Joshua Scigala: Bringing Together Digital Gold and Physical Gold

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If you could hack your own pacemaker, certainly, there is little you cannot achieve in life. This sentence near summarizes today’s Blockleader, Joshua Scigala. Let’s hear his story about crossing paths with blockchain after reading Satoshi’s white paper, and helping investors jump in between two great options: digital gold (bitcoin) and physical gold.

A brief flashback on the history of money would bring up the earliest known form of exchange: trade by barter. It was upon this classic principle that Joshua, in 2001 founded a modern business, the world’s first online clothes swapping marketplace. Of course, the same challenges faced by the traditional trade by barter soon engulfed his business, namely the problems of availability and desirability. “I have always had an interest in alternative economies, building the world’s first online clothes swapping market place in 2001. I soon realised that swapping, while fun and sounds great, it’s really very inefficient. If I love something you have and I don’t have anything you want then the deal falls through. So, I tried to figure out a token that could be used in the system so you could swap a token for the thing you really love and that person could use that token within the entire market place instead of having to swap with you.  But this is just like the money I’m trying to skirt around by swapping. Except now, the central bank is us as a company and how are we meant to know how much to supply? Let’s not even get into the legalities of issuing private currency. I thought that maybe there were other solutions and read up on what the cypherpunks were talking about. In 2005, I gave up looking for a solution and started on other projects.”

That wasn’t the end, just the close of a chapter. Five years later, Joshua’s search for a way out of the gloomy situation, led him to Satoshi’s light. “I Still had a massive interest in alternative digital money and in late 2010, I came across Satoshi Nakamoto’s Bitcoin white paper and fell in love. Satoshi did it! She solved the double spend problem. She solved the issuance problem and the shared ledger consensus problem calling the whole system Bitcoin.” I couldn’t help but notice that Joshua refers to Satoshi as a She.

Following the events of September 11, 2001, Joshua’s worldview dramatically pivoted, playing a huge role in shaping his current interests. “Like most people September 11th, 2001, really impacted me. I was in my early 20’s at the time and knew that if you wanted to solve a crime a good way to go is to follow the money. So that’s what I did, I started to follow the money behind that event. I fell down a rabbit hole of banking history, what money is, why gold is interesting and how the control of money has shaped the world. I was fascinated with hyperinflation and how they come to pass, fascinated by empires all failing because of bad money creation, debasement and going away from gold-backed currencies to pure paper ones.”

Even seasoned professionals have a hard time understanding what the heck blockchain is, but everyone does understand that the term has been receiving close attention from all around the world, whether well deserved or just hype. For everyone’s benefit, I asked Joshua to describe what blockchain is, while assuming he was talking to a child. He goes on to give a relatable analogy using a family’s shopping list, brilliantly touching on blockchain concepts like consensus algorithms and block rewards.

“I’ll say the child I’m explaining it to is around 5. Imagine you have a shared shopping list where your mum, your dad, and your two sisters also have a copy of the exact same shopping list. The catch is that if you go shopping you can only buy items that are on everyone’s list. You can all add to the list, but only if you all get together around the kitchen table and all add it to your lists at the same time. If you want to add something yummy like ice cream to the list, you have to call everyone around the kitchen table and tell them that you are adding ice cream, then everyone adds ice cream to their list so it can be purchased.” This is similar to a blockchain consensus algorithm.

“But let’s say your mum thinks ice cream is bad for you, so you sneak it onto your list while you are hiding in your bedroom? Well, next time you bring your list to the kitchen table meeting, everyone would know that your list is wrong because no one else has ice cream on their list. As you can imagine, asking everyone to come to the kitchen every time you want to add something to the list is annoying and hard to do. But this is a magical list. Every time you manage to get the whole family together and all add something to the magical list, the list would have a lucky draw and give you or one of your family members a free voucher that you could spend at the supermarket on anything you want next time you go shopping. This list is like a blockchain and the free vouchers you get to spend on anything you like are bitcoins.” This is referring to block rewards.

“The problem is that these vouchers go up and down in value like crazy. When you buy something with the vouchers, The shopkeeper needs to to be able to rebuy what she sold you but that’s hard if the voucher lost 10% within 1 hour selling you something. The shops accepting them can use Vaultoro.com (our company) to instantly convert the vouchers (bitcoin) into gold so that value is locked into something relatively stable.”

“Basically, A blockchain is a decentralised ledger that keeps track of what everyone has and if you help secure the ledger by running a computer program, you win the ledger’s native currency bitcoin. Bitcoin is super volatile so traders and merchants like to park profits in allocated, and insured money (physical Gold).”

By now, it must be obvious that digital money which people can control themselves is of huge interest to Joshua. “Money for me is the killer app for blockchain. But that is not stopping people trying to find other good use cases that adversaries want to shut down. I would say the top interesting use cases for blockchains are In-game items becoming a bearer based instrument, rather than something that the big game studios centrally controls. Another industry is robotics because robots can’t get bank accounts. Robots using digital currencies to make them more efficient by having micro economies for motions, sensors, electricity usage and much more. By using the natural laws of supply & demand, Robots could budget better for resources. Another industry worth mentioning would be cloud computing, getting paid to rent out your spare hard drive space instead of everyone using Amazon and Google.”

