Episode 67 – Enrique Martinez (Crypto and Blockchain)

This podcast audio has been transcribed by an automatic transcriber.

Fred Rocafort  0:00 

Before we start today’s episode, I’d like to make two special announcements. The first one is to express our gratitude to Andrew Smith. Our summer associate whose time with us is sadly coming to a close. Andrew has helped us tremendously, not just with the production of the podcast, but with our legal work more broadly, we wish him all the best in his future endeavors as an attorney. Second announcement, we’d like to send our best to one of our former guests who is experiencing some health issues. He knows who he is, we wish you a speedy recovery. Hopefully everything will work out you’re in our in our thoughts and prayers, my friend.

 

Global law and global business go hand in hand, but never seem to keep pace with each other. The importance on the global stage of developing and developed nations waxes and wanes, while consumption and interconnectedness steadily increase all the while laws and regulations change incessantly requiring businesses to stay nimble. But how do we make sense of it all? Welcome to Global Law and Business hosted by Harris Sliwoski International Business attorneys. I’m Fred Rocafort.

 

Jonathan Bench  1:17 

And I’m Jonathan Bench. Every week, we take a targeted look at legal and economic developments in locales around the world as we try to decipher global trends in law and business with the help of international experts. We cover continents, countries, regimes, governance, finance, legal developments, and whatever is trending on Twitter. We cover the important, the seemingly unimportant, the relatively simple and the complex.

 

Fred Rocafort  1:43 

We hope you enjoy today’s podcast, please connect with us on social media to comment and suggest future topics and guests.

 

It’s a real pleasure to welcome Enrique Martinez to Global Law and Business. Enrique is a friend and a fellow alumnus of the University of Michigan. I’m also friends with his brother was also at University of Michigan graduate, and we’re all from Puerto Rico so Enrique, it is a real real pleasure to welcome you to our podcast.

 

Enrique Martinez  2:24 

Thank you, thank you very much truly my honor to be here. And and to be able to discuss after so many years of us knowing each other to be able to discuss a topic very close and dear to my heart.

 

Fred Rocafort  2:36 

Let’s get right to it. Tell us about yourself. What have you been doing after the University of Michigan? What is it that you specialize in? And tell us just a little bit about yourself?

 

Enrique Martinez  2:46 

Sure. So during my time at University of Michigan, I specialized in aerospace engineering, did several projects over there both for the Air Force as well as for the army while I was a student over there. And then when I left the university of Michigan, because of a project that I did for the Air Force, then the army was interested in, in recruiting me to work for them and become the lead aerospace engineer for drones, which at that time, it was just a very early stage technology of unmanned air vehicles UAVs, so I started working for them around 2004 and and then that was the lead for, like I said, drones. And until 2007 that then we start working with artificial intelligence, neural networks, machine learning, but all everything together, combined with drones. Then in 2009, because of our interest in trying to continue automating our Jones, then a friend of mine gave me what is now known as the Bitcoin white paper. And so by default, I pretty much became an early adopter of, of this technology. When I left the government in 2010, then I moved to Miami, I started talking to different people that were at that time developing this technology, developing what now is called the blockchain technology, trying to get to learn a little bit more. And so it was you know, I did that for about four or five years, talking to different people learning to know learning how we can use this technology, sharing with different people from different countries, like Malawi in Africa has and then people from different parts of the world can use this technology. And the main reason at that time for this technology had to do with how Can you provide access to the economy to people that were either on bank or have limited banking? More than 65% of people around the world have either liquid banking or don’t have any access to bank? And so, you know, we were thinking about how can we use this technology so that people can from different parts or parts of the worlds and don’t have any ATM or, you know, bank branch close to them can then start trading. And so I started in Malawi, and I continue to different helping entrepreneurs in different parts of Africa and then latinamerica on to 2015, which was when the second biggest cryptocurrency came to market, which is now called aetherium. And then I started looking into how we can use that new technology to do new things and apply to different industries. So with Bitcoin, initially, it was all about the finance industry. Now with aetherium. And the introduction of smart contracts, which actually really comes from the Bitcoin blockchain. But with Ethereum, which specializes in smart contracts, then we started looking into how then we can apply smart contracts to provide a trust less environment and platform to people in different industries. And so we started looking into how we can apply aetherium to decentralized HDI for example, or how we can apply aetherium in the industry of water, or in the sense that, you know, people can transact, and send data, send information, and trust 100%, that the data that people are sending, is not hacked, is not corrupted anywhere and in any way possible. And so, in 2017, because of what happened in Puerto Rico with Hurricane Maria, then I became a more vocal and a more aggressive technologist of using cryptocurrencies in different industries, not just finance. And because because of what happened happening with Rico with Hurricane Maria, then I started using Ethereum blockchain, to solve the issue of providing electricity in Puerto Rico. And this pretty much came from the personal issue of my mom not having any electricity, and she has chronic asthma. So if she doesn’t have any electricity, then she can, you know, death was actually something very real for us in the family. So we started looking into how can we do it, then we can put solar panels, and then just have her write half electricity. And then people started saying, Well, if you have a community of houses, and all of them need electricity, and you can provide solar panels to all of them, then and, and storage batteries inside each of the houses, then something that can happen is that if one of the some of the some of the people inside those houses happened to go on a trip outside of their house, right, then obviously the solar panels are going to continue generating electricity, or that think about that, how you can become a supplier of electricity to other houses. And then if that’s the case, then how can you provide a system that allows for that monitoring, and can track you know, that electricity somewhere else to another house, and then the other houses will then pay in return the house that providing electricity, and that is how then we started that project in 2017, which ended up being publishing Forbes magazine, and then I got invited to the United Nations to speak about that. And then in 2018, a good friend of mine from the NFL, came to me. You know, he at that time, he had already retired and came to me and asked me, hey Enrique, you know, how can you help because I’m going bankrupt. I didn’t know at that time, but now I know that more than 65% of all professional athletes in NBA, NFL and MLB. Baseball, they go bankrupt within the first five years after they leave the sport. And so I say, well, you know, maybe maybe what we can do, I can help you to get revenue from different sources. But then at the same time, you still have to help yourself. I but maybe we can start selling some of your memorabilia, some of your collectibles. And, and the way we can sell it in a very trust less and frictionless way is by using crypto. And maybe we can do it that way by tokenizing, quote unquote tokenizing, your collectibles or some of your memorabilia, or whatever you want to sell to your fans. And so in 2018, then by default, I pretty much started working on what now is called the NFT movement, right? The the non fungible token movement, which now different artists and athletes and singers and blah, blah are trying to start using. And so the way that everything has evolved, at least for me, has been because I, I am very passionate about different things that can be of value to people, and finding ways that I can use this technology in different ways that I never thought about, just to help them. And so, because of that, then now, I am very heavily involved with everything related to renewable energy, and blockchain, sports and blockchain water as well, because water has the same issue of the renewable energy industry, that there’s little investment. But a lot of reward if you can provide investments, to those projects, water projects around the US, but the Caribbean, and Latin America, Africa as well. Right. So I am very heavily involved with all those at least main three industries of renewable energy, water, and then sports.

