#56 - Black Box Wealth: Earning Passive Income On The Blockchain with PIVX DAO Advisor Hans Koning

[00:00:00] Welcome to Passive Income Pilots, where pilots upgrade their money.

[00:00:15] This is the definitive source for personal finance and investment tactics for aviators.

[00:00:21] We interview world-renowned experts and share these lessons with the flying community.

[00:00:26] So if you're ready for practical knowledge and insights, let's roll.

[00:00:29] Hans, thank you so much for joining us.

[00:00:31] My pleasure.

[00:00:32] Low free to be here.

[00:00:33] I'm thrilled today to bring you on the show, Hans.

[00:00:35] And we're obviously you're a dynamic figure in the world of blockchain and

[00:00:39] digital innovation, a career that spans across continents, really from Europe

[00:00:45] to Australia, Asia, America, and you've really dove into technologies,

[00:00:52] digitization and notably blockchain.

[00:00:54] But before, before I talk about or ask a few questions, why don't you

[00:00:58] give us just an overview of your background and where you are today.

[00:01:00] That's an interesting question.

[00:01:01] I saw that I spent a lot of time in consultancy and especially on

[00:01:05] business technology with the business and the organizational aspects.

[00:01:08] And Peter said, how could technology facilitate your business and how

[00:01:13] can it help boost your business?

[00:01:16] And I started doing that for AT&T and when a lot of people were in AT&T,

[00:01:20] I worked for that AT&T Bell Labs through a lot of people with

[00:01:22] these big, big losses and they were really smart.

[00:01:25] They came up with really snazzy stuff, but no one actually

[00:01:28] knew what can we do with it.

[00:01:29] So I was more or less in that group of people who consulted on the

[00:01:34] business and consulted on the technology and bridge that making

[00:01:37] it intangible projects and products.

[00:01:40] I've later on got into informant testing, which I really enjoyed.

[00:01:44] Sparthopsy was very fast.

[00:01:46] A lot of new technologies came around and I really enjoyed that.

[00:01:50] And the past few years have been focusing, as you said, on the blockchain.

[00:01:54] And specifically I focus on adaptation and on the governance aspect.

[00:02:00] And since I still see we need a lot to learn very yet about

[00:02:04] blockchain and how it can help us and what it can deliver to us.

[00:02:09] I started a PhD in blockchain governance a few years ago, and

[00:02:12] that's a long-term project.

[00:02:13] Obviously it's not a career choice anymore for me, but it's

[00:02:16] more like a hobby project.

[00:02:17] So it keeps me off the street.

[00:02:19] Nice.

[00:02:20] This show really breaks down some of the simpler things of what we do.

[00:02:24] And I know blockchain and crypto and all these new digital currency

[00:02:29] words have been thrown around, but can you just in the simplest

[00:02:32] of terms talk about how blockchain is different from traditional

[00:02:36] banking systems that most of us are used to?

[00:02:39] There are a lot of similarities and obviously there is a lot of overlap.

[00:02:42] If you look at the similarity in your overlap, they are both

[00:02:45] logistical transactional protocols.

[00:02:48] The finance industry is more or less putting money from one

[00:02:52] hand in your blockchain, transects, data, transects, money,

[00:02:56] transects, whatever you want.

[00:02:59] So it's a transaction protocol, but the core difference is that

[00:03:03] in blockchain it goes peer to peer.

[00:03:05] There is no need for an intermediary.

[00:03:07] So it is decentralized and that's it's peer to peer transactions

[00:03:11] happen between you and I.

[00:03:14] It further relies very much on what's called self-suggesting identity.

[00:03:18] That means I can actually be in charge of transaction.

[00:03:22] And it also quite often works with zero knowledge proof and I'm sure we get

[00:03:26] to cover that later on in the show.

[00:03:29] But the big difference is that it's decentralized, it works on blockchain.

[00:03:33] It's faster, it's cheaper, and it actually works at the blink

[00:03:37] of an eye cross-continent.

[00:03:39] And it's permissionless.

[00:03:40] You don't need permission.

[00:03:41] The bank actually needs to authorize your transaction and not just

[00:03:46] your bank, the intermediate bank, the recipient bank, the sending bank.

[00:03:50] So sometimes it's seven, eight, nine permissions.

[00:03:54] Blockchain is actually permissionless.

[00:03:56] It's just you and the recipient who engage in the transaction.

[00:03:59] So in that sense, you become your own bank.

[00:04:02] And I think especially that's slow, be your own bank is very much applicable

[00:04:07] to what the big differences between blockchain and traditional finance.

[00:04:11] Can I ask why should we care as people who aren't necessarily involved in it?

[00:04:17] I feel when a new technology comes out, there's usually there's that graph, right?

[00:04:20] Where everybody gets really excited about it and then it's disappoints.

[00:04:23] And then it slowly creeps into our everyday lives, but

[00:04:26] without us really noticing it.

[00:04:28] This was huge five years ago maybe.

[00:04:31] And everybody was going nuts about blockchain saying it was

[00:04:34] going to transform the world.

[00:04:35] And then predictably it fell off the map.

[00:04:38] People stopped talking about it.

[00:04:40] How is it going to affect our lives?

[00:04:42] Why should we care?

[00:04:43] How is it going to be integrated into everyday lives?

[00:04:45] Yeah, I definitely agree with what's called the hype cycle and blockchain

[00:04:49] is more or less as any other technology surface that I grew up a couple of

[00:04:53] years ago, blockchain was the big thing.

[00:04:55] Then it became metaphors, then it became web three.

[00:04:58] Now it's AI, now it's machine learning.

[00:05:02] And so we tend to move on to new technologies, but it doesn't mean

[00:05:06] even new technologies in the hype that the older technology is fading out on

[00:05:11] the contrary.

