Episode 478: Miles Parry & Cat Le Huy, Co-founders of MPCH Labs

In this episode, Mike Townsend speaks with Miles Parry & Cat Le-Huy, Co-founders of MPCH Labs, the team behind Fraction.

Miles Parry has extensive experience building highly secure solutions to protect sensitive data and assets. Miles has worked as a trusted consultant for a variety of government organizations, such as the Ministry of Defense, the Financial Conduct Authority, and the Foreign Commonwealth Officer. Before MPCH, Miles founded and built Vo1t (now Genesis), a high-security service that safeguards valuable digital assets trusted by some of the world’s largest companies. At MPCH, Miles is focused on delivering military-grade security infrastructure and cryptographically approved business process management across economic sectors.

As a software engineer by trade, Cat Le-Huy has experience working with some of the largest organizations in the world across numerous sectors, like defense, investment banking, MarTech, and FMCG, to help them achieve digital efficiency through various digital systems and strategies. As a veteran with over 20 years of experience and a uniquely creative approach to development, Cat brings together technology, product design, and business strategy. At MPCH, Cat is focused on designing military-grade security infrastructure and cryptographically approved business process management across economic sectors.

Host: Mike Townsend

Guests: Miles Parry & Cat Le-Huy

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Episode Transcript

Mike: Todays guests on thepodcast are Miles Perry and Cat Le-Huy, the co-founders of MPCH Labs and alsothe team behind Fraction. The company has raised roughly 45 million to date andthey have over 70 employees. We talked about what they're building and how theyare selling it in the market. We discussed the global economic trends,particularly the intersection of cryptocurrency, technology, and thetraditional banking system. We discussed this as SBV is in the midst of acollapse, so the conversation is especially poignant. I hope you enjoy. If youdo, please give it a like, thumbs up, subscribe wherever you're listening. Andwithout further ado, here is Miles and Cat.

Mike: Thanks for joiningguys. I'm excited to kick off this conversation. Miles Cat maybe since Miles isyour first podcast, I'll throw it right to you, push you in the deep end andask you to just  

explain a little bit about what you guysare working on at MPCH and how it got started and what you're trying toaccomplish in the world.

Miles: Yeah. Cool. So, MPCHit's kind of hidden in the name. So MPC Multiparty computation is what wereally focus on. What we have done is actually built a secure infrastructurethat is alo to any industry where it can be applied along multiple other use caseswhere we're applying it in the financial sector and the crypto space in thetraditional side of things as well.

A long way of government, military,healthcare, and so and so forth.  

Mike: So what is multi-partycomputation? And I, at first I thought it was an acronym for your initials,miles Perry Cat. And I was like, where is, where's the age? What, what is itmore specifically if you're to explain multi-party computation to me in a verysimplistic way?

Miles: You know what, I'mgonna split that up into two questions and I'll throw the other half onto Catcuz I'm a common person like that. I'll explain where we came up with the nameMPCh so like every company that tries to come up with a company name, we hawhat we were governed by what was available and domains.

So Cat and I were sitting on the corner,we were looking through every single domain possible and we could not findanything that we liked. And we were like, you know what, we'll go incognito. Wewanna be stealth cuz we've been stealth for the past year and a half now. So,oh, I'm on. On domain search and said, oh, I've got an idea.

How about Miles Parry and Cat Le-Huy MP,and then CH, it's Noil know what it is, and both of us, it's like three or fouro'clock in the morning. We're like, yeah, they'll, they'll do, we'll get that.We bought the domain. It's great. Okay, let's set up the email ring. Your emailtab is Cat MP C. And then we both clicked and realized that we've got a namesaying BC in the whole title, so wasn't as incognito as possible and, but MPCtechnology.

I'll split that into the secondquestion. I'll let Cat sort of explain that through.

Cat: Yeah, sure. So MPC isa branch of of, of cryptography called computational mathematics. It pertainswith the idea that a single function Either a mathematical function or acomputational function can be cocom computed by a group of people. Right. Withthe special caveat that the people that are party to, you know, workingtogether in this computation are not necessarily aware of their particularinputs.

Right. So a very sort of nonmathematical way of looking at it would be you know, yeah. Chopping up a pieceof wood, for example, where multiple people may be party to it, but in thiscase, no one knows what the other person is working on. So the output there's acommon goal in the outputs. In our instance it's a cryptographic output, butthe input that each person contributes is unknown to the other parties.

So, in essence, The common way ofthinking about it in the crypto space is, you know, type of consensus orarriving at, you know, a, a typical form of cons, consensus. But in our case,you know, we extend what we're trying to do to any form of of computational,cryptographic work that multiple people might be trying to undertake at thesame time.

Mike: And so, would this be,Cat,  

would this be a, a technology thatblockchains or developers would use to build a blockchain? You know, cuz Iunderstand that this running consensus and having multiple miners or multiplecomputers run algorithms is part of the, that that's kind of the definition ofdecentralized computing and what enables blockchain is how, how does this fitin with the rest of the ecosystem?

Cat: Yeah, sure. So there,there's a number of ways in which we can sort of answer this. The first one isyeah, blockchain in its implementation is all about consensus mechanism, right?We have a number of different consensus mechanisms that are absolutely core toblockchains as a whole. It's it's something that is shared by all blockchains,but in the implementation, that's where it's slightly different, right?

And outside of blockchains, for example,we may have things such as multisig or threshold signatures that all achievethe same goal. But what's different between them is, you know, you trade, youtrade off speed versus security versus practicality versus ease ofimplementation versus scalability around.

But you're absolutely correct. You know,MPC, if you will, is a type of consent as mechanism at a very sort of popularvernacular sort of sense. But yeah, I think overall it is a subset of whatwe're trying to achieve in the blockchain space as a whole, where everything isdistributed and in the distributed world to get anything done, we need someform of consensus, you know, that we're all pulling in the same direction.

MPC is one form of technology thatallows us to achieve this.  

Mike: Okay. And the companyis, I imagine it's structured as a company, a C Corp or llc. You guys haveraised 45 million is my understanding with about 70 people. Where, where isthis, where do you sell this? If you have salespeople on the team, who do theycall and what does the sales process look like?

