Written by Mike Finch

Co-Founder, ICO Alert; Founder, Sutler Ventures
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November 28 2018

ICO Alert Podcast #61: Ray Xiao, Berminal

Ray Xiao of the Berm Protocol, Berminal application and a Co-founder of IOST. 



My guest today was Ray Xiao of the Berm Protocol and Berminal application. Ray is one of the Co-Founders of IOST, which you can learn more about in a previous podcast we hosted here.

Berminal is the first application built on top of the Berm Protocol and has grown tremendously in the last few months. Berminal allows you to earn tokens just for reading and marking news articles as “Bullish” or “Bearish”, filling out polls, and predicting future price. I’ve been impressed with the quality of news that Berminal is able to feature and had a great time on the podcast with Ray.

The mobile app is well done and can be downloaded today for iOS and Android devices.  




Check out our comprehensive list of ICOs at icoalert.com

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The ICO Alert Podcast showcases exclusive, in-depth interviews with founders of past, present, and future Initial Coin Offerings. The podcast is hosted by Mike Finch, Co-Founder of ICO Alert. If you’d like, you can request a guest to appear on a future episode by emailing podcast@icoalert.com.


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Mike Finch: Welcome to the ICO Alert podcast. I'm your host, Mike Finch. COO and Co-Founder of ICO Alert. You might ask who or what is ICO Alert, right? Well, we're a team of 14 cryptocurrency enthusiasts and entrepreneurs here in Pittsburgh, Pennsylvania that want to see this industry continue to grow. ICO is a company that aims to help move this amazing industry forward. So, if you invest in this space as a retail, accredited, or institutional investor, we provide tools and resources to help you do so. If you're an ICO or STO, we offer consulting, marketing, and much more to help solve problems that you face in fundraising for your new project. We provide content for you to watch, read, and listen to. Collect tons of data on every ICO that has ever existed. So, if you'd like to connect, feel free to drop us an email at team@icoalert.com, or tweet us at the username ICO Alert. If you have questions for me, feel free to tweet me @thatfinchguy.

Mike Finch: And of course nothing on this podcast should be considered investment advice or any other piece of advice. So, my guest today was Ray Xiao, of the project at Berminal.com. And essentially Berminal is the first application that will exist on top of the Berm Protocol. That's B-E-R-M. And it's Berminal.com, B-E-R-M-I-N-A-L. Ray comes from IOST, where he was a Co-Founder. And essentially Berminal.com, the application, is looking to solve the various biased problems that exist. Specifically to cryptocurrency or blockchain industry here to start. Where obviously there's been all sorts of issues with biases, you know, related to different projects, or people pushing things out that aren't necessarily true that involve bias, because of the inherent inventive model that exists within cryptocurrency.

Mike Finch: Past our industry, they want this protocol to be used by traditional media as well. So, some lofty goals there. But, all very exciting. News is something that has kind of divulged in the last five or 10 years. We talk about the issues with click bait. We talk about how Berminal is set up to change that at first for the cryptocurrency industry. And while we've been focusing a lot on different perspectives in the industry to help explain market sentiment and regulation, and the future of this industry, and this bear market we're in, I'm excited to get back to the projects themselves.

Mike Finch: It's great to hear from VC's and others. But, I'm always equally excited to talk to awesome projects like Berminal. Likely you'll listen to this. Get a great introduction of Berminal and Ray, and the Berm team. And from there look to learn more. If you want to check out the application they've built already, that's at Berminal.com. Hope you enjoy.

Mike Finch: Get a bit of background. You know, stick to the human side before we hit on the project. So, how you got into crypto, how you got to Berminal. All that fun stuff.

Ray Xiao: That's how I initially got started, but then professionally got into crypto around 2016. I was basically mining athyrium on the side. And then, you know, and more professionally started IOST in mid 2017. And then, which is a scalable blockchain platform. Mostly in China, but we also have offices around the world. And then, you know, for the Berm Project, that's something that we started fairly recently in mid 2018, which is a data governance protocol. And we also have our own apps building on top of it already.

Mike Finch: Broadcast a handful of episodes ago, he's also the, one of the Co-Founders of IOST. So, you were a Co-Founder of IOST, right?

Ray Xiao: Yeah. We have six Co-Founders at IOST.

Mike Finch: Know each other from University or something? Or just kind of meet, or what?

Ray Xiao: And then met like, our product Co-Founder is my college roommate. And then we knew our CTO and our Chief Architect through common friends in school.

Mike Finch: Friends there's the ... other ones that this is the next big thing. It's not usually that all six friends are on board and start this massive project.

Ray Xiao: Our CTO, he did a lot of crypto stuff back when he was at Princeton. And Jimmy was an early BitCoin miner as well.

Mike Finch: IOST to start Berminal then?

Ray Xiao: You know, instead of kind of still kind of built something that doesn't really have a real usage, I think I want to focus on building something that has a real adoption, great retention rate, that actually solves people's problems. Ideally have a really high frequency of usage in people's lives.

Mike Finch: Right.

Ray Xiao: That's where your barrier of your business and also just building things people want. Just kind of go back to, you know, it's not a bull market anymore. So, like we really have to go back to things that really solve people's problems and so on, and so forth.

Ray Xiao: Than just another app that nobody really uses.

Mike Finch: Right. So, it can be complex, but just kind of give us a broad overview of Berminal and ...

