Transcript: Blockchain Based Economic Development For Corporate Real Estate Assets

$700 trillion of valued assets in the world, but there's only about $70 trillion worth of currency. So how do we create liquidity if there's only $70 trillion worth of currency and there's $700 trillion worth of valued assets? This is a really big problem and we need a different way of doing this. What the blockchain provides is an ability to do something really radical. Where literally you loan you money.

The blockchain holds you accountable to paying back a loan that you give yourself. And because you didn't borrow the money from anybody, you can actually do this without a credit check. You can do this without needing to fill out any paperwork or any kind of application. And you can actually borrow this money and then use it any way you want. The only thing is you have to pay it back or the blockchain will sell your asset if you don't honor the terms of your own loan.

In construction, you can just imagine how this could be used. Providing liquidity both for the asset once it's constructed, but also in the construction process using the value of the building as it's increasing. Because you didn't have to rent the money from somebody else, you can even do this in such a way you can do it interest free. Hello and welcome to the Constructor Podcast, the best way to build it. Episode number 65.

I'm your host, Brittany Campbell-Turner, and this podcast is dedicated to helping property owners have certainty in their decisions about their construction projects. We talk about fostering trusting relationships, helping you to understand how to lower risk, be under budget and on schedule, and most importantly, exceed your end user's desires. Last week we started our second blockchain series. I'm interested about blockchain technology and how it changes the behavior of people and how they interrelate with each other. Last week we spoke with Yukai Chow, gamification author and international keynote speaker, to kick off the blockchain series.

So if you haven't listened to that episode yet, check it out at constructor.com slash ep64. I hope you're as excited about this current series as I am. And I do have an announcement to make. I will be co-hosting an event with the Chicago Blockchain Center. If you're interested in learning how to impact the built environment with blockchain, this event is for you.

And I'm hosting it in Chicago. So who is this event for? It's for individual professionals in the AEC, architectural engineering and construction industry. But that includes utilities, logistics, facilities, owners and developers, and any ancillary services. So that includes you entrepreneurs, investors and startups.

So what are we going to discuss? We are going to have a panel that will discuss how blockchain can change, how data is managed, how events in the material supply chain is recorded. And lastly, the AEC side of project management. So you can find out more at constructor.com. Check it out.

In today's episode, I speak with CEO of Sweetbridge, Scott Nelson. And we'll be talking about how creating liquidity from assets can really change blockchain economics, where you can be your own lender. So with that, let's get into the interview. We are interviewing Scott Nelson, CEO of Sweetbridge, where he is endeavoring to provide liquidity to the supply chain of the world to unlock the value of the $700 trillion of assets, assets that are typically illiquid. At a high level, Sweetbridge is a blockchain based protocol stack that enables highly efficient supply chains and commerce without intermediaries.

We will unpack this as we go through the interview. But first, Scott, welcome to the constructor podcast. Thank you so much for having me. So for the audience, please share about your background in supply chain and how that dovetails into the reason why you developed Sweetbridge. I have a unique background in that I spent my entire career in the confluence of three things that don't normally go together.

And that's finance, supply chain and technology. And my last work experience, I built a company that did settlement for some of the largest corporations on earth in their supply chains related to the logistics transactions that they do. And in that process, I couldn't believe how crazy the world worked. What I found is that there was a ton of distrust between the parties who had agreed to be partners with one another. And that just didn't make any sense to me.

And when I saw why they distrusted one another, it was really because they couldn't decide the difference between a lie and a mistake and the truth. And there were just a lot of mistakes. And the mistakes we get kind of categorized as potentially somebody trying to take advantage of somebody else, when in reality, they were just mistakes. That really is what dawned on me in the blockchain was the opportunity to fix this problem by making it much easier to tell the difference between when somebody's lying to you and when something is just a mistake.

Well, it seems like we have a couple of similarities that we identify with just given the historical approach to construction. I think this problem exists in construction in space. I think there's all sorts of things that happen by accident or because of competence or other things and people can't tell the difference between somebody actually trying to get them or somebody that is just a victim of an error from somebody else's point of view or whether it's just incompetence. And it's very hard to tell the difference between these things.

