ICO Regulations and The Token Economy | Interview with Floyd DCosta

If we could just start by introducing yourself and telling us a little bit about how you got into the blockchain community and how you've gone from there to where you are now.

Correct. Good. So yeah, I actually have a background in management consulting. Spent 11 years with a company called Capgemini and somewhere along the way decided, you know, started looking at blockchain a couple of years ago and then decided to take the plunge and venture out myself. And that's when I started my venture. One of them called blockama, where we are doing cybersecurity using blockchain technology with one of my co founders who's the former chief information security officer of India's national stock exchange. And then here in Singapore I have a blockchain design studio where we help enterprises basically design and develop next gen next generation networks using blockchain technology. Last but not the least, I advise the Gibraltar Stock Exchange and am their chief blockchain officer. It's interesting, right? When was the last time you heard a stock exchange do something exciting? An official stock exchange. Right.

So you've mentioned cybersecurity. So blockchain technology looks like the best idea for cyber security. But how does that work? How do you implement one into another?

Very important. Interesting. I'll share with you what we are doing, really. So what we do is we focus on critical systems. Now what is a critical system? For a stock exchange, it's the main trading platform. For an airport, it's the air control towers. For a bank, it's the core banking application. These are the 20 or 30% of applications or the golden nuggets, the crown jewels in an enterprise that you want protected at all cost. So that's what we focused on. And then we use a technology which has been originally developed by and used by the US military and we render those servers invisible. So how does someone attack a system that they can't even see? How do you DDoS a server that you don't even know exist? And then we use blockchain technology to do identity and access management because you need to have genuine users access those servers. So yeah, we use digital identity on the blockchain for both humans and devices and basically provide secure access to that critical infrastructure. Wow.

So it seems like you're systematically building almost like the economy of the future because you have the stock exchange. And so what does, because I know you spoke today about the token economy and I want to know what does the future token economy look like to you?

Correct. I think it's interesting times. Right. And there are two or three things. When you look at the token economy, number one, it's the whole decentralization, right? Today you have a lot of centers at power. And if you see blockchain or bitcoin, the original thing was, how do you disintermediate all these gatekeepers, right? And so that's exciting. And today you don't have to go to a stock exchange to kind of do a token sale. You just say, I want to do a token sale. You don't need someone's permission. Of course. Hopefully that gets regulated to some level because. And that's where we step in, right? What we're saying is we're not regulating it, but hey, we play that one step in front, right? So let's say today you're on one side, you've got the guys doing ICOs. So how do they know? And let me take a step back. One thing I mentioned today is today, if you look at the ICO space or the tokenization, it's just the blockchain companies, companies that are core blockchain. But going ahead tomorrow, you'll see E Commerc companies that will start doing token sales. Going ahead, you'll see simple cafes and all sorts of brick and mortar companies that will also start to tokenize, right? So we are right at the start. Now, the blockchain companies, well, they know it, but cafe, online commerce, stop. They have questions. How do we tokenize? How do we know whether a token is a utility or is it a security? How do we know what's the right way to go about doing a token sale? On one side, on the other side, you've got participants. Today. You don't need to have a stock exchange account or whatever to participate in a token sale. You have an ether wallet and you instantly start to participate. You can have tokens, you can buy tokens, you can invest, you can pick up utility coins. But people need to know, how do I know that these guys are genuine? How do I know that someone's not going to vanish, right? If I have 1000 coins today, how do I know which is the top 25 that suits what I'm really looking for? And so that's where we come in and say, hey, now you've got a traditional stock exchange that's also going to have a blockchain exchange. And we're tying the two together. And so here is what we say, what we think is good stuff. And so people can start to follow through on that.

Amazing. You've mentioned regulation. It seems like the token economy is a bit in a gray area with regulations, right? So we've seen Chinese ICO ban. We're having a lot of issues and difficulties with the regulation. How do you think the regulation will look like for the token economy in the future?

So here's the thing. Yes, you've got countries and you've got nation states that says, hey, no, absolutely zero. Right. But I believe that's temporary tomorrow, again, it's today. Because what they can see, and there are a lot of reasons that there are things like kyc, anti money laundering, CFD that they also need to protect against. And that's why you're seeing that stop. Because otherwise it's this crazy rush and the herd mentality and then everyone. And then you've got scammers, you've got, you know, people doing Ponzi schemes. So tomorrow, if somebody gets scammed, he's going to say, hey, regulator, what were you doing? And so till we figure out this and how we can protect the small investors, let's just put a stop to that. We'll come back to it. On the other side, you've got places like Gibraltar, I think Switzerland's put out something recently, and places where the regulator is saying, great, guys, you want to do tokens, that great. And here is some framework, here is some guidelines to make sure that you adhere to A, B, C and D. And then we are okay with it. And we take care of investors, of not just investors, but the common man who's now without a central regulating piece or a central system, simply going and investing in you, simply going and buying your tokens, right? So ICO guy, just make sure you adhere to these things and then you're fine. And so I think that's a great start. And there are a few nations that have taken the lead. And then again, we are still at the very beginning of this. It's got a long way to go. So I think it's already a good start. The guys who stopped it will of course come around and the moment they figure this out, they'll put in their guidelines, they'll put in their risk controls and things like that, and then this will evolve.