Fred Krueger, WorkCoin | Blockchain Unbound 2018

(Latin music)>>Narrator: Live, from
San Juan, Puerto Rico, it’s theCUBE! Covering Blockchain Unbound. Brought to by Blockchain Industries. (Latin music)>>Welcome back to our
exclusive Puerto Rico coverage, here, this is theCUBE
for Blockchain Unbound, the future of blockchain cryptocurrency, the decentralized web, the
future of society, the world, of work, et cetera, play,
it’s all happening right here, I’m reporting it, the global
internet’s coming together, my next guest is Fred
Krueger, a founder and CEO of a new innovative
approach called WorkCoin, the future of work, he’s tackling. Fred, great to see you!>>Thank you very much, John.>>So we saw each other in Palo Alto at the D10e at the Four
Seasons, caught up, we’re Facebook friends,
we’re LinkedIn friends, just a quick shout out to
you, I saw you livestreaming Brock Pierce’s keynote today, which I thought was phenomenal.>>Yeah, it was a great keynote.>>Great work.
>>And it’s Pi Day.>>It’s Pi Day?
>>And I’m a mathematician, so, it’s my day!
(Fred laughs)>>It’s geek day.
>>It’s geek day.>>All those nerds are celebrating. So, Fred, before we get into
WorkCoin, I just want to get your thoughts on the
Brock Pierce keynote, I took a video of it,
with my shaky camera, but I thought the content was great. You have it up on Facebook on
your feed, I just shared it, what was your takeaway of his message? I thought it was unedited, obviously, no New York Times spin here, no–>>Well first of all, it’s very authentic, I’ve known Brock 10 years, and, I think those of us who
have known Brock a long time know that he’s changed. He became very rich, and he’s giving away, and he really means the best. It’s completely from the heart, and, it’s 100% real.>>Being in the media
business, kind of by accident, and I’m not a media
journalist by training, we’re all about the
data, we open our datas, everyone knows we share the free content. I saw the New York
Times article about him, and I just saw it twisted, okay? The social justice warriors
out there just aren’t getting the kind of social justice that
he’s actually trying to do. So, you’ve known him for 10 years, I see as clear as day, when
it’s unfiltered, you say, here’s a guy, who’s
eccentric, smart, rich now, paying it forward?
>>Yep.>>I don’t see anything wrong with that.>>Look, I think that the–
>>What is everyone missing?>>There’s a little
jealously, let’s be honest, people resent a little bit,
and I think part of it’s the cryptocurrency world’s fault. When your symbol of
success is the Lamborghini, it’s sort of like, this
is the most garish, success-driven, money-oriented crowd, and it reminds me a little bit of the domain name kind of people. But Brock’s ironically
not at all that, so, he’s got a–>>If you look at the ad tech world, and the domain name world, ’cause they’re all kind of tied together, I won’t say underbelly, but fast and loose would be kind of the
way I would describe it.>>Initially, yes, ad tech, right? So if you look at ad tech back in say, I don’t know, 2003, 2004, it
was like gunslingers, right? You wanted to by some impressions, you’d go to a guy, the guy’d be like, “I got some choice impressions, bro.”>>I’ll say a watch too while I’m at it.>>Yeah, exactly.
