Transcript of EP 194 – Bob Reid on User-Owned Identity

The following is a rough transcript which has not been revised by The Jim Rutt Show or Bob Reid. Please check with us before using any quotations from this transcript. Thank you.

Jim: Today’s guest is Bob Reid. Bob’s the co-founder and CEO of Everest. Everest is a very interesting multidimensional company, applying blockchain to society, in a short sentence. I’ve been talking with Bob behind the scenes, I don’t know for how many years now? Four or five years, something like that.

Bob: About four or five.

Jim: I’ve always liked them, but I’ve made less money than I would’ve thought owning their coin, but oh, well, I’ve made some, which is a good thing, but not a lot, just a token amount, just so I have a little skin in the game, just for full disclosure. That was years and years ago, it still just sits there, but that’s all right. And anyway, before founding Everest, he had lots of other interesting career businessy things, always on interesting non-stupid ass stuff, which is good. Want to check him out? He’s on LinkedIn. Anyway, today we’re going to talk about identity mostly, I think, and probably a little bit about other things. So let’s hop into it. So why don’t we start by talking about Everest? Just a little bit, two minutes worth, what Everest does? And then we’ll start talking specifically about your new identity product.

Bob: Sure. So Everest started about five years ago, basically with a core of… How do you create a de-duplicated live human being, attached to a wallet, where the user actually gets to own their identity. The impetus was, look at Estonia’s society or Aadhaar plus IndiaStack, and then realize that we wanted to decentralize it so that literally, the user could own all of that. And then we built a stack on top of that, which ended up being… Here’s an account, fiat and crypto, full ledger, and the ability to tokenize fiat, stablecoins, crypto, and what you’ll see from us later this year, is actually tokenized stocks, commodities, indices, et cetera. So when you say society, we’re talking about all other societies, identity at the base level, and the entire economic stack above, including all the licensing to do it.

Jim: Very interesting, very interesting. So let’s talk about identity, right? In your propaganda, or maybe it was an email you quoted, Mark Andreessen. “Hey. Hi, Mark,” an old friend of mine…. That, “Identity is a trillion dollar opportunity.” Why is that?

Bob: And he was specific about saying blockchain is probably the way to do it, right? And the reason he was arriving… And the same reason I arrived at it years ago… The same reason Facebook with Libra tried to get there, and now even Elon Musk is talking about it with Twitter, is… If you can get a user to actually prove they are human, unique, one of these eight billion people, and then run a financial stack on top of it, what Musk say, “We’ll run probably half the world’s financial transactions.” Because you leapfrog over all the legacy systems, and the user ends up… Truly, it’s me, I’m going to transact on fiat, crypto stocks, commodities, et cetera. It all starts with proving you are, who you say you are.

Jim: Though, of course there’s two models there. One, you could then do it all, that’s obviously Musk’s vision. The 2nd is, you could be a provider of identity services and it’s not a trillion dollar opportunity, but it’s a nice business, as many people know. I actually ran an identity service for a while called the domain name system. It was a very lucrative business as it turned out, and to show that when we didn’t do anything other than run the domain system, and we did not try to compete with our customers. And I often will recommend to people from a business perspective… Think about being a trusted 3rd party who provides arms to all the war fighters, rather than competing with your customers. That’s always a key business decision one needs to make.

Bob: Couldn’t agree with you more. I mean, I can tell you just to share war stories with you. Born and raised in Silicon Valley, my dad used to come home… Back when integrated circuits were invented, the first thing they said, “Here’s a Texas Instruments chip, and it can do a watch.” Right? Watch and calculator were the first two thing applications of EIC. And what Texas instruments do, after making the chip? They made their own calculators and watches, never ever. I was seven, it’s like, “Bob, never, ever compete with your customers.”

Jim: Very important. I do a fair bit of coaching of entrepreneurs, and of course they often want to boil the ocean and conquer the universe, which is a good thing in a startup CEO. But I also always warn them, that if their business has that trusted 3rd partner attribute, you have to make a decision early on… Are you going to be a trusted 3rd party? Or are you not? And if you are not, you’re going to have to leave some seemingly lucrative opportunities on the table.

Bob: Agreed. I can tell you, Dude… Why we built what we built, and what we’re leaving on the table, and how, if you’re more of an open system that others, can use.

Jim: Before we do that, one other point to help the audience get oriented… One of the key ideas around where identity and finance come together is called, Know Your Customer. It is, it is why opening a bank account is 20 times more fucking trifling than it was 20 years ago. Back in the day, you just showed up, told them the name you wanted. In fact, in New Mexico, where I lived 20 years ago, you could actually even open a business under its own name, without a DBA, hilariously. You try to do that today, you could be sent to Guantanamo or something. Tell the audience about KYC, and its evolution over the last 20 years?

Bob: Sure. So generally, you have to prove you are, who you say you are. And so I’ll give you a sense… Just in society at large, if I want to get on a dating site, and most dating sites will say, “Hey, let’s make sure he is not a catfish.” Does he have a Facebook account? Does he have a Facebook account with 50 or a 100 friends? They do a little bit of, “Let’s just make sure it’s not random guys who’s creating a Facebook account.” So if you have a 100 friends, they’ll be like, “That’s good enough identity verification to get into our service.” And it escalates up from there.

How much more identity verification do you need for each service? And at the top of the peak is… Are you going to touch regulated financial services which the government regulates, across the planet? And at that point you have to prove to the governments… And this is enforced via intermediaries like banks, and payment systems. “I am truly Bob and I don’t have three accounts inside of an institution.” So that means, “Here’s my utility bill, here’s something with my face to verify, here’s my cell phone bill.” Something like that.

Jim: Picture of your driver’s license? Picture of your passport? And of course nothing is perfect, but they try to stack up enough things to reach a level of confidence, that they can proceed?

Bob: Now look, the word identity, it’s almost worth taking a step back. There’s identity of like, “This is me, and nobody needs to know anything else.” And that’s true for a lot of what you do in your daily life. It is. But identity also in many cases has a legal repercussion, there are obligations and ramifications. If you vote… And you’re not who you say you are.

Jim: Felony?

Bob: Right? If you’re moving money… By the way, moving money under a $1,000, most governments and regulators don’t care. Moving over 10 or 20,000, they start caring, and you have to prove you’re not, who you say are. And so like I said, identity, low-level, low-level financial, low-level most, is how you’re going about your life. No big deal. At a certain level it’s a legal thing, and so social verification doesn’t work.

Jim: And the United States for cash, it’s $10,000. And so if you move anything that’s like cash over $10,000, then you have to file a treasury report with a relatively strong form of identity. But again, I will say I do those from time to time, and maybe I haven’t done them recently enough, but they weren’t that onerous. I could have easily come up with a bogus identity, to pass the treasury reporting form that you have to fill out.