Ray Xiao: Also getting a lot of scammers, where they just post [inaudible 00:08:10] to earn coins and stuff. Which I think is actually a huge problem on [inaudible 00:08:16]. Also a lot of other platforms that incentivize people to post contents to earn points. So instead we, you know, I was a big fan of ... there was a, he's a french philosopher, Montesquieu, right? So like he basically created the idea that you kind of have to segregate power into three ways. So that one kind of control the other, such that we create this equilibrium where in Berm protocol we do have three ways.

Ray Xiao: One is the content contributors. And one is the content of consumers, which is basically the reader. And we also have people who kind of govern the dynamic. Which are kind of like the curator, or content distributor. So, we create this three ways such that we incentivize, we focus on incentivizing the distributors, so they will do a good job if the product is good, if the content is good. And then basically they're the people who control all the content contributors to find out the best content for the users.

Ray Xiao: So far.

Mike Finch: You had to spend money for that content, that data, that information, right? Which you know, I said this off air, but I think your white paper is probably one of the best I've read, just as the context is presented, and the flow of information about the project is presented in a short 15 pages. So, those that listen here, are interested to learn more, go a bit deeper than we're going to go, read the white paper. It's a great read. And the reason I bring it up is because that context that it's presented at the beginning of it, about how the digestion of information has evolved over many, many decades. And where some will think it will evolve, you all included, is super key. So, a little context for our listeners, why do you think this kind of decentralized data or decentralized news is so important?

Ray Xiao: That really occupy people's time, and people enjoy reading it, watching it, stuff like that. So, that's why we think that this area has a strong potential. And also at the same time, we also explore this opportunity to really ... to give a lot of smaller media opportunity to present their content, because if you're looking into the PR space or Journalism space right now it's all click baits. It's all kind of occupied by the bigger guys that recruit a lot of journalists that create click baity contents. We think that this is definitely not the best way to do it, in a way, because in the traditional business model they have to do that because their entire business relies on advertising revenue, and click baity contents reduce results in the higher revenue, in the advertising.

Ray Xiao: However, in our case we basically create this kind of a mechanism for all the, you know, so A, like all the readers, they're a part of the owner of the entire content platform. And so, this will save a lot of cost in terms of the user acquisition, and at the same time, because user, or the readers are part of it, so they will ... they look for contents that are meaningful, and they appreciate the contents that are meaningful, so this really creates a better way to produce better content that are more related to what users need. That has more quality.

Ray Xiao: Yeah.

Mike Finch: The next evolution of the way that news or content is handled or digested. What I was kind of hinting at in kind of the evolution that data, news, and content is going to go through with blockchain is that as you so expertly put it in the white paper, the digestion or flow of information has grown steadily over many decades. You know, you go way, way back and information was transported via horseback, right? Paul Revere. That's the big one, right? And then the newspaper comes along. And it's this massive shift, this massive change, where now all of a sudden you can get information eventually delivered to your door every day. And you're going to be updated by a handful of people who curate the newspaper, who put that together, who have control over the newspaper.

Mike Finch: What's next? Obviously TV and radio come, so that you can get this at practically any time of the day. The most recent, the internet. That comes. You've got smart phones. Now, basically any information that you want in the entire world is available. And you know, Elon Musk on Joe Rogan's podcast was talking about this in relation to the neural network that they're claiming they have ready. In that we really have a big problem in the way that we digest information. And there is so much out there that it's really impossible to know all of the happenings when you think about news being a piece, or digest all of the content that's out there and available. And it seems to me that it's getting to a point where unless we get some sort of technological breakthrough, like a neural network where the input of data or news, or content, or whatever you want to call it is increased, and flows more smoothly.

Mike Finch: That this finite, this scarce amount of data input, or news input that humans can receive, that's incredibly valuable to a Wall Street Journal and these other companies. So, if you look at it in the context of the flow of information over a long, long time, it makes sense that you should now get paid to digest this information from folks. So, that's part of it, but then obviously as you've said, you guys are going further too, and we'll talk through that on the governance side to make sure that people are getting what they want. And they're able to have a say in what they want. And they're not receiving biased information from a mainstream media source, or whatever the case maybe.

Ray Xiao: Right. 100 percent. Yeah. That's the point. And we'll definitely talk more about how this type of equality or you know, our bias is achieved in our protocol later.

Mike Finch: Berm Protocol, then you also have the blockchain layer. So just kind of broadly explain how ... a little bit deeper on how each of those are functioning.

Ray Xiao: The application layer is a UI. It's, you know, it's people who build the application on top of it. In our case it's Berminal Application, which is a news and data platform for blockchain and cryptocurrency news. It talks about, you know, it shows and sends push notifications to our users about like the major adoption, the major movement, market sentiments, like things that are, or opinions from the industry leaders. So, these are a couple things. And other than that, you know, you could also build like say joke apps, or you know, like something that's purely for something like Night Gag, and yeah, you can pretty much build whatever things on top of the ... on the application layer. So, that's primarily a UI. That's where you handle the interaction with users, and display of information.

Ray Xiao: So, to become ... then basically we also have an incentive for users to become the application layer on Berm Protocol, because you know, you can basically get free contents through the usage of Berm Protocol. And then you have contents that start with that kind of solve [inaudible 00:18:50] problem for all the early stage startups. And then that's A, and B is that for the protocol layer, that's basically where the unbiased, like how we make news unbiased, and how we incentivize our distributors, and also content contributors. And also potentially all the readers through the token economics, that's where all this crypto economic thing happens.

