "text": "And then founded Ripple, left that, and now I'm working on Stellar. Great. So I think what we decided to start with, first of all, who here knows about Stellar or knew about Stellar before they walked into the room? Just raise your hands. Okay. That's a good number. So I think what we maybe could start with is, Joyce, if you want to just give a little bit of background on what Stellar is and some of the stats, and we'll start there and jump in questions."}, {"start": 487.39, "end": 516.7, "text": "Another quick follow-up question. How many people here are technical? OK. And everybody here already knows how Bitcoin works? Who does not know how Bitcoin works? OK, just checking. All right. So Stellar is a financial protocol that essentially increases the interoperability between diverse financial systems and diverse currencies. So it allows any kind of currency or any kind of value, dollars, euros, Bitcoin, pesos, to move freely within the network."}, {"start": 516.7, "end": 542.03, "text": "It also allows for any kind of transaction size, from large business-to-business payments down to micro-micro transactions. It is intended to be a back-end for real-time and faster payments, and it also is a back-end for lower foreign exchange type of transactions, cross-border transactions. It is supported by a not-for-profit, the Stellar Development Foundation, which Jed and I are a part of, and it is..."}, {"start": 543.06, "end": 571.25, "text": "Structured that way so it can behave more like the internet and more like email. SMTP and the internet are also different kinds of core infrastructure that are not owned by one entity. For those of you that are familiar with how these protocols are set, there's typically standard setting bodies like the IETF that comes together, has multiple stakeholders from industry and the public to decide how these protocols should work. So one of the things that makes Stellar"}, {"start": 571.47, "end": 600.37, "text": "Thank you very much."}, {"start": 600.91, "end": 630.0, "text": "It's also 1% inflation, and that has its own interesting methodology for how that is distributed. It's essentially a direct form of democracy where the existing holders of Stellar get to decide where the new currency goes. And all of that is packaged together to remove the reliance or remove the focus away from the currency aspect of Stellar and focus on the protocol aspect of it. The currency is not necessary as a business model. It's also not intended to be an investment vehicle."}, {"start": 630.0, "end": 650.03, "text": "There's some nuances there that we can dive into as we move along in the panel. And one of the goals of the foundation is to provide broad access and education to as many people as possible. So to date, we have funded over 4 million wallets, and we can get into the statistics of that as well. And I guess quick recap, we launched about..."}, {"start": 650.35, "end": 678.67, "text": "Three months ago, our demographics are really interesting. It's mostly developing world users after the US and Europe. In a lot of developing world countries, there are more people on the Stellar protocol than on any other digital currency protocol. And this is because the accessibility of the giveaways. The user base is 35% female. And I actually think for the first time in a FinTech panel, this room is doing better than even that. So I'm really excited by that. Good job, Brian, if he's in here."}, {"start": 678.67, "end": 707.68, "text": "And then in terms of engagement, we have about 140,000 weekly active on the network. Great, thanks. So Jed, just given your background and familiarity with other cryptocurrencies, when you got started on this, what was the original genesis and motivation? What got you thinking about this? Let's see. So when I first learned about Bitcoin, I was really enamored by it and thought it was the awesomest idea and spent a lot of time thinking about it."}, {"start": 707.68, "end": 734.58, "text": "Prior to that, I didn't think such a system was possible. I've always been into distributed systems, but didn't think a payment system without a central issuer was possible. Once you understand the implications of that, it's pretty radical and it can actually change the world pretty dramatically. So I knew I wanted to do something in this space. I think Bitcoin is very much a first iteration of a decentralized payment network."}, {"start": 734.96, "end": 761.06, "text": "There's a lot of things about it that are not perfect. With everything in software, there's a first iteration, and then people improve upon it and make better and better versions. So I was just thinking about ways to improve upon Bitcoin and, namely, get rid of the mining, which I think is a big problem, both in terms of environmental impact and economic impact and the fact that it actually will break in the long term."}, {"start": 761.06, "end": 787.76, "text": "So in trying to solve that problem, I came up with this consensus method and then went on to get people to work on that. And then I basically came up with what became Ripple. So in doing Ripple, it didn't quite go off the way that I anticipated."}, {"start": 787.76, "end": 817.33, "text": "I wanted to give the currency widely to the world and that kind of wasn't what was happening at Ripple. So I left and then sellers kind of another iteration to try to do that correctly. So that's kind of like the vision. So to build on that a little bit. So one thing I think is really interesting about if you look at Bitcoin is everyone sort of talks about Bitcoin as a currency, right? And that the thing is Bitcoin is much larger than that, right? You start out with this digital currency that's kind of off by itself that is doing this thing. It's got its own rules, its own sort of way of being traded around."}, {"start": 817.33, "end": 834.19, "text": "Thank you."}, {"start": 834.19, "end": 861.65, "text": "Also on these very centralized exchanges and sort of each one, they don't interoperate. They have their own sort of rules. You have to do your own trust evaluation and that sort of thing. And so really Bitcoin is this ecosystem, right? I think it doesn't make sense to look at any one piece of it. It's really about what's the sort of sum of all the activity, all the things people have to build in order to make it all work. And as soon as you're in a world where you have to do this interoperation, so you have to build these exchanges, you may as well build those into the protocol."}, {"start": 861.65, "end": 886.26, "text": "So I think that in a lot of ways what Stellar really is, is it's the minimum encoding of a financial system that can interoperate with what's already out there. I think that no matter how the rest of the digital currency space evolves, I expect that we're going to see more and more adoption of this concept of let's standardize how all these other pieces work and actually try to bring them into the core protocol."}, {"start": 886.67, "end": 914.91, "text": "That's interesting, Greg. I mean, you guys, obviously, a very impressive company. You've grown really, really fast. Early in the year, you announced support for or that you intended support for Bitcoin. And then also, obviously, you're partnered with Stellar. How will the way that you interact with those two different technologies be different or similar? Yeah, so I think of Stellar as a layer on top of something like a Bitcoin, right? If you think of Bitcoin as..."