But again, that’s the thing. And of course the other issue, and this is when you’re sitting on the other side of the table, to the degree that somebody is giving you credit… They’re interested in fraud. Because the easiest of all frauds is the so-called breakout. Where you build up a business, build up some inventory, get some loans, all this stuff, and then on Tuesday at 11:30 PM you just disappear, right? It’s called a breakout. The Mafia is great at it, it’s the simplest of all major frauds. Any moron that wants to make $300,000, look up, “How to do a breakout.” And then go do it. No, don’t do it. But go out and read, “How to do a breakout.” So identity, when someone’s extending you credit, is hugely important.

Bob: Absolutely. I would say there’s great World Bank studies of what happened when they introduced biometric national identity in parts of Central Africa where it was like, “I’m going to go get a loan for $300, and then I’m going to go 200 miles South and open up another bank account under the name of Steve, instead of John. As soon as you go like, “Hey, you can’t actually disappear your identity.” Guess what? It was… By the way, that previous scenario, banks lost money then there was no credit, and all of society started collapsing, because you couldn’t actually get credit. You put in a biometric system, you end up with like, “Oh, well now people can actually get loans, because they’re going to get paid back and farms get done, and kids get educated and society moves.”

Jim: And that’s a very important point, I’m going to break in with this point. I’d love to hear your thoughts on it… Trust is an important part of how societies work, and why places like the West have prospered, versus places like Central Africa is, at least in part… Lots of reasons, colonialism, whatever, natural resources, iron, germs and steel or whatever the fuck it was… Jared Diamond’s book. Lots of reasons. But one of the reasons is for historical trajectory reasons, there’s been higher levels of social trust in the West. And so being able to build trust, even if by artificial technical means, is a way to really help these societies start to prosper. Because without trust, as you point out, the small business loans are the absolutely indispensable fuel, for building an economy from very low, to low, to moderate.

If you can’t make those small business loans, really difficult for economies to move, and so if you build trust even across… Because one of the problems in Central Africa is these artificial boundaries designed by the colonial administrations… Combined a bunch of people that spoke different languages, had different religions, hate each other historically for 20 generations. And so the ground level trust is low. So if you can build the equivalent of trust via other means, you actually provide those societies a way to start getting their economies to come up. And that’s got to be good for the world, to help these people move up into a higher level of economic life.

Bob: Look, there’s a playbook now if you go into the development banks, when you want to start increasing capacity of a society, starting with its economy in society, I’m lumping in social, political, and economic systems. The playbook starts with getting an identity system, and specifically a de-duplicated live human system, which is almost always biometrics. And then you build on top of that from there. After that, you’re doing the freeways, the voting, the loans, the everything else. India is the sort of poster child of this, with Aadhaar.

Jim: I’ve been following this out of my left corner of my left eye, since it started. How many people have they brought into the Indian system over the last few years?

Bob: 1.1 billion.

Jim: That’s a lot of people.

Bob: It is, and-

Jim: It’s almost everybody in India, not quite, but almost.

Bob: … it’s required for bank accounts. They did do a switchover for sim cards a couple of years ago too. And so by the way, it made checking an identity, getting a bank account, everything else that comes along with it, much, much easier, faster. If you jump with me here mentally, President Toomas Hendrik Ilves, from Estonia, who advised us, he was the one who pointed out, he was like, “Bob, you accidentally built Estonia.”

Jim: The e-Citizenship thing. I’ve got an e-Citizenship in Estonia.

Bob: But they have the entire stack, it’s single identity all the way up that stack. He goes, “Because of that entire stack and the fact that we know who the user is, we attribute roughly 2% of GDP, to literally just efficiency.”

Jim: And over time it’ll get even better, because fresh systems that are built will take that into consideration. They won’t have to have all that legacy horseshit… Because now they got to do it both ways, at least in most countries?

Bob: Yeah.

Jim: Now, let’s turn to the other side of this, the dark side. There’s now a single choke point for life, and consider that motherfucker Trudeau in Canada, the guy who froze the bank accounts of people who were engaged in… It was fairly rough, but legitimate civil disobedience… Yes, they could have been arrested and charged with misdemeanors. But instead, and which is fine, it’s honorable. Martin Luther King was arrested for misdemeanors, I think 17 times, during the civil rights movement. His most famous document was the letter from the Birmingham Jail, where he was arrested for some bullshit, by racist fucking cops, right? And so if they had arrested the truckers on a misdemeanor charge, and they’d all gone to jail and just refused to leave, that would’ve been classic civil disobedience, very honorable.

Instead, that motherfucker froze their bank accounts, used the power of the Canadian government, which was a lot stronger than the American government. It’s a veritable police state in-waiting. And of course freaked everybody out. If your credit card stops working, your bank account starts working, your wife can’t buy groceries, talk about government fucking tyranny. Trudeau basically announced himself as a dictator with that move.

Bob: He did.

Jim: Now, if we have a system like your building… What keeps Trudeau from entirely fucking up somebody’s life by calling Bob Reid and saying, “By Canadian law, you got to fuck Jim Rutt, because he said, “Trudeau’s a motherfucker.”

Bob: So two things, and by the way, you’re touching really close to what a central bank digital currency, that is attached to an identity or a wallet, can do. And everyone should be… Outside of, I would say Europe, where I think the principles and underlying laws that get enforced, and watchdogs along with it will probably keep the Europeans [inaudible].

Jim: I wouldn’t trust those motherfuckers, fucking five inches. When it comes to government, I don’t give a shit how good their historical record are. Every government has become tyrannical, sooner or later.

Bob: Let me say, they’re only slightly better than the Canadians and everywhere else, is all I’d say. Because I actually know of cases when the Europeans have actually said, “No, you actually can’t have the user’s data.” But let me answer you-

Jim: But anyway, so let’s take the general case. Let’s assume governments are no damn good, and sooner or later they’re going to try to fuck people over?

Bob: So what we did is, we actually took Everest, and we took the infrastructure for identity and literally sent it out, put it into a non-profit with different governance, that literally I nor Everest, nor anyone, can actually get into the user’s identity. And separated it from Everest, the licensed financial entity. And what that does is, that infrastructures… If you would have called THE Foundation… It literally has all of the building blocks to create a free identity and wallet that nobody else in the entire world can see.

Jim: Or turn off?

Bob: Or turn off.

Jim: How do you keep it outside the ability for a government to turn it off? To turn off my identity, for instance?

Bob: So they would actually have to have the keys, and they would actually have to have the servers. And so each identity in the infrastructure we donated is… Think of a million identities or a million distributed data stores, each data store… So let’s say it’s mine, has a wallet and then it has… Using the IPFS standard, distributed storage around either Europe-

Jim: Interplanetary File System.

Bob: Right? We’re using the standard, not their service, and each little piece of my identity attached to that wallet, from my biometrics to my proof of address, to my… Whatever credential or at a stage that I want to add to my identity, is all separately encrypted. And it requires.. What I say, it requires my live face and pin, in order to open that data store up.

Jim: How many shards have to be assembled to create your identity?

Bob: Ah, we’re literally doing live face, plus pin to create.

Jim: No, I don’t mean that, at the technical level? Because presumably to get real security, you don’t want the whole wallet on any one server. So typically, you would shard fragments of the record, and then require pulling together shards from multiple services, before you’d be able to decrypt it?

