Title : “Bitcoins & Gravy” podcast
Episode 17 : “Solar Power & World’s Smallest Computer”
URL : http://youtu.be/qFplul7dbX8
Organization : “Bitcoins & Gravy” (podcast)
Co-host #1 : John Barret
Contact : email@example.com
Co-host #2 : Lij Shaw
Contact : http://www.thetoyboxstudio.com/
Guest #1 : Nissan Bahar
Web Site : http://keepod.org/
Guest #2 : Nick Gogerty
Contact : LinkedIn Profile : Nick Gogerty
Web Site : http://www.solarcoin.org
Announcer : Adam B. Levine (Founder of the “Let’s Talk BItcoin” network)
Contact : adam@letstalk bitcoin.com
web site : http://ww.letstalkbitcoin.com
Announcer (Adam B. Levine) : This program is intended for informational and educational purposes only. All views and opinions expressed are the views and opinions of the individuals and sponsors presenting them, and not the LTB network. Enjoy the show.
John Barret (Co-host 1) : Welcome to “Bitcoins and Gravy”, episode 17.
Lij Shaw (Co-host 2) : On http://www.bitcoinaverage.com, Bitcoins are trading at $0.49 per millibit. That’s $490 per Bitcoin, a significant increase this week over the last few weeks, where Bitcoin was hovering in the lower 400s to mid-400s. Sounds like Bitcoin may have been listening to our last podcast – Episode 16 – talking about Greek coffee, finding the right dire, and a proper rise for Bitcoin.
John Barret : Mmmm… Mmmmm… Mmmmm. Now that’s gravy.
John : Welcome to “Bitcoins and Gravy”, and thanks for joining us today as we podcast from East Nashville, Tennessee. I’m John Barret.
Liz : And I’m Lij Shaw.
John : We’re two Bitcoin enthusiasts who love to talk about Bitcoins.
Liz : And share what we learn with you, the listener. Welcome to “Bitcoins and Gravy” and thanks for listening.
[end of intro and music]
On today’s show Lij and I travel to Tel Aviv, Isreal to speak with Nissan Bahar. Nissan is one of the core developers of “Keepod” – a simple and inexpensive technology that may be able to help to bridge the digital divide that we see in the world today. Together we discover that there are over 5 billion people – that’s 2/3 of the world’s population – who still don’t have access to a computer or a smartphone. Hey people, that’s a lot of people!
Lij : We also continue our “To The Sun” series, as we talk with SolarCoin’s very own Nick Gogerty – the founder of SolarCoin. Nick wrote the whitepaper on SolarCoin, and he’s just the guy we’ve been waiting to talk with to get the final details on the SolarCoin project, and what we can expect to see in the years ahead. The future definitely looks bright for SolarCoin, and for solar energy. You know, maybe it really is time we started paying more attention to that massive, flaming ball of nuclear energy in the sky. After all, it really is our very own, naturally occurring nuclear power plant. Oh yeah, but without the problems like nuclear waste and Fukushima-style meltdowns.
John : Today Lij and I are thrilled to be speaking with a gentleman in Tel Aviv Isreal, Nissan Bahar.
Lij : Hey Nissan. Welcome to the show. Welcome to “Bitcoins and Gravy”.
John : Welcome to the show Nissan.
Nissan : Thank you. Thank you for having me here.
John : Nissan is one of the core developers of “Keepod” – a simple and inexpensive technology which may be able to bridge the digital divide that we see in the world today. Nissan, can you tell us – first of all – all little bit about yourself and then tell us about Keepod.
Nissan : Yeah, sure. So I was born in Isreal, and living in Italy actually in the last 10 years or so, where I met my business partner, Franky – who is the co-founder of Keepod. I’m coming from a background in technology – mainly information security. I’ve been doing security for many large enterprises : banks, telecoms, energy companies, and so – in Europe. We started with Keepod a few years ago as a security product, which was targeting that market. Then about a year ago we decided that it was time to do something better with the technology that we developed, and with the knowledge that we gathered – and started what you see today as the Keepod project.
Lij : Wow, interesting. So it started out as a security project, and it evolved into this miniature computer that’s going to save the world and bring computing power to the other 5 billion people in the world.
John : We hope so. Yeah.
Nisan : Well, yeah.
Lij : So tell us what Keepod is now, because it’s pretty fascinating.
Nissan : So Keepod is a project, first of all. It’s not just the product, because it’s an ecosystem of tools, conditions and organizations that are making this happen. First of all we have the actual operating system. Keepod is an operating system which was designed to jump between one computer to another. We are not inventing here anything new, because “OS-on-a-stick” is something that geeks and hackers have been using for many years now. What we are doing here is really targeting it as the main system of the user – which is not something that is being done today. So we decided to go with Android, which is the most common operating system today, in the world. So we are running Android 4.4 Kit-kat on your desktop. And it is beautiful. So imagine having “What’s App” and your favorite applications on the big screen. It’s very lightweight. It’s very powerful. We’ve reduced the footprint of the system to something like 300 MB, which is really tiny for a desktop OS. And it is very intuitive. So where we are going – where people don’t have access to computers – they find themselves with something more familiar, because there are markets, like India – where you have 94% penetration of mobile, and over 50% of which is smartphone. So they find something that is familiar to them – very intuitive. And people who don’t know it at all, the learning curve is very fast. The biggest and best example I have is the project we just did in Nairobi. We went to three schools there, and kids who were 9 to 13 years old – something like that, who never saw a computer and never worked on a computer – after two hours they were sending us emails.
Lij : Wow!