[00:05:12] And there are a couple of phases that are really important when it comes to

[00:05:16] the development of new technology.

[00:05:17] And I think getting recognition from business is an important component.

[00:05:23] Getting the recognition from the finance industry is actually money pouring

[00:05:28] into that technology and all that actually use cases.

[00:05:31] And I think on those three fronts, blockchain is gaining a lot of traction

[00:05:36] at the moment.

[00:05:37] So there is money pouring in institutional money into the blockchain.

[00:05:41] The ETF for instance, facilitate that.

[00:05:44] The businesses are looking into the blockchain itself, banking, healthcare,

[00:05:49] education, even law for instance.

[00:05:53] And also we see more and more use cases and adaptability.

[00:05:57] And there's also a bridging coming between crypto and traditional finance.

[00:06:02] So you can actually use your crypto to buy day-to-day products, either for

[00:06:07] a debit card or spend on let's say travel if you want to go on holiday.

[00:06:12] So for me it's definitely, yes, the initial hype is over, but that in

[00:06:17] the background actually it's the whole evolution.

[00:06:19] I have also heard the benefits of energy efficiency.

[00:06:22] Is that true as well on proof of stake?

[00:06:25] Is that right?

[00:06:26] Yeah.

[00:06:27] Absolutely.

[00:06:27] Proof of stake is definitely less energy consulted.

[00:06:30] So that's a big thing and you always get one at a time to get these

[00:06:34] graphs of how many electricians use for Bitcoin mining alone.

[00:06:38] And it's sometimes just the same as a whole country and there's

[00:06:42] an extraordinary amount, but there's actually a really interesting

[00:06:47] other side of that coin.

[00:06:48] And that is because of the extremely growing need and demand of energy

[00:06:54] and especially cheap energy, a lot of sustainable energy and alternative

[00:07:00] energy force has been developed.

[00:07:02] So yes, it is extremely aggressive in consumption of energy, but also

[00:07:08] because of blockchain we've actually gave a boost to developing more

[00:07:13] energy-friendly and consumer-friendly type of energy.

[00:07:17] Think solar, think water, think wind energy.

[00:07:22] So actually the funny side is that because of that, we actually have

[00:07:26] a lot of cheaper energy as well.

[00:07:28] So yes, it consumes a lot, but there's also a big benefit.

[00:07:31] All right.

[00:07:32] So I'm a pilot and I don't proof of stake, proof of these different

[00:07:36] ways of doing blockchain technology.

[00:07:39] It's probably people are probably like, what the heck am I listening to?

[00:07:42] What is going on?

[00:07:43] So maybe some homework to do, but I, but let's make this practical

[00:07:47] to a pilot who's sitting there thinking, okay, blockchain, why do I

[00:07:51] care, right?

[00:07:52] Maybe my real estate transaction will happen through the blockchain and

[00:07:55] the future, and it'll be different than going to a title company.

[00:07:58] But at the end of the day, eh, okay.

[00:08:00] So a title company doesn't do it.

[00:08:02] This blockchain technology does it and it's more efficient.

[00:08:05] Let's talk about making passive income through blockchain technology.

[00:08:10] My understanding is that proof of stake is a way to actually

[00:08:13] potentially make passive income.

[00:08:14] This is a participatory activity that could generate income.

[00:08:18] How does a layman get involved in that if they can?

[00:08:22] Actually the good news is yes, you can.

[00:08:24] And it's relatively easy.

[00:08:25] And I think it's one of the great things of proof of stake is of

[00:08:29] speaking is that it is actually very low key, low entry.

[00:08:34] You have your own coins, which are holding your wallet and you

[00:08:37] allocate them to a stake program.

[00:08:40] That means you still own the coins.

[00:08:42] You still have the keys of the wallet.

[00:08:45] So you still have control of the coins, but then merely locked.

[00:08:49] I think of it in a way, in a simple term as a certificate of the passage.

[00:08:54] Right?

[00:08:55] So you get an interest to get a certain yield on that.

[00:08:57] When you cannot actually access the money straight away for a couple

[00:09:00] of weeks, couple of months, couple of years.

[00:09:02] Staking is more or less the same.

[00:09:03] You have tokens, you're not using them.

[00:09:05] You have coins and you allocate them to a stake program and they give you

[00:09:10] interest or a return on your investment and the amount for a CD that's usually

[00:09:15] starts with a thousand dollars.

[00:09:17] That's a bit of a hurdle already.

[00:09:18] Staking, you can actually, for instance, you can do that with 10, with a

[00:09:23] hundred, with 500 coins, so there's really low P and it gives you a

[00:09:28] good return of eight, eight percent.

[00:09:31] And that's nothing to sneeze at just from sitting, sitting, sitting

[00:09:35] on your chair, do absolutely nothing.

[00:09:38] And you literally send your money to work.

[00:09:40] So in layman terms, it's really simple, easy to make.

[00:09:44] Can you explain what are, what's the structurally what is happening

[00:09:48] there, right?

[00:09:49] Because you're lending coins in order to put up collateral, I understand,

[00:09:54] in order to verify transactions on the network.

[00:09:57] Right?

[00:09:57] So you, so what's happening in the background in order to generate those

[00:10:01] returns?

[00:10:03] You're not lending the coins.

[00:10:04] They stay in your wallet and that's, I thank you for only your doubt

[00:10:08] because there's really a big difference.

[00:10:09] You do not give away your, your coins like you do in a certificate of

[00:10:14] deposit that the bank actually uses your money and lends it to someone

[00:10:18] else to make a bit more interest.

[00:10:20] And it gives you a little bit of debt, but they hold most of the money

[00:10:23] with, with staking the coins stay in your wallet, then locked it in your

[00:10:27] wallet in a way you can see it as a way that facilitates the blockchain

[00:10:33] and facilitates the transactions.