Bob: We’re not doing distributed shards. We are using a DAG though. So think of a DAG type database.

Jim: So basically a network database?

Bob: What is it? Directed acyclic graph.

Jim: Directed acyclic graph, essentially. It was that fancy name for a tree structure, basically?

Bob: Tree structure once in, can’t come back out, and then we… So think of my identity as a distributed, encrypted DAG.

Jim: Across multiple servers?

Bob: Across multiple servers.

Jim: The key is, you can’t put a single wallet on a single server. And the more shards you have, the more secure you are from someone like government coming down, putting their thumb on you?

Bob: Right. So it has to be… As our mutual friend, Jordan, put it to me, walking down the beach in Encinitas once, he said, “You have to be in a position where, if somebody shows up with $10 billion, or a gun to your head, you literally have to be able to go, ‘I can’t help you.'”

Jim: Exactly. Exactly.

Bob: And we designed for that scenario, because personally-

Jim: Good.

Bob: … I believe either one of those things can happen.

Jim: And if they know you can’t do anything about it, there’s no point in them putting the gun to your head?

Bob: That’s right.

Jim: So that’s good. So I’m very glad to hear you’re doing that. And I also like your point that it’s exceedingly unlikely, that a central bank crypto identity system, would have that attribute. Could you imagine the lobbying from the FBI and the CIA, when this legislation is being passed? You know God damn well, that even if there isn’t an obvious front door, there’ll certainly be a back door.

Bob: Absolutely. I was actually recalling it, this came up recently… I’ve had two governments come to me and say, “Open the damn database of these identities.” And both times I’ve had to say, “Sorry, I can’t help you.”

Jim: Even if you throw me in jail, I still can’t help you, right?

Bob: Exactly.

Jim: And that’s the way it should be. Well, I’m very glad to hear that you guys have taken that very seriously. While I see the tremendous power of identity… For instance, a strong identity system ends the immigration problem immediately. Because there’s already the laws on the books that say that the employers are supposed to verify, but the methods of verification are so dodgy these days, and the courts have ruled that even the most shitty fake social security card is good enough. If you had strong identity, there would be no jobs for illegal immigrants, they have to go home. That would be a very simple solution to a very complex problem, but I wouldn’t trust the government to run that kind of system.

Bob: Clearly. So going back to the Aadhaar system, which again was inspirational 15, 20 years ago when it got started, but they get hacked all the time. They have their own internal IT guys inside Hyderabad, that’ll go into their own systems, they have people still trying to sell different ideas. They’re not trusted, impartial brokers on this, at this point. I think we all have too much information, to know that they can’t be trusted on many things.

Jim: And as we all know that if you have a monolithic database, all it takes is one corrupt individual typically. And 1% of humans are sociopaths, it’s always important to remember that. Another 1% are schizo fucking phrenic, right? So if you have to build systems, assuming bad people and crazy people will be present at fairly substantial levels… You say, “Well 1%.” Well, in a country the size of America, one percent’s, three million. So, my fellow Americans, there are 3 million sociopaths amongst you-

Bob: That’s right.

Jim: … and you have to design your systems accordingly. All right, so I’m very happy to hear that you have that perspective, and that you’ve done that work. That is huge, it makes me much more willing to give you publicity, and help you guys along. Because my biggest fear is that this becomes the choke point for the motherfucking Trudeau’s, I’m going to have his name legally changed to motherfucking Trudeau. I just saw his wife’s ditching him, which is a good thing too.

Bob: Oh, that too.

Jim: Anyway, welcome to the Jim Rutt show and salty Jim, right? So now let’s get on to what is it that you are actually doing in this range? And what’s it called? And where can people learn more about it?

Bob: Sure. So either, which is the licensed financial institution in Europe, that can create an account and an identity, et cetera. Or you can go to, which is THE Foundation… Which is again, the non-profit that just gives away identities and wallets for free. So I put it, here’s your MetaMask equivalent with biometrics to scan your face and pin, to get your free wallet.

Jim: Okay, let’s go one step to more tangible. You say MetaMask equivalent? So it’s not MetaMask? Because MetaMask doesn’t have biometrics, things like that. So what is this? Is this a phone app? Is this a plugin like MetaMask? What is it? How is it actually tangibly delivered to the user?

Bob: Good question. Basically, so it’s a web app, you can literally go to and scan your face, put in your pin and you get access to… You can manage other wallets from your desktop or laptop, right? You can use your own wallet and if you want to send, what I call a regulated financial transaction, then we will actually do an identity verification on that side. If you don’t want to do a regulated financial transaction over Everest, use Ethereum Mainnet, or do whatever you want, and you just run the software for free.

Jim: Now, do you have links to other service providers? Because again, in the domain name business, it’d be fucking useless to sell domain names, unless they were embedded in browsers. And that people in corporations, hook their mail systems into DNS, so other people had to make our magic valuable. It would be utterly useless to map a name to an IP address, unless there was a use for the names. How are you driving uptake of the names, so that they’re valuable to do things in the world?

Bob: That’s a really good question. It explains literally why we built Everest rather than just say, “Here’s the free identity system.” As it turns out, and this is as much as you and I appreciate privacy, and a non-compromisable, non-hackable identity system… I can just prove I am who I say I am. The truth is people don’t care, they still go to Facebook and give away their data, they use Google and give away all their… They just don’t care.

Jim: They use their real email address when they log into things. I mean, I’ve got a 100 email addresses for various purposes. I mean, God damn, I would never give away my main email address to some piece of shit, that’s trying to get me to send me a newsletter or something.

Bob: Exactly. So because of that, we built Everest, which is a licensed financial institution. We were one of the… Out of the 400 companies that showed up in Malta in 2018, 10 of us got a licensed to actually custody crypto, and execute orders and send, and transmit. As I put it, if identity is an operating system, let’s call it Windows, nobody really cares, but it’s got to be there. After that, you’ve got Microsoft Office, that’s our financial services stack. We go like, “Okay, we’re going to give you fiat accounts, where you can actually send and receive dollars, and euros, and pesos.”

We have a crypto account and you can buy, trade and sell, that’s where we’re letting you… So here’s all the application stack that actually drives usage, drives adoption of the Usenet. I can give you one more web to metaphor… Zuckerberg, when he set up doing a photo sharing site, which is primarily what Facebook is… Here’s photo sharing with all your buddies from high school and college, at the end of the day, he ended up with an identity system with single sign-on. If he started with single sign on, never would’ve gotten it.

Jim: And they did make a very interesting decision that most other people did not, which was that officially at least, your Facebook login must be unique to you as a human, and two, you must travel under your human name. Now we do know that their architecture is so sleazy that it’s very… At least, I don’t know, again… I don’t know if it still is, but I used to have a few sock puppets on Facebook, but it wasn’t very hard to game their system. I don’t know what it is like today, but they had an opportunity, they could have been the guy that built identity, but they didn’t.

Bob: Right. And they’re paying the price for it now, just like Twitter is, just like LinkedIn is, they’re all trying to get into the identity verification business because one, everyone’s gaming it, and two, there’s about to be an AI tsunami that wrecks these games.