(John laughs) That was the ad tech world, right? And that world was basically replaced by Google and Facebook,
who now control 80% of the inventory, and it’s pretty much, you go to a screen, it’s
all service and that’s it. I don’t know if that’s
going to be the case in cryptocurrencies, but right now, initially, you sort of have this, they’re a Wild West phenomenon.>>Any time you got alpha geeks, and major infrastructure
application developer shift happening, which is happening, you kind of look at these
key inflection points, you need to kind of
have a strong community self-policing policy, if you
look at the original DNS days, ’cause you remember, I was there too, Jon Postel, rest in peace, godspeed, we all know what he did, Vint Cerf with TCP/IP, the core dudes, and gals, back then, they were tight! So any kind of new entrants that came in had to prove their worth. I won’t say they were the most welcoming, ’cause they were nervous
of people to infect the early formation, mostly
they’re guys, they’re nerds.>>Right, so I think if you
look back at domain names, back in the day, a lot of
people don’t know this, but Jon Postel actually kept the list of domain names in a text file, right? You had basically wanted a domain name, you called Jon up, and you said, “I’d like my name added to the DNS,” and he could be like, “Okay, let me add it “to the text file.” Again, these things all
start in a very sort of anarchic way, and now–
>>But they get commercial.>>It gets commercial, and it gets–>>SAIC, Network
Solutions, in various time, we all know the history, ICANN, controlled by the Department of Commerce up until a certain point in time–>>Uh, ’til about four years ago, really.>>So, this is moving so fast. You’re a student of the industry, you’re also doing a
startup called WorkCoin, what is the formula for
success, what is your strategy, what are you guys doing at WorkCoin, take a minute to explain
what you guys are doing, your team, your approach–>>So let’s start with the problem, right? If you look at freelancing, right now, everybody knows that a
lot of people freelance, and I don’t think people understand how many people freelance. There are 57 million people
in America who freelance. It’s close to 50%, of us, don’t actually have jobs,
other than freelancing. And so, this is a slow moving train, but it’s basically moving in the direction of more freelancers, and we’re
going to cross the 50% mark–>>And that’s only going to get
bigger, because of virtual work, the global workforce, no boundaries–>>Right, and so it’s
global phenomena, right? Freelancing is just
going up, and up, and up. Now, you would think in this world, there would be something like Google where you could sit there,
and go type patent attorney, and you could get 20 patent attorneys that would be competing for your business, and each one would have their price, and, you could just click, and hire a patent attorney, right? Is that the case?
>>No.>>No, okay.
>>I need a patent attorney.>>So, what if you have
to hire a telegram manager for your telegram channel? Can you find those just by
googling telegram manager, no. So basically–
>>The user expectation is different than the
infrastructure can deliver it, that’s what you’re basically saying.>>No, what I’m saying
is it should be that way, it is not that way, and the
reason it’s not that way is that basically, there’s no economics to do that with credit cards, so, if you’re building a marketplace where it’s kind of these
people are find each other, you need the economics to make sense. And when you’re being
charged 3.5% each way, plus you have to worry about chargebacks, buyer fraud, and everything else, you can’t built a marketplace
that’s open and transparent. It’s just not possible. And I realized six months
ago, that with crypto, you actually could. Not that it’s going to
be necessarily easy, but, technically, it is possible. There’s zero marginal cost, once I’m taking in crypto,
I’m paying out crypto, in a sort of open marketplace where I can actually see the person, so I could hire John
Furrier, not John F., right?>>But why don’t you go to LinkedIn, this is what someone might say.>>Well, if you go to
LinkedIn, first of all, the person there might
not be in the market, probably is not in the market
for a specific service, right? You can go there, then
you need to message them. And you just say, “Hey,
your profile looks great, “I noticed you’re a patent attorney, “you want to file this patent for me?” And then you have to negotiate,
it’s not a transactional mechanism, right?
>>It’s a lot of steps.>>It’s not transactional, right? So it’s not click, buy, fund, engage, it just doesn’t work that way. It’s just such a big
elephant in the room problem, that everybody has these problems, nobody can find these good freelancers. What do you end up doing? You end up going to Facebook, and you go, “Hey, does anybody know
any good patent attorneys?” That’s what you do.