 

Jonathan Bench  11:50 

Enrique, that is all fascinating. I have been on the fringe of a lot of those things, you know, kind of keeping an eye on it, tried to understand I haven’t read that crypto paper that you talked about. I have so many questions now that now that you’ve opened this up, right, it sounds like it sounds like you’ve been involved in these technologies that say some really foundational technologies that have emerged in the last 20 years, and you’ve been on teams, or at least thinking about it in ways, probably five to 10 years before the rest of us even started reading about it in mainstream media. That’s fascinating. So let’s talk about Bitcoin and cryptocurrencies, more, particularly, you’ve been involved in us, Latin America, Europe, Africa. What do you see as the future of cryptocurrencies? How are they going to be used is it going to be more Ethereum based where we’re not just using them for payment structure, but like you said, where we have a trustless system where you can go into it and, and the ledger is wide open, and, and the finances are wide open and available, and anyone with, you know, with solar panels, and can get an internet connection can be involved in some way? So can you tell us a little bit more about what what you see happening in the next five to 10 years.

 

Enrique Martinez  13:02 

So before I dive into, into that, just, I always like to give very briefly a little bit of the background of how we got here, right, so so around 2007 and eight, by with the, with the bust with all the issues that we were having over in the us with our economy and actually worldwide in the the collapse of the housing market. Pretty much the collapse, the collapse of the banking industry, and the fear in the US my defense and and and at the government level of the whole banking industry worldwide collapsing that there was this group of people trying to find or develop an alternative to provide to regular citizens and you know, households have How can they protect their investments and all the money that they have earned through other years so that you don’t have people that have retired that then they lose pretty much everything. And by the way, this is a very real and personal feature that happened to wipe out the you know, in 2007 2008, they lost a lot of their of their, you know, retirement and money because of this, right so that it’s used by the way institutions to trade and in the stock market. So there was this group of people trying to find ways to develop an alternative and this person or Google people, we still do not know, but they have the name of Satoshi Nakamoto. then develop wrote this paper called the Bitcoin white paper, which pretty much lay out how then we can use different technologies encryption technology and and there Types of computer technology to then allow people to save data, and then have it provide some kind of value to that data. I always tell people that cryptocurrencies is not the first digital currency, the, you know, the Fiat, or the US dollar is already digital and has been digital for a long time. Right, we use credit card, so we have money using our cell phones, mobile phones, right. And so we have already digital money. But what cryptocurrency provides is a way to send data that we call it cryptocurrency from point A to point B, in a trust less, very seem less friction less than platform our way. And so the biggest issue at that time, aside from providing an alternative, the biggest issue, why this had not been developed before in the internet era, had to do with how, you know, a very old problem called the Byzantine generals problem, which has to do with how can you then send a message from Person A to Person B, and make sure that that messenger has not been that message has not been corrupted, right? So the Byzantine generals problem has to do with two generals tried to attack a common enemy, and then general a sense a messenger with a message of general B. And the message had to do for when how, and where to attack this common enemy. And so when the general be received the message from the messenger, then that you know, B, has now a, a question to ask himself, which is, number one, several questions are asked himself, which is, which are, is this message, really, from general a, is this messenger really a messenger from general a, is this message has, you know, hasn’t been tampered or changed in one way or another, because they are, you know, they’re not in close proximity, they are far away by one or two days of distance. And so that has been a problem ever since.

