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Crypto 101: Understanding the World of Crypto, Blockchain & NFTs with Larkin Reynolds & Zak Wolff

by Patents Integrated
August 11th 2021

Whether you find yourself confused, fascinated or both by the world of crypto, there's no denying its captivating hold on today's society. Luckily, there are crypto experts like Larkin Reynolds and... More

Hello and welcome to the novel and non obvious podcast where we discuss the intellectual property topics impacting the startup world. My name is jerry Komori to the host of this podcast and founder of patents integrated Today we welcome two guests, My friend Larkin Reynolds from Foundry Legal and also Zach Wolf who is an independent web three engineer with a lot of experience and information security. And more recently in crypto, he calls himself a longtime crypto unique. So welcome Youtube. Thanks so happy to be here. Thanks Nice to be here. So crypto N. F. T. S Blockchain. These are not topics that I am very familiar with but I know that there's a lot of interest in my audience. So let's start with a very simple question. What is a non fungible token or N. F. T and what is it not? Who wants to take this 1? Okay, so we're talking about N. F. T. S which are a type of Blockchain token. It might help to back up and understand what a Blockchain token itself actually is at a very high level.

A Blockchain token is a digital asset that at any given time can be spent only once because of the nature of it being traded via a Blockchain powered protocol. So where I say that the asset is digital, that means it obviously doesn't exist in the real world. And yet there are other characteristics that might distinguish one token from another here is where we get into the split between non fungible tokens and fungible tokens. A lot of folks listening might realize that one of the original use cases for Blockchain tokens was as a payment method. In fact the original Got an academic paper white paper written by Satoshi Nakamoto in 2009 laid out a peer to peer system for cashless trading of currency. I'm forgetting the title off the top of my head, but the whole premise of Bitcoin was to find a way for individuals to exchange value I.

E. Money in some way without the need for a trusted intermediary or series of intermediaries which is the status quo in our traditional financial systems where you have a bank and you have payment processors and you have settlement rules and systems and you have government regulations all overlaying those systems. So one of the problems that Satoshi Nakamoto was fixed on solving is that without a trusted authority, it is incredibly difficult for two private parties to know whether any particular non tangible asset that they are dealing with has or has not been traded before. Right? So as with any digital file, it seems like you could just copy that file and send it to a million people claiming that it's the same one when it's really not. The Blockchain is the technology that solves that problem and particularly through cryptography, which I'll leave that whole aspect aside.

So then we have tokens which are digital assets and they have different characteristics, one of which is fungible. Itty fungible assets are like cash, one can be immediately exchanged for any other and it will retain the same characteristics as the original meaning if it's used as a store of value, it will assuming it is the same quantity of that asset. It will, it will have the same purchasing power. And this is very very similar to money. And this is how Bitcoin works. Non fungible assets on the other hand, are distinguished by the fact that it's not how much you have of the assets but which ones you have. And so there would be unique characteristics about that particular asset that gives it value in the market where that asset is traded. So this could be something like in our modern times, right, a unique piece of art or a collection of very unique trading cards or player cards uh in the olden days it might be a very special sword or something that's been passed down generation to generation like, you know, sets of silver, those are non fungible.

And so aside from their sentimental value, you know, whatever those might be, the assets are so unique that it's very important to have a clear picture of authenticity when you were trading them as well as clear chain of title, just like in Bitcoin and with fungible assets. So, you know exactly who owns it at which point in time. Okay, to clarify one thing though. Um so Larkin when you say and and either of you can answer this question, you've said a Blockchain ethereum is a type of Blockchain. So there isn't a single thing that can be referred to as the Blockchain. There are several different iterations, is that correct? Yeah. Eureka, that's exactly right. There are more than one kind of Blockchain and I wouldn't even go so far as to say that they're iterations of one another. They are entirely different. Just like a chevy is different from a Volkswagen is different from Ferrari and you have to kind of think about what the use cases are, what the underlying code of the network does as well as what the underlying code of the smart contract standard does if it is a smart contract.