John : So, Nisan, how did you decide to go to Nairobi? And can you tell us a little bit about the “Why Not Academy“? I’m sure there are many acadamies like that in the world, but why Nairobi? And what city were you in there?
Nissan : Yeah, so we went to Mathare, which is one of the largest slums in Africa. It’s the second largest slum in Nairobi, after Kibera. It’s home for 500 thousand people who live in incredible conditions. We were looking for a first project, and our interest was to go and do it in a place where the conditions would be difficult for implementation – where we were going to find ourselves in an environment which was not so “tech ready” – like we might have in other areas. From the other end, it is a perfect place for starting people, because the language barrier is not so big, because they speak English there – quite good. And there is connectivity. We can get 3G access in Nairobi.
We went there an we met the guys there at “LiveInSlums” – it’s an NGO that works in slums around the world. They work in Brazil. They work in Cairo – if I’m not mistaken. They work in Nairobi. And they presented to us the “Why Not Academy“. It is a school that they have built in Mathare. They support this school. It’s a “street school”. It’s one of many. Kids there don’t have the means even to go to the public schools. And those street schools – that are mainly supported by charity – are the only thing the kids have.
John : The “Why Not Academy” is a new school, is that right?
Nissan : Yeah, it is a new school. The guys from “Liven Slums” built it. They practically built it, really. They sent a group of people. The designed it. They build the school, the facilities. They built a vegetable garden – which is feeding the school – inside the slum. It’s an incredible agricultural project. They hooked it to the power – although it’s not really legal, the power – there is power. Also it is operating, and it s a really nice initiative. And when we heard about it we felt that Keepod might be a good fit, and that we could bring — with access to information in the end, which is what Keepod is all about – education might be empowered there. And also, not only that, that school is actually a base for other projects like the organic agriculture, which require information and access to techniques. Also an HIV prevention initiative, human rights initiatives, and so on. They are all gathered in that place. So it is all little projects that require access to information, to technology, and to computers, for different reasons.
John : Wow! How did you first hear about that.
Nissan : We met in Milan. “LiveInSlums” is an Italian NGO. So we met with the NGO looking for one of their projects to see if it is interesting. They told us about Mathare, and we met some members of the community that were brought to Milan by the “LiveInSlums” team, and we really fell in love with the place – the people and the stories. And when we went there it was quite an incredible thing. So, Nairobi is not the safest place in the world, you know? But in the slum, we felt really calm. People were expecting for this. People really embraced us. We went inside the slum and lived with them for more than a week there – just setting up the place : the hub, the school, the connectivity and everything. And we never felt so secure. And the reaction and the hunger there is for these kinds of technologies is incredible.
The more amazing thing is is that there are connected to the world in terms that they know there is Facebook, they know there is Google, they know there is Apple, and so on. If you go outside of Mathare and just go to the highway, you see billboards for the new “MacBook Air” that it looks like you are traveling in California. They don’t have access to it, but they are absolutely interested in it. So the moment we presented it the first thing that they started doing was actually creating an email account on Gmail, or a Facebook account, or stuff like that.
Lij : Wow! That’s pretty fascinating. So I just want to jump back for a moment and clarify a little further. We’re talking about an operating system for Android on a USB stick that is called “Keepod”, that can be given to people – since USB sticks are extremely afforable and much easier to get to people who can’t afford something like a “MacBook Air” in Nairobi. So this system can recycle and reuse older computers, right? Is that the way this works? You can take an old PC laptop, or an old Macintosh that somebody else has discarded, and use this system with the USB stick to bring it back to life and use Android on it?
Nissan : What we do here is we break a few paradigms, that breaking them will allow bridging the digital divide, in our opinion. The first one is we don’t think that it is sustainable or possible to bring a laptop per person in the world.
Lij : Sure.
Nissan : Okay? That’s just impossible. It’s not scalable. It’s not sustainable. There’s not enough material in the world for that. Okay? So this is the first thing. In order to bring personal computing to everyone we can use shared computers wisely. And in order to do that we separate the operating system from the host. So the operating system is not sitting inside the hard drive, but it’s sitting on a thumb drive. By doing that we actually are able to guarantee all kinds of things – especially better privacy, better security, avoiding malfunctions misconfiguration of the host, or virus spread on the old system – and so on and so on. And the computers live longer. Another thing that we do is, we say that instead of trying to manufacture cheap computers – which is what everyone is trying to do : cheap laptops, cheap tablets, and so on – they will never be cheap enough. Even $50 is too much. And in a world where only in the United States there are 85,000 computers thrown away each single day.
John : Wow!
Nissan : We can find computers. We can bring them to a new home. And yes, if they are old computers I can use Keepod in a very smart way, because it is going to be a shared computer with no hard drive, with no host operating system. You just go there, plug in, and “Boom!” Android is very slim. It doesn’t require a lot of power. It doesn’t require resources. When I remove the Keepod the next user can go there and have his own private operating system – his own private computing environment. We compare ourselves a little bit to public transportation. Think about it. It’s like everybody would like to have a nice car. Not everybody can afford it. So you hop on a bus. It’s not as shiny. Sometimes the air conditioner is not working, but it gets you to work, right?
John : Yeah. That’s a good analogy.
Nissan : So, we’re doing the same thing here. The same thing. But we do it at the street level. We do it in a way that the distribution model that we have chosen, and the approach to it is going to work from one hand – yes – through organizations, through people who are active in the field, and so on. But we are also going to enable this to have direct access. People will be able to download the operation system for free. People will be able to create grassroots projects – which is what we are all about. Since we have started we are saying to people, “Okay. I am traveling next month to Kenya. I want to bring with me my two old laptops and – I don’t know – 20 devices, or 40 devices. Let me know where they are needed.”