Absolutely. And I think there's the nature of how the contracts are set up as well, and who is reporting to who and when and why. And I think there's incentive to do one thing a different way, whether it's lying or holding back information or it's too many things going on where you have to focus on something else where, like you said, it's a mistake. I think there are just so many different variables and agreed blockchain can certainly help with that, especially the immutable ledger. We have pretty much that complexity in supply chain alone here in construction when I have to ask when are the doors coming, frames or whatever.

Now that you've gotten to this place of developing StreetBridge, you've acquired a lot of partners, team members to support you in this endeavor. What does that look like for you as far as the team? Well, we are an unusual project in our size and scope and team. We're very fortunate to have attracted some very qualified people to the project and they fall into different disciplines. We have a great technical team, of course, which you need in the blockchain space, it's a technical environment where we have people that have actually worked in the space for three to four years now.

And that's like grandfathers in this space. You don't have people that have that kind of experience in this space. We've got a number of people that come from a very diverse set of supply chain backgrounds. As you point out, construction in many ways is like almost the ultimate supply chain. It is this incredible high rise building or shopping center complex or something that comes together from all of these sources that work together to provide things to other people, who provide things to other people, who provide things to other people, who finally show up in this building and have hopefully everybody has what they need when the right time and it all shows up and it all magically goes together, which you and I both know doesn't work.

That's the way it's supposed to work. But each one of these buildings is a custom endeavor and is a custom project, which is kind of the most complex supply chain problem there is out there. So we've got people that have done these things for everything from pharmaceutical to high tech to actually construction supply chain. We also have people that have spent their time in legal. So we've got lawyers that work for the project and have multiple lawyers actually around the world.

We've got people that are from banking backgrounds. Of course, construction requires a ton of finance. We have people that have started banks on the project, people that have run banking divisions on the project, and people who have worked as funds traders and quants, economists who've worked for central banks. So just really been fortunate to develop a really diverse group of people on our team. And it's a really large team as well.

So we've got great backgrounds in finance, law, supply chain, technology, government policy, central banking, banking and finance industries, funds management, pretty diverse group of people. You couldn't ask for anything better at this point just because there's a lot of potential hurdles definitely with regulations, definitely with this mindset and building awareness and fear of legalities, especially with lack of precedence in this particular topic. So I think you couldn't ask for anything better. It's great to have such a robust team. To that point, our team is trying to educate governments and regulators around the world to what can be done in this space that's good and positive and how it can be done in ways that are regulatorily compliant and don't have to be seen as opening the door to black hats or in fact provide a mechanism to ensure that those people can play.

It's much different than what the popular press would have you believe. The blockchain and cryptocurrencies can be used, if designed properly, to create environments that are extraordinarily safe, very easy to police, extremely transparent and highly compliant. Yeah, I think a lot of us when we think about blockchain, we liken it to Bitcoin and then we think about the Silk Road scenario. And it's totally not about that. I'm so glad you said that.

There are some challenges that we do face even with blockchain. I'd like to just kind of really address those really quick, particularly as it relates to supply chain. And I found these in your white paper. There's a lack of liquidity in supply chain. There's resource underutilization.

There's suboptimal supply chain operations and accelerating the pace and scale of change by creating more flexible and adaptive supply chains. These are really huge problems and many people don't recognize them, but I can make them kind of relate to your industry. There are probably all sorts of people all over the world who recognize opportunities to do things in creating or owning or utilizing real estate in better ways. But in order to do that, you have to have a credit history, you've got to have some You have to be able to convince banks and other people to provide you with money in that process.

If you're building buildings, you have to get construction loans, you have to be able to convince suppliers to work for you, provide the raw materials and subcontractors. You have to figure out how they're going to get paid. They're always worried about getting paid. And all of these are examples of liquidity problems. Then you have resources that are used to say construction, heavy equipment and other things.

70% of the time, heavy construction equipment is unused. We just said bark somewhere. And this is true of all assets and supply chains around the world. An increasing percentage of them are underutilized. Less than 75% are utilized on any given day.

And this is of all the ships, planes, boats, trucks, bulldozers, warehouse, everything out there that's used in supply chains. On any given day, 25% of them are idle. And just 50 years ago, that number was only 10%. So it's getting worse. The last two points that you raised really are kind of two sides of the same coin.