Um and that is something we could also spend a lot of time on but these in general have distinct attributes that make them more or less amenable to different use cases. And those use cases determine which Blockchain network you would want to choose to either buy or create or otherwise trade in particular. N F T. So right now the dominant N F T standard is set by the ethereum network and that standard is called E R C 7 21. There are a couple of newer standards that have other attributes, but the basic of an E R C 7 21 token is that it is unique. It has unique types of metadata actually layered into the code of the smart contract that creates the token or the digital asset. And so when you are interacting with a certain type of E R C 7 21 token, you can read the code, hopefully. Hopefully it's on some level public or you can find out enough information about the way that that token is treated on the network.

So that's if you're trading in an ethereum or ethereum compatible Blockchain token, there's are also N F T. S on other Blockchain, such as card ono. Although Cardona does not use smart contracts which is something of a question mark in the crypto community right now there's also Selena there are N F. T. S on the Bitcoin Blockchain as well. And so yeah there are quite a few. Okay, and maybe this is a question for Zach so I know that there are a lot of startup companies that are trying to build businesses around various types of Blockchain. So what are some of the trends in the types of startups that are coming up that are related to various Blockchain frameworks? Probably the largest trends happening now. N F T s are really big. So there's a lot of startups that are targeting N. F T specifically defy or decentralized finance was was kind of like really came on strong last year. And then I think there's also like an emerging segment that's related to interoperability of block chains, so connecting the different ones than making them work together.

And you know I think those are probably some of the larger verticals now maybe wanna wanna throw in there as well is uh scalability. So a lot of these kind of first generation block chains like Bitcoin and ethereum have worked really well in a limited capacity but scaling them up has become a little problematic or it's just a difficult problem to solve. And so there's a lot of focus now on companies that are working to develop scaling solutions for these different block chains as well. Or even native block chains that kind of start scalable. So related to that. So you said that there's a lot of interest in N. F. T. S right now. What are some things that you can do with N. F. T. S? How do you acquire it? How do you sell it? How do you exchange it? That's a good question. And I think there's actually a lot of misunderstandings now or we're kind of looking at N. F. T. S in a pretty limited capacity. So you know, you anyone can deploy a contract and then mint their own N. F. T. S. You can go out and buy those from some of these different emerging market places.

So these, you know, different websites essentially that kind of aggregate and display the N. F. T. S. For folks to look at? But this is really kind of like one of the many possibilities for a non fungible token. You know, another example Larkin and I worked on a hackathon recently at East Denver where you know, we created N. F. T. S. That essentially functioned as park passes for the state of colorado. So you know the idea was hey instead of buying a hanging parks pass your parks passes is issued as an N. F. T. Right? And and so in that capacity or context it's a whole different way to sort of look at these non fungible tokens. And that is probably, you know, to me I think that's where we'll end up going is a lot of this art stuff. It's really cool and and there's a lot of compelling reasons for N. F. T. S to be used for selling albums and art and things. But the you know when you start to think about every receipt being issued as an N. F. T. Different use cases like that, we still have a long way to go as far as like what we can do with these.

My understanding is that with N. F. T. S. One of the powerful things about an N. F. T. Is the fact that its authenticity is verifiable. What are some aspects of an N. F. T. That makes them unique assets. So it's not just like having gold or dollars that can be readily exchanged for other types of assets. Like Tesla was trying to accept Bitcoin I think in order to be able to buy Tesla, that exchange system isn't very smooth but there are very specific reasons why N. F. T. S. And those types of Blockchain backed assets are so important. What makes them unique? I might start with the ledger. So you know, one of the core features of a Blockchain or remove the core feature is that it is a distributed Ledger and distributed in the sense of it's it's not one set of data that is stored in only one place that has complete control to make entries and delete them or delete the entire record.