Ray Xiao: For the blockchain layer, that's essentially, you know, because Berm Protocol relies on blockchain the play with, right? We can do this on Athyrium, we can do this on EOS, we can do this on IOST, but you know there are some reasons for selections. And essentially for Ethereum, we definitely don't want our users to pay for the gas fee, and stuff like that. So, it makes sense to have something that's more scalable, which basically will, you know, which basically makes Athyrium not really a possibility ... not a possible solution for our case. And for IOST the good thing is that it's super scalable, and it's good to store news and content data, and stuff. And then at the same time it doesn't require our users to pay for a fee. We can basically just take some IOST tokens to get access to this network.

Ray Xiao: And so, you know, that's the primary rationale. But obviously we're open to looking to all different possible options, and find out the best fit for the protocol. But, obviously as a protocol it's primarily handling the crypto economics and the incentive part. So you know, obviously if we do want to, we can also built on Ethereum. Like it's platform agnostic.

Mike Finch: You've got Berminal, Berminal.com, right? That's the application layer. That's the client that you see today.

Ray Xiao: Yeah.

Mike Finch: So let's start there. If you go to Berminal.com, you're looking at the site. You've got pricing on, it looks like about 1,200 coins. You've got all sorts of awesome featured news. You've got air drops. And then you've got kind of all of those together in one. So, Berminal, what kind of users do you guys have on this application thus far, and what are you guys thinking in the future alongside Berminal as a separate application?

Ray Xiao: Right, right, right. So, for Berminal right now, we started this with, it's kind of like the toy on this protocol. And then it's really cool, because it really becomes a major type of information source for me, myself, for a lot of friends of mine who are also in the space. If you look at, you know, what's his face, Michael Arrington, the Co-Founder at Coin Base. Not Coin Base, sorry. Tech Crunch. He's using this every day, like sharing news and so on, and so forth. And a lot of other industry big people. Like Eric Maltzer, Dobey Yan from [inaudible 00:22:04] dot DHBC, which is one of the best crypto blockchain VC in Silicon Valley.

Ray Xiao: Yeah, so like it's a pretty useful, handy application that kind of give people the most updated information in the crypto space. So, we thought that, you know, like we initially thought this was quite useful. And so, we built this. And it has received really good traction. So, we started off, only after two months we grew to 400K users, just by you know, launching a lot of campaigns, and also like bouncy programs with our early adopters. And then we were gradually growing our user base, and you see people are liking all the news and so on and so forth, they shared it to social media. Yeah, it's something that people want, and obviously for news like blockchain use, that's something that they require that's super sensitive. That they want that kind of fairness, and unbiased coming on from this source of news. And that's where we think Berm Protocol solves a problem a lot.

Mike Finch: That's insane. 400,000 users. I mean, that's obviously significantly more than most. I mean, just looking at the latest data, that is more users than probably all applications out there that, you know, that ran an ICO last year, or there after.

Ray Xiao: Oh, 100 percent. Like even given the market condition right now.

Mike Finch: Right.

Ray Xiao: Because if you really look into a lot of data, like basically the visits for many crypto sites have basically not only halved, they probably cut like 90% from their peak.

Mike Finch: Right. Yeah. That's wild, man. Congratulations on that front.

Ray Xiao: Yeah. So, we anticipate a lot of growth in this application itself, and obviously a lot of other growth in the Berm protocol itself. So, the next step really is to kind of extend this type of news platform into something outside crypto. And that's really our original goal to, you know, for doing this. It's really to bring more user adoption to build things people want. And figure out what people want to use, and how to kind of integrate that with blockchain technology, which provides the transparency, and the immutability, and then at the same time it's about, you know, bringing crypto into those people, and try to get them access. So, for us, our next step is really to build something that every day people would use, and also kind of evangelize the idea of cryptocurrency, and you know, and hopefully our application will become kind of like the entrance for them to enter the space.

Mike Finch: Right. Yeah. That's fascinating. I wasn't aware that you guys were looking to move past the just cryptocurrency news. So, all kinds of problems, because of the inherent incentive layer that exists in cryptocurrency. I mean, this has been a problem since BitCoin came along way back when. Where if I purchase XYZ token, I am then further incentivized to evangelize about that token, and have more people buy it, and increase adoption, and that's great. And that obviously moves forward the adoption of these cryptocurrencies and this technology faster than the traditional non tokenized model.

Mike Finch: But, obviously with that as well you get people who maybe they fudge certain pieces of news, or pieces of information about that specific project, or whatever, and you know, that's a big time snowball effect as we've seen. And you end up with these kind of clashing groups of subjectivity around certain projects. Whereas a new user coming into this space, it would be incredibly difficult to actually know what is true, and what is false. What's actually the case, and what's just some XYZ projects fan out there trying to increase adoption through false sentiment, or false news. So, yeah. Hugely needed in this space, but obviously you know, there's a big need in just traditional news as well. So, that's awesome. Props to you guys on taking that head on with the application layer of sorts.

Mike Finch: So, moving on to the protocol layer then, the Berm protocol. What does that allow you guys to do in the future, or what does that allow others to do in the future as they might look to build on top of that protocol?