}, {"start": 914.91, "end": 941.68, "text": "Purely, okay, so we have some currency over here, right? And then there's the rest of the ecosystem that I was just describing, but kind of similarly for dollars, right? You have US dollars over here, and they're sort of these separate islands that don't have any way of directly talking to each other. And Stellar is a connective substrate. Stellar lets you take these islands and build bridges between them, and let you have all these currencies interoperate, communicate with each other. And so from our perspective, that it's actually..."}, {"start": 941.68, "end": 963.58, "text": "They're pretty orthogonal concepts, pretty orthogonal pieces of technology. And so the way that our Bitcoin product is currently in private beta and will hopefully be doing the public unveil relatively shortly. And that's a product that will allow anyone to just instantly start accepting Bitcoin without doing any real additional work. I think that'll be really exciting to see what happens when you suddenly..."}, {"start": 963.58, "end": 980.3, "text": "Thank you."}, {"start": 980.3, "end": 1007.73, "text": "When you think about something like Stellar, that actually another thing that it's really focused on and I think does a good job of solving is that access problem. How do you actually get this currency into your hand? Well, you can go to the Stellar website and OAuth with Facebook. There couldn't really be anything simpler than that. And so I think that for us, a lot of what we're looking at is how do you make these things really simple for people to interact with and to use? And I think that both of the..."}, {"start": 1007.73, "end": 1033.23, "text": "Both of those systems have their own strengths and weaknesses, and we can combine them. And I'd also like to say that often overlooked is that 1% inflation that Stellar has, which makes it way more complementary to Bitcoin. I mean, Bitcoin is a set amount that will be in existence, and it is a great store of value. Stellar, as a protocol, is designed to allow Bitcoin to move faster."}, {"start": 1033.23, "end": 1060.7, "text": "And to allow Bitcoin to be more accessible to more people. So I find that to be highly complimentary. How will the inflation work? So the inflation is really interesting, actually. It's one of my favorite things in the Stellar design. Essentially, 1% is created over the course of a year, and it's distributed weekly. The vote is by the existing Stellar holders. And X number of wallets will win. And that number is currently set to 50, which means you need 1.5% of the vote."}, {"start": 1060.7, "end": 1082.11, "text": "Because we're distributing it so evenly, more than Bitcoin or the US dollar, it requires some collaborative action in order to win a vote. And in my own kind of sociological mappings of how we expected this to play out, there's three user behaviors that are likely to result. One is the self-interested model, where we all decide to vote together and then we split it."}, {"start": 1082.11, "end": 1105.25, "text": "Prorata, which is essentially like human mining. The second one is a charity model, where we all decide there's a major earthquake somewhere else or a tsunami, and then Kanye gets on TV and says, hey, let's donate. And then we all vote in that direction to help people for those few weeks that that is capturing our attention. And the last one is a proxy model, something similar to how banks and actually Gmail works today, where you get free services, and then they control."}, {"start": 1105.25, "end": 1132.05, "text": "Whatever X asset of yours that they're holding. And then those financial institutions or organizations or companies would then be able to vote for themselves in exchange for providing you for your additional services. So you guys are, you're definitely one of the few nonprofit startups I know. So can you talk a little bit more about what that means on a practical day-to-day basis? And maybe just a little bit about the mission and how you guys are pursuing that mission. Right."}, {"start": 1132.05, "end": 1157.33, "text": "So when we were deciding whether to be a nonprofit or a social B Corp, we looked at a number of different things. Obviously, there's the common belief that nonprofits move slower because there are higher restrictions. We are encountering that where all of our compensation and our tax rules and how we use our resources has to fit with nonprofit regulations. And that includes additional transparency measures."}, {"start": 1157.33, "end": 1186.99, "text": "Where we have to basically publish our budgets and share that information and other things. From a philosophical perspective, it was very much the right thing to do because when we look at infrastructure that is this core to how we live, I mean, money impacts us on a societal basis every day. That type of infrastructure that touches us multiple times a day needs to be owned by everybody and it needs to be owned by nobody. So one of the reasons why we decided to make a nonprofit was to separate"}, {"start": 1186.99, "end": 1202.61, "text": "The revenue motivation from the design and the rollout of the protocol. And from the Stripe perspective, I think that Stellar being a nonprofit was actually a really attractive thing. And I think that's something that we've really admired about how they're operating."}, {"start": 1202.61, "end": 1229.41, "text": "When you think about kind of any sort of core protocol of the internet, you really do need to have a story for why this isn't going to just be twisted to one company's needs, right? That there isn't going to be some entity out there who's going to try to put their own needs before sort of making a protocol that's really successful and giant. And so I think that having sort of a custodian who sort of is very clear what they're doing."}, {"start": 1229.41, "end": 1251.41, "text": "What their motivations are, what the rules are that they're bound by is something that certainly makes us really comfortable and excited about working with Stellar. And I think that it provides a story for how this becomes larger than something that's just a couple of companies. It really becomes something that's a universal protocol. I want to actually say one more thing on that point."}, {"start": 1251.41, "end": 1268.96, "text": "I've read a lot of studies about how financial access plays out in the developing world and in communities where there's not a lot of financial services to begin with. And what these studies have shown is that financial access is never enough alone to cause adoption. It has to be paired quite closely with education."}, {"start": 1268.96, "end": 1298.4, "text": "For the entire digital currency space to move forward or for financial access to reach that next level, there has to be an organization that's focused entirely on education of consumers and companies and government officials and whoever the case may be on how these things work, the pros and the cons. And being a nonprofit allows us to focus on that quite heavily as we move forward. So what does that mean? How do you educate? Well, maybe give an example of the type of consumer you're targeting or organization in whatever part of the world and how do you interact with them?"