>>That’s a bounty.>>Well, it’s kind of, yeah.>>It’s kind of a social bounty. “Hey hive, hey friends,
does anyone know anything?”>>It’s social proof, right? Which is another thing that’s
very important, because, if John, if you were–
>>Hold on, take a minute to explain what social
proof is for the folks.>>Social proof is just
the simple concept that it’s a recommendation coming from somebody that you know, and trust. So, for example, I may not be interested in your video services, John,
but I know you, and I am in the business of a graphic
designer, and you’re like, “Fred, I know this
amazing graphic designer, “and she’s relatively cheap.” Okay, well that’s probably
good enough for me to at least start looking at her work, and going the next step. On the other hand, if I’m just looking at 100 graphic designers, I do not know.>>It’s customized contextual data, around a specific transaction
from a trusted source. So you socially, are
connected to, or related.>>It, sort of, think about this, it doesn’t even have to
be a source that you know, it could be just a source
that you know of, right? So, to use the Brock example again, Brock’s probably not going
to be selling his services on my platform, but what
if he recommends somebody, people like giving the
gift of recommendation. So Brock knows a lot of people, may not be doing as well as him, right? And he’s like, “Well, this
guy could be a fantastic guy “to hire as social media
manager,” for example. Helping out a guy that
needs a little bit of work.>>And endorsement’s a major thing.>>It is giving something, right? You’re giving your own brand, by saying, “I stand behind this person.”>>Alright, so tell me about
where you are with WorkCoin, honestly, people might
not know your background, if you check him out on
LinkedIn, Fred Krueger, mathematician, Stanford PhD, well-educated, from a
centralized organization, like Stanford, has a good reputation, you’re a math guy, is there math involved? Obviously, Blockchain’s math
related, you got crypto, how are you guys building this out, share a little bit of, if you can, show a little leg on the tech–>>The tech is sort of simple. So basically the way it is, is right now it’s built in Google Cloud, but we have an interface
where you can fund the thing, and so it’s built, first of
all, that’s the first thing. We built it on web and mobile. And you can basically buy WorkCoins from the platform itself, using Ethereum, and also, we’ve integrated
with Sensei, a different token. So, we can integrate
with different tokens, so you’re using these
tokens to fund the coin, to fund your account, right? And then, once you have
the tokens in your account, you can then buy services
with them, right? And then the service provider, the minute they finish delivery of the service, to your expectation, they get
the coin in their account, and then they can transfer
that coin back into Ethereum, or Bitcoin, or whatever, to cash out.>>Okay, so wait, now
that product’s built, has the coins been issued? Are you guys doing an ICO? Are you raising money?>>So we’re in the middle of an ICO–>>Private?
>>Private, only for now. So we’ve raised just under $4,000,000–>>Great, congratulations.>>I have no idea if that’s good or not–>>Well, it’s better than a zero (laughs).>>It’s better than zero, right? It is better than zero, right?>>So there’s interest obviously.>>Yeah, so look, we’ve
got a lot of interest in our product, and I
think part of the interest is it’s very simple. A lot of people can go, “I
think this thing makes sense.” Now, does that mean we’re going
to be completely successful in taking over the world, I don’t know.>>Well, I mean, you got
some tailwinds at your back. One, the infrastructure in e-commerce, and the things that you’re going after, are 20-year-old stacks. Number two, the business model, and expectation of the users, is shifting radically, and
expectations are different, and there’s no actual product
that does it (laughs), so.>>So a lot of these ICOs, I think they’re going to
have technical problems actually building into the specification. ‘Cause it’s difficult,
when you’re dealing with the Blockchain, first of all, you’re building on some
movable platform, right? I met some people just today who are building on
Hash-Craft, now, that’s great, but Hash-Craft is like
one day old, you know? So you’re building on
something that is one day old, and they’ve just announced their coin five minutes ago, you know. Again, that’s great, but
normally as a developer myself, I’m used to building on
things that are years old, I mean, even something that’s
three years old is new.>>This momentum going
on, that someone might want to tout Hash-Craft for
is, ’cause it’s got momentum–>>It’s got total momentum.>>They’re betting on an ecosystem. But that brings up the other thing I want to get your thoughts on, because we’ve observed this at Polycon, we’ve been watching the
industry landscape now, onto our 10th year,
there’s almost an ecosystem stake in the ground. The good news is, ecosystem’s developing. You got entrepreneurs, you got projects, you got funding coming in, but as it’s going to be a
fight for the ecosystem, because you can’t have zillion ecosystems, eventually they have to be–
>>Well, you know–>>Or can you?
