This week’s show guest is Federico Ast, blockchain entrepreneur, graduate of Singularity University, and founder of an exciting new company called Kleros. Kleros is an arbitration platform for the decentralized age. It’s a unique solution for resolving disputes if you have blockchain and crowdsourced specialists, while ensuring integrity and transparency of rulings. Kleros aims to democratize access to justice in emerging economies and other topics on blockchain and governance. Federico walks us through this interesting and unique application in the blockchain space and how his team at Kleros aims to disrupt arbitration.

Jay: Hi, Federico. How are you doing? Thank you so much for coming to the show.

Federico: Hi, Jay. Thanks for having me.

Jay: I’m pretty excited to have you on. You have a very unique and exciting background and a very interesting project that you’re working on in a space that is extremely, extremely popular and well sought-after right now. Personally, I’m not a blockchain or crypto expert by any means, so I’m 100% on board with learning as well, and I think my audience shares the same sentiment. For the audience listening in, perhaps you can give us a general introduction of yourself and your background.

Federico: Sure, Jay. My name is Federico Ast. I was born in Buenos Aires, Argentina. I studied economics at the university. Then I studied philosophy. When I was a teenager, I always wanted to be a writer. So when I finished university, I went to work for a newspaper, for the most important newspaper in Argentina and also one of the most important in Latin America.

I started working there in the online media sections. I was very young and there was a project there. I would call it like a Fast Company in Spanish — online website for business and entrepreneurs and worked there. And then I was there for a couple of years and very connected to innovation, and that’s what took me to blockchain. It was, I think, early 2010s and some people were starting to think about blockchain and bitcoin and these weird internet currencies. And that’s how I got connected to that.

I also was very interested in governance because, being from a country like Argentina, which has had lots of problems in governance by the government…like failed governance and a very serious currency crisis. In Argentina, it was one of the few countries in the world that managed to have a million-dollar inflation rate back in the 1980s. So that made people here very aware of the problems that bad currency can have, can create in a society. So this connection between governance and currency crisis made me become very interested in blockchain.

Then I got tired of working in the media and went back to school to do a PhD, and I studied collective intelligence, and I studied how people make decisions together. From all those experiences I had in life, I guess that’s what took me to what I am doing now. That is applying blocking technology to improve governance — in my case in particular, justice systems.

Jay: That’s fascinating. I know that you are also a graduate of Singularity University. Is that correct?

Federico: Yeah, that’s correct. I started working on my project, the use of blockchain for governance. So I published a paper in 2015, I think — a paper that… Basically, what it said… We have justice systems that are built with very old technology — technology around the 18th century, when people used horses, and they wrote letters to each other. And now we have the internet. What we have known as courts are not really working anymore.

I wrote a paper to propose how justice should work if we had to build it with the tools we have today and with the things we know today. I published that online, and people started to call me — people from MIT, from Princeton. Scholars. It was interesting. I was invited to a conference in Amsterdam to talk about this. It was a panel of blockchain and governance. And there I met a professor of Singularity. And he told me, “This is very interesting what you’re working on. The world needs people working on exponential governance. Why don’t you apply to Singularity?”

I knew Singularity, but I thought it was very far for me. What is Singularity going to do with this little man from Buenos Aires, right? But he said, “You should apply.”

Then I applied, and I guess they were drunk at the admissions committee because I got in. So I went there. In 2016, I spent six months there, living and studying and collaborating with another 79 people from 40 countries. Some of them, the most amazing people I’ve met in my life. Some of them doing biotechnology, robotics, VR, AI — whatever. And I got a chance to talk about my project and what I wanted to change in the world to the world’s brightest minds, I guess.

Jay: That’s fascinating. Singularity University is literally some of the smartest people in the world. There’s a metric they use. You have to solve a problem that’s tenth to the something degree that you have to be able to solve a problem to that magnitude. It’s just fascinating because I’ve met a handful of people that have come out of that program, and they’re just… The thinking is on a different level. So I think it’s fascinating, and I’m sure you’ve enjoyed the experience.