Because we're seeing the pace and scale of change increase, what you're seeing is that it's becoming more and more and more complex, with more and more choices of how to do things available to any organization or person out in the world. And this is making it harder and harder for people to keep supply chains optimal in their performance because the reality around them is changing all the time. And nobody can stay up to speed with all the opportunities, products, all the new services, all the new things that they could be considering doing.

And so there's an increasing level of suboptimization in the supply chains of the world. And this is probably equal to at least double digits in global GDP terms of inefficiency. That's a very meaningful thing. We can do something about that. You're talking about being able to grow the economy by 10, 15 percentage points.

That is absolutely huge. That would affect most of the people on Earth. That is huge. The fact that we are not aware, the focus is not around this, it's not about the waste. But I think if you focus on eliminating that, then what happens is there's a shift to really trying to understand what's taking place in an accurate way and having that transparency about the details to unpack the layers of how to address these challenges.

You guys, you have five layers. The Sweet Bridge Protocol stack. And I wanted to just kind of work through those with you. Let's talk about them. So the answer to the liquidity problem is to provide liquidity.

But unfortunately, that's very difficult to do. We have, as you mentioned at the top of the show, $700 trillion of valued assets in the world, but there's only about $70 trillion worth of currency. So how do we create liquidity if there's only $70 trillion worth of currency and there's $700 trillion worth of valued assets? This is a really big problem and we need a different way of doing this. What the blockchain provides is an ability to do something really radical, something that will sound like it's almost a fantasy zone kind of thing, but it's actually just going back to what was done for 5,500 years, but most of us never learned about in school.

And that's the ability to create a currency that is based upon the asset value. Believe it or not, this was started in Egypt, 3,500 years BC. And Pharaoh would have a set of priests who would have these special signet rings that were known as Pharaoh's rings. And they would write on clay tablets, inventory that people would bring into government-run warehouses that would be kind of supported by Pharaoh. The priests, after writing the amount of grain or wine or oil that you put in the warehouse, would write out the quantities on these clay tablets and seal it with a ring.

You would then be able to take that clay tablet and exchange it in the marketplace for maybe you had oil and you wanted to buy some wine for your daughter's wedding. So you would go to the marketplace, find the wine vendor, decide how much oil you needed to give them, go to the priest, break this clay tablet in half. Priests would create two new ones, one with the amount that you were retaining and one with the amount you were giving the wine merchant, and do the same with the wine merchant's wine for you.

And then you could go to the warehouse and withdraw the wine for the wedding. This became more sophisticated through time until in the 1850s, for example, just in the United States, there were over 4,000 banknotes of different currencies that were in use in white circulation in the United States. And every bank would produce their own banknote. You'd go in with your farm or you'd pledge for your produce from the next harvest or something and the bank would take that as collateral and then give you a banknote.

Well, we can do this on the blockchain now in a way where we can create currencies that are pegged to fiat currency like a dollar or something like that and actually mint this off of you locking this asset up. We can do this in a way where literally you loan you money. I know that sounds weird. Where the blockchain holds you accountable to paying back a loan that you give yourself. And because you didn't borrow the money from anybody, you can actually do this without a credit check.

You can do this without needing to fill out any paperwork or any kind of application. And you can actually borrow this money and then use it any way you want. The only thing is you have to pay it back or the blockchain will sell your asset if you don't honor the terms of your own loan. Well, in construction, you can just imagine how this could be used. One of the great use cases is in real estate and providing liquidity both for the asset once it's constructed, but also in the construction process to provide liquidity in that process using the value of the building as it's increasing to basically do this.

Now, here's the really wild thing. Because you didn't have to rent the money from somebody else, you can even do this in such a way that you can do it interest free. Just imagine what that's going to do. Now the next layer of our protocol stack is a settlement layer. I'll try to relate this to construction as well because it could be very significant there.