[00:10:37] That's where staking and masternodes are useful.

[00:10:41] So they facilitate the transaction process and on that you get a fee.

[00:10:45] So rather than interested, it is a fee that you get on the, on the blockchain

[00:10:51] that is being split with the masternode holders and with the stakers.

[00:10:57] And this would be different than I know when you're mining Bitcoin, right?

[00:11:01] That computer has to be on and it's obviously it's a big expensive computer

[00:11:05] that has a bunch of fans and it has to be connected all the time.

[00:11:08] Precisely.

[00:11:09] So is it the same thing with proof of stake where your computer has to be

[00:11:12] sitting there turned on the internet?

[00:11:14] No, I'm really glad you mentioned that tape because no, it isn't.

[00:11:18] You don't need to be online and actually staking can be very simple.

[00:11:23] A lot of you can do with try your phone even the lockers, how your wallet

[00:11:26] so you don't need to be online.

[00:11:28] You don't need to, it's one-off thing you need to do.

[00:11:31] That's it.

[00:11:32] And the money comes in.

[00:11:32] It's more or less as simple as that.

[00:11:35] There's actually quite an easy guideline.

[00:11:37] If you go to pivots.org for instance, and you go to the tab

[00:11:41] staking, it really guides you through the process, how it's being done and

[00:11:46] what you're staking rewards are.

[00:11:48] So let's say you have a hundred, you have a hundred tokens, a hundred coins.

[00:11:53] It gives you precisely, it does precisely what are you staking rewards.

[00:11:58] So it's an easy tool and it also can guide you through the process.

[00:12:03] And really you do not need to be a technical nerd in order to be able to stake.

[00:12:08] I can do that.

[00:12:09] I feel like this is the natural evolution here and that, that income is coming

[00:12:13] from the transactions, right?

[00:12:15] Because there's a small cost to every transaction that occurs.

[00:12:18] Correct.

[00:12:19] Yeah.

[00:12:19] It's, it's the block reward and, and, and the block reward is, is where all

[00:12:23] the transactions and in the PIXXX blockchain are being calculated on and

[00:12:28] you guys have been generated and that is being split between master

[00:12:31] node holders and the stakers.

[00:12:33] So it's an automatic process being handled for the transactions that

[00:12:37] that occur in the PIXXX blockchain.

[00:12:39] So interesting.

[00:12:40] What's the market look like for this?

[00:12:42] Is this like something that not a lot of people know about?

[00:12:45] And then in 10 years, it's going to be even more popular.

[00:12:48] What's the runway look like?

[00:12:50] I think, I think it will take a while before the deal becomes

[00:12:54] more interesting and more mainstream because there is a lot of

[00:12:57] staking in the DeFi sphere.

[00:13:00] And that's something completely different.

[00:13:02] Staking in DeFi is that you actually often sign over your tokens on

[00:13:08] your coins and they are at risk.

[00:13:11] So staking within the blockchain of a specific coin, in this case, PIXXX,

[00:13:17] you need to keep ownership.

[00:13:19] So staking within DeFi, Centros Finance has a lot of popularity

[00:13:24] and it's definitely becoming more or more popular, but also has a lot

[00:13:29] of risks and that is definitely something we do not have in our

[00:13:33] chain. We do not have those high rewards, but also highly.

[00:13:37] It's a passionate income as you say.

[00:13:41] And where would someone go to learn about this other than getting

[00:13:43] in their appetite interested on the show here?

[00:13:47] Where did you get your background and where would someone understand

[00:13:50] how to dive deeper into this topic?

[00:13:53] Yeah, I think your question actually is broader than just that

[00:13:56] specifically because I think the beauty of that question is that it

[00:14:02] touches on something the community as a whole struggles with.

[00:14:08] We are all relatively new.

[00:14:10] Blockchain is new.

[00:14:11] We're all relatively new.

[00:14:12] We're all learning every day and the technology moves relatively

[00:14:16] fast and technology, I do not necessarily find intuitive.

[00:14:21] So we all need to learn.

[00:14:23] If I just look at PIVX, for instance, on our website, there are a couple

[00:14:27] of tools you can use.

[00:14:28] You can go to Discord, you can go to Telegram, you can go to our

[00:14:32] forum and simply ask questions.

[00:14:35] Hey guys, I've learned about staking.

[00:14:38] I'm really interested.

[00:14:39] I'll just do a clicker help me and on pivx.org, our website,

[00:14:43] there are tutorials to help you through it, to guide you through

[00:14:46] the process and if you're still not quite sure, there's actually

[00:14:49] help lines you can actually help reach out and people can help you

[00:14:54] get things in order.

[00:14:57] I think overall your question was, and that's important, that we also

[00:15:01] are new in this industry that we need to make sure that we're not

[00:15:04] all have science degrees.

[00:15:06] We do not all have a computer background.

[00:15:09] So we still need to learn.

[00:15:11] And it also gives us as a blockchain the owners of responsibility

[00:15:15] that we actually guide and help and educate our community.

[00:15:21] And that's why we are so keen on pushcasts, our AMAs, because it gives

[00:15:27] us a perfect opportunity to actually talk about things and to guide

[00:15:32] people through the process and to make them less nervous in

[00:15:35] entering this industry.

[00:15:37] It's a lot like Scott Galloway was talking about how Coinbase is

[00:15:40] the AOL of the crypto space, right?

[00:15:43] When the internet first came out, nobody knew how to get online.

[00:15:47] It was like, there's this thing, but I don't know how to access it.

[00:15:51] And AOL was the first one that sent you a CD in a cereal box and it

[00:15:54] was like, okay, they're making this easy.