So I'm going  

Miles: to kinda bring it backa bit from the previous question to bring it into that question as well. MPC Kgave a great description on what MPC is, but we should also take some time toactually identify why MPCs so good in its entirety. Now one of the things, andto fill us up misconceptions on the market, MPC technically isn't a technology,it's a concept.

And multiple people have picked up thistechnology concept and made that earlier alterations. Now, MPC actuallypredates crypto, right? So it's not something that I g cave and was born inEngland, crypto space. It was actually something that wasn't really necessaryor high value behind it. That was brought into the crypto space and used thecrypto space as a perfect incubation to actually grow that technology andactually see what it could do and where the value actually was, could have putpinned in.

That moved to side a bit like GPSgraphic and graphic cards and stuff. There wasn't a big incentive to. Hey,graphic cards besides playing games and stuff, but then suddenly in the cryptospace, you needed graphic cards to earn something, sorry to mine, a Coin thathad a value. So you had a financial game behind it, which then incentivized anindustry to grow up GPUs, right?

So then take the pin again about theMPC. MPC came into the crypto space and actually fixed a problem. We'll talkabout that problem in a second, and that is what that incentivizes to. Growthand the innovation of MPC two, hc, its value now only crypto space. Crypto'sbeen around for quite a while. There's thousands, if not more than that of wallets.

Loads of different wallets. So why is itwhen, hey, MPC MPC wallet comes out of nowhere. Why does that suddenly dominatethe space? And it's really pretty simple multi. So with the wallets, they weresingular. All you had multisig, but that Multisig was great for Bitcoin andvarious other chains. But then suddenly, when you wanted to adopt multiplechains, Those mechanisms to have multiple people approve different outcomes.

There were different technologies. Youhad multi on Bitcoin and you had smart contracts on Ethereum, and it keepsrolling out into these different things. So then you suddenly turn around andgo, right? So institutions are throwing to adopt this technology, but theycan't because they have to spend out all these different types of technologiesthat are a new age, not tested, and it's all over the place.

And suddenly their risks increasedmassively. And then they wanted something that was allowed multiple people orparties in this case to approve the outcome of multiple chains. Just oneapproval mechanism that did all right. No, I'm trying not to quote Lord ofRings here, but by doing. That's where multi-party computation came in, whichwas really good.

That's where they came in and said,look, we can use MPC to enable multiple parties to enable the output ofmultiple chains in a singular fashion. Allowing the institutions to go, right,okay, well actually we understand this. We can get to grips with this, and nowwe can work with this to enable the adoption of crypto.

Hence why MPC wallets suddenly grew. NowKent and I have been in this space for quite some time. I started up acustodian, I sold it to CG in, turned into Genesis custody, went through allthe cycles. In short, I've gone from the small startup shaking the tail all theway to one of one, one big custodian, right?

And I've seen all the pain pointsthrough the cycle. And then Ken and I were looking at this and we say, we seethis, but there's this fixes something bigger. Back to the point, multipleparties are able to approve and authorize the outcome of multiple chains.Authorize. That's where the problem is that that's the bit that needs to beinnovated.

So like, let's just take a step awayfrom crypto for a second. It's authorization and authentiCation. And we went,okay, let's build a proper version of MPC. We've seen the other MPCs, we'velooked at the open source, we've played with it and it's all been round crypto,but we actually looked at the ways to scale in different industries not beingsiloed and shoe hunted into crypto.

And by doing so, we built somethingcalled the MPC six engine. And I can go into all the details later, but bydoing so, we created this engine, not deliberately just for crypto, but to tryand fix all the authentiCation layer. We put that, and this is now answer yourquestion, putting it and into MPCH, the top crow where the, the main com, thestudio.

And we've spent a lot of time with someof the best minds around the world to actually build this engine in such robustway. Like with any engine, somewhat, you can put an engine in a car, a plane, aboat, a bike, and have different capabilities. So from there with MPCH, webuilt this engine and we've now applied it in an agnostic way to our firstproduct called Fraction, which is angled at financial institutions in thecrypto space.

Formed that we have built the frontinterface and used that MPC for the wallet, not just for the wallet, but forthe neutral interface to give the power zero knowledge to the client to meetall the standards, cryptographic audits and everything in a way institutionscan be happy with, but run a full stack business utilizing the authentiCationin multiple different layers.

So to answer your question, we, in MPCH,we've done the innovation of the technology, and now we have the subset companyfraction, for example, focused primarily in the financial services space withthe specialists who specialize in financial services. Right? Not. You can't berunning with other people in different industries, but so long now.

So the sales team, the specialists, theSMEs and everything sit there, which can sit with the clients, understand theirneeds, and just utilize this engine to enable and the keyword enable theirbusiness for adoption.  

Mike: Okay. Okay. So if I'mhearing you, you're saying that the MPCH is an engine and, and fractal uses thatengine fraction uses that engine.

The engine itself solves the problem of,of allowing multiple people or multiple parties to resolve multiple blockchainsat a time. Is that like, why would that be useful? Why is that a problem? Whatare people currently doing without this engine? Like, yeah, maybe you couldexpand. I just wanna make sure I'm crystal clear on what's happening today andhow this changes it.

Miles: Well, I'm gonna saysomething quite aggressive, but factual. A lot of people have been using MPC asa snake oil, sexy word. They go into industries and go use our product. Why isMPC woo, it's magic? And everyone goes, ah, this is exciting. They run to riff,they run to compliance. And they're like, yeah, but what's magic?

We need to understand this. And you'llactually find that there was this FOMO in the crypto space at the early days,and they're like, oh yeah, but everyone's using it, right? Everyone's using it.Let's not do as much due diligence. Let's use it. You know, God forbid there's,I'm, I'm not gonna name names of big institutions who have had that fomo andthen they collapse because of not only n c space, but where they've justcapitalized on the fomo, right?