Jim: Exactly. I use that term AI tsunami, it’s already started. I also call it the flood of sludge. You can already see it. You can feel it in your feeds, right? That the level of inauthentic horseshit is increasing, it’s down here… I’m drawing a picture of an exponential curve, where before the knee, but we’re damn close to the knee, it’s about to go straight up.

Bob: Right. I’m saying, currently what they’re trying to do, all of them, more or less, they want to use a credit card to validate that I’m me and, one-

Jim: And that you’re over 18 supposedly? Which of course you and I both know, you can go down and buy a Green Dot card at Walgreens, and they don’t do a very good job of KYC, and you can have yourself a credit card on an address that’s not even your own, and with somebody else’s name, just finding a… All you really need to do is find the name of a live person who you don’t even know, and you can get yourself a Green Dot card.

Bob: Dude, it’s not scalable globally, not everyone has credit cards. It also doesn’t stop impostors, like you said… It’s just not plausible. And by the way, you’re making people pay for it too, so the friction on that… There has to be a free, “Hey, scan you.” Be, “Free? I’m a live human being, and I’m not an imposter.” There has to be that, we’re actually showing it now on Twitter.

Jim: I saw that. Have you been talking to these guys, right? You just made a compelling argument… Why, one… Their approach sucks. And two, why your approach is better, and, “Oh, by the way, it’s fucking free.” So why not go to these guys and say, “Hey, adopt our form of identity as an alternative to the other forms.”

Bob: Those are interesting conversations.

Jim: I know a guy who knows Elon Musk personally, so when you’re ready to talk to Elon personally, let me know.

Bob: Okay, I will.

Jim: Because again, this is really important shit, and the fact that they’re building on these foundations of sand, are a big part of why they have the problems that they do. And as my listeners know, I’ve been building online communities since 1980 of all sorts, and all scales. And one of the things I have always found, and I go… This puts me sideways with some of the crypto assholes, is that in online community, real names produce much higher quality of community, when you’re not able to be invaded by sock puppets, and by propagandists and by spammers. And why I know there are some arguments, and for some cases where anonymity is important, for instance, a support group for domestic violence people, or people for a medical condition support group. So I do believe there should be some limited cutouts to allow anonymity. But in general, real names equal better discourse, and so I’m also very adamant on anything I do, that real names are the policy.

Bob: Interesting. I can tell you we architected for anonymity or pseudonymity, so I can for example, say, “Here’s Bob on Twitter, human unique.” And by the way, here’s a picture of me that I registered with, and it more or less matches my Twitter profile. That’s truly Bob. I can also use my Anon account and simply prove I’m not AI, I’m not a bot. I’m not going to give my real name, that’s going to be my nasty, deep, dark web, alter ego and might not be great for the Twitter discourse, but as an individual-

Jim: Or the ecosystem in general? Or, it’s also helping sexual exploitation of children, all kinds of bad shit.

Bob: But fundamentally, privacy is human rights. I should be able to share whatever I want to share-

Jim: Yeah, maybe.

Bob: … except for regulated financial transactions, I have to go, here’s my date of birth, name and address. After that, you don’t get to see a whole bunch. Twitter, just-

Jim: I could see why you could build it in, but I would also see why anybody who is responsibly running a network, should not use it. It produces shitty networks and crime. If you’re not prepared to put your fucking name behind what you say, don’t fucking say it. Right?

Bob: Right. People who were not verified at that level probably only get a little bit of credibility.

Jim: Well, that’d be nice if… Let’s take Twitter’s case. “Hey Elon, if you’re listening, here’s an idea for you.” For people who use real identity, the symbol next to their name is… Got a gold star. If they use a real strong identity, gold star next to their name, if it’s a non-verified real name identity, it’s a pile of shit, one of those triangular piles of shit, and the pile gets a little smaller as they add more credentials to their identity. But it’s still a pile of shit, until they get down to the bottom, and whatever policy they choose on strong enough identity, then the pile of shit goes away, and then they take one more step and they get a gold star. There’s a very nice way to allow anonymity, but to inform all the users on how shitty the identity is, quite literally.

Bob: I can say that what we’ve done is not dissimilar. We’ve got about five levels where it’s looking like, “Here’s human, not a bot.” Period. That’s it. You’re one of the eight billion live, pieces of carbon, after that, there’s no imposter, right? You can go like, “I own this account.” And by the way, you can 2nd level if not an imposter. Here’s a picture, which a lot of people won’t do, they’ll just stop at level one, one and a half. 3rd level is, here’s an identity verification. We’ve done just a basic verified driver’s license, let’s say. And the last one is here’s a KYC, you can actually start transacting thousands of dollars over the network.

Jim: And then there’s a 5th one which we have specified in the game B protocol, which is that you have personally met with a game B notary in person, and that’s the final check. And I would suggest there’s a very interesting business there, of offering in-person verification, and by the way, not just of identity but of anything, and especially in this world of deep fakes, which I’ll talk about another tsunami of sludge.

I believe that there is a business to verify anything including that an event is actually happening, at a certain place in time, that a speech being given by some politician is actually happening, et cetera. And you could charge a couple hundred dollars to go verify an event, and put it in the blockchain, and then if anybody puts out a deep fake, the victim of the deep fake, just puts out the link to the verified fair witness, witnessed event. And say, “This is what actually happened here, here it is, recorded.”

But live human is going to become more and more important as it’s easier. I mean, I can now fake easily a driver’s license, there’s software on the web that allows me to fake a driver’s license, right? We can fake anything and that’s just today, it’ll get exponentially worse. A 2nd, one of my favorite counters to, “I’m a human, duh.” There’s a nice exploit, which is, “Oh, go find some bums on the street.” Get their credentials, register them, and then just start hooking names to them up the yin yang, pay them $200 a month to use their identity. And they’re buddies too, “Oh yeah, do you know any other drunks that want $200 a month? Come by and sign up and show us your credentials and we’ll be depositing $200 into your bank account every month.” How do you guys deal with exploits of that sort?

Bob: I’d say a lot of the crypto scam artists, 2017, ’18, ’19, were trying a lot of that of… They would pay someone to do the KYC into X, Y, Z exchange. And that way my name isn’t actually associated.

Jim: Exactly.

Bob: As a licensed financial institution, when we see that type of behavior, and you can see it in the transactions. At a certain level, you go from, let’s call it under a $1,000, the law doesn’t care what you’re doing. Are you on the sanctions list? Based on, by the way… Here’s my name and address and it’s self-attested. We don’t check, nobody else checks, nobody caress. A 1,000 to 10,000… Let’s go ahead and do a quick check. Wait, that bum isn’t actually in that address? You do an address verification, and then above a 10,000 you actually prove the source of wealth or prove the source of funds, or both. And so with more volume, there’s more enhanced… You’d find out, “Oh, that guy doesn’t actually have an address.” Under a $1,000, the system isn’t at risk, the company isn’t at risk, nobody cares.

Jim: Society isn’t really at risk.

