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ICO Insight featuring Witnet

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ICO Insight featuring Witnet


 

Amy Wan:

Hello, and thanks for joining us. I'm Amy Wan. ICOinvestor.TV is the first online video platform dedicated to ICOs. We feature interviews with ICO experts, the ICO learning center, and so much more. It's all at ICOinvestor.TV.

Coming up on today's episode of ICO insight, in your ICO and crypto headlines, we have new details to share on the Kodak coin ICO. Witnet is in our ICO spotlight, learn how Witnet connects smart contracts to any external data source. The co-founders will be here to give us an update on their ICO. Also, we'll take you to New York City for the latest crypto Monday meetup hosted by Lou Kerner. That and much more is coming up on this episode of ICO insight.

Now to your ICO and crypto investing news. We begin with your crypto headlines. Twitter is looking to ban crypto currency advertisements. The policy would block ads for crypto currency wallets, exchanges, and ICOs. The move follows Facebook's decision to block crypto ads back in February. Meanwhile, google says that they will also ban all crypto advertisements starting in June. However, google will create a certification process that may enable ICO and crypto related services in the future. Google said that they're constantly updating their policies to protect users from scammers.

In your ICO's investing news, France wants to become the Mecca of ICOs in Europe. According to a report in the French business newspaper, legislators there want to create a welcoming environment for ICOs, allowing them to flourish. The goal is to provide legal certainty for those who seek it, along with innovative regulation. New rules could be in place by sometime in April. We'll let you know the latest developments here at ICOinvestor.TV.

Finally, an update on a story we've been following: the Kodak coin ICO. In it's finally with the securities in exchange commission, Kodak coin is looking to raise 176.5 million dollars under a RegD-506C filing. Kodak coin will also be using a SAFT structure, or simple agreement for future tokens. When digital purchased license from Kodak for 750,000 dollars to use its brand, Kodak one platform and branded crypto currency. Kodak will not receive any proceeds from the ICO.

Remember, if you want to learn more about the latest crypto and ICO terminology, we invite you to visit the ICO learning center on our website ICOinvestor.TV.

Now, it's time for this weeks ICO spotlight. This is where we'll introduce you to a company that's planning to launch, or has launched, an ICO. Witnet is in this weeks ICO spotlight. Their ICO just ended. The Witnet protocol connects smart contracts to any online data source: sports results, stock prices, weather forecast, or even other block chains. Before we introduce you to the co-founders, lets learn a little bit more about Witnet.

Voiceover:

Block chain technology promises to revolutionize business by creating smart contracts that, unlike paper contracts, are impossible to breach. However, up until now, smart contracts were completely isolated from the rest of the internet. This is called the oracle prompt.

With Witnet, this won't be a problem anymore. The Witnet protocol connects smart contracts to any data source available online: sports results, stock prices, weather forecasts, you name it. Witnet will also allow block chains to inter-operate with each other.

For example, in a theorem smart contract, we'll be able to check the state of a big point transaction, and act based on it. The protocol works thanks to a distributed network of mining notes called whitnesses, who earn whit tokens as a reward for retrieving web data and reporting it directly to the smart contracts.

Voracity of this data is guaranteed by a consensus algorithm that detects fraudsters, who are immediately punished. All of this, without any centralized authority or single point of failure. Witnet. Smart contracts with real power.

Amy Wan:

I had the pleasure of chatting with Witnet's co-founders about their successful ICO. Let's take a look.

Hi, Daniele and Adan, thank you so much for being here today.

Adan Sanchez de Pedro

Thanks to you.

Daniele Levi

Hi, thanks for having us.

Amy Wan:

Let's go ahead and get started with the oracle problem. For those of the audience who don't know what an oracle is, what is it? Can you explain what the problem is, and how does that pertain to smart contracts?

Daniele Levi

Block chain technology promises to revolutionize business by creating smart contracts, which, unlike paper contracts, are impossible to breach. The truth is, right now smart contracts are completely isolated from the rest of the internet. They are self contained. They cannot access an external data source, or at least they cannot do that in a decentralized way. If a smart contract has to rely on a centralized oracle, then it can be breached by compromising the oracle, which completely misses the point of smart contracts in the first place.

That's the problem we are solving with Witnet.

Amy Wan:

Great. How come you guys didn't go ahead and use an ERC20 token, given how popular those are?

Daniele Levi

The truth is that ERC20 tokens depend heavily on the ethereal network, and that brings some exogenous factors to your own network. You depend on gas price. You depend on the possible congestion that your network could have. It makes much more sense for us to have a native token.

Amy Wan:

Can you go ahead and give us some examples of applications of how Witnet could possibly be used?

