I'm here this morning and I'm very excited about sharing some practical ways to get involved. Just maybe a little quick explanation how I got this information. I worked for Christian Aid Ministries and a few years ago we were looking at this whole subject of how we had a burden of how can our Anabaptist people get involved in crises pregnancy centers and this whole thing of abortion how can we get involved and so I was appointed to do some research and so I did extensive research on this how can we get involved and I was getting things set up and ready and presented it to our board and our board just felt like it didn't quite fit in with Christian Aid Ministries goals and didn't feel real comfortable with it so I was sitting on this information and I was I was burdened and wishing somehow I could go around and talk to churches give this talk and tell people how to do it it's simple let's get involved then I get a call from Joe Martin and we started dialoguing and talking about this and and that's why I'm here this morning so I thank the Lord for giving me this opportunity to to get this burden off of my shoulders and pass it on and and get everybody excited today my goal is not to give a bunch of statistics but I'd like to create sparks it only takes a spark to get a fire going right and I'd like for you to take those sparks home to your congregations and get your fires going in this topic here just a few average statistics about abortion that are key points to what I'll be sharing four to seven hours after a lady thinks she's pregnant she has decided to have an abortion four to seven hours after from the time she decides to have an abortion until the time she has one there is a nine-day window of time to reach her nine days and over 90% of post-aborded women said they weren't given enough information to make an informed choice where are God's people listen to this lady relate her experience I was a scared 16 year old girl searching for someone to tell me that everything was going to be okay I wanted my baby and remember trying to devise a plan of how I would raise him no one told me that it was a doable thing in fact everyone told me just the opposite that I would be ruining my life by having this child I remember the coldness of the office and wanting to get up and leave but I felt like I had nowhere to run and no one to run to I remember crying uncontrollably the nurse said that it would be over quickly and that it wouldn't hurt it did hurt and the pain has lasted for over 26 years they said it was no big deal so I thought that I could put it out of my mind forever unquote there's a tremendous amount of guilt and an emotional pain that these ladies experience from an abortion of course the media would never tell you that media makes it sound like it's nothing so what can we do you may have heard and Finney mentioned this crisis pregnancy centers or the latest name for these is is pregnancy resource centers or pregnancy care centers you hear those names interchangeably pregnancy resource centers are in a quiet way meeting women where they are and gently steering thousands away from the horrors of abortion pregnancy resource centers offer free pregnancy tests and ultrasounds to women who think abortion is their only option the goal is to show the love of Christ and to give counsel concerning other options such as adoption and parenting and just a little side note we need a an abaptist adoption agency that's another whole story in a subject most importantly a loving and caring attitude is the goal to walk alongside these women looking for who are looking for a way out of their pregnancy pointing them to Jesus and all services offered are free at these pregnancy centers now there are two types of PRC we're gonna call it PRC facilities we have the brick and mortar building which is typically what we think about as a pregnancy resource center and then we have the mobile RV unit and this is what really gets me excited and so we're gonna look at these two real quickly here we visited a brick and mortar facility in Alabama called save a life pregnancy test center and just a very nice program very they have walk-ins walk-ins are welcome you can also make appointments they make sure that that you're not sitting in the waiting room longer than five minutes they try to keep people moving through very comfortable atmosphere before a counselor enters the room to counsel a client the staff gather around and have a word of prayer with that counselor and then she goes into the room very organized and very attractive program a stationary building allows you to have programs like earn while you learn and this is another exciting part of it the earn while you learn program offers various classes for parents on topics such as postpartum care first aid foundations of discipline child training and much more and every time a parent attends a class and also if they're puncture if they're on time they earn tokens or what some people call mommy money or daddy dollars or baby bucks and they earn these tokens then the parents can use these tokens to purchase much needed baby baby items from your little thrift store your baby items thrift store that you have there and baby clothing strollers cribs and all of that it's a way of encouraging and helping these young women a lot of them are single that are considering abortion now let's look at the pros and cons of a brick-and-mortar facility number one you're able to establish ongoing relationships when you have a brick-and-mortar facility and you can see multiple patients at the same time if properly staffed also it's able you're able to offer parenting classes like I mentioned the earn while you learn works much better in a brick-and-mortar facility the post-abortion classes and ongoing spiritual counseling and you can provide prenatal care at a facility now some of the cons a permanent facility is a targeted and attacked more by the media and planned parenthood and so here you have a physical building and you get a lot much you get much more resistance you get the walk-in fakes fake clients they do that all the time they walk in with a recorder they set you up and try to catch you in you know saying something wrong or giving them wrong advice and take it a court and all of that so they're they're a little bit more targeted in that way there are higher costs to maintaining a building and they're also limited in reaching people where they are so you kind of have to go wherever there's a building available or a land available and that's where the building is now let's look at a mobile unit ICU mobile is based in Akron Ohio and it provides mobile ultrasound units that are road compliant and legal they build them in Indiana at an RV place there they build them for this purpose special ordered many women especially in the lower class urban areas may not have access to transportation and this this will allow you to bring the ultrasound right to the women where they are it consists of two rooms in the back is the private ultrasound room and in the front it consists of a counseling room very nice and spacious facility is a little shower and kitchenette and everything there and the max is you can bring two people two patients in at a time now let's look at the pros and cons of a mobile unit so a mobile RV unit can get you to wherever there's female traffic you can set up at shopping plazas malls grocery stores near college campuses and near abortion clinics take note mobile units fly under the radar and not as targeted not targeted as much by the media and Planned Parenthood you're moving around you don't have a physical address you're just down in wherever the the traffic is women find them when they are in their decision-making process and are unsure colleges universities excellent place park close by so that these young women have a place to go to they allow you to see 53% more abortion minded clients house calls are very effective you can go right to the home and with the RV and it's a very simplified startup process house calls are I'm sorry I'm ahead of myself here simplified startup process and then more cost effective and I don't have time to go into the details of the costs if you're interested talk to me but the costs are very much a lot lower with the mobile unit now there are a few cons they're not able to provide prenatal care you would need a center to refer clients to for ongoing care you okay there we go sorry need to click can only take in two patients max at a time okay so you're a little bit limited there and you're limited in offering classes and counseling from this unit but mobile units are very effective and there's all kinds of testimonies here's just one one of the many stories the staff of a mobile team in Memphis Tennessee drove to the home of a confused and frightened woman through a free ultrasound it was confirmed that she was pregnant she's still planned to have an abortion that weekend the sonographer of the mobile team said if you're going to have an abortion we will be parked across the street if you need to talk before or after the procedure all right early Saturday morning the mobile team drove to the abortion facility to meet this young woman they parked near the abortion facility when this lady arrived for her scheduled abortion her first stop was on the mobile unit to express her gratitude for their support unfortunately she told them that she was still having an abortion as young woman walked into the abortion facility the mobile team was back praying 30 minutes later she came out knocked on the door of the mobile and said I can't do this to my baby this brave woman chose life she later decided to place her child for adoption this beautiful baby is deeply loved by her two adopted parents miracles like this happen every week on these mobile units and these mobile units are are growing in number they're scattered all across the U.S. so let's bring these two ideas together in a nutshell and this is just a vision that God gave me here but I'm sure there's different ways that you can apply this information but this is how I feel it could work well number one you would purchase a mobile unit and you would start reaching out in your nearest city if you have a near nearby city or abortion facility universities all of that you just get the mobile unit the ICU mobile and Akron provides training and the whole package the ultrasounds in there everything's ready to go you just need the personnel to run it so you would you would purchase that start connecting with people and then you would turn your church and this is what got me excited you don't need a separate building you could do that but turn your church it sits there most of the time anyway empty right except for your services so there's a building turn your church into a counseling center with classes throughout the week that you can refer your clients to from this mobile unit and maybe if you're outside too much from the city you could you could purchase a building right in the city and have a little counseling center right in there and I just talked about the earn while you learn you could integrate that in with Bible truths throughout your classes you can have ongoing discipleship programs right in your church and get your congregation involved everybody has different gifts and you could use those gifts in this whole process it doesn't just take two or three on the mobile unit you can involve your whole church and then start collecting baby items and stores and store them at your church you could have like a little thrift store there your mobile unit would refer these lonely pregnant ladies to your caring church people and their classes again our main goal is not just to save lives but it's to save lives to serve Jesus and that's where the ongoing discipleship in the classes come in if we're just out there saving lives these babies will grow up in these homes and not even hear about Jesus and end up in an eternity in hell and so we have an opportunity not only to minister to the ladies going through this time but we have an opportunity to minister to the babies the children growing up and providing ongoing discipleship and connection I think it's just a wide open door just waiting for our people to seize Psalm 127 threes as low children are in a heritage of the Lord and the fruit of the womb is his reward and so to sum it up your church needs some money an RN or a registered medical diagnostic sonographer on board is what is the required for the ultrasound a local doctor in the area if you have a local doctor that you can work with he can give you a standing order to take do the ultrasounds he doesn't have to be on board and a few dedicated volunteers people that have a vision for the work and your RV unit is available and you're ready to go and I hope that was simple enough for you to take back to your congregations if you are interested and need more information I have much more than what I could put into 15 minutes and I'd love to pass that on to you and share that with you but it's an area that we as Anabaptist people I believe have hardly touched I know there are some involved but I think believe it's an area that would give our people a more direct connection to these hurting people and they're right around us and people are hurting privately it's not something that comes out openly and this is a way you can bring them right into your door show them love and compassion and minister to them and another little side note but ultrasounds are very very effective and it's even more effective if you can have the dead in there seeing the ultrasound most times when the dead sees the ultrasound they want that they want to save the baby they want to keep the baby and so ultrasounds are really really a key to this work as well so let's be in prayer concerning this wide open door of opportunity God bless you all


