Ep. 529 w/ Arie Trouw Co-Founder of XYO

Show Notes

XYO is an incentive-driven blockchain network of over 3 million IoT devices that anonymously collects and validates geospatial data, or data with a geographic component.

Our mission: The continued development of the XYO Protocol, XYO Network, and XYO Token to verify and validate the world's geospatial data.

https://xyo.network/

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Kevin Horek: Welcome back to the show.

Today we have Ari Throw.

He's the co-founder of X Y o.

Ari, welcome to the show.

Arie Trouw: Oh, thank you Kevin.

Thanks for having me here.

Yeah,

Kevin Horek: I'm excited
to have you on the show.

I think what you're involved with and
everything, uh, x y o is actually doing

is really innovative and cool, and
it's kind of an interesting time for

the blockchain crypto space right now.

But maybe before we get into all that,
let's get to know you a little bit

better and start off with where you.

Arie Trouw: Okay, well, um, I was,
uh, born in South Africa originally.

I moved to Cleveland, Ohio,
actually of all places in,

uh, 1976 as a seven year old.

And, uh, learned English there.

So, um, was actually my
original, uh, language.

But then, um, I, I grew up in Cleveland,
went to high school there, went to

college in New York of New York Tech.

And, um, ever since about third
graders, I've been fascinated

with computers and technology.

I got a CRS 80 model one in 1979
and started playing with that.

So I've pretty much been
using computers my entire.

adult life or even pre adult life.

Kevin Horek: Interesting.

So were you fascinated before
you got one or just when you got

one, you became fascinated by it?

Arie Trouw: Probably more when I got one.

So, um, my father was a
physician and so, okay.

He had bought a computer system
for his office to automate some

of the billing and stuff like
that from Radio Shack at the time.

And so he went, you kind of took
me to the, the classes so he could

learn how to use the computer.

And so I just kind of sat there as
a, a 10 year old and third grader

listening and partaking in the
class and it just, It blew my socks

off and I thought it was amazing.

So once I, I, I really enjoyed that,
uh, he decided to get me a computer and

so I just started playing with that.

So it was definitely the exposure at
the, you know, radio Shack Computer

Center, um, thing from the, the
late seventies that got me going.

Kevin Horek: Very cool.

So you went to university.

What is your take and why?

Arie Trouw: I went to computer,
to computer science there.

Um, I would argue actually I went to
university because, uh, living in New

York at the time, I, um, really couldn't
get any interviews as a software engineer

without having a, a degree of some sort.

I could, you know, program and develop.

So I, I went there.

I would say it probably was good for me
to actually go to the university anyway,

because of the fact that I learned a lot.

Theoretical aspects of develop
developing software and some of the,

the more purist sort of of concepts.

So it was definitely was not a waste,
it's just something which I, at the

time thought was not necessary cause
I was pretty eager to, to get my

career going and build cool stuff
and use computers out there and get

paid to do what I loved doing anyway.

Kevin Horek: Interesting.

Okay, so walk us through.

Your career, maybe just some highlights
along the way, and then let's

dive into what you're doing today.

Arie Trouw: Well, I started off as,
um, a software engineer working for,

um, a small company in New York.

Um, but probably like I said, in my
first touch with entrepreneurship, it

was, you know, probably a 30 person
company, couple founders of that.

They were doing well.

Um, they made, uh, tools actually
for visual basics back in the day.

Oh, interesting.

So that's my first real programming
job I made, like the little tab

component that went from the
visual basic and stuff like that.

And then, um, from there, I worked at
a couple other companies after that.

I did some consulting and eventually in
about 2008 or so, I started my first, um,

well probably my, my third company at the
time, but my first company that actually

had legs and, um, it, it did quite well.

We ended up actually in 2015,
um, it was called some Braille

and, um, it did um, uh, browser.

Plugins and add-ons and added features
to, to users experience on a browser.

So that was my first, um, um, real
experience with being an entrepreneur

as well as just a software engineer.

But, um, really, I, you know, I, I, I
spent probably the first, uh, 10 years,

15 years of my career really getting
better at my craft by working, um, mostly

under entrepreneurs and mentors that, um,
that were really good engineers as well.

Kevin Horek: Okay.

So walk us through what you're doing today
with X Y O, and then let's dive into that

and how did you come up with the idea?

Arie Trouw: So for a long time
I've been really fascinated with,

with data at large, um, and set
theory revolving around data.

Um, the fact that, you know, all data
kind of already exists and certain kinds

of data is, and certain kinds of data are
asserted, and the, um, the certainty of

that data can vary from thing to thing.

So, I would actually prescribe
myself as a, um, a data analyst.

And the fact that, you know, data
to a large degree is one of the most

valuable things, um, in the world.

So I got fascinated with that when I
was working in my, my previous startup.

Um, and how you can actually
manipulate, uh, the world through data.

And this kinda really
what the internet is.

The internet is a whole bunch of
connect connected computers, but it's,

it's, you know, A way to actually look
at the world through a certain lens.

And each person's reality is kind
of different based on the data they

have in their mind and their memories
and their interactions with people.

So I wanted to replicate a lot of
that on a computer in, in a system.

And that's kind of what the original
impetus was for my current company,

was to build something like that.

Uh, it was originally called Ebbel,
and the idea was, , it was these little

web bubbles basically, where you have
certain amounts of data in there, which,

uh, is for a certain domain, and then
you can interact these different, um,

domains of data to make, um, offshoots
or expanded versions of those data sets.

The biggest problem I had with that
was making them, um, self-sovereign

was really difficult at the time
because, um, you know, a person could

put whatever they wanted to in there,
the history of them could be lost or

you'd have to storm 'em somewhere.