It is a living transaction history that can exist on any number of servers in the world. And so those transactions are kind of printed to the ledger in a cryptographic manner such that they become immutable once they are verified by you know a certain threshold number of other transactions on the network. But the way that the Blockchain is organized makes it possible for any transaction to be verified almost like a perfect chain of title from each owner. All the way back through the origin let's say of that particular. Well when you're talking about an N. S. T. At least you would be able to track the origin of the token all the way back to its creation event which is you know called minting as Zach mentioned. And so you know anybody can access it. It's it's public record. So let's let's go back to the example of your project at the hackathon which was the park's past.

So I can see advantages to that for the National Park service in that people wouldn't just be able to say oh I forgot my past at home. Can you just let me in or borrowing one from your friend or whatever? So it avoids a lot of those sorts of issues with falsification or simply just copying it. I guess what are other advantages of having a parks pass as an N. F. T. I think one of the cooler elements that we incorporated is um we kind of started to integrate it with the decentralized finance. So you when you purchase the N. F. T. And this is not inherently connected to having an N. F. T. But it's it's possible. And you know what we did was when you purchased the park's past, you can optionally include a donation maybe just a couple of bucks to Colorado. Parks. And those donations were programmatically on the Blockchain, automatically moved into defi position that's earning interest.

So the state um could theoretically do this with the profits from selling the past. All legal questions and issues aside this is purely technical right? The money that was used to purchase out of the coins can be immediately moved into a defi position that's earning money for the state so interest. So instead of that money just sitting there it's now working for the state of Colorado, you know, which is kind of like a really interesting element when you start to think about how all these systems can integrate together in addition to some of those, you know, nice security properties that you mentioned, there's also a lot of cool things we can do in this regard. What are some of those cool things? So the defi integrations specifically are are pretty nice. There's different startups out there calling it different things. I like the terminology of kind of charging in N F T. So you can think of a charged N F T. Is that N F T could control a portfolio of assets. Right? For example, you know, there's different ways, some of the other like more kind of less way out. Their ideas are simple things.

Like recently I purchased an N F T to support the development of an upcoming E I P for ethereum. So essentially there's a protocol upgrade coming in a few days and a lot of developers worked really hard on it, but they kind of worked on their own time said, hey, we're, we're minting this limited. You know, batch of N F T s. You can purchase one of these and the funds are programmatically distributed across the developers. Right? So that's kind of cool. You know, you don't need a third party to come in and say, okay, we collected donations for these developers and now it's my job to send them each checks or issue them payments on Paypal. It's all programmatically done. Right? So you can trust that when you donate or you purchase that N. F. T. Now, those developers are going to receive that money with the security of the ethereum Blockchain. Um the further extension of that is that now that I have that N. F. T. This is, you know, speculative thinking, but there's a good chance that down the road, someone might say, hey anyone who helps support the development of that ethereum upgrade a few years ago, I want to gift them.

Um you know, I want to airdrop as it's called, you know those token holders. So by holding an N. F. T, you also open yourself up to the potential for people to um you know, send you things and give things out to you. Right? And that's we see it more commonly now with with standard tokens on ethereum, fungible tokens. Air dropping is is pretty common but I think it's gonna happen more with N. F. T. S too. So, you know, another interesting kind of use case you hold Parks passes for maybe four years in a row. Someone can see in your wallet that you have a Parks pass from the last four years, they could say, wow this is a long term supporter of Colorado Parks, I'm gonna now air drop them, you know, this, this other asset. Okay. And like Larkin was explaining those features of these tokens are very much just programmed into the framework itself and its public so that can anybody look into your virtual wallet in most cases Yes, there are, you know, privacy protocols running on ethereum and different block chains that kind of take that vision away, but with the public protocols, yeah, for the most part, anyone can see those tokens in your wallet and kind of have a, you know, an understanding of what you've been doing okay.