It’s interesting to me, Federico, because as someone who doesn’t have, really, a legal background, more of a media/publishing background, for you to go into this field, specifically around blockchain… I think a lot of people… I’ll take myself for example. I’m an investor, but I’m not necessarily in the blockchain space. But because I was an early-stage investor, I also heard about bitcoin and this sort of thing back in 2010-ish. But it was more of a very tech, geeky type thing. I would go to conferences, and people would be talking about it. Tech geeks would be talking about bitcoin and how it was going to change the world, but it never really moved the needle outside of that small, contained ecosystem. So for you to actually pursue something in this, was there a lightbulb moment when you put blockchain and governance together, and you were like, “Ah-ha. This is what I have to pursue”?

Federico: Look, I was interested in changing governance. I was not trying to do a bitcoin or blockchain startup. Something they always tell you at Singularity is fall in love with the problem, not with the solution. So I started to think about this topic before anyone was thinking about blockchain and governance. It was very, very early stage, and no one really knew how it would work, if it would work. So I was just in love with the problem, and then it just happened that blockchain was the solution to this problem.

If the solution to this problem had been AI or VR or whatever, maybe I would be doing a different technology. It turned out to be that blockchain gives us the technology that we need to tackle this big problem we have now. And that’s why I became interested in this technology.

The fact that I don’t have a legal background, I guess this could be more of an advantage than a disadvantage. Because the people in history who have disrupted all industries, all institutions, they usually didn’t come from that same industry. If you see who disrupted libraries, it was not like a master librarian doing librarian-ship better than existing librarians. It was Google. It was software engineering.

If you see the guy from Uber was not an expert in transportation. He was a software guy. And then the same with Airbnb… As Marc Andreessen says, “Software is eating the world.”

It’s also about something that Elon Musk says, so I think about the first principles. In the end, what’s a court system? It’s a number of guys trying to find the truth about some facts that happened in the world and if someone broke or didn’t break an agreement. So it’s more about finding the truth about the dispute. You don’t need to be a lawyer for that, I guess.

Jay: That’s very true. That’s a great point, Federico, because oftentimes, it is people that are outside of the niche or the space that gives you that variant perspective in, and you can actually see. A lot of times when you’re too neck-deep into the industry or just deep in the thick of it, then you don’t see, sometimes, what could be very obvious to outsiders — things like disrupting an entire industry.

So let’s get right into it. This is quite interesting. I’m excited to dive in. So let’s talk about Kleros and what exactly you’re trying to do there. Where did you come up with that name? And what exactly is the broad strokes, elevator-pitch type of idea? Let’s start there, and then we’ll drill down from there.

Federico: Good. Let me take you back to ancient Athens, the 5th Century before Christ. The Greeks had a different concept of justice than we have now. They didn’t have lawyers or judges, but they had the idea that ordinary citizens had a right to judge in a trial. So on trial days, every citizen who wanted to be on the jury, he went to the court with his ID. It was a bronze plate called pinakion. It was like a small bronze plate with the name on it. And then he put the plate into a big stone block with many slots called kleroterion. So that’s where the name comes from. So kleros is chance and terion, it means something like alter. So kleroterion is the alter of chance.

You put the ID there, and then comes official from the justice system and throws some white and black balls on a tube affixed on a side of the stone block, of the kleroterion. And if you have on your row a white ball, then you are going to be a juror. If you have a black ball, you’re going home, and you’re dismissed.

So that’s what the Greeks invented in order to have juries selected in a fair way and in a transparent way. So no one would tamper with the jury selection process.

So let’s take this to our day. This idea of the fact that ordinary people could be a judge in a dispute. Thank about I am in Argentina, so I want to hire some developer in Guatemala, for example, to do a website for me. So we do an agreement, and I pay him, and he does the website, and I don’t like it. I’m not going to Guatemala to sue him for a $500 or $1,000 website.

Imagine if I would, instead of paying him directly, I put the money into a smart contract. If everything goes right, the money is transferred. Everybody is happy.

But if there is a dispute, the money stays locked in a smart contract, and Kleros is going to select a jury of experts in website disputes, and these guys are going to analyze the evidence and vote who is right. And they are going to collect a fee for the work they did.

So Kleros is this autonomous organization, completely decentralized, that’s going to handle all the selection process based on the ideas that the Greeks had a long time ago — selecting experts in the issue at hand for adjudicating a dispute — and not having experts like professional lawyers and judges. But people from the community should have the right to decide. So that’s the main idea.

This is a very simple case, but Kleros can be used in lots and lots of different use cases. We can use this in insurance. You could use this in government, for example, in transit tickets. You can use this in all kinds of ecommerce disputes. Many, many different small claims Kleros can have the possibility of solving them much better than the existing solutions.