When crypto came around, um,
that was really, to me a big.

Change in thinking about how I can
actually accomplish the goals that

I started to do in 2012 with using
cryptography, using hashes, and using

blockchains where you can basically
link the passive things together.

And that's what really was the impetus
for the white paper for X by O was how

do you build, um, different sets of data,
represent the relationships between those

success of data, but also make them soft,
sovereign, and not require consensus to be

Kevin Horek: true.

Interesting.

Okay, so you've been at this a while.

Walk us through the evolution of X
Y O until up until what it is today.

Arie Trouw: Well, so x y o we
started the white paper was in 2018.

Um, that's when we issued
our token back then.

Um, the first iteration of it
was much more location centric.

So, uh, we had a previous product called,
um, x y finders, and they were, were,

um, Little hardware devices you can
put on your keys and it would locate

your things for you in the real world.

So it would use a Bluetooth signal
to kind of record where your

last location was of the thing.

And you can also make it make
a sound so you can go find it.

So it was a way to actually, you know,
reach into the physical world from your

app or your, your virtual world, and, uh,
using it, that technology and our, our

connection to the, the physical world.

One of the, the very interesting parts
of data when it comes to being a data

is, is how does it relate to, to reality?

And so for example, just, you know,
having a location or just having a

person, um, isn't that interesting?

But if you'd say, well, this person
was at this location, at this time,

it becomes much more interesting.

Or, you know, this item is at
this location, so location.

and time are probably the two most
important heuristics when it comes to

data and taking data from being just
a, you know, a, a stated heuristic.

Um, like blue for example.

You can say blue, but blue doesn't
mean anything until you say, you know,

this car is blue and this car's at this
location and it was blue at this time.

Maybe after seeing the sun for a
hundred years, it's not blue anymore.

So the time matters there.

So location was a very
important part of that.

So, um, we.

Made X by oh 1.0.

The technology kind of revolve around
this hardware device and, uh, location in.

And, um, you know, it was
quite difficult to use.

The premise also was based off of, uh,
affordable gas on Ethereum and smart

contracts, which turned out to be not
good because the gas prices, as most

people know, went, um, completely
haywire over the last few years.

So, um, starting last
year, we pivoted into this.

We pivoted, but we started working
on XY 2.0, which is, um, a more.

Um, like j s o based version of the
same data structures, which is these

entangled, uh, bound witness or entangled
blockchains, basically, which stores

the data fo location and for the things
which you observe at these locations.

And we are doing it more on computers
and phones as opposed to on little

devices, which has become much
more efficient and much better.

And, and along with that, we
also introduce Coin, which is

an app which people can use as
a front end to interact with x.

. So, um, and that's really become the
way that people become familiar with

XY o is by using coin and enjoying it.

So to some degree, I would say we're one
of the companies out there, which is,

uh, we're a, a profitable company that,
um, also does blockchain as opposed to

just a blockchain project, which hopes
to have a long enough runway from their

token to be able to make something.

And we're also really crossing
Web two and Web three.

An app, for example, is a Web two
solution, but it also accesses web three.

I think Jack Dorsey was the one who
pointed that term recently on Web five,

which is kind of where Web two and Web
three meets, and I think we're solidly

in that Web five sort of a category.

Kevin Horek: Okay.

So give us some examples of how.

People can use x, y O and, and the data
now, and maybe like you don't have to

say client names, but maybe give us some
examples of how some clients are using

it just so people fully understand.

Arie Trouw: So, uh, many of those use
cases kind of manifest themselves in coin.

So for example, depending on which
region you're in, you might get

different offers to collect data for
us that some of our partners would

want, and you could reward it with.

Like one of the examples is, um,
during Covid a lot of stores closed

or their hours changed or their rules
changed and that sort of a thing.

So a lot of, um, data providers out
there, they had very stale data.

They didn't know is the store still
open or is it open on the same days,

or are the hours still the same or
are they, you know, take out only

and you can't sit down there anymore.

So what uh, we would do is we would
ask our, um, customers with coin.

To go and, you know, if they're in an
area, we'll say, Hey, can you go there,

take a photo of the front of the store,
tell us if it's open, tell us what the

hours are, and those sorts of things.

And we'd have, um, you know, depending on
what the, the customer wanted as far as,

um, this data goes, we'd have, uh, two or
three or maybe even 10 people go and do

the same thing completely independently.

And then you can look at that data
and see, you know, if we call it

a micro consensus, if, if nine
outta 10 are exactly the same.

Then we know that's almost certainly
the truth of what the hours are of the

store or the, you know, the fact that
it's still open or, or not, so that

we know hand that back as the answer.

So it's really crowdsourcing physical
world data for a company which needs

to know something that's out there
without having to have them go and

hire a team of people to go and
wander around and get these things.

So it's much more cost effective
for them to just make these little

microtasks for our users in coin.

Kevin Horek: Got it.

Okay.

And then as somebody that's
building an app, what types

of data can I get access to?

Arie Trouw: Um, if you're making an app,
you mean, um, using X by O or if you're

just using, making an app separately?

Kevin Horek: Well, yeah, like cuz
I would have to use your technology

if I want to access the data.

Correct.

Or how does that.

Arie Trouw: Well, we provide that, uh,
via APIs or via our blockchain answers.

So a person just accesses,
um, in the backend.

So it is, uh, once those answers
are there, then we can provide them.

Uh, if they're a very web two company,
we can provide them just a API endpoint

where they can download those answers,
uh, to the questions which they've asked.