>>Here’s the problem, that everybody’s focused
on the plumbing right now, right, the infrastructure? But, what they should be
focusing it on is the app. And I’ve a question for you,
and I’ve asked this question to my advisors and investors,
which are DNA Fund, and I say–
>>Let’s see if I get it right, it’s a test here on the
spot, I love this, go.>>Okay, so here’s the question, how many, in your wallet right now,
on your mobile phone, show me how many Blockchain
apps you have right now.>>Uh, zero, on my phone?
>>Okay, zero.>>Well I have a burner phone
for my other one, so (laughs).>>But on any phone, on
any phone that you possess, how many Blockchain apps
do you have on your phone?>>Wallet or apps?
>>An app that you–>>Zero.
>>An app, other than a wallet, zero, right? Every single person I’ve
asked in this conference has the same number, zero. Now, think about this, if you’d–>>Actually, I have one.
>>Uh, which one?>>It’s called Cube Coin.>>Okay, there you go, Cube Coin. But, here’s the problem,
if you went to a normal–>>Can I get WorkCoin right now?>>Yeah, well not right now,
but I have it on my wallet. So for example, it’s in test flight, but my point is I have
a fully functional thing I can go buy services, use the
coin, everything, in an app. I think this is one of the things–>>So, hypothetically,
if I had an application that was fully functional,
with Blockchain, with cryptocurrency, with
ERC 2 smart contracts, I would be ahead of the game?>>You would be ahead of the game. I mean, I think–
>>Great news, guys!>>And I think you absolutely are thinking the right thinking, because, everybody’s just looking
at the plumbing, and, look, I love EOS, but, it’s sort of a new operating
system, same as Hash-Craft, but you need apps to run on your thing–>>First of all, I love chatting with you, you’re super smart, folks out there, Fred is someone you should check out, you got great advisor potential. You’re right on this, I want
to test something out with you, I’ve been thinking about this for a while. If you think about the
OSI model, OSI stack, for the younger kids,
that was a key movement that generated the key
standards in the stack for inner networking,
and physical devices. So, it was started from the bottom up. The top of the stack
actually never standardized, it became the presentation session layer, they differentiated, then
eventually became front end. If you look at what’s happening now, the top of the stack is really the ones that’s standardizing, or
standardizing with business logic, the bottom of the stack
has many different versions of say, Blockchain, so
the question is is that, it might be the world that will
never have a TCP/IP moment, it might be that the business app logic will dictate to some sort
of abstraction layer, down to programmable plumbing. You see this with cloud with DevOps. So the question is, do see it that way? I’m thinking out loud
here, but when I’m seeing the trend here, it’s just that, people who make the business
logic decisions first, and nail those, that
they’re far more successful swapping out and hedging on the plumbing.>>Look, I think you
mentioned the word alpha geek, and I think you’ve just defined
yourself as an alpha geek. Let’s just go in Denzel Washington’s set in the movie Philadelphia, talk to me like I’m a five year old, okay? What is the problem you’re solving?>>The app, you said it, it’s the app!>>My point is like, everybody
is walking around with apps, if the thing doesn’t fit on an app, it’s not solving any problem, that’s the bottom line. I don’t care whether you’re–>>You’re validating the concept that all that matters is the app, the plumbing will sort itself out.>>I think so.>>Is that a dependency, or
is it an interdependency?>>What do you need in a plumbing? Here’s how I think you should think. Do I need 4,000 transactions per second? I would say, rarely, most people are not sitting there going, “I need to do 4,000
transactions per second.”>>If you need that, you’ve
already crossed the finish line, you probably want a proprietary solution.>>Just to put things in perspective, Bitcoin does 300,000 transactions per day.>>Well, why does Ripple work? Ripple works because they
nailed the business model.>>I’ll tell you what I think of Ripple–>>What’s your take?