And I guess just to start with, they have to know which addresses zacks because there's a long wallet address that you know, Zach is the owner of, but it's not necessarily listed, you know, unless zack put some sort of identify there with his address that is like his name, it's not necessarily going to be known. So it's it's like needing to know someone's address, you don't necessarily know who lives there, but the address itself is public. So then, you know, it could be such a democratize er in a way as more of these transactions become more common, like for example, I I could imagine a company implementing a payroll system using this framework so that everyone would know what they're getting paid and how they're getting compensated and how equal maybe democratization is the best way that I can think of it, but there are so many advantages that can be given by implementing such a structure, but what sort of risks are there for buyers and sellers of these types of tokens.

This is, this is a fun one, I'm not, I'm not entirely sure where to start. Um and I think the main one is that, you know, as much as there are certain standards and certain characteristics that are common across all N. F. T. S. There's a lot that really remains up to the the mentors like the original creators of those tokens that establishes what rights actually are part and parcel of that token, meaning that those can be transferred to the next holder of the token versus which rights are granted by the platform on which that token is exchanged. So, you know, one example is N. B. A. Top shop or Top Shot rather, you know, people might have heard about it. Um These are the guys who initially did crypto Kitties a couple years ago, which was a super successful project. They teamed up with the N. B. A. To sell packs and moments of N. F. T. S. And so, you know, you can go to the N. B. A top shop website, you can buy a pack of moments where it's like opening a pack of baseball cards when you're a kid or when my brother was a kid, I wasn't a big baseball card fan, but you would open it up and it would be a surprise which ones you're getting.

Like, you don't know how rare the cards inside will be, which players will be highlighted, you know what part of their careers or which games, the graphic there, like the visual element of those moments will touch on, but you buy it and it's a set of, you know, four or six or however many individual moments. But if you read the underlying terms of service for top shot dot io maybe it's dot com. There's no ability for the owner of that asset to actually commercialize that moment in anyway. So it's not as though you could, you know, host an event at a museum and like display all of your moments and collect fees upon entry for anybody who's coming in to see, you know, your collection of moments, you'd have to get special authorization from the top shot. You know, managers and directors in order for that to have value in that sense. So yes, you hold the token but you only have a license to use the content. I like the copyrightable images and words associated with the token for your individual purposes.

You can't commercialize it in anyway. So it's more, it's kind of a pride thing. Like the ownership pride that you just happen to have a mint when you have that super valuable baseball card. But the difference I see though is that with a really valuable baseball card, you can go and exchange it. You can go sell it, You can do whatever you want with it. You can even gift it to your kids as an inheritance kind of a thing. What can you do with a moment like that that you just bought? Well you can you can sell it to another user as long as that user is on the platform and is abiding by all the other rules not to um you know, attempt to go out and like make t shirts or make derivative works of the clips. These are typically video clips. So in that way you can transfer it, but you can't do, you know, large scale projects off of it. It's not as though, you know, okay, I've bought a token that has this, you know, painting by people or it's not, you know, painting, it's a piece of digital art, but you don't suddenly then become able to print t shirts with that image on the front and not face a potential copyright infringement suit from the original author of that work.

People, because that would be copyright infringement. So unless people is like specifically conveyed in writing the rights to to that specific type of use, then you're under a typical copyright infringement framework. Those are the issues that you have to weigh. You know, is it is it valuable enough to me to buy this just to have these bragging rights. And I think, you know, and it's a really rare awesome moment in a particular game, or is it not? This goes back to the idea of the value of the token being specific to each individual purchaser and whatever the market will bear, you know, one of the things Zach as a developer, so I'm sure that there are and so now Larkin talked about the different licensed rights that are conveyed, are there things involved in the software itself, the actual framework that you and other developers are developing? Are there open source implications or copying or any sort of, I guess dedication to the public of what you are creating here?