John : That’s really cool.
Lij : Yeah, it’s fascinating. I think the first thing that was a little hard for me to understand was the concept of, “How do you get a laptop to live on a USB stick?” But the brilliant thing about what you are doing is that you don’t need to use all of the massive processing power of the laptop. By using the Android system it’s very simple. It’s as simple as what I am used to on my phone, which is already super capable and powerful.
John : Let me ask you, Nissan. Are they taking the hard drives out of these used laptops first? Is that the first thing, to just get the hard drive out of there?
Nissan : Yeah, so we prefer that the laptop will arrive without a hard drive. We sat with local technicians — like in Mathare we did exactly that. So we get the computers, and some of the computers still have hard drives. He provides services to the school. He goes and fixes what is not working, and so on. He removes the hard drives. He can keep them, and he can sell them. And actually it is a pretty good deal for these guys. So he can get up to $60 or $70 for a hard drive there, which is quite a lot for Mathare.
Lij : Also, you mentioned security – and that’s how you got into this. Does this actually increase your security and protection from viruses and things of that nature – from the internet – by not having a hard drive, and just using this Android operating system?
Nissan : Yup. First of all, if the user got infected by malware or a virus, it doesn’t affect the next users. Okay? Because, think about it, you use the computer – the operating system – and then you go out and there is nothing on the host. The next user is booting his own operating system, which is completely separated.
John : So that person goes away with their Keepod that has the virus on it, and if they knew that they could just get another Keepod. Is that right?
Nissan : Yeah. They can just reset it – flash it – and “Boom!”
John : Is there a way to fix, or to get rid of a virus that gets onto somebody’s Keepod so that they don’t have to erase it and all of their information is gone as well.
Nisan : One way – and it’s actually a prevention way, which is ideal – is just go to the app store, download an anti-virus software and then you are covered there. If not, you can always reset the device and just restore to the manufacturer settings, and you get to OS fresh and new. Then you restore your data and you’re good to go. So this is one thing. The second thing – which I think is even more important – is that you are not leaving any footprint of your activity on the computer that you used. Data is not linking from one computer to another. And – if you think about education and shared computer environments – I actually got this comment from the United States, and it was so true. I was speaking with one school, and they were saying, “This is ideal for us, because kids always go to the library or to the computer class, and they log in to Facebook but they don’t log out. And if another kid goes to that computer, he can ruin your social life in five minutes”.
Lij : [laughter] Oh man.
John : Sad but true.
Lij : So it’s cool what you say in your analogy about footprints. It reminds me of when you go visit a national park and they say, “Take nothing but pictures, and leave nothing but footprints.” But with Keepod you can take just about anything you want and not even leave footprints behind. That’s pretty cool.
John : Nice. That is cool, man. That;s great.
Lij : What are some of the limitations as far as which computers this might work on, or might not work on. Is this going t o work on just about anything?
Nissan : We’re targeting desktops, first of all. So at this moment we are not working with or targeting tablets, and obviously smartphones. That is real-time ability, and we categorize it as — actually there is a good balance between the two if you want to discuss this. Now we’re targeting [X86?] systems, but we prefer not older than 2006 computers. [This is] because we don’t want to get, first of all, junk – because there is no sense in bringing in something that won’t work properly. And because of – in terms of computing power – any news web site, or whatever, will require some computing power, right? And if the computer is too old it’s just not up to the latest web sites and web apps. So we need to have 1 GB of RAM. We want to have at least a first generation of Dual Core. This means 2006.
Lij : I was going to say, “Yeah. Whew! My laptop is just going to make the cut.” I think I’m still running a 2007 MacBook.
John : Oh man. So, as far as the United States – let’s take Nashville, or any other city that has public schools, and that has, let’s say, maybe not the best educational system set up with the US public schools. My friend works in the public school system in the south side of Chicago, and I would guess that the students there are less interested in learning than some of the students you met there in Nairobi. So there are lot’s of problems in the public schools in the south side of Chicago, as there are in other cities in the U.S. Do you have plans to bring Keepod to these cities. Are there organizations that are interested in Keepod now in the U.S.?
Nissan : It’s actually happening right now. The cool thing about it is that in the last ten days , since there was a major story in the BBC about us, and then “Boom!”, things started to roll really quickly. We got a lot of requests from the United States. Both from the more charity side, and on the other, from the education side. The U.S. is very interesting for us. I don’t know if you know this, but 20% of the U.S. population don’t have access to computers at this moment.
John : I believe that.
Lij : Yeah, I believe that too. I work in the public school system here in Nashville, and I’ve worked with many kids who don’t have access to computers – other than at school itself.
Nisan : So, first of all, yeah. So definitely the United States is currently a target for Keepod. The idea is that we don’t require – and we don’t need – distributors, or official channels in order to move. What we have created is, from one end, the possibility to do a grassroots project, So, anyone can decide to start a Keepod project. And in the United States this is happening. We’ve got people who have started to order devices. They get our computers. If they need our assistance to get refurbished computers, we help them – if it’s a school or if it’s a community center, and so on. The second that we did is we started the program – now it’s in beta, and we are getting applications at this moment – for what we call a “Keepod Point”. A “Keepod Point” means that anyone – really anyone – who has the space to do this, can be a Keepod reseller. What does it mean? That you can get Keepod and sell them to your local community. The condition is that you have at least two computers that are available for public access. Okay? So you can be a little coffee shop, you can be a bar, you can be community center, you can be anything. This is starting to get really popular. We’ve got a lot of requeats from the United States, actually, – form the different states. So we are working on both directions. From one hand helping people and organizations who want to do this as a project, and from the other end people who take the initiative and want to create their own Keepod point and enable access to information.