Well, I'm visual asset news or Dan for short. My name is Rob and today what I want to do is I know we're getting bombarded with FTX information and who scammed this and what's going on behind the scenes and and Crypto.com and they're they're they're pushing out hundreds of millions of dollars worth of Worth of a theorem all the place and and just everything that's been happening And what I want to do is just kind of slow things down and get a little bit of Perspective from someone who has been in this business for over a decade now and what I'm talking about here is friend the show Simon Dixon and Simon if you don't know he's been an early investor into Crypto and digital assets more importantly Bitcoin and as far as the back is 2010 when it was a couple of bucks and On top of that. He's also got this little business called Bank the Future and he's he's invested into small little startups like Bitfinex Kraken Coinbase Bitstamp Ethereum coin payments BitPay Circle Circle Abra Ripple Labs and that's just on the first page If you just take a look here and just go to all the companies that Bank of the Future that invest into and also their disclosure of how much they've actually invested into those companies. It's 12 pages long and I can I link this in the description the website you can check it out But you've got I mean oh honey. I don't know what that is Delaware Corp with Operation based on New York a FinTech company about a million bucks yield that 310,000 not a big deal first digital trust five million Exordium then we go to like page two and we go to this thing called I don't know if you heard about this one It's called Robin Hood almost about a billion dollars there and then Baltoro Crypto holes and of course just let me confirm Abra and let's just goes on and on and on and these of course Are all available for you to check out. Oh Ripple. Look at that almost 300 million dollars circle. Is that right 4 billion? Yeah, so anyhow, so Simon's got a pretty good wealth information We don't know where we're going till we know where we've been so what we did is Of course when we did this interview this was a pre-record interview was just a couple of days ago So I know things move at the speed of light but the things you talked about are I think are super important and what we asked them is The first one was could FTX have been avoided Next one was one of the next steps Forward when we talk about regulation as well And then I asked the question is is this the worst year ever in crypto because you have to understand Simon has been around since I mean 2010 he's gonna talk about when Bitcoin crashed From $30 to $3 and it was like the worst week, which if you get us like 90% you understand That's a pretty bad week one week So for that to crash and for him to hold on and the people around him. It's pretty amazing So again, this is a pre-recorded interview. It's about 20 minutes long But I will be here as we come back because I want to go over just a quick a quick recap on why Voyager and Celsius cannot Reorganize in a new business is pretty much out the question And we'll talk about that and then of course the very end will do a little Q&A and who knows Simon might even show up He's over at the UK. So a little bit later, but we will see so without further ado Let's jump into the pre-record interview With myself and Simon Dixon. Let me just get out of here and off we go Again, thanks for coming back to the show It seems like the whole world's changed since we last played I thought everything was going just swimming we fine in June of 2022 and now here we are November and FTX just Just took a big just Swallowed up the entire crypto industry. So Simon. I got a couple questions and hopefully you can just make make sense of things The first thing is this we got to talk about this the thoughts on the FTX And where do you think what do you think we go from here? Then the next one is since you've been here since the early days 2010 2011 crypto Is this the worst year you've ever seen it or do you think like this is just one more year in the long progression of crypto Next I want to talk to you about the Celsius and the exclusivity re-up as they start to Put forth the information for the illegal process to retain their exclusivity to get that Their new plan together and lastly just your thoughts on regulation Do we need it is really important or how do we all make this work? So the first things first my man FTX What happened? What's gonna happen where we go from here? Yes, FTX is what happens when you put a short-term speculative trader in charge of one of the largest exchanges And so essentially Sam Bankman freed SPF because he you know He made all his money in the kimchi premium, which was essentially an arbitrage between The fact that Korean people in South Korea were willing to pay more because of capital controls for their Bitcoin and then in the in another country or another exchange And so FTX is a classic example of what happens when you take a hedge fund venture capital fund in exchange a VC investor a market maker a custodian a transfer agent and All of them and make them one person that controls the whole process and then you allow them to Print money like a central bank and when they print that money, they then use it as collateral to make VC investments And then they dip into client money when those investments go wrong In order to prop up and rehypothecate and create what a dirty bubble media called a flywheel And that flywheel blew up as soon as it got to the tens of billions And Unfortunately those that hold deposits All of those shareholders that invested in it they get wiped out All of those that have deposits they become creditors and they enter into this extremely painful process that we now call chapter 11 Where we figure out who owns what how it gets distributed and unfortunately Sam has stepped down and he's in a lot of trouble Yeah, I mean very well said so this would be leaving me to the follow-up question So when we talk about FTX first of all it Was there a way to avoid this situation or was this just in Inevitability and this really comes from in there's an ethos and crypto digital asset space Which is you must do your own research. You must make sure you do your due diligence. However, we see somebody like Kevin O'Leary Mr. Wonderful he did he's got a mass amount of people to do the research for him And he got fooled into investing in FTX We just saw Anthony scaramucci the mooch he came on to MSNBC and said look he goes I'm not gonna use the word fraud But these are the things that we're looking at right now and he said also, you know We sold 30% of Skybridge capital to them Was there a way for this to be avoided in in any certain way other than the fact of we can always just tell people to of course in The retail side make sure you take everything off exchanges, but was there a way to avoid this Yeah, and I've been involved in Bitcoin since three dollars been through every cycle And I still had tens of millions on Celsius and no credit to that now so it happens to the best of us and Really the the it's the The you know the way this could have been Prevented could have been rented so there's a difference between a bad investment in the scam right so a bad investment is you invested in something a Scam which is a very overused word in crypto that we just call everything that we don't like a scam now But there are actually, you know real definitions of a scam and so when you fraudingly, you know use client money And you represent that you're you continue to trade when you're insolvent These are actually legal things that you're not meant to and allowed to do And so essentially FTX is the banking system in the 1900s And we had to go through the great panic of 1907 to realize about market manipulation And the need to have some regulations there and then we had to go through the 1920s You know a crash boom and bust in order to learn that People when you put all these actors together in one place and you allow them to be an exchange and an issuer and All of those things that you have Then you get market manipulation over leverage and then people get on hold of a bubble And then they all over lever themselves and then you have an almighty crash when the leverage runs dry And the price doesn't perform so that we've also seen that When you have a bank that goes boss like in Lima brother situation You have rules for investment banks rules for retail banks and rule for brokerages Right and normally rather than going through this painful process you go through you know a different liquidation process Where another bank takes over and takes on those relationships? And then you have various other Mechanisms in place. So what we're experiencing right now is what we experienced What the banks experience in the 1900s and in crypto change the technology, but it's moving at a lot faster pace But we forgot in all of the rules and all of the everything that prevented all Okay, so Simon it makes a lot of sense especially we're talking about as far as like the history and we are actually going in reverse We're we are forgetting the failures that we've had in in the prior generations But the question then would be I'm not to skip around though because this will make a lot more sense You talked about you know the things that we could actually do what if Because the banks when they went through through these collapses There was parts where different parts of government to step in and regulation came about so my question then would be is What are your thoughts on? Regulation right now because right now the ethos for most crypto investors as they are adamant against any type of Regulation whatsoever, which I personally don't Don't get the whole point of why people will be around or against Going against regulation as far as on just an exchange I understand what the projects and defying like that, but the exchange itself. I don't understand So it just gives your thoughts on regulation then Yeah, and this kind of goes back to the SPF thing. It's really the the difference between regulation but good and bad regulation for a star And then centralization and decentralization.   