Adan Sanchez de Pedro

Yeah, there are a number of use cases ranging from scroll for physical market places to prediction markets and many other smart contract based used cases, in which you need to have some information from the real world or from anywhere on the internet. In any use case in which you need to decide the output of your smart contract based on something that's going on outside of the block chain, you can leverage the power of these decentralized network that Witnet is.

Amy Wan:

What's the story behind you guys? What made you so determined to work on this type of problem and solution?

Adan Sanchez de Pedro

We come from [inaudible 00:07:01] in 2014, and with [inaudible 00:07:04] you can create proofs of the existence and honor sheet and integrity of any kind of data. At some point, we realized that our customers needed not only to prove the existence of that data, but also to prove that the certain piece of data was available online, somewhere on the internet, in a certain URL.

For example, they needed somehow to notarize websites, so we started with that problem. As soon as we started also using Ethereum for our product, we also realized that that problem was horizontal to a number of sectors in that the oracle problem was there, and that we needed some way to solve it in a decentralized way.

Amy Wan:

Very cool. Where's Witnet located?

Daniele Levi

We are in Madrid. Most of the team is in Madrid, while we have the foundation, it's in the US. I think we are happy and we are lucky to be able to leverage the incredible technical talent we have in Spain, in Madrid specifically. Also, compared to other places, I have to say that talent, it's super cost effective, super good. I think we have a big advantage being able to leverage this talent here.

Amy Wan:

Great. Let's talk about the concept of witnesses for a second. What exactly is a witness?

Adan Sanchez de Pedro

The Witnet protocol works thanks to a distributed network of notes called witnesses. These witnesses earn wit tokens in exchange of retrieving and attesting information on behalf of smart contracts and delivering that information to the smart contracts.

They are the brokers for the information between the internet and the smart contract.

Amy Wan:

Very cool. What is the function of the wit token? What does a wit token holder actually get?

Daniele Levi

The wit token is the direct economic reward. Witness notes get to perform when they perform valid work for the network. The incentive that keeps everybody honest in the network.

Amy Wan:

Great. I heard that you guys used a title three offering. Can you tell us a little bit more about why you decided to go that route?

Adan Sanchez de Pedro

We first ran public offering directed to the general public, portioned to regulation crowd funding, which allows you to raise up to a little over one million dollars from non-accredited people. We raised that one million very, very quickly. We had a great experience with this kind of offering. We did it on the republic crypto platform. It allowed us to have a very direct conversations with the purchasers of our token, and also to be very inclusive to allow people to participate in a crypto offering, people that otherwise wouldn't be able to participate in a more deregulated ICO.

Amy Wan:

You mentioned that it took a very short amount of time to reach to the legal maximum of slightly over a million dollars under your regulation crowd funding campaign. What was it? Was it hours, days, weeks?

Daniele Levi

It took four hours, but it really speed up on day four. I think we covered like five or six percent of the whole raise in the first three days. Then we reached the cap, so we covered the remaining 95% of the raise in just a few hours, in six or seven hours. It really sped up at some point. It was a very good experience because, as Adan said, we had the chance to speak with all the people involved in the sale, to understand the motivations, to understand who or future users are going to be. That's really an amazing experience.

Many other ICOs, I think they don't have the luck to be able to experience what we did with republic crypto.

Amy Wan:

How do you intend to use the proceeds from all this money that you raised?

Adan Sanchez de Pedro

This is not a simple application, a simple crypto application. We're building a really low layer of technology that some other people will build applications on top of. There is a lot of engineering and research and developing going on. We also want to extend possible, to fund other teams, create independent implementations of the Witnet protocol. That's also applications build on top of the protocol because we are really convinced that in crypto projects it's community building and ensuring that the ecosystem is really decentralized, is as important as the development itself.

Amy Wan:

What are the next key milestone dates including when your solution will actually be in production and get launched?

Daniele Levi

We hope to have a prototype in approximately six months. These are the very optimistic deadlines we are trying to follow. Six months, prototype, nine to twelves months, test it, then main network launch in 18 to 24 months from now.

Amy Wan:

Daniele and Adan, it's been a pleasure talking with you today from Madrid, Spain.

Daniele Levi

Thank you, it's been a real pleasure.

Adan Sanchez de Pedro

Thanks.

Daniele Levi

Thanks for having us again. Thank you.

Amy Wan:

To learn more about Witnet, visit Witnet.io. ICOinvestor.TV has been covering crypto meetups from around the nation, and putting those interviews on the crypto meetup channel on our website. These meetups are a place for ICO and crypto enthusiasts to meet and discuss everything from block chain to best practices for launching a token based business.