[00:15:56] And now the internet is just ubiquitous.

[00:15:59] Before we dive into, I don't know, a little bit more what's coming

[00:16:03] in the future and how it's going to roll into everyday life.

[00:16:06] Can you explain how PIVX fits into the whole ecosystem?

[00:16:09] I think most people know that there's Bitcoin.

[00:16:12] They know that there's Ethereum and then there's thousands of other coins

[00:16:16] with varying degrees of volatility, varying use cases.

[00:16:22] So what is PIVX?

[00:16:24] You know, we spoke about it a little bit in the intro, but can you

[00:16:27] tell us how did you arrive here?

[00:16:29] What was PIVX specifically created for and where does it fit into

[00:16:33] the whole contextual ecosystem?

[00:16:36] Okay.

[00:16:37] Again, about the questions that I'll try to remember the minute.

[00:16:41] I'll try to do everything.

[00:16:42] If I forget something, please remind me.

[00:16:44] Um, I think first of all, you're absolutely right because, um, uh, we

[00:16:49] know Bitcoin, we know Ethereum, uh, if you really push hard, I think

[00:16:55] I've heard of Cardano, this Litecoin, but that's it.

[00:16:59] This exhausts the knowledge of most people now.

[00:17:02] And for instance, even the term token and coin are used

[00:17:07] inter-exchangeable by most people.

[00:17:08] And a coin is, is a cryptocurrency on its own blockchain.

[00:17:13] A token is a cryptocurrency on another blockchain, either Solana or Ethereum.

[00:17:20] And there are thousands, literally thousands of tokens, I think tens

[00:17:26] of thousands of tokens, but there are only a few coins.

[00:17:30] PIVX has its own blockchain and is there for coin.

[00:17:34] And we use the term altcoin for that, because it's an alternative to

[00:17:39] the mother of all coins to Bitcoin.

[00:17:41] PIVX is also one of the older ones.

[00:17:44] So it's already 80 years in existence, which makes it almost

[00:17:47] a dinosaur in the ecosystem.

[00:17:49] And the specific focus of, of PIVX was on privacy and a lot of people

[00:17:56] in the beginning always thought, and still a lot of people say that

[00:18:00] this cryptocurrency is private and it gives you anonymity.

[00:18:04] No, it does not.

[00:18:05] It gives you pseudonymity at best, but privacy isn't becoming a more

[00:18:11] and more important aspect in this philosophy.

[00:18:14] PIVX is that privacy is a fundamental basic cube of right.

[00:18:18] And you should also be able to transact here to there just between

[00:18:23] you and just in the other side of that transaction and no one else

[00:18:27] should be included or involved or have to be aware of that, of that transaction.

[00:18:34] So PIVX gives the opportunity to shield your transaction.

[00:18:38] A lot of people actually use PIVX as any other currency like the

[00:18:43] Connex theory so you can follow the transaction completely, but you

[00:18:46] can actually shield as a recipient or send your transaction so you can

[00:18:52] shield part of the transaction if you choose to do so and that is

[00:18:56] precisely what self-sustaining identity is because it helps you, gives you

[00:19:02] control over what you want to share and how you want to

[00:19:06] participate in the transaction.

[00:19:08] So for PIVX, the role of privacy has from its inception been

[00:19:13] the core of what it is and what your role is in privacy.

[00:19:17] It feels like at least here in the U S with the anti-money laundering

[00:19:22] laws coming out, the new requirement to register LLCs, the reduction in

[00:19:28] the amount to $600 and say if you have more than $600 in a Venmo

[00:19:33] transactions per year, then the IRS wants to know about it.

[00:19:36] So are you getting pushback from government institutions which

[00:19:38] are moving the other direction that are moving towards they want

[00:19:42] more data, more transparency on transactions?

[00:19:45] Each country has its own set of rules and regulations so I

[00:19:49] can't answer the question in a global context so that's more or less impossible.

[00:19:55] However, it's true to say there are different countries who have

[00:19:59] different interpretations and handling cryptocurrencies differently.

[00:20:02] I always need to laugh a little if I hear people talk about

[00:20:07] why are money laundering and prevent funding from terrorism.

[00:20:11] Yeah, that's usually the arguments governments use in order to get more control.

[00:20:16] But is it actually specifically used for money laundering or finance

[00:20:22] and terrorism and if you look at almost any bank in the world,

[00:20:26] the major bank, they launder a billion dollars per day and that's

[00:20:30] just before the coffee break.

[00:20:32] So a lot of the banks in the financial institution handle a lot

[00:20:37] of dirty money, do that knowingly, get the swipe on the wrist,

[00:20:40] get the fine and it's business as usual.

[00:20:42] I'm not dismissing the fact that there are people who might want to stay

[00:20:47] under the radar and want to use cryptocurrencies for that, but if

[00:20:51] you just look at the total market capitalization of cryptocurrency,

[00:20:55] it is still actually quite small so the problem in that sense

[00:20:59] doesn't make it as big.

[00:21:01] Secondly, most of the transactions still go via centralized

[00:21:05] exchanges and those centralized exchanges at one point in time,

[00:21:10] disclose their buildings and raw information to the government

[00:21:14] or to the tax authorities.

[00:21:16] So there is a catch there already built in by governments that by

[00:21:21] letting centralized exchanges, opening the books to them, they

[00:21:25] more or less have a good understanding of what's going on.

[00:21:28] And if you look at Europe for instance, it's one of the bigger

[00:21:33] jurisdictions globally, the European Union is like 600 million consumers.

[00:21:38] They recently adopted and introduced Mica, that is the new regulations

[00:21:42] for marketing crypto assets, regulations act and they actually now

[00:21:47] regulate and give opportunity to service providers in crypto to

[00:21:51] regulate and to actually deal and handle in cryptocurrencies.

