I recently had the pleasure of sitting down with Block 30 Labs CEO and Founder Brian Foote for an insightful conversation on the evolution of commercial crypto adoption and BLOCK 30’s efforts to normalize and facilitate a whole new level of wealth creation and redistribution.
Why caused you to create BLOCK 30 Labs?
On a very personal level, I wanted to help people 40 and under (myself included) have a chance to “buy in” on the front-end of a new hybrid investment, technology and trading market, while improving investor education and protections as that market evolved.
We looked backwards and found that new, human-made trading markets tend to only come along once in a lifetime. And they usually kick off with a big crash on the front end – typically caused by the excitement of people who see the enormity of the disruption that is coming, and the learning that goes along with how to value, rate and frame a new market.
We also found, historically, if you can catch investment markets early and shape them over the decades- with intelligent dialogue, quality listings and tracking indexes – those new markets can offer really great ROI to investors who hold over the years and decades on the backside of a Wave 1 crash.
Sounds like you are on a mission-driven beyond financial game theory.
Absolutely. We think Millennials + Gen Z are going to need global markets “win” to stay in the game economically. Just given the rising levels of sovereign debt, student loan debt, housing prices, equity prices, etc. Or else they’ll start to check out economically on capitalism as a model, which is not the answer.
And you think digital asset markets offer that opportunity?
For this generation, it’s going to have to because of the implied upside. To be clear: We’d all love to be buying in on the traditional stock market in the 1950s, or the backside of the internet crash in the early 2000’s – but that’s not our economic reality or generational timing, so we’ll get creative and make this work.
But for US investors – this is not a “Just Buy Campbell Soup” stock market anymore and wait for your dividend in the hard mail. We are getting lapped by other countries in terms of their adoption of new technologies like blockchain and we have to move faster or risk great competitive economic disparities.
The world is much more competitive and cutthroat now. What’s wrong with things?
If you truly study global labour pool competition, job automation, shifting wealth concentration, education costs, living wage compression and affordability indexes – and what average people are up against in just buying a home, starting a family or building a life – the model is not working and will not work without some fresh thinking and investment ideas.
There seems to be a major generational gap with tone-deaf leadership at the top. Where is the succession going to come From/
Yes. Blackrock just put out a customer research survey that found that 57% of people are not even investing anymore. You literally cannot nation build or have generational wealth handoffs that way. It doesn’t work. And the grenade handoff from the older generations is mind boggling here.
I guess we take it for granted because many of us have seen this evolution on both a macro and micro scale. I guess it comes down to the need to embrace Innovation + Blended Economic Markets as we factor our wealth planning.
Exactly. This will have to come in a converged, multi-asset state with the traditional financial institutions and equities markets meeting digital asset markets in the middle – to guide inflows. Companies like Fidelity, etc. that get there first will be rewarded very handsomely. People want a place to put 1% of their 401K in Bitcoin, alongside stocks and bonds and multi-asset strategies. We have to loosen up the pace of innovation in the United States or we will get left behind very quickly.
BLOCK 30 Labs sits at the intersection of this emerging transition. How do you plan to stay on top?
We do. We worked really hard to strike a respectful balance between the polarities of hardcore crypto and never-coiners – and I think we nailed it with the BLOCK 30 Labs brand. We’ve met amazing people on all sides, that want to build a better future and do it through exponential technologies.
Do Opposites Attract?
Well, hardly – when it comes to digital assets and securitized tokens. Blockchain is so disruptive to white-collar services, fee layers + middleman redundancy that it’s very threatening to people and there is some “head in the sand” type of stuff here in the United States from Wall Street, Investment Advisors, Bankers, etc.
If your entire job was to identify new wealth generating, Sharpe ratio opportunities on behalf of your HNW clients – and you advised them for the last 10 years to sit out on the top performing asset class of the last decade (which so many did), would you be talking about it on the news?
What are your feelings about change?