And the innocent people just end up having to give all that data And also accredited investor for example, so now accredited investor is just lazy regulations. It's right a lot of retail people Complain when things go wrong and then they just say screw it We'll just leave it to the rich people so we don't have to deal with all this stuff But the right way of doing that is just making sure that there's user experiences like what we had to create a bank to the future where You only allow them to invest a certain percentage of their net worth and you disclose the risk So suitability and disclosures and so what happens is you get this mixed match of all sorts of different ideologies Where you have Bitcoin which is doesn't require any regulations and is completely counter-intuitive because it's fully decentralized Right, and then you have an exchange and you apply the Bitcoin ideology to the exchange when really you could have had segregation of client assets suitability disclosures Auditability disaster recovery business continuity bans custody versus investment and all of those good things to protect you Take those out, but then you've got one more part of this There's obviously corruption in regulations and there's no perfection in regulations as well Otherwise it wouldn't happen in traditional finance and so you need an exit which is where you need to decentralize so if a CBD C Becomes predatory in a regulated environment, then you need an exit to Bitcoin to compete with if you have a centralized exchange that's Becoming you know overbearing and counterproductive you need to decentralize exchange to compete with it So this whole application of different ideologies you almost have to take your head And apply it to a different, you know filing box when you're thinking of different things and it's that crossover that causes all the issue Yeah, so I mean to me it sounds like I mean we can have a little bit of regulation We can have the best of both worlds, but we have to temper it just to make sure that we don't have over regulation There's some things that actually do work out pretty well as far as regulation goes and that would actually just to talk real quick this is from I guess one of your one of your initial investments Jesse Powell on the former CEOs of Kraken and he put out a great a great tweet This will be a link in the description and a number of leavening talks about this US lawmakers and regulators have some accountability as he's talking about the different problems that are arising in the central exchanges He states you drove this business offshore because you refused to provide a workable regime under which these services could be offered in a supervised manner enforcement wrongfully focuses on convenience off or onshore good actors And when he's trying to get to the point right there is that this we can have a regulation We'd like to have regulation just give us some guidance a little bit as far as some clarity and we can move forward I think what you just said correct me if I'm wrong is that we can have both these things and it can actually work We have to make sure that they actually are tempered Yeah, you absolutely need regulation of centralized financial institutions and you need to embrace the technology otherwise you lose your competitiveness and so there's that balance in between where um the the US And jurisdictions like the UK. I remember we spent three years in the early days trying to secure a license to allow companies To you know people to invest in Bitcoin companies It took three years and then we ended up saying they ended up saying well You can only work with UK companies and UK investors and there were no UK Bitcoin companies and very few UK investors You use a global solution so we had to go literally I had to move house Regulate it get regulated with a more globally minded regulator So that certainly does happen. It can drive people to different jurisdictions in order to get what they want But at the same time There are a lot of regulations in the US that these companies are just not complying with so if you look at the Celsius situation They had an earn account where you were investing in a security And there should have been full disclosure and you received a yield Based upon risk. That's a security. There's loads of securities laws already and with lending they had crypto back lending You can fit in with traditional lending regimes. It you know, it makes you have Plans collateral all of that still works whether the collateral is crypto or not and And then you have custody custody is just segregation of assets Making sure that they have title to it And you know segregating those closely so all of those regulations exist It's just that in the US you have that little bit of is the underlying crypto currency a security or is it a currency or is it a commodity? But once you figure that part out, then you can just slot it into the existing regulations Or you can do what's happening in a lot of countries right now, which is virtual asset service provider regimes Putting together the right regulations for the right technology Thanks a lot of sense if we can get it done First of all, we should have already had that part done and then we wouldn't have all these people going to Barbados and the Virgin Islands and just kind of sidestepping so Simon before we get to the I'm gonna switch things around again before we get down to the Celsius Issue I want to ask this this one main question, which is this you've been around for quite some time Bitcoin at $3 for example 2010-2011 is this the worst year you've ever seen in crypto or is this just one more year? Yeah, and so I have been through the $30 to $3 crash in a week. That was a pretty rough week and Yeah This one's pretty rough But it's the same thing that we see time and time again But each time the numbers get bigger and the number of people get bigger and the stakes get bigger So as we're getting bigger and bigger adoption in every single cycle It feels more chaotic because there's more people involved and the crashes just get more Spectacular and the products get ever more sophisticated. So I would certainly say that this has been one of the most For me, it's just been business as usual because I just dollar cost average every month no matter what's happening And I have a set strategy and I never deviate from that strategy no matter what the markets do it But however, I have been dealing on Twitter spaces with you know people that From one extreme to another, you know, they've been suicidal and and some have actually literally committed suicide And so it's been a very traumatic year for many people because of a number of reasons firstly The traditional markets are giving people massive financial anxiety And then the crypto markets we've seen our normal cycle, which is that you get You know a pump cycle based upon something that happens in traditional markets Then you get a lot of innovation and a lot of new adoption and a lot of excitement Those people haven't learned the lessons of the past. So they put all their money on an exchange That exchange makes a bad act whether it's a hack or or a fraudulent activity That then leads to a big correction and fear that then leads to a regulatory crackdown And then you go through the cycle again and you tend to then go through a building cycle And then that leads to the next halving cycle with Bitcoin And then you get everyone trying to find the next Bitcoin killer to try and get more and more returns That then leads to the next the bunch of people that the pump in that they're just here for the fiat currency not here for the for the for the mission and then you just repeat the cycle but each time it hits new or time highs And then you get you get more and more people more adoption a bigger market cap And the more money involved the more people come along So I expect the same cycle again, but this was a rough rough year and unfortunately We all learn best through experiential learning and there's nothing that teaches you more than losing your cold hard money putting your neck on the line and experiencing a chapter 11 process because You will you will learn a lot more from that or your legs in the market Yeah, and then it's perfect and the great thing is that we have time I think we have time especially what's what's happening. There's there's two things actually bring up before we get to the Celsius issue first of all when you talked about The rules the things that you do and you don't deviate I you can't see right now But I have the rules up right below me and it's always the same thing don't invest more You can afford to lose everything's a scam until promote otherwise don't leave anything on exchanges. That's why I have zero percent exchanges Don't use leverage 1500x is a little bit crazy and take profits along the way and then also just like what you talked about You know just don't deviate just stick to your schedule. Everything works itself out people learn the lessons It's all it's all cycles. There's always a bear cycle is always a bull market cycle four-year cycle still intact And we'll see how it works out and back when Simon was picking up Bitcoin for nothing And 2011-12 they went through their first cycle having all-time high dip reset 2016-2019 the same thing with having all-time high in 2017 a dip and a reset then again in 2020 We just hit our all-time high last year 2021 November now. We're going through a dip. We're gonna see probably further Losses I I am assuming then 2023 who knows what will happen 2024 will be a halving I can guarantee that then all-time high potentially in 2025 not to say that's gonna happen But that's just what we have and then Simon to finish us up. Let's get to the big stuff Which is this part here Celsius? So we know you've been going through a lot of different motions a lot of things to get a plan to actually work I know Celsius trying to get their plan in action kelvin I personally don't think it has a snowball's chance in hell of actually making it work And there's what they've come out with just yesterday Celsius today filed a motion requesting approval to extend the exclusivity Period in our cases. This is the period when Celsius has the exclusive right to submit a plan of reorganization I said basically look if you haven't Got one out and since June I mean Simon's already had like three or four iterations of these things So if you're telling me that you can't get it out in four months and even another however many how long it does You're just using up my money your money and everybody's money just to pay the insiders Simon talk to us about this real quick and any updates on the plan that you guys have moving forward for Celsius Yeah, so it's been one heck of a journey since we last spoke But in the nutshell I've learned a lot about the chapter 11 process and kind of just from speaking to so many people Understanding so many creditors understanding the people that have the most on the line and being the 21st largest credit to myself I was always thinking about what would I sign off on so I've got bitcoin I'm probably going to lose 50% of the bitcoin that I had on Celsius. It's only a percentage of my net worth. So You know, it's not Disaster for me because I was using those principles But what am I going to sign off on and and eventually put together a whole plan around how The funds that are left you just give it to people in custody so that they can then withdraw it It doesn't create a bank run because you get the segregation between Investment money custody money And people learn those lessons And you give them a security and the security is taking all of the assets That Celsius essentially bought with our money and given them all to creditors So that in the next run in the next bull run If the market recovers and is managed well All those assets should start to perform. So what we've learned is that Um There's only two out. There's only really two outcomes that are feasible Firstly the company if it did have a reorganization plan as you said It would if that was the priority it would have been released by now But regulators are looking at this. There's 60 state regulators as the sec. There's a cftc There's the ftc. There's a doj And really we've only got one shot from my perspective to give them a regulated model Where any custody if they allow us to get out of this Then custody has to be regulated custody Investments have to be regulated securities and lending has to be regulated lending And so we put together A process whereby We've put all that together and we can bid on