John : So hey, is there any way that we can get you and Franky to come here to the United States, and maybe we can all take a trip up to Chicago and do one of our shows from there?
Nisan : We would love that?
John : Or right here in Nashville, right? We could do a show right here in Nashville.
Nisan : I’ve never been in Nashville. I play guitar, and this is one of the places I want to go.
John : Hell yeah. You know, Lij has the Toybox Studio. This is perfect. You can come here and record. And, you know, this board that he has here is the same board that recorded “Hotel California”. I don’t know if that, Nissan.
Nisan : Are you serious?
Lij : Yeah, it’s the very same one. It makes sense to me that you would be a musician. When I first heard about Keepod I thought it was some sort of MIDI control or a keypad. Then I learned that it was just to help people get smarted and connect around the world.
Nissan : We are really connected to the music world. It is one of the things, if you look at how we move and how we do things, we are working as a startup. But the mood there, is really, really a lot about the artistic side. Not only [me], but my business partner is actually a filmmaker, Franky. He’s not coming from technology. This guy did videos with Red Bull and Barton snowboards in the last 10 years, doing extreme sports.
John : Oh wow. You know, when I watched the BBC special it looked like you guys were having a lot of fun and I enjoyed that so much. I got really excited when I first heard about Keepod, and I started combing the internet for more information about it. That’s when I landed on a Reddit page, and they were discussing Keepod. One of the posters there – one of the people who wrote in – wrote that you were considering including a Bitcoin wallet on every Keepod flash drive. So we would love to know that this is true, but at this point it is really just a rumor. And we actually don’t really enough know if you know what much about Bitcoin, or if you have interest in Bitcoin. I am guessing you might.
Nissan : So, it is a very interesting opportunity, because we think – we don’t know yet. Okay, so we are actually studying this – and actually anyone who can contribute to the idea, and to us understanding better – is very welcome to do that. Because we are trying to understand if this is something that can actually empower the people we are targeting. My feeling is that, yes. And my feeling is that Keepod feels like a very good match for Bitcoin, both from the OS side, and the fact that you have your own hardware is perfect. And the idea that you actually bypass so many limitations that we have today when it comes to money transfer, and getting funds from one place to the other or one person to the other, this might be very interesting. In Nairobi we see something that is called M-pesa. I don’t know if you know that?
Lij and John : Yeah.
Nissan : Yeah, so they do everything with mobile payments. They don’t use cash. And I don’t see any reason why they would not be eager to do that with Bitcoin. So, you know, it’s an opportunity.
Lij : Yeah, I mean in the Bitcoin world, just the concept of having an operating system built into a USB flash drive and using that in order to create wallets and sent Bitcoins back and forth. That’s already in existence. That’s already the smartest way to carefully and securley create your wallets.
John : Right, and I think that anybody using Bitcoin, if they can take their Keepod out of the computer, knowing they’re not leaving any trail at all, what a thrilling thing for new Bitcoin adapters, and really for anybody that uses Bitcoin on their computer. Because that’s a big fear is that after you’re finished doing whatever you’re doing with Bitcoin, or with this site or that site, you’ve left information there, and that computer can be hacked, and then people can steal your private keys for the Bitcoin. So that’s something that seems really important. You know, Andreas Antonopoulis, I remember him talking about how it’s difficult here in the United States to get people interested in Bitcoin because you have to go through this long explanation, plus you’re fighting what the media has to say about money laundering and all these scary things. But when he went to Kenya, and he talked to the people there, as soon as he said, “Oh, it’s like Empesa.” they immediately understood what Bitcoin was. I thought that was so cool, so I think the same thing would be true in Nairobi and other places in Africa.
Nissan : Since the Reddit discussion started, I’ve gotten requests from India, China, Malaysia, and some other countries saying, “Are you going to do that?” And they really dig this. It looks like they completely understand what is the potential here. You have a strong community there of people who understand what Bitcoin is, so we will be happy to get some advice there, and to see if we can design something smart into this. Because, indeed we don’t know this world very good. We are not experts in Bitcoin, and if the scale that we are looking to do here with Keepod, and for the project to work, we need to design it properly, and make the right choices.
Lij : Well Nissan, let’s use this opportunity here to put a call out to our listeners, and ask them for contributions of any comments or ideas they may have for what will work well for Keepod. We’ll make sure that that gets to you.
John : Calling all listeners. Calling all listeners… Yeah, yeah, absolutely Lij.
Lij : Well Nisan, thank you so much for joining us here on “Bitcoins and Gravy” today. The Keepod project is just really fascinating stuff. And the concept that you might be able to bring this together with Bitcoin just seems to make a whole lot of sense. I know that there’s lot’s to explore, but it sure sounds like it’s a perfect fit.
John : It really does, and just thinking about the disenfranchised people here in the United States – in the cities, and just throughout the country – who really don’t have any access to what a lot of other people do. It just seems like such an important thing that you guys are doing, and it sounds to me like you guys are not doing this to try to make a bunch of money. You guys are doing this to really help, is that right?
Nissan : That’s true. Everybody looks at me kind of weird when I talk about this. We went to our accountant, and he was like, “Okay. I’m not used to having customers like you. I don’t know how to handle this.”
John : Oh, man.
Lij : It’s a little bit like when Nicola Tesla was talking with J.P. Morgan, and Morgan looked at him and was like, “How are we going to charge for this? I don’t understand?” And he was offering free energy to the world.