}, {"start": 1298.4, "end": 1321.39, "text": "So the developing world and the developed world have very different use cases. Right now, our client was designed to be a reference client for the developers that we expected to come find us our first month, and obviously our launch went a completely different direction than we expected, so more than a couple of developers found us. It was designed to do a couple of things, which to everybody in this audience will seem really basic. It's meant to teach you how to create an account."}, {"start": 1321.39, "end": 1345.87, "text": "How to send, how to receive, and how to secure your account. Just those four things. And we do that every day, every time we see something on TechCrunch where something launched, and then you do all those four things. In countries where people don't have any financial service account, it is the first time they're doing it, or it's the first time they're doing it with relation to money. They may have a Facebook account, they may have a Twitter account, but they've never had a financial account online that allows them to store value. So the plan is..."}, {"start": 1345.87, "end": 1376.21, "text": "From our baseline level of that flow of those four steps, we're doing a lot of user research to see where people are falling off, what they're not understanding, what they're still having trouble with, and we're going to continually iterate those educational steps and then localize it by country. And then what do you hope they'll do once they get that value? The end goal? Like far out? If I go far out, I think that we need to make sure people understand the pros and the cons, the risks,"}, {"start": 1376.21, "end": 1406.03, "text": "And the benefits of using these kinds of systems to deal with the financial transactions in their lives. And to be honest, the risks in certain countries where there's not as much internet access or data access is completely different than the risks here. So we're going to have to see as we roll out into countries more specifically. But the goal is for people to have the knowledge they need to make the decision as to whether or not this is the right methodology for them to start transacting."}, {"start": 1406.03, "end": 1435.58, "text": "To take a slightly different angle on it, so how many people in the audience actually hold Bitcoin? Raise your hand. Okay, so that's probably like 30%, 40%, which is a lot higher than normally when I ask that question. And the really interesting thing about Bitcoin is I think at this point most mainstream Americans have probably heard of Bitcoin, right? Maybe only in association with some shady Silk Road or something like that, but they've at least heard the term."}, {"start": 1435.58, "end": 1456.48, "text": "The number of people who have actually figured out how to obtain some, very, very small. And there are companies that I think are doing a good job of increasing the amount of access to it. You can go to Coinbase now and you can sign up for an account. You can actually start to get your hands on it as opposed to going and running a miner like you would have to in the old days. But I think that it's..."}, {"start": 1456.48, "end": 1482.9, "text": "And it's been really fascinating watching what's happened with Stellar, where you literally just need a Facebook account, right? You sign up, and then you instantly have your Stellar, and you're able to use them and send them around. And for example, I remember on the launch day, I sent a link to my sister to Stellar. I was like, hey, check this out. And she sent me an email saying, oh, that was awesome watching the rocket go. I want to see it go again. Who else can I send Stellar to?"}, {"start": 1482.9, "end": 1496.35, "text": "And that you never really have that experience with Bitcoin, right? It's not that tangible sense of that you hear about it, you go and you get it, and then you can send it and you know exactly what it means and you get a sense of what it can do. And I think that..."}, {"start": 1496.35, "end": 1526.16, "text": "From my perspective, Stripe's very much a developer company in that one of the biggest things that you have to do for developers is give them this instant feedback loop. It's all about you give them some code on the front page that they can paste directly into their terminal so they can see exactly how that works. And I think that that's absolutely the right methodology to apply to taking new technology and making it accessible to people. And so I actually think that one of the great things about the approach of make it accessible and easy is that..."}, {"start": 1526.16, "end": 1555.97, "text": "It goes from being this abstract concept. It's a little bit scary, actually, if you just kind of hear about this weird digital crypto something something in the cloud. Who knows what that is? But then when you actually get it and you see the rocket go, you realize that, oh, this is what it's actually doing. I think it makes it a lot more friendly. And I actually think that that's a really important thing, not just for Stellar, but for cryptocurrencies generally. Yeah. Basically, Stellar becomes the freemium model for cryptocurrency."}, {"start": 1555.97, "end": 1585.3, "text": "Everything on the internet, basically, you can try for free. Facebook, everything, you can sign up for free. And then maybe some have some upsell or something else to get you there. But for anything to take off virally, if you want to seed an economy or have a worldwide currency, it has to be this viral worldwide thing. And the only way to have that kind of scale is to have something that's free to try. With other cryptocurrencies, you actually have to go shell out money to go try them or actually use them, which is a big ask for people with some weird coin, right?"}, {"start": 1585.3, "end": 1614.4, "text": "So this is like an easier introduction for the world into cryptocurrency is kind of how we look at it. At the end of our first month, there was a user survey that was put out by some community members, and 47%... At the end of one month, there was a million sign-ups. We had an office pool internally. Jed won it, actually, for how many people would sign up, and his guess was 10,000. No, no. 160. Oh, 160. I had guessed 10,000. I was wrong. If the time frame was 12 hours, then I would have won. But..."}, {"start": 1614.4, "end": 1638.03, "text": "We did a survey at the end of the first month. Actually, the community members did a survey at the end of the first month. 47% said that it was their first digital currency. So if you take those numbers and extrapolate out, we created half a million new digital currency holders in that first month, which is great for everybody in the room. The other really interesting angle on this is..."}, {"start": 1638.03, "end": 1661.36, "text": "So another problem that we think about a lot at Stripe is sort of the multi-sided marketplace problem. So for something like payments, you have a consumer and you have a merchant. The merchants want to accept whatever the consumers want to pay with. The consumer wants to pay with whatever the merchant's going to accept. So you have a chicken and an egg. How do you introduce a new payment mechanism? Well, you kind of don't. A lot of people really go wrong by trying to address both sides, and they just don't have scale on either one."