For someone with an abundant dose of creativity and a strong DIY spirit, it should probably come as no surprise that he hacked (successfully for that matter) his own pacemaker. “I love creativity, painting, making music and generally creating. Eight years ago I had a pacemaker put in that for the first 5 years kept acting up. I went to 5 different cardiologists and none of them figures out what was going on. They told me that I would need to get opened up again. I said no because I knew it was a computer problem and nothing wrong with my heart. I then went home and downloaded the technical papers for the pacemaker, 2 months later after googling all the terms I didn’t know, I figured out how to fix it. I’m proud to say, I wrote instructions, told my latest Cardiologist to plug me in and follow the instructions I had given him. It’s fun to say I hacked my own pacemaker. (Actually, pacemakers are very insecure and that needs to be fixed too, but that’s for another lifetime LOL).  My takeaway from that is that health is the most important thing in the world and you should not wait for others to fix you but do it yourself using the wealth of information out there.”

Among his family members, Joshua says his brother-in-law is involved in the blockchain and crypto space. “It was strange because he was around in the early days too and lost most of his crypto through investing in butterfly labs an early ASIC chip manufacturer and NEO BEE a project out of Cyprus. He left the scene for a while after that but is back and very passionate about decentralisation.”

Having started or joined several projects over the course of his life, Joshua requires that projects he joins, especially those involved in blockchain, must pass a simple litmus test. “I’ve built 4 startups,  previously worked as head of special effects and 3D animation at major television stations and film post-production houses. I know it sounds corny but I only ever want to work on projects that make the world a little better. This attracts very intelligent, empathetic, fun and slightly rebellious people. I love surrounding myself in intelligent people, people that I can learn from and people that inspire me with their passion. The team that we have built at Vaultoro is absolutely amazing both in talent and soul. “

It’s not enough to give people fish, teaching them to fish is probably much more important. This is why Joshua hopes his impact on the world is to contribute to eradicating poverty as a result of his work. “Poverty is one of the biggest problems in the world. It leads to terrible suffering as well as environmental problems. I would like to think that helping people truly understand what money is and give them tools to save and spend outside of a systemically corrupt system would help widen the middle class globally.”

He further hopes that his work would leave a legacy that gives “anyone on earth the ability to access asset-based money to use and save in it. This is opposed to debt-based paper money that we have now. Bitcoin is a rare number found and spent into existence, Gold is a rare metal found and also spent into existence. Most government currencies are printed as debt with far more interest owing than exists, so it can never be paid off and many people fall through the gaps. I give talks at conferences all around the world and you can see some of them on our youtube channel.”

In times of uncertainties, those able to ride on the waves, are those who eventually maximize the opportunities such uncertainties present. Joshua’s advice for those looking to launch a career in blockchain is to fish for opportunities in the grey areas. “It’s the grey markets where the opportunity is. So you naturally have to be a little reckless. Think of UBER just replacing taxis. They found a grey zone by not getting customers to pay the driver directly but through them as a third party. This meant uber wasn’t breaking laws that drivers could not be paid for rides without a taxi licence. why? because you are paying uber and uber is paying the driver. This grey zone in most countries around the world enabled UBER to dominate. But only because they were a little cheeky to try it in the first place.”

It is perhaps not a coincidence that a Satoshi fan would be passionate about the Silk Road case. Most people remember the Silk Road case for bringing bitcoin to the limelight when it was discovered that dealings were being paid for on this dark website through crypto. Well, one can only create an invention and cannot guarantee that it would be used within ethical boundaries.

In his response to my question on philanthropic activities, Joshua says: “I’m personally very passionate about Ross Ulbricht and silk road case, this Kid’s case, arrest, trial, and subsequent jailing was full of corruption and misguided justice. I feel that Ross has paid the price and should be released. If people hate the drug trade because of the violence and harm involved then they should support Ross’s case and sign the petition for release over at https://freeross.org. I’m not a fan of drug abuse but the statistics are very clear. These online marketplaces are much much safer for people to use than some dodgy street corner. Somewhere where you can give honest feedback to the vendor without the threat of being shot.  If you haven’t seen the Netflix Doco “Deep Web” by Alex Winter of Bill and Tedds Excellent adventure fame, please check it out and sign the petition.”

What is your definition of extreme? Well, it is relative and subjective. But, I do agree with Joshua that having to walk around in public in a balaclava tends towards the extreme. Okay, a little confession here, this is my first time of learning that those ‘partial’ face masks are actually called balaclava. Thank you, Joshua and Google!

“When I first came to Berlin I went to Room 77 where a tiny group of Anarchists, artists, maths freaks and Computer nerds would all meet once a month to celebrate bitcoin.

One of the first people I met was demonstrating against the surveillance state by wearing a balaclava whenever he was out, even on the train. He had sticky tape on his fingers, put a pebble in his shoe to stop walking recognition and would encrypt everything under the sun. The Funny thing was that he stuck out like a saw thumb but it was more of an art piece, he assured me.”

“This space is full of crazy characters, misfits, artists, and extreme intellectuals but that’s what makes it so fun. You also soon learn to spot scammers relatively quