Daniel Cage is the CEO and Founder of Blockchain Technology company Speedchain. He joins Cameron Vandewiele, a sophmore at the Georgia State Robinson College of Business to talk about the role of blockchain technology in financial services.
Daniel Cage is the CEO and Founder of Blockchain Technology company Speedchain. He joins Cameron Vandewiele, a sophmore at the Georgia State Robinson College of Business to talk about the role of blockchain technology in financial services.
Welcome to the Georgia Fintech Academy podcast. The Georgia Fintech Academy is a co operation between Georgia's FINTECH industry and the university System of Georgia. This talent development initiative addresses a massive demand for fintech professionals and gives learners the specialized education experience is needed to enter the fin tech sector. Hi,
everybody. This is Tommy Marshall, the executive director of the Georgia Fintech Academy. Well, welcome to Episode seven of our Georgia Fintech Academy podcast. Today is April 16th and I have two guests with me today that I'll introduce here in a second. But first, just for historical purposes, we've been keeping track of the Hogan 19 public health crisis metrics Azzam Today worldwide, there's two million cases of, um, Kobe, 19 and in the U. S. We're now at 644,000. And in the state of Georgia, where the three of us are today, there's for a little over 14,000 paces. Recent news on the viruses that seeing things seem to be peaking and the New York market um and then there's been there was a big, really scary outbreak in South Dakota in a meatpacking factory that was very concentrated and those. Those two items have been getting a lot of press. And then there's been beginnings of a lot of talk about how do we reopen the economy? Indifferent disagreements between governors and the federal government, the president and whatnot. So that's been dominated. The news. Why did it with regards to the public health prices, Um, but today we've got Daniel Cage shoes, the CEO and founder of Speed, chain and camera vendor Will who is a student at Georgia State. Welcome to you both. Thank
you. Thanks for having us,
Daniel. Um, I wanted to give you some time to start with introductions and just tell us about yourself. Tell us about your career and Fintech and tell us about speeches.
All right. Well, Tommy, thanks for having me. Uh, yes. Oh, Speech Ain is a a company that's focused on distributed applications to a private Blockchain ecosystem. And what we are is a primarily business to business, uh, digital transformation company. So if you think about Blockchain is Cryptocurrency, that is not what we do. What we do is really used smart contracts, private Blockchain ecosystems and distributed applications to make communication between companies and agencies easier and we're focused on on payments and security
and just tell us a little bit about you. And, um what your your career trajectory has been
S O. I am, I think, probably not too different than other entrepreneurs where I had a serious of companies and been real fortunate to come across incredibly talented people and, um, been able to build some really neat things we've been. I started out years ago in actually in the Advertising world, and we were a service company advertising agencies. And then, out of that, I had my first payments company, which was really a We created a national payments network that allowed state governments to modernize their infrastructure. So it just one of the things that we what we did most of was actually modernized lotteries in a lot of the states, but really gave us a deep understanding of the regulatory environment of payments. What kind of modern e commerce technology platforms were available on DDE have always been kind of a, um I guess, really a fan of innovative fintech.
Cameron, tell us about you.
It's almost off more Georgia State University. Um, I'm pursuing a finance undergraduate degree with a fintech certificate. Um, first started getting interested in Fintech. My dad, he works in payment processing for Enterprise Holdings. Um, so I was grew up hearing him talking about it, and I have really understood it. Um, but now that I am pursuing a degree in it, a lot of the things he said growing up are starting to make sense. He would always talk about, um, like bits and coins, and they do a lot with credit cards. So how do they store those numbers safely and securely, And how is their front end meeting with their back end? And how are they meeting client expectations?
Well, that's that's I love that. And then I love you gotten involved with the Georgia Fintech Academy. I think your timing's good before being interested in this industry. You know, the Fintech academies just a little bit over a year old, and so you're kind of showing up really a great time when there's more focus being placed by the university system on this. This industry.
Yes. So, um, I first heard about the Fintech Academy when I worked the Robinson College of Business holiday party. Um, I'm a student assistant in the dean's office and Mr Meadows Govind on, uh, walked up to me, and it was like, Hey, what do you do in here? You look a little young. Um, and, uh, we we got to know each other, and he his interest in me started recirculated and came back into the Fintech Academy. So part of it was where I grew up in part of it was just being in the right place at the right time. Uh, so I'm happy to be here and happy to learn more.