Bob: You get to a certain level-

Jim: Unless you get enough of them. I mean, you’re smurfing.

Bob: Exactly.

Jim: You know about a thing called smurfing, right? Where to keep under the treasury limit of $10,000, you hire a bunch of bums, one step above bums, whatever that’s called these days. And you pay them to go do cash transactions for $9,000, and that’s the low-end of money laundering.

Bob: And so I can tell you what we do that’s actually unique, and I give you a real sense. We had a casino come to us and say, “Hey, we’ve got gangs of roving 21 year-old’s that will come in and do this.” And it was-

Jim: Buy $9,000 worth of chips and then cash them out an hour later, right?

Bob: Exactly. Now, nobody can really stop that from happening once. What the casino wanted us to do, was make sure it never happened again, and we can. Because when people are doing it, we’re literally going, “Okay, that live face and the pin associated with it, which it’s not just a person, they have an account. We actually know that guy came in here an hour ago for 9,900. So do his 20 friends.” And we can go, “Aah, we can stop the fraud from happening.” Because we actually know who they are, or that they’ve done a transaction like that, previously.

Jim: Of course you can… I mean the casino could do that themselves, but what you get is across multiple casinos… Because let’s say Caesar’s Palace, they’ll know if the same person came in multiple times, and they can stop that themselves. But it’s the whole industry that you could help to collectively… So that’s an interesting service, also a Trudeau danger point though, I would say.

Bob: Agreed. That’s why I would say, we had to separate the identity from the financial institution. The financial institution will go out, and just sell software and move money in value, accordingly.

Jim: So the software company is subject to Trudeauian extortion, presumably?

Bob: The financial institution that’s licensed. Absolutely. Just like Coinbase, and Goldman Sachs and Bank of America, we do what we’re told, but the identity non-profit, we can’t control, we can’t stop it.

Jim: That’s very interesting and important for people to understand that distinction. To know that any financial service organization you’re dealing with, can have the thumb put on by the government. You get a court order, you got to obey it, period. At Network Solutions, where I ran the domain name system, that was our one inviolate rule, we will obey a court order from a court that has jurisdiction over us, which basically meant the U.S.A. and the State of Virginia. We will obey nothing else, and including… I once got a call from the White House and asked us to do something and I said, “No.” That’s it, I said, “If you’ll put it as a court order, happy to comply.” But they did not want this thing on the public record, so it never happened. It was very simple, court order, “Yes.” Anything else, don’t care who the fuck you are, “No.”

Bob: As a financial institution in Europe, we are beholden, and by the way, we’re transitioning our license to MiCA, so it’s Pan-European. We’re beholden to the European laws, and if somebody shows up and says, “Financial intelligence unit wants to look at who’s passing what value, where?” We comply. But similarly, any of them show up, including God almighty with a capital G on that identity. So sorry, we’re beyond GDPR, everybody can go fuck themselves.

Jim: I like that. So entrepreneurs out there, think about ways to do financial services that are KYC compliant, but unstoppable. And they may be able to stop at a given… Probably the way to do this is to have ephemeral entities that spring up, but you have some spare ones. You get shut down, “Oh, well we just migrated all the accounts and data over to the new one, and there it is.” Something like that, because these guys will be trying to crush this stuff. They want control, they want choke points. Motherfucker Trudeau’s of the world want to Trudeau. I think that should become a verb, to Trudeau… To subvert a democracy and become a dictator, via using choke points in the financial architecture.

Bob: Sure. Let’s not forget choke point 2.0 in the U.S. of OCC and FDIC, basically calling CEOs of banks saying, “You better not have a crypto client touching ACH rails? If you do, maybe we’re going to take a 2nd look at your license.” That’ll send a chill down a CEO’s spine.

Jim: Or how about the guy in England? Nigel the… the Brexit guy. The banks pulled his accounts because he’s the Brexit guy, now, of course, the chairman of the bank has had to resign, the CEO of the bank has had to resign. This is a gigantic scandal. Because they were stupid enough to document this shit in writing. And they have clearly, under government policy, have encouraged the banks to fuck with people, and they do. And so it’s very important that we build alternative infrastructures that the Trudeau’s can’t Trudeau.

Bob: Yep, I agree.

Jim: And so that basically says Everest could be Trudeau, but the foundation cannot, and so people should keep that clearly in mind.

Bob: And keep in mind, we can only be Trudeau’d by the Europeans, and the Europeans have clear known laws. You know exactly what they are, and they’re not shutting down folks that actually obey what’s written in the law.

Jim: And at least today, I would say that, that’s a safe bet that, within reason. But again, they’re also Europeans, they have a long history of dictatorships periodically, and I would not count on them for the long haul… So let’s say somebody was organizing a revolution legally, a social change movement that looked to completely overhaul the social operating system of society, to change the monetary system, to change the financial system. I know some people like this… One could imagine the Europeans saying, “Oh, well we have our rule of law, but we got to squash these fuckers.” In which case that they would Trudeau.

Bob: There hasn’t been a social revolution here since the French. So I’m not saying never, I’m telling you it’s just better than everywhere else on the planet.

Jim: Well, hell, that’s not true. Think about the Nazis. That was a social revolution… There was, think about the communists all over Europe. It happens all the time.

Bob: [inaudible]

Jim: Think about Orban in Hungary, right? He’s not quite yet a full-on tyrant, but he’s getting mighty close.

Bob: Lets go into, let’s segue for a moment, let’s define what revolution is. It’s social, political, economic and bloodshed, 99% of the time. You got to change all three systems, and spill some blood.

Jim: The Nazis certainly did that.

Bob: The Nazis had their moment in Europe-

Jim: Anyway, so Europe’s probably a little safer. Well, United States is super safe for the moment, and Europe is better than many.

Bob: Well, let’s define our terms here, and I’ll tell you where… I was flying to China when Snowden’s papers hit the wire, and it turns out the CIA was actually spying on Americans.

Jim: Of course, you don’t think the European secret police aren’t spying on Europeans? Of course they are.

Bob: So I land in China, and I walk in and they go, “Wow, have you seen the newspaper?” And I said, “Look guys, the only difference is, your government tells you that they’re spying on you.” The Americans-

Jim: It’s slightly more honorable to admit that you’re a dictator, than not admit it.

Bob: I’d say there’s less of a surveillance state and less of a Trudeau… I mean the point of Trudeauness, the Americans have proven choke point 0.10 and choke point 0.20, that they are willing to go there. The Europeans haven’t shown that.

Jim: Okay, that’s interesting. What has the U.S. done that, to individuals for reasons of political protest?

Bob: So they… Choke point 0.1.0 is literally the Obama administration going after mostly adult industry, and saying “Visa cut them off, MasterCard cut them off.” Choke point 0.2.0 was literally anybody related with crypto, and there are some really interesting case studies on that of like I said, “FDIC, OCC,” in coordination from the White House, “Target this, make it happen, cut these guys off.”

Jim: If you could send me some links on that, I’d appreciate it.

Bob: Sure.