}, {"start": 1661.36, "end": 1684.61, "text": "With Stellar, I actually think that there's a story for how you break the model. Actually, the problem with Stellar is more complicated than just a merchant consumer. You also have the traders, and you have all these other entities that have their own specialized interest. And the Stellar strategy, which I think has really proven that it can work just by looking at the growth numbers in that first month, is that you just"}, {"start": 1684.61, "end": 1709.41, "text": "Give free currency to the consumers, right? And then suddenly everything else will be dragged along behind it. And it was really fascinating just watching the crazy exponential growth. It was actually like, you know, kind of in those early days, you're kind of looking at the numbers and you're just like, you know, again, kind of the thought was that we're probably going to hit like 100,000 in the first month, right? And that it was clear that it was just going to be an order of magnitude more than that."}, {"start": 1709.41, "end": 1729.94, "text": "And that if you just sort of like, you know, you have this lever of like, how many coins do you give out? Are you, you know, how much do you do the airdrop? And if you go and you do it full bore, that it looks like there's just like kind of no limit for how fast the thing can grow. And so I think that one of the interesting things about where Stellar is right now is that..."}, {"start": 1729.94, "end": 1759.74, "text": "There's sort of this ability to change the knob and to change the growth rate. That's something. It's a configuration option that sort of is, I guess, it'll be interesting to see sort of how that ends up playing out. So one of the, I guess as an investor, I'm most aware of this, but one of the ongoing, I guess, evolutionary aspects of digital currency that we think a lot about is what will big companies do?"}, {"start": 1759.74, "end": 1789.58, "text": "Obviously, they typically move slower, but you kind of need them to kind of legitimize some of the regulatory requirements. Are big companies, banks, merchants, are you starting to have conversations with those bigger players? Are they taking notice? Any observations there? Yeah, we're actually getting inbound requests constantly about people that are trying to learn more. I think what people are finding most interesting is the diversity of people on this stellar network because that's something that,"}, {"start": 1789.58, "end": 1817.34, "text": "I mean, I've been involved in the Bitcoin space for three years now, and it's not exactly representative of the normal world yet. And all these big organizations have normal users that look like the world. So they're taking notice of the demographics that are within the network. They're also really interested in the developing world because of the whole idea of who is the next billion."}, {"start": 1817.34, "end": 1846.38, "text": "What will they do? They will certainly change the internet. They will certainly change how money is moved. But we don't know how it will happen yet. So I think a lot of these big organizations are looking at the 10-year horizon, not so much the six-months horizon that we look at in Silicon Valley. So they're trying to map out what does it look like for that next billion. And what countries are your biggest countries? After the US and Europe, it's Indonesia, Vietnam."}, {"start": 1846.38, "end": 1868.86, "text": "Philippines, Singapore, Mexico, like along those lines. Countries that you see that are developing world economies that have a strong middle class, have strong mobile penetration, like Indonesia and Philippines. They're both island nations, which means mobile penetration is much faster than regular internet. Vietnam is this funny edge case."}, {"start": 1868.86, "end": 1898.67, "text": "So like two, three days after we launched, our Vietnam numbers started to go crazy. And we're like, what is going on? So we're getting all these emails in Vietnamese. And for any of you that have tried to use Google Translate for Vietnamese, it really sucks. So we're getting emails that made no sense. And then finally, some of the users spoke English. And we were asking them, how did you find out what's going on? And they all pointed us to this one particular guy on Facebook who is a poet slash journalist in Vietnam who has a million Facebook followers, respected journalist."}, {"start": 1898.67, "end": 1925.2, "text": "Journalists, they're great people all around the world. And he translated all of our launch material into Vietnamese. And then he published it on his Facebook feed. And in one false hoop, we hit the tech NPR audience of Vietnam. And it just took off like wildfire there. And it took us four or five days to figure that out. And meanwhile, we're staring at these numbers and getting all of these emails and not knowing how to communicate yet. So it was an interesting"}, {"start": 1925.78, "end": 1952.42, "text": "Dipping our toe into learning how things move in other countries and realizing we have a very diverse team in terms of country distribution, but we still have blinders because we're all still tied to Silicon Valley somehow. Just in general, either technically or business-wise, what's been the most challenging aspect of the first four or five months of this business? No sleep is one. It's any startup, right? Yeah."}, {"start": 1952.42, "end": 1981.42, "text": "Me and Jed would have different answers because I'm on the non-technical side. Do you want to go first? Sure. Yeah. I mean, technically, by far, the biggest challenge has been scale. I mean, this is the first time this kind of technology has been stressed to this limit. So we've been kind of scrambling to keep up with the load. We've actually tried to dial down the giveaway as much as possible by limiting the amount that we're giving away just to keep kind of the lid on. We're doing a major refactor of the code base right now just to deal with this level of scale. So that's certainly the biggest challenge."}, {"start": 1983.18, "end": 2004.5, "text": "And on our side, so we always had this thesis that money is culture. How we pay for things here is different than how I pay when I'm in Korea, which is different from how I split the bill with friends in Europe. So we knew there was an intense amount of localization that had to happen, but when your audience is"}, {"start": 2004.5, "end": 2032.93, "text": "Already is like global three days out and your team is sitting in an office in San Francisco. We weren't ready for that. And we're scaling up on that side of it now. But we have to, you know, it's like where the rubber meets the road. We have to really get more boots on the ground in countries where we're doing, where we're seeing a lot of users and understanding, you know, what are the specific problems in their countries. Like Indonesia, it's something like less than 15% of the population has credit cards."}, {"start": 2032.93, "end": 2062.51, "text": "So what happens then? And why they're using Stellar? Like the Indonesia case was really interesting. We had a bunch of users that we're looking at to try to determine if they were good users or bad users doing fraudulent activity or real activity. And we reached out to a bunch of them. And it turns out one of the guys was a early merchant. How many people have traveled to countries where you do prepaid mobile data or prepaid top-ups?"