Jay: Thanks very interesting. Thank you for the basic introduction and explanation because it helps me understand exactly what you’re after here. Just to recap, it’s ancient Greece. Is that right? And how did you guys even find this original scenario where the people could come, and they would use their pinakion bronze plate and get selected for basically a jury duty type scenario? How did you guys find this? Did you research it? Were you a historian or someone on your team thought of it?

Federico: Actually, remember I am a philosophy major, so I have read about the Greeks long ago. Of course, at the moment that I read Aristotle and he was writing about the Athenian constitution, I didn’t pay too much attention to how the jurors were selected. But somehow, when you start working your path, you’ll see in the past, and then the dots start to connect, and I guess that’s where the idea came from initially, of course. And then I did a lot of research and, of course, it’s not that Kleros works exactly as the Greek system worked, but it is quite heavily inspired in the main idea of how the Greek system of justice worked. But I guess it comes from my university education a long time ago.

Jay: I think that’s great. That’s fascinating how you can draw inspiration from that. Very cool. So let’s walk through that simple example again, just so we have a live idea, the audience has a very good idea. Like you said, let’s say, let’s say myself, Jay Kim, wants to have a website done. I want to get my website redone, and so I hire a web developer somewhere in another country. Let’s call it Indonesia, because I like this person’s… I don’t know. I go to his website. I see his work. I like his style, so  I want him to revamp my website. So he does the thing. I make the payment. And then all of a sudden, I realize afterwards when the project’s complete, that he forgot to add a few things, let’s say. And so this is where the problem usually begins. And this is a small job — maybe a thousand US dollars. Nothing big.

Immediately in my mind, what pops up, Federico, is right now, there is social proof-based ratings that a lot of companies are using — up votes or user reviews for things like Uber and Airbnb. And that directly affects a service provider or a consultant’s ratings which then you would expect that to negatively affect their revenue going forward or their business going forward.

Now you’re saying that with your platform, with your solution, basically you can then go to a third party who will then organize a group of jurors, so to speak, online, or specialists, to look into this case specifically. And then, I guess, the collective votes. And then when the decision comes down, then the jurors get compensated?

Federico: That’s correct. Kleros, what is does is it selects the right jurors with the right skills for the specific type of dispute you need to solve. I didn’t dig very much into how the juror selection process works, but this is where the magic happens.

In Kleros, assigned jurors are anonymous. So you don’t have to… Because if you need a juror who has experience being a juror before and you know his reputation, what happens? You end up having a couple of jurors with very high reputation. And so maybe these guys are going to ask for a lot of money to solve this dispute because they are more trusted and have the problem of lots of people who want to start being jurors, but they don’t have any experience yet. Right? So they don’t have reputation points. And how can they start? It’s a very big entry barrier for them.

If we can develop a system that we can adjudicate a dispute using jurors that don’t have maybe this proven experience, you lower the barrier to entry to being a juror, then you have a much larger pool of jurors. This website dispute about the guy from Indonesia, maybe if you wanted to go to the proven jurors, then you have like 100. If you develop a system that allows everyone having this expertise to be a juror into this kind of dispute, then you’ll have one million potential jurors. And if you have one million potential jurors, you’ll have lots of people to select. And so the supply of arbitration services is going to be so much higher than the cost of arbitrating a single dispute will go very, very low. And I think this cost will go below some threshold after which it becomes, for the first time, possible to arbitrate disputes that before, you just had to write it off because you could not arbitrate this dispute for the website with old technology because if you go to court in Indonesia for $1,000, it doesn’t make too much business sense.

But if the cost of adjudicating the dispute goes to $10 or 15 or 20 or who knows, then it makes sense to do it. That’s, I guess, when the world changes because you would think also about how different industries are being reconfigured now.

What we think about blockchain is going to be true. We’re going to have in the next five years, maybe, some ecommerce websites but completely decentralized — a platform that’s like an eBay without the eBay, Uber without the Uber, Airbnb without the Airbnb. So all co-operatives owned by the users. These co-operatives are not going to have a customer support service because they just do the one thing. So bitcoin does not have the chargeback system that credit cards have. Each part of the ecosystem has to build one piece of the puzzle.

What I imagine as the future is like the Uber decentralized, Airbnb decentralized, and et cetera centralized are going to outsource their solution to a player that is going to be very effective doing this, and I hope this is going to be Kleros.