the assets and then give all the assets To creditors rather than us being a predator buying up all those assets So this goes full circle into the fdx scenario. So fdx had a big hole So, uh, they were trying to go around to voyager and Celsius bid up or you bid for all those assets And then be able to fill their own hole by giving it to their shareholders Um, essentially we flipped the process on its side And said well, how can we utilize this process and we created two things firstly A way of using the bidding process so that you can bid And then give all the assets to creditors rather than to your own shareholders And then also went back to the future. We've learned a lot about the bankruptcy code And securities laws is what we've been doing for a decade So we've created a new product where creditors can actually import their There a claim on Celsius and then use it to take Who wins the bid and so they can back a bidder And then that bidder will go to the voting process And if you don't like their plan, then it doesn't go through And so you can we've we've tried to use financial technology as we always had in these disasters And now there's so many companies in chapter 11 And that we think we're going to be utilizing this for a lot more Clients that are in a queue right now so that we can just really try and get all of those assets and make sure They go to creditors rather than predatory bid in the worst market just before Christmas Two years before halving in a regulatory crackdown in the disaster market I gotta tell you this this would be the time right? I think this is the perfect This is the right place at the right time. Imagine if we were going through this and like I mean We wouldn't do it but in during a bull run if we can get this taken care of now Before the next big bull run that's huge and then we don't have to deal with the regulatory issues We don't have to deal with the the exchange is doing the funny business. We can really make a big dent I like that Simon before we take off. Do you have an example of that? An example of that on your website already. Uh, yeah Oh, yeah, so um, well, I mean on on bank to the future right now and we created um on my youtube channel I sent um, I created a video with a message to um judge glenn Um, so I'm Simon Dixon youtube channel Um, and uh on the second half of it I gave um, uh some screenshots and demos of how you can import your Celcius claim would be able to do at the or voyager claim Probably your fdx claim and then probably your block fi claim and then maybe your nexo claim wherever this goes next Um, and then uh companies that want to do right by the community Um can allow you to allocate their bids. So yeah, there we go that video there I gave a few um slides and I'll I'll be in future videos. We'll be demoing the actual feature but um, yeah It's a go to bank to the future.com Uh verify and certify your account Ahead of that.  All right. I will link that video in the description for everybody that can check it out So simon, I know you're a busy guy, but thanks for stopping by it helps to alleviate some of the pressure that we see Especially with the the wisdom that you've had throughout the throughout the uh history of crypto. So thanks simon for stopping by Okay, thanks for having me again rob. All right. I'll see you All right. So I hope that made sense for what simon was talking about again You can't know where you're going until you know you've been and simon's one of those one of the very few people out there That can tell you where we've been he's been around since 2010. It seems like I mean, I like simon dixon. I like what he stands for But you gotta take it with a grain of salt because you just you you never know it seems like Some of the most trustworthy people by the ones that just have been around for a long time I know people they get a little perturbed at like some of the some of the rates of coinbase the coin has been around a long time And uh, if you take a look at some of those like rates for the exchanges. Yeah, I was pretty I was high But what's higher? Coinbase is whatever it was 0.5 to 1.5 percent per trade or was it the 0.2 percent for ftx Oh plus 100 of all the different cryptos that she lost. So again, I think just Time in sometimes just a little bit more important anyhow that concludes the interview And I just wanted to just to follow up and just talk about a couple of things. Uh, first of all If you're looking for the video that simon was talking about he Let me see here this one He talked about this video in particular where you could where he showed you snippets of his website Where you could register it for anybody who's going through an exchange that is going through chapter 11 Which hints there's gonna be a lot more coming up. I think so that would apply to you voyager and celsius users First of all, watch that video and he gives you an example of that that video is linked in the description on top of Uh simon's youtube channel as well And then also I just wanted to bring this to everybody's attention because I know there's like some people like this They say well, you know, what if we just reorganize? What if we just reorganize this? We're gonna is that I think once you're in chapter 11, especially in crypto and Crypto exchanges, I think you just screwed and uh, this was from the uh voyager town hall meeting the voyager uc seeming Which was like about a week maybe eight or nine days ago And this is the legal team talking about why Voyager did not reorganize When it would have been easier to do so and I think a lot of people think about this is gonna have them with celsius I don't think it's gonna happen. So just listen. This is about two minutes. Then we'll open up to the q&a Mainly because yeah, there's always different permutations And different flavors that bankruptcy cases take but specifically I think what you're suggesting Is that there may have been a way to sort of save the voyager platform such that we didn't need to liquidate Which agreed this this basically is a liquidation I mean ftx is essentially acquiring customers and they happen to also be monetizing the crypto. There's there's no Question there that that's effectively what's happening The problem with uh, and this really goes to the standalone plan concept Some of you may have heard that term being thrown around at the beginning of the case That was the initial plan that the debtors had filed which basically called for voyager to continue What you have to understand and this is public information. You can look it up on every state's website Voyager did not have The appropriate regulatory licenses that they needed to operate their platform in a number of states And that is why a number of states Including new york are investigating the company and probably some of the individuals I don't know what they're doing exactly. It's the states that will do what they want But it basically made it so that it would be virtually impossible to reorganize this company Because you had a company that was operating illegally They didn't have the licenses that they need to operate and once you already have gone down that path You can't just fix that and get the licenses the states are going to come after you And so from our perspective from the committee's perspective There really was no way to sort of save the voyager platform as you know it today Because of this regulatory overhang. That was the big concern I'm not sure if your dal example was directed at some other construct But if it was how, you know, how we could have used creative crypto Organizations like dal is to sort of save the existing voyager. It really wouldn't have worked Okay, does that make sense? No, it makes sense.  Yeah. Well, I mean what you just highlighted was was news to me Yeah news to me too. So I don't know if you were aware of that But apparently voyager was doing illegal activities. That's why the states were going after them and of course we saw Different states also go after Celsius as well. So again, if if we're talking about reorganization I know we're jumping around a bit But I just wanted to bring the service attention that if we're talking about reorganization for For a Celsius or voyager, that's not happening. It is not happening and it goes to my point again I know people don't I know some people don't like it But the majority do Which is when I talk about clarity and regulation for exchanges I have done multiple polls on my channel On youtube on twitter and it is 85 to 90 percent who say yes We would like some clarity and some regulation for these exchanges because they keep screwing us I understand about the whole projects and things like that You know, I don't want to get in the weeds here, but i'm just saying I know As people are going to be vocal in the comment section, but you're not the majority You're just not and I think that these regulations, especially now i'm tired I'm tired of playing In the kiddie pool. I'm tired of not moving things forward I'm tired of not being able to to get past these people who keep screwing things up Just because of of greed and ambition and incompetence That's it. So anyhow, that will conclude my rant and also today's video So look, if you like today's video, I'll give a thumbs up also consider subscribing I think it's talking about our very time sensitive especially right now And if you're in crypto right now, you have to understand this is not a set it and forget it You've got to be on it. You've got to do your Your you know your daily information or wherever you can get it And I think that's why you should probably subscribe to my channel and that's it for today. So look That concludes the news and all that good stuff. Now, let's get into a little q&a I'll answer all your questions the best of my ability as we go from there But you got to take off take off it's football sunday. So get out of here And that should do it now. Let's go a little q&a. Shall we let me get this banner out of here


we saw so many different kinds of partnerships.  But, you know, the thing, there were some characteristics that were really important. One was that we realized that, you know, here were two people who decided to get together and to stay together, and all of us are moving targets. All of us are changing every day, right? And you realize that when you get together with someone, you're changing. That person is changing.  So how do you deal with two moving targets moving together? And I think one of the things we found was that the couples that were the most satisfied were the couples who really welcomed change in the other person and rolled with it and adapted to it and supported somebody in taking chances, trying new things, that kind of thing. It didn't insist that somebody be who they were, you know, on the day they got married or the day they had their first date that that is a recipe for a disaster. The other thing is that the people who were the most satisfied were people who kept being curious about their partners. So one of the things they find in research studies is that we are most tuned into our partners when we first start dating. And if you think about it, it makes sense because you're like worrying all the time, is this person into me? What are they thinking? What are they feeling? Right? So you're really preoccupied with what's going on for this person.  I know what they're going to do. And then what they find is that people are actually less tuned into their partners the longer they've been together in perfectly good stable relationships. So one of the things we found was that the people who managed to keep relationships vibrant were the people who kept being curious about their partner. Who is this person today? Actually, one of my meditation teachers taught me this exercise, this meditation that's really useful. And you can use it in relationships. The question you ask yourself is, what's here now that I've never noticed before? So it could be while you're sitting and breathing, which you've done thousands of times, right? Or it could be while you're having dinner with your partner, you know, what you've done over and over again. What's here now that I've never noticed before and see what comes up?