And they've made a lot of shortcuts toget onto these platforms because it's MPC, it's sexy, it's the new technologyis great, but then when you open up the hood, you then suddenly realize thatit's a small path. That's n c. What they have been telling you of what itactually does and how it integrates and all the different things that make itamazing.

There's actually a lot of web one andweb two technologies, which actually very legacy, right? And if you actuallylook back for over the last year, you're gonna start seeing a lot of people'swills getting shaken, right? Because people now starting asking questions, youknow, have so sad about ftx, but people are asking very, very aggressive duediligence questions, right?

You've got regulators coming in,standards are coming in. So I do. So when I'm kind of going into, you know,other people in the space and I'm not naming names here from great business andeverything, and they're doing what they can to, you're reverted, but they'requite far down the line from an structural perspective to Roberta.

So when we are looking at it, and thisis where I'm going to change it around a bit with our MPC six engine, whenpeople think Lio, it's BC and. They, they've built a wallet around it. And asyou said, it's like crypto, right? Crypto is on that MPC. But the problem is,if you think about it, every time they add a new asset that comes out, a newcrypto curve and everything, it's changing.

They have to change the MPC constantly,right? That's production, that's scary, right? Which can cause downtime andeverything. That's only the tip of the iceberg. Then you think about, okay,once you can support it and you can send receive, how about when you interactwith it, all these new functions, you know, staking, delegating, boating, theseare other things that are gonna change this.

So when we took it away, we were like,well, these things are just gonna keep coming, right? And cuz we've made itagnostic, we changed it to be more of an structural basis. So an instructioncomes in and that is cryptographically authentiCated by the right, allowing itto be anything in effect. So the clo, it's completely zero knowledge.

We see nothing, we can't see anythingand all that stuff, but these instructions come in. So we've resolved thesecond part of the problem that I was saying earlier. And because of theinfrastructure layered in its six layers and how crypto roughly is gluedtogether, it means we're able to add these curves without changing theinfrastructure or the production environment.

Creating a mature infrastructureinclusive of different environments to allow upgrades to happen in more realtime. We've been hidden wave.  

Mike: Cool. Just for thesake of entertainment, how would you explain this to your 10 year old niece?Like what, what, so, you know, she has a wallet where she keeps her money onthe computer and it has Bitcoin in there, and the bi.

How does the Bitcoin know? Like howwould you, assuming she had a Bitcoin wallet on a computer, she gets that howdo you explain it in the most, in the most simplest way possible.  

Miles: I hope to feel likeI'm gonna pass that one over to Cat.  

Mike: Sure, sure.

Cat: So my 10 year oldniece has a Bitcoin wallet. I'm so proud. The way to look at what we do. If myniece suddenly grew up to be 14, and I needed to explain that to her, and I'dprobably say that what matters is what you're trying to do with which assets,right?

You still need permission to do it. And,and what we've done is simply segregated the assets away from the permissioningso that, you know, the core permissioning isn't being yeah, the, the integrityof that permissioning system remains the same. Regardless of the things that wewant to do. Now, if you take it back away from fraction into MPCH, for example,and why we started MPCH the idea that we might have a wallet with multipleassets was where we started from.

But what we're actually trying to do isyou remove the assets away and put in a building. Or a rocket ship or somethinglike that, right? It doesn't matter what it is that we are trying toauthentiCate, it's yeah, it's interchangeable on the back game. And that reallyis the power of what of what we've actually gave.

Gotcha. I'll just thank you. Yeah.  

Miles: Can I give a go onthat one? I swear absolutely doesn't know about permissioning, so I'm going togive a different twist on it altogether, is that  

Cat: your niece is now 16.  

Miles: Mm-hmm. , well afterthe explanation,  

Mike: and she's studyingcryptography in high school, right?  

Miles: So here's a way forit.

You, you want something on yourcomputer, and that's something is money, right? Something of value. You have iton your computer, but you take your computer to school and someone is going towait till you are away from the computer and they're gonna steal it. They'regonna put something in and they're gonna steal it away from you.

There, there is a way that you canprotect it. And you know, your auntie who's on the other side of the world andyour grandpa down the road or whatever it is, they have to come here to yourcomputer and they, at the same time will press some buttons on there and allowit to be on there safely. So every time you want to move it, you, one of your,your grandparents and everything have to come here and also approve it for you.

Right? So that's kind of like on amulti-six perspective. Now, the MPC side of things, right, is that you don'thave to have anyone come here and actually set this up for you, right? Yourauntie is in Australia probably change loCation, Naomi, me, and all over theworld. They can not get out of their houses whatsoever and they can be added tothis capability, which means that when you wanna send it, Wherever they are inthe world, they don't have to come here ever.

They can approve it wherever they are.Right. And you don't have to worry about them coming here or anything like that.So therefore, when you're at school and they try to steal it, you, nobody'sgonna be coming in. Other people have to approve it to allow that to be removedso you don't lose it. So they're probably changing it a little bit from myperspective.

Mike: Mm-hmm. . Got it.Okay. Interesting. Let's, let's, let's broaden the scope a little bit.

So when you look at where we are today, March,2023, certainly crypto has a, had a volatile ups and downs as far as theoutside perception of what's happening. Prices are, are more volatile the lastcouple of years. Do you feel the same as happening internal?

Are people dropping off of projects ordo you feel like this is really a productive time across the industry? Peoplewho are really building meaningful value are still working super hard andexcited about what they're doing. I mean, what's your like take on that. Doyou, do you, do you feel it's, do you feel the industry at large is underratedor overrated? Given that it's pretty lowly rated at the current point?

Cat: I think in the marketthere's been a lot of value speculation. And the upshot of that is that, youknow, we've had an influx of capital into the industry that's enabled you know,a whole lot of innovation to happen. But equally, I think perhaps it's also hasan impact of perhaps disincentivizing some forms of innovation to happen.

Right. And especially if what we'rereally, really concerned about is, you know, getting in and out really quickly.Then perhaps the greater mission or the greater potential of the industry issomewhat lost in sort of people's excitement in, you know, chasing up monetaryvalue, right? And so one way to look at what we're experiencing right now mightvery well be for example, a form of I guess where we are is actually peopleactually just looking at how we're actually able to genuinely create newinnovations and new value, right?