Jay: Very interesting. Going back to our example here, Federico, if you don’t mind… Let’s say… I’m not sure if you guys are at this stage yet of development, but how do the… Let’s say, in my dispute, how would the jurors, so to speak, be selected? Can you just volunteer, kind of like bidding on a freelance gig at a site like Fiverr or Upwork or something like that? Or are you selected, so to speak?

Federico: It works like this. Actually, we self-select into a court where you think you have expertise to solve disputes. For example, imagine this guy from, I guess, Peru, he works in a website design company. During the night, in his downtime, he may want to make some extra money by arbitrating disputes in Kleros. So he needs to have this token that is going to give him the possibility of being a juror in disputes.

So I am this guy from Peru, and I have this token, and I activate a token into a court handling website disputes. So imagine 3,000 other potential jurors deposit the token into this court. So then there is this random machine that’s going to select maybe seven jurors out of the 3,000. And so these seven guys are going to have the right of arbitrating the dispute. And this means to right to analyze the evidence, vote on the outcome, and then collect an arbitration fee for the work. So that’s how jurors are incentivized to participate in the platform because they actually make money by providing the expertise in solving disputes from other people.

How do you incentivize the people? Because here, the biggest risk is having the juror voting randomly, whatever, just to collect the fee and leaving fast of the platform. So here is where the magic happens because this is where we use game theory incentives in order to have jurors arbitrate in the cases honestly.

This is based on, again, theoretical principle called the Schelling Point. It was invented by Thomas Schelling, a mathematician, and he won the Nobel Prize of economics of 2005. The thing he developed is a kind of game. You know the prisoners’ dilemma about the two prisoners…? It kind of works like that.

Imagine if you have seven jurists voting on the same type of dispute or the same dispute and having the same skillset. So we would expect these guys to have the same decision to the dispute because they have the same skills. They have the same evidence to analyze. So we would expect them to vote in a similar way.

So imagine you have six of them voting A is the winner and one of them voted B is the winner. So what can you assume about the guy who voted B?

Jay: You can assume that he probably wasn’t… If the standard is the same, then maybe he didn’t put as much work into it to come up with his conclusion.

Federico: That’s correct. That’s how the Schelling Point works. So this guy, remember, he had deposited a token in order to be drawn as juror. So this guy that we can assume that he did not do his job properly is going to lose that token. And this token is going to be redistributed to the other six jurors that voted in a coherent way.

Since every juror is going to vote independently from the others, we expect them to vote for the truth, for the truth in this type of dispute, for what they think according to the skills that they have and the evidence they see, should be the winner in this dispute. So that’s the magic of the game theory which comes from the economic discipline. It doesn’t come from law. But it has an impact, when you apply it to dispute resolution. I guess that is why we are not lawyers here, but we are trying to apply logics from other disciplines into solving disputes.

Jay: Right. And what is the magic number of jurors working on one particular case? Is it seven? Obviously, it has to be an odd number.

Federico: That is a very big question, and we still do not have an answer, but that’s an important research point that we have. Remember we’re mostly a science company. We are developing social technologies. We actually have a guy on the team, William, who is in Toronto, he’s a mathematician, and he’s doing exactly this type of research — figuring out what’s the exact number of jurors that we want to have to solve disputes. Because there are two forces at odds here.  

We want to have as small number of jurors as possible because that would lower costs. But if you have a low number of jurors, then it may be more difficult to figure out who is the guy who is voting differently because if you only have like three jurors — two to one result — this guy who voted different from the others… Is it really that he didn’t take a look at the evidence, or is it really that the case is not very clear cut. So he still might be punished unfairly if we take his token.

So if we have twenty-five jurors, then you have, I guess, twenty-two voting for one thing and three voting differently. So in this case, it’s more clear that these three voted differently. So what we’re trying to understand is what’s the optimal number of jurors at which we can have a great verdict at the lowest possible cost. That’s what we want to optimize.

Jay: That’s interesting. Obviously, there could be variance between cases and sectors or specific cases of different industries and this sort of thing. I’m sure you guys will have to dig into that. I guess there would be variance in compensation as well. I mean, if it’s something that is pretty crystal clear and easy type case like a website dispute versus potentially something much, much more involved like something on the corporate level or something much more complicated involving a much higher level of expertise, I guess the reward would be adjusted accordingly?