What this allows you to do is to get rid of all the counterparty risk in trade and commerce. And in construction, what this looks like is say a subcontractor performing services and then not getting paid for it. How do I know if I actually perform those services that I'll actually get paid for it? And that the contractor actually has the money and the bank is actually giving the money to the contractor to actually pay me? Well, the settlement layer, the settlement bus that we have, takes care of this problem by making it so that if the bank gives the contractor the money but the contractor doesn't pass the money on to the subcontractors, the settlement bus actually reroutes the money from going to the contractor to the subcontractor or the subcontractor's subcontractor or the suppliers to make sure that the people are actually paid and don't require any of the

intermediary, even if they default, even if they don't do their job, protects the rest of the party. So what I'm thinking as well that you didn't mention is say, for instance, the contractor has a piece of equipment that they would like to leverage in order to rent maybe another piece of equipment, they would be able to write a SMITE contract with themselves in order to do that. Exactly right. And we're going to get to that point specifically in four. The next layer is an accounting layer, an enterprise accounting system.

And what this does is this makes sure nobody lies because both parties on the buy and the sell of each transaction have to agree on the business purpose of the transaction. And what that does is it forces the accounting on both parties, between parties to stay in sync. And what this does is this substantially reduces the risk to lending inside the supply chain because you can actually lend based on the value of the orders and the invoices because you know people haven't actually manufactured. And you can do this without factoring and you can do this without charging an interest rate.

Instead of having that 60 day payment term, you can actually get paid immediately, but the other party doesn't have to actually come up with money for 60 days still. And that's all enabled by this accounting process. What that does is once you have liquidity, you have a settlement bus that can reroute payments around bad actors, and you have an accounting system that prevents anybody from lying about the state of the financial transaction, then what the implications of that are is resources like equipment that buy themselves and you can actually then just rent them and share them instead of actually having to own them yourself.

In fact, here in Arizona, we're going to have a Tesla by itself here as soon as we can get the government sign off for it using our protocol as an example of doing this. But you could do this with bulldozers, you could do this with dub trucks, you could do this with all sorts of things that could be assets that were kind of owned by the economy, the community, if you will, and a variety of people could use them when they need them. It's kind of like Uber without the driver and you can use the car when you need it.

Exactly. Yeah. So this could work for all sorts of things. I mean, this could work for everything from factories down to small devices. Lastly, there's this ability, since all of the transactions are accounted for in a way that people can't lie, it means that you can actually now engage labor in ways that are based on outcome of contracts.

A lot of times, outcome-based contracting is very tough to do in the world today because if you have an outcome that is much better than somebody thought you could produce, then they owe you a bunch of money and they don't want to pay you. There's this dispute you get into in doing this. Well, the blockchain can enable outcome-based contracting, which is based on very simple financial results. And this allows you to have a much more even participation in the benefit of creating a building, for example, where, let's say, a bunch of contractors got together and suppliers built a building where everybody contributed their labor and efforts to the construction.

And actually, when the building was sold, everybody got a portion of the sales proceed based on the total value that they contributed, whether that was value that they contributed in labor or value they contributed in material. You could actually do things like this and everybody could trust that you would get their fair share because it's impossible for anybody to basically cook the books. And this allows lots of industries to function much like music or moviemaking does, but without the problems that the music and moviemaking business have of where you can actually get, say, some modest payment, but also participate in a percentage of the proceeds of the sales revenue from the movie or whatever.

So it's like royalties at the end of the day. Yeah. And then what that does is that means that you get to work for more than just your wage, right? Instead of creating a world that seats the bottom, how do I get the lowest bid? How do I get the lowest price?

You can talk about contracting in situations where how do I get a deal where my contribution is going to be valued the greatest? And this can lead to a very, very different kind of environment where you actually make potentially, you share in the same kind of benefits that money historically has shared in, where it has gotten a disproportionate amount of the value. You know, if you think about building a commercial building, the people who fund the building will typically make far more money per value of contribution they made than say maybe the general contractor or some of the major subcontractors or suppliers.

Designers do. This is a way of creating a much fairer economic environment, and that can enable types of projects that wouldn't otherwise be able to be financed or funded because maybe the money people wouldn't be willing to do it. I mean, we're talking to a small town in Oregon that is kind of needing to do some revitalization in their city about how they could use this, for example, as a way of getting their community, which has a lot of construction skills in it, to help revitalize a downtown area, but in a way that would actually share the benefits that would come from redoing it when they can't get developers or other people from outside the town.