}, {"start": 2062.58, "end": 2091.39, "text": "Okay, so typically you go to a kiosk, you pay something, they give you a scratch off, you put it in your phone and you're topped up. In Indonesia, there's roughly a 40% price differential for if you top up in person versus top up online. It is 40% cheaper when you're paying online. So if less than 15% of the population has a credit card, then who's paying online? Only a small minority. This guy was inspired by a Bitcoin company called Pico, which allows you to top up mobile minutes in 100 countries using Bitcoin."}, {"start": 2091.39, "end": 2121.22, "text": "And he was an agent for TelcomSell, which is their largest provider. And he was like, I can sell these minutes, this data, online if I accept sellers. So then he started accepting sellers. And I had no idea. I kind of thought he was a bad user, and I felt really bad. I was like, oh, you know, my bad. I apologize. Let's start this conversation over. But understanding that that's how things work there and seeing that early merchant adoption on the ground, it's been a challenge, and it's different in every country we go to."}, {"start": 2121.22, "end": 2145.68, "text": "Are you guys working with a bunch of startups either locally or internationally in those markets that are plugging into your system and partnering with you for those types of applications or other ones? Yeah, we're seeing a lot of people starting to build to Stellar in the developing world because typically what happens is they reach out to us and they say, how many users do you have in my country? And then we look it up and then we tell them and their answer is usually, holy crap, that's more than..."}, {"start": 2145.68, "end": 2174.8, "text": "Fill in the blank, whatever metric they've been using to measure digital currency adoption in their countries. And what we've been seeing, obviously, Indonesia, we have a lot of stuff going on, Philippines as well. We're going to be announcing some really cool stuff in South Africa and Nigeria soon, which I'm really excited about. I'll tell you guys when we're ready. And I think one thing that's important to keep in mind with Stellar is just both, I mean, how early it is."}, {"start": 2174.8, "end": 2204.14, "text": "We're now about three months after the launch, but also it's been really fascinating seeing the amount of momentum that's been picking up. And I think that for sort of introducing any big shift or any sort of new piece of technology or something you want to be successful, I think that there's no question that it's a long haul, right? You really have to be ready for this slog where 90% of the work of building something is always all of the sort of little grungy details that aren't the kinds of things that anyone wants to listen to on a panel like this, right? And that's really what most of the work is."}, {"start": 2204.14, "end": 2233.47, "text": "But I think that it's been like, you know, I was hanging out with, you know, spending a lot of time with the sellers prior to the launch, right? Just kind of, you know, we're talking through what it might look like post-launch and how people might react to it. And it's really hard to build a model in your head of what that's going to look like, right? That I think the biggest sort of takeaway we all had is that the world is sort of like this chaotic system, right? Where there's so many different people with so many different motivations and sort of, you know, views on things that it's hard to know how any given sort of..."}, {"start": 2233.47, "end": 2254.66, "text": "You know, segment or what sort of the overall gestalt kind of reaction will be to introducing a new digital currency and sort of a new vision for how things might be done. And at the end of the day, really the only thing you can do is just sort of say the thing that you're doing as plainly as you can and be as straightforward and clear about what you're doing and then go and execute on it."}, {"start": 2254.66, "end": 2274.1, "text": "I think the thing that's been really heartening is just seeing how many people have responded positively to that. I think that there's really a lot of pent-up demand for something like that. The thing with Bitcoin I think is interesting is that it's been this very..."}, {"start": 2274.1, "end": 2299.57, "text": "You know, iterated process over many years to get people sort of more and more aware of it. And that I think there's a lot of good stuff going on in the Bitcoin community. I think that there's still a lot of shortcomings. And I think that the upside case with something like Stellar is that it's able to address those sort of shortcomings. And that I think that the..."}, {"start": 2299.57, "end": 2323.52, "text": "Good outcome or a really cool place to be would be one in which you can kind of mesh all these things together and you end up with an ecosystem that's way more valuable than any pieces would be on their own. It's interesting. I feel like in every panel I've either been part of or moderated that's talked about cryptocurrency or digital currencies at all, I've managed to ask this question about where we are."}, {"start": 2323.52, "end": 2352.98, "text": "And adoption, you know, when do we get to sort of broad mainstream adoption? Where are we relative to that? What do we think the timeframe is? And candidly, what are we looking for in order to determine that that's occurring or has occurred? So let's even just stepping back from Stellar specifically, just as the ecosystem, because I think a lot of people here are interested in this ecosystem. I'm curious for all of your views on that and, you know, where do you think we are and what are you looking for to signal that, you know, we've sort of hit mainstream with digital currencies?"}, {"start": 2353.36, "end": 2381.12, "text": "I think we're still a couple of hops off. I think for any technological shift, you always sort of have the early adopter crowd that has a set of things that they care about and sort of look at. And then over time, you sort of boil away a lot of the things that, and I think it's a painful process in a lot of ways, right? You look at something like introducing PCs, right? And it shifts from being the hobbyist in the garage who really care about being able to kind of like hook up their own pieces. And then suddenly you end up"}, {"start": 2381.12, "end": 2401.36, "text": "With today's computers, which look nothing like that, hobbyists from the 1980s would probably be pretty unhappy with the computers of today. But on the other hand, they're just way more valuable to way more people. And I think what we've done is we've refined and refined and refined and found what's the thing that actually makes people's lives better."}, {"start": 2401.36, "end": 2429.42, "text": "And I think that with cryptocurrencies, that's something that we have yet to do. I think that there are sort of a list of a bunch of different attributes that something like a Bitcoin has. And then the question is, what is it that people really need? And then there's a lot of building that needs to happen. I think there's a lot of technology and interfaces and security and education, all these different things that are going to be required. And then you also sort of have the business level questions around trust. How do you actually decide?"