Federico: Yeah, of course. This, in the end, is like a two-sided marketplace. On the one side, you have a demand of arbitration services. So this website dispute demands expertise in websites for adjudicating. But if you have disputes about nanotechnology, whatever, the amount of jurors that maybe have the expertise to arbitrate this is going to be much lower. So the fee that you will have to pay for jurors to adjudicate a dispute would be higher.

At this moment, we are focusing mostly on very simple use cases, very simple disputes. I told you the website one. Another one could be insurance. So you have like two cars who have a car crash. Company A against company B. So who was guilty for this car crash? Who has to pay? So you have a jury of people who understand transit and regulation and so, seeing the evidence, expert witness, who was guilty… So we are still, at this point of very early technology, just going for use cases that have two possible decisions, like A or B, where there are no very gray areas. Because when you start to complicate…

Imagine solving a complicated corporate lawsuit in Kleros. Here you may have more actors. You can have… There’s not only two parties but maybe five parties. And so the evidence is not clear cut. In principle, the technology should work for that. But this is like the early days of the internet. Let us send an email for now, and then we will see if in the future we can start to stream video. But for now, we are starting with use cases that are simple.

Do you know why? Because lots of the problems that people have in everyday life in their economic relationships are simple like this one. If we can help this guy who builds websites, that’s great for a starter, and then we will start to focus on more complicated disputes.

Jay: Absolutely. I have a much better understanding now, Federico, after just spending a few minutes, the last several minutes, walking through these scenarios with you. You’re doing a great job of explaining it to us, our audience as well. So thank you. I appreciate that.

I think it’s kind of one of these things where, on the small scale, I can understand it. And then on the big, large scale, I see the huge potential that this could happen in all parts of life. But to get from here to there…I guess that’s for you and your team to figure out.

Federico: That’s our job. Yeah.

Jay: It seems way, way above my level of comprehension.

But having said that, you did mention a little bit about your team member that was researching what the optimal number of jurors are. Maybe you could tell us a little bit more about your team there at Kleros and how you pulled them together to work on this exciting project.

Federico: Yeah, sure. Kleros was born one year ago because we had three guys from different parts of the world that, actually, were working on similar stuff at the same time but without knowing each other. I told you I was doing research and became interested in the use of blockchain and the use of crowdsourcing in justice systems for a long time. There was this guy called Clément and the other guy called Nicolas who were in France, in Paris. And they were doing the same type of research, and they presented at a Hackathon some ideas that they had.

One of the jurors of the Hackathon actually knew me and knew what I was working on. And she told Clément, “Why don’t you talk to Federico, and why don’t you see if you can collaborate?” So we talked, and we were passionate about the same things. We had very complementary skills, and we started working together. This collaboration that started one year ago now is a team of 10 people. It’s a very distributed team because I’m in Buenos Aires; Clément is French, but he’s in Portugal; Nicolas, the other cofounder is French, and he’s in Paris. So we have a communications manager in Peru. We have two developers in the US — one in Oregon; one in L.A. We have the cryptoeconomics researcher in Toronto. We have a PR manager in Germany. We have our design lead who is in — what’s his country? — Slovenia. We have the community manager who is from Scotland, but he’s in Serbia. I’m sure I’m forgetting about someone, but that’s how the team… It’s distributed.

Jay: A fully decentralized team.

Federico: Yeah. We walk the talk, you know. It’s a very interesting new model for building companies because I have not even met some of the people on the team. So next week we’re going to Paris, and we’re going to have our first full-team meeting. So I guess some of them, I’m going to just meet them for the first time. But the thing is, it doesn’t matter because it works. So if you go to our GitHub, you can see that… It’s working. There’s a proof of concept that’s already working, and we are already doing some very powerful partnerships with different companies. When you have people motivated and you have your vision of what you want to build, you can make it work. It doesn’t matter where you are.

Jay: That’s right. I love the way that we’re able to do that now because of the internet. It’s something that you can’t even imagine maybe 15 years ago, that you could literally build companies from all around the world, a team, working on it together, that some of the people you might have never met. But I’ll tell you this much, Federico — and I know this first hand because I have several business partners. I do projects around the world as well. In many ways, we’re much more efficient being in our own time zone. There’s no frivolous meetings, any of this sort of thing. Literally, we’re just working, working, working, and we’re on Slack, and we’re talking. We do a few conference calls here and there but mostly Slack chat and just working, grinding through it. So I think it’s great. And it’s just a preview and precursor to what the world is becoming, which I love.