We're in the period right now whereperhaps people are less motivated because of, you know, where it is where thepricing is right now. So perhaps we're in the period right now where we canfocus on actually genuine elevation, right? Things that are making a differencein terms of bringing new features to the market, enabling a different way ofdoing business.

Perhaps even, you know, different venturesthat are focused on blockchain for good, for exactly right. So I think ratherthan being sort of down on where we are right now, I think we have toreorientate around what value looks like and what value generation where, wheredoes that actually come from? And I think right now that may come from ingenuine innovation or genuine idea creation.

Mike: Interesting. Oh,miles. Any thoughts on that?  

Miles: Yeah, lots of themunfortunately, but , I'm going to throw this out there. We are in a good place.The crypto space, coll collectively is in a good place. Crypto's being run fora long time, but it's actually not been a long, long time. Innovation andgrowth within this space has been amazing, but we have to also identify theflaws of what happened cause of that.

Right. And I'm going to just say forwhat it is There is a lot of fomo. There's a lot of excitement, and there's alot of wealth generated from people that wouldn't have generated wealth in atraditional sense, which has also caused problems by having very wealthy,uneduCated people, not in a harsh way on how they invest, which is also whathas generated FOMO into certain projects and bits and pieces.

Now, I'll try and glue this together.Now, in the, the crypto space particularly, we are, well, we were or we are acollection of a nod of geeks. I'm a geek. I will put my hands up to that, butwe get very excited. We see a problem and we try and fix it, but the problem isthat we fix it within the scope of what we see, but in a traditional.

There's a lot of lessons learned andthey have learned over years and years. So they, when they look at something,they have that eduCation to go, yes, that's good, but you know, have youconsidered this, that the other regulatory aspects, lessons learned from cyberbreaches to volatility risks, all of these sort of bits and that eduCation andknowledge that has been pass upon.

Now you look at a crypto space that'sgoing at exponential speed and you've seen it. We've had the bull markets andthe bear markets. And the bear markets very pessimistically you said. But I seethem as reckonings of where we go through a period of where these are boost,stop, amazing ideas, but they're getting validated and the problem with thefomo, it, they raise capital very easily.

They grow at an exponential rate andthen suddenly it comes to delivery and then suddenly they get the gotchas, oh,we didn't really think about that. Oh, actually this technology is not evenneeded. Or something along those lines. And the big capital raise, they can'treally deliver. And then suddenly that CL causes turmoil in the market andsuddenly it crashes.

And then the fear of missing out is now,you know, chasing your losses. And then there's a panic on the market, whichmakes the volatility of the market crazy. But when I say that the bear marketsome more reckonings, it's because it's starting to purge out all the wrongideas, right the wrong ideas. And enabling the phoenixes to come out of thetechnology that is actually focused at changing the world, changing the othersystem, making it better.

And we're gonna keep on going throughthis. We're not in a lot, we're in a bear market, but there's gonna be others.And it's going to stabilize as we go along because it's refining the cryptomarket to these technologies of where log trade could be used to actually beoptimized in other industries to make you better.

So then when we look at the price, soyeah, last bit is just so when we look at the prices, you've got a lot ofpeople coming in and having uneduCated money coming in, right from people whohave created wealth from not an investment background, but now you've got a lotof FOMO from retail, which creates to a lot of volume now, for example, the FXmarket, right?

The FX market is so lucrative because alot of retail clients go in and put a lot of money in there, which gives thebanks more capability to actually get more swings and stuff. And it's quitesimilar in the T space in this period at the moment because there's a lot ofretail flowing in money cause of the fundraise and the marketing, if that makessense.

So yeah, totally. I see that we will becoming out this strong where w answering your question, people are working onthings that are more infrastructure and just for what is needed for theindustries, which are now making institutions go. We need this, this actuallymakes sense. That makes sense.  

Mike: Miles, I'm curiousyour thoughts on this.

How, how much of or a confrontation doyou foresee between the decentralized form of monetary exchange and thecentralized form in the Federal Reserve and the eu? There seems to me likethere's just this obvious tsunami heading towards each other where there's notan overt recognition of this conflict.

You know, you see a lot of politiciansin DC that are very supportive of Bitcoin and you don't see too much resistanceto it. But I suspect that that resistance will grow once the. And the amount ofmoney flows into more decentralized forms of currency, and the technologyreally starts to get impressive.

And then banks start to feel threatened.And then the global reserve currency under the US dollar starts to feelthreatened that there'll be some political narrative to it. You know, Bitcoinis, is evil or you know, other forms of crypto are, are bad and so on and soforth. But eventually they're really just feeling that the power is moving fromcentralized, the Federal Reserve to print money into more decentralized forms.

And I just am curious your thoughts on,or your speculation as to how intense that clash may be. Is that going to be,is that a correct assumption as to the macro trend that there will be atransition of power into a, a decentralized form of, of global currency? And ifso, is it obvious that there'll be a conflict between these large centralizedmonetary agencies?

Miles: It's a very difficultquestion. Well just highlight one thing. Just add on that. It's quite funnywhen I first got into crypto and I was mining Bitcoin and I tried to explain itto people and they were like, oh, Bitcoin, so you're a drug dealer. No. And howto explain it and how we've gone to the trend offline.

Bitcoin's amazing to now, like you'resaying, we Reno going on the reverse trend of where is in the political interestto you actually knock it down a bit to actually trans transfer that adoptioninto decentralized capabilities. So a bit more broadly on the question, if wesplit it on up a bit, we should ex Yeah.

Take some comfort in the fact that the,the institutions and governments and banks and everything are e looking atblockchain technology, endorsing it and actually recognizing the actualtechnology. Right. They've also. By them doing so they're actually looking atit and going, right. And what I was reverting back previously with the lessonslearned, they're trying to do it in a way, utilizing their lessons learned tooptimize the economy in a way, but have the ability to apply those lessonslearned to make it more stable, right?