[00:21:57] And the consumer itself is not included in that.

[00:22:00] It only wants protection for the consumer and centralized

[00:22:05] exchanges that at the end always have their books open to authorities

[00:22:10] if need be.

[00:22:10] Yes, it could be an issue.

[00:22:12] I don't think we know exactly how big the issue is, but we also

[00:22:15] know that money laundering is right in anything and I assume it's

[00:22:21] probably part of crypto as well.

[00:22:24] Speaking of education, I wanted to expand this, our vocabulary today

[00:22:27] for our listeners who might not know anything about this, which

[00:22:30] is typically me, I want to talk about zero knowledge proofs.

[00:22:35] Can you explain the concept of the zero knowledge proofs?

[00:22:37] And I understand this is basically a method that allows one party to prove

[00:22:41] to another that a given statement is true without conveying any part

[00:22:46] of the information, if you wouldn't mind.

[00:22:48] No, of course not.

[00:22:49] No, it is as you said, and I actually can do a little test if

[00:22:52] you like, that makes it a little easier perhaps to understand.

[00:22:55] I got two white pens here.

[00:22:57] One is green, one is red.

[00:22:58] Right?

[00:22:59] Correct?

[00:23:00] Correct.

[00:23:01] I see that on the screen.

[00:23:02] For those on the YouTube panel.

[00:23:03] Okay.

[00:23:03] You need to be connected for yourself.

[00:23:05] Let's say for argument, say that I colorblind and I cannot see the

[00:23:09] difference between those two pets.

[00:23:12] So I'm putting them behind my back and I'm holding up one and you

[00:23:17] need to tell what color is this?

[00:23:20] We see that it's green and that's green again.

[00:23:25] And now it's red.

[00:23:27] So what happened is that behind the back, I was actually

[00:23:30] switching the pants from one thing in the other.

[00:23:32] You could not see I was switching the pen from one hand in the other.

[00:23:38] So I knew that first time you said, this is a red pen, that is a green pen.

[00:23:42] With that knowledge, I actually switched the pen and tested whether

[00:23:47] you would come up with the same answer every time for the color

[00:23:52] of the pen that I held up.

[00:23:54] So if I do that once and you get the correct answer, I say,

[00:23:57] okay, that's what it goes.

[00:23:58] You do it twice on saying them like it goes.

[00:24:01] You do it three times, four times, five times, six times the same result.

[00:24:06] Then you think, okay, yeah, this is too lucky to guess all the time.

[00:24:10] So if you do that 10 times, the probability of you guessing that

[00:24:15] 10 times correct is 0.009%.

[00:24:19] So the probability actually goes to almost a hundred percent.

[00:24:24] So that's an example of how zero knowledge proof

[00:24:27] in a practical setting works.

[00:24:30] So what it does is that me as a prover and you as a verified, come to an

[00:24:36] understanding that we both understand that this is the red and this is the

[00:24:41] green, but I'm colorblind and I cannot see the difference.

[00:24:44] But because of you giving me those answers, I know that this is red and

[00:24:49] this is green.

[00:24:50] Now, one of the things you can actually use it for, and it has been used

[00:24:54] for, is remember COVID, it's almost a distant memory already for a lot

[00:24:59] of people, but during COVID you could not necessarily get access to a

[00:25:03] restaurant, to schools or to a function without a QR code.

[00:25:07] And that QR code gave you access to the bill or to the function

[00:25:12] or to the restaurant.

[00:25:13] But it didn't say whether you actually were fully vaccinated.

[00:25:17] It didn't say whether you actually had a test done and you were negative.

[00:25:22] Or it didn't say that you were recovered correctly from COVID.

[00:25:26] It was either of these three.

[00:25:27] It just said, he's fine.

[00:25:29] He can access the bill.

[00:25:31] So that's an example where zero knowledge scroll works.

[00:25:33] The person who actually looked at the QR code said, yeah, he's good to go.

[00:25:37] He can come into the building, but he didn't know I was vaccinated.

[00:25:41] Vaccinated is something that is a personal choice that might upset

[00:25:45] people and not upset people.

[00:25:46] It's no one's business but mine.

[00:25:48] So there's an example of how the zero knowledge scroll works.

[00:25:52] So it allows you to prove facts, let's say my identity, without

[00:25:57] giving the underlying information.

[00:25:59] Same goes if you want to go to a restaurant or to a bar,

[00:26:03] you need to show your ID.

[00:26:04] So why do you need to show your ID?

[00:26:06] Is it your birthday?

[00:26:07] There's all sorts of information on it.

[00:26:09] It only needs to mean that you are 18 at all.

[00:26:13] That's the only thing that's relevant, but yet you need to

[00:26:16] show all that information.

[00:26:17] So that could be another application where zero knowledge

[00:26:20] scrolls can be used.

[00:26:22] So it gives you as a holder of that information, that specific

[00:26:26] information that gives you the possibility to demonstrate that

[00:26:30] the fact is indeed true, but you still keep the fact hidden.

[00:26:34] That's in a nutshell what zero knowledge scrolls are.

[00:26:36] Interesting.

[00:26:37] And how is this different than privacy when you look at

[00:26:41] blockchain versus Bitcoin?

[00:26:43] What would be, which is more of a fully public tokenization.

[00:26:46] What would you say that the difference is there?

[00:26:49] Then a couple of things being used generally in Bitcoin.

[00:26:52] And I think in blockchain, we use three things of fixing.

[00:26:57] Things come together.

[00:26:58] There's decentralization, it's self-serving identity and that

[00:27:01] zero knowledge scroll all come together in blockchain and also within bitcoins.

