>> Announcer: Live from San Juan, Puerto Rico, it's The Cube! Covering Blockchain Unbound Brought to you by BlockChain Industries

>> Hello and welcome to this special exclusive coverage, in Puerto Rico, for BlockChain Unbound, I'm John Furrier, the host of The Cube We're here for two days of wall-to-wall coverage Our next guest is from Hashgraph He's Leemon Baird, who's CEO? >> CTO, and co-founder >> CTO, okay that's great

OK, so you got on, you're about to go on stage, Hashgraph launched two days ago, a lot of buzz, we talked to a couple entrepreneurs in your ecosystem, early partners, doing some healthcare stuff What is Hashgraph, why is it important, and why are you guys excited? >> Oh, yes So this is, this is fantastic Two days ago we were able to announce the existence of a public ledger, Hedera Hashgraph Council The Hedera Hashgraph ledger is going to be a public ledger with a cryptocurrency, file system, smart contracts in Solidity

All Solidity contracts run without change It is built on a consensus algorithm, called Hashgraph And if you want to know what that is, in 12 minutes I'll be speaking on this stage about what it is >> OK, so I'll see everyone who knows what hashing is, but I mean what makes you guys different, if it's going to be that protocol, is it the speed, is it the performance, reliability, what's the main differentiator for you guys? >> Yes, so it's security and speed and fairness all at the same time It's ABFT security which is very strong

It's hundreds of thousands of transactions per second, with a few seconds latency, even in just one shard That's even before you add sharding to get even faster And then it's fairness of ordering Three things that are new, it's because of the Hashgraph protocol, which is different from just hashing >> Interviewer: Yeah

>> But it uses hashing >> Yeah So here's the question I have for you, what's on people's mind, whether they're an investor in a company that's in your ecosystem, how can you bet on a company that's only two days old? Why are you guys important? What's the answer to that question? >> The answer to that is, we are not two days old (laughter) >> Two days launched >> Two days launch, but first of all, the Hashgraph algorithm was invented in 2015

We have been having Swirls incorporated, has been doing permission ledgers for a couple years now And we have great traction We have a global presence with CU Ledger, the credit unions around the world >> So, we have got real traction with the permission ledgers, and for years people have been saying, "Yes, but what we really want is a public ledger, could you please, please, please do that?" >> And what are some of the used case data coming out of your trials before you launch? I mean, what were the key criterias on the product side? What was the key product requirements definitions that you guys focused on? >> So, speed and security, having them both at the same time And usually you have to choose between one and the other

The security we have is very high It's ABFT, which means that, double spins won't happen, and it's hard for someone to shut down the network But you know what, even the credit unions, I think were even more interested in the speed The truth is, at a small number of transactions a second, there's things you can do, but in a large number, there's more things you can do >> You know there's a lot of activity on the value creation side, which is really phenomenal, so creating value, capturing value, that is the premise of this revolution, but let's just put that aside for a second, but the real action is on the decentralized application developer

These are the ones that are looking for a safe harbor, because they just want to build new kinds of apps, and then have a reliable set of infrastructure, kind of like how cloud computing had dev ops movement That's what's going on in this world What's your answer to that? What's your pitch to those folks, saying, "Hey developers, Hashgraph is for you" What's your answer? >> Yes, and by the way, this is not just to new developers We've got 20,000, I think, now on our telegram channel

We have amazing response from our developer community We have a whole team that is working with them to develop really interesting things that we have demonstrations and so on So, my pitch to them is thank you because we have them in addition, since we can run Solidity out of the box, all of those developers have already been developing on us for years without knowing it Thank you and for others, there's no limit to what you can do when you have speed and security at the same time >> So, Solidity, talk about the dynamics of this new language

Why is it important? And for someone that might be new to that approach, what's your story? What do you say to them? "Hey, it's great, jump right in?" Is there a community they can come to? Do you have a great community? What's the story for that new developer? >> Yes, so I would tell the new developer, "You know we'll probably have a new language someday, but right now we're sticking with the standard We're starting by supporting the standard language" On these ledgers, there are smart contracts, which are programs that run on top of them in a distributed way You have to write them in some programming language Solidity is the most common one right now

>> Is the smart contract, the killer app going on, in terms of demand, what people are looking for? Or is it just the ledger piece of it? What's the main, kind of, threshold point at this point and juncture? >> We see cryptocurrency is a killer app in many industries Smart contracts is the killer app in other industries File storage, actually, with certain properties that allow irevocation servers is the killer app in certain industries and we are talking on having to gain traction in all three of those >> OK, talk about the community, which, by the way, it's great There's a new stack that's developing

I know you're going on-stage and I'd love to spend more time with you to talk about those impacts at each level of the stack But, let's talk about your community What are you guys doing? How did you get here? What's some of the feedback? What's some of the conversations in the community and where you're going to take it? >> OK, the conversations are amazing The interest is amazing There appears to be this enormous pent-up demand for something that can have security and speed at the same time, along with this fairness thing

People are talking about doing whole new kinds of things, like, games where every move is an action in the ledger, is a transaction in the ledger The fairness is important and the speed is important and you want security and then anything involving money, you want security and anything involving identity, you want security, so these are all What we're hearing from people is, "We've been waiting

" In fact, literally, every big company has a blockchain group and what we keep hearing is, "We've been excited for years, but we're not doing anything yet, because it just wasn't ready" Now, the technology is ready >> So, tired, kicking to actually putting some stuff into action >> And that's happening now That's what our customers tell us, "We've been kicking the tires, we've been holding off, we've been waiting for the technology to be mature