And have those abilities. Now they'vehad multiple different conversations as well of where people are all privacy,privacy, privacy. And I'm all for privacy. But we do also have a form of dutyto also protect each other. Right? And there is bits such as, you know, youwant to also know that you have your privacy by all means.

But there's a level of privacy that wehave to compromise if we want to live in a safe world. Because terrorism, allthe terrible things also gets funded not by a different currency that we don'tknow about, but still the currencies and the unfortunately crypto and stufflike this as well. So we do have a duty to try and.

Bridge the gap, right? Bridging the gapfrom the traditional financial institutions and this new of crypto together tofind that happy media looking at this as well with these central banks in thedigital aspect. Right? I think that's one extreme of where, where they'repicking it up, and I personally don't think that's the way it should be.

And I feel that there has to be over theyears, or over the months or how this comes together and find that medium toenable the ability to work together. And I'll be honest, I'm concerned by thefact whether that is going to be possible or not because of the aggression andthe power or the governments and institutions and to drive, because you know,crypto has a big market cap, but compared to a single a company, it's nothingin comparison to all the world banks and everything like that.

Mike: Let me just comment onit and then maybe modify it a little bit past the Cat.  

So, I see today is a particularly ironicday because svb Silicone Valley Bank, which is the home for the vast majorityof, of fiat funds for startup companies, is basically on the, on the brink ofbankruptcy or insolvency.

And they're desperately looking foreither an acquirer or some form of financial bailout. And it seems to be nofault other than themselves mismanaging capital and messaging and all the wrongthings at the wrong times. But another good example of how the effects of the,the Federal Reserve interest rates create this fractional reserve system thatjust couldn't, couldn't happen if you had your own keys and had custodialcontrol over your.

Pros and cons to that, right? You don'thave the same debt instruments and liquidity instruments to raise capital, butalso you don't get stretched so, so thin that there isn't the capital in thesebanks to, to pay back people. So Cat, I'm curious, do you have thoughts onthis, whether you see a possibility of both coexisting or whether there's ahard or soft clash?

Cat: Yeah, I mean, this isa fascinating question. I think one that could probably be continue though withmultiple bottles of scotch, but I mean, I'm, I'm quite curious about last timeI checked, I think that was about 140 CBCs currently being trialed across theworld at the moment. Right? And you know, the way and when you look at some ofthe white papers, they range from.

Dipping their toes in to their space allthe way through to exploring the potential of actually a, a, a physical fitreplacement, but still a fit nonetheless. And so the breadth of theexperimentation, I think is a testimony to what it is that blockchaintechnology can achieve. Right. But when we sort of draw back over, say if wehave a look at the roles of central banks, for example the role of the rolethat, of that central banks play in terms of monetary policy for an example,well, can they be mimicked in within you know, using a cdbc for example?

I would probably say yes, it'sabsolutely possible. There is absolutely nothing else stopping us from actuallyrepliCating that if that's actually what's desired or desirable. But equally ifwe have a look at, you know, things like DAOs for example, right? Could weimagine a world where a central bank has issued a c d BBC with a Dow that helpscontrol monetary policy or appliCation of monetary policy, right?

Where there is perhaps a more democraticapproach to to applying monetary policy. That's fascinating. And it raisesother things such as, you know, is that desirable, right? Is the wisdom of thecrowd necessarily a good thing or is it a bad thing? And these are sort of, theedges of sort of moral questions that we have to ask when, you know, centralbanks start to look at adopting blockchain technologies we have to askourselves.

How are they adopting it across? Whattype of timeline, what are we giving up and what are we gaining right? And allof these are sort of moral questions around how we careful, well hopefullycarefully apply blockchain technology to central banking models right now theother question I think you had was around, is there a clash coming?

And I don't believe there is in theshort term. And the reason for that is that however we choose to look atblockchains and stores of value in particular, for example most of our derivedvalue, including old school GPU mining for example, has required some form offit input, right? So is it wealth?

Or is it wealth transference? You payfor your electricity and then you've got your GPS running, then you havemining, and then you have an appreciation or an inflation price inflationeffect on that, right? And, and sure people make money, but I think it'simportant to recognize that there is a lot more value transference on an opchain, you know, between chains between theater and onto a chain than op again,right?

So, you know, I wouldn't quite say thatit's a law of physics, but there is a lot more transference going on of valuethan there is genuine invention or bringing value out of nowhere and magic itand managing it and then having it suddenly manifest somewhere, right? So if weaccept that as a, a reality, then think that the medium long-term picture of a,some sort of showdown.

Between a more traditional central bankmonetary, policy driven economic model, and a fully decentralized nana, I'm notsure that we can expect you know, a huge sort of, you know, volatile explosionor showdown in that sense.  

Mike: Well, reconcile thisfor me. Oh, this form.  

So I, I see a, an inevitability that,that the two theories, monetary management theories were actual practices ofhuman intervention over interest rates and monetary printing is the FederalReserve.

And we have, have, that's been tried fora while. It was pegged to a metal of gold. It's now de pegged so they can justkind of print whatever. And so there's an incredible amount of politicalpressure. That is influenced in, into those decisions. And then there's thecompletely void of that. There's the mathematical mining and you know,mechanical distribution of, of money through mining and Bitcoin.

And that has no possible interventionfrom people. I mean, people can lose their Bitcoin and there there can be somelike human error that changes the actual currency and and circulation. Buteffectively we're testing these two theories against each other. And to me itseems like one has a huge value proposition over the other, the new one, themore advanced technology, the older one, the horse and buggy is not better thanthe car.

And in the same way I see the abilityfor human beings through political pressure to manipulate monetary circulationand interest rates does not seem to be in any way, shape, or form a positiveinfluence on the long-term prosperity of a civilization. . And therefore I seepeople recognizing that fact moving more and more of the percentage of theirportfolio to decentralize currencies.

And in so doing the global or I shouldcall it national, the Federal Reserve and the US government will feel areduction of power and an increased pressure to stop that flow. And they'll,they'll clamp down and one day they'll maybe be increased regulations oncompanies like Coinbase and Kraken Binance that will just make it so difficultthey, they back out.