Communities itself is really interested in making that happen. Wow, I think that's such an interesting approach. I spoke with a gamification expert, Yukai Chow. He talks about intrinsic motivation based upon if you know you're going to get some long-term benefit out of what you're contributing, you're going to put more effort into it. You're going to be more passionate about what you're doing.

If you were simply just hired straight on for the job to get the reward of just payment, you're not going to want to take as much action or the quality into it. The end of day, it's recognition for what you've put in if you're going to get that return on investment once you've built into this space. I think that's an interesting model that you just mentioned there, and I can certainly see how that relates. The funny thing is the last two on our protocol stack are almost side effects of the first three.

It's just like, okay, once you have this, this becomes easy to do, so why not do that? That's so true. When things become easy to see how the path goes down, where research sharing and optimization are like, okay, well, now we can just add these things onto accuracy of information and making sure that your records are fine. I wanted to transition here a little bit and talk about contracts. When I've heard you explain how you see blockchain as the union of illegal agreement, value transfer, and updating of official records, I thought that was a great explanation there because processes are expensive.

They take a lot of time, especially here in supply chain and construction, and where there are errors traditionally, which we see a lot, this is really where blockchain is a good application. I wanted to get from you what are some of the legal obstacles that you are recognizing and working to hurdle with the utilization of blockchain? Yes. Well, thank you. Thanks for getting that because the fact that the same system handles legal value and official record really is an amazing reduction of effort.

Because today, those all three are separate. The biggest legal obstacles come from, I think, people in regulatory environments. They're trying to figure out how to deal with this stuff. It's because their assumptions about it either come from a set of biases that we condition by some initial negative media related to blockchain or cryptocurrencies, or more likely finding them not actually recognizing what is changeable and seeing a lot of really bad examples and some really poorly thought through ideas from enthusiastic, but maybe not exactly wise initial actors in the space.

This is a space that has no shortage of hype, as you know. Indeed. Unfortunately, the hype hides the real. What's shocking to me is in many ways, the real is more substantive than the hype. But because the hypesters are so shallow, they can't really communicate the real things.

They just communicate these really lightweight, terribly shallow ideas, which really aren't going to be true in the long run. The result is you get this incredibly hyped up market that really doesn't know what they're doing. But most regulatory bodies are there to solve a problem. We didn't just say, oh, let's decide to put in this regulation about having car seat because nobody dies in a car as a child. It's a reaction to can't drink and drive just because we think that's a good idea.

We're saying it because there's been a lot of people die because of people being drunk on the roads. And so that's something that's important. And a lot of these financial regulations and other kinds of legal obstacles that exist for the blockchain grew up as positive reactions to bad things that people did. And so what most regulators don't understand is that the actual ability to conduct some of the bad activity now and now be addressed in a different way and in an alternative fashion. And as a result, we need to rethink what we do.

And a simple example is the case of value legal and official record all being the same, and literally the same record, the same data structure, the same transaction. What this means is that you don't need people to audit the fact that these things are the same. You only need to make sure that they model reality. Yet in the real world, there's an awful lot of activity that is done, say, in banking or in other kinds of industries to make sure that what the legal document says equals what the financial transaction has happened and what the official record states.

And there's no place where this is more true than real estate. And so much of the stuff that we've built up around real estate to manage things like title and who owns the property and mortgages and all these other kinds of things, and all of the weight and mass related to this, we recently refinanced our house a year or two ago. I mean, we literally had a stack of paper that was two or three inches thick that we had to go through and sign. All of that has happened in all of that legal stuff, I was lawyers involved.

All that is a reaction to things that have happened that were bad. And people came up with, well, the solution to that is we're going to put this in the contract, or we're going to create this regulatory body to check this, or we'll create this other thing over here. And we now have an opportunity to rethink a lot of those things because they literally aren't necessary. The thing that they are protecting you from isn't possible if done properly with the blockchain. And that's the biggest obstacle we face is people actually getting that.

I'm so glad that you brought up the real estate transaction. We closed on our condo a little over a year now. And unlike you said, two, three inches of a stack when you were doing your refinancing. My hand cramped. Exactly.