Let’s move into my next question, which you kind of alluded to when you were explaining the idea of Kleros, which is the pinakion bronze plate or coin that the ancient Greeks used to go in and submit to try to get this jury duty, so to speak. Let’s talk about your latest project that you’re working on with relation to Kleros and what you’re trying to do there.

Federico: The jurors are going to be selected by use of the token, so we need to put the token in the hands of the people, of the users, for them to have it and so can deposit it for being selected as jurors. So we’re planning to do a token sale around April, probably at the end of April. We’re going to use a new method of token sale called Interactive Coin Offering that was developed by Vitalik Buterin and Jason Teutsch — he is one of the founders of TrueBit, a very important blockchain company — because this method is more efficient for having more people being able to buy the token. Because you don’t want tokens going only into the hands of the big whale companies, big whale investors. We have to remember at all times that token models have tokens for a reason, and this reason is because they play an important incentive role in the platform. That’s why we need to do a token distribution, and this is the way we think is going to be more efficient for our goals.

Jay: Can you explain quickly how it differs from a traditional initial coin offering?

Federico: Yes. In the traditional coin offerings, you are the investor, and you can either select how many tokens you want to have… You can be diluted. You don’t get to know what percentage of the platform you’re going to own or the price you’re going to pay.

In this new method, you can choose your own personal haircut. So you select a lower haircut at the end, the one that ends up being selected by the whole market, then you are kicked out of the token sale. But you have more certainty of what you’re going to pay and for what part of the token percentage that you’re going to pay that.

So it’s a new method that we are still analyzing exactly how it works. It has not been done at this moment by any company, but we think that it can solve many of the problems that tokens sales had in the past. For the moment, it’s only a paper by Vitalik and Jason. But we think it can solve a bunch of problems of token sales, and we are willing to experiment with it because it can work very well.

Jay: It’s almost like a blind bidding type scenario where you put your maximum price, so to speak, and then if you’re below the threshold or the average then you’re out. Is that the general concept?

Federico: Yeah. You can say it that way. I guess it’s much simpler to explain it in that way. There are multiple rounds where you can come back and adjust your bidding. But the general idea is that one.

Jay: I see. Okay. Interesting. So that will be interesting to see if you guys actually end up going on that route. In that scenario that you gave us, it’s actually that utility token where, if I’m someone of expertise and I want to join an arbitration panel, I would deposit this token into the system, so to speak. And then if I get selected, then I would arbitrate a case and get awarded… I guess you get your deposit back and then you get awarded on top of that if you vote honestly. Right?

Federico: Yeah, that’s correct. You, as a juror, you get two types of rewards. One reward, you get that in Ether because you just are paid arbitration fees. It doesn’t matter how you vote. Even if you vote without even taking a look at the evidence, you will still be awarded that fee. But on top of that, you have this token system. If you voted differently from the others because you didn’t take a look at the evidence or things we discussed before, you’re going to probably vote in a different way from the others because you have these other six guys who are experts in websites that did take a look at the evidence and probably would have the same decision. And you are going to have a different decision. So you are going to be the only one who loses the token. And these guys are going to split your token among them. So these six guys are going to collect their arbitration fee and, on top of that, they’re going to collect one-sixth, one-seventh of your token that you lost.

It’s important for the platform to have the token because it’s the only way to generate the right incentives for jurors to participate. If we didn’t have the token, then we could have the problem of jurors voting randomly. Anything. So it will work. So it’s important that we have it for the incentives being right for voting.

Jay: And there will be a limited amount of tokens, I gather?

Federico: Yeah. Correct. It’s going to be… The exact number we’re still feeling out because we want to do it as simple as possible for jurors to use the tokens. So maybe interested of thinking about 0.00001 token, maybe to think about two tokens. But it’s going to be a fixed amount.

Jay: It’s interesting because, man, this space has just exploded, and I think that there’s such a disconnect between education and basically people that have jumped into the space for greed, basically, trading some of these tokens and these ICOs. A lot of these companies… I’m not an expert, like I said. And I haven’t really followed it that much, but I’ve looked at some of these companies, and there is a massive disconnect between the token that they’re issuing and the underlying business. A lot of them, they don’t even need a token, and I don’t know why they’re… I guess it’s a money-raising gimmick or something. It’s just strange to me that these people actually have these ICOs, and they’re able to raise millions of dollars, that people jump in and jump out of them, and they make money too, and no one knows why. So it’s refreshing. My point is it’s refreshing, Federico, that you actually have a proper business that has a proper token that is useful on that platform. And I’m excited to see it live and work.