We've been to meetups from coast to coast, and we were at the recent crypto Monday meetup in New York City hosted by Lou Kerner. Here are some of your highlights for the evening.

Tobin Mccomas:

The regulatory environment has been changing, feels like by the hour. It's really about investor protection. In our venue will be a platform which will allow for secondary trading of those security tokens. We think it's another great avenue for investors to participate in companies that are doing some really great things with the block chain technology.

Chi-Ru Jou

Right now, the problem is that different regulators are all stepping in and claiming jurisdiction. We have LSCC, CFTC, we have Vinson all claiming jurisdiction, so we may be headed toward a lot of litigation in the future.

Ian Olito:

Wyoming just passed five bills, I don't know if you're familiar with what happened in Wyoming. They're very pro block chain and crypto. They just did this a couple of weeks ago. The environment's changing every day. We don't know what the SCCs gonna do. They're looking at companies right now, so I think I'd be careful. That's what we're trying to do.

James Galitsis

I think regulation should just begin and end in terms of the security token offering in ICO. I believe crypto currency is a very, very unique asset that traditional securities or commodity laws don't necessarily apply. I do believe that anytime that you raise outside capital, like an ICO or security token offering or a TG of some sort, I really do believe that you need regulatory bodies to oversee because these are funds that are given by investors. A majority of them, they're not big investors, they're small investors. We have to make sure that the money's being utilized in the proper way, that you don't just raise money and then these people walk away. It's very important that regulatory bodies come in in terms of the STO, the ICO space.

James Haft:

There's a need from the government to make new products look like the old products. What we're trying to do right now is the government seems to be trying to shoe horn this new development in the capital markets into the old framework of stocks. This is probably something you can anticipate as happening. We hope it's a short term phenomenon, and we hope that the ability and the added excitement of the tokens and the flexibility of the democratization of securitization that the tokens offer is able to shine through over the long term. The short term, that the regulatory environment that's forcing the tokens to look more like stocks and to fit into our existing security structures. We're hoping that that doesn't kill the market because this is, right now, what we're going through, is the fastest and biggest redistribution and creation of wealth in humankind. It's very important for job creation and for wealth creation, and for the United States to maintain its position in the global capital markets that we figure out how to support this class.

Juan Hernandez:

I think a lot of what we're hearing is just a reminder that, "Hey, there are rules out there for this." Again, I keep going back to the jobs act of 2012, the job act really set the framework for what's happening, what's allowed out there. Again, it's all done in the name of investor protection. None of it's in the name of stifling innovation and killing this great energy that's out there. It's really just about protecting people like you and me, protecting that little old lady who's investing her retirement money into these types of deals, and really just providing a save and even playing field for all the participants out there. For us, we think they're certainly coming out with guidance around reminding people that there are rules out there for this sort of stuff. We're fans of light regulation. We're fans of investor protection. For everything we've heard has been in support of the broader movement we see playing out.

Calvin Bradley:

For us, compliance is absolutely key. It's one of our core pillars. We're directly working with the DFS and making sure that they set the tone, they set the framework, they set the ground works for us to be a successful business. We're very much in line with how do we work with government, how do we work with non-profits, how do we work with regular businesses, and how do we build that ecosystem so that this technology is actually used the way that it's meant to and the way that it's effective?

Chi-Ru Jou

A lot of issuers are moving out of the US market, but we are seeing the most popular response is to do an offering under and exemption to the SAC registration rules under regulation D to accredited investors. A lot of these are following up with what's called the air drop, which is a free token giveaway, but we want to caution issuers that the air drop is not without its risks, it's SCC risks. We would say that the air drop needs to also be offered under an exemption as well.

Dan Raykhman:

I'm hoping that the regulators will be able to understand what project is really trying to do something new and innovative, something that has benefits for the end user versus projects with people just trying to raise money and really have no interest in helping the market or helping the investors.

Calvin Bradley:

The way the trend is going in the industry, I think securitization on assets is a massive, massive leap forward. I think the credibility that that's gonna give to companies who are pushing the boundary there is gonna be amazing for the space.

Chi-Ru Jou

People are scared that the utility token offerings right now ... I'm anticipating that one of the larger block chain companies will eventually challenge the SCC on the definition of a utility token. We can see that move up to an appeal court. Hopefully will be resolved in the future.

Amy Wan:

To view more meetups from around the nation, visit the crypto meetup channel on our website. Alrighty, that does it for today's show. Remember to visit us on Facebook, Twitter, and Instagram. We love hearing from you. Don't forget to subscribe to our YouTube channel so you don't miss out on any of our videos. Be sure to share them with your friends. I'm Amy Wan for everyone here. Thanks so much for joining us and we'll see you back here next week.