That's good. The well, you know, my nose is one of the greatest sales people in the history of the fintech industry. Uh, we had him on this podcast just a few episodes ago talking about the new initiative. He's been working on the shot ventures. Um, but, you know, my nose. Um, he started the technology partnerships group at Bank of America. Um, what kind of over 10 years ago and then got involved in, um, doing a similar kind of building a similar organization at Wells Fargo. So he's he's really got some deep roots into the into the fintech industry. So that's you know, that's great. I'm thrilled. I'm thrilled that you've gotten a chance to interact with that. Well, so I thought, you know, Daniel, particularly since we've got you here is in the depth of your expertise and Blockchain technology and the fact you're building a company, um, Thio to support the evolution of that technology. I thought we we kind of get started. Um, kind of diving into watching tech. Ah, a bit. And how we've been seeing this develop over the last. You know what's own, I think almost exactly 11 years now since, um, Satoshi Nakamoto, whoever that is or whomever that is ah dropped the Bitcoin. Um, but and then, you know what? What kind of focused your attention on this technology in regards to the establishment of speed change?
So I think that I think there's there's a couple elements to the actually underlying technology that attracted not only me, but, you know, a number of of, uh, business owners. Really? I think you can boil it down to its really scalability, security on and usefulness for businesses. So if you think about kind of a migration to cloud, you know, was was revolutionary for businesses and how, uh what used to what we all grew up. Being a technology stack was transferred into different types of technology, and certainly cloud based has changed the way we all behave in a business setting. The Blockchain, certainly certain types of Blockchain or certain elements of the underlying technology will do the same. So if you think about both from, I don't think the end user will know the difference on Lee that they will be more secure and their providers will be able to scale more quickly and be more efficient. So, um and that that has to do with the underlying decentralization and the host the way you can host data on dhe. Secure it. And so that really is what, um, you know, we ought We say internally that it's not technology that we need to be more functional. It's the user's need to be functional by using the technology. So if this new technology allows companies to provide products that arm or efficient for their users, that costs less that are more secure than it is useful on DSO. It's about I should say it's valuable. So that's really what excited us and, you know, um and continues to excite us. Uh, and I think really there. There is so much opportunity in different verticals. It's really kind of up thio up to us to really, you know, pick the most useful and most valuable use cases for it and really, the markets that have the least traction Or I could say it a different way where adoption is easier for the end user and we're the most valuable kind of pieces of it for partners are. And I think Fintech is, um, certainly one of them. And I think that you can I you know, obviously there's some big names that are already in it in financial service is, But I do think for merchant payments and some other some other areas that are less kind of traveled so far will become more so over the next 2 to 3 to five years.
Yeah, the, um, in in late 2018 me shot dos, who's the associate professor of finance at the Scheller College of Business. That George attack, Um, he teamed up with me and we we did it just a very quick study on, um where Blockchain technology was beginning to take hold as a as a kind of to create some of these meaningful infrastructural opportunities and pipes. And, um, you know, what we immediately were seeing was the cross industry, uh, application. I mean, everything agriculture, arts and wreck automotive financial service is, of course, health care, insurance, manufacturing, mining, property, public sector, retail, tech, media, telecom, transportation, utilities These air the all the, you know, just with every segment of the economy. And we found a study that Mackenzie had done in the middle of 2018. That was Ah, that was interesting to us. And they were talking or they measured more qualitatively like watching adoption, um, in all these various industry sectors. And then they were looking at it from where there's a revenue growth potential where there's a costs, a potential where it could bring meaningful social impacts. Um, and some of the ones that really popped out were, um not surprisingly, ones We hear Maur and more of I think as, uh or I certainly do is is ah, trying to stay on top of the space. So it's like agriculture. Um, there's this Ah, guess example. There is the food trust that's been built up by Wal Mart and IBM has been very involved in that. And others. Financialservices, which will talk more about health care, which we've seen different engagement on resource is insurance was noted as a big area for potential cross saves property. The public sector, um, were those were the handful that really popped in terms of opportunity industries. Um, and it sounds like when you, as you've been, is they been taken, speak changing market. A handful of those industries are ones that have been resonating. Absolutely. Yeah, it's a long you know, the list that you
just read off his long but but accurate. You know, I think that there's really what you're underscoring is anywhere we're interoperability or communication between different different organizations or and or the importance of the chain of custody of data. And as you said in agriculture and some other things, it's also tied to actual physical assets so you can talk about the token, token ization or digitization of ownership. Those are all things that kind of underlying benefits of, Blockchain said. So it's not surprising that it would have a wide out of use appeal.