Ray Xiao: Yeah, let me go through this step by step. So, on top of this protocol, if you build an application on top of it, and then for every new users you bring to the Berm Protocol, you'll be able to get some tokens as an incentive, to build things on top of us. And then, I mean, for all the content, you don't have to pull all the data from Berm protocol. But, like you know, this is a protocol that provides good unbiased data, so you know, if you're trying to build something that requires unbiasness, that requires you know, like some professional content that that's where to go. And one very important angle that we tackle here is really to aggregate, or in a sense aggregate, but also like it's kind of like building a protocol for all the PGC data. So, PGC as in professionally generated content.

Ray Xiao: If you look at Reddit, Instagram, Quora, they're all UGC, which means like users are responsible for generating all those contents. And how the UGC platform becomes successful is not through just pure user adoption, it actually requires a lot of centralized curation. So, what that means is that like to give you an example, like initially when people just started to grow Instagram. They had 13 employees and four of them are like community evangelizer's they're the people who kind of set up the tone for the entire community, such that all the followers, they imitate whatever tone they have within that community. That's just kind of how human and how community works.

Ray Xiao: So, for all those platforms, like similar for Quora as well, you have to kind of build that question and answer mechanism. And then for people who come in next, they know the right format to answer questions, and ask the right questions. So, that's the tone for all the UGC community. However, for a PGC community like us, we don't really have that platform. We don't really have that problem, because you know, like we kind of limit users ability to generate content. So, such that in our case we take advantage of the growth power by the value of cryptocurrency. So, this will definitely introduce a lot of spammers, and a lot of people who are not able to contribute the contents.

Ray Xiao: So, instead we just focus on building this platform for all the professionals. So, they produce contents, and all the coming people, they just read it.

Mike Finch: Yeah. And you guys are obviously trying to put out there the best content, right? So that there's not ... users aren't coming to your site and they're seeing content that is poorly written, or you know, if you look at the example of twitter, like a lot of people functionally Twitter makes sense for, but because there are so many other people out there spouting nonsense, they don't want to use it, right? That's one of the things that drives me crazy about Twitter, is that, yes you can follow certain people. But, you know, the way they have it set up under the UGC model, any of the people that follow, if they like something that I just don't really care about, I'm going to be shown that.

Mike Finch: It's kind of the Wild Wild West in a lot of ways. So, under this model then, how are you guys making sure through this voting structure essentially that when a user comes to your site, they're going to see what they want to see. They're going to get that high end content. How does that work without presenting a multitude of problems?

Ray Xiao: I think there are different ways to solve the problems. But, essentially the idea here is that you've got to make sure users ... they're participating in the voting process. And then that's why on our application right now we kind of build that behavior for users to participate in voting, and engaging with the community. So, I think that's really the fun part. Other than that, we tried to built something that's ... that will basically ensure that user participate, kind of participate in the decision process of content ranking. Such that all those contents are good quality. They're picked by users. But also like the picks are factored by the amount of tokens they have. So, that's kind of how we ensure the ... that's kind of how we ensure the distribution of all those contents.

Ray Xiao: And the other side point is that users don't directly contribute to all the decision process through tokens. They vote for the delegates, and delegates will be the final decision makers. And the idea here is that if the user doesn't like those delegates, they replace them. So, it's kind of like how the country works. They vote for the delegates, and the delegates become the government. And government make decisions on behalf of all the people. And then you know, and then the government using whatever way they need, they build the best society they can.

Ray Xiao: If the users don't like them, they kick out the government's.

Mike Finch: Okay, yeah. So, those that are coming to Berminal.com, they're able to vote towards the type of content they want. Like you said, introduced this delegate, who is the one that the users are voting for. So, that kind of gives you all the control to make sure the application doesn't devolve into uselessness, but also still gives that vote to the user. So, there's the user obviously. Then there's this delegate that you mentioned. And there is a third user as well within the Berm protocol? Is that right?

Ray Xiao: Yeah. So, it's user, delegates, and content providers, generally. And then I think a key part here is that like a users can ... so obviously in terms of the actual content curation, like whatever user votes, like how Reddit is doing, it might not best represent the best content, just because users directly participate in the voting mechanism. And you know, and that way a lot of contents are not tailored toward their taste. That might not be the best content that represent the entire interests of the platform. So, that's why we introduced this group of delegates that kind of make decisions on behalf of users.

Ray Xiao: But, we ensure that the entire like delegates group ... they're motivated by making sure that they can be kicked out at any time. So yeah, that's kind of how the protocol works.

Mike Finch: If I'm a user, I come to Berminal, I'm able to vote for these delegates, what does that process look like? Is it super complicated? Are there tokens involved? You know, obviously most of the users on Berminal are going to be these, you know, the people digesting this content, this news. So, how does that occur?

Ray Xiao: Yeah, sure. So, essentially all the users are there to ... so basically interaction wise, it'll just be a voting process. It doesn't happen every day, probably happens every week or something. And then they just find out which content they like the best, and then we also have, we will combine some data for all the delegates, such that users can see their performance pretty easily.

Mike Finch: Okay. Give me an example of who or what this delegate might be. Is this is a person? Is this an organization? Is it a company in the space? Who are these users voting for usually?