 

And obviously now with the with the era of intetnet and, and sending any kind of data between two people or between two servers. So I think that, you know, it’s exactly the same problem, how do you know that the information that you’re getting in your TV in your computer, is exactly what is happening from the source stand, so then people were able to solve that problem 2009 2008 with this Bitcoin white paper, which with what is now called the blockchain technology. And so that was welding, the big breakthroughs in technology, those that will solve with with Bitcoin, and then use us to then be able to provide a safeguard and protection to any data in the internet. Meaning that now you can start monitoring and tracking and making sure that you can keep for, you know, anytime as you want this specific data, which now we call, you know, Bitcoin or cryptocurrency and so people start using cryptocurrencies back into those 9-10 11. And, and then, to the point, initially, people thought, Well, we know we’re going to be using this technology, the first use case for remittances sending money from one country to another, to help people, you know, for, for example, in the case of just to use as an example, people in California, Mexico City  that want to send some hard earned money to their families in Mexico, and then not have to get the high fees that the western unions or the monograms charged. And so we thought I thought as well, that then remittances was going to be a perfect use case and that everyone was going to use for remittances. Well, that was not really the case. People start using it for that, but but, but not so much. And you know, throughout all these years then vacant has been used for different things in different ways. To the point that now people associate metcon with gold and what is the value of gold? Well, gold as you know, is used for storage of value, or storage of wealth, wealth preservation, right whenever the stock market goes down, typically gold goes up. And so that is how then people say, well maybe we can use this technology called Bitcoin to replace gold, the multitrillion dollar market of gold. And so, that is right now how people are starting to see the future of Bitcoin, I personally do not think that that has to be the only future of Bitcoin I and there are several reasons why Bitcoin is a lot better than gold. Meaning very simply that you can use it at any time around the world at any moment, without any issues from someone in the middle that you need to ask for permission, or you need to request something to somebody in the middle, in a very trust less way. And so, that will definitely still I think, still be one of the uses of Bitcoin, but I do believe that there will be other cryptocurrencies that are going to provide a lot of value in the future and in the present as well right, that is a reason why I use Ethereum. How can then you provide a contract someone and having a template that is set and monitor and track and stamp in gold, we are established on paper right, forever, and not be corrupted, right. So that is the the area of smart contracts, which then it replaces any job that there is there in the middle to provide trust, then smart contracts can replace those jobs, which is another issue, right? The issues and issues of then those people that are in those jobs, how can you then make sure that you protect them? Or, or somehow bring them to the job market so that they don’t stay without jobs? Right. So just to give an example. An art curator, an art curator, is there to validate that a specific art is really well, if you can put that art through a QR code, for example, or some other means, in the blockchain, then you know, 100% of that art is now and forever is the real one. And you don’t need any more the help or the services of any art curator to tell you that, again, this is the real art. And that is one of the new ways that it’s starting to be used blockchain in art blockchain AI in healthcare, right. Why is that? If some if I go to the hospital, Doctor office, and why is that my record is only the doctor’s office, what happens if I go to a trip? And for all those that travel a lot, what happens if I go on a trip to Japan, right? And something, God forbid, something happens to me over there? Well, the doctors over there or the hospital there doesn’t know, my medical record, right. So what what if I can have in my phone or any way that my computer is like that, that I can provide very quick access to my medical records to that doctor in Japan, so that they know, you know, what is some of the issues that I have had in the past. And so, blockchain provides an alternative to that right? Instead of having to wait weeks for my doctors in the US to send a record to Japan, then I can give a temporary access to those doctors in Japan very quickly, for maybe one week, so that they can have access to my medical record and that is something that is being worked toward that right now. In the case of you know, rewatching as I mentioned, right, you can start having trading electricity from one house to another and exchanging opportunity in a very simple and frictionless way. And so, the evolution of Bitcoin, you will continue to be used as a store of value, but who knows, maybe it will be used as well later on maybe for remittances or it will start being used also for smart contracts as well. And so, the what I see is the value of several types of cryptocurrencies going up. And then obviously, there are right now there are more than 1000 cryptocurrencies out there, most of them are going to fail, right, because there’s just way too many that do pretty much exactly the same thing. And so most of them are going to fail. There’s a lot of crappy projects out there, that  tried to ride the ride that wave. But that happens with any kind of new technology right to happen in the way they when they just came out, or they happened with, you know, emails and blah, blah, everybody just tried to become the standard and the main one. And ultimately, some of these projects are going to fail, some other projects are going to be bought out maybe or by bigger companies. And, and so but the good thing is that people are now going to have several things one, an alternative as to the, to the problem of the storage sort of value, or wealth preservation. Second, people are going to be able to start sending data sending value, or exchanging value across the internet, in a very simple, fast, easy way and cheap way, across across continents, or across states as well. And so that opens up the possibility to a lot of new projects that are that are being worked out in different industries, healthcare, arts, sports, water, right, in Nigeria itself, as well. So it’s just I say that we’re still in its infancy when it comes to the the evolution of cryptocurrencies.

