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ICO Insight Featuring Encrypgen, LLC (US ICO)

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Featuring

Encrypgen Transcript


 

Adam Chapnick:

You are coming at this whole ecosystem from kind of an unusual place compared to the people we talk to a lot of the time. We're here with a lot of Fintech people and you're doing a really interesting application. What is it that Encrypgen does?

David Koepsell:

Originally, we decided that we needed to develop a way for scientists and individuals to share genomic data more securely and also to build a platform for them to be able to get recompense for the use of that data. There's lots of cloud-based solutions out there, but we felt that they're inadequately secure and private, especially for different regulations. For instance, Europe's privacy rules are extremely severe and getting worse.

It turns out blockchain is able to satisfy a lot of the concerns about maintaining privacy because of the strong encryption. Also, it provides a audit trail in case of misuse, so we can go back and track back misuse of the data if that occurred. It also gives us a platform to be able to trade. One of the things we want to do is encourage the flow of genomic data in science and for personal health, and having a exchange value like a token on a blockchain works pretty nicely.

Adam Chapnick:

Amazing. You guys did essentially an ICO but entirely with the different sort of motivation than everybody else that you hear about. What was the motivation?

David Koepsell:

Yeah. We had built a prototype and shown it in the Bio-IT Conference in May. Then I had a call from one of my advisers who told me, have you heard about these ICO things? I said, I haven't, but I'll look into it. We talked about it a little bit and we realized that since we already had a token as part of the platform, that it would be a perfect instance to test the waters to see what was out there, see if there was community interest. Actually, we got our first customers. The people who bought our tokens are people who are interested in the product, the ultimate product, and taking part in that product, putting their own data of blockchain, sharing it with their doctors, and actually selling it for science.

We've built this great customer base. I've discovered that there's a real large amount of interest out there and passionate interest, and now we have this great community of ICO purchasers, people who bought the token who are eager to use it now to start trading data. It also has given us an asset that we can basically say is in the bank so that we can leverage it if we need to.

Adam Chapnick:

Is that the reserved tokens that you have to issue? Is that ... [crosstalk 00:03:46]?

David Koepsell:

They bought it with cryptocurrency.

Adam Chapnick:

Got it.

David Koepsell:

That cryptocurrency is now sitting there as a reserve …

Adam Chapnick:

Right. It skyrocketed.

David Koepsell:

... if our VC round doesn't pan out. We're in a VC round.

Adam Chapnick:

Amazing. What was your call-to-action for people to get involved, which angle did you suggest as the benefit?

David Koepsell:

You know, we just describe the product, so our pitch to the consumer is the same as our sales pitch. It was, you want to be in control of your genomic data and we're giving you a platform to do that. You don't have that now, but blockchain a perfect way to do it, and you can do it with these tokens and you can do it using our platform. You may even get some reward out of it if what you're interested in is controlling data. It turns out a lot of people want to do that.

Adam Chapnick:

Fascinating. Is this the future of all like medical records, electronic medical records, and everything else, is that what you see?

David Koepsell:

I think it is and I think the market sense is going that way, too. In the ICO realm, there's a number of healthcare companies coming along. Some of them are here with us. There are big ones, little ones. Most of the focus has been on medical records, because ... A lot of the sort of sales pitch behind that is take control of your data.

Adam Chapnick:

Sure.

David Koepsell:

I think it's clear that the consumer wants that. They want to be in charge of the medical records right now. There's a mishmash of systems and types of data. Blockchain technologies, if properly applied, can give us a way to sort of take control and take ownership of that data, create curation in the user and give back to them some sense of ownership.

Adam Chapnick:

Is this the future also of things or just a general private information always, does this relate to social media somehow?

David Koepsell:

I think once the public starts to grasp the amount of control that blockchain technologies give users, if properly applied, I think it's definitely going to force these big platforms to start to try to give back something to the users they're getting all this data from. A smart consumer is going to recognize that there is a value and there should be some unit of value representing it that they can get back. Yeah. I think tokenization is going to empower people in tremendous new ways.

Adam Chapnick:

Yeah. We talked about different things as virtual currency, it's almost like the sports team you like and who you're married to and how old you are is currency that maybe someday we'll all get rich on all of our personal information.

David Koepsell:

You know, somebody else is, so why shouldn't we, right?

Adam Chapnick:

Amen. That's right. Yeah.