}, {"start": 2429.42, "end": 2447.14, "text": "If you're willing to, I think that the purists, I think, would argue that, well, we're just going to have cryptography, which is going to solve all the trust problems. And I think that maybe that's possible, but I don't think that we yet have the technology to do that."}, {"start": 2447.14, "end": 2472.48, "text": "If you start from that assumption, then you basically need to come up with a story for, okay, how do we actually figure out who we're going to trust in this ecosystem and how you decide what actions are reasonable to take. I think that there's just a lot of stuff that needs to happen there and a lot of value that needs to be demonstrated. Yeah, I also think that we're pretty far off still. But I think one interesting thing is that it's pretty clear that it will happen. There will be some worldwide..."}, {"start": 2472.48, "end": 2499.63, "text": "I think the route is inevitable. It's just how we end up getting there is still an open question. And how long it'll take is still an open question. But it's pretty clear that it will happen."}, {"start": 2500.02, "end": 2529.09, "text": "I also think we're really far off, and the two biggest issues are access, which is one of the things we're obviously focused on fixing. The other one is user experience. It's really hard for me to get my friends who are not in tech to even think about transacting in a Bitcoin. Is the reason why would you do it? Yeah, I think it's more just like they say, oh, this is one of those crazy tech things that Joyce does."}, {"start": 2529.09, "end": 2558.16, "text": "We've all heard this from our friends, right? So I think that for me, what true adoption looks like is when people around the world that are many degrees of separation from us in the room are using some type of digital currency protocol to transact on a back end, and they don't even know. They may still be transacting whatever they're used to interacting with, be it a dollar, be it a peso, be whatever it may be, and they don't actually have to think about it. If you make people have to think about it,"}, {"start": 2558.16, "end": 2579.52, "text": "Then you're going to have the problem. Okay, so I'm going to ask one more question, and then we're going to give the audience a chance to ask some questions. So my question is a little bit more generic, which is, excluding Stellar or Stripe, which company do you guys, and each one of you, I'm going to ask each one of you."}, {"start": 2579.52, "end": 2616.29, "text": "Which company do you think has the potential to have the most impact on the future of money, which is, I guess, what we're all here to talk about? So we'd love your guys' opinion on that. Yeah, let's see. I actually don't think that much about other payment companies. It doesn't have to be a payments company. I mean, yeah, I think the big impact, if it's not Stellar and it's not Bitcoin, it'll be some third."}, {"start": 2616.29, "end": 2645.06, "text": "Cryptocurrency that we just don't know about yet that's in some basement somewhere that someone is working on that is just yet to be revealed, I think, is the answer. So maybe not quite a company, but I'd say the US government and maybe not just the US, but kind of world governments, I think, are sort of going to be a big determiner, certainly in the timeline of what happens with cryptocurrencies. And possibly, if the world governments just decide that they want to stamp out cryptocurrencies,"}, {"start": 2645.06, "end": 2674.45, "text": "At the end of the day, they sort of can, right? That I think that, again, sort of the purist view is that, well, it's technology that exists in the cloud. No one can shut it down. But you can actually sort of regulate it to the point where it's not being used for anything mainstream. And I think that that's actually, we're sort of on this tipping point right now where you can kind of see it's like this, you know, it's kind of like an inception where you have the top turning and you're not sure if it's going to topple or not. It's been really interesting watching the regulatory landscape over the past six months."}, {"start": 2674.45, "end": 2698.59, "text": "I think it's not yet clear exactly where that's going to shake out. But I think that the higher bid on what ends up happening is going to be determined a lot by those. I would actually say that it will likely be telcos. Because in a lot of the world, we see telcos acting as the other bank. And even though they are heavily, heavily regulated, they still function in a different world."}, {"start": 2698.59, "end": 2728.91, "text": "Then traditional financial regulation right now. And that may change. But what's interesting to me is that they're actually moving faster than one would have expected. Like Tanzania just decided there's several telcos that split the market there. And the government has just mandated interoperability for their mobile payment solutions. Because that's what that country needs. So if we're already at the point where people think about interoperability for mobile money, that's way ahead of the game than where we've been in the space that we're in today."}, {"start": 2729.33, "end": 2759.36, "text": "Okay, great. All right, so we've got a few questions. Let me start right there. We've got t-shirts that we're going to get out. Yeah, you. For questions. Hi, Mitra from Lumitor Networks. Obviously, I'm really excited by what you're doing with Stella, given that you seem to be one of the only companies around that actually cares about what happens in developing countries like we do. I've got both a concern and a question. So the concern for you, Joyce,"}, {"start": 2759.36, "end": 2786.75, "text": "I love what you're doing as a nonprofit. I love that you play well with local currencies. I'm concerned that you're building social engineering into the currency itself. So if you get it wrong, it's baked in and you can't get it out. Are you talking about the inflation side of things? Yes, exactly. And the question for you, Jed, is have you built interstellar, have you built around the problems with Bitcoin that make it impossible to use it as a receiving agent for..."}, {"start": 2786.75, "end": 2810.99, "text": "Payments. So that you can't use Bitcoin for receiving payments in most contexts because you get no information immediately when a payment's made. So you can't use that, for example, as the receptor for electricity payments and things like that where you need an instant response with an activation code. So have you built an API that allows for instant..."}, {"start": 2810.99, "end": 2836.8, "text": "Reception of transactions. Sure, yeah. I mean, you can do this with Bitcoin as well. But yeah, you can monitor an address and know when it's received. It's really screwy to do that in Bitcoin. It's less screwy with Stellar. So yeah, and you can attach a memo so you can have additional information other than the recipient or the source. You can toss them out a large dirt there. Oh, really? Yeah. I'll answer the question. You don't want to throw?"}, {"start": 2836.8, "end": 2864.58, "text": "On the social engineering side of things, no, it is available. We actually had to think long and hard and talk to a lot of economists and different folks when we were trying to design the inflation mechanism. But in the end, on something like Stellar, because it is any currency, the role of Stellar specifically as a currency on Stellar as a platform is not as huge as it is in other types of protocols because people may end up still transacting mostly in dollars. They may end up transacting in..."