Ray Xiao: So, initially to bootstrap this entire thing, we basically work with reporters in the space. Like a lot of our reporters, or delegates right now at Berminal, they are like experienced industry people. They worked at Coin Telegraph. They worked at CCN. They worked at Coin Desk, places like this. And also like some content editors who previously contributed contents to say Forbes and also Bloomberg. So, they all had the expertise in picking out which news are newsworthy, and which contents are good. So, we started with that, and eventually ... and gradually we're in the process of moving to work with, say a larger media, or like a larger bloggers, that potentially they have more say in the industry, once we moved to something that's broader.

Ray Xiao: As in like once we not only cover crypto news.

Mike Finch: Right, okay. Yeah, so it starts out kind of in a similar way that you would see today with the Coin Desks and the Coin Telegraphs of the world, but the goal eventually is to incentivize this smaller person where under the current structure it would cost a lot of money to get your article up on Coin Telegraph or CCN, or whatever. But in this model, that blogger could then get their content out there for free, or if they got enough votes from the users. How does that evolution work?

Ray Xiao: Yeah, so essentially we have a process of constantly looking for good contents to show our readers. And for all the things that are similar to the idea of advertising we will basically run this through, in the future will be run through a smart contract, where basically everything will be relatively transparent. And this transparency is needed in order to build a trust between all the users and the ... basically distribute all the revenue back to potentially back to users. And back to content contributors. So, that's how, yeah. So, basically we do have this kind of a fundamental for all the tokens. So like it's not a token that only means voting rights. It also means potential revenue splitting and so on, and so forth.

Mike Finch: Gotcha. And there are two different types of tokens on the Berm Protocol, right?

Ray Xiao: Yeah. And in order to do this we also have the regular Berm and also the BMP that we're in the process of implementing. Having BMP and Berm, like it's very important because Berm primarily legally it works as a utility token for Berm, which allows us to distribute that to our general public, and that allows us to ... like in many countries it allows us to trade on exchange. And BMP is something that, you know, more or less in the grayish area. That's where it represents the ownership of the revenue. BMP is a security token. And then the regular Berm is a utility token.

Mike Finch: Got it. Okay. Interesting. So, other than those two pieces between a security token and a utility token, what does each token function as on the protocol? I know in the white paper you talk about BMP being vested for six months, I believe it was. And Berm is almost kind of seen as like a lesser token in a way.

Ray Xiao: Yeah, I would say Berm is like the cash, you know, that's used to pay, that's used to transfer, and you know, incentivize people, and stuff like that. And BMP is more or less like equity in a sense. It's not really equity, but it acts like a community equity where you know, they potentially ... they could get revenue distribution and they would have the voting rights.

Mike Finch: Gotcha. And if you have Berm, you can upgrade it to that BMP?

Ray Xiao: Exactly. Yeah. It's basically kind of like an internal mini exchange type of thing.

Mike Finch: Gotcha. Okay. So, why have two tokens versus just one that can do both?

Ray Xiao: Regulation.

Mike Finch: Oh.

Ray Xiao: Regulation, right? You're not supposed to distribute a security token to a user. So, this type of a growth campaign whatsoever. For a utility token, it's fine.

Mike Finch: Interesting. Okay. So, it's not necessarily [crosstalk 00:40:34].

Ray Xiao: I've been in this space for a little bit, so you kind of know all of the tricks and all of that.

Mike Finch: Yeah. Yeah. It's interesting you bring that up. I mean, we've ... the last few podcasts we've had, at least the ones I've had, have been focused a lot on regulation, and kind of getting a perspective from different folks in the industry, whether they be a VC, like the Sustany Capital interview that I did, or other players in the space. Like the most recent one with Jaren and Eric. So yeah, it's good to hear that you guys are aware of that obviously, and taking the necessary steps, because those projects that don't are going to end up getting burned, or already have been burned. And while it's unfortunate that this is the case, it still is the case, and you know we have to act accordingly.

Mike Finch: Yeah, that's interesting. I didn't kind of catch that in the white paper. So, good to know.

Ray Xiao: I do think actually that a lot of security ... like all the regulation issue is being, you know, to my perspective, is a little bit being too exaggerated in the States. I don't actually see that in many other countries. Well, they do have high regulation, but it's not really like you know, they don't go to specific terms. So, I found that very interesting actually.

Mike Finch: Yeah. It's ... you know, it's the main topic right now in the States, and really in North America. Even parts of Europe too, where as you said, like you look at Singapore, or Malta, or a lot of these other countries where they're like, well we've got this figured out. We're leaving you all behind. So, we don't care necessarily about security tokens, or we don't necessarily care about what your regulatory body says at some conference. And we're starting to see that in the data, right? There's a project called Elementus that just came out with updated data on ICO's, and they showed that in August there was actually the first increase in a while of the number of ICO's and the actual amount that these projects are fundraising. So yeah, it's wild. It's very easy to get kind of stuck in your area, right? Your plot of ground and say, "The entire cryptocurrency industry or blockchain industry will not move forward until the SEC figures this out."

Ray Xiao: Well-

Mike Finch: When realistically that's not the case globally.

Ray Xiao: Yeah, well in US.

Mike Finch: Exactly. Yeah.

Ray Xiao: Also like from my standpoint, I found it really interesting that you know, people tend to be more aggressive in the countries that they don't belong to sort of. So like you know, I saw many US projects they're happy to do whatever they want overseas. And similar to Chinese projects. A lot of China projects they're super low profile in China, but they kind of do whatever they want in US and globally. Yeah, it's really interesting to see that.

Mike Finch: Right. Yeah, Binance is probably the best example.