Or if they want to, they can go and,
um, look through our data with our,

uh, web three connections so they can
see what those answers were on there.

But that's all done.

At the back end there and then they
import that data into their system and

then they can use that data however
they want to, to show it to their users.

Kevin Horek: Okay.

So I have to ask the questions and
then like X Y O will get me the

answers from users, like you don't
have data sets that I can just say

like, I really want data about, I
don't know, the real estate market

in Southern California or something.

Arie Trouw: Well, we have some of that.

So for example, um, if you
want to know, um, yeah.

What percent of people of our
customers go to, to McDonald's once a

week versus Burger King once a week.

We, we have a lot of that
data that's, that's minable.

So we know we can use our existing
data in those cases to come up with

answers where, you know, we don't
have to collect any more data.

So it's, it's preemptively collected
data basically with our app.

And then after the fact, we
can answer that question.

And in some cases, like the store.

We didn't go and ask, you know, our
customers to go and take photos of

every single store in the world.

So that's a just in time data model
where they ask a question and the

answer, you know, as possible.

If we already have the
answer, we'll give it to them.

But in those cases, usually it's pretty
rare because they have a very specific

question like, you know, is this
specific restaurant still open or not?

So that's the just in time model.

But both of them exist and we have
some data sets that we, we mine for.

, um, generally speaking, you know, larger
scale answers, uh, not like specifically

like where was this one person, you
know, that's a p i I problem, but more,

you know, like, uh, people who are in
the physical world in New York, what are

their behaviors or, you know, where's the
traffic heavier and that sort of a thing.

Kevin Horek: Okay.

So, and I'm curious if, if you get
this question a lot is do people.

Really understand which data they
really need to collect and like,

do you help them through that?

It's like, and like for an example,
it's like I'm trying to solve this

problem, like how do I go about,
or what questions do I need to ask

to actually retrieve that data?

Because yeah, obviously if it's something
as simple as like, is this store open?

But as you know, like a company
that's collecting certain types

of data, it some, you need to ask
the proper questions to get the.

Proper data that you're
actually looking for.

Do you know what I

Arie Trouw: mean?

Yeah.

We generally work with
our partners on that.

So the, the cu or the, the, the
users of coin don't really know.

Uh, we're just asking 'em specific things.

Take a photo of this or, you know, take
a photo of the hours of that or tell

us, you know, if it's open or closed.

Um, You know, those sorts of things.

Um, what question we're trying to answer
is not something which we necessarily

share with our coin users, but for
the people who are, are trying to

use this data, what we do is we sit
down with them and say, well, what is

it that you're trying to figure out?

You know, what's the geo
that you wanna do it in?

You know, what's the the
level of certainty you want?

For example, would you rather
have 10 times as many stores

checked with one person or you.

A third of those with three people
checking it to have higher certainty.

So what's their, their need for
certainty, for example, what's

their, um, need for frequency?

How often do they wanna recheck it?

Do they wanna, you know, every week have
go, uh, verify that the stores will open?

Um, but for example, we also,
um, do, uh, locations in stores.

You can say, well, you know, if you're
a Coca-Cola and you're paying for a

end cap in stores and you want to get
third party validation that the store is

actually putting your product on the end.

Our, our customers, when they happen
to be at that, that grocery store, we

can just ask, oh, by the way, find the
Coca-Cola endcap and take a photo for us.

We put a stamp on there of where
the location was, what the time was.

We put it in the blockchain, so it's
an auto trail and it can't be changed.

And then we can go to them and say,
well, look, here's proof that your,

um, your product was actually at
the endcap, or if several different

users all failed to find that endcap.

That's also in interesting
to them as well, so we have

to generally work with them.

Understand what the questions they are,
and then how do we either use our existing

data to answer that question or get new
data to be able to answer the question

or use some combination of the two.

Kevin Horek: Got it.

Okay.

So in what locations then can
people actually sign up and actually

start using and collecting coin?

Arie Trouw: Oh, all over the world.

You know, barring certain
countries, which are.

Uh, you know, not allowed to have
abstinent from the place source.

So pretty much everywhere in the world,
minus, um, those 10 or 15, uh, countries

which have, um, app restrictions on them.

But, um, it, it varies from country
to country, what types of things

people are willing to pay us for data.

So your, your value of your
data is gonna be vary, kind of

like the value of advertising.

You know, advertising in the US is much
more valuable than advertising in, say,

Argentina or something like that, just
because the, um, you know, the average.

Spending of a US citizen versus
an Aine citizens a lot higher.

And so people are willing, willing
to pay for clicks more there.

Same kinda thing with this data.

Knowing answers of how, you know
Americans wander around or Europeans

wander around is a lot more valuable
for them than other people in the world.

Kevin Horek: Right.

Okay.

So walk us through actually, if, if
I'm a consumer and I'm looking to, you

know, use coin, walk us through what I
need to do, just so people listening,

can, can maybe start doing this.

Arie Trouw: Well, all I have
to do is go to the App store

and look for the Coin app.

There's, you know, you can install the
Coin app on your phone, on Android or iOS.

Sign up for an account from there with
your email and start collecting coin.

There's Geo mine in there, so wherever
you go, you, um, push a little button on

there, it looks little pickax, and then
Geo Mines collect some data for you.

Um, unlike most companies we're
very transparent about, uh, the

fact that it we're collecting
data and we're, um, providing you

a way to monetize your own data.

We're not collecting data without your
knowledge or that sort of a thing.

And then, uh, once you have that, you
know, you have a certain amount of

coin you can take that you can redeem
it for different things like x Y O,

um, tokens, uh, Bitcoin, Ethereum,
or PlayStation five, for example,

and different kinds of rewards.