The in my consulting business second was in it was in early 2013. Um, we had we were doing a fair number of, like, short sprint projects that were more focused on clients. These air, all financialservices clients, that air we're just trying to understand. Okay, What is this tech? And how could this be useful to us in terms of either service delivery or how we run our business and that we were doing those types of projects and then began to get exposed to, um, some different start ups as well as, um, we had some of our technology teams working with the with, um, Ethereum and Hyper Ledger in particular. And we It was pretty interesting because we could see, um, where you could really get some amazing efficiencies, um, and improve security. Uh, and there's this smart contract feature that began Thio. But when's Ethereum was launched in particular became an interesting component. Where are you know, as we learn more about it, we would joke because we were like, you know, they're not smart contracts is a fun word that they're not really that smart. It's kind of this if if then statements that air pretty, somewhat simplistic, crowded. But we had this really cool project for one of the large global investment banks. They were has a meaningful securities lending business, and I didn't know a lot about SEC lending until we got into this. But as we were studying it, we realized that that's Ah, that's Ah, kind of part of the market. That's pretty manual, heavily manual lot of excel spreadsheets, a lot of phone calling. Um, And this Ah, there's just some way didn't approve a concept, or we could just see their beast really remarkable scale improvements and claw saves. I am using this Blockchain technology thio. Just keep track of the loans that were being securitized and, um, into these all these various private placements and then all these different rules that for each, um, each provider of the different trying to the loan, they would get different kind of rights given to them based on, you know, whatever they put in, or they could negotiate different rights. So full seconding pockets can get quite complex as you've got more participants in it. And you could really see the benefits of this. Yeah, um, but camera You telling me that you had a chance to Tito be part of that Georgia State Fintech conference that was hosted back in early Feb. And I know there was a lot of some good papers that were provided around Blockchain. What kind of jumped out at you in that conference
s o? It was the second year of the Fintech research conference. Um, and on Saturday morning, they had a paper called Corporate Governance of Corporate Capture of Blockchain governance. Um, and it focused on proof of work Blockchain and profit squeezing, um, so kind of taking a look at how can Blockchain be manipulated? Um, and how can participants be hurt or helped by, um, the the equipment producers? So they're the two main goals they're trying to measure. Where equipment producers owning and operating their own mining pool. Um, that lowers the average fee. But then they also start to take more ownership of the pool. So there's less for reward for the miners, and then equipment producers without pool have a stronger incentive toe enter the market. Um, but they also like, how is that profit squeezing as well? Um, I'm that's probably a little bit more into Cryptocurrency than, um, Mr Cages. Speed chain. Um But I would like to hear more about how proof of work and proof of steak and how, if there's do effect, speed train.