And to imagine that all of that can be consolidated so that you are verifying the information that is being shared and you can trust it. Honestly, at the end of the day, it's less if all of the parties agree to utilize a blockchain to transact the information and the funds, which is sort of a pipe dream there. But at this point, I know we are transacting real estate in the real today. Well, it will happen. It will happen because there's just so much friction and cost.

I remember the closing cost in their house purchase was, you know, a couple thousand dollars for refinance. What's the purpose of that money? All that is going to go away here in the near future. Agreed. And you know what, as I was researching your talks on YouTube, particularly one thing that kept popping up was the Ricardian contract.

And I'd never heard of that before, but I said, oh, wow, there has been a connection to like a legal document and cryptocurrency. If you could share a little bit about that, that would be really helpful to provide some context as to like what the precedence has been in the past. You know, there's this term out there called smart contracts that people talk about on blockchains, which are neither smart or contracts. They're just programs. And because they're not contracts, if you're going to do something in the real world, you do need to connect them with real legal work.

And the first person that proposed how to do this, their name was immortalized with the idea of how to do this. And that's why we call it a Ricardian contract. And this was actually proposed pre-blockchain. And it's the idea that you have part of the contract, which is a legal document that is used by lawyers in courts to interpret it. And then you have a part of a contract that has some of the aspects of the contract represented by a computer system or code that enforces certain conditions or clauses.

And so that's kind of the best of both worlds. And you have to kind of exist in this world of real assets with real documents that real courts can actually work with, you know, because they're not going to know how to read a program that somebody wrote in a smart contract. And so projects like Materium and others that are taking all of the world's contracts and creating Ricardian versions of them that will allow you to kind of do this stuff. And Materium is an alliance partner with us.

This is their whole thing, is building these Ricardian contracts to help automate the legal work and legal frameworks in ways that will work with blockchain. Very interesting. No, I didn't know that you guys had a partner that's working on this with you. That's really helpful to understand sort of where it's been since it's not new and this was happening before the idea of smart contracts with blockchain. Yeah.

Yeah. It predates that. So now that we've discussed contracts, let's switch over to coins. I want to understand what is Bridgecoin? What is Sweetcoin?

How do they interrelate? We use a two coin system because most economists agree that to have a stable economy, you really need two different forms of currency. In fact, almost all economies in the world had two forms of currency until 1880s or so when the colonial powers decided to outlaw various other currencies because it was undermining their ability to tax people and create a single currency, which is where the US got the gold standard for a while for its currency. And that's when the US dollar really rose to preeminence.

Prior to that, there were always two currencies. You had one currency that was used as kind of investment or long-term value appreciations to be gold, silver, or precious stones. And you had another currency that was used for settling payment in marketplaces like that clay tablet we talked about in Egypt or script that was used in European markets for those banknotes. And what you need to have to be able to create a quiddity and the ability to trade everything is you want a stable token, a stable coin that doesn't fluctuate in price because nobody wants to use Bitcoin, for example, to buy a pizza only to find out three years later that pizza cost you $25 million in Bitcoin terms.

Currencies that appreciate in value like Bitcoin or other cryptocurrencies actually make very poor currencies to conduct trade with. And so, Bridgecoin is available pegged to the currency of our user's choice. So you can get Bridgecoin USD, Bridgecoin Pound, Bridgecoin Euro, whatever currency you want. It is designed to be used for payment of goods and services. And it's pegged to the local currency for two reasons.

One is so that you won't have a reason to hoard it because it's not going to appreciate in value. So you might as well spend it. And the second reason is to make it so the local governments don't worry about it undermining the central bank's authority to be able to control the monetary policy of the country, which is a real problem that a lot of people have thought about. Then we have Sweetcoin. Sweetcoin is a discount token.

It's a very novel idea. It's the first real discount token of its kind that has ever been created. It has a really unique characteristic. Actually, both of them have kind of unique characteristics. Bridgecoin, which is for the buying and selling of goods and services, and stable, is 100% asset backed.

So every Bridgecoin is backed by real world assets that are worth more than the value of the Bridgecoin itself. Sweetcoin is a discount token that offers users monthly discounts on any fee that Sweetbridge has in its entire ecosystem, which will ultimately be lots of different kinds of things that you'll be able to buy and sell in the Sweetbridge ecosystem. And Sweetcoin offers discounts on it. As a result of the fact that it offers a discount, and that discount is a specific number. For example, it starts at a value between six and seven cents a month for Sweetcoin because it has a specific value.