We also have different tasks, like even
surveys people can take in the app.

So once you get that app, the coin
app, that's the best way to, to you.

Use our system from a a consumer side,
um, if you wanna use the, from a developer

side that we have develop relations
where we go through to, um, do that.

And same thing for, um, data
purchasing is much more of a business

to business sort of a, of a thing,
but most people just use coin.

Um, we have, I think to date
like 5 million installs of coin.

Um, and, uh, a lot of people
out there are using it.

So it's, it's a good
way to get lots of data.

.
Kevin Horek: Okay.

Interesting.

And then I want to dive a bit
deeper into the developer side.

So I asked my questions, um,
well, I guess even before that.

So how do I get x y O into my app
and start actually asking questions

and pulling data from either the
repository or the questions I, I have

Arie Trouw: on?

So, um, right now coins are
our largest user, of course,

of, um, of X bio XO backup.

And, and our SDKs for iOS and Android
are, they're right, only SDKs.

So what you do is you install those
and then those SDKs let you get data or

you'll get the data for you, for example,
location or your information about your

phone and those sorts of things, or ad
hoc, you can add some other information.

So say for example, you wanna take a photo
of something, you can put it in there.

That information basically is pushed
from the app to our storage, um, of there

and then, , all the rest of the data
processing, whether it is, it's going

through that data, um, checking the, the
hashes to make sure it's all valid, uh,

getting a, uh, uh, answer of a certainty.

That's all done off the phone.

It's not done on the person's phone.

So it's, it's done, um, after the
fact, kind of like going to ethers

scan and looking at things there.

So, um, your app just basically
needs the, the SDKs to be

able to produce data on there.

Um, at some point we probably
will be, um, making a more.

Reen enabled SDK version for
coin, sorry, for XY o as well.

So people can actually directly use
some of this, the data that they stored,

um, from their phones back in the app.

But we, um, we don't do that very much
right, uh, right now, but even in coins

case, but it doesn't wanna pull data back.

It pulls it back through APIs because the.

um, the data that we
stored is in our archivist.

In our archivist, basically
can, can regurgitate that data

with, you know, signatures and
cryptographically sound forms.

So getting it back to API is
the easiest way to do it right

now as opposed to using an sdk.

Kevin Horek: Okay, interesting.

So if, can I basically, if I'm a company
that's like, can I use a different,

Front end other than coin for x Y O and
create my own, or I have to use the two

Arie Trouw: together.

You can use whatever front end you want
to, uh, if you want, if you have your own

app, for example, or if you wanna write
your own app, you can just use your sdk,

put it in there, and start collecting
data with that, that sdk, and then, um,

retrieve that data basically from the
API and do whatever you want to with it.

Um, you know, so I think for most people
it probably more likely that they have

an existing app and they wanna add.

Um, some of this functionality
or auto trails to their existing

app rather than their, um,
Making a whole new app around it.

The one thing which you DOF use our SDK
for is, um, a separate SDK actually is

to interact with our Sentinel X cards.

We have this cards called Sentinel
X that people buy from us, and it's

a way to verify, um, uniqueness
out in the the physical world.

So it has a N F C chip inside of
it, which has a rotating cipher.

And kind of like a, um, you know,
those, those, uh, two-factor

authentication apps you have.

So every time you scan it with your
phone, it comes up with a new id.

But we can actually look at
that ID and see if it's the

same card with the same id.

And, um, that's basically used so that if
we ask, if you wanna make sure a person's,

um, not cheating at making data, if
you, if they scan that along with their

data, then we know it's the same person
who's been scanning that because you.

Um, just give the card out or
you can't, like photocopy the

card and give to other people.

So it's a way for us to, to verify
that a chain of data is actually,

um, generated by a singular person.

So that if you wanna use that as a
way to, to make your data even more

certain, you have to use our SDK to
be able to scan that, um, N FFC card.

Kevin Horek: Okay, got it.

So maybe can you give
us some use cases then?

I already have an app and I'm,
I'm not gonna use coin because

it just doesn't make sense.

Can you give us some other
use cases for how people would

integrate x y O into their

Arie Trouw: current app?

Well, the, the most common, uh,
request that we get is auto trails.

So, Well, one thing that blockchain
provides you is, uh, data permanence.

And so what happens is if, if you go and,
uh, scan the N FFC card, for example,

or if you go and collect data or do
different things, if you store it in X

by O, each time you store this piece of
data, the address or the wallet that we

have in the, in our S T K, we'll go and
sign that and make a chain out of it.

And so as long as you have the
hash are the most recent block in.

, um, you can tell, you can walk
that block back and you can tell

if someone's removed some data.

So for example, if you wanted to have.

A service provider, check into the,
the app every hour to see where they're

at and see if they're not, not hanging
out at McDonald's instead of going to

do their plumbing or whatever it is.

They can use the app to do that,
but it makes a, a transparent

blockchain out of it so you can
actually see the auto trail for it or.

Even if it's a de a delivery aspect of it
where each time a package gets somewhere,

you scan the package and then it will
make the auto trail home trail for you.

So basically a simple way to provide
data permanence without having

to write your own blockchain.

Um, and also without having to
put it on a consensus chain, cuz

it's really expensive to do that.

You can do it obviously with Ethereum or
with like Polygon, but, , each time you

make another block on there for your,
your data, it's gonna charge you gas.

And so in our system, um, you don't
need to do that because all it's doing

is just basically, um, making the
blockchain for you without having to,

um, store it in a consensus based system.