Ray Xiao: One of them [inaudible 00:43:56] for sure. They do nothing in China. Well, obviously people know them, but most people use the local exchanges. But yeah, when they kind of get out of China, they do whatever they want. And just got super aggressive with growth, with other strategy. Which I know, I mean, it's great.

Mike Finch: Right. Yeah. Very cool. Well, let's talk a little bit more about the governance aspect here. So, voters are, you know, users are voting on the content that they want. They're essentially through this delegate system, the delegates at first will be these established media companies, these trusted sources, right, that we know for sure are putting out good content. We don't have to worry about them putting out objectively false information, or things like that. As you said, that will grow. That will evolve, so that the smaller person can kind of come in and have a say, and then the content producers, right, so is there a scenario where the content producer could also be the delegate, or how does that kind of fit in as the third user on the protocol?

Ray Xiao: Yeah, I get what you're saying. So, yeah a lot of community members, investors ask us these questions as well. But, honestly in my opinion, we haven't actually restricted people from being both roles at the same time, because if they really try to do something that's super selfish, it's only blockchain that are going to see it. Right? So, I don't think that's a problem. So, as long as they were doing the right job, you know, they feel free to contribute more, and so on and so forth.

Mike Finch: Gotcha. So, solving that essentially just with transparency then, because the, yeah okay. I get it. Yeah, that makes sense.

Ray Xiao: People will see it. They kick them out in the next round.

Mike Finch: Gotcha. And then there's a reputation system involved as well. That's kind of related to the FDG that you talk about in the white paper. The federated Data Governance to some degree as I understand it. One of the problems you see in proof of stake, and delegated proof of stake, is this collusion or a lot of them, a lot of people call them cartels or what not, right? There are issues on the EOS protocol, quote unquote issues where you have a number of delegates kind of controlling the platform. What are you guys doing, or what have you guys kind of planned to combat that? Because that's something that I think a lot of protocols have, or a lot of projects have where they do everything right, but then still people are able to kind of find the loopholes, and find control. Is there some sort of oversight that you all will have to make sure this doesn't happen? Or are you pretty confident that the governance system will really flush this out?

Ray Xiao: Honestly, I think it's generally fine. I'm not too worried as of now. And also at the same time we operate this community pretty closely in the very beginning, so if things go wrong we can still control that. Yeah. But, it really takes time to kind of work on it, and play with it, and stuff like that. So, I don't think this can really be built in a day. But, you know, this will go gradually.

Mike Finch: Right. Yeah. Governance is obviously a big topic in this space. And it's going to take some time, no doubt. It's not built in a day, like you said. So, the voting process for the users. Users have to lock up their tokens for six months, is that right, in order to vote?

Ray Xiao: Right. So, that's kind of what we're thinking about. For that one we're still flexible. Not really flexible, but like we still need to have more discussion, because those changes, the regulation changes, and obviously this depends on, this varies by countries as well.

Mike Finch: Got it. Got it. Okay. Yeah, because six months, that's a long time if somebody's taking their Berm token transferring it into the BMP, then holding it there for six months. Yeah, that's a long time. So, you think that'll change?

Ray Xiao: Yeah, I think that's generally fine. And yeah, but I guess time will tell.

Mike Finch: There was one piece in the white paper where you guys talk about the ability to censor false or kind of inappropriate content or data, right? Especially at the beginning, totally understand the need to kind of make sure that the application doesn't run away from you, right? That's not the goal of Berma. You need that kind of incubation phase to make sure it's working like it should be. But, as it continues to develop will the Berminal team still have the ability to censor that quote unquote false or inappropriate news or content, and how do you kind of qualify this news and content as inappropriate or false without doing too much censorship, right?

Ray Xiao: Yeah, yeah, yeah. So, a couple of things. I think I still sort of, you know, like we do for all the customer presenting things right now, we do have censorship. But, in the long run I think the censorship should go to the, supposed to go to the application layer versus the protocol layer. So, on the protocol layer, you know, the blockchain is fascinating just because it doesn't require censorship, or it's censorship resistant in a way. So, in that regards, we kind of just leave that open. And yeah, so you don't like on the protocol layer, it's like we don't check anything. I think that's the beauty of the protocol layer. But, on the application layer, yes, we do like you know, for the Berminal app itself, yeah, we do some censorship for sure. We make sure things are right.

Ray Xiao: We make sure it's factual, yeah. But, I guess in the long run we are not trying to use this type of protocol to solve fake news problem. We solve bias problems. We don't solve fake news problem. I think whether some people think it's fake or not, like it's just really hard to tell. And that's my take. And it kind of, like whenever people vote against this content, then it will all be transparent, non chain, so like people will see it.

Mike Finch: Really, as I see it, and maybe this is completely wrong. Let me know if it's completely wrong. But you guys are trying to build an experience for readers, for people looking for info in the cryptocurrency and blockchain space, you're trying to build something better that's currently out there, but you're also trying to do it in a decentralized manner so that it's fair, right? So, that it's kind of this different model where the traditional model that we've seen with EOS as a great example, or I think Tazos might also fit this example. Where immediately out of the gate this project becomes decentralized. And it's pretty much like, hey, here's the code, do with it what you want. We're not going to touch it. We are basically as fully decentralized as possible.