We can’t afford to not have change. Each one of these early trading markets, whether it was the NYSE in 1929, or the Dot Com bubble from 1995-2000, have gone through these initial waves and crashes. It took the Nasdaq over 15 years to regain its peak after the dot com crash. But the market always wins – and so do investors that buy and hold a diversified balance of both new and historical markets, particularly around seminal technologies like internet, cloud and we think, blockchain.
So, You Created the BLOCK 30 Index to Chart This Historical Path. Correct?
Yes. We wanted to quickly launch a Digital Trading Markets index to help give these new markets shape – but do it in a thoughtful way that had multi-factor index construction (market cap, trading volume, sentiment, etc.) so that it would hold up for 100 years like the S+P 500, vs. something like the Dow Jones (Dow 30), that is not as agile in its construction.
Not Just Market Cap Weighted?
Exactly. The couple of digital trading indexes that beat us to market, globally, we’re all just “market cap” weighted, which is academically and historically lazy.
More importantly: that is way too simplistic an approach for this kind of market – which has factors like trading volume, arbitrage and social sentiment moving price. Some other indexes have worked back in to create greater levels of dimension to their indexes as a result of that, so I’m glad we pushed the market to think more intelligently on this in terms of disaggregating these assets into thematic sectors and vertical markets, similar to the traditional markets (finance, transport, etc.).
How did you account for Bitcoin in the index?
We came up with a cool strategy there called the B30 Constant. What this does is account flexibly, as sort of a sliding scale, for a variety of Bitcoin eventualities (minimal or maximal), while also allowing the Index to accommodate other BLOCK 30 blue chips in the index as those change over time and the quality of other holdings improves. Even if the “Bitcoin as portable, alternative store of value to gold” thesis pans out, and Bitcoin goes to say, $100,000 a unit – the BLOCK 30 Index will still be exceptionally accurate in terms of the total blue-chip market.
Because Index Holdings Change Over Time…
For sure. If you look at the shift in constituent assets in indexes like the Dow 30, it would be naïve for any of us to think that the top 30 assets on a market are going to be the same 100 years from now. Look at the Dow 30 you buy today, not a single one is still on there from the original index.
When the Dow Jones Industrial Average came out in 1896, people literally couldn’t envision a world beyond railroads, cotton and sugar at some point, too. And that’s how we feel about the blockchain conversation. People get extremely myopic about the next 30 minutes, rather than the next 30 years.
In a scientific, peer-reviewed environment – it’s incumbent upon any lab or financial team to do that same scenario building for how our work will be relevant not just this year, but 100 years from now. And we didn’t see that being done properly in this market, so we got involved.
More Customer Education + Market Indexes – Fewer Price Predictions?
The folks that were getting an early voice in the space were all the Bitcoin oracles and price prediction guys – that either a) just cared about pumping their Bitcoin or token holdings on CNBC – or b) don’t have the education, leadership skills and business acumen to guide global markets.
It made blockchain and crypto very easy to marginalize for traditional finance and institutional media because they painted these Wave 1 Bitcoin people as uneducated, non-credentialed buffoons that knew nothing about finance. Which is true. But it was a classic stall tactic that allowed institutions to continue their “not to be taken seriously,” position on the space until they could own it themselves – which they soon will.
Makes Sense. Have You Worked Back into Traditional Media At All To Support?
We mocked up concepts for some of the hosts at CNBC – in ways we thought could help improve their digital assets coverage…We suggested a balanced weighting of BLOCK thematic sector coverage, to help customers disaggregate and process this space in the same way they do traditional markets to help protect investors and educate the audience. We’re hopeful they revisit with us as a service to their audience to help cover the space in a more insightful way than just “price prediction oracles” for their audiences.
Is the digital asset market ready for long term sustainability?