John : Oh, man. Well, I think that what you guys are doing is fantastic. And again, watching that BBC video, everybody should watch it. Can you tell our listeners how they can watch that BBC video, and also how they can find you, and how they can get involved.
Nissan : “Keepod BBC” on Google will definitely bring that up. Keepod.org is our url. You can go there. There are a lot of links in the blog. For sure, you will also see the video for the BBC. And that’s it. Guys, it was really a pleasure talking with you, and I really thank you for the kind words, and the ideas that you’re pitching here with the Bitcoin is amazing for us.
John : I would have to say that if you get a chance to listen to Andreas Antonopolous, he’s the Bitcoin guru, really. Just go and listen to some YouTube videos, and listen to him speak. He’s a great educator, he’s a great speaker, and his heart is in the right place. He’s the one that talks about the other 6 1/2 billion other people in the world that don’t have financial systems – or access to financial systems – like we do, who are basically financially disenfranchised. So when you’re talking about helping the 5 1/2 people who don’t have computers and don’t have cell phones, and access to that, he’s talking about pretty much the same thing. So I think you guys could work hand-in-hand. I would love to see, somehow, you and Andreas get together and have a meeting of great minds.
Nisan : That would be amazing. It sounds so in line with what we are doing. I told you, Keepod is about not only the operating system, but about an ecosystem. Ecosystem means a lot of things around it. It can be from the more simple things we’ve been talking about, like refurbishing computers – how to get the 85,000 computers thown away each day, to Nairobi or whatever. But it’s also what’s surrounding it. And the financial system is a key, key element in this. You know?
Lij : I like it when you say “ecosystem”. It sounded a little bit like “equal system” to me. You’re really, kind of, creating an “equal system” to just bring equality of computing to people around the world.
Nisan : That’s actually the idea.
John : Nice.
Nisan : Guys. This is amazing. So, I’m so happy we connected. Really. Let’s talk soon then. Keep in touch. Really.
John : Thanks Nissan.
Nisan : Cheers. Bye bye.
John : So Lij, I need to talk about the “Bitcoins and Gravy” contest for a minute. On last week’s show we told our listeners about how they can enter to win 0.25 Bitcoins. That’s one quarter of a Bitcoin, and that calls for a hearty : “Mmmm…Mmmm…Mmmm”. So if you’re interested in entering the contest, here’s what you do. Using your Smartphone, video camera – or any video camera – record yourself singing along, playing along, or dancing along to the song “Ode To Satoshi”. You’re performance can be ten seconds long, or three minutes long. That’s up to you, the listener, and how creative you feel like being. Once you’ve recorded you’re performance, upload it to YouTube and give it a name. Then email us, or call us on the hotline, and let us know how to find you on YouTube. If you need further technical assistance, just ask. We’re happy to help. That’s right, we’re making a music video for the song, and we want you the listener to be in the video. Since we know that we’re going to get more than just a few submission, Lij and I have decided that we’re going to include at least a half a dozen or more of these performances in the video. So how are we going to decide who the winner is? That’s easy. The winner is the one that Lij and I like the best. So get out your video cameras and start creating for the chance to win 0.25 Bitcoins. “Mmmm…mmmmm…mmmmm. Now that’s gravy.”
John : So today we welcome Nick Gogerty, the founder of SolarCoin, and principal of value-creation consulting firm “Thoughful Capital Group”. Nick, welcome to the show.
Nick Gogerty : Thank you very much. I’m excited to be here.
Lij : Nick, it’s a pleasure to have you here on “Bitcoins and Gravy” with us.
John : So Nick, where would you like to start? I know that you’ve written a book titled “The Nature of Value : How to invest In the Adaptive Economy”. Can you tell us what you mean by the “adaptive economy” and how that fits in with SolarCoin? I know you have an extensive background in investing and economy. How does all of this fit into SolarCoin?
Nick : The book “The Nature of Value” deals with the economy, and the creation of economic value as an adaptive process – and the process acts a lot like nature. I spent personally about 25 years investing, and working with different groups – including the world’s largest banks and hedge funds – and in four years of that research I boiled down to that book. Part of that book deals with money, and how money works, and that kind of deals with SolarCoin, and the creation of that.
Lij : MmmHmmm.
Nick : Basically, the thinking behind SolarCoin is that a currency, or a form of money, effectively is – and this is going to sound a little strange – but it’s really a social protocol. Money is a way for all of us to exchange value efficiently. And so as a social protocol, the more people that agree to and accept a form of money – whether it be dollars, gold, Bitcoin, SolarCoin, etc. – the more utility, or the more value, that form of money – that currency – has. And that’s part of the research that came out of the book, and the part of my work involved in that. My background in foreign currency goes back to the age of 17, when I was trading Japanese Yen futures. That was back in 1987. So being a proprietary trader for one of the world’s largest banks in London – which is, kind of, the ForEx headquarters of the world – and having worked for various hedge funds here in the states. So a bit of background in money, and some other things. And, of course, the book is being put out by Columbia University – the same place where Warren Buffet went to school – and the book is on value. So, I’ve got a bit of a background in economics and money.
John : Well, that’s pretty impressive. I think we should begin by maybe bragging about you a little bit. You worked with the world’s largest hedge fund, “Bridgewater Associates”, $150 billion. Being a quantitative ForEx analyst for “Banque Nacionale De Paris”, $2 trillion balance sheet. Founding software startup and strategic risk firms. Chief analyst at Starlab, a deep future, multidisciplinary science research institute. And I think there was something in there that had to do with research into time machines, or something like that? Black holes and time machines?