It's just provable with cryptography
without having to have consensus.

So the auto trail is, is what provides,
um, a lot of security for people.

And also a nice thing about it is
you actually have the auto trail.

You can store the hashes
for it, um, publicly.

So a person can see that you have an
auto trail for something, but you can

actually store the, the payloads for
those auto trails privately so no one

can see what those auto trails are.

But if in the future, if you know
folks, you know, say somebody complains

that something didn't get delivered or
somebody didn't show up, or you know,

there's a lawsuit or whatever it is,
you can actually expose the data at

that point in time and you can prove
the data, which you're showing actually

is the data that was collected based
on the audit trail because it has the

same hash so, It's private or private
until you don't need it to be private.

Um, data storage with a full auto trail.

Kevin Horek: Interesting.

Okay.

So how do you monetize the platform then?

Arie Trouw: Oh, the,
um, The X Y O platform.

Mm-hmm.

. So the primary way right now
is, is reco because, you know,

coin basically connects the data
purchasers with the data producers.

So that's where our primary
monetization comes from at this point.

Uh, we do look at, um, in the future
having it be more balanced where the

gas that's being produced and the gas
beefs are being paid to our different

nodes in our system is going to be
a larger portion of our revenue.

But at this point in time, it's
really the, the ingress and.

The, the outside of the data that, um,
provides the, the most revenue for us.

Kevin Horek: Got it.

Okay.

So I'm curious, obviously kind
of blockchain, crypto, maybe

not so much blockchain, but the
crypto space is definitely kind

of all doom and gloom lately.

And I always say that
like I own some crypto.

I don't think it's dead.

And I think it'll, you know,
we're still at the early stages.

That's my opinion.

Uh, I'm, I'm curious, what are
your thoughts on the space and

kind of what's happening right now?

Arie Trouw: Well, yeah, I, I
think it's definitely cyclical.

Uh, it kinda like the stock market,
the, the cycles on on crypto tends to

be a lot faster and, and more violent
it seems like than most markets.

But it's, uh, it's definitely cy cyclical.

And so the question's always like, Hey,
how long is this winter gonna last?

Um, you know, you obviously want to.

Buy to low point, sell to high point.

If you're, if you're playing a
market, that's always the thing.

But, uh, often what happens in
crypto is people are like, oh yeah,

this is definitely the bottom.

And then it goes down more and
then they're like, oh God, yeah,

I shouldn't have bought that.

I should have waited.

So it's really hard to know
how to time the market.

And I think in general, timing
markets are, are, are, are bad.

But overall, I think to me,
I, I don't really care so much

about the, the finance portion.

Crypto because I care more about
what the blockchain technology and

the crypto concepts can provide.

And so I think that's something
which is gonna stick and

stay around for a long time.

Um, and I actually think it, like
what's happening recently with FTX

and those sorts of things, there
needed to be a reckoning because, you

know, everyone knew that there was
some shenanigans going on somewhere.

because sometimes these, these
stories that are just too good to

be true, like the FTX story, it
seemed to be too good to be true.

And it turned out that one was, there
are some that seem to be too, too

good to be true, and they just happen
to be really, really good and you

know, you're happy for those people.

But we needed to, to
kind of filter those out.

And I think short term, like the FTX
situation and uh, a lot of those, you

know, block, final, a lot of those, those
contagion portions of the FTX situation

is going to hurt the whole space because
I think it hurts, trust, it hurts a

lot of things, but a lot of people
have pointed out that, you know, it's.

Crypto problem.

It's a fraud problem.

Right?

You know, you can commit fraud
a variety of different ways.

And FTX was, you know, oh,
we should regulator ftx.

FTX was regulated.

The stuff they did was illegal already.

It's not like we need new laws to make it
illegal because it was already illegal.

And so, um, getting rid of those bad
players and, and filtering out the, the

bad portions of inet reckoning long-term,
I think is really good for this space.

It's just hard to.

Figure out how, how do you
identify those, those parts of it.

And you know, to some
degree it's just capitalism.

Capitalism will eventually take care
of, of those sorts of situations.

And I think, you know, from a regular
regulatory standpoint, one of the biggest

things that that government should do
is just focus on current laws and, you

know, look at those current laws and,
um, you know, as I said, like fraud.

Go and check to see what the
filings are for these companies.

Go read those, actually
internalize 'em, understand them.

Look at what they're, you know,
But how are they holding customer

money and those sorts of things.

Those are, you know,
accounting one-on-one problems.

They're not super advanced,
you know, crypto problems.

So coming up with a bunch of new crypto
laws to me is kind of scary because

it's so hard to quantify at this point.

But starting off with at least applying
the obvious ones, um, I think will, will

help the situation and stabilize it also.

So at some point, We'll probably have, you
know, a little bit better understanding

of how to apply all those laws and also
have less bad players out there because

it'll just, you know, we'll, we'll end up
finding the Ft Xs to the world and then,

you know, the market will get back there.

But I think it's definitely.

Not dissimilar from the, the internet
bubble from, you know, the web, the

two, your 2000 ish bubble, the.com
bubble, where, you know, after

the.com bubble, everyone was like,
oh, you know, is the internet dead?

You know, like, like, like
our website's gonna come back.

Is this, you know, of
course websites came back.

Not all of them, you know, Amazon
came back, but pets.com did not.

. And so having, you're going through
that, that de linting of the space

on a fairly regular basis is done.

It's definitely not a bad thing,
it's just a painful thing.

Kevin Horek: Yeah, that
that makes total sense.

The other thing too is I
think the cryptocurrency

that was just based on hype.

And didn't actually do anything.