It has intrinsic value, meaning I know how much the Sweetcoin has worked, not because, hey, I look on an exchange and it says it's worth this. I know how much of a discount it will give me. And as our economy grows, as the ecosystem grows, then any growth in the economy increases the discount power of the Sweetcoin. As the economy grows, Sweetbridge economy, the ability to get discounts increases in a ratio is such that every time the total number of fees in the Sweetbridge economy double, the amount of discount that a Sweetcoin provides increases by 75%.

This creates an environment where customers are incentivized to be customers for life in the Sweetbridge environment because they get things at a discount and they can get things at so much of a discount, they get them for free. So things like interest-free loans, who wouldn't like to have a mortgage on their house and have no interest payments on? But that does, okay? Transaction fees. So we'll have a payment mechanism that we'll be releasing with our product.

It allows you to make payments for goods and services. That is analogous to credit cards. Well, instead of the merchant having to pay 2%, it can be free. Again, if you have these tokens to make it free. And we are talking to all sorts of types of businesses, everything from coffee shops to big, huge transportation conglomerates around the world about supporting discounts with Sweetcoin for people that make payments in Bridgepoint.

That's what Sweetcoin is all about. Thank you for giving the explanation. And to be honest, I think I had to hear this about two, three times before I could get my head wrapped around it. One thing that really gave me a good sense, I think, of the Sweetcoin perspective is when I heard you discuss about, say, frequent flyer miles. Yeah.

Well, when you get frequent flyer miles today, some flights for free, which is great. Sweetcoin is a similar mechanism. But if you used it with an airline, and we actually have had discussions with an airline about using it, instead of like, I've flown on the airline so many times, therefore I can get a seat, you basically get a seat because you get so much discount power from the coin that you own that you basically get to buy seats at lower price or for free. And guess what airline you fly?

What you're talking about is a mechanism of customer-based financing. Discount tokens are a way of getting customers to buy tokens. And in exchange, you give them discounts on future services. This does two things. It means that you can get money to help fund things like buying airplanes, let's say, or building a building or whatever.

And you get your future customers to help fund it, and the customers get a discount on it. You could even extend this to governments where, let's say, instead of a bond, the government would issue a discount token that would allow taxpayers to buy it instead of buying a bond, and they would get a discount on their taxes. Imagine how popular that would be. You could do something like, say, develop a piece of real estate, build a building on it, buy enough discount tokens so the building had no property taxes, and sell the building to potential buyers with the tokens that basically eliminate property tax.

And the government would have gotten a whole bunch of money that they wouldn't have had to pay interest on in the form of bond payments to investors. And it's now their own taxpayers are giving them money, not some Wall Street investment company. That's such an interesting model. These are different ways of using the sweet coin in different structures that all kind of tie to same concept, which is giving people discounts. Or just think of Groupon where you have to get a bunch of people together to buy a service.

But what about a Groupon where instead of the company having to agree to get a bunch of people together to get a discount, you basically give that company some money to help that company grow, help it improve its service, help it invest in maybe a new store or some new equipment or something. And in exchange, the customers that help fund that, you give them discounts on services, not just for one time event, but for a recurring event. That could even be utilities, for instance. My mind is going right now.

I'm just thinking about a developer. Oh, yeah. And think about solar panels, got all sorts of things that we've been looking at and talking with people about where we could use this to help create clean energy systems that are locally owned and operated by a community. We have maybe a mixture of natural gas turbines with a local distribution hub and solar panels that are kind of owned by the community sitting on everybody's house. But everybody in the community helps make that happen and they can buy a discount token that basically gets them the power at a lower cost into the future.

I just spoke with Siemens and they spoke about the micrograde utilization and how energy sharing can take place. I can certainly see how that could integrate into a developer's lease, for instance. That's going to be big, big, big. I mean, you know, I think it's part of the story of a home developer is building a whole new community where part of the deal is, oh, by the way, your energy costs here three cents a kilo. Thanks for getting my wheels turning even more.