[00:27:06] But all three of those phenomenons, decentralization,

[00:27:09] zero knowledge scrolls and self-serving identity are not new.

[00:27:13] They're not new phenomenons.

[00:27:14] It's just that they come to a different set of light within blockchain.

[00:27:19] If you look at, for instance, what will be the difference between, let's say

[00:27:24] an acrylic card company and a blockchain that uses a zero knowledge

[00:27:28] scroll, the credit card company, for instance, has access to all that

[00:27:33] information, even if I do a retail transaction, the credit card company

[00:27:38] still has access to all sorts of information.

[00:27:41] So they are a centralized entity.

[00:27:43] They're not peer-to-peer.

[00:27:44] They actually review the actual information.

[00:27:47] I only need to prove on the blockchain that information is actually true.

[00:27:52] And I think the biggest difference is that the old school is based on trust

[00:27:57] and blockchain is based on trustness.

[00:28:00] So you actually don't trust, but you certify and you certify that

[00:28:05] fire and sugar and all schools wait.

[00:28:07] I do understand.

[00:28:08] Um, and that gives you then ultimately the privacy.

[00:28:11] You also desperately crave for it.

[00:28:14] And I do understand that it still sounds a bit lofty, but I think

[00:28:19] that the core difference is that I am in charge of information about myself

[00:28:25] and I choose when and how to share that on the need to know

[00:28:30] the issues with another party.

[00:28:32] And a credit card company can do that at random without you knowing.

[00:28:38] Uh, and I think that's what the big difference is between social

[00:28:41] identity and sharing my life's growth in the blockchain.

[00:28:44] Uh, sorry.

[00:28:45] The other set up.

[00:28:47] Can I shift gears into how to spend cryptocurrency?

[00:28:51] Right.

[00:28:51] Because there's a, there's the always the issue of you have to convert

[00:28:56] us dollars or euros or whatever fiat currency you have into a

[00:29:01] cryptocurrency, which can be very volatile in price.

[00:29:05] And then you have to convert it back into a fiat currency in order

[00:29:09] to spend it.

[00:29:10] And to be fair, the argument is always it's volatile because whatever

[00:29:14] crypto you're talking about is only worth what it's worth because

[00:29:17] people agree that's what it's worth.

[00:29:19] And to be fair, that's exactly the way, uh, fiat currency works today.

[00:29:23] The entire world has come off the gold standard.

[00:29:25] The U S dollar is only worth what it's worth is because we all

[00:29:28] agree that's what it's worth.

[00:29:30] The Euro is only worth what it's worth because we all agree

[00:29:32] because there's really nothing backing it up anymore after we came off

[00:29:35] the gold standards.

[00:29:36] But with that being said, a vast majority of the globe agrees that

[00:29:40] the U S dollar is worth X.

[00:29:42] And so how do you get around this issue of converting dollars or

[00:29:46] euros into cryptocurrency?

[00:29:49] And then you're getting past the volatility and then getting past

[00:29:52] the fact that you have to eventually convert it back.

[00:29:55] Can you speak to that?

[00:29:58] The, well, which is what's called the city of the rain and, and

[00:30:02] that's getting from your day-to-day dollars into the cryptocurrencies

[00:30:06] and five streets, that's called the theater.

[00:30:09] And most of the Rams are fire exchanges because they regulate it

[00:30:14] in terms of money comes to account.

[00:30:16] And then we got, you can, there are a few ATMs where you can actually

[00:30:20] deposit cash or transfer cash and then you get coins, but that's

[00:30:25] the modern novelty rather than anything else to, uh, to be honest.

[00:30:29] So the ramp is still, um, I would say the killers heel to the whole system,

[00:30:33] but that's definitely a bottleneck for sure.

[00:30:37] And because at the end of the day, cryptocurrencies are nice and they do

[00:30:40] represent value and do sort of stuff with it depending on the

[00:30:45] blockchain, but at one point in time, people want to convert

[00:30:51] cryptocurrencies either back to the dollars or whatnot.

[00:30:56] So you need to take it off the rack.

[00:30:58] So one of the things a lot of people use is debit cards and there are

[00:31:03] a few buy racks or even finance has them at most of the, most of the.

[00:31:11] Exchange has had one foot of credit card debit card, I should say in

[00:31:15] which you can transfer your cryptos directly and we get you can go

[00:31:19] pre-check so that it actually makes the, the, the offering a lot easier

[00:31:25] and there are also companies that accept cryptos and more and more do

[00:31:30] that Starbucks is part of the thing with it.

[00:31:32] Travala, the website, they accept cryptocurrencies.

[00:31:37] So it is not necessarily the traditional offering always need it

[00:31:43] for spending it in the real world or the real economy, if you like.

[00:31:48] And that's hinges on one simple thing and that's called adaptation.

[00:31:53] And the more people use it, the more adaptation there is, the more

[00:31:56] liquidity there is and the more trust that is in the underlying system.

[00:32:00] The more retailers will start accepting it.

[00:32:03] So that's the chicken and the egg phenomenon.

[00:32:05] It's an economical scale.

[00:32:07] The more people are entering the sphere, the more retailers are

[00:32:10] willing to accept and ultimately that would diminish also the need

[00:32:16] for for a fee up on rent five days.

[00:32:19] What do you think about volatility?

[00:32:20] Because that's the, the issue that I'm seeing with transferring

[00:32:25] $10,000 into PIVX and then staking it and earning eight to 10%.

[00:32:29] What if the value of PIVX comes down by 50% now that eight to 10% per

[00:32:34] year is essentially not doing me any good, right?

[00:32:37] What are your thoughts around volatility?

[00:32:39] It reminds me a bit of an episode of South Park and it's gone.

[00:32:43] Right.

[00:32:43] That's right.