Like people want that to disappear
because, and yes, it sucks that you

lost, you are gonna lose a bunch
of money, but it's better to kind

of weed all that out early on.

And hopefully people, you know,
figure out like, oh, this one

doesn't actually do anything.

Right.

Where I think so many people
got caught up in the hype.

It's like, I gotta buy
all this stuff, but.

, it doesn't really do anything other,
cuz they, like, there's all those like

joke coins that people started, right?

And it's like, well of course
they're gonna probably go to zero

cuz they don't really do anything.

Or do you know what I'm getting at?

Or do you agree with that?

Arie Trouw: I do.

I I'm kind of fascinated though,
with how well those meme coins work.

Like, like I, I, whoever makes
them, or if you look, look at, you

know, do's been around for a while.

Yep.

But then you had, you know, Shibu
for example, and there's, there's a

whole bunch of meme coins out there.

You know, I, I, it, it is kind of like
it shows that, you know, a person who

would buy makeup because the Kardashians
tell you to buy makeup, right?

They don't, makeup is, it might be
a good makeup, I don't know, but

same kind of thing with these coins.

It's like if they think the coin's
cool because it's the meme that

they, like, they go out and buy it
because, you know what the heck?

I, I'm not sure if people or society
is rational enough to not buy.

Things that have, you know,
pretty frosting on them, like

meme coins that don't really have
much value other than just that.

Um, I think that'll continue
to happen, to be honest.

Um, they'll, they're gonna come and
go perhaps, you know, maybe the,

the meme coins that survive, you
know, they have to be a concept

or something that's got a longer.

brand life.

But um, I'm actually
shocked how well they do.

And now maybe there's a space for them.

Maybe, uh, maybe they function better
than some other currencies, uh,

for paying for things like Bitcoin.

The original purpose of it was to
make, you know, inexpensive small

peer-to-peer payments, right?

Obviously that's not it.

So if one of these other coins,
even if it's a mean coin, can

actually produce that result.

Maybe it's not that, I don't know.

I don't think light points interesting.

Accomplished that either, but it's
so I wouldn't write 'em all off.

But I do agree that I think, um, and
that's one of the places where I think

the, the government should be looking
at a lot of these things is how much,

um, of, of these prices that are out
there, you know, how do they get to

where they are and, you know, were they,
you know, internally, you know, pumped.

Like, I think ftt, for example,
was the price of it was

manipulated on the exchange.

So that basical.

They could use the value of that.

And this is my understanding
from looking for the outside.

So I don't know for details, but the
value of their, their asset would grow.

But the way they were doing that
was by basically manipulating what

the prices were by, um, on a short
portion of the, the value of it.

And so then, you know, they
take loans out against that.

So situations like that, where
basically you're, you're manipulating

a currency for the purpose of a fraud.

Already is illegal and I, I don't know
how they, you know, how many of the, the

coins that are out there right now have
done that or um, have, have those probably

are the pump and dump sort of a thing.

Right.

And I'm sure there's quite a few
portions of the, the tokens out there,

there where the pump and dump things.

Hopefully that goes away cuz um, I
think people are getting smarter.

It's just we have to go
through that growth process.

Kevin Horek: that, that
makes a lot of sense.

So I'm curious, does N f T play into x y o
or coin at some point ever in the future?

Arie Trouw: Yeah, NFTs are
actually, I'm a huge fan of NFTs.

Um, not from the standpoint of, you
know, having a clip of a basketball

play or, you know, a, a picture of,
of, you know, art or whatever it is.

Um, using it as.

As a title of ownership, for example, I
think it's interesting where you can say,

well, you know, I have say it's a, a piece
of art and I've won 100th of ownership of

this cause there's a hundred NFTs of it.

And that actually means that if it's ever
sold, I get won 100th of the proceed.

So I think tying it to some sort of
a, a titling system is fascinating.

Um, and even, even for
being able to, to sell 'em.

So taking a item out of a game,
for example, minting it into an nft

selling to somebody else, and the
person who bought it from you could

then go ahead and use it in the game.

Kind of like, um, wishes to the coasts.

Um, Card game, the collectable
card games, being able to make

NFTs out of those so they, they're
transferrable between people and you

don't have people photocopying them.

I think there's a lot of
cool uses for them like that.

Um, again, kind of like the, the meme
coins, I feel that, uh, NFTs fundamentally

are really sounded really cool and they
have these really good purposes, but

then as soon as everyone sees them,
you know, they think they have a hammer

and everything looks like a nail.

And so next thing you know, you have
millions of, of NFTs out there that are.

A person making weird graphics or
whatever it is and getting lots

of money for it, then it deflates.

This was a really fast cycle of a tulip
market that's going on, but I think

there's a real valid use for those.

And like for example, in uh, X Y O world,
which is a portion of X Y O, we have

NFTs, which are, we call 'em geo tokens.

and they basically represent a section of
the world depending on which zoom level

for a quad key, and a person can own
those and, you know, transfer 'em between

each other and that sort of a thing.

But the idea is it allows you to actually
have some say over what the rules are

for the world XY world in that area.

And like you can have a, a quote
in there if you want to, or you.

Say that, you know, these, these different
levers, these different settings are

different for this part of the world.

And so there are ways to use
NFTs to make interesting apps and

interesting games that are are
useful, or even just permanence.

Like for example, in our coin app
right now, we allow a person to

take their badges, like they have
achievement badges in the app.

, we allow people to take those and mint
them to ethere, um, Ethereum or to

Polygon, and they can have 'em forever.

So that way, you know, you can prove
that you've had this achievement.