As we look to wrap up here, Federico — and thanks again for your time. It’s been such an enlightening and engaging conversation we’ve had. I’m fascinated in Kleros, and I’m really going to… I think my audience is going to keep track of the work that you guys do. So just a last few couple of questions. I have to ask you, as someone that’s in this blockchain space, how do you see the next 12 to 18 months playing out in this? And I’m not talking “What’s the price of bitcoin going to be?” None of that. I’m more interested in what you think about the bigger picture landscape. Right now there just seems a lot of noise. It seems like there’s a ton of things that are coming online, and I’m going to go back to that analogy that you said where you talked about the problem, not the solution, focusing on that. And I feel like a lot of people right now are trying to reverse engineer a problem based on this blockchain solution when it’s not necessary. And so I’m just curious to hear your thoughts. How do you see this space evolving in the next 12 months?

Federico: I think that we have seen this picture before. Right? This is not very different from the 1990s and the internet bubble. So suddenly, we had this new technology called the internet that could connect people everywhere and send data at a very low cost. And so people started to think this is a hammer we can use for every nail. So you started to see companies selling pet food on the internet and having a fleet of trucks everywhere like Pets.com and some other very dumb business models raising millions of venture capital money and then it went down, and lots of them went bankrupt. But still, you still had some Googles, some Amazons, and some other companies that actually did change the world.

I think that this moment of the industry that we are in now is not different from there. So you have this new technology, blockchain. So we saw that it can be used for making payments, but nobody really knows how it works and where it can be used. So lots of people just see the hype, and they go and put money everywhere. And this drives valuations to pricey levels.

Eventually, you know who is going to survive? The guys who are going to solve a real-world problem for real-world people using blockchain as a tool and not as an end in itself. That’s how it always works in business. Scammy projects, I guess, can fake it for a while, but in the end, there is no market for what they are doing, so it’s not going to work. So I think in the coming 12, 18 months, we will start to see real use cases of blockchain technology. We know it can be used for payments, but what about smart contracts? And where does this work?

I guess we’re going to start to move into the slope of enlightenment in blockchain and start to see real use cases, and I hope one of these real use cases is going to be one that Kleros has proposed.

Jay: I hope so too. I absolutely think that this one is one that needs to survive because I can see the clear use case for this and how it will vastly improve our world. Again, I think we’re all looking forward to tracking your progress. Definitely, I’m going to keep my eye out on Kleros.

I know you’re in Hong Kong next month actually. What sort of things do you have in the pipeline? I think you’re doing a little conference tour, going to be speaking at some things. What do you have in the pipeline?

Federico: I’m going to Hong Kong on the 19th of March until the 24th. And I’m going there for a conference called Token 2049. It’s a blockchain conference — very important, very good speakers. So I’m going to go there to speak there and then also to have some meetings with blockchain communities there — blockchain companies, maybe potential partners for us. It will be my first time in Hong Kong, and I’m very excited about that.

Jay: Fantastic. I’m looking forward to sitting down with you and spending some time. Are you going to be elsewhere in Asia while you’re out here?

Federico: Yeah. It’s a roadshow. We’ll go to Korea first and then Hong Kong and then Singapore, which also has a quite powerful blockchain community. So that’s the Asia roadshow.

Jay: Absolutely. Federico, I’m going to make sure that all your links and stuff are linked up and stuff in our show notes here for the audience so we can go back and reference some of the things that we talked about. But in the meantime, what’s the best place that people can find you or follow you, learn a little bit more about Kleros or maybe learn a little bit about the offering that is coming up?

Federico: You can visit our website at Kleros.io. That’s our website. And then if you want, you can join our social media channels. You can come to our Slack, Telegram, etc. So you can stay in tune with everything that is coming from us.

Jay: Fantastic. Federico, thank you again. It’s been an enlightening discussion. I wish you the best of luck. We’re definitely going to follow your success in the future. So best of luck, and thanks again for your time.

Federico: Thank you, Jay, and I hope our Asian friends like the project and give us some support so we can all move forward in this global movement.

Jay: Absolutely. Take care now.

Federico: Bye-bye.