 

Fred Rocafort  26:30 

And we got lots to unpack there, let’s slowly make our way through through some of the many issues that you raise fascinating issues. One good follow up is to consider the main obstacles that cryptocurrencies face there’s there’s certainly a segment of the population that remains skeptical. I imagine that some of their objections are legitimate, some of them perhaps, are a result of not knowing enough about about the technology. So perhaps you could address what these obstacles are, and how you think we can go forward and help deal with those specifically, what can lawyers like us do to facilitate the process? Do you see a place for the law into development of crypto as a way of enhancing trust on the part of those skeptics?

 

Enrique Martinez  27:23 

100% and, and something that is great right now, that is happening, and has been happening already for several years. But now with a lot more information out there is that I think that now we are having some very healthy skepticism of this technology, which is great. So before it was mostly fear, fear of the unknown, now we are going to have some healthy skepticism of which projects, I should be paying more attention. Right. So those great, we should always be, you know, have been a little bit skeptic. And, and, and curious to some extent about any new technologies. You know, like, for example, artificial intelligence, I mean, it’s, it can be an amazing tool. But it can be a very challenging tool for a bunch of different reasons. So what in terms of the adoption of this technology? There are several obstacles one, and probably one of the main ones is the ease of use, by unfortunately, unfortunately, a lot of the platforms or apps that have been built to some extent, or the websites as well have been built for engineers themselves. A lot of this technology tools and mean use debit credit so far, are mostly too techie driven, right? When you open them, you start playing with them. It’s sometimes it feels that you need to have like a PhD to understand how to use the very stupid app. And it should not be that way. And that’s that’s a criticism that I always that I always have of ourselves or technology, we need to build things for the masses, we need to build things for the regular average Joe, that that wants to use this technology, I sometimes say yeah, you we should be building for our grandparents, not for ourselves, if our grandparents can use it. for that. That’s that’s a, that’s a very big step forward. And so each of us with the what’s called the UI UX, the user interface, it’s something that needs to be improved significantly in order to keep bringing more people into the market into the psychology. The fear that has been voiced by several of the incumbents in the different industries has also not helped, right? So the fear of well this technology is being used, it’s got to be used for all only for money laundering or or for pornography, you have to buy, you know, a child pornography or for terrorism or things like that, which by the way, it is a real fear, right is something that we should all be addressing and paying attention. But I always say, Hey, keep in mind that none of this fears none of these issues are exclusive to cryptocurrencies, they have existed for a very, very, very long time. And so, you know, if you start thinking of some of the attacks that are that we have faced, and when that somehow cryptocurrency was involved, for examples, some hacks some hackers that have tried to, to ask for ransom, all you need to pay me X amount of Bitcoin, if you want me to. If you want me to unlock your computer, well, what all those hackers have realized very quickly, is that the $5 million, for example, that we that USP, we recovered.

 