We're going to kind of have an open and hopefully enjoyable chat today about a little problem. So, you know, I get hired by the U.S. government to run the National Cyber Security Center. And that was to stitch together, help to link all the networks across military intelligence and the civilian government and to coordinate the defense of all those networks. And realize, you know, pretty quickly that there was some serious denero being dropped down on this problem.  And having some background doing high-tech companies and, you know, software companies and internet companies and also doing a lot of economic and finance work, I said, well, where's the risk management models? You know, don't we have a risk management model? So we actually know what we're trying to get done in cybersecurity because we're going to spend, you know, tens or hundreds of billions of dollars over time, over decades. Shouldn't we really know? And the answer was no. There wasn't a model.  And that wasn't even a model. And I thought, well, you know, how can we go spend billions of dollars of taxpayers' money if we don't actually know what we're getting for it or think we're getting for it? So this work came out of that effort. So the initial thing I was thinking about is how do you do risk management for cybersecurity, okay? But then I thought about, well, you know, how are you going to figure out how to protect a network and how much you should spend a network?   That doesn't make much sense, right? So before you figure out how much you want to spend to protect something, you've got to figure out how much that thing is worth. And so that line of inquiry then led to looking at some things, namely looking at the traditional approaches to look at network valuation. So here's what we're going to do today is kind of look back to the history of how people have tried to approach this problem of saying what's a network worth. Then talk about a new model that actually may work, or actually does work, to answer that question. And then we'll look at cybersecurity in kind of like different ways to take the economic model and apply it. So how many of you have, like, I mean, this is a DEF CON festival, so I imagine we're mostly techies here. But how many people have a background in engineering, math, science, or computers, network administration? Okay. And is there anybody who's not comfortable with Greeks on the board? Good. Leave. If you're not comfortable with Greeks, leave. No, so we're going to, we're going to throw some math up here today just to, because the stuff has some bones that's behind it. So anyway, and I'm Rod Bextrum. I've normally been a high-tech entrepreneur. So I started my first software company when I was 24 that did derivative trading systems. I was a quantitative trader at Morgan Stanley, building my own derivative trading models in my early 20s. And then I left and started a company called Kat Software. And we got really lucky because we built these good analytical systems, and there really was a market. So second year in grad school, we sold about a million dollars of the software, and then we were able to actually build that up into a global company. So we had offices in New York, London, Tokyo, Sydney, Geneva, Hong Kong, kind of all over the place. And then we got really lucky because one of the professors I asked to help me start the company was a guy named Myron Scholes. Has anyone heard of Myron Scholes? Yeah, the hand going up there. So what model did he invent? Exactly. Black Scholes. The black Scholes, the fundamental options pricing theory. And what he did is he took the insights, he took the general diffusion equation out of thermodynamics and applied it to finance problems. And it worked. So he and Fisher Black took the diffusion model, applied it. That worked. So Myron was helping us and then he was just like a really smart professor at Stanford when we got to work with them. And it was really nice though because three years later they gave him a Nobel Prize. So he helped us solve some of our modeling problems and looking at derivatives. And then we had another guy helping us out named Bill Sharp. Has anyone heard of Bill Sharp in finance? Or William F. Sharp? Capital asset pricing model? Anyway, Bill did risk return analysis with two other guys helped develop the fundamental concepts of risk in finance. And he too won the Nobel Prize. So we got to work with some really smart people. And Bill actually helped us develop a model in economics for value at risk and he encouraged me to write a book on that which was the first book that I wrote which almost no one knows of unless you're a finance weenie and like risk management. But some of you may or may not have heard a book I worked on called Starfish and Spider. Has anyone heard of the Starfish and Spider? All right. So anyway, did some of that stuff and then I got recruited by the government to help out in cybersecurity. And I thought well that'd be really interesting because I've done only private sector companies and non-profit work for a long time. So let's go work for the government. So I did that and that was fascinating and that led to this work. So I was at DHS when we helped develop some of this stuff. And now I'm at ICANN. So it's my third, fourth week on the job at ICANN. So let's do a test. How many people have heard of ICANN? I know what ICANN does. All right. So for those who don't, ICANN is the Internet Corporation for Assigned Names and Numbers. And what we do is we address the Internet. We're addressing the Internet. When you go to a city, right, you open the phone book. I mean, is your phone, everyone's got a phone here. Is your phone number unique? I mean, if people call, your phone number, do they get to you or do they get to, if they're calling from somewhere else in the world, do they get to somebody else? Your phone numbers are unique, right? Well, someone has to enforce that policy to make sure that every phone number on the planet Earth is unique. Someone has to do that on the Internet to make sure that every network address is unique and that those get handed out and allocated through the ISPs and all the different parties. Same thing with names. So when you go to your phone book, and who's got Smith as the last name here? Any Smiths? Bakers? No, no luck. Okay. Well, there's a lot of Smiths and bakers in most cities. So in the phone book, right, you got a lot of John Smiths. Well, on the Internet, do you have a lot of johnsmiths.com? No. You only get one, right? So there's naming integrity in the Internet to maintain global space and there's addressing integrity and ICANN is the group behind the curtains that runs that policy process and contracts with all the governments of the world and with the other parties and the registries to allocate names and numbers. So anyway, that's what we do. There's about 200 million names in the world on the Internet that have been purchased and there's about a billion numbers that have been allocated in IPv4 and then of course when we get to IPv6, it'll be trillions and trillions of numbers. So that's what ICANN does. It's a non-profit and it doesn't work alone. It's part of an ecosystem. The kind of the amazing thing about the Internet is in some of you actually you'll probably work with one of these groups. So ICANN, IETF and Internet Society are three of the key players in the ecosystem. How many of you have heard of IETF or been a member? Thank you.  IETF is the Internet Engineering Task Force and these brains here develop all of the protocols for the Internet. Whether it's IPv4, IPv6, HTML5, wireless standards, all kind of IPv6 and the Internet of Things there and how to do low power devices and get them on the Internet and I don't need to geek out and all that but anyway, the Internet ecosystem is amazing because it's run by these non-profits in total, those three groups they have thousands and thousands of volunteers like many of you in the room and only 200 employees. So there's only 200 employees in the world that are basically coordinating these basic functions of the Internet that are used by 1.5 billion people. So that's one person per 7.5 million users. Anyway, and I'm the lucky guy I got hired to be CEO and president of ICANN so I'm totally thrilled about it. So that's that background. So why do the economics matter? You know, does it matter? Well, I think if a government's dropping tens of billions of dollars right into a problem, I think it matters and if our companies, you know, your companies are putting tens or hundreds of millions of dollars into it we've got to really ask some hard questions about where's the payoff and what we need is kind of a framework to hang it off of and let's look at some of the questions that we might want to look at.  What's it worth to you? That's an economic question that we need to have a framework for answering. What's the total value of a network? Maybe your social network with 50 friends in it on Facebook or it may be a business network with 2,000 companies or it may be the Internet with 1.5 billion people. What is that whole network worth? How are we going to approach that? What are the economics of security? What about security risk management? So how are we going to do risk management and make decisions? What are hacker economics? How many of you are hackers? How many hackers we've got in the room? All right, we've got some hackers. So we've got to look at your economic model. You know, how do you make money? Because we have to understand that if we wanted to deter your activity, make it harder. Okay?  But otherwise you're on the other side. But we need to understand the economic deterrence. We need to understand billions of dollars on or throw policy solutions at that won't work. Or we can use economic models to figure out how to incentivize the right behavior. So supply chain. How are we going to get it cleaned up? Get the malicious code out of the supply chain. And then we want to look at things like the protocols themselves. The Internet that are holding the Internet together and what are the economics of them? What are the economics of outages? What's the economics of resilience? So these are all really important problems. We can actually answer them. Okay? It's actually pretty easy. Pretty easy from a conceptual standpoint. And then there's some work into getting it done.  