}, {"start": 2864.58, "end": 2898.94, "text": "So the impact of the inflation on just the stellar pool shouldn't be as massive as we think. Who else? Any other questions? Morgan? Hi, my name is Morgan. And my question is about trust and incentives. And I think that one of the fears that I have about all sorts of these cryptocurrencies is that some of them actually will be successful. And I think that we obviously have no idea which ones they are. And my fear is that we're going to replace"}, {"start": 2898.94, "end": 2926.96, "text": "What a lot of people think is a horrible crappy system with other horrible crappy systems. And I was wondering if you could say just a tiny bit more about the governance aspect of Stellar and specifically with respect to Stripe. When I tell many of my friends I'm messing around with Stellar and they've never heard of Stellar, even many of my incredibly technically savvy friends. But everyone's heard of Stripe and they're like, oh, this is Stripe's thing? Stellar is Stripe's new project? And so can you talk a little bit about why this is not?"}, {"start": 2926.96, "end": 2951.78, "text": "Stellar's project because I mean we've all heard of numerous you know so-called nonprofit corporations that are just fig leaves for a large yeah yeah and so you know can you help me with that because frankly when I'm looking at you know what should I be supporting which efforts are good you know I you know man I trust the US government to attack whatever they can I trust Stripe to build great stuff but I don't know how I trust Stripe and Stellar."}, {"start": 2951.78, "end": 2967.25, "text": "On the governance side right now, our board is three. We're expanding it to five. The only Stripe person on it is Patrick Collison, who is the CEO and founder of Stripe. The other board members are Jed here and then Keith Raboy, who's the former COO of Square."}, {"start": 2967.25, "end": 2993.58, "text": "And is now at Coastal Adventures. He's early PayPal mafia. And then we will be adding two more seats. And neither of those will be striped seats. So the impact will, and the board will continually expand. But we just started off small since we're just starting off. So beyond that, other than a single board vote, and the board typically votes only on major things like making sure that we're complying with nonprofit law. They don't really vote on."}, {"start": 2993.74, "end": 3023.94, "text": "Thank you."}, {"start": 3023.94, "end": 3039.87, "text": "I mean, so Stripe's sort of formal involvement is that we gave $3 million in exchange for 2% of the Stellars. And when we were kind of looking at that number, we were like, 2% seems like a lot, right? It seems like actually it's kind of on the border of being like kind of a..."}, {"start": 3039.87, "end": 3059.34, "text": "I think the most important thing..."}, {"start": 3059.34, "end": 3088.59, "text": "From our perspective for our involvement with Stellar is that it stops. I would love if the story became not this is Stripes thing, but this is Stripes and all these other companies, both payments institutions and not. That's, I think, the end goal. But again, it's still fledgling. We're three months in, but I think that that's the medium to long-term goal. Steve?"}, {"start": 3088.59, "end": 3116.3, "text": "What's the economic model in terms of the incentives? Because don't you give people like $10 in free Stellars for signing up? Or is there some, you know, that if you come in through the right link, you get $10. So if a million people in your first month signed up and they're given $10 in value of Stellars, then where is that $10 in value, $10 million coming from? And as you add a million dollars a month, it just gets really expensive. So where does the money come from is the question."}, {"start": 3116.3, "end": 3142.19, "text": "So I think this is actually one of my favorite, like, almost surprising realizations about Stellar, which is if you've ever read, like, the PayPal wars or, you know, the early stories of PayPal, right? The way that they grew was that they went and they raised a big VC war chest and then gave $10 to anyone who signed up and $10 to the person who referred them, right? You know, we're paying $20 a head, basically, for user growth. And the thing is, so this is basically a wealth transfer from the VCs to all of their users."}, {"start": 3142.19, "end": 3168.13, "text": "And with Stellar, you kind of have a similar thing, right? You have people sign up, they get free sellers. But then you're like, where does the value come from? Who contributed to this war chest? And the answer is that it's the people who are on the exchanges. And the thing that happened really from day one was that people started trading Stellars, right? This was a thing where it was like, there's no basis for the value of this thing, right? It was sort of like someone just came and planted a flag in the ground and said, all right."}, {"start": 3168.13, "end": 3188.46, "text": "This money is now in existence, right? And like go forth and I'm sure it can be used for something at some point, right? And people immediately started putting a value on it. And I guess you could kind of benchmark against the, you know, we sort of set a value by doing our $3 million for 2%, but, you know, it's sort of a number that's kind of anyone's guess, that sort of thing."}, {"start": 3188.62, "end": 3215.3, "text": "And so really, it's been this wealth transfer from the people who are buying into the currency on the exchanges. And so a lot of that's happening in Bitcoin. And so you sort of have kind of the people who have all these Bitcoin converting them over into Stellar. And so it's almost like the Uber model for growing a payments company, right, where you sort of take it. It's this marketplace where you kind of connect the supply and demand side. So it's essentially the exchanges and the markets. But on a similar note."}, {"start": 3215.3, "end": 3252.02, "text": "I will also kind of airdrop this magical money on everybody in the audience. So if you guys do want to try out Stellar and you haven't already, send an email to eva, E-B-A, at Stellar.org, and just say, Joyce said you're giving me Stellars. And then we'll send you an invite so you can start poking around the system and see. We'll require Facebook off, but I let Eva know to expect a lot of emails today. Sorry. Yeah. Oh."}, {"start": 3252.4, "end": 3282.32, "text": "Sounds like you've built a cryptocurrency and a platform. Do you ever see actually spinning off the platform to compete with the likes of Stripe and Adyen and other payment solution providers? No. The goal of the platform is to be a ubiquitous layer, so any kind of Stripe or Western Union or a bank can plug into it. It's to be kind of like an IP layer for payments."}, {"start": 3282.32, "end": 3313.3, "text": "Equivalent of SMTP as an email. It doesn't matter who your email provider is. They can all interoperate and talk to each other. So the seller is a similar thing. It doesn't matter who your payments provider is. It gives them all a common language so you can speak to any of them. So that's the idea. Oh, sorry. We're just going back to the lady who... Yeah, we'll get to you next. Sorry."