Jim: Because that’s, again, not quite, it’s not over the line 3.0 Trudeau, where you’re going to smack individuals, due to their political beliefs, or even for their political actions, up to and including misdemeanor, civil disobedience. That’s where it becomes totally scary. And that’s where the line has been crossed, and that’s where good citizens could get their AR-15s out, and march to the town square and say, “Motherfuckers, come get me.” Because that is totally unacceptable.

Bob: I agree. We haven’t seen that yet, thank goodness.

Jim: Not yet. Not yet. And our first amendment is still pretty strong in the current court, despite some of the other stupid they do. Do seem to be very strong on the first amendment.

Bob: Fair.

Jim: … which is good. Let’s see what other questions I have. Oh, this is a technical question. You can’t see him, because this is audio only, but my friend Bob here has got quite a fuzzy face and he wears glasses. It turns out, biometrics sometimes gets fooled when you go from furry face to clean face. And when you go from glasses to contact lenses. How do you deal… And this is a minor issue, I’m just interested in it… How do you deal with multiple manifestations of biometrics like that?

Bob: It literally works. I can give you some case study and literally tell you, I have not had a beard. Yes, had a beard glasses, no glasses. And it always recognized, and has for a bunch of folks in our community. I’ll tell you the most fun test I did live, with the Central Bank of Samoa. We took in all of the voting database, which literally had 20 years of people with QSIF little photos, sometimes SIF, all these other different pictures from the voting registry or database, for the past 20 years. The Central Bank governor was a 40 to 50 year old woman, and it was her photo from when she was 25 or something. And we did it live and she literally scanned her face and we found her face and she had changed materially over the past 15 or 20 years. So we haven’t actually had an issue with that.

Jim: That’s pretty amazing. As you know, you go to the DMV for your photo, for your driver’s license, they usually make you take off your glasses and not smile, and all that stuff. But you guys have a good enough tech on facial recognition to add a 99.9%, 99.99 probably level, it works.

Bob: Here’s a good example of global entry for the U.S. government to get into the country. It used to be face and fingerprint, and your boarding pass. Nowadays you just walk in, do one of these and keep walking.

Jim: Now is that facial recognition technology open source? Or is that something you guys developed?

Bob: We use off the shelf biometrics, and so what we found is most biometrics are almost at the 99.8 or 99.9. And if you use that plus a pin or that plus another biometric, you’re at five, nines.

Jim: Five, nines is enough, probably.

Bob: Five, nines is enough, right?

Jim: Five, nines means enough, means that you’ll fuck one person in a 100,000 essentially.

Bob: And what that means is, “Oh gosh, you’ll have to do it again and we’ll have to do a broader search.”

Jim: Which implies of course you have to have a… Or this foundation, it has to have a non-trivial customer service function, when things go awry. Just as Network Solutions, we had to have a non-trivial customer service function, despite the fact that what we’re doing seems like it’s pretty brainless, but there are a bunch of corner cases where you have to deal with problems.

Bob: Yep.

Jim: Interesting. All right, we talked about this in the pre-game, but I’m going to run it by again, just because I thought it was interesting. I recently, I don’t know, six or eight months ago, participated in a crypto crowdfunding called and it had a match. Somebody put up 25 grand worth of crypto, and if you went through sufficient verification, but only if you went through sufficient verification… They would allocate under some complicated crypto bro formula, some part of that 25 grand to the causes that you support. It had 50 causes that were metacrisis related, it was hilarious. It was weighted towards smaller transactions, but larger accountants, I mean typical crypto, they got nothing better to do than play with these algorithms. But it was clever, and you could say it was principled in its own way, but you had to go through this thing. And the service, whatever… I was searching my emails this morning to try to find it. I couldn’t find it.

It essentially required you to log in using OAuth, to multiple of your identity surrogates like Facebook, like LinkedIn, like Twitter. There was, I don’t know eight or 10 of them. And they gave you points for each one that you OAuth’d into their app, and you got the most points for LinkedIn, and I forget what the rest of the table was, but I know LinkedIn was 15 points. And you had to get 70 points to qualify your crypto account, it had to be a specific crypto account, that you were a real human being. And I go, “That’s fairly clever.” Tell me the strengths and weaknesses of that approach?

Bob: Sure. So let’s define our terms. You added credentials to a wallet, you didn’t prove that you were human, nor unique nor anything else. And so I’ll give you a step back on identity writ large, and what the strengths and weaknesses of that. Start with the basic, can you prove you’re not a catfish? Put it to you like… If you want to just get onto a dating site, almost no identity verification, connect a Facebook account like you did, maybe connect another social account where you have a 100 followers.

Jim: Oh, let me add this detail, I forgot to add this detail. You got points based on how many followers you had, so LinkedIn you got 15 points if you had more than 500, which I do, but you only got one point if you had under 10 or connections, I guess they call them on LinkedIn. And the same was true on Facebook, if you had less than a 100, you got a few points. If you had more than a 100, you got more points. If you had more than 300, you got the full points. So again, it was fairly nuanced.

Bob: Sure. And so look, there’s a big trend in the crypto community to do a social graph and call it identity. And the truth is, it’s because they have not figured out how to actually do identity. So fundamentally at its core, you need to prove I am human, live and unique, one of this eight billion. And everybody, by the way, even Vitalik knows this, and cannot solve this. And we have, which is fundamentally I’m this one in eight billion, human being, after that I’ll add credentials like Twitter, LinkedIn, Instagram, and then I’ll be able to share it, little pieces of that to other folks. What you’re describing is credential sharing, or adding credentials to a wallet, it’s still not proving your one in eight billion. And the one in eight billion really matters, as soon as you actually do anything financial. Matter of fact, it matters to the point of you go to jail, or don’t.

Jim: Exactly. So what is it that distinguishes you… You have biometrics for sure. Is that the main distinction?

Bob: Yes. So we do, you can prove that you’re live, and human and one of the eight billion people out there, right? After that, you can add on all the credentials you want.

Jim: And then you could also do classic KYC credentials? Look yourself up in the postal database, show me your picture of your driver’s license, so the rock-

Bob: Should have statements, all that stuff. And then what we did is, we actually added a way to share credentials in… What I call it zero knowledge proofs. So you can say, “Here’s the proof that I have KYC, but you don’t get to see the data.”

Jim: You’re right, but here we go. That is actually a nice thing, the zero knowledge proofs, it’s a very wonderful outset of algorithms for things like this-

Bob: Agreed.

Jim: … that you can actually stipulate a fair bit with a completely opaque token?

Bob: Right. And so look, let me hammer this point home of the social graph is cute-

Jim: And it’s better than nothing by a lot, right?

Bob: Sure. If you’re trying to solve the problem of, “Hey, does this wallet, is it good enough to actually do something?” Do we kind of think it’s not a catfish or a box?