So what is the law that most people refer to if they talk about what's the value of a network? Who was it? Bob Lynch's presentation yesterday morning. He mentioned it. It's a guy who worked on Ethernet. Giving you a hint. Metcalf. Metcalf's law, right? And what does Metcalf's law say? Anyone remember what Metcalf's law says? Okay. But what it says, that's right, is that the value of the network, let's say network J, the value of network J is equal to the square of the number of nodes on that network, or endpoints, times p, which is some constant. So basically, the value of every network in the world is portrayed by a picture that goes and it goes screaming upwards. Right? Does anyone want to buy stock based on that? Do you want to value a network based on that? Has this ever been done? It was in the late 90s. Okay. Metcalf's law was just used to justify you know, 10, 30, 50, 100 billion dollar valuations of these networking companies that were grabbing a piece of the network, you know, like pets.com. So, and what was the story? People remember the network that Metcalf used to justify why this model worked or should work? Fax network? Sound familiar? Right? So what Metcalf said was, well, look, obviously, you know, this is proven because the more people get faxes and the more people can communicate and the value just keeps going up. Now, is that really true? I mean, is it really valuable to you that another 10 million people in Africa and many of you care about the 10 million machines in Africa? Okay. Well, if you don't care about those 10 million fax machines in Africa or a lot of other countries, then why would there be this geometric progression? So, this was what Metcalf's law said. What it really relates to is the number of possible connections in a network is equal to mathematically n times in parentheses n minus 1 all divided by 2 which is a geometric progression that goes at half this rate basically. And it doesn't work. Okay? The problem with Metcalf's laws, it doesn't work. It doesn't tell you anything except the potential number of nodes in a network. So no one's used it for real valuation. So you can't use it to determine how much to invest in cybersecurity or national policy or any other issue. Your own corporate investment. So then other people came along and said, well, you know the problem with Metcalf's laws, it goes forever, right? It just goes zoop, so zip came along, z-i-p-f, and zip said I've got a law and I'm going to have it taper out. I'm going to have it go up and then I'm going to have it hit a peak and I'm going to have it curve down. Okay? So I'll add another little factor in the equation. Well, that's kind of good, but how are you supposed to get that other number and what does it really mean? And then Reid came along at Harvard and Reid said, well, I'm going to do Reid's law and Reid's law is going to say what's the number of sets of people in groups you can organize in a network? So the two of us could form a group, just the two of us, and then you and him and then you and three other people, five. So I think of all the different sets in this room. Okay? I don't know how many people we have in the room, someone smarter than me, but you know, it's probably like 10,000 sets or something we could have. Who cares? Who cares? Okay? It's irrelevant. It's just a theoretical like. So Reid's law is interesting about it. What's the total number of sets you could have? It doesn't really have any practical application. Well, there's one thing that all those models had in common. And by the way, and I spent years trying to fix Matt Kaft's law. Okay? I took Matt Kaft's law right here and I tried to add in substitutes. Because I looked at the email now, I mean faxes and I said, well, emails are a substitute, so they're making the fax network less valuable. So let's add substitutes to the equation. Let's add latency to the equation. Let's add pure cohesion of the participant. I started adding all these things to the equation and some people thought, well, maybe that's really interesting what the spectrum is working on. And then I realized one day when I was confronted with this problem on cybersecurity, I said it's a total joke. I'm just on the wrong track. I'm not going to get there. And so what I finally realized, and this was the realization that came last June, I was working on the problem on the whiteboard, which is it's not about N. It's about T. What is N? N is the number of nodes in a network. So think about the Internet of Things. We're going from, you know, devices and computers and toasters and refrigerators.  Well, the value of the network is not about how many endpoints or nodes you've got at all. That is not what's relevant. Because you might have a PC in your house that three people use. Or you may have eight machines that three people use, kind of like we have at our house, four people use. So what's T? So what's the T that matters in the economics? And that's transactions. What really matters in network economics and even cybersecurity is it's all about the transactions that we either want to have happen or don't want to have happen. That's the, and once I got that insight, then the question was, okay, how do you build an economic model around transactions that actually makes sense so that you can value a network? So, another way to express this, I want to talk about a little bit. Since some of you've heard of the Starfish and Spider, so the problem with the N view looking at the size of a network and trying to say, you know, what's it worth is that the N view is a centralized spider-like perspective. Because you're looking at the network as a whole and you're saying all I have to know is how many endpoints there are, okay? Well, that's a spider-like approach, totally centralized. The transaction approach is completely the opposite. It's very starfish-like or decentralized. We use the starfish as a metaphor for decentralization because you can cut off an arm and it regenerates because it's pretty decentralized, or if you cut off all five arms in this species here you get five new starfish. Each arm can regenerate an entire new living starfish. Why? Because it's completely decentralized. It doesn't have a centralized brain or a centralized nervous system or other central organs. It's got a nerve ring that's centralized to send messages and it can regenerate that nerve ring. So, when we look at transaction, we're decentralizing the problem and we're going to look at the network not from the middle but from the edge. From each one of you. From every one of you. We're going to look at the economics of the network to you and the perspective. If we can figure out what the network's worth to you and then just another billion and a half people on the earth we can solve the problem. So, here's Beckstrom's law and that is the value of the network equals the net value added to each user's transactions from their standpoint, by the way, summed for all users. Okay? That's the English. It's pretty simple. Or mathematically, we're going to look at the value to you. So, you are VI. You are what's your name, sir, in the orange shirt here? Corey. So, Corey in the orange shirt up here, thanks for volunteering. Raise your hand, Corey. All right. Corey, we're going to look at the value of the network to Corey as an example. He's the first instance of I and then J is the network. We'll say the value of the network for Corey and what the value of the network is to Corey is the sigma, the summation function of the benefit of all transaction Corey's going to do on the internet for, say, one year minus the cost of all transactions. So, very simple framework and we're going to get into making it a little more explicit in a second but let's just do a simple example. I mean, Corey, do you ever buy books online? Okay. You buy books online. Like, how many do you buy a year? About 20 books a year. And what do you think, what's the average price on those books, would you say? About 30 bucks. So you're buying some science books, security books, hardbacks. So, 30 bucks a year is what you pay online. What do you think you'd pay on average for those books if you went to a bookstore? About the same. And how much, and if you went to a bookstore, presumably you'd spend some time, right? Take more of your time to drive, spend some gas. Can we say that your time to go buy a book is probably worth at least 10 bucks? Okay. So, if Corey can buy a same $30 book online that he had to go to the store and spend $10 of his time, on average, the network is adding $10 to his transaction. And if he buys 20 bucks a year, then he's 20 bucks, he's saving $200 a year just in book transactions.  Maybe a fifth. So, let's just say for a second, there's 200 bucks there and you do a lot more transactions, five times that many. Are they probably average about the same size or some of them bigger and some of them smaller? About the same. So, if it's about the same. So, for Corey, he's saving about a thousand bucks a year then. Five times 200 bucks on those transactions. Now, you probably do emails too, right? Okay. Or send a lot of documents around. You do web research or use search engines, Google, Bing, Yahoo. If we take Corey, we look at every transaction he does in a year. And by the way, this is easy on computers, right? All you got to do is key log it. I mean, this is an economist's dream. The network is the most measurable thing on the planet Earth, these transactions. We can get everything. A little harder to go figure out what it costs him to go to the store in terms of time. Then we have to ask him how much is your time worth? You probably value your time in 100 bucks, 200 bucks an hour, right? So, it probably takes a half hour to get to the store and back. Maybe 40 minutes. Say, half hour. Say, your time's worth 200 bucks. So, it's actually costing you 100 bucks to go to the store. So, what we're doing is illustrating let's say Corey's transaction, he's saving a thousand bucks on products. Plus, you're doing research and emails. Now, another way we can figure out what the network's worth to him is what do we do? You tell him, Corey, now we go to his computer, right? And we take a hammer, we break the wireless card, and we unplug the back of it and say you're disconnected. You can't go online for a month. What's it worth to you? What do you think you'd pay to go online if you couldn't go online at home? At least a grand? A month or a year? And you're not sure. Well, you'll figure it out. You'd probably pay quite a bit. That's another way to look at the value. But, so once we know, let's say the network value to Corey is 3,000 bucks a year. At home. Now, that's not his job. It's also got value to him and his job. But that's just to Corey as an individual. Well, we're now answering this question then. Because we've got Sigma benefit for Corey is about net benefit we're saying is 3,000. So, actually he's saving money on transactions, but you're paying how much you pay for connectivity every month, Corey? 40 bucks a month. So, 480 dollars a month.  