So the nature of a Blockchain like ethereum when you deploy a smart contract, which is essentially, you know, you can just think of it as a piece of decentralized code that's living on that Blockchain, you know, that code is out there for the world to see. There's a couple of, you know, there's a little bit more to it, it's technically shows bike code and it's kind of up to you if you want to upload the contract to make it visible, but anyone can with the right tools can kind of see that code anyway. So the by nature, you know, every smart contract is essentially open source, like I said, there's kind of a caveat that there can be some extra steps to de compile it yourself, if the deploy er, has chosen not to show that, but yeah, it's all really out there, so that's kind of nice and it really does foster like an open source development environment, you know, because if your, your final product, your code on the Blockchain is, is going to be seen and can be reused by other folks, then, you know, you kind of approach your development maybe a little differently?

Um of that. And at the same time there's a lot of open source tooling companies like open Zeppelin do a really good job of kind of putting out code snippets or reusable pieces of code, for example, there in FT contracts are heavily used in leverage. So that standard that Larkin was talking about 7 21 you know, they basically have created a set of contracts that implement that standard for you. So, deploying your own N F T contracts to ethereum, you don't, at this point you really don't even have to have an understanding, a deep understanding of solidity programming language used for ethereum. You know, you can actually kind of just push buttons to deploy those contracts in your own N F T s now. So there are a lot of problems that I think are being solved by the implementation of N F T s and development of an F T s. Are there? Well, specifically for creators? So let's go back to some of the I P aspects of how N F T s tie into different intellectual property rights and how they do not. Are there specific problems that are being solved for creators by and FTS by the implementation of N F T s.

We talked a little bit about like the N B A essentially monetizing their video archive and other artists that are using it to monetize their body of artwork. Are there other benefits for creators to get involved with N. F. T. S. I'll jump in with one real quick. I was working with a company recently and they were extremely interested in implementing N. F. T. S to align with their product. And one of the use cases that was so compelling for them is related to royalties. And how, let's say an artist creates an N. F. T. For a piece of their artwork. This ability to collect a portion of future sales of that piece of art, you know, moving forward down the road and you know, for them to essentially get a royalty cut, you know, in a programmatic way is extremely compelling to artists. You know, that's a really nice feature because that's something, you know, if an artist sells a piece of art and then someone buys it and then they sell it to someone else later, the original artist typically doesn't see royalties for that.

So that's kind of one of the on the creators side, something that I think is really compelling. The other one that comes to mind kind of immediately is, you know, just the accessibility, you know, I purchased an N. F. T. Recently from an artist in Japan who I would have probably never seen um or had exposure to otherwise. And so I think there's um that's kind of a compelling use case for creators is just the ability to get these out to a larger audience and kind of, you know, the authenticity and the integrity of them. And I want to ask larking about her horses. Yes, I I am the proud owner of a run thoroughbred and F. T. That is very, very dear to my heart. There's a protocol out, there's that run which, you know, they create horses which are there. They're N. F. T. Model and the horses have different attributes, he's very well fed, I must say, and doing quite well. Thanks for asking. Okay, so then let's flip the questions, what are things that are not appropriate for application two N.

F. T. S. Mm. So I struggle with this one. I I think that honestly asking that question, it's a good question. But I think of it in the sense of what our applications of email that are not good applications of email. There's really, you know, an infinite way of answering it. And it, and it depends on the goals of the, you know, obviously the parties transacting. I think one of the risks of leaving too much to just presume that, oh, because it's an N. F. T. It has all these qualities. I think that is maybe one of the wrong ways to go about using N. F. T. S. Because it really the rights and the degree to which those rights are legally enforceable for, you know, someone like a creator of copyrightable content or, you know, whether that's visual, audio, video, any type of material writing, it's all going to depend on a, you know, what's going into the token where it is minted and what, you know, like these code snippets that zack was talking about and then where you trade it, I don't know if we talked about it much, but you can also just trade if I have a wallet and Yuriko, you have a wallet.