>>Why ripple works, I think all, and I’m not the
first person to say this, but I think that, the
thing that works right now, the core application of all
this stuff, is money, right? That’s the core thing. Now, if you’re talking about
documents on the Blockchain, is that going to be useful, perhaps. In a realist’s say in
the Blockchain, perhaps. Poetry on the Blockchain, maybe. Love on the Blockchain? Why ban it, you know?>>Hey, there’s crypto-kiddies
on the Blockchain, love is coming next.
>>Love is coming next. But, the core killer app,
the killer app, is money. It’s paying people. That is the killer app of the
Blockchain right now, okay? So, every single one of the things that’s really successful
is about paying people. So what is Bitcoin? Bitcoin is super great, for taking money, and moving it out of China,
and into the United States. Or out of Nigeria, and
into Switzerland, right? You want to take $100,000 out of Nigeria, and move it to Switzerland? Bitcoin is your answer. Now, you want to move money
from bank A to bank B, Ripple is your answer, right? (John laughs) If you want to move money
from Medellin, Colombia, that you use in narcos, Moneiro is probably your
crypto of choice, you know? (John laughs) Business truly anonymous. And I think it’s really
about payment, right? And so, I look at WorkCoin as, what is the killer
thing you’re doing here, you’re paying people. You’re paying people for work,
so, it’s designed for that. That’s so simple.>>The killer app is money,
Miko Matsumura would say, open source money, that’s his
narrative, love that vision. Okay, if money’s the killer app, the rest is all kind of window dressing around trying to race to–>>I think it’s the killer,
it’s the initial killer app. I think we need to get to
the point where we all, not all of us, but where
enough of us start transacting, with money, with digital money, and then after digital money, there will be other killer apps, right? It’s sort of like, if
you look at the internet, and again, I’m repeating
somebody else’s argument–>>It’s Fred Krueger’s
hierarchy of needs, money–>>Money starts, right?
>>Money is the baseline.>>The initial thing, what was
the first thing of internet? I was on the internet
before it was the internet. It was called the ARPANET,
at Stanford, right? I don’t know if you remember those days–>>I do remember, yeah, I was in college.>>But the ARPANET, it was email, right? We had the first versions of email. And that was back in 1986.>>Email was the killer
app for 15, 20 years.>>It was the killer app, right? And I think–
>>For 15 or 20 years.>>Absolutely, well
before websites, you know? So I think, we got to solve money first. And I bless everybody who
has got some other model, and maybe they’re right,
maybe notarization of documents on the internet is a–>>There’s going to be
use cases for Blockchain, some obvious low-hanging fruit, but, that’s not revolutionary,
that’s not game-changing, what is game-changing is the promise of a new decentralized infrastructure.>>Here’s the great thing
that’s absolutely killer about what this whole world is, and this is why I’m very bullish, it’s, if you look at the internet
of transmitting value, from one node to another node, credit cards just do not do a
very good job of that, right? So, you can’t put a credit
card inside a machine, very well, at all, right? It doesn’t work! And very simple reason, why? Because you get those Amex fraud alerts. (John laughs) Now the machine, if he’s
paying another machine, the second machine doesn’t
know how to interpret the first machine’s Amex fraud alerts. So, the machine has to pay in, the machine’s something that’s immutable. I’m paying you a little bit of token. The classic example is
the self-driving car that pays the gas pump, ’cause
it’s a gas self-driving car, it pays it to fill up, and the gas pump may have to pay its landlord in rent, and all of this is done
with tokens, right? With credit cards, that does not work. So it has to be tokens.>>Well, what credit cards
did for other transactions a little bit simplifies your things, there’s a whole ‘nother wave coming, that just makes it easier
and reduces the steps.>>It reduces the friction,
and that’s why I think, actually, the killer app’s
going to be marketplaces, because, if you look at a marketplace, whether it’s a marketplace
like ours, for freelancers, or your marketplace for virtual goods, and like wax, or whatever it is, right? I think marketplaces,
where there’s no friction, where once you’ve paid, it’s in. There’s no like, I want my money back. That is a killer app, it’s
an absolute killer app. I think we’re going to see real massive consumer adoption with that, and that’s ultimately, I think, that’s what we need, because if it’s all just business models, and people touting their
4,000 transactions a second, that’s not going to fly.>>Well Fred, you have
a great social graph, that’s socially proved, you
got a great credentials, in mathematics, PhD from Stanford, you reinvent nine, how many exits?>>Nine exits.