Setting up a BTC Hedge Fund, ERC-20 token, Twitter Account or Pump Podcast, doesn’t mean you know how to lead complex, global financial markets of 8 billion human beings. Managing growth with sound bites and drive-by media snippets isn’t the way to grow the economic narrative – it’s also very dangerous for first-time investors. We’re looking to a more articulate Wave 2 of coverage that’s broader in reach and reflection.
98% of people have never bought digital assets? Is a new wave of leadership coming to this market drive growth?
Wave 1 Blockchain guys are not getting the job done on global adoption. We view that as batting 2-for-100 at the plate and some of you are getting subbed out.
So How Are You Monetizing Your Index Work?
That was definitely a passion project, volunteer work for us. A lot of what we’ve done is self-funded so far – just because I believe passionately in the space.
We got our USPTO Trademark notice this week for the BLOCK 30 Index and the feeling of pride was incredible. We will expand quickly into our BLOCK 30 Mix, and other thematic sectors, that help define what balance looks like for investors that want exposure to traditional equities, emerging markets, bonds, real estate and digital assets. We just want to break down walls and eliminate asymmetrical dialogue and ideological polarities, which benefit no one.
What’s Driving That…
Fear for the future. My two cents: you cannot give Millennials + Gen Z record levels of fiat currency supply, sovereign debt, student loan debt and housing prices and then tell them to stay involved economically.
While Boomers are screaming at them on CNBC to invest in mature equity prices at a near-term top – instead of speculating in newer “Store of Value” or technology markets with a small part of their portfolio.
These kids are literally just trying to get out of debt, buy a house, start a family, pay off student loans – and they’re nowhere close. They need upside to hunt. These are the same people that managed to COMPRESS middle-class wages during the greatest 30-year wealth generation event (the internet) in human history. The mind boggles.
Basically – Buy more high P/ tech stocks and ignore digital assets?
Exactly. How you can in good conscience tell Millennials to use $5,500 to buy 3 more shares of Amazon at $2,000 and 87x Price-to-Earnings instead of balancing out their portfolio with some of our BLOCK 5 ETX or similar, is beyond me.
Finance and technology innovation is only benefiting a few. How do effectively re-distribute this model?
The borrow-spend, slash-and-burn, economic farming style of Boomers and Gen X has led to 84% of US stocks in 10% of the wallets, and record levels of systemic debt across the board. It’s irresponsible at best, geopolitically destabilizing at worst. Has to be addressed.
Silicon Valley and FinTech used to stand for tech innovation, but now it’s a handful of Mega Tech conglomerates, pushing compressed middle-class wages and labour offshoring – and we want to make sure that tech continues to press forward for everyone, not just a select few.
Capitalism still works, but it breaks down if you let it fall into the hands of a few conglomerates through bailouts, loose anti-trust regulation, low minimum wage and heavy quantitative easing, which occurred in spades across Finance and Tech for nearly a decade after the 2008 recession.
What’s the latest with your rollout?
We’ll launch the BLOCK tokenized index baskets with digital assets first, then a blend of multi-asset tokens (stocks, bonds, digital, etc.) as regulation permits. That’s the simple, “tokenized basket in a wrapper” stuff that’s easy to execute, we’re just waiting for regulatory clearances and better exchanges. Our partners at Blackmoon Platform are already doing amazing stuff in this zone and we want to keep pushing.
Basically, Moving ETF’s From Analog to Digital Tokenization?
Exactly. We’ve all watched ETF’s become a $4.5 Trillion financial product line over the last 25 years once the market understood the concept. It can apply here in the form of securitized tokens and token baskets pretty easily – we just need the regulation to speed up, and the quality of the constituent assets to improve enough to expand the number of holdings and feel good about it.
Why Not Just a Traditional ETF?
Folks were spending all this time bouncing off the window trying to get a traditional ETF punched in there…We took a different view and said – why not just tokenize these into a digital format and let the market come join us, even if our products don’t peak until 2025 or longer?
Where Can People Buy Your BLOCK Index Tokens Now?