I could make my own N. F. T. Horse. That's got nothing to do with that run. And I could tell you the price is $10 and send it to you. But I could put all sorts of caveats attached to it without those being apparent in the contract itself and in the code that you're able to view. And so it's important for people to be aware of those different types of rights and what they are and are not giving away or purchasing when they're involved in the markets. That's one. And then doc and I were just talking about a couple of others, There seemed to be ways to where the wallets themselves because they are, they're kind of like open information. It's possible to drop inappropriate content into a wallet that, you know, someone owns, let's say that person is not your favorite person, Not that anyone would do this, but you could in some ways really damage their reputation by putting them in possession of an asset that they never wanted anything to do with. And that could be a way that we use and these protocols could be abused.

Um There's one more, if I think about it all pipe back up. Yeah. And I could add there maybe even kind of like going back to the risk question, not a specific uh not good use case for N. F. T. S. But just in general on the tech side, there's this idea, you know, that block chains are way more secure and in many ways the security properties of Blockchain are far superior to systems that we've had in the past, but at the same time there is a lot of risk and so like examples, you know, managing your wallet, keys for your N. F. T. S. Right, if you lose that, there's no way to get it back, it's gone forever. You know, there's these crazy stories about people losing, you know, the guy going to a dump somewhere in eastern europe to search for his hard drive that he threw away years ago because it's now worth $50 million in Bitcoin or something. So these are real risks and in certain cases, you know, if we're talking about hosting, you know, the title to your home as an N. F. T.

I think that's a really great use case but we have a lot of work to do before. Well, a before all the legacy systems can work together to allow us to have that system, but also to avoid some of the kind of technical risks related to N. F. T. S. Right. Larkin had mentioned a couple of times. It was talking a little bit about like the contracts and now you know, anyone can create them and you make your own N F T s. You know, in some cases with Blockchain, we love to talk about how we don't have third parties that we have to trust. And in cases where you incorporate third parties that need to be trusted, we're losing some of these valuable principles. When you look at marketplaces like open C and wearable, we're trusting in many ways, those third parties, you know, they verify accounts. Right? So if you look at, you want to go by Aziz run horse, you can see the little blue checkmark and should you really trust that because that blue checkmark is listed next to an N F T on their marketplace that it's real. I could, you know, deploy a set of smart contracts identical or very close to zero runs and take their images and put them right on my, my horses as well and try and trick someone into buying them.

So some of these risks are, you know, I think they make it for the time being that certain use cases for an FTS probably aren't ideal. And I, you know, for me that's probably more of a, hey, we haven't worked out all these details. there's some really nice new features are on crypto wallets related to like social account recovery and things like that that are making progress. But you know, at this particular point in time, I think there's certain assets that given some of these technical complexities, it's just maybe we're not there yet that we want to make everything in N. F. T. Right? So then for somebody who is new to the field and wants to get involved, what are some resources or what are some ways that a total novice can get involved in businesses involving N. F. T. S? Well there's, you know obviously kind of like podcasts such as yours, here we go or there are a couple of others out there where you know, this topic has been cropping up quite a bit lately but that that helps with background and sort of an overarching understanding.

I think one of the best ways to begin to understand the ecosystem is to honestly go like buy $10 worth of ethereum and then try to go buy an N. F. T. On one of the platforms and just learn it that way. I think you begin to understand what types of assets are available. I mean there is a wide and I mean very wide range of kind of communities that are popping up and you know, try to understand, you know what their rules are and what features do they offer people in the market. Do they say that they're going to verify the authenticity or the originality of some some N. F. T. I mean some of them are reporting to do that. Let's see what happens. That would be my my guest. I'm curious what what zack thinks there. Um I think one of the difficulties with learning about crypto similar to something even like politics there's so much information and there's a lot of straight up disinformation scams things like that in crypto. And so it can be very difficult.