Hey, thanks, Cameron. It's It's It's really cool and heartening to hear of, you know, um, students like you diving so deeply into it and look the future, the future of our businesses is really gonna be based on your talent and your and your ability to go get it. So I know Tommy shares that we both love to see you in this conversation and appreciate all the work and talent you're thrown at it. So because our futures ultimately got in your hand. So, um, you know, it's funny, so you bring up a really cool delineation in the business. And with any new technology, I think there's this kind of, you know, there's this migration of different and I don't want to overuse the word forks because we use the word forks and a lot of in a lot of Blockchain, but their forks in the road, in strategy and in business and so proof of proof of work. And Tom, you know, some companies in town here that that are have blocked trains that are based on proof of steak, which is a slightly different take on that, um, are are kind of were actually, you're right. We're actually not really in that side of the business, but Aiken lend a little bit of it of, I guess, thoughts on it. It is very effective for public block chains and to establish trust in a network. And that's really basically what proof of steak and what proof of work. D'oh! Um, you know, over time the efficiency both from an energy perspective but also from a business model perspective has gotten better as it's mature as the business is mature, there's more miners theirs. But to your point, there's also a more sophisticated owner. Now that is saying, Well, wait a second. If I own the machines, why am I going to give this percentage to the just the the actual the minor themselves, with the kind of wood I would go out of Network Minor, I guess. And so they changed the economics of that business a little bit. I think, you know, and Tommy will get some other people on that arm or kind of know this side of the business better than I. I think that once you start dealing in crypto currencies in the secondary market, there's just different market pressures that will drive the maturity of that market right. So if you're ah, you're mining forms, where they I mean, there's some talk now about, like where are they going to be allowed to reside like physically? Do they have to be in the States? Can they not be in certain areas? Because the regulations are different. So they're those kind of, um, you know, those kind of market pressures will come up a swell as we go. So certainly you do bring up a delineation between public Block Jane's and permission or private box chains. They operate very, very differently, and the end consumer is very different. Um, typically enterprises will for a private Blockchain that's processing their data where a Cryptocurrency company can rely on a much bigger group of miners or public.
It's been it's just been fascinating to me to see all of these different protocol iterations beginning Thio come forward and I think it's a great sign to me. Just shows there's continues to be meaningful research, meaningful investment. Um, there's lots of business opportunity that's helping to drive that. Um, and it, uh, I think that's it's very encouraging. Um, you know, it's it's been frustrating to me, Justus having gotten into this again, as I mentioned from a consulting's perspective back in 2013 I just thought, Well, you know, almost three years ago now that this was gonna be a technology that was gonna get engaged more quickly and, um, in the enterprise businesses, I would say, I mean, I thought it was gonna be like, really bitter kind of more wide scale adoption. And 2014 2015 2016. And it's really not until now. And I mean, your company is a testament to this, that the kind of large corporate enterprises are really beginning to put very important mission critical types of business processes, um, onto this technology in different different ways. Um, so it's Ah, it's been, I guess, more of marathon than a sprint. But it was It's clear, I guess, what's encouraging that it's clear that this this isn't a it's not a technology that's going away. Um, and it's continuing to improve. Um, so it it certainly seems like one that's worth continuing to make really meaningful. That's on, uh, and Bill Businesses Room. Well, Tommy, you know, it's funny. You know, we always say that people don't like
the way things are, but they don't like to change right. So I think that in solving some problems from a process perspective, so when you're really dealing in enterprise, workflow and risk and security, it's very easy when to just put those decisions off, You know, and and so I think that it's digital transformation. I think some companies every company sees it as a must. But depending on the depending on the actual use case or the problem that you're solving, it's just a matter of kind of where are you on that priority list?
Yeah, um, the other thing, like we have in this conversation over the last 23 minutes, done what so often happens. It's so difficult, it seems, to get into a conversation about Blockchain technology without getting into some degree of a conversation around Could go currency and, uh, Thea that always interested me and, uh and then, of course, it you know, there's continues to be, um, a lot of effort into trying to clarify you know, differences between Cryptocurrency and watching technology, Um, against the way I try to simply keep it straight in my head is to be like, Okay, Bitcoin is the first use case executed on Blockchain technology. And then there's a course other currencies that have come forward but that are additional execution of a use case on Blockchain technology. Uh and then, you know, And then the two, of course, continue to have no sort of a symbiotic relationship, because I that makes sense to me. I mean, as as thieves cryptocurrencies become further adopted and engage with by consumers and enterprises, et cetera, Um, that just, you know, continues to evolve that that use case of blockade technology. Um, I bet I mean, I know like even in the middle of this in this there's been Ah, I've been involved in a lot of different different cars, calls or whatnot, Maurine the Fintech venture capital community. Just over the last month, as there's several several companies like, cos we've got Georgia Tech in the Advanced Technology Development Center that are you no good? Just good entrepreneurs that are thinking Okay, I've got this really early stage company is there some way I should pivot in relation to this covert 19 crisis. Um, and there's a lot of particularly government funds that are looking thio be deployed against innovative ideas that can help with response to this public health crisis in all sorts of ways. Eso Well, I know there's several ideas that I've heard of that would be supported by blocking technology in responding to the crisis Will be surprised at all if there's some kind of interesting new companies that come out of this in that regard. Um, but, Cameron, um, you news? Facebook?