Jim: Well, in this case, the stakes, it’s always important when I talk about security. Security versus stakes. I’ve got a programmer working on a project for me actually last week, and he actually put more security in it than I needed. Because I said, “Worst case, we might lose $500 a month.” All right, don’t give a fuck. It’s not worth spending $3,000 to solve their problem. So in this case, they were giving away 25,000, there were a bunch of participants, so a non-verified person might be getting 50 or a $100 dollars, so what the fuck? You didn’t need ironclad proof for that, just enough to make it not worth… You’d have to spend more than 50 bucks to do it, and because you can buy LinkedIn identities for instance, and surprisingly inexpensively, but getting the names to match is a much bigger problem.

Bob: Sure, I wanted to say Worldcoin released their solution about a week ago, and they’re having exactly that problem, where it’s people… You might’ve done biometrics to register, and so that wallet now has… It’s only one human being attached to that wallet, but that wallet’s getting sold for $30 on the black market, because they’re not doing verification on sign in.

Jim: They’re not doing biometrics, right?

Bob: They’re doing biometrics on the way in, just to register once.

Jim: Gotcha.

Bob: And what we did is, we literally ended up with a selfie. So it was like, “Sure, we could collect DNA samples to make sure your real.” But to your point, that outweighs the value of the stakes, and so making it a selfie where you’re literally just going… Do login anyway, that was a pin, we’re there.

Jim: So that’s interesting. Now again, so I can understand the stack, if somebody went and did the deal with Elon to use this kind of verification, get a gold star rather than a pile of poo… Who would be the API that they called with the picture? Would it be you? Or would it be Everest, or would it be the foundation?

Bob: It would be the foundation if it’s just the identity solution.

Jim: Okay. And is there anybody marketing that from the foundation?

Bob: No, we literally have been just doing the vertical stack from Everest, and it’s just… If you open direct to consumer, from the foundation right now.

Jim: I gotcha.

Bob: Now talking about Elon just, and by the way, we even go back to Facebook and Libra, what they attempted to do, it’s actually worth mentioning… Facebook tried to do the financial stack but didn’t have the identity underneath, which is the Achilles heel that broke them. They couldn’t actually prove who was actually sending value, which is why they got shut down. Now Elon has two problems, he has an identity problem of like, “Hey, let’s make sure it’s not a bot, real human and do it for free.” And the 2nd thing he’s got to do is, he’s got to go build this financial stack, it turns out we actually have that already.

Jim: Of course, it’s not that hard to build a financial stack. I mean, if you’re worth $250 billion, it’s not that hard to build a financial stack.

Bob: It’s not that hard, it just takes a year or two.

Jim: Takes a while.

Bob: It takes a while, and the licenses.

Jim: So Elon should buy you? Is what you’re saying?

Bob: No, I think Elon should just license our stuff, and so should Meta.

Jim: Interesting. Okay, so it’s your stuff. But nobody is marketing the foundation directly as an API to service providers?

Bob: Right.

Jim: Probably somebody should? I have to think about that, how to best do that. Maybe I’ll set up a foundation that does that.

Bob: Look, the APIs are out, in terms of… Actually, to be fair, we’re doing widgets. We have a payment widget, so you can say, “I just want to embed fiat to crypto, crypto to fiat.” Right? There’s a widget you can call, just pull it up inside of a wallet. And we have an identity widget where you can do everything from basic, is it a bot or not? All the way up to a KYC.

Jim: Cool, well, let me run a real use case that I actually have, trying to find the good solution for it. And Coinbase used to be a good solution for this, but it isn’t anymore. Which is I want to pay a contractor with crypto, but he doesn’t know shit about crypto and doesn’t want to get entangled with crypto, but he would like me to… I said, “I am happy to send you 5,000 bucks of USDC, your problem to figure out how to get it into your bank account.” And he goes, “I don’t want to do,” he looked up Coinbase, he’s, “They’re under the investigation for the SEC.” And this and that and the other thing. “I don’t want to touch those fuckers.” So I said, “Okay.” So could he set up an account on Everest? Attach his Canadian bank account to Everest, and I could send him $5,000 of USDC, and it could then flow to his bank account?

Bob: Kind of-

Jim: Kind of?

Bob: … and I’ll tell you why. We are not plugged into the Canadian banking system to push across the Canadian banking rails, which is what he would need.

Jim: What we were saying, essentially?

Bob: It’s ACH equivalent. What we are adding, because we got tired of dealing with all of these choke points that the Trudeau’s continue to cut off, randomly, whenever they feel like. We can do push-to-card then. So if he has a debit card, we can push 5,000 to his debit card.

Jim: Oh, okay. I think he does, I don’t know… I’m sure he does have a debit card, that’s interesting.

Bob: That’s a feature we’re adding in the next couple of weeks.

Jim: The next couple of weeks? Unfortunately I need to solve this problem the next week. How about the U.S.? How about if the person was in the U.S.? How would that change things?

Bob: It wouldn’t. ACH is off for most crypto. We can do it in Europe, in and out of European bank accounts, no problem. But not the Americans, we’re doing push-to-card for them.

Jim: But you can do push-to-card in the States?

Bob: Yeah.

Jim: Can you do push-to-PayPal?

Bob: Not yet. That is closer than… That’ll be this year.

Jim: That would be a nice little intermediary. Push-to-PayPal, because they’re a pain in the ass, but then Venmo, and what’s the cash card thing? There’s a number of these virtual intermediaries that could be interesting ways to not have to touch the ACH 3rd rail.

Bob: Right.

Jim: Let’s think about ACH, it’s interesting, because in theory anyone should be able to use ACH, right?

Bob: In theory, go talk to all the folks in Wyoming who tried to get a digital banking license in the State, and then have the OCC go, “Thanks for playing, you don’t get a master Fed account, go home, we don’t care.”

Jim: We don’t care.

Bob: And it just-

Jim: So this is level two choke point, essentially. So again, they’re Trudeauing, but not for politics, but for other reasons-

Bob: Right.

Jim: … which is also annoying and not good.

Bob: I’ll go back to the Europeans and what they did with MiCA and where Everest is positioned. So we’re a crypto custodian in Europe right now, and this means we can custody Bitcoin, Ethereum, et cetera. We also do stablecoins, our own… What happens with MiCA is we can now add to our license and we can custody euros. So that’s, if you will… And we’ll be connected to SEPA, so that is everything custodia tried to do in Wyoming, and all those digital banks… We literally will be that in Europe, as soon as MiCA actually comes into force.

Jim: What is SEPA?

Bob: SEPA is the ACH equivalent in-

Jim: In Europe.

Bob: [inaudible].

Jim: Why don’t you tell… Again, I know all this shit, but why don’t you, for our listeners’ purpose, tell them what ACH does, and what SEPA does?

Bob: Sure. It connects all of the banks for basically overnight settlement. In case of ACH, it’s usually two to three days, so that if you send money from Bank of America to Wells Fargo, they’re literally transiting that money effectively over automated clearing house, ACH.

Jim: And users can use it, right? I can send 50 bucks from my bank with ACH, can I?

Bob: Yeah. I believe you can. By the way, there’s the equivalent in Europe, it’s SEPA. UK has FAST, I think is what they call it, and it’s real time.

Jim: And it’s very, very inexpensive. So inexpensive, the banks don’t even charge you for it, unlike the Goddamn credit cards or PayPal’s, that skim a couple of percent. It’s like a 100th of a percent or something crazy, crazy small.