This is so fun. Okay. So now that we've sort of gone through most of my notes, I want to give people the opportunity to find out more about Sweetbridge. If anyone is willing to purchase coins, they have to register. And you guys are now open for public registration as of December.

So it's been just a short time, but I'm sure lots of activities taking place. We're kind of unlike a lot of these other projects. We're not doing the big ICO with splash on the screen. Everybody throws money at it. We're doing a grip release and entirely KYC AML.

And we are selling only to customers. Absolutely no investors allowed, only customers. We only want customers for life. And we want people that want to get interest-free loans. We want people that want to be able to get discounts on the things that we're going to offer discounts on, such as funding and growing your business or other products that we already have available.

We can use our Fund and Grow product today. We've got supply chain liquidity systems for people that want to have liquidity in their supply chains. We can do prototypes today with people, sign them up. We've got those things today. We are signing up people, making sure that they are good from a KYC, which is Know Your Customer and AML, anti-money laundering.

We're trying to do this in a government-controlled, responsible way. It doesn't allow any bad actors into our system. Full recourse, full indemnification for people in our platform to protect them and to make sure that people can only use the system. They can't do it to sell drugs. They can't use it to do terrorist activities or any of those bad things.

And that's why we have this process. And we're accepting signups now. And in the near future here, we'll be actually releasing Sweetcoin and Bridgecoin to people who get registered and go through that process and agree to actually use the coin for the purpose it's created for instead of just sitting on it trying to use it to make as an investment, which wouldn't be as nearly as good an idea as actually using it to get discounts. Because if you just put it in your pocket and store it, it's not going to give you the kind of benefit that if you actually use it to get discounts, then you get the benefit of the discount, which is going to basically equal as much or more than what you're going to pay for the coin over the course of the next couple of years.

So it's a very different model. And it's not a heroin addict, cryptomania model in a way that really delivers true value and where we release our coin only as we reach economic milestones where we can actually demonstrate value to customers. No, that's excellent. I like the approach that you guys are taking and I hope that those who are listening to this episode, you check out SweetBridge and see if it's something that is for you. I see this as something big.

There's lots of critical people, lots of people in this robust team that Scott has. And I think that going to go somewhere stable, we should definitely just be watching and seeing if there's areas where we can get involved. I said from your mouth to God's ears. Oh man. So Scott, no, this has really been a pleasure.

What is the best way to contact you and or learn more about SweetBridge? Well, our website is the best way to contact us. And then, of course, to learn more, we've got, man, there's a ton of videos out there that you can download and watch about all sorts of different pieces. There's four different white papers right now. There'll be a couple more here being released in the next 30 days that are around other specific topics that people can learn more about.

And then we have an active social media channels, Telegram or our Rocket Shack channel are two really great ways to kind of engage us and our community. We are, and I didn't mention this, we are entirely, we're deeply, deeply, deeply non-profit. We are not against profit, but we are not run for the profit of anybody. There is no one that owns us. We are entirely community owned, entirely community led.

We're kind of like a big mutual company or a big credit union. And all of our protocols are open source, are being developed actually by an extended community, not just by people from SweetBridge, but by people that are from around the world. So I will put the social media platforms website on the show notes. And with that, thanks for joining the Constructor podcast today. Thank you so much.

It's been a pleasure. Thanks for listening to this interview with Scott Nelson. Find out more about Scott and SweetBridge at Constructor.com slash EP65. If you've learned something valuable in this episode, share it with your friends and colleagues. You can also let me know if you've enjoyed a discussion by connecting with me on Twitter at Brittany underscore CT, or find me on LinkedIn, or you can just email me too at Brittany at Constructor.com.

That's B-R-I-T-T-A-N-I-E at ConstructRR.com. Next week, we'll be speaking with Dan Robles, founder at the Integrated Engineering Blockchain Consortium. He talks about the engineering profession from a traditional, segmented, hierarchical structure to a network structure like Common Database called the Engineering Body of Knowledge. Dan's presentations caused him to be the 2017 ASCE Innovation Contest winner in the category of Best Value IoT. If you haven't already subscribed to the podcast, you can do so at iTunes, Stitcher, Google Play, TuneIn, and iHeartRadio.

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