Right. We've already kind of seen thiswith the staking, like, Kraken drops shaking in the US whole bunch of featuresaren't allowed in the us. Why not? Right. They're, they're kind of the, thepoliticians that are making these decisions are juggling to. Two balances,right? Two, two values. One is, hey, I wanna do what's best for the people.

I wanna be voted, I wanna be seen asbeing helpful and prosperous, like the same way Bill Clinton was towards theinternet. Like, let it rip first and then make regulation later. On the otherhand I wanna look like we're keeping people safe and in so doing, I can keepthe power in the hands of the centralized government for monetary policy.

And the latter seems like the, the, thetemptation that will eventually force the hand of the politicians. And in sodoing the Federal Reserve to make it effectively impossible or so inconvenientthat there's, there, there's like a declaration of war on, on, on Bitcoin anddecentralized currencies.

And that that's the point at which Iwould've liked to put a lot of thought into it before that happens. Whetherit's 2024 or 2029 or 2035, whatever it is. I personally, and I'm sure listenerswould like to have already computed, like, what are the ramifiCations andoutputs? Like these things are not, they're not rapidly changing, unpredictablethings.

They're, they're slow long term. If youthink about them sort of predictable, you're right with some imperfection oftiming. But, you know, there's some degree of thought you can put into seeingthe, the picture here, I'll put that to you guys. KA Miles.  

Miles: It's, I mean, it's,it's hard to answer the question because who knows. Right? And with everythingthat's coming, we can only speculate It's interesting because obviously in thecompany as well, we've actually enabled, we pay people in dollars and pounds.Euros, but we also have adopted the way to actually pay people in Bitcoin.

And you know, we, we've started payingourselves in Bitcoin and I've been one championing that and actually reallypushing that to actually utilize it. Admittedly, it's a bit painful every monthto actually pay my mortgage and everything to actually trade it because I don'tactually want to part ways with it.

But it, it is a, it has shown that overthe years people like myself and several other people in the company and otherpeople in the crypto space are now recognizing Bitcoin and various other coinsand their ones as a form of payment to, it enabled them to live their lives.And it was really interesting because I think one of the big things that waseye-opening for me was zPo.

Remember back in the day where you hadyour debit cards and you were able to sit there and buy stuff and that ease andthen to me it started to climb down a lot and I. I, I can see that in thefuture it's starting to open up again where the ease of actually utilize yourcrypto to actually use it as a payment to actually live your life.

And I do believe that there is a form ofclash coming because yes, the governments do want to actually, you know,incentivize you to go their way. But at the same time, we've also seen how lookat all these different policies to tax your crypto and everything in adifferent safe haven to then pull all that business there to get that wealththere, and then have more incentive schemes, the differences between the UK andthe us, for example, wonder, so you know what you guys profile and we will workwith you to come up with some regulation and then the us' protect our consumersand then open it up gently.

And there's, we're in this very weirdspace of where these diff different governments and everything are trying toget in with it, but also capitalize off it, but controlling it, but wary thatit could impact them. A lot if they manage it incorrectly, if that makes sense.And I do believe that this long-term, as you said, the long-term until it's,it's a long tail until we're gonna get to that point where, you know,governments are gonna start sort of being very against these layer one.

They want to incentivize us to go ontotheir own blockchains and stuff like that so they have more controls. Iactually think that's coming a lot quicker than a long tail. If you actuallylook at the last couple of months, let alone the last year to most couple ofmonths, last couple of weeks. And these very aggressive campaigns that they'redoing to try and lock things down.

There's something interesting you saidabout knocking down on staking. It's very interesting cause it is funny. You,you have money, you put it in a bank, and I remember back in the day when I wasa kid, I put money in the bank. I got paid money. You. I actually earned moneyjust giving it to the bank and now I barely get a couple of cents or if not adollar or two here and there.

And then suddenly staking came along andyou know, we were staking and getting really good returns where you couldactually live off it somewhat if you had enough of it. And that was interestingand incentivizing and that created a lot of auction boards that, and guess whatjust got shut down in the US A, a very incentivizing capability of the cryptospace.

So I think a lot has happened over thelast couple of weeks and I think a lot more will happen happen over the nextyear. And I think what will happen between now and then will really dictate theprojectory of how, how it's going to turn out of trying, where your question isangled at what that's gonna be.

So I can only speculate on the variablesthat we have here, but trying to project it is very hard because I think we'rein such a key point in the crypto space. What happens next will determine whatthe outcome will be.  

Mike: Yeah, I agree withthat. I mean,  

I think there's very few things thatpeople care about more than money.

If you were to rewind the clock a fewhundred years, you could say the same thing with religion. And generally, whenthe, the powers of these shifts, whether it's the Protestant reformation or youknow, whoever's controlling the church they tend to be massively influential tocivilization. And when monetary control changes you know, you have the rise ofChina, which is gonna definitely challenge the uss control over the globalmonetary policy or reserve as being the US dollar.

That also puts a, another pressure from anotherangle. But I think there is a, there, there could be enough passion and enoughconcern of the Bitcoin team to really put up a strong. Resistance. If therewere to be a, like clampdown, like an overt clampdown, Hey, the government, asthe US government, we have to protect our people and therefore we're blockinganyone from buying, selling, trading, Bitcoin.

It's like, it's not crazy to me thatthat happens. I mean, we're already kind of seeing it on the edges and it kindof depends how it happens as to the reaction, right? If it's like a soft, sortof subtle thing that gets covered up in the background, we start talking aboutaliens and then they, they introduce some, you know, policies over here.

Then maybe people kind of get the, the,the, the wool pulled over their eyes. But if it's like, if it's like, Hey,we're shutting it down tomorrow, then there's brights in the streets and likeI, I could see it, I could just see enough passion, enough people care enoughabout it. Whereas you're not gonna get that with religion today.

Like that's just not what people arethinking about or concerned about. That's not what's changing. So, I know. Cat,do you have any final thoughts on this?  

Cat: Yeah. Look I, I thinkin, in a world today where we're, we're set up to be combative it's difficultfor us to shake that frame of reference, right?