Bob: There’s what they call open banking, especially in Europe, people got tired of paying a couple points on Visa and MasterCard, and they literally just go bank to bank all the time, because it’s frictionless, and all the banks are connected.

Jim: That’s a cool thing. All right, well we’ve talked about where things are so far, very exciting. Where are you going? What’s your vision for the next couple of two, three years? Beyond that, none of us can forecast anything. At least I can’t, poor dumb guy like myself. But what do you see out the next two or three years?

Bob: So I’ve taken on a dual path. One’s identity, one’s financial. On identity, we will continue to add more Web 2.0 ability to pull people in. That is, we’ve already said you can prove you’re not a bot and be anonymous on Twitter. Next up will be Meta with Facebook and Threads, et cetera. And we’ll keep adding that in so that if you’re… At the end of the day, the user owns the identity, and their account and their ability to share their attributes, and it’s not owned by the Twitter’s, Facebook, LinkedIn, et cetera, the world. So that’s a paradigm shift and it’s literally just… Here it is, for the user. Now that has to come along with some monetization strategy. So that’s our, what I call Everest Bank of the Future. We custody crypto, we custody fiat. We’re tokenizing stocks and commodities, which is… By the way, that’s incredibly hard to do.

Jim: I was going to say good luck with that. I mean really big, big boys have tried to do that.

Bob: By the way. I’ll actually walk you through it, and I’m sitting here in Malta today, having spoken with regulators and lawyers, et cetera, to actually figure out… And we’re doing this, you’ll see this from us. What did it take? You had to do? You have to be a crypto custodian, you have to have a broker dealer, MFIB equivalent license in Europe.

Jim: Which you don’t have?

Bob: Which our partner does have, and we do ride on that license.

Jim: Okay, cool.

Bob: You have to have a permission to chain, which basically means you can mint a token that represents Apple stock. You then have to have the logic of compliance around it, because if I want to send my… We’re literally going to mint a token of Apple, and go put it in somebody’s wallet.

Jim: This has been… People have been talking about this since 2017. It’s the obvious thing to do?

Bob: But here’s the whole thing. Now, if I want to actually send it to you, well, sending a security, which is effectively what this is… You need to actually have the compliance rules around it. Where, I can tell you what happens is, it comes back to us, the custodian, we check and make sure you’re not a terrorist. And then… It might feel on a UI level, I sent it directly to you. We scrubbed everything along the way. So all of that stack and the logic give you a sense… Tokenizing a security? Franklin Templeton tried this three or four years ago, and now at the very basic level, they’re tokenizing Mutual funds, but they’re not swapping crypto for it. They’re not letting it go peer-to-peer, they’re not letting it be used as collateral to go get a DeFi loan. It’s really complicated, and we did it. I’ve seen it, I’m actually going through the process of actually getting it ready to rollout.

Jim: That is cool. I mean, whoa, that’s very impressive.

Bob: So if you now connect those dots of here’s the identity and people are in… Let’s call it India, Brazil, not the U.S., we’re not touching the Americans yet. Places that are hard to reach, and they go, “Here’s my identity and I want to actually buy a share of Apple.” We can actually deliver a token to them in their wallet wherever they are in the world, and they can send it to their friends.

Jim: Oh, I just love this, because when I first heard the idea in 2017, I loved this, but nobody has ever done it.

Bob: Nobody’s done it. But here’s the interesting part of where we’re all headed. All the permission-less chains want this, and they cannot do it without going to jail.

Jim: And certainly not in the United States, and probably other places as well?

Bob: Anywhere were there are securities laws, which is 196 countries, I believe.

Jim: Now what’s a good country that doesn’t have securities laws?

Bob: I can tell you, here’s a good indication. Saint Kitts and Nevis, which is about as… Even they will not accept bearer bonds.

Jim: Too bad. That’s good. So Saint Kitts and Nevis? Which is an enjoyable place to hang out.

Bob: Alexander Hamilton came from there. I think there’s mild irony there, but I say, there’s a place that even they will not accept bearer bonds, which is what a tokenized security would be if you don’t track where it goes.

Jim: Gotcha. So a true trustless network with no tracking would violate the anti-bearer bond rules?

Bob: Which is everywhere.

Jim: Good. That’s very, very interesting, very, very interesting. So what else? Anything else that you want to talk about?

Bob: Look, it’s worth probably mentioning where I think we all end up, right?

Jim: Yeah.

Bob: As I put it-

Jim: Hopefully not jail?

Bob: All identity is getting digitized, let’s just start with that. That happens. As sure as the sun sets in the West, and the only question is… Who’s going to control it? And it darn well better be the user, because I think that-

Jim: It better be, but we know the big boys don’t want it to be the user?

Bob: We know they don’t. And by the way, if it’s not the authoritarian government, it’ll be the Web 2.0 guys, again-

Jim: Exactly. Last thing Facebook wants is a 3rd party cost, plus identity provider?

Bob: Right. Unless they’re making enough money?

Jim: Make it worth their while.

Bob: Yeah.

Jim: Now here’s, just thinking out loud here. Sorry, I do it all the time, and it’s worth every penny you’re paying for… Which is absolutely nothing. Which is, maybe the way you seduce Meta, is to give them the fast track to the rest of the stack?

Bob: Oh, yeah.

Jim: Duh.

Bob: I can tell you-

Jim: Right?

Bob: … I don’t think Meta, Twitter, LinkedIn, any of them actually want to stand in front of Congress and explain why they are housing biometric data in their databases.

Jim: Exactly.

Bob: They don’t want to.

Jim: They don’t have to do it, if they did the deal with you?

Bob: Right. They want the financial stack.

Jim: Exactly. That’s what I mean when I say the whole stack. They want the financial stack. So you go to them and say, “Oh, you get the identity over here in a way that you are blameless, because you don’t have any custody over it, and it’s magic. Even God couldn’t get it out. And you also get the financial stack to make money off of it.”

Bob: Exactly. For me, the foundation should be something akin to Wikipedia in a way. It’s a 3rd party trusted entity that can verify users, but it’s for the commons, and it’s owned and run as a non-profit.

Jim: Cool. All right, anything else before we wrap her up?

Bob: That’s all I have other than thank you and say, I always enjoy chatting with you.

Jim: It’s been a damn interesting conversation, it’s an area I’ve sort of followed out of the left corner of my eye, but this is a good update on what’s actually going on in the trenches, with real bullets.

Bob: It is trenches with bullets, it is.

Jim: Exactly, people talk about getting an MBA, “Oh, don’t be a pussy, go join a startup, get your MBA with real bullets.”

Bob: Yeah.

Jim: “And they’ll pay you. They’ll pay you. You won’t be paying some people who are fairly clueless idiots, $80,000 a year, they’ll pay you $80,000 a year and you’ll learn a shitload more.”

Bob: Absolutely.

Jim: All right, well thank you. That’s Bob Reid of Everest, and you can find more about all this stuff at the, or check out his company at