I was called, sometimes called the wall, you know, they probably were not so smart hackers, because they knew very well to psychology, then they should have known that this is not the right technology for that kind of illicit and illegal activity, meaning everything that happens in the blockchain and cryptocurrencies is being tracked and monitored. So for anything else, this is an amazing technology, a great technology to be able to track and monitor what happens, you know, and so it’s actually the opposite, instead of being fearful of this technology, well, you know, unless you’re trying to do anything to listen. But if you’re not, this is the technology that we should be using. This is the technology that we should be looking at, you know, from being different government agencies, and so on that sense, is very good technology that we have developed. Now, how can the legal industry and all the lawyers, right, can start going about this technology? Well, first of all, I would recommend, you know, read as much as you can about Bitcoin and aetherium. Those two are the big, the big gorillas in the room. And so their usage, it’s paramount in order to understand and the technology right, these power to enter to understand how then to go on any case. Any state or city that right now encourage your engineers and their citizens. So use cryptocurrencies is being seen right now, a, a large influx of both investments as well as engineers, that happens in Wisconsin, that is happening right now in Miami. That happened, to some extent in Puerto Rico as well, that is happening right now in El Salvador. And so the issue now becomes, from the regulatory point of view is okay, if this is maybe a technology that we can use, in addition to our own central currency issued by central banks, or by the Fed during the case of the US with the US dollar, okay, then how can we use that the benefits of this technology to integrate it to our own currency? Maybe we should then use this technology. And this technology is going to be the evolution of what we know as the fiat currency. And that’s the that’s a discussion and decision that obviously has to be ongoing from a state or country level. In the case of lawyers, if the only thing that lawyers do is only to create contracts, I always say be careful, because you can be replaced with smart contracts. But then one other value, can you bring can lawyers bring in to the to their customers that is not cannot be automated? Right? Well, your expertise in understanding all of the law or all the different laws, that cannot be replaced your skills that cannot be replaced, right, you’ve been able to, to talk to a judge or to a jury that cannot be replaced. And so you’ve been able to adapt very quickly this technology and to offer it very quickly to your, to your clients in the form of a smart contract, just to deal with very easy things, I think it’s a, it’s going to put that lawyer at the forefront of this technology is going to I’m sure 100% is going to attract a lot of new customers that are looking specifically a lot of people now getting into cryptocurrencies, right, that are looking to, you know, can I do this? Can I do that? Can I, you know, what happens if I do this? Well, the laws are going to be different by the laws, as we establish are not going to change just because of cryptocurrency right now. But maybe you can start helping them in terms of the transaction of those paperwork, and all that data by facilitating things in using smart contracts. Right. So there are there there are talks right now inside the cryptocurrency community of completely putting everything, all the different laws in a blockchain so that people can very quickly access them, and then you can increase my contract very quickly and move forward. That’s going to take some time.

 

It’s it’s, you know, the legal industry is extremely complex. And obviously, I’m preaching to the choir over here. But being able to become a a facilitator, and also an early adopter of this technology, from the legal point of view, I think is going to be to your to your benefit.

 

Jonathan Bench  37:05 

Enrique I’d love to hear your thoughts on whether the benefits of Bitcoin blockchain technology outweighs the the burden of the energy production, right. I mean, that’s always part of the conversation, you know, do you think we need to lean lean even heavier onto renewables? Or what is the what is the way? Do we just suck it up and say this, these benefits from having this decentralized technology available around the world outweighs the the harm that is caused by the sheer need of energy production to keep the system running?

 

Enrique Martinez  37:42 

That’s a very good question, because the question that, that we have been dealing for some time, and obviously one that came, that came to the news, when Elon Musk said that he was going to stop using or accepting Bitcoin to for people to buy Tesla’s need. the ironic thing of doing that of Cena is that he also spend, I believe it was like 1.31 point 1.5 billion, billion dollars to buy bitcoin. He never sold, when he said that. Or I think, ultimately, then he sold or he admitted to selling some. But in regardless of what was said, at that time, some of the research has been done into bitcoin for example, says that more than 50% of all big of all, the energy we use to maintain the blockchain technology comes from renewable energy. And so it’s, it’s definitely something that has been blown out of proportion. Yes, it uses a lot of energy. No doubt about that. But if you start to think, you know, what is a Bitcoin possibly replacing? Right then it’s just a very tiny fraction of, of the usage and the value that Bitcoin is actually replacing. In the case of Chicago, Bitcoin uses a very tiny fraction compared to all the energy that is being used to the mining and in the production and in the distribution of gold. And so, you know, we started thinking of Okay, all the truxtun to mined gold, they use these a lot of, you know, the sword or orogastric, and then to distribute gold and then to protect gold, and then to make gold. Well, I mean, just if you think the example, let’s say beacon only is going to replace gold as an alternative, as a store of value, then yeah, it’s still Tiny convert to that now, it is still a very good discussion to have, because at the same time, we need to be concerned and we need to be aware, as I say, you know, citizen of this planet, of how can we continue to make progress in technology with with the less or with a very limited harm to nature, right? And so and to the climate, right, and so the way that the way that we should continue to support and to evolve this technology of cryptocurrencies, I highly encourage the people that are involved in cryptocurrency, mainly the miners that are the ones that are creating and and, and validating these transactions and creating the Bitcoins. I encourage them to use renewable energy to continue moving forward, even though Bitcoin already uses a lot of renewable energy. And they’re continue to use renewable energy in the level of 234 cents per kilowatt hour, versus other sources of energy that sells electricity at 10 1520 cents per kilowatt hour. Right. So, or the case in the case of coal, that produces a lot of pollution, right? Still, the biggest producer of coal is not even the US, it’s China. And so, Okay, are we going to force China? Well, yes or no? How are we going to do it? How are we going to track and well, you know, that’s all information. But just to limit and to completely negate this technology because of his energy consumption, I think it’s not the right way to move forward.