One of the I think probably most sound pieces of advice is kind of this idea of if it seems too good to be true it probably is. But when it comes to specifically picking up and learning interestingly enough it's it's kind of one of the problems that I'm trying to help tackle with a new project I'm working on in really I think you know trusting your information sources and finding a way to collect and research you know that you can trust because it's just incredibly difficult to understand. I really like Larkin's idea. I mean I think you just start with a small amount go to a trusted exchange from you know whatever country you might be in someone that you can trust by a small bit of crypto and kind of start playing with it and go purchase an N. F. T. You know on one of these sites and and just kind of get a feel for it. Um we're at a point now where there's starting to be some really good resources. I'm nothing specific is coming to mind, you know, as far as like actual, you know websites to go and learn, but you know, it's it's a lot better than it was even two years ago.

There's a lot more solid information. So you know, you just have to be willing to put a little time into it to do some research and uh I think you can find some some good info. What you're saying is it sounds to me a bit like day trading that now you put a little money into it and you start, you know, figuring out the system that way. So one last question, I know that you talked a lot about trust and one of the ways that for example, money that you put into a bank is backed by regulatory authorities. That if you put your money into a F. D. I. C. Backed bank then you know, your money up to a certain amount is going to be safe, that you will get it back if something were to happen. Are there regulations coming down the pike for crypto or even in FTS. So crypto as a whole. Yeah, there have been regulations that have come down from tax authorities, from the securities regulators, you know nationally internationally that have guided participants in terms of how those assets are gonna be taxed and whether or not they're going to be held to standards of, you know, not admitting material information and anti fraud provisions when they're using Cryptocurrency as a, as an investment contract in the N.

F. T. Space though. So far, there's no, there's nothing specific that I'm aware of, but there is the existing framework of, you know, anti consumer fraud legislation that exists, you know, just like you would buy something in a best buy to the extent that there's false advertising happening in that sale and the parties involved in the sale that you can tie a fraudulent statement to them, then yeah, there there is that framework that applies to crypto assets, just like any other asset, but I'm not aware of any overarching N. F. T. Specific initiatives, at least not right at the moment. Okay, so the two of you have a ton of knowledge regarding N. F. T. S and you have a lot of experience here. What are some things that excite you about the N. F. T. S and developing businesses around N. F. T. S in the short term? I think for me it's the sheer amount of possibilities, you know, it's kind of like being on the front lines of something big.

There's so many interesting different use cases still to be explored. And part of what's exciting about that I think is, you know, selfishly that there's probably going to be a lot of rewards for those that explore those systems early. And again that comes in the form of things like air drops. You know if you're an early user of certain N. F. T. Platforms have already been some airdrops to to those that are participating. So it's just like a really exciting time and I think probably most exciting is going to be to see what people build that's really outside of some of these first use cases and you know when we get to where you know vehicles or titles exist as N. F. T. S. And things like that that just um it's gonna be so much more fluid right? The idea of like I could sell my car as an N. F. T. Assuming we had a lot of the technical complexities and security stuff sorted. I mean that process could be reduced down to just a you know a number of minutes, right? You could just transfer that title over the guy sends you the coin right in person.

So a lot of improved efficiency is exciting for me for some of our systems that are just really heavy on the bureaucracy. I think I fully concur with zack because as much as you know what N. F. T. S are doing in my mind, they're not necessarily creating a sea change in the way people transact. They are certainly like reducing the costs of those transactions significantly. You know and we I think we talked about several examples here, you know just automating you know, how payments might flow to multiple parties as a lawyer who often facilitates a lot of those, the paperwork on the back end of that. I would love nothing more than to be able to trust a computer code segment to facilitate that for me and my clients. Another thing that I think is really exciting is just figuring out where these lines are. I mean I started my practice, you know, as a solo practitioner coming out of a large law firm a couple of years back with almost exclusively clients in the Cryptocurrency and Blockchain space and I, you know, I really enjoy the puzzle nature of it and needing to kind of like wade through and you know, there's nothing directly applicable.