Mike Finch: Where's in this model, it's that understanding of saying, okay, well here's the problem. If the solution is all the way over here. You know, if we're at point A, and the solutions at point Z, we understand that there are going to be some first steps that need to be taken in order for basically the application not to devolve into uselessness, as I said earlier. But, there's still obviously plans for that decentralization. So in kind of thinking about that, what have you seen with other projects that haven't don't this correctly, or projects that have done this correctly, like how did you guys kind of come to this model, or this setup, this strategy?

Ray Xiao: Yeah, a couple things. I think one of the things is really to become the first one in whatever you do. I think that's super important. And to become the first one, it's helpful to be early. And you know, it's helpful to do something that people haven't really done. So, I'm honestly not a big fan of imitating what other people are doing. I think there's a theory where if you kind of imitate what other people are doing, people will just gradually become competitive, even if they previously are not. And then they're kind of just grow a lot like each other, and then they become in differentiable, and basically both get worse off by imitating. So, nobody we're kind of imitating, and I kind of ... I mean, not only me, but we asked the team.

Ray Xiao: We're all a big fan of building something that's actually useful. So, yeah that's why we're doing this. And with [inaudible 00:53:47] matter. And again, like I kind of see this entire adoption of cryptocurrency as running a UGC platform. Although, our protocol is more tailored towards a PGC network, but you know, the entire thing, in the end, it's all about user facing and community building. Then that basically means you have to do something centralized first. And kind of demonstrate to other people how things should work. And then you kind of build that community, and build that imitation behavior by other people. This is a different imitation than I'm talking about previously. When it's a competition, you're not supposed to imitate other people.

Ray Xiao: But when you're doing this community thing, you have to kind of give all the users a feeling that they know they should fit in to. So, that's why we're doing this in a super centralized manner first, and then we hope to find out of the best partner, enlighten the best entrepreneurs in this space to do that same things with us. And really the goal is to build a crypto adoption in the end.

Mike Finch: That's fascinating, man. Yeah, that's super fascinating. So, past the tech of Berminal and the Berm protocol, what's the overall plan for adoption, and you know obviously a big answer there are rewarding users and authors for participating in this new content ecosystem of sorts. But, how does that all work, right? Why are you guys so confident that you'll be able to go from 400,000 users to 800,000, to a million and onwards?

Ray Xiao: Yeah, like actually through the last month we've been slowing down a little bit purposefully just to build a better product. We just recently re-polished our application. We made a lot of, we made the experience a lot better. And right now it's just we saw this market, it has been proven through other ways, in other markets. And we know that this type of incentive referral kind of thing works. And we do see this as a great opportunity to do something on blockchain.

Mike Finch: So, I'm a user. I go onto Berminal. I'm able to receive rewards. How does that reward mechanism work?

Ray Xiao: So, if you use it, if you do it right now, whenever you answer the right questions in the app, you get some tokens. If you refer more users into the protocol, you get tokens.

Mike Finch: Gotcha. Okay. And then what about the delegate and the authors, how is that broken up?

Ray Xiao: Yeah, so like for delegates and authors, so authors, if they want, they contribute information into the space. So, they just do it. And for all the delegates, they basically work with other partners in this space. Like Hacker Known, like all the crypto websites. Likes Crypto Briefing. We basically work on those, and then some of the news are from those sources. And then we kind of give them credit back as well. Yeah, so they're all incentivized with tokens. For some of the authors right now, they could also get some [inaudible 00:57:07]. Stuff like that.

Mike Finch: Okay. The tokens, are the tokens coming from the users who are voting for them?

Ray Xiao: So, basically we have a big pool of tokens. And it's basically, kind of see this as a mining process, if you wish.

Mike Finch: Yeah.

Ray Xiao: So, that's a part of the mining process. And once we build out that organic growth, then that's kind of when we can slow down in giving out our tokens. It's just like BitCoin. Initially you give out a lot to the miners, and you gradually slow that down.

Mike Finch: As the value of the tokens increase?

Ray Xiao: Yeah. Right.

Mike Finch: Got it. Okay, so those tokens are coming then from the team, you all, as incentive?

Ray Xiao: You mean all the initial, right, those are the tokens that we meant. Yes.

Mike Finch: Okay. Gotcha. Yeah, that's interesting. And then from there how does Berminal kind of make its money? I know you talked about advertising a little bit. Obviously you don't want to become the Wall Street Journal of the world where again, there's four or five popups. Maybe they're not the best example, but so many sites out there it's almost impossible to read the article, because advertising is all over the space. How are you changing that up?

Ray Xiao: I think, you know, just for Berminal, there are so many ways to make money ... and when it's in crypto space. You know, as long as you built things that are tied to your core product, that brings you traffic, there are different ways to make money. For example, like the apps, or even anything that ... I'm not saying that it has to be an exchange, but I'm saying something like that. And stuff like that. Anything that's related with the traffic, and with your core users. Build another product they're willing to pay, if they're willing to pay either for the good or service it provides, or willing to pay the commission. So, that's kind of how I see it.

Mike Finch: Interesting. Okay. Yeah, in the white paper you mentioned a hap, instead of a dap. Is that right?

Ray Xiao: Yes, hap means hybrid.

Mike Finch: And what exactly is that? Because I had never seen the concept for a hap before.

Ray Xiao: Yeah, hap is actually a new concept that we kind of just bring up. Like it's ... basically there is a problem with the decentralization scalability right now. And it's just, you know, I kind of personally believe that there is an immediate process that kind of sit in between.