Nick : [laughter] Exactly. At one point the institute was modeled on the MIT Media Lab, and had some people from the MIT Media Lab on board. And there was a theoretical physicist who was researching some of those things, among some more, let’s say what we call, “applied science” areas – material sciences, life sciences, media studies. I was overseeing three different schools of artificial intelligence at one point, in terms of research. So, it’s some interesting stuff.
John : Wow.
Nick : Yeah. It’s really fun.
John : And building risk models for global banks. I wrote that you had done that. That’s some pretty heavy stuff, man. So you’re background in finance and investing, it seems like anybody who’s interested in investing in SolarCoin, they might want to listen to you.
Nick : [laughter] Well, ultimately everyone has to listen to themselves, and look around at what they think is correct, what they think is true and is going to be most interesting. But feel free to read what I have to say, and if you agree with the arguments it might be very interesting.
Lij : Well, so tell us more about SolarCoin and why we should be interested in investing in it.
Nick : Sure. The original idea came from a whitepaper that I drafted with co-author Joseph Zitoli, who you’ve interviewed earlier. And in that whitepaper there was the concept of an energy-backed currency. And at the time, in 2011, that concept really wasn’t feasible unless you had your own central bank [laughter], to implement. Now, with the provability, or the fact that Bitcoin technically works, and that anyone in a sense can issue a currency that is robust and transparent to over-issuance or over-circulation, that premise became viable – potentially viable – an energy-backed currency. And then, looking into it, realized that it could be used to do good by backing solar energy with that currency, and then having that currency represent solar energy. The SolarCoin idea is a subset of this energy-backed currency idea, and the realization was that the “proof of work” inherent in acting as a distribution mechanism, and as a verification mechanism, Bitcoin, instead of using a purely cryptographic “proof of work”, why not use a real-world, physical “proof of work”? And that real-world, physical “proof of work” is the production, or generation, of solar energy. And so that’s tied into SolarCoin.
What ends up happening is anyone who produces one mega-watt hour of solar energy in the world – anywhere with the facility – can claim on of these SolarCoins. And that’s viewed as an equitable means of distributing the currency, while also acting as an incentive to produce more solar energy globally. And there’s a pre-mine that was set up that’s participated for the last, at least 40 years, to incent solar energy globally.
John : Can you tell us about how the SolarCoin mining differs from Bitcoin mining?
Nick : Sure.Most of it is similar. It’s based off of a Litecoin fork, and that will produce – roughly based on the design – about 105 million coins, based on the half-life, etc. The rest of the coins were pre-mined, and so the only way to earn them – or the “proof of work” required to get those coins – is to submit a verifiable “proof of production ” of solar energy. So each verified one mega-watt hour of energy produced entitles the claimant to a SolarCoin. And to date we’ve had claimants from 11 countries, so it’s rolling out pretty well. We just gave coins out to Cypress and Austria over the weekend, and we look forward to adding more countries.
Lij : Help us understand a little bit. Scrypt mining is going to get more and more difficult as more miners get involved. It is similar to Bitcoin in that way? Will the mining become more difficult?
Nick : It’s similar to Bitcoin in the fact that the algorithm, and the effort required – something called “re-targeting” – so that it adjusts relative to the effort applied to it. So there’s a constant issuance of rate of the coin.
Lij : Okay, and them when it’s issued to people who are generating one mega-watt of solar energy, it seems that one mega-watt of solar energy is going to become easier and easier to generate as solar energy is adopted globally. How does that translate?
Nick : Yeah. So here’s what ends up happening. The mining [?], because the half-life only lasts, really, for four years. So there is a one year half-life, and about 95-95% of the coins we’ve mined in the first four-and-a-half years. So what will end up happening is that as the mining tapers off – with the exception of, let’s say, transaction-based rewards – the real circulation mechanism will become the granting, or the basically “giving away” of SolarCoins to people who produce solar electricity. Now one mega-watt of solar electricity is quite a bit. That’s about enough to keep the average American home powered for a month. So, what’ll end up happening is – over time, for example last year – globally there are estimated to have been about 160 million mega-watt hours of electricity produced with solar energy. That would equate to 160 million potential claimable SolarCoins. That amount grows – or is anticipated to grow – 20-30% per year, over the next 20-30 years.
John : That’s good news.
Nick : Yes it is. And the neat thing about energy – in almost any economic process, and part of the research for my book “The Nature of Value” – is that any manufacturing or production process gets cheaper as you make more of it. As more value flows through the economic system, it gets cheaper. And the cool thing about solar energy is every time we, globally. double the number of solar panels we produce – so we shift, let’s say, an extra 2X gigawatts of solar panels – the cost drops 22%. That’s kind of like a “Moore’s Law” of solar energy, and that’s held up for the last 20 or 30 years. So, to produce one solar panel that would make a watt of power, back in the 70s, cost about $1, 000. Now, it costs just under $1.
John and Lij : Wow!
Nick : And as energy is a pure commodity, it’s a price thing. So what ends up happening is you have this commodity that’s dropping in price by a factor of 22% every time you shift 2X more.
Lij : It’s quite different from gasoline.
Nick [laughter] Exactly. It get’s more difficult — well, parts of gasoline get cheaper with [drilling?], but also it gets more difficult to find it as it gets in more deeper rock formation, etc. – with the exception of shale, but we won’t get into the technical discussions on that. So the interesting thing about solar is it’s one of these things where, as you ship more solar panels and produce more energy, it gets cheaper, so you sell more. And as you sell more, it gets cheaper, faster. So, solar energy is going to be one of the most interesting things right now. It’s cost is not fixed. It’s a moving target, and so it’s going to get cheaper, better, faster, globally, very quickly. And you’re in a space – namely “global energy” – where you’re talking about $100 billions and trillions of capital investment.