Not really. Um,
you know, do you know what I'm talking about?
when I say facebook being what I'm talking
about. Yeah, um, I used to keep up with with family members, and that's usually about it. I'm not very active in that space. Um, a lot of my friends,
only old people like me and Daniel would probably be the ones on Facebook,
so we actually talked about this in our marketing class. Um, I think Facebook just kind of hit this when it hit the market. Um, it was very like that. The the consumers that were open to Facebook were, um, of older generations in mind. Like I think I was probably think Facebook Facebook was 2012 right? I think so. I was 12 at the time. No,
no, no, wait, Hang on. No Facebook. I'm just looking as love. I don't know if it was founded in 2004
right? But when when did it start
with? You were you were probably about five.
Okay, so All right. Um, s so that's a little bit, um, past me? Um, no, we don't. Social
media moisture, social media platform of choice.
Uh, probably Instagram just gets that's That's what I grew up into
now did it? Now who owns Instagram? Facebook? But by the way, 50 I have a 15 year old daughter
and she's same thing Instagram is is there They're doing a good job in a wide
one wonder even I'm bringing out Facebook is You know, a year ago, they announced their intentions to create this global digital current CD that they called Libra and the regulatory this regulators across the world basically readout and we're just like, No, you're not doing this. And you're gonna have thio, you know, really work through all our different regulatory bodies. But I'm only leaving back to that because just today, um, Libera made a big announcement, Or Facebook lever made a big announcement that, um, they formally commence the process of obtaining a, uh, payment system license in Switzerland. Uh, and they said they're expecting and will be asking for input from other central banks and regulatory bodies. Bodies around the world, not just from the Swiss. So, um, that, uh, it's it's almost like they're coming out of, um, along. You know, we just haven't heard a lot about you know, how they were gonna work on repositioning related to a liberal, and we're gonna engage in with with regulators. So, um, it'll be interesting to see how this new news is received and for us to understand. I'm sure they've had the reposition, the labor currency. Um, I think they're thinking about doing it. Mora's ah, uh, supporting specific, stable coins. Um, that I think would be tied to particular nation states. But I'm speculating, coming wantto get into the news of the outside. It's over the next day, but I guess one last question I wanna have we'll ask you, Cameron is like win. Like, how did you personally engage with financial service? Is technology fintech?
I'd say the biggest one as far as, like, payment processing would be Venmo like That's how most of my friends and I'd, uh, split checks and share money. Um, some of us also use l that one starting to come up because it is integrated into your bank account. Um, it's for his Cryptocurrency. I haven't really touched the stuff. Um, partially because some of them can get pretty pricey, but also it for me. It's too new for want to accept that risk. Like as a younger person. I probably could take on that risk, but then it becomes the talk about it. It is a high cost to enter that market. Um, and for a social media platform, to have their own Cryptocurrency is an interesting idea. I know. Personally, I'd probably want to keep I like to keep my my spaces separate, so I probably wouldn't entangle my finances with a social media platform.
Zell, um, comment reminded me last week. Uh, I was invited to get involved with, um, Glenbrook partners. They put together a, uh They're great payment boutique consulting firm, but they also do training around payments. And they put together a new virtual training that they invited me to be part of last week, which was really good. And we're we're gonna spore maybe having relations between them and the French Academy. But they had they had really good data on Zell. And, um, they said that in 2019 Zell had 187 billion and processing volume. There's now 766 member banks. Um, that air signed on to the cell network. Um, the $252 is the average transaction amount. Ah. And, um, you know, it's really been significant. And they and they handsome dated too, where they were showing that Zell adoption has surpassed, uh, Venmo which, um, you know, I found particularly interesting. Uh, and I and it's really that that's been a recent development, like in the last 12 months s. So it just kind of it shows once again the power of these large banks. You, um, control their destiny in this fintech space.
