The CEO of Global Blockchain Technologies thinks what it’s working on is “way, way more important than an ETF”…
Global Blockchain Technologies has spent much of 2018 revealing the fruits of labours funded by its 2017 IPO.
So far this year, it has announced the launch of its Ethereum ERC20-based Service Node layer, the Laser Network – and its accompanying Laser token – which promises to facilitate Lightning Network-type fast and secure transactions across multiple blockchains.
It has also moved into the exchange space with the creation of GBT Exchanges Corp., which will oversee a Securities Token exchange, Hyperion, the Stellar-based Singularity exchange, and an as-yet-unnamed State-sponsored exchange offering – which will also offer some unique vertical integrations.
It has also set up a Dubai-based subsidiary, Blockchain Technologies DMCC, to develop blockchain-based business opportunities alongside the Dubai Multi Commodities Centre (DMCC). That’s a government-backed organisation and free trade zone authority for an area that is home to over 15,000 multi-national corporations.
As if that were not enough, GBT has been heavily involved in the KODAKOne blockchain image rights project alongside Wenn Digital, and recently floated its crypto-mining arm on Canadian and US stock exchanges.
During last week’s World Blockchain Forum, we sat down with Global Blockchain’s CEO and President, Shidan Gouran to talk about his – and Global Blockchain’s – path into crypto, and where he sees his company and the blockchain space in general moving in the near future.
CryptoNewsReview: Let’s start at the beginning, how did you get into the cryptocurrency market?
Shidan Gouran: I had a software development company, and one of my developers was a Bitcoin miner in 2010. I’d read Satoshi’s paper when it came out on the peer-to-peer to peer Foundation website, thought it was interesting, but I left it alone. My developer was very much into it, and he gave me 2000 Bitcoin one day. 2000..! And I was like, ‘okay, thank you, whatever’…
When it reached $3000, I exited it, obviously. And then the next thing I went into was Ethereum and a bunch of other sales. I stayed within the area and started investing in various companies in the space, and that’s when I really got into the mining as well.
CNR: Was there a catalyst for you thinking this went beyond something of technological interest to something of a business opportunity?
SG: From from the very start, I knew it was a business opportunity. Because, after I read the white paper, I knew that solutions will be built around this idea. When the price kept going up, that’s when I knew this was growing and there was a real community behind it. I got very excited about it.
CNR: At what point did you start to funnel resources into the mining? Into the technical side of it?
SG: Mining on a really massive scale we restarted last year where we raised through a public offering – and private placements with a bunch of investment banks – quite a bit of money. We raised around $72 million, but in total we had quite a bit more than that. Our first project was deploying a mining company.
It was our first incubated project. That’s still a work in progess. Right now, we have around 60,666 Bitcoin machines. We’ve deployed some of those, but I think soon it will be all of them.
CNR: Have you diversified much from Bitcoin?
SG: We’ve stayed with Bitcoin for now, but we’re looking at other tokens as well.
I think where the space is going is, it can’t be just mining. What’s going to happen is these data centres are going to develop into being data centres that compete with Amazon for cloud services and then, using their spare cycles, they will mine. Or, their services will be tokenised.
I think things like that are going to become really big. There are going to be companies that focus on AI, or video rendering, or gene sequencing, and these kinds of things that need a lot of hardware power. The process of mining is something they will be doing in their spare time.
CNR: How do you feel about the attitude of Brad Garlinghouse at Ripple, who says China has an unhealthy hold on the mining of the Bitcoin blockchain? Do you think that’s a thing?
SG: No, what I think is that Ripple has an unhealthy hold on XRP. A very unhealthy hold… They’re completely, in my opinion, controlling that project. I’m not a lawyer, so I’m not commenting on this as an authority but, to me, if you’re controlling something that goes up in value there’s no decentralisation. It looks a lot like a security.
I was never very impressed with XRP. I think Stellar, at least, organised its system much better, and the project itself is much better. It’s a stronger team, and we actually believe in Stellar quite a bit as a company, we’ve invested in a bunch of projects that involve Stellar.”
CNR: Of all the projects that you’ve put money into, which ones interest you the most at the moment?
SG: What really excites me, at Global Blockchain, is we have an exchange division. We really think that exchanges are still the most important pieces in this equation.
We have [the Laser] project, where we’ve forked Ethereum, and we’ve added the feature of Master Nodes to it, which we call Service Nodes. And these allow cross-chain transactions, instant transactions, and private transactions – that’s how it differs from Dash, it offers cross-chain transactions as well. And, of course, you have all the power of smart contracts because it’s on the Ethereum platform as well.
We wanted to build a DEX similar to 0x, the only difference being that we wanted our DEX to handle multiple assets. So [we did that] by having this Service Node layer be able to handle other assets, and take custodianship of assets on the platform.
All of that was a big deal for us. And that’s what we’re doing, we’re building a DEX also on top of it. The token is called Laser. We haven’t named the exchange yet, but here’s the thing that’s great about it: we’re not just developing a product, we’re developing a business.