}, {"start": 3313.3, "end": 3339.12, "text": "I have a question around the industries that you support. And I think that when I hear about the second world or the developing countries that you're actually working with, there's a lot of opportunities around women-owned businesses, small businesses, and industries. And you were also talking about kind of education. How do you go on that kind of digital divide, teach them, and then how do you figure out what industries you should be going in after those sellers?"}, {"start": 3339.63, "end": 3368.27, "text": "I think what's interesting is that everything in money is two-player. There's always a sender and receiver, so you have to have an ecosystem. So that means that we'll likely partner with, learn from people already on the ground, local partners, local leaders, local startups, government officials, and see what is already there and start working in through that methodology rather than us coming in saying, we know how money works in your country. So we're going in with an open mind, asking a lot of questions."}, {"start": 3368.27, "end": 3391.97, "text": "We intend to do these educational programs that will educate people, but we also expect to be educated ourselves in the process. So it's constantly evolving. What we're seeing is a lot of e-commerce, like the many stripes of the world in their local economies, because as you guys know,"}, {"start": 3391.97, "end": 3421.07, "text": "International expansion in the business that they're in is really hard. We're seeing some folks in the remittance space. I'm personally fascinated with health care because I was hearing about some stats that say of the people that live on under $2 a day, most of them are actually not statically poor. They're intermittently poor, which means something causes them to plunge back into poverty. And in 80% of the cases, it's typically a health care crisis. And it's unavoidable. We all get sick. We're all human. The cost."}, {"start": 3421.07, "end": 3457.63, "text": "For the medicine or the medical care that would have avoided that is about $1 to $2. And they cannot save up that money because there's no savings tools. So imagine a world with global health savings accounts where somebody can save $0.10 every other week. That could really change these poverty levels. So we'll see as we get there. But I personally am interested in things like that. All right. The guy who started talking. Gerard Buckley from Toronto."}, {"start": 3457.63, "end": 3477.23, "text": "You talked about the concern that the regulators would render the cryptocurrency non-functional by putting so many handcuffs around the currency or the process that nobody would use it."}, {"start": 3477.23, "end": 3501.74, "text": "What would happen in the opposite extreme? How about if the regulators or the traditional regulators, i.e. countries, central banks, actually started their own cryptocurrency? Because one of the money market officials from the Bank of Canada has actually said, if this has become as popular as it could be, why wouldn't we just start our own cryptocurrency?"}, {"start": 3503.18, "end": 3528.67, "text": "Well, so I think it's actually a good question. I thought you were going to go a different direction for it, which is what happens if you just removed all the regulation and let people do whatever they want, which is also a very interesting thought experiment. But I think that the real question in my mind is value prop, right? At the end of the day, what's the most sort of valuable thing for the world? Or what would be kind of the thing that would be awesome if it happened?"}, {"start": 3528.67, "end": 3557.74, "text": "And I think that for any sort of disruption, you always need both the end story of like, if this happened and was successful, it would be great because X. And you also need the story for how could this actually happen. And I think that with a lot of these payment systems, the easy part is that end state, right? The hard part is how do you actually get people on board and get them to use it? And so I think that if you started to have all these governments starting to do their own cryptocurrencies, that the real question would be, would there still be a place for all these to interoperate?"}, {"start": 3557.74, "end": 3587.15, "text": "Right now we sort of have this weird system where you have all these correspondent banks. The way that a lot of the cross-border stuff works is you have some bank in one country who gets a deal with a bank in another country. And then suddenly all the other banks in the first country will talk to the one that has the relationship. And so you have this multi-hop thing going. And there's a lot of confusion in that process. And it's a really inefficient and kind of unfortunate setup. And so I think that you could have countries go and start trying to do digitization."}, {"start": 3587.15, "end": 3612.59, "text": "I think that within their own fiefdom, they can probably do a pretty good job of pushing adoption. The question is, in order to get this to be really valuable and way better than the thing we have today, you need to solve that cross-border problem. You need to make sure these systems can all interoperate. That's where something like a Stellar can actually be really useful. You can almost do it independent of, it's actually almost even better for Stellar if the cryptocurrencies have."}, {"start": 3612.59, "end": 3660.74, "text": "As you have more of them because you need some layer that lets these things interoperate. Maybe just to finish off that answer then, I think it's hard to know exactly how those things play out. I think that there are few different possibilities. I think that you have some amount of water flowing downhill in terms of things going towards the more valuable case. The question is, given that"}, {"start": 3660.74, "end": 3697.07, "text": "I can totally see countries that are able to sort of regulate within their own space being able to make those cryptocurrencies successful within their region. And then the question is, can you actually get those to interoperate? And I think that there's a decent chance the answer is yes, but I don't think that it's a shoe-in. And then I guess the question is, are you talking about developing their own protocols or their own currencies? Because... If somebody else creates any product..."}, {"start": 3697.07, "end": 3725.54, "text": "Why don't we just create our own? It doesn't mean that they've figured that out. It's a throwaway statement, obviously. But it enters a new academic development about that subject. So if they make their own currency, it could easily run on Stellar because Stellar is totally currency agnostic. If they have their own protocol, if they can also move their own currency in and out of that protocol, also works well on Stellar."}, {"start": 3725.54, "end": 3748.64, "text": "Use case, for example, would be there's a social network that started to release their coins that made their own coins that allowed them to share ad revenue with their users, and that's on Stellar. So all of their users have Stellar wallets. So that's like a very simplified version, but it could also work in that way. So I think we're out of time now, but I'm sure these guys may be outside the door after."}, {"start": 3748.64, "end": 3756.43, "text": "Or hanging around for a couple minutes afterwards if you want to approach them separately. But just join me in maybe thanking our panel here and thank you all for being here."}]}