David Koepsell:

The thing is, for us, DNA is like the one thing everybody has. The poorest person in the world might be the source of tremendous wealth. There's a famous case of Henrietta Lacks, who her cells became a very famous cancer cell line that was used in research for decades. She died more or less penniless. The family discovered this a few years ago, and that thousands of papers had been written, patents had been granted, medicines developed. Somebody was getting rich of these cells that she had donated right before she died. They were cancer cells and they killed her. This is part of the motivation why we decided, well, we can give ownership through and immutable record to the person, the next Henrietta Lacks, right, who somehow changes the world of medicine.

Adam Chapnick:

Visionary. How did you end up coming to this? You know, rumor has it that you live in Mexico City.

David Koepsell:

Yes.

Adam Chapnick:

How is that possible? Where did this come from?

David Koepsell:

Okay. We're an international organization, we have roots all over. My wife is a genomic scientist. She works for the Mexican National Institute of Genomics. She and I have collaborated for years. I was a philosopher and a lawyer for decades and we've collaborated on academic papers and chapters, etc for quite a long time, issues of genes and ethics. I had also developed this blockchain habit. I was mining various coins at home and buying ASICs and annoying her with the sound of these things running. I also had a philosophical interest in blockchains and money, because it's a fascinating thing.

You know, what is money and what is currency is a lot of what we've been talking about right here at this conference, but I saw that there is a connection. The fundamental elements of cryptocurrencies, of privacy and transparency, of anonymity and immutable records, could be easily applied ... technically, it might not be easy, but in theory, applied to the problems of genomic data and sharing in science. That's how we got interested in that. My folks live in Florida, I go there a lot, so we incorporate it in Florida.

Adam Chapnick:

There it is. There's something beautifully appropriate that you're a philosopher and an ethicist who's also a cryptocurrency enthusiast. Everybody that we talked to, I mean, with almost no exception, has this sort of almost quasi-religious relationship to the possibilities of all this. From your philosophical sort of ethicist side of your brain, what is it about that you feel is the biggest promise and then maybe also the biggest danger?

David Koepsell:

Cryptocurrencies are fundamentally transformative technologies, because they are revealing for us the nature of money. There's a lot of confusion and I've heard it a lot when I talk to typical finance folks and economists. There's a lot of confusion about the nature of money and currencies. People talk about stores of value or they confuse money with currencies. There's a real big difference between all of those things. I'm just going to give you my philosophical perspective here. The store of value is the human mind. That is the only store of value. Whatever we decide to use as a mechanism of exchange of value is a currency. The money exists independently of the currency.

These are philosophical questions I'm writing about and dealing with when I'm not running a company. They're really important if we start to consider that the future of money is going to be totally separated from states. For the past couple hundred years, currencies have been things that states make as the authorized unit of exchange of value. Cryptocurrencies threaten to undermine that completely, because they will give us a mecha ... and they do give us right now a means of exchanging value totally separate from states.

That's troubling for states because they can't collect the taxes they're used to, they can't monitor it as easily, but it's also perfectly transparent. We can go back over the Bitcoin blockchain and see every single transaction. If we can associate those transactions with people, which we could do if we did sufficient forensic analysis, we would have a lot more transparency about the flow of Bitcoin than we do about US dollars. You know, we talked about Jamie Dimon?

Adam Chapnick:

Dimon. Yeah.

David Koepsell:

Dimon? Dimon. Sorry. Jamie Dimon, his ... Which is his ... ?

Adam Chapnick:

Chase. JPMorgan Chase. Yeah.

David Koepsell:

The JPMorgan today ... I don't know if you read the news today? About a $2 billion of money laundering they're in trouble for? Fiat has its risks, too. We don't know how many pieces of fiat currency are out there, and we don't know how they're flowing, and tracking it down is a much bigger forensic task than it is to unwrap a blockchain if you have sufficient tools and time.

I think, yeah, people are going to recognize that their ability to transfer value among themselves with blockchains will liberate them in ways they haven't even discovered. Ours is a very small solution that we think empowers people to make use of data that's uniquely their own, but there's got to be thousands of such cases where value is going to be able to be transferred in markets that we haven't even considered through blockchains.

Adam Chapnick:

It's staggering when you start to apply it all around the world and all of the different possibilities. It's exciting. At least, exciting. It's been exciting to talk to you, too. Thank you so much for sharing your philosophies and your insights and also what you're doing with the company.

David Koepsell:

Thank you very much.

Adam Chapnick:

It's been great having you.

David Koepsell:

Thanks.