We’ve been in talks with a major financial player in the world, a country actually. The regulators, in the Middle East – who we believe are at the forefront of these technologies and understanding where they can go – might be working with us to offer insurance on custodianship.
That would be a world’s first. Nobody else does that. Lloyd’s has announced that they’re offering insurance; Aon, the insurance company, has announced that it’s going to be offering insurance…
No country has, to date, insured a cryptocurrency exchange like they would a bank, though. And this country is seriously considering that, in partnership with us.
We’re going to be deploying this exchange, if this deal goes through, as the exchange for this country and now you’ll have institutional investors. Think of a Goldman Sachs, right? Now, there’s no way that they would start trading cryptos, they just wouldn’t do that.
CNR: They just don’t have the cover.
SG: Exactly! They need to know that those funds are secured as far as custodianship goes. They can’t take that risk. They all offer small OTC desks, as you know, but they’re not trading for themselves, at this point, really.
This is way, way more important than an ETF. It’s immensely more important because it’s a real application that will bring liquidity to the market to a level that just doesn’t exist today. It’ll bring real value, and that’s what we look at: real values, real applications, and I think this is going to be a massive project.
CNR: How do you think the regulatory environment around this is going to play out in America? You say the country that you’re dealing with doesn’t have a problem with the decentralised nature of the exchange, but how do you think that idea is going to play-out around the world?
SG: I mean, it’s decentralized, but it’s not decentralised in what matters for them. For that project they will still control control who can come on the platform and who can’t. That’s not going to disappear.
What matters is that everybody wants decentralised custodianship.
Security tokens are not going to be bearer instruments like a utility token can be – where you can have in your terms of service that, ‘hey, if you lose this token, you lose a it’, and it becomes the property of whoever owns it. That’s not the case for a security, you’re not allowed to do that. You have to have it registered under somebody’s name. Today, you have to go through the process of a transfer agent and a clearing house and all of that.
What security tokens really mean, is that you’re taking that process and you’re automating with Blockchain technology. At the end of the day, that’s all it means.
CNR: Are you someone that sees a big future for security tokens going forward?
SG: It’s going to be a multi-trillion dollar industry. You’re never going to see the raises you did before, especially in the security token world. They’re going to be small raises, but it’s going to be thousands and thousands of raises, right?
So for people that are building platform solutions it’s going to be a fantastic industry. And you can compete with an ICE or a NASDAQ because they’re not really looking at it that seriously. I mean, they are – ICE and NASDAQ are very interested in this space, obviously – but they’re not going to be first movers.
We invested in a stock exchange and alternative trading system – Hyperion – that’s adapting itself to be a security token exchange. And I’m also one of the founders of that company. We’re going to be live in October.
We’re really excited about that project, obviously.
CNR: What sort of percentage of the existing securities market do you think STOs have a chance of grabbing over time? Do you think you think it will completely replace legacy systems eventually?
SG: What do blockchains do? Blockchains turn the network into the exchange… It’s about turning networks into markets. It’s going to be the ‘market of everything’, I think. It’s going to replace everything, as far as that goes.
Exchanges will have a role to play, it’s just going to be a slightly different role. They’re still going to make a lot of money, and they’re going to save a lot of money because they won’t need as many staff as they needed before.
These things are going to be way more tradable than they were before. Much less friction. And I think it’s going to replace the capital markets, I really do.
I think a lot of companies that before would have been private, are going to become public now – a lot of them.
CNR: So you think it’s going to lower with the bar of entry for small- and medium-sized enterprises to raise money?
SG: Yeah, I think it’s going to replace Venture Capital funding – which was always a bad idea.
Early-stage companies are going to be small public companies. Later-stage companies that are cash-flow positive, or have a really good mandate, are going to be the [equivalent of the current] ‘public companies’ on certain exchanges. There is going to be a delineation there.
They’re all going to be essentially on the same network, it just that some of them are going to be whitelisted for private trading and whatnot. They’re going to essentially call those ‘exchanges’, and flag features that don’t appear on the open network.
Hopefully, what it also means is that you’re going to have more open networks. So I can trade across borders easier and, as long as I’m meeting regulatory requirements, no one’s going to come after me and say ‘Hey, you didn’t register with us as an organisation’, ‘you didn’t register with those guys, as an organisation’. It’s just open.
The world is right now is like a Minority Report world; they try to stop things before it happens! As long as somebody’s following the laws and regulations. They shouldn’t have to register an offering, in my opinion, with all these regulators and have so many hoops to jump through.
I think ‘Reg D’ offerings are definitely going to be very liquid compared to what they are today, for accredited investors. And I think eventually people will say ‘we should open this up to more investors.’
The current crowdfunding laws are a joke, Reg A+ is still a bad deal – you still have to go through regulators and spend a lot of money in the states. Europe is a bit better, it’s at least as sane as Canada, which is good – but it can be better. Now, you have a lot more transparency, and then you have to rely on the crowd to moderate themselves more.
CNR: So essentially the way the network is formulated becomes the de facto regulator?
SG: Yes, that’s a great way of putting it.
CNR: Shidan Gouran, thank you very much.