 

Fred Rocafort  42:05 

And we can let’s turn to your work with sports and blockchain that was fascinating to hear, not just in general about the topic, but how you got into into that area, specifically, very interesting to hear about how you were able to come up with a creative solution to the sell of memorabilia, right? By by integrating pretty traditional activity, right, that the sale of physical objects with very leading edge technology, so like to hear more about that, I mean, where do you see this particular area of blockchain going?

 

Enrique Martinez  42:43 

So the area of tokenization have you been able to tokenize your own future earnings, for example, in the case of, for example, Spencer, Dinwiddie, a NBA player from the Brooklyn Nets, he tried to do that, and, and then the, the NBA. It’s, let’s say, they’re still working with that case. But the NBA initially said that told told Mr. Dinwiddie that now you can tokenize your your contract. And it’s still an area of discussion, because, you know, the NBA doesn’t have any sane when it comes to buying a house a $5 million house. And that’s perfectly fine, which you are, by default, obviously, you are already you know, assign some of your future earnings to this mortgage of this house. But then, somehow, if I want to do it with investors then or with anyone on the fence that I cannot do it. And so, that is something that is now open to discussion. In the case of my friend from the NFL, and a very real case cases of bankruptcies. It’s something that that allows that players or anyone that is facing technology that is facing bankruptcy and that happens to be a as a professional, a past professional play your current professional player, it allows them the opportunity to be able to sell some of their memorabilia collectibles in a very easy way. Now, did you just like I said, I mean collectibles or memorabilia is nothing new. I mean, we have been collecting stuff since since probably since since we we can use but the way that now you can transmit or send this collectible or this memorabilia in a digital form or the way that you can track it, the physical asset and monitor it and know that You’re going to sell to someone, this fiscal acid, their real one, and that this customer buyer is can can feel assured that yes, I have a guarantee that this is the real one because it’s in the blockchain. I think it’s a, it’s an incredible step forward when it comes to being able to use this technology in this specific industry, right? industry of collectibles, memorabilia. Because of COVID, and what happened last year, then this evolved very quickly, the reason being that we were forced to be in a digital world, we all have to be, you know, hard to learn or how to get used to using Su, and winning zoom calls. And I’m sure a lot of us, were fed up already have some calls. And so we were forced to live in a digital audio, we wanted to continue to in somehow business. And so the NFT non fungible tokens, or the degree of blockchain technology applied to memorabilia collectibles, then became a very nice and easy fix solution for that problem, which is how can I keep selling my art? How can I keep selling memorabilia? How can I do this? How can I sell my songs?

 

If I don’t have the fans in the stadium? If I don’t have the fans in the, in the arena? How can I do that? How can I still connect with the people that want to buy from me? Well, that that became the boom that we saw in NFT’s. And so what’s going to happen is that is going to go you went up. Now people are saying, Well, you know, this was a bit of a fad. You know, this is just something temporary? Well, yes and no, right? There. There were some. And if these, there were so just like simple, very easy, JPEGs stupid JPEGs that or GIF that anyone can get from the internet and were sold for $5,000. And then the question becomes, okay, why is that I want to buy something that I can just get in nature for free. Why is I want to buy it for $5,000? Well some people did, obviously those people are now in the in the group that is saying, this is this is a fad? Yeah, well, you know, you didn’t buy the right stuff. You just you just got on just went too fast with the with the wave. But there were some people that were able to buy things that truly has a lot of long term value. And I see that as the evolution, you know, how can then you can put an experience, you can share an experience to your fans in the form of an NFT that is the evolution of this meaning just to give an example. So let’s say that I buy some digital art, or some like anything from the gas or, or, or anything, right, Michelangelo, so you just give an example. But in the digital form. And then I go to a hotel, I have my phone with me. And I go to the hotel, and I say Listen, I know that in my room, you have 10 Digital frames, right, just the frames that we already in, some of us already have in our homes, that you can put any kind of digital photo into that frame. And then he just keeps changing the photos every five to 10 minutes. Okay, you have some some of those rooms in my room, I happen to have 10 nF T’s art in my form, which I’m going to give to you temporary access to those or to that art. And I want that art in the form of an NFT I want that art in my in my room in all of my frames. So that when I get to my room, my room is already customized to me. That is really the evolution of this being able to customize or to provide an experience through Nfd which is which then is a validated and a true experience because you already know that what you’re getting is the real one through and if these so that then anything that users do without NFT becomes also you know, part of their life. And so I see a lot of potential for players to be able to start creating their own brand and creating their own perception. Just because they can now have control in the form of a phone they can have literally a phone and you recording a 10 second video to any specific buyer, very specific event and then sell that video to that fan. As an infp, and obviously that fan will always know, yeah, this came directly. And it’s validating discovery for me. That’s number one, right? That player has that accident, that opportunity or that art is that opportunity now, at the same time, something that it’s also the second step to the NFT’s is that whenever that NFT is being resold in the secondary market to anyone else, well, be careful because of smart contracts that are embedded in the, in this technology of blockchain, often NFTs, then you can program inside the NFT, that the original creator of the NFT, meaning maybe the buyer, meaning yours, meaning the producer, what that person can get five or temperance, or, or 10%, or 2%, for the most part, royalty of that secondary market sale. And that opens up the possibility for that player to, you know, now I can have revenue coming from different angles, because I can sell a lot of memorabilia that has value. And every time someone a fan, that fan resells that to somebody else, then I can get some money. How is that being used, for example, with tickets, just to give another example, Mark Cuban was saying, well, scalping is a big issue. Why? Because I sell tickets $50. And then if that if that game happens to be a very important game, then people are outside my outside my city, selling the same ticket at $1,000. So what argument is saying is okay, maybe I’m going to, from now on, I’m going to start selling tickets as NFT. Why am I not, I might not stop scalping. But what I’m going to do is I’m going to get some royalties out of that resale of that ticket. And then I’ll be I’m sure, now I’m going to get grab some of that, grab some of that exchange of value, right, because now I know I get it, by the way, the five to 10% royalty, that can be programmed to be 100%. And then if you do that, and you sell to someone else, then you know the original fan is not going to get with the original buyer is not going to get anything in return. Because everything is going to be very easy in a digital way is when that money is ready to be transmitted is to be changed or to be sent to Mark Cuban or to the Mavericks and not to the fan. But that is something or maybe your mark is going to say, you know, I’m going to split it 5050. You know, since you’re doing the work of selling the tickets on of course, I might, I might split the royalty, right. So something like that. But that is, or those are are some of the future use cases for NFS. And the way that we’re going to start seeing this technology of blockchain smart contracts to be integrated into our everyday lives.