[00:32:44] And I guarantee, I guarantee that there are a lot of pilots listening to this

[00:32:48] that have played with some current cryptocurrency and it's gone.

[00:32:52] And it's gone.

[00:32:55] Myself included.

[00:32:56] I can't really blame them for having that, having the notion about it.

[00:32:59] Volatility is definitely an issue.

[00:33:02] Well, even recently, for instance, when I ran, launched all those

[00:33:07] drones and rockets on Israel, the Bitcoin dropped almost eight, nine

[00:33:11] percent and some other currency, cryptocurrency dropped 20 to 30%.

[00:33:15] And it's huge.

[00:33:17] That was really massive.

[00:33:18] So there is definitely a lot of volatility, nervousness and unpredictability

[00:33:22] in the market.

[00:33:24] And that also comes because there's still a lack of liquidity.

[00:33:27] If you look at the total market cap of cryptos, it's now two, two and a

[00:33:31] half trillion.

[00:33:32] A lot of money.

[00:33:33] It really is a lot of money.

[00:33:35] But if you actually look at the total liquidity globally, it's $1.5

[00:33:42] quadrillion dollars and it's 1.5 and then 15 zero.

[00:33:47] So that's a lot.

[00:33:48] That's really a lot.

[00:33:49] And then the market cap of crypto actually is minute.

[00:33:53] It's dropping the ocean on the whole liquidity.

[00:33:55] So liquidity is still an issue.

[00:33:57] That's one.

[00:33:58] Secondly, there is a big level of anxiety people on one hand, fearing

[00:34:05] to miss out, but they're also fearing to lose their money.

[00:34:09] And once people start selling the next one sells, the next one sells,

[00:34:14] they get next thing you end up and end up with a fire sale.

[00:34:17] Your currency drops 20 or 30%.

[00:34:20] So liquidity and adaptation and the user base are definitely still

[00:34:25] left to be desired, I would say, in order to come to a more stable thing.

[00:34:30] So even Bitcoin, during the example, I mentioned that Iran,

[00:34:34] drone attack on Israel.

[00:34:36] Even that was the Bitcoin not immune for.

[00:34:39] So that goes to show there's still a lot of new things in the market and we

[00:34:43] still need to mature the market because honestly, and that's one of

[00:34:47] the things that really bothers me and upset me and actually annoys me.

[00:34:51] A lot of people go into the crypto.

[00:34:53] I think I can make 100% return on investment within a matter of days.

[00:34:58] As long as we still think that's normal and as long as people still

[00:35:02] find that acceptable and actually think that it's going to happen, then you

[00:35:08] will keep that nervousness and volatility in the market.

[00:35:13] So when it comes to have I lost my money if I'm staking, do your own

[00:35:18] research, never invest more than you can afford to.

[00:35:22] If you stick to those two guidelines, you're good.

[00:35:26] That's great.

[00:35:27] Well, Hans, we really appreciate you coming on.

[00:35:28] I want to transition into one more kind of section of this, which

[00:35:31] you've really talked about specifically some of the securitization and proof

[00:35:36] of stake specifically with as an interns of privacy, but I want to

[00:35:41] explore like the economic and government's models with some of these

[00:35:45] projects highest back to the larger theme of decentralizing and democratizing

[00:35:50] the capital and use of money.

[00:35:52] And I wanted to talk about the introduction of the DAO, which is

[00:35:55] the decentralized autonomous organization, which is funny because it seems

[00:36:00] like a, it's a structure with no centralized leadership run by rules

[00:36:05] and coded by a computer that is transparent, but then it's controlled

[00:36:09] by its members and been independent of central state influence.

[00:36:12] So wow, like that's completely different than what we have

[00:36:16] currently in our monetary system.

[00:36:17] So can you speak to that?

[00:36:19] Yes, absolutely.

[00:36:20] At PIVX we have a big campfire and we sit around with them

[00:36:23] wishing Kumbaya all day.

[00:36:25] That's the, no, that's the, that's sometimes what people think

[00:36:30] when you hear the DAO, a lot of people think of the sixties, the hippies

[00:36:33] and the provost, they also had this, this vision that there shouldn't

[00:36:38] be a central authority and we should, we all should live in a commune

[00:36:41] and we should live all happily ever after.

[00:36:44] And that's not necessarily what the DAO does.

[00:36:47] The DAO is an organizational concept that recognizes that the technology

[00:36:52] can more or less take care of itself, but that are always unforeseen

[00:36:56] circumstances that can happen that needs intervention.

[00:37:00] And so how do you go about that intervention?

[00:37:04] And, and that's more or less the core of what more governance is in the

[00:37:08] blockchain, how do you make sure that you can make a strategic change?

[00:37:12] How can you make sure that you do an update to the protocol?

[00:37:15] When do you do it?

[00:37:16] How do you do it?

[00:37:16] And why do you do it?

[00:37:17] This, the governance aspect and that's quite often decided by the DAO,

[00:37:22] the decentralized autonomous organization.

[00:37:24] And the core of it is that there's no management, we're all equal.

[00:37:29] And that makes it actually quite interesting, but it also means that

[00:37:32] everyone who raises his or her hand is all of a sudden a stakeholder and can

[00:37:36] be part of the DAO and can partly discussing and debate about it.

[00:37:41] Now how you come to that decision is a different thing and quite often

[00:37:45] there's some sort of voting mechanism that can either be related to the

[00:37:50] holding of the tokens of the coins you have, it can be related to mining

[00:37:54] activity you do, or it can be related to your creations, simply in

[00:37:59] the share in the DAO.

[00:38:01] But then it's quite often like a voting and a consensus mechanism

[00:38:04] in that, that arrives at the decision.

[00:38:06] Yes, it sounds quite lofty, but you need to understand that quite often

[00:38:10] the blockchain itself takes care of itself.