What what do we have, that's closest, you know, if you have a decentralized autonomous organization, do you have a partnership trying to think through some of these legal issues in ways that you know, will hopefully do a service both to the, to the founders and the startups and what they're trying to accomplish and also not create too much of a an exogenous risk to everyone else that they're interacting with and navigating the regulator's mandate to. I think it's super fun, but I might be somewhat of a nerd in that way, but I do consider that pretty fun reducing the friction of these transactions certainly is a very attractive attribute of these developments. I know I really appreciate you taking the time to talk with me about these topics. Any last things that you'd like to say or anything we haven't covered yet that you'd like to mention. I'll add a couple of questions ago when you were asking about you know related to like the F.

D. I. C. And how money is insured. I think that one of the important points to kind of highlight there on like the cipher punk mentality that sort of gave birth to Bitcoin. You know in the in the genesis block there was this kind of headline included of of Bitcoin. So the first Bitcoin that was ever mind you know chancellor on the brink of the second bailout for banks. So really we can only you know assume what exactly was meant by that or why Satoshi included it. But you know it definitely aligns with this idea that there's a mistrust or maybe that we can't trust you know the F. D. I. C. And the banks and if We have $100,000 in the bank go try and pull that out on any given day and in a lot of cases you know in the U. S. You can't do that there's daily limits and there's another daily limit and so it's certain regards it feels like those things are we have security and safety but the you know Kryptos answer was like hey no you control your money. Do you want to send million dollars in one transaction today to your friend?

You can do that. So right. It's it's really, it's really nice. It's really amazing. But it also comes with a whole new set of risks, right? And that, you know, sometimes that hasn't always played out well if somebody clicked the phishing link and their coins were sent, they're not getting them back. So, you know, there's pros and cons. But I just wanted to add that. I think really the the crypto mentality kind of lines up with a lot of the cipher punk stuff and that is that, you know, this gives the individual the ability to really be in control of their money, their tokens and you know, now these N. F. T. S as well. So it's very anti establishment. There might be a bit of that in there. Yeah, Larkin anything else? Well, I mean, I I was just going to add building on six point I think that we're in an era of extreme experimentation right now with all the different applications. You know, the financial store value ones, the ones we're talking about today with respect to artistic assets and two years ago with securities and fundraising and so we are in a very very interesting time.

And I think it's just going to be fascinating to see how things ultimately play out. I mean, who what substitutes will we find for trusted intermediaries, if any and what types of protections will people actually have when these assets take the place of some of the ones that we're more familiar with and have been for many years and we haven't even talked about initial coin offerings and and those sorts of things that were so common just a couple of years ago. But that's a topic for another show I think. Yeah, agreed, agreed. Well, thank you so much. Larkin and Zack, it's been great talking with you. I think I've learned even more about about things that I don't know about N. F. T. S and this this area of technology, so I really appreciate you coming on and talking to us about it. Yeah, thanks for having us. Yeah, it's just been fun. We hope you enjoyed this episode of the novel and non obvious podcast. Our guests today have been Larkin Reynolds of Foundry Legal and Zach Wolf feel free to send us comments or suggestions for startup and I.

P related topics you'd like us to discuss on this podcast at info at patents integrated dot com. Our producer is Joel Davis of analog Digital. Our marketing specialist is Tim Sprinkle of layup content. Our theme music used with permission is the Workday Takara from A Life In A Day, composed by Sherry slider and performed by Michelle Stanley guitar and you're Australian cello. Here's our obligatory disclaimer the content of this podcast is information or only and not intended to be legal advice. The novel and non obvious podcast is a production of patents integrated, and all rights are reserved. See you next time.

Crypto 101: Understanding the World of Crypto, Blockchain & NFTs with Larkin Reynolds & Zak Wolff
Crypto 101: Understanding the World of Crypto, Blockchain & NFTs with Larkin Reynolds & Zak Wolff
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