 

Jonathan Bench  53:10 

So Enrique, this has great application, you’re making me rethink my career choice, although not not with an entire twist. But But thinking as an early adopter of the technology, like you said, people will still need lawyers to help Usher them through this process, even if they’re using smart contracts. They’ll want to know how secure is it? How does it work, where the terms and conditions to those get changed? You know, all of that and including me this the idea that that the contract terms and the payment terms can be tied up in the NFT so that you can continue to get what’s the equivalent of a license agreement or a royalty payment? Is is absolutely fascinating. Fascinating. So we’re unfortunately we’re at a time it’s been excellent we’re already I think at 15 minutes which is which is fantastic. But we still want to ask you for recommendations for the audience. Fred and I will share some as well but have you read anything listen to anything’s you anything recently that you think is is worthwhile and valuable for the audience to take a look at?

 

Enrique Martinez  54:13 

Always start with the basics right read the Bitcoin white paper, then there’s a book called the Bitcoin standard. That’s a great book. There’s different books of Ethereum and also Bitcoin just go and get them and understand both types of blockchain so that you understand Okay, how to use each one and also I recommend for the people in the in the legal industry or legal department then definitely go and start seeing what’s happening Wisconsin and what’s happening Miami, you know, what’s happening Wisconsin with with the banking industry and and my dear friend, Caitlin, Caitlin long, that is leading an amazing attorney and she’s leading the regulations in Wisconsin, when it comes to the evolution of cryptocurrencies in that place, you know, it’s going to be very important. And actually, I have to correct myself. It’s not Wisconsin, so I’m sorry to Wisconsin, it’s actually Wyoming. And I hope that Kelly doesn’t kill me but is Wyoming take a look at everything related to Wyoming and, and what they’re doing over there in the banking industry. What is happening in Miami with the mayor Miami Mayor Suarez, now allowing employees to get paid in cryptocurrencies and knowing those two places Wyoming, and what’s happening Miami, then, you know, you can start seeing trouble you’re citing in probably about what’s going to be the future of cryptocurrencies in the banking industry, and also in other industries, right. So I highly encourage everyone to take a look at that. And if possible, take a look at some of the other projects out there that are top top massive projects. And when it comes to smart contracts, such as cardano, is an amazing project, the founder of Cardano comes from the group of Ethereum. All also one more, because I have to this new era of what is called decentralized, finance, or defy, for the most part defy is right now evolving outside of the US, because of regulatory obstacles in Asia and in Europe, but defy is definitely an area that that is they will continue to grow in a way of anyone may be possibly given a loan to another friend, in a very simple way doesn’t have to be a bank. Now anyone possibly I can do a law, I can because I have all my money, I want to do a given soils in exchange for obviously some interest or something like that. So but when it comes to legal Wyoming is definitely in the US leading the way with Kelly long and everything that she’s doing. Jack Dorsey has written a lot about this, and it is a huge proponent with this company square. And I think that he mentioned this a few weeks or days ago that that that Bitcoin defy is his priority right now with his company square. So it’s, it’s happening very quickly. And the evolution of this technology is definitely going going very quickly. And so it might feel that you’re drinking from a firehose. Always good to reference bitcoin.org the website. But just stay at it. And I sometimes say to people, if you want to know how Bitcoin is behaving, its behavior. You know, give it a try, try maybe 5-10 dollars $15. Again, get yourself some Bitcoin to see, you know, what, it’s how you get to use this technology, how it goes up, how it goes down. And and then at the very least, you start getting used to some of the some of the advantages, and also some of the disadvantages right of using this technology.