And I guess in that sense, I'm very mucha moderate, yeah, by no means a pacifist, but definitely a moderate. And what Imean by that is that if we're going to be itching for a pipe, for example thenwe'll get one, right? But if we have a look at sort of how this, the cryptospace has evolved, for example, right?

We often talk about crypto as havingthis sort of self sovereignty effect or a self sovereignty characteristic orfree or. Connected to these notions of freedom. And actually part of it isthat, yeah, the equal part to freedom is a certain amount of accountability,right? Without self-accountability, there is no freedom, right?

It, it just devolves, right? So, and Ithink this is also a bit of a reflection on how we choose to carry ourselves aspeople in the industry in terms of whether we want to meet opposition, add-on,or whether we can actually work together to find a way of ensuring thelong-term survival without the types of volatility that things actually claimsabout, right?

Mm-hmm. And for me, I think there isthat middle ground where if we're looking for a fight, then that conversation willbe up the table. But actually we're willing to meet. More importantly, we arewilling to learn about how we, what the agendas are on both sides. Then perhapswe may be able to climb a many grounds in terms of allowing both things toflourish.

A prime example of this might verywellbeing, perhaps a little bit, my ego, my part is that actually if we have alooked at regulations for exactly right, a lot of regulation is around yeah,under the banner of protecting the consumer. But we know, for example, withself-directed investors, peop there are buckets and trenches of investmentvehicles or different for different risk appetites, right?

And you can buy something straight fromyour retail bank of which are incredibly low risk, but incredibly low return.You can be different types of self-directed investors all through a vehicle orsomething, for example, where it is literally your capital at risk around. Andwhat is that middle ground in this sort of introduction though, of this weirdnew technology into the world around and, and how much of it is actuallymotivated by beer because of people not knowing and not understanding it,versus actually people actively wanting to see it quail.

Right. And I, I'm not so cynical yetthat I actually believe people want to see it. Well, and with that, there is anof responsibility for us to want to meet people. We want to meet thegovernment, we want to meet the regulators to enable a conversation to have.Right. And we can only do that if we don't rock up arm to the T wanting afight.


Mike: Yeah. Amen tothat.  

I think it would be amazing to somehowtransition through this period without bloodshed. I mean, god forbid you know,it, it feels, it's funny how, you know, you've lived through, we all have livedthrough some of these with the Covid you know, with FTF collapse svb, you know,a major reputable bank in, in Silicon Valley.

It's like, these things feel impossible.I mean, if I were to tell you that like the, the top tech bank in the world isgonna fail tomorrow, if I told you that on Tuesday, you'd be like, no. What areyou talking about? You know, how is that possible? But yet, here we are, andit, it, it is always a reminder to me that things that seem crazy and seem sofar off, they happen slowly, slowly, slowly, and then all at once, which is, ittends to be how, how things, how, how changes happen in, in civilization.

So, I appreciate you guys. I appreciateyou guys pondering these deep thoughts with me. I'm particularly interested in,in your thoughts on that, because I know you, miles in particular had worked inyou know, all sorts of defense government. It seemed like you really had a, abackground of having worked in in the, in the industry of the government itselfand curious what you thought saw from the inside out.

Miles: Yeah, so my, myinvolvement was very thinking outside the box. Yeah, basically a very paranoidindividual, let's put it that way. But really thinking outside the box and, youknow, when there are situations, I'm heavily dyslexic. I'm, I don't see that asa disability. It's, it, it's a superpower in my eyes.

I think about things in a verydifferent. Which I've really been able to utilize over the years to actuallylook at problems and instead of think of it in a traditional format, I reallylook around how different ways I can actually think outside the box andactually got these bits. So doing stuff with governments, tickler when therewere situations of how to mitigate risks and actually fix things to all the waythrough to resolve very complex situations.

And that's from a technical part to aphysical to all the way through game planning out from a situation to get thebest outcome. And it's very interesting that the different things that we'vespoken about, you hear these little macro things, but they all add up, right?And we can see where it's going.

We can see these risks coming along andeverything like that. And we we're working in such a way to try and reallybolster it. Industry. You kind of said to yourself like a big. Tech giant couldgo like that, you could say, but then if you achieve it, I, I mentioned earlierin the podcast that the actual cap of crypto in itself is probably the size ofone of those big bigs, you big tech giants and stuff like that.

And another comment you said was, youknow, there's passion behind it. People will come to the streets if it wasbanned. Yes. But we, the size of us in comparison to the world is, it's notreally comparable. We're, we're just a small scratch in effect. And I'm notknocking the crypto industry and I like the fact till over the last, inparticular, two to three years, the maturity of it.

Right. Regardless, Bitcoin. Yeah. That'sit. No, there's understanding of we need. Be in Washington. We need to be workingwith people and what Cat was saying, the middle ground of working closelytogether. Right. So then when I revert back to my previous bill, my backgroundof looking at these microbits and how constructively you can achieve your goal,I'm crediting the crypto space because they've now gone minutes.

These people are coming in. Actually,yeah, we, yay crypto stay. It's not gonna do, we're gonna have to carefullyplan here, here, here, here. And actually navigate our way, supportingourselves to get to that maturity, to enable bigger adoption. The adoption hasbeen fantastic. Right? And I, I was just in a meeting the other day and I wassitting there and I was looking over the table and I saw these people talkingabout crypto, trying to explain it, laughing.

Cause a couple years ago, if you said itagain, like I said earlier, if you're associated with crypto, you were doingsomething illegal and I now everyone's talking about it. So we are doingsomething right and. If we keep being, you know, not knocked up to the streetsas such, but working on our middle ground and actually working with them, notfighting, but having the ability to have strong opinions and have backers, thenwe can achieve our goal.

We are achieving our right, but we haveto also be very careful that if we push too hard, that the relationship willmorning. And that's where the pa the, the progress we've done so far will startto just fade away in effect. And as much as they're told that the regulatorsand various other people are coming in, we also should be, are gonna be carefulon how I say this.