[00:38:13] That's once it starts, it keeps going.

[00:38:16] It doesn't need intervention.

[00:38:18] And that's precisely what we wanted it to do because we don't trust

[00:38:21] people to get involved.

[00:38:23] That's why we have the blockchain.

[00:38:24] But sometimes for unforeseen circumstances, updates, you need to

[00:38:29] intervene or you need to do something.

[00:38:31] How you arrive at a change that is the governance aspect and

[00:38:34] that can be done outside the DAO.

[00:38:36] And the DAO is in this sense an ideal vehicle, but also a

[00:38:41] very incomprehensible vehicle.

[00:38:44] If you look at the blockchain for instance, no one is in charge of

[00:38:48] the Bitcoin.

[00:38:49] No one owns the Bitcoin, no one is in charge of the Bitcoin.

[00:38:52] Yet it's the longest running blockchain we have.

[00:38:55] It has a value of more than $60,000.

[00:38:58] People are happy to invest in it and buy and trade and exchange it.

[00:39:01] There must be something in this search that actually works.

[00:39:05] And that is quite an interesting thing of the DAO.

[00:39:08] But there is one thing in the DAO that is actually also a bit of

[00:39:11] the kill seal.

[00:39:13] And I think Plato already pointed it out once that democracy is

[00:39:17] really nice, but it's determined by the people who actually show up

[00:39:21] and to vote.

[00:39:23] And that also goes for the DAO.

[00:39:26] And empathy in the community can be definitely an issue that people

[00:39:30] are not involved, couldn't care or forgot or have other priorities.

[00:39:34] And then a minority can actually make an abrupt decision for the DAO.

[00:39:38] So there is a lot to be said for it.

[00:39:41] And I like the concept of community driven governance, what the

[00:39:45] DAO basically is.

[00:39:46] But you always need to be aware of the downsides and pitfalls, if you like.

[00:39:51] Yeah.

[00:39:52] Well, that's great.

[00:39:53] Hans, I really appreciate your time.

[00:39:55] I always ask one question at the end when I remember what's something that

[00:39:59] you've learned in the last six months about blockchain, crypto, that

[00:40:05] you haven't shared with other people or maybe have, I don't know, that has

[00:40:10] really changed the way you think about this technology and this evolution.

[00:40:16] I think what I've learned is that the power of community is actually a lot

[00:40:21] stronger than I thought it would be.

[00:40:24] Yes, I believe in underlying technology, but the power of community

[00:40:28] is actually extremely strong.

[00:40:31] And it really fit in the situation we are in today.

[00:40:35] We live in a society that is almost an example of a lack of trust.

[00:40:42] There isn't trust in politicians, not in the legal system.

[00:40:45] We don't trust the police, we don't trust the accountants.

[00:40:49] We don't trust our neighbors.

[00:40:50] A lack of trust is a big issue.

[00:40:53] Now, what if we can use technology to help reestablish the trust in

[00:40:59] society that we can actually have a society where we can actually work

[00:41:03] towards trusting each other again.

[00:41:06] And if technology can play a role in that, then I would be all for

[00:41:10] in introducing blockchain and deathchains into society.

[00:41:14] So what have I learned?

[00:41:15] I do believe that there's definitely the right time and the right place

[00:41:20] for blockchain to look at societal challenges we are facing.

[00:41:25] If someone's interested, if someone's listening to this and they think

[00:41:28] they're catching the bug and they want to learn more about this stuff,

[00:41:31] how did you get your background?

[00:41:33] Are there books that you would recommend?

[00:41:34] Or are there, I know you mentioned your website, which we'll absolutely

[00:41:37] link to in the show notes that has some information there, but if

[00:41:40] somebody wants to really go deeper, do you have any references?

[00:41:44] Let's speak about books.

[00:41:45] This is definitely a book I recommend from Kevin Van Bosch.

[00:41:49] He is professor at the Barton Wharton Institute and he talks about

[00:41:58] blockchain as a new architecture of trust.

[00:42:00] And he explains why we actually came towards blockchain, what it really is,

[00:42:06] how it happens, what are the fundamental challenges we came to

[00:42:10] address and try to overcome.

[00:42:12] So that's if you want to learn a bit about it, this is really a good book.

[00:42:18] Secondly, I can only say there's sort of a mantra you need to live by

[00:42:22] and that is read, learn, talk, ask, read some more, read again,

[00:42:28] ask again, talk again.

[00:42:29] Go to forums, go to chat rooms, go to discords and just simply ask people.

[00:42:36] And there are a lot of ideas in that sphere of trust, but also a lot

[00:42:41] of people who are really nice, really educated and polite and can help you

[00:42:46] navigate through those challenges.

[00:42:48] And our blockchain PIVX has a nice forum, if you go to our website

[00:42:54] pivx.org, other projects have more or less to say, so I can only encourage

[00:42:59] you to read and to ask and to talk to people and just debate, learn.

[00:43:04] That's how you slowly and slowly become more comfortable.

[00:43:08] And also make sure that you always live by the mantra of do your own

[00:43:13] research, don't invest more than you can afford to lose, not your

[00:43:17] keys, not your cords.

[00:43:18] And your network is the network is secure, the blockchain is secure,

[00:43:22] but your computer might not be.

[00:43:23] So also make sure that you continue to research such good advice.

[00:43:27] Amazing.

[00:43:28] Hans, I took away a lot.

[00:43:30] Thanks for coming on the show.

[00:43:32] Absolutely.

[00:43:33] Yeah.

[00:43:33] Thank you.

[00:43:34] Thanks Hans.

[00:43:34] We appreciate your expertise.

[00:43:36] Thanks for listening and we'll catch you on the next show.