Plus, you're worried on your computer a little bit. But you probably have it anyway. So, if you look at all the benefits and the costs then you're going to figure out what the net value is to Corey. Okay, so now we've got our building block. So, if we're going to take it into real math, or just make it more explicit, we're going to get more formalized. And I'm going to go, we're going to scale now from Corey, one user to the whole room and all the internet. So, what we're going to say is Sigma for all users I on this network, which is the internet. So, Sigma I equals 1 to N for users of the network. V of I sub J is equal to the summation of the benefits for every single user. Okay, the benefit transactions. Minus the cost transactions. And then a little function on the bottom, 1 plus E, raise the power of T is just, we call discounted cash flow analysis. So, in other words, if he saves a thousand dollars this month, it's worth more than saving in a thousand dollars a year from now, or five years from now. But this is the explicit formula. And this is the, from this model, you can value any network in the world. Now, the challenge is you got to go figure out what your transactions are. Right? You got to, but as I said, it's pretty easy to figure out what we're doing online because we can keystroke log it, okay? And then some of that finance we can measure, our costs are pretty easy to measure. The benefits are a lot harder. Because then we got to go find out what it would cost to go replace that product or service elsewhere. Okay? But this, so the fundamental notion of the law is it's entirely transaction base. And you have benefit transaction and cost transactions and the, now why would they not line up the same? You know, there's different counters here. There's K equals 1 to M on the benefits and there's L equals 1 to P on the costs. Why would we use a different counter? And by the way, someone on slash dot corrected my notation on this. I was using, I was using N equals 1 to N. I mean, I equals 1 to N on everything and someone on slash dot slash me up it's like, what are you doing? That's sloppy, you know, you need different counters and it's like, yeah you're right, thanks. Thanks, thanks for the catch. But why would there be different counters on the benefits versus versus the costs? Okay, so we do the book example he's going to pay 30 bucks and he gets a book that has some value. So that's kind of paired, right? But what about his internet service, right? You probably pay monthly, right? But you use the internet how often? Every day. Or every minute or every second or every hour depending upon how big an addict you are, Corey. Okay, right? So the transactions are not matched. So your cost transactions are not identical to your benefit transactions. Sometimes they'll pair up. But so there's separate counters on here. So this is the foundation and then we should roll forward. What then is the network effect, right? We've all heard about the network effect, right? The incredible network effect. What is the network effect? What is it mathematically? Can we even define it mathematically? Well, it ends up we can. We're now just going to leverage the model we just developed, this transaction based model, and explicitly define the condition where the network effect is present. So this is not the driver of the network effect, but this is a test to determine whether the network effect is present or not. And that's simply we're going to use the summation function. The only thing difference between the two sides of this equation is n plus 1 on the top versus n. So we're going to take a network and say it's like this room and we're all in a club together, okay? We're going to let one more member in the door, okay? That person comes in what happens to the value of the network?  If they're a positive contributor and the value of the network increased they get a greater than sign, okay? So the network is now more valuable. But that's the perspective of the entire network including that person. But we're sitting in the room, right? And if we're sitting here do you really care about the value of the overall network? Well, maybe if you're really magnanimous, but if you're just looking at your own position, you care about the value to you. So let's tweak the model and look at it from your standpoint or the standpoint of the existing members of a network. The value then becomes the value of the N plus one network minus the value of that N plus one individual. Let's take their value out and then look at did the value of our network increase. And this is the one that MySpace may have missed, right? Because how do we know in part that these rules are valid? Let's look at the news this week. What did Bill Gates say something about Facebook? What did Bill Gates say about Facebook? Too many friends. Too many friends. So what did he do? He quit and left. Why? Not useful. Wasting his time. So look, if Metcalf's law was true, then Bill Gates would say, well, the more friends the better. But that's not true because he got the transactions he didn't want to have, which is all those updates and notices and all those things that pester us, right? I mean, I actually thought, well, geez, you know, should I think about the same thing? I'm getting pretty tired of Facebook messages at this point. You know, my network's over a thousand, I think, of friends and it just keeps growing. So here we come back. So here's the acid test and here's where MySpace is on a declining slope, I'd argue, and Facebook, I don't know where they are. But you've got new users coming on to MySpace and they think it's good for them but they're overloading other people so the value to other users is going down. So if you get past the tipping point, there's a positive network effect, then there's a negative network effect. Here we're on the positive, so we're saying, you know, it's just like the early days in Facebook and we're so excited to connect to those colleagues we worked with five years ago or people we went to high school with or from our hometown, it's like so cool and how we can connect to all these people is amazing and you have that great feeling until you keep getting more and more and more and more and more and then you get the inverse network effect. So here's the inverse network effect. We're going to use the same math, it's just a lesser than symbol. We've now gotten to a point where the larger network in plus one is worth less than the network was worth before and to make it more explicit we're now going to look at the previous members and take out one member.  Why? Because I'm past the growth point and I'm going to come on and secure in a second but the beauty is once we have this really ridiculously simple model, because the model is ridiculously simple, it's just tally your transactions and measure them. Once we have that we're able to start doing a lot of different quantitative measures to figure out where we are in a system and we can start developing the conceptual models as well because the underlying ideas are really simple, right? I mean I don't think it could be much simpler. So let's look at some examples. So who here plays golf? Who plays golf? Okay. Who here is in a private golf club? Okay, sir. What's the name of your golf club? Grand Oak. Grand Oak. Do you mind coming up the microphone, by the way? If I could ask you, please? So you're in Grand Oak Golf Club and what's your name, sir? Chris. Chris. And how many members do you have? Too many. Too many? I don't know how many. Okay, like maybe 400 or 500? Yeah. Okay. Now why do you say there's too many? It's become increasingly difficult to get a tee time. Thank you very much. So would you say that the next member is adding a you're in the positive network effect zone or the inverse? Inverse. So you're in the inverse network effect zone? Yep. In this private club you had to buy in to buy your piece, right?  Right, less enjoyable. Less enjoyable because you're not getting your tee time and that's the transaction value. So we go back to Beckstrom's law, your B is lower. Your benefit's lower because you're not getting the time slot you want. Does anyone know what the average size of these private golf clubs is around the world? It's about 4 to 500 people. You know why? Because we'll look at how often you play golf. How often you play golf? Twice a month now. Right? That's pretty average for a lot of clubs. So the tee times are staggering, every 12 minutes right or every 15, you know, and so only so much can get in. So golf clubs are a great example because if it only had 200 members it might be a little expensive, right? So you're probably okay up to some zone and then somebody took it too far. So thank you, thank you very much. That's a great example. So golf clubs show us these principles at work and think about your online networks, okay? It's the same thing. You don't want them too big. But support groups. So has anyone been like a cancer support group or any kind of support group? You know, no one wants to talk about it. Okay, don't raise your hands. Support groups tend to be best when they're around 10 people. Why? And this is a social network. Why would support groups be best of 10 people? I mean wouldn't you think the more people supporting you the better? Right? I mean I get 10 people support me. You want to be better if 50 people supported me? What are the transactions though that you do in a support group? What are the transactions? You support each other. Well you listen right? You have a listening transaction. So I'm in listening mode, right? You have a talking mode. Now let's talk about talking mode. If you got 10 people, what percent of the time are you talking? 10% on average. If you got 50 people, what percent of the time are you talking? Two percent. People want to be heard. So we're happy to support each other but we want to share as well as listening. So support groups tend to be best around 10 people. So it's another example where the transaction set and the trust level is defining the right size. Facebook, we just talked about Facebook. YPO, I'm a member of Young Presidents Organization. It's a global network of CEOs. It's hard to get into. You have to meet a certain, you know, level of revenues and employees and this and that. And so it's like this club. These people love each other all over the world because they have a lot of things in common and age. They got to be young and they got to be a certain size company and they face challenges. Well, of course, people always come on and say, well, let's just open up the membership definition. Well, let's just make it easier to get in. Well, is that going to make the network more valuable or less valuable? Make it less valuable for the people that are in it if they've really got cohesion in what they're doing. So Twitter, you know, I saw... I mean, how many people have Twitter accounts here? Okay. How many people are on Twitter every day? All right. That's a subset of us. Okay. The question in Twitter is what are those followerships worth, right? I mean, because you can build huge networks and followers. I've got 5,000 people following me on Twitter. What does it mean? You know, I guess it's good because some people want to hear the ideas and some people want to share. Some people could care less. They just want me to follow them and I've got autofot all turned on, right? So people are scaling up and building their followerships. So AARP. How many people are members of AARP? Okay. How many people are members?  