You can even sell to
somebody else if you want to.

And, um, those uses of NF NFTs are great.

And I think we'll definitely
expand more into the NFT space

for x Y O and x y O world.

And some of the things we're
doing next year, it's just, I, I

hope that the noise of a lot of.

, you know, that inflated, you know,
basically the, the meme NFTs to large

degree will go away quickly, and it
seems like they have, it seems like a

lot of that market has deflated recently.

Kevin Horek: Yeah.

No, that makes sense.

I, I agree.

I, I think there's a
lot of really good uses.

Just majority of people haven't really
seen those use cases, so a lot of

people that write it off, it's like,
well, you don't understand, like just

how much, even like, it's just funny
if an NFT especially tied to the

blockchain and just even like buying.

Legit concert tickets and being
able to track right from the

artist, right to like, if it gets
resold a bunch of times, right?

Like things like that, that people
don't even need to know that

really it's an N F T even in the
background and it's using blockchain.

I think that's where a lot of
people are gonna really benefit it.

They're not, they don't even know
that those are the technology powering

some of their digital transactions.

Do you agree with that or your

Arie Trouw: thoughts around.

Yeah.

Yeah, I definitely agree.

I think it's, um, uh, it's kinda like
everything, you know, come up with

a really cool technology and people
are often, you know, the whole,

you know, guns don't kill people.

Gun, sorry, guns don't kill people.

People kill, kill people.

Same kind of thing like, like
internet video for example,

is not fundamentally evil.

But if you ask a person about
internet video in the nineties,

internet video meant porn.

Yeah.

Cause the people who were like,
oh, how do you know, how can we

maximize the value of internet video?

Well, porn was the immediate answer.

So if everyone was like, okay, well we
should just cancel all internet video.

And because someone used it for
porn first, like, like that would

mean we wouldn't have, you know,
Google Hangouts now, for example.

So all these technologies, it seems
like the, the arbitrage people who

jump on the new technology and make
money off it on the short term.

Can really get to market really
fast because a lot of it's smoke

and mirrors and they, they do that
and then later on it will finally

figure out like, what's it good for?

And I actually think it's
very similar to consensus.

I think consensus is one of those
things where people think that con

it's the, you know, you can solve
everything with consensus on blockchains.

I don't think so.

Actually, I think consensus is
great for, um, like ownership, like

ownership of NFTs, ownership of, of
ERC twenties or tokens and currency.

Um, having, you know, those sorts of.

are really cool, but actually having smart
contracts that you wanna run in any sort

of a performance way consensus really,
really does not work for that very well.

I actually think self-sovereign, um,
blockchain systems like x, Y O is the way

of the future to actually achieve scale.

Not to just try to figure out
how to actually make consensus

faster and faster and faster.

So I, I think consensus is
also getting to the point.

There's the, the two or three things,
it's just amazing ad and we should really

lean into how those are used and then find
better solutions for the other things.

And same thing for NFTs.

You know, find the things which
they're actually fundamentally good at.

Use 'em for that.

Don't do the, you know, the fly
by night sort of NFTs don't.

Use 'em for things or
doesn't make sense for.

And then, you know, you end up with
maybe 10% of the uses of it become

long-term uses and the other 90%
just kind of fall away eventually.

And I just feel like we're going
through these cycles with these new

technologies really fast in crypto
because we can't, you know, e G 20 s,

NFTs, just consensus in the blockchain
in general, even blockchain itself.

I don't think blockchain is
something where every, everything

in the world shall always.

In a blockchain, it makes it much
heavier and there's some cost to that.

So knowing where to apply these
technologies, I think is very important.

I I actually think that consensus as
a cryptographic mechanism for, uh,

for these systems are gonna, is going
to actually shrink in usage and get

replaced with zero knowledge proofs
and, um, those sorts of solutions.

Kevin Horek: Interesting.

I, I agree with you.

Can you maybe give us some examples of.

When you think blockchain makes sense
in some examples, when we should

just do it how we always have, well,

Arie Trouw: blockchain makes
sense specifically if you

want permanence, right?

Because the hashes can't be changed.

So permanence is a very
important part of it.

If you don't care about permanence or if.

Like, for example, if you're gonna drop
every 10th frame in a video, for example,

if you have a blockchain on that and you
drop every 10th frame, your chain breaks

and there's no way to verify it anyway.

So that basically wasted a bunch
of time linking these things

together, and you can't go
through and walk that, that block.

So in, in many data stores, uh, especially
if it's, if it's data which you don't

wanna retain all the data of, or if you
don't care about the order and which

is in or any sort of permanence, you
don't necessarily need it for that.

It is nice though to be able to
potentially take a large portion of

data, hash it and, and be able to
store that hash somewhere, so you can

say, well, I know this didn't change.

I, I know, you know, we, but we
already have that sort of a thing.

If you look at GitHub, GitHub is basically
a blockchain of changes in your code.

Settings for, or your code
that for that, that repo.

Yeah.

Totally hash.

It's unchangeable.

And then on n pm when you download
the package, that's got a hash also,

so you can know that, oh, it's just
the exact same thing I got last time.

Yes.

Cuz the hash is the same.

I can verify it.

So those are are ways to.

potentially provide some of the same
solutions as blockchain with hashing,

um, without having to go through
and, you know, have links between

them necessarily or have consensus.

You know, we don't have to have
people agree that the hash is correct

because I can just do the math
and tell you the hash is correct.

Right.

So all those things finding out, you know,
what are the right nails for the right

hammers, I think is something which it's.

. It's happening nice and fast actually
in the crypto space, but people tend

to, to, you know, when they get a new
hammer, they go and try and figure out,

you know, what can you do with this?