Grateful that they're paying attentionand trying to help us. Mm-hmm. To enable that adoption. Because if you thinkabout it, when they started, the institutions were living from cuz they weregetting kind of ambu flap, green lights to come in on that. But we have to keepthat balance in place. And when they overstep and they're like, oh, wellactually we're gonna craze all this off.

We can like go, no, we, we've in thatmature state of the next sea to actually pull it back and actually enable thebalance. So again, to what I was saying earlier, what will happen in the nextsix to 12 months will really determine the trajectory of how this will end,will not end, but how this will grow, be the Greg words.

And it's very exciting of if you, again,take, take a step back and actually just look at the little strategic bits ofthe different industries. And if you look at the different bull and bearmarkets and what succeeded in what didn't and how that has grown into maturity.And then you take a step back and let you look at a traditional financial spaceover a much bigger time and see that it's basically the same thing, but sped upsignificantly and the maturity is grown.

Mike: Hmm. And so you seenext six to 12 months in particular, Because that's when regulation is due tocome out.  

Miles: I wouldn't, I wouldn'tpeg it on there. It's just the, the, the tempo of things have scaled upsignificantly. And obviously crypto spaces 12 years in the crypto years. Right.But I'm just interested in what happens within that space.

Not for a particular target, but likethe tempo for the last three to six months has been very, very interesting ofhow that scaled up. So seeing these next couple of quarters will really help usget a better understanding of all the secret conversations that I've obviouslybeen had in all the different countries and stuff like that, and how these arejust so happening to come out the same time.

And then also the photos withingovernments as well, because that does happen, right? How did all the cards getlaid on the table over this period and how everyone else reacts to enable thatadoption and what that adoption is going to be will be very interesting.  

Mike: Interesting.  

And where do you guys gather yourinformation?

Like what's your your information diet?Is it coming off of Twitter? Any particular blogs that you pay attention toconsistently or email lists or anything else that you want to throw outthere  

Cat: I think the one that Iactually it's not a very useful source of information but there's sort of, youknow, the gallows humor part of me spends a lot of time refreshing Coinfashions on Twitter.

A sort of anonymous sort of confession,so sort of crypto people. And there is a certain sort of gallows humor that'sassociated with her.  

Mike: That's great. Coinfashions. Anything else?  

Miles: Yeah, I just answeredfrom my side and like, mine comes from different sources, from certain callsfrom people from. Background of having conversations from the conversations,which were me eduCating to them magically then asking some information aroundlike how the views and it's interesting to listen to what the questions arebecause that's really dictating where their head is.

That makes sense. And then also kind ofjust the traditional, right, the, the, the traditional sort of marketplaces ofdata that you usually get, like Coin telegraph and all that sort of stuff,which is quite interesting cuz if you look at the trends between which ones aremore prioritized over and that will actually determine, like I said earlier,and a lot of the markets actually trended by a lot of FOMO retail.

By seeing what news, you can also get anidea of where the actual focus is. And then, yeah, it's a lot of conversations.I have a lot of conversations with a lot of the top leaders in the space thatare. In the, you know, in the trenches and the hearing an I-team for us in thecrypto space to enable the adoption and just kind of hearing those questionsand conversations that really sort of tied together to enable more of a ideawhere we think we're going.

Mike: And are you guysactive on Twitter or blogging or anywhere publicly that you wanted to throw outthere?  

Miles: I am not , no, I'm notat the moment. We, we've been very quiet at the moment. The reason for it iswe've been stealth in the last year and a half. Building out the technology.Yeah. Bashing our keyboards. But you, that will probably be changing in thenext couple of weeks.  

Mike: Nice.  

And MPCH and fraction are the two, the,this Venture studio and then the product you guys have great funding. Soundslike a pretty sizable team. 70 people. It's amazing. You've done all thatthrough being stealth, is that right?

Yes. Wow. Oh yes. Wow. How was raisingmoney being stealth over multiple rounds?

Miles: It was very, verygood. Yeah, and when I say that, I'll explain it. So no rereads between thelines on that one. We identified this big gap in the markets and say marketsbecause of this authentiCation, authorization and what it is fixing across allthese different industries.

And we went and we built up, proved itout, and we went to a couple of people and they, they were so excited. Theywere like, right, we'll, we'll, we'll fund you all completely you the earlydays. And it was like, alright, no, because we, this isn't our first radio. Thefact is money is money, yes. But it's all about the smart money and it's alsothe endorsement and the enable, the ability to be enabled further down.

So to put into perspective, we have justshy of 40 different investors. So we went from potentially just one that didthe full round and we actually took our time over a period of five months toachieve, slice it and achieve, get very strategic our big institutions all theway through into different industries.

So think market leaders to achieve, lookand achieve rip us apart, right? We don't want compliments. We want to becriticized to define the weaknesses so we can fix them. And every single one ofthem work through that. We sliced stocked around deliberately to have thosestrategic people, those people who are, are partners who have enabled us.

So while we've been in stealth, insteadof just being stealth and kind of working it out in a D room, we've utilizedthose investors who are market leaders and. It will all come out over the nextcouple of months while we start launching out to them and actually pulled fromthe data, the problems that they've had in the market, what they needresolving, not, you know, you have a problem, we'll fix that.

You know, what are your hopes and dreamsand wishes and would loves? And we've actually been working with themcarefully. So when we launch our publicly, it's resolving and enabling otherbusinesses in those different domains. That makes sense. So answering yourquestion, it was, it was actually humbling.

Very easy. And from that perspective,endorsing the five talk, the technology we built and building is what isneeded, which has been very good for us.

Mike: Cool. Cool. Well,congrats on all the progress guys. I hope you guys have a, a great launch andhope to deliver a lot of value in the, in the marketplace. I really enjoyed theconversation.

I loved going off the rails into thedeep end, so to speak, and I appreciate you guys contemplating those, thosedeeper and super important thoughts. I'll let you guys run and we'll have allthe links in the show notes. Cat Miles.

Miles: Really appreciate it.Thank you very much.  

Mike: All right.  

Cat: Thank you.  

Mike: Take care.