" Now, it's mature >> What are some of the low-hanging use cases that you're seeing coming out of the gate? >> So, the credit union industry is going to be using this for keeping information that credit unions share with each other, information about identity, information about threat models, information about contracts they have with each other, all sorts of things like that We have Machine Zone, multi-billion dollar game company was on the stage with us, talking about how they are going to be using this for doing payments for their system Just, Sat-oor-ee is amazing Watch the video

Gabe did an amazing job there on his stuff And he said the reason they had to go with us is because we were fast and secure and no-one else is the way we are >> What are some of the white spaces that you see out there, if you could point to some developers and entrepreneurs out there and say, "Hey, here's some white space Go take it down" What would you say? >> Exactly, find a place where trust matters

I do hear people saying, "I want to start a company, but, you know, we could run on a single server and be just as good Well, great, then use a single server and be just as good (laughter) >> Good luck with that (laughs) >> No, no >> Yeah, but, that's just their choice >> Don't use a hammer when a screwdriver is appropriate

>> Yes >> Not everything is a nail, but you know what? There's a lot of nails out there What you should do is, if trust matters, and if no one person is trustworthy If you want your users to be able to trust, that a community is trusting it, then you need to go to a ledger and if you want speed and security, then go with us, especially if you want fairness Look at auctions

We've had people build an auction on us Look at stock markets, look at games Look at places where fairness matters Look at us >> So, I got to ask about a reputation piece, because in fairness comes data about reputation and I see reputations not as a single protocol, but a unique instance in all applications, so there's no, kind of global reputation

There might be reputation in each application What's your view on reputation? Is that going to be a unique thing? How do you guys deal that with your fairness, peace, consensus, what's your thoughts? >> Reputation is critical, identity is critical The two of them come together Suited in amenity is critical For reputation, you can have your how many stars did you get, how many people have rated you? We're not building that system

We're building the thing that allows you to build that system on top of it Anybody can build on top of it What you do need, though, is you need a revocation service and a shared file service that no-one can corrupt No one can change things they aren't supposed to change No one can delete things they're not supposed to delete

People say immutable, well, it's not really immutable It's just make sure it mutates the right way >> And also, cost and transaction cost and speed is a huge issue on Blockchain as we know it today Ethereum has took a lot of hits on this What's your position, ERC 20? People are doing a lot of token work without the smart contract

We're hearing people saying that it's not ready, there's some performance issues outside of CryptoKitties, what else is there? What's your thoughts? >> Exactly, so, ERC 20, since we do Solidity, we do ERC 20 if we want If you want, anyone who wants to can do it But, you talked about the cost of the transactions If you're going to charge a dollar a transaction, there are absolutely useful things you can do, but if you're going to charge a tiny fraction of a cent per transaction, there are whole new use cases you can do And that's what we're all about

>> Awesome, Leemon, I know you got to get up on stage, but I got to ask you one final question Where do you guys go from here? What's on your to do list? Obviously, you guys, what's the situation with the funding? A number of people in the company, can you share a quick snapshot of what you guys have raised, what the status of the firm is and what your plans are? >> The interest is fantastic We have raised money or are raising money We have people working for us and we're hiring very fast >> Did you raise equity financing, like preferred stock or are you doing ICO? >> Hudera is not equity

Hudera is just a simple agreement for future tokens and we have various things going on (laughter) You know all the space, but, of course So, there's a lot of things going on Swirl's head equity, we're led by NEA The first round was led by NEA

We're not taking, sorry, we're not selling equity right now in Swirls, but– >> So, NEA is an investor >> Oh, yeah, >> Who's the partner on– >> Sorry, in Swirls >> Oh, Swirls >> It's confusing Hudera is the public, Swirls is the private

Both are important to the world We continue to do both I'm CTO of both, I'm co-founder of both >> It's a corporate structure to get around the new– >> Not to get around, not to get around It's because it's two different things

Public and private are really two different things >> Explain the difference real quick >> Yes, private is you have several companies like just credit unions in it and it's important that no one but a credit union run a node It's important Public is, I want everyone to run nodes, not just people with mining rigs

Every person can earn money running nodes, that's the goal >> And having that corporate structure gives some stability to that positioning >> It's all about stability and the public ledger has to be run by someone who isn't me It has to be run by 39 different companies, not a single entity for trust >> Great, well, this is also a great topic

We don't have time for it, but this is super important Corporate governance on how you structure the company, which relates to the IP and its relationship to communities is super important >> It's radically different than what we're doing It's because we started from sin, it has to be trustworthy You need to split governance from consensus

We want millions of nodes doing consensus for transparency, so you know what's going on We're going to release the code as open review so everyone sees what's going on It's incredibly important, but you also need governance by people who know what they're doing, but not one person It's got to be split, so 39 Fortune 100, but global, across the world, across different industries, 18 industries across different companies running it Not us running it

>> Interviewer: That's where community matters >> Them running it, incredibly important, incredibly important >> OK, we've got to go Congratulations, Hashgraph, two days old Protocol worked for multiple years, coming out of the closet, doing great work

Congratulations Thanks for coming on the Cube >> Thank you very much >> Good luck on stage We'll be back with more coverage here in Puerto Rico This is the Cube

I'm John Furrier Thanks for watching