Yeah, I know personally that the backing of of lots of banks has been a big draw for me to start moving more into Zel and to encourage my friends and family to move over to Zo. Um, that Mo just has is pretty easy to use when it came out. I know that was a big initial draw for a lot of my friends and I,
you know? Yeah, I just on the date I was looking for the queue for this is key For 2019 the transaction volume was about 25 billion ish Venmo. But Zell's transaction volume was like 55 billion, So it really has overtaken, and no one is significant in a significant way. Um And then what? And then what's also interesting is that the it's, um, in terms of P to p usage, it's kind of dead, even with Venmo. Um, but the, uh, there's clearly the folks using Zell are moving larger sums on cell, then on then on bimbo, which is why you see that transaction volume. Yeah, I know. So so much significantly high. So yeah, I'm a just this whole PGP area is really interesting to me. Um, because I'm still not convinced anybodies making profit on it. They're making revenue, but I'm not convinced they're making profit. Um, on that on that part of the business and we'll see how that might change a SZ Folks like yourself continue to use these platforms and use them for ever increasing sums of money. Let's just, uh, kind of pivot towards the final part of our conversation. Um, well, I wanted to just hit on kind of think any big fintech news we heard in the past, um, in the past week, Daniel, what's caught? What's caught your attention.
You know, I think probably I think, more than anything is just business continuity. I mean, you know, I think everyone for rightly so you know, has now that we're working at home and any time that there's a cop. I mean, this is unprecedented kind of common challenge, you know? So every everybody across every strata, regardless of where in the world you live on DDE what you do every day. Everyone's affected by something by this one thing, which is very, very unique. But I think what it's underscored. I think you mentioned it earlier today in our conversation is whatever transfer mission was gonna happen is just it will accelerate, and I think, and that's really kind of what we're hearing as well, and I think it's what we're hearing. It's more around business continuity, right? So we know that we're gonna have employer employees either working remotely or working in a different way. And I think the more that we can trust data and our communication with each other, the better on. And that includes friend. I mean, Finn Tex Right in the middle of that, Um and so I think more than anything, it's it's that I think it's the It's security. It's it's the transformation. And it's really just kind of digitizing our communication as we are doing right now.
Yeah, um, came in. How about you?
I thought the papal into it and square getting approved for the help of the small business. Really fun was was pretty interesting. Um, whether that is a move to encourage the small businesses they lend thio continue to do business was with them or to just, um, take a stake in being responsible and giving back to communities. I thought that was pretty impressive. And as someone who's looking to be employed in the future, that that means a lot to me as well.
And then there was right as the cares that got passing the wall. There was a lot of lobbying that was taking place on behalf of authentic industry to determine how toe you basically get thin tax engaged. And, uh so I mean, it made all the sense in the world to me that these kind of where I think up, some of the more the older I don't more mature intact, like paper. How square would would really, you know, find find a good argument to get engaged, didn't provide a ton of value. Um, and helping that that hero protection program, Tommy. There's also just a just
a credit to a local company who's doing great is cabbage was part of that as well, because they have outreach to small businesses, and I know that they were right in the middle of that on DSO. That's that's another example. Ah ah younger, smaller company. That's not so small anymore. But they have done some good stuff as well.
That's right. Um, the other two bits of news that I found significant in the past week one so fi announced $1.2 billion acquisition of Galileo Financial Technologies which is a payment payment prepaid card processor, just indicating so five moving further into the payment space. And then Marcus pay was launched, which is the markets again, as the Consumer financial Service is arm of Goldman Sachs. And they launched the point of sale installment lending business, uh, with their first major rollout customer being JetBlue. Um, so there is a very large POS installment lending business born here in Atlanta called Green Sky Financial. Um, so it's, I think, just continued validation that this corner sale installment living space is here to stay. It is going to continue to grow. Um Well, good. I'm gonna wrap up there. Um, Cameron, thank you so much for being with us.
Thanks for having me
and Daniel. Thanks for being engaged with the Georgia Fintech Academy in such a significant way. Uh, and just we're here. Thio, uh, hopefully participate or support the growth of speed chain, as that continues to happen.
Tommy, Thanks for having in love with what you and the Academy are doing. It's great.
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