Mike Finch: I see, okay. So, it's that hybrid app between fully centralized and fully decentralized.

Ray Xiao: Yeah, that kind of hybrid solutions. Yeah.

Mike Finch: Okay. That went right over my head in reading the white paper. But, makes a ton of sense. Yup. Cool. Awesome, man. That's super interesting. I like the governance model of user, delegate, plus then you also have the content author. So, in looking at all of this, and looking first at Berminal on the application layer. What are kind of your thoughts on the different groups that have emerged in the cryptocurrency industry? Because it seems to me like when I got into this, it was much different than you see today, right? Like back in 2013-2014, you didn't have this kind of segmentation of people based on belief, right? So the most obvious ones are BitCoin and BitCoin cash. But then you also kind of have your BitCoin Maximalist, and your quote unquote alt coiners.

Mike Finch: And you know, I don't really know, nor do I think anyone really knows if this is good or bad for the industry yet. Like the last thing we want to end up with is just a bunch of in fighting and no innovation. I don't think that will happen, but what's kind of your perspective on the different groups that have emerged, and whether or not this is positive or negative?

Ray Xiao: You mean, so basically what you were saying is a lot of groups have merged into one, or they kind of converge in value? Or is that what you mean?

Mike Finch: Kind of. So, you think about the early days of cryptocurrency, where everybody was kind of on this one mission. Maybe the focus was BitCoin, or the focus was just general adoption. Now you see a lot of in fighting, right? You see BitCoin versus BitCoin Cash. You see BitCoin Maximalist versus Alt Coiners, as they've kind of been called. And instead of the narrative being pushing the industry forward together, it's kind of been pushing say a specific project forward. Kind of like the flaws of you know, this incentive model where somebody as we said earlier will spread false information, or misleading information in order to further their project, or their own beliefs about that project.

Mike Finch: So, you guys are obviously in a unique position, trying to solve a lot of these problems. I mean, what are ... what's kind of your overall perspective on these different groups? Do you think it's okay that we have BitCoin versus BitCoin Cash in a lot of the mine spaces is on that, or is this super bad?

Ray Xiao: I mean, it is like, I kind of feel like it is what it is. And ... yeah. I kind of feel like it is what it is. The problem I do kind of see, well or maybe that's just kind of how that process goes, is that in the end it's all about, you know, I think the final goal is about adoption, right? And potentially for all the early people to make money, hopefully. I guess it's just, that's just part of the process. And I do actually think that there are actually a lot of shortcuts through that. But, like I just kind of feel like people haven't been taking it.

Mike Finch: Gotcha. Yeah, I guess the reason I bring that up is because if you look at BitCoin versus BitCoin Cash, if I'm a new user, a new cryptocurrency enthusiast, and there's some serious use case for BitCoin for me, right? I'm in a country where the government has ruined my currency, and I go, and I look, and I say, "Okay, what's BitCoin all about?" And I get conflicting news, or conflicting information about BitCoin versus BitCoin Cash, and I don't really know what to believe. This now becomes a problem for me, because I don't know who is telling the truth. I don't know which currency is best for the problem that I'm working with.

Mike Finch: Yeah, I mean it's an interesting time in this space. For sure. But, I love what you guys are doing with this new governance model around news. This, you know, stepped out approach versus just focusing on an application, right? Like the protocol layer is super important. It's not just about building an application, and being able to look down the road towards not just crypto news, but also traditional news, I think is a great goal to have, because that problem obviously exists as well.

Mike Finch: So, that's awesome, man.

Ray Xiao: Yup. That's actually a bigger problem than simply crypto-

Mike Finch: Oh, definitely. Yeah. Obviously way larger user base there, and certainly broader implications. So, that's awesome, man. Well, I'm going to let you go. I know you're a busy guy. We're just over an hour here on the podcast. But, for those that want to learn more, they want to reach out to you, any questions they might have for you or the team, what's the best way to get a hold of you guys?

Ray Xiao: Yeah, any time. We have our team email on the Berminal website. I think it's hello@berminal.com. Something like that. And then also like follow us on Twitter. I think it's BerminalApp. That's our official Twitter. If you search Berminal, there are some other ones. Those are not official. But, yeah.

Mike Finch: Got it. Yeah. Awesome. And then obviously like I said, Berminal.com is where you can go and check out that first application.

Ray Xiao: Yup.

Mike Finch: Since you showed me it, I've been using it, and I can say it's super helpful.

Ray Xiao: Yup.

Mike Finch: So, awesome, man. Well hey, appreciate the time. I know you're busy building all of this, and raising money, and all that fun stuff. So, yeah. Thank you for coming on. It's truly been a pleasure. And I'm excited to see where you guys go in the future.

Ray Xiao: Yeah, definitely. Just let me know if you have more questions. Happy to reach out and talk about the space, talk about anything, any time. And Mike, thanks so much for your time.

Mike Finch: Perfect. Thanks, Ray.

Mike Finch: There's a lot to unpack in this episode. Hopefully we did a good job of explaining the different layers that work within Berminal. Again, Berminal is the application layer. We've got Berm protocol as the protocol layer. And then you have the blockchain layer as well, which is kind of a different set up, right? Obviously IOST is in the running for their blockchain layer, but they're looking at EOS, and Athyrium, and others as well.


Topics: Blockchain, ICO, Cryptocurrency, Podcast, Blockchain Technology, Podcasting