John : Wow.
Nick : Solar coin acts as an incentive to help people make that choice. So, let’s say a SolarCoin – which right now has a de minimus value – but let’s say that as we grow the economy of SolarCoin holders, if it were to go to $10 per mega-watt hour, all of a sudden the individual looking at putting solar panels on their roof, or in a village or [other?] area, might say, “Oh wow! Not only do we get the solar energy, but we get the benefit of claiming the SolarCoin as an incentive. That’s pretty cool.” Now the value of a currency has two factors that drive it. One is speculative, and the other one is transactional. Economists call these two “utility functions” of a currency. So the more people that hold, or agree to, or believe in a currency, they more transactional value it has. So a dollar you can use almost globally, because everyone agrees, and they understand, what a dollar value is. The dollar protocol is global.
So the current universe of Bitcoin holders is estimated, I think, at about a half million to two-and-a-half million users – last report I saw. Now the cool thing about that is that’s pretty small in the internet world, and yet Bitcoin has the market cap of $5 to $5.5 billion dollars.
John : Right. Almost $6 billion. I like to say six billion. It makes me feel better.
Nick : So the cool thing is we are at what I call the “Compuserve Era” of this technology, or this protocol. Compuserve – if you remember back in the 80’s – everyone had email addresses that were numbers. It was clunky. Nobody used it. Nobody liked it. It was ugly. And that’s really the great news for Bitcoin. The software is horrible. The wallets aren’t user-friendly. Your aunts or uncle can’t really figure it out, etc. The great news is you’ve got a $6 billion economy out there, with something that – engineering-wise – works, but from a useability perspective is horrible. Once that useability gets solved, or improved, and we move from the “Compuserve Era” and have what I call the “AOL Moment”, you’re going to see an explosion into something really interesting, for a lot of the alt-currency spaces. What I mean by that is that is you move from a $6 billion economy to a 10X or 100X one. Whether that happens in the states, or in some other country that adopts the currency and the protocols, that remains to be seen. What isn’t known by a lot of people is the average fiat currency – or government currency – lasts 27 years. That equates to about a 3% failure rate, and I can give you guys the links on that. Now we’re used to the dollar, and the pound, and these other currencies that have been around for hundreds of years. But depending on what country you’re in , if you have a very unstable currency, and there is a problem, you might be very interested in an alt-currency that is easily accessible, not as controllable, and easy to park into a smartphone. And with $20 and $40 smartphones emerging in the next two or three years things could get very interesting, both for Bitcoin and the alt-coin space. And we think SolarCoin is going to ride along with it, and we hope to do a lot of good.
Lij : Mmm Hmm. To focus on the value of SolarCoin, in the future, wherein Bitcoin becomes harder and harder to create – and the value goes up partly through that, I think . In SolarCoin, the value is going to rise, or fluctuate, with the speculative volume, and also the ability to trade in SolarCoin and use it for transactions down into the future, even though it’s going to be easier to acquire.
Nick : Yeah. You have two sides to that equation – supply and demand. The supply side is the granting andthe mining. So the more people, the easier that it is to get SolarCoin by receiving a grant for generating electricity. Or, if mining gets harder – that’s the supply side – the demand side, which is like, “What the heck is this thing worth? What’s its value?” is going to be a mix of the speculative belief in how high, and where, it’s going in the future – and the utility function. How many people can you trade, swap, get something with this currency for. That’s about it. We’re very focused on “ease of use”, growing that economy via “ease of use”. We’re working on improving our communication and our messaging, etc. to try and get to the broader audience of people who aren’t as familiar with — and frankly, don’t even really need to know all of the plumbing under the coin.
John : Nick, one thing I’m still unclear about is, how do the producers of solar energy prove to you that they;ve produced the solar energy? What is the proof that allows you then to award them SolarCoins?
Lij : Yeah. Where’s the “proof of work”?
Nick : Sure. Exactly. The “proof of work” is a submitted verification from the energy meter in the home. So, if you have a solar panel on your roof, it produces DC power, and that gets converted into AC power for your house. That conversion goes through something called an “inverter”, and that inverter also works like a meter, and it shows exactly how much has been produced. And a lot of these things are online. So our first grant, for example – to a woman named Lisa Shockly, in Arizona – she just sent us a link to her inverter. And that feed was online. I think she is a “Solar City” customer. You can look it up online, and say, “Oh yeah. She has “X” number of solar panels on her roof” – and you can verify that in lots of ways. It ties out to what she says she claimed on the power. And the converter images and documentation all looked like that was verified.
We’re working on developing software so we can show those verifications to the community. So you’ll be able to dial up – especially for the larger solar farms – and say, “How were these verified? Who verified and said these were okay? And what was the means?”
John : I always want to say, “Can’t we just throw it onto the blockchain, time-stamp it, and say, “this is proof?”
Nick : Well, what we’re going to be doing is the grants will all go onto the blockchain, and there’ll be a transaction message that will tie out : Who the generator was – in terms of what the source was. Who made the claim? How much the claim was for? And that data is going to include the latitude of where the person is at, what’s called the “nameplate capacity”, or the capacity for the solar generating roof. So it’s going to be, “Bob Smith… Five kilo-watts on the roof… Between June and July, in Arizona.. and claimed 5 SolarCoin.” etc.
John : Nice.
Lij : Okay, cool. So for our listeners – say for a listener who is an absolute beginner at this – how would they about, right now, getting some SolarCoin? Can you explain the basics?