>>Nine exits. You’re reinventing
freelancing on the Blockchain, you’re an alpha geek, but you can also explain things to a five year old, great to have you on–
>>Thank you very much John.>>Talk about the WorkCoin, final word, get the plugin for WorkCoin, can people use it now, when
is it going to be available–>>Look, you can go
check out our platform, as Miko said, Miko’s an
advisor, and Miko said, “Fred, think of it as a museum, “you can come visit the museum, “you’re not going to see a zillion, “but you can do searches
there, you can find people.” The museum is not fully
operational, right? You can come and check it out, you can take a look at
the trains at the museum, the trains will finally operate once we’re finished with our ICO, we can really turn the thing
on, and everything will work, and what I’d like you to do, actually, you can follow our ICO,
if you’re not American, you can invest in our ICO–>>WorkCoin dot–
>>, and, really, at the end, if you have some skill that you can sell on the internet, you’re a knowledge worker,
you can do anything. List your skill for sale, right? And then, that’s the first thing. If you’re a student at home, maybe you can do research reports. I used to be a starving
student at Stanford. I was mainly spending my time
in the statistics department, if somebody said, “Fred,
instead of grading “undergrad papers, we’ll pay you money “to do statistical work for a company,” I would be like, “That would be amazing!” Of course, nobody said that.>>And anyways, you could
also have the ability to collaborate with some
quickly, and do a smart contract, you could do some commerce, and get paid.>>And get paid for it!
>>Hey, hey!>>How ‘about that, so I just see–>>Move from the TA’s
grading papers payroll, which is like peanuts–>>And maybe make a little
bit more doing something that’s more relevant to my PhD. All I know is there’s so
many times where I’ve said, my math skills are getting
rusty, and I was like, I’d really wish I could talk to somebody who knew something about
this distribution, or, could help me–>>And instantly, magically have them– And I can’t even find them! Like, I have no idea, I have no idea how I would go and find
people at Stanford Institute, I would have no idea. So if I could type Stanford, statistics, and find 20 people
there, or USC Statistics, imagine that, right? That could change the world–>>That lowers the barriers,
friction barriers, to–>>Everybody could be
hiring graduate students.>>Well it’s not just
hiring, collaborating too.>>Collaborating, yeah.
>>Everything.>>And any question
that you have, you know?>>Doctor doing cancer research, might want to find someone
in China, or abroad, or in–>>It’s a worldwide thing, right? We have to get this platform so it’s open, and so everybody kind of goes there, and it’s like your identity on there, there’s no real boundary
to how we can get. Once we get started, I’m
sure this’ll snowball.>>Fred, I really appreciate
you taking the time–>>Thanks a lot for your time.
>>And I love your mission, and, we support you,
whatever you need, WorkCoin, we got to find people out
there to collaborate with, otherwise you’re going to get
pushed fake news and fake data, best way to find it is
through someone’s profile on WorkCoin–
>>Thanks.>>Was looking forward
to seeing the product, I’m John Furrier, here in Puerto Rico for Blockchain Unbound, Restart Week, a lot of great things happening, Brock Pierce on the keynote this morning really talking about his
new venture fund, Restart, which is going to be
committed 100% to Puerto Rico, this is where the action will be, we will be following this exclusive story, continuing, we’ll be back with more, thanks for watching. (soothing electronic music)

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