What do you think? It's right. It's more valuable. And why? It's all about the transactions. It's a purchasing block. It's a lobbying block, you know, and every member that comes in is putting more money in. They deliver more services that get spread out across everybody. So AARP has a business model where it stays perpetually in the network effect. Doesn't have the same dynamics of a space, right? It's a different kind of network. So we're talking about this stuff so we can start thinking how the economic model applies what's right. But I know we want to get to security, so I get it moving on. But we can do this with almost any organization you're in. You can do it with every network in your life. Every network you're involved in, in fact, implicitly you do that analysis at some level, right? Do I stay in that church or do I move to another or this synagogue or, you know, temple, whatever? Do I stay here or do I go there? These are relationships and transactions that you're going through. You can look at it through the economic lens. Now let's go to security. So the basic model, if we simplify it, is the value is equal to benefits minus cost of all the transactions. Now let's go to security. We're going to take our cost transactions and we're going to break out our security investments. So SI is security investments and we're going to take our losses because the hackers get in every now and then and they're successful when they're not on the golf course. They're doing their job and they're getting into our systems. All right, so now it's benefit minus cost except security and investment losses which are going to separate separately. Now, this is a very subtle move, but it blew me away when something really simple happened next. And here's what happened. We now got our risk management function for cybersecurity. The thing we started to try on the very beginning of a very simple function we're trying to minimize our security costs. Security investments plus losses. Now I was working at Homeland Security with a lot of people that dedicated their lives to protecting this country, risking their lives and when I put this formula up, you know a lot of them said you're a heretic. Security is not a cost. Security is an asset. Security is an asset. I said no, it's only an asset if a dollar in security is a reduction in losses. And otherwise it's a waste of money. Because what you're trying to do is preserve overall health and wealth for society. And that wasn't a diss. Actually a lot of people in Homeland Security really like this. They're like that's really good, that's really clear. So we have a function. Now let's start looking at some other economic tricks and tools that we can take. So now let's just map. So we'll take a vertical element and we'll look at our losses and map those versus our security investment. Zero in security. We have no firewalls. Nothing, everything's wide open. How much are our losses going to be? Going to be a lot, right? We're going to get rated of everything all the time. Now if we just do the basics, right, like what are the two or three basics that we should do in security? Firewalls, IDS, patches, antivirus. You do the basics, you get a huge payoff. It's going to be down. This is a hypothetical curve, but I'm taking this through the reasoning. But then if we start tightening up our security, can we ever get perfect security? Right, we never get perfect security. So it becomes asymptotic at the bottom. You could spend an infinite amount. You could spend billions of dollars in security investments to protect a million-dollar company and it still wouldn't be secure if you're using electronics. So the reality is, we've got to figure out where we want to be and we've got to figure out how our projects stack up. So in the federal context, for exemplary, as an example, I looked at the issue and I said, the biggest payoff, if I talk to the smart engineers at IETF or at DH&S, Homeland Security Science and Technology, other places, they'd say, look, you've got to improve internet protocols. Because if you don't tighten up DNS and DNS is getting attacked, the security piece that ICANN is involved in, our role is to help protect the domain name system. It's in our charter. But if you improve the protocols of the network itself, then you can increase things. Because I tell people, I tell you, I'd say, look, we could spend a trillion dollars on cybersecurity, but if we don't implement DNSSEC and if we don't develop BGPSEC or Border Gateway Protocols Secure and get it rolled out and tighten up SMTP and other protocols, then it's just like, instead of putting our fingers in a dike, we're putting our fingers in a fishnet. Now, how much water do you stop by putting your fingers into a huge fishnet?  You don't really stop the problem. The system is wide open. Anyway, I'd argue from a federal standpoint for U.S. government and other governments around the world, same problem. Focusing on the protocols is the best single investment we can do and rolling out DNS, BGP, etc., according to the experts. We'll talk about the patches, the values of that, IDS, data loss protection. So, what we're trying to do here is get people for us to start thinking, what is the payoff? What's the money we're going to put in and what's the payoff we're going to get? So, let's look at the chart again. It's called a Pareto curve in economics. It's like the most optimal set of investments that you could make. And the curve function moves down when we improve the protocols. Because the security across everything gets a little bit tighter. So, what we're trying to do here is get people for us to start thinking that we're going to be paying for the buck. Because that curve drops not just for your company, or my company, or my home, or your employer, or this country, or that is for everyone in the world. Everyone on the internet. Huge payoff. Economics is a deterrent, so we've got to deter the hackers. So, what we've got to do is drop the benefit function to the extent we can. All right? Make it harder to use those credit cards. And the FBI had a good presentation on that at Black Hat. Make it more expensive. The security investment of the hacker is obfuscation and anonymity. They're trying to stay secure by you not finding them, okay? And they have to spend a lot of money, a lot of energy and effort on that. And then what's their loss? The loss is going to jail. Or losing your money. Or getting sued and tied up in courts. So, this is the economics of deterrence. How do we figure out how do we change these dynamics? How do we raise the bar? Anyway, we went over the point since, so we kind of reviewed it. The model can be used to calculate the value of a network. You just got to go get all that transaction data. You can optimize your investments once you figure out and analyze and get that data. You can also use it to set up policies for supply chain and other problems. Here's some of the, there's a big drawback on the model we're going to get to in a second, but there's a lot of benefits. Here, right? It's down to every single keystroke that you use in transactions. It's scalable. You can scale it to internet or any huge network. It's subsettable. Because we used, we did a trick here. We're using net economic value. We're able to sum up all of our stuff and have no double counting. And by the way, us is not just individuals. It's corporations, governments, anybody. It's anyone that transacts on the net is a user by the definition of this model. Or Sally or Sam. It's any entity that contracts. So it's subsettable when you set theory. It's accurate. It's very similar to P&L concepts. So you can get financial people to understand it when you go to your CFO and others. It leverages traditional cost accounting techniques so we can amortize. If you paid your virus checker annually, for example, we can amortize that monthly. We can use all those traditional cost accounting techniques. It's testable. And it's as simple as it can be, and it's a foundation for derivative models. We took the model, we applied it to deterrents. We applied it to security. You can apply it to a whole range of different issues. There's only one problem. There's a really big problem. And then as the model is only as good as the data is you put into it, right? So you've got to get the data or estimate the data. And we did that for Corey with his book purchases and other online transaction purchases. Think about your companies. Think about your organizations. So in the net message that wraps it all together is very simply, it's all about T. It's all about the transactions to do network economics and looking at security. And it's including the transactions you want to avoid.  It's not about N, it's not about the numbers. So that's the model overall. And if there's any questions, I'm happy to take them. Yes, please.  For the Twitter example, I had a question. And I agree having more people is clutter on Facebook and Twitter. But the one thing that I found with either of those, the more people in my network the higher, when I have a question the higher the probability that I'll get a good answer. So is there a way to balance or factor into the equation of the value of the particular type of transaction because to me the tire that blew off my lawn mower, somebody said spray starter fluid in it, hit it with a lighter and it'll blow it back on the rim and thank God it worked. So to me there was good value in having that extra person who gave me that insightful information. But I would agree the inverse, all the updates I'm eating toast, stuff like that. So let's decompose this. So what I'm hearing you say is that so you pose a question out there and the more followers you have or people are connected to you the higher the quality the answer comes if you pose a question. So let's decompose that in terms of the model. What's the cost transaction and what's the benefit transaction? The benefit is a better answer coming back, right? So that's valuable to you. You got to blow the whatever was that, the spray can get going. So you got a better benefit because you had a bigger in, a bigger number of users in your network which might take you a little more time in general. So what you're saying is I can handle some of that noise traffic, you know, or maybe I'll ignore a lot of noise traffic and I'm just going to go drop out what I want and look for an answer so I want a bigger pot and pool. And actually it's a great observation and I think it shows how the model can help us step through it. And for me it's true like Twitter, I'm happy to have a ton of followers on Twitter because I don't respond to every single direct message. Right, you filter. But I do when I send stuff out I get good feedback, you know, or I have good pointers and articles. So I thought does someone else have a question about the security model? Okay. Well great. Well that's it. If you want to get a hold of me there's my contact coordinates. The slides will be on slideshare.net. They're not on your DVD because these just slides just got tweaked before I did the presentation this morning. They're on slideshare.net on our Beckstrom's Law DEFCON and thank you very much and I'm happy to answer questions afterwards in the room. Hey folks before you get too far please go this way. Thank you. Thank you very much.


Everybody forced here ripping a box of 2022 finest baseball hobby for Eric W on release day here, Eric. Good luck, buddy So I know Matt holds some nice rookie autos earlier. Hopefully we can do the same right here Two autos and some color coming up Cornerstone George Springer Brindela Cruz rookie Aqua shimmer numbered 175 of 175 Stott and Thomas Green refractor Otto Jesse winker 16 of 99 DeGrom Molina rookie refractor Mackenzie Gore and Soto aura of excellence purple refractor Jonathan, India 104 of 250 cornerstone McGill Cabrera Trade Turner refractor. Come on now. See some big hits in the second mini box. Oh, that's pretty big actually rose gold Mini diamond rookie Jeremy Pena numbered 32 out of 50 That's what I'm talking about Eric. There you go, man. We'll go ahead and get that magpena to 30 Suzuki rookie base rookie refractor Otto Marcos Diplom Abrams rookie rookie refractor Jake Berger or of excellence Tessa Padreia green refractor. Yeah, you're Molina 82 of 99 Salvador Perez cornerstone Julia Rodriguez rookie base Duran boss rookie refractor Seth beer and That will do it. Congrats again on that Jeremy Pena Eric. Thank you again Get it out to you