We’re now live on Coinbook in the US for non-accredited and will be launching to global investors, Europe and US accredited on the Blackmoon Platform here in the next month or two. The Asian, LatAm and European regions are running circles around the United States right now on blockchain adoption and their understanding of the market opportunity, but we’ll keep pushing.
Sounds Like You’re Ready for Wave 2 Adoption + Scale?
Definitely. There are thousands of amazing project technologists building this space – often at their own cost, every single day – to make blockchain services available to anyone on the planet. Simply because they believe in it. And we want to take that to the masses in the zones we can help in. I view it as a charter and a responsibility in the zones we’re good at like branding, marketing, packaging and Fortune 500 partnerships.
Executing the Final Mile…
Exactly. Decentralized blockchain projects still need big-time help on global adoption in the consumer, merchant + Fortune 500 partner layers. That’s what we offer at BLOCK 30 Labs.
You guys have achieved a lot in the past year since inception
We’re one of the rare crypto projects that just decided to self-fund, recruit the best person for each position, grind hard for 16 months in the basement during a bear market – and create real MVP products that actually work. We have an amazing team and we believe in outrunning our roadmap, which is another pain point in the blockchain that we wanted to set the tone on.
We want to be an Apple or Amazon of this next generation – in terms of our global brand reach, multi-decade staying power (minus the anticompetitive conglomerate behaviour) and packaging a new generation of technologies for the consumer – and I think we’re on the way.
What Should We Expect from BLOCK 30 Labs By Way of MVP Products?
Expect an easy-to-understand consumer layer on top of a decentralized Web 3.0.
Break It Down Even Further for Us…
In plain English: kickass products that package blockchain simply and in a mobile phone, with 1-click interoperability between them. List an asset on the blockchain, pay with digital assets or credit card, and invest spare balances through new financial products like tokenized baskets.
An Interoperable Ecosystem for the Customer
Yes. The gap is that you have thousands of developers working on a variety of decentralized public blockchains that are available to anyone off the shelf. That tech will only get faster, easier to use and more mundane for builders.
But we view “Layer One” folks like us – global brands, boots and briefcases on the ground – as the next critical battleground for adoption in the final mile. People want the best tech under the hood, but they just want it to work. We’re positioned to deliver that over time as technologies change.
Buy, Sell + Invest On The Blockchain?
The three things you need for economic utility. Our concept addresses those very specific pain points we saw in the market.
- BLOCK 30 Marketplace – Pairing Buyers + Sellers on the Blockchain.
- BLOCK 30 Pay – A digital asset wallet for checkout on the marketplace.
- BLOCK 30 Financial – Invest easily from B30 Pay wallet.
Pretty amazing and empowering stuff for the consumer once they get it.
Finally, what about your consumptive digital utility token – BLOCKS?
Super excited on that. You go out in the field, globally – and consumers and merchants are hungry for an alternative to credit cards. But they want it packaged simply, and with lower fees and processing times than Bitcoin (even with the Lightning Network updates).
Our BLOCKS product can save them up to 2% on that (meaning, no more minimums and $1 charges on top of credit cards).
Credit cards take up to $1 Trillion a year out of the business and merchant layer – that’s too much and it needs a 30-year update on options to Visa and the Diner’s Club stickers of yesterday. BLOCKS is 40X faster than Bitcoin with 200,000 Nodes Installed Globally. We can really make a difference here. We have an amazing team of 15+ people, grinding hard on this project. We’re also expanding our global reps program on BLOCKS – so more coming there.
Thanks for promoting the adoption of blockchain and for all you are doing to give voice to the space. Exciting times ahead.
BLOCK 30 Labs
Also published on Medium.
- Bryan Feinberg Interviews Brian McLaren Foote, CEO, BLOCK 30 Labs - 5 May 2019
- Resetting Stored Value. The Decentralization of Central Banking - 29 August 2018
- Bryan Feinberg – Interview with 1W’s Alex Fedosseev - 30 October 2017