Nick : Sure. There are a couple of ways. Obviously you buy on an exchange, and those are listed on the site. As a claimant – let’s say you have solar panels on your roof – just go to the web site, download a wallet, and then fill out the form – submit the claim. There are about 10 or 15 pieces of data we need, and if you have solar on your roof you”re going to know – pretty much – what those pieces of data are, in terms of, “Oh, here’s the type of meter. Here’s how much [you’ve] generated.” The same way that you might look at your electricity bill and say, “I used 50 kilowatt hours last month.” You’ll go online and be able to look — because you’ll get it from whoever is providing, monitoring and managing your solar panel. You’ll have a little report that will say, “You generated 50 kilowatts.” You just put that in the form. It usually takes 10 to 15 minutes to do the first time.
Lij : Okay, and so for somebody who might be a beginner — for example, they may have experience with solar panels, and having solar energy, but this whole concept of SolarCoin and Bitcoin may be new to them. How would you describe what downloading the wallet means to them?
Nick : Sure. Just go to the homepage. You’ll download a piece of software that will sit on your computer. It will sink up with the blockchain – or this large ledger of all the transactions –
John : And we should let people know that the faster your computer is, the faster it will do that. And that if you have a really slow computer, it could take half of your day.
Nick : [laughter] Yeah. It just runs in the background, so you have to be patient. Inside that piece of software – which is called your wallet, which is basically where you’re going to store your coins – you’ll get an address that will be the receiving address. That’s basically where you ask people to send your SolarCoins to. Take that address, put it – with your other information – into our web site, on the claim form. It’s right up there on the homepage. There’s a button for claiming SolarCoins. And usually, within three to four days, your SolarCoins will be sent out, and you’ll get an email, and you’re part of the process. You’re part of the SolarCoin community.
Lij : That’s cool.
John : That’s well explained. And I guess the form that they fill out to verify the production of solar energy is also probably fairly straight-forward?
Nick : Yes, it is. We’re designing it to be as simple as possible. And right now – because we’re in the early phases – we’re learning how to make it as simple as possible, and just building out the database to automate it more. So right now, for all the volunteers in our community, it’s a very manual process to do all of that stuff, across 11 countries – as you can imagine.
Lij : So do you have a term, or a name, for the people who have downloaded wallets? You know, the volunteers in the SolarCoin community? Are they referred to as “the planets”, or the [?], or-
John : How about the “Sun Gods”.
Nick : [laughter] You know, we don’t. One of the fun things about the whole process is the communities come up with some great names and concepts, and it’s fun to watch the whole thing grow organically. So, from the name of the smallest unit being a “photon”, instead of a “Satoshi”. Someone refers to the currency now as “Solars” – which, kind of, seem like “dollars”. So, we’ll have to see. Again, let people self-identify. It will be one of the great things when people come up with the nickname of how they want to be called.
Lij : Okay. So now do we explain to the beginner how they might go about mining SolarCoin at this point?
Nick : Yeah. Mining SolarCoin is really like any alternative currency. There are a couple of ways to try and go about that. One is the wallet itself. If you download the piece of software from the web site, it allows you to mine the SolarCoin. That being said, the difficulty now found in the currency is so high that really mining with a PC isn’t worthwhile. It’s not efficient. So, if you really want to get into mining, it’s really for the techie people – who probably are already miners.
John : Or the gaming folks, that have GPUs sitting around?
Nick : Yeah. They can either use a GPU, or you go and join a mining pool and lease a mining rig. I’m not going to try and explain that to people. I think that they can probably find better explanations online to do it.
John : There’s a lot of information online about that.
Nick : Exactly. It’s just like any other coin, from that aspect of the mining.
Lij : Great. Well thank you so much. That was a lot of great insight into SolarCoin, and just the process of investing, and the value of money.
John : I agree. And, you know, I still like to think of the sun as the giant nuclear energy plant in the sky, without the associated risks of radiation, without the associated risks of nuclear waste, and Fukushima-style problems. That’s my perspective.
Nick : Yeah. I’m actually working on reviewing a paper for an astrophysicist at Harvard. He’s doing some stuff on economics, and he’s under the same agreement that the most effective means of energy – from a safety perspective, a bio-safety perspective, for 100 or 200 years – is solar. Because it doesn’t have a thermal footprint, which nuclear, fossil fuels, and other things have –
John : Right, and yet we still have goofy people out there saying, “Why solar? We have plenty of coal?”
Nick : Well, it’s always good to have a diversity of opinions, and well thought-out arguments. The good thing is that solar is getting cheaper all the time. So eventually it just becomes a simple, economic argument.
Lij : Yeah.
John : So the last thing I’d like to ask is you wrote somewhere, I read, “The nature of value is the economy of life.” Can you close our interview with some words of wisdom for our listeners?
Nick : The economy, long term, will continue to grow, find, and invest and allocate to stable things that contribute value to us all. And those will grow.
Lij : Like the sun.
John : Nice.
Nick : There we go.
John : I’m investing in the sun. Thank you so much.
Lij : Nick, thank you so much for joining us today on “Bitcoins and Gravy”, and we look forward to seeing what happens with SolarCoin, and hopefully speaking with you again down the road.
Nick : Great. Thank you very much.
John : Thanks Nick. We really appreciate you being here.
Nick : All right. Take care. Bye.
Lij : Thanks to today’s guest on the show – Nissan Bahar of Keepod, and Nick Gogerty of SolarCoin. To find out more about our guests and sponsors, visit our show notes at http://www.bitcoinsandgravy.com/episode17 . Thank you so much for listening to our show. We greatly appreciate your time and attention. If you like the show, please remember to go to ITunes and leave us a review. Also, hit the “subscribe” button if you would like to hear from “Bitcoins and Gravy” each week.
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