It's, it's a new toy.

And so we see that explosion of
different ideas, which is nice

because you get to find out, you know,
what the corners are and what the

interesting things are really fast.

It's just if potentially also has
the effect of if people get in the

wrong, wrong bandwagon and they think
that's the future, they're gonna end

up being burnt like they buy NFTs that
are gonna be useless in the future.

I feel bad for those people, but.

, they're adults and you
know, we should be careful.

Kevin Horek: Yeah.

Interesting.

Any other predictions or thoughts for the
future of kind of crypto and blockchain?

, um, or Web three in
general, or the metaverse?

I'm curious, like would you tie the
Metaverse into x y at some point?

Arie Trouw: I would definitely.

So, I, I think the
metaverse is interesting.

I, I kind of hate the fact that Zuckerberg
kind of took a, you know, 10 million

piss on, on the Metaverse with his name.

Yeah, you and me both.

But, um, cause it's
actually a really cool name.

The Metaverse is, the idea is all this
data together, kind of in a weird sort

of way, like your own mind and your.

You know, being as a human is a metaverse.

It's your own personal
reality that's there.

And I think the metaverse, you know,
is, is really just a shared space

between all of our own personal
realities and how they overlap.

So I think that's actually gonna
be something that's gonna be

very interesting in the future.

I don't think it's vr.

Um, I, I dunno if you've tried out VR
solutions, but after about 15 minutes,

I'm exhausted from using a VR headset and
trying to walk around and not fall over.

Yeah.

Kevin Horek: So, um, they also
make me dizzy, so I get it.

.
Arie Trouw: Yeah.

Well, augment reality is definitely more
interesting on there, but even just,

um, Your, your online personas and data
storage is kind of part of the metaverse.

So I think to some degree we already have
a metaverse, the internet's a metaverse.

You know, your, your social media
pages, your Twitter is, is a little

me metaverse and how those all go
together, you know, is, is a metaverse,

but how do you actually harness that
and make it into something which is

more interoperable with, with each
other, I think is um, is one of the

interesting things that's on there.

So I think the Metaverse is a.

per my definition of it, is
a huge part of the future.

Um, I just don't think what people
think of the metaverse often, especially

after Zuckerberg went and, you know,
tried to deal with vr, is anything

close to what it's going to be.

Kevin Horek: Yeah.

I agree with you.

Um, cool.

I, I'm, we're kind of coming to the
end of the show, so is there any

advice for people that are maybe
starting out in the blockchain crypto

space, whether they're doing a startup
or not, that you'd like to pass?

Arie Trouw: Um, well, uh, definitely
if you're, if you're gonna be in

the startup space making your own
company, I think there's a lot of

diligence that'll still be done
on, on the legal aspects of things.

Um, my company, for example,
we, we did a reg a plus where,

you know, Publicly filing.

You know, we have public shares, we trade,
we have our token and all sorts of things

we're in the US and I actually would
recommend for people to do it in the US

as opposed to going and you know, Isla
man or finding some sort of a jurisdiction

where you feel like, you know, the
government can't get to you because.

If you are those jurisdictions, you know,
your, your little evil sides inside of

your mind is going to tempt you to do
things which are maybe questionable.

I, I actually like being in the
United States because I think A, it

provides credibility for my company.

And b it also, um, it's a nice checks
and balances system for, for your

yourself and for your company, and, It
also, you know, gives a transparency

where people can see where it is.

So, um, I think long term the value,
like I, I think Coinbase has a really

good long-term, uh, value because
the fact that it's, it's in the

US as opposed to other exchanges.

And same thing from my company.

The fact that we're in the US we're
publicly filing, you know, we have audited

financials by reputable auditor as opposed
to, um, by whoever audited FTX financials.

Um, Uh, those sorts of things
give you much more comfort.

So I think if I was starting a company
now, I would definitely either do it

in the US or, or potentially in Europe
somewhere like, like in a main, you

know, country, not, not in a jurisdiction
where it's, uh, a haven of some sort.

So, um, don't, don't try to bend
the rules because you know it,

it's gonna bite you in the ass.

Kevin Horek: No, I actually think
that's, that's really good advice.

But, uh, we're, we're sadly at a
time, so how about we close with

mentioning where people can get more
information about X y O coin and

any other links you wanna mention?

Arie Trouw: Okay.

Well, so Coin is at, uh, coin app.co.

If you go there, that's the
website that tells y'all about it.

Or if you just search for Coin app
in apps or replace store, uh, X

BYO is easily found at X BYO dot.

. Um, there you can see
what the technology is.

Uh, our GitHub repos are available there.

And then X BY Labs is our company.

So if you go to X by labs.com, you
can see more information about our

company, and that's also where you
can see about our shares, for example.

So if you wanna, you know, buy
shares in our company and there's,

uh, XY lbs, our, our stock tickers.

So if you search for X by LB price,
you'll see that in Google come up as our,

our, uh, price sticker for our shares.

They're on, um, on T Zero actually,
which is a, a crypto wrapped, um, equity.

Market basically.

So we're one of the earliest
companies to do that.

So go to xy xy labs.com by our
company, XY o.network for the the

technology, and then coin app.co if
you wanna partake in the well the

data marketplace that we have there.

Kevin Horek: Very cool.

Well, Ari, I really appreciate you taking
the time under your day to be on the show

and I look forward to keeping in touch
with you and have a good rest of your day.

Arie Trouw: Thanks, Kevin.

Kevin Horek: Thanks very much.

Thanks.

Thank you.

Okay.

Ari,