 

Jonathan Bench  58:30 

And Fred what do you have for us today?

 

Fred Rocafort  58:32 

A couple of recommendations today, the first one is one of our older episodes, Episode 47, to be exact, where we had James Cooper who who spoke quite a bit about blockchain, among other things. So if you’re interested in this topic, take a look at that that was released in, let’s see, March 16 of this year. So go to our website, and you can find it there. My second recommendation today is another podcast called the China history podcast. And I have been a listener of this podcast for a very long time. I mean, it’s one of the first podcasts that I listened to. I’ve had the pleasure of meeting the producer of that podcast, Laszlo, Montgomery, and as often happens, there are periods of time when I have less time to listen to podcasts, or all focused on other things. But every time I go back to the China history podcast, I’m glad of having done that if you have any interest in China. It’s absolutely fantastic. Just this morning, I was listening to an episode about the Chinese Civil War. And then you also have episodes on lesser known aspects of Chinese history. A couple of days ago, I was listening to one of the more recent ones where Laszlo is talking about some of the Chinese communities in in Borneo Indonesia, you know, historical communities they’re so all these fascinating stories that are not as well known, although there is a lot of material on this stuff that is well known. So China history podcast, Jonathan, what about you?

 

Jonathan Bench  1:00:13 

I’m bringing up an article from the economist is is not highbrow stuff. But it’s kind of fun to look into the the title of the article is the secret economics of a VIP party. And the title was enough clickbait that I clicked it and wanted to read it. Because it goes, it’s kind of a long form article, not not super long, maybe a 15-20 minute read. But it gives you an inside look into the world of the super wealthy, right when they go out. Or they’re, you know, they’re scheduling a club or a bar for a party on a Friday night. how that gets set up? Who is in charge? How does the pretty girls make it there? And why do they come? I mean, it’s really kind of interesting look inside the like, it says the economics of how these that look like impromptu parties are actually put together with quite a bit of detail and thought, and certainly a lot of money involved too. So if that kind of thing floats your boat, the secret economics of a VIP party, in the economist, it’s in the 1843 magazine for long reads in life. With that, Enrique we want to thank you so much for spending time with us today, Fred and I were messaging each other while we’ve been there, in this episode, and saying how much we’ve enjoyed it. So we hope we can have you back again, learn more from you and explore developments between now and then.

 

Enrique Martinez  1:01:33 

Absolutely, truly my pleasure, I mean, in all the industries that I mentioned, there is an incredible, incredible, massive need for experts in the legal industry that can help us you know, engineers and and intrapreneurs to guide us in this in this evolution of this technology, right. And then that is something that, that all cities or states or countries issue to think about meaning to be able to provide a sandbox to some extent, an area for, for all these amazing engineers, to see sustained the US to stay with recovery, you know, in the In my case, and then and then be able to stay there and, and program and help help bring technology, you know, advancements in technology to to the world because as a citizen and for the US to always continue to be the number one leader when it comes to the technology. Right. And that’s something that that, that having champions in the legal world that can say they can give us that, you know, guidance. It’s definitely needed. It truly hasn’t been an honor. I mean, like Fred mentioned at the beginning, I have known Fred for several years already.

 

Fred Rocafort  1:03:04 

Decades, my friend decades.

 

Enrique Martinez  1:03:09 

You guys are amazing. You guys are doing an amazing job. I highly encourage you, both of you, Madeline, as well to, you know, to continue this, this endeavor of creating all these podcasts that are extremely valuable to write to your listeners to and to anyone, anyone that can connect to your podcast and take advantage of all these wealth of information that you guys are bringing. So kudos to both of you.

 

Jonathan Bench  1:03:35 

Thank you. It certainly is fun. We enjoy it. I consider it a masterclass every time we get to sit down and talk to someone who isn’t in our core area. It’s it’s a lot of fun for us and we’re glad that everybody else can get a little benefit as well. We hope you enjoyed this week’s episode, we look forward to connecting with you on social media to continue discussing developments in global law and business. This podcast was produced by Harris Sliwoski with executive producer Madeline Williams music composed by Stephen Schmitt. Tune in next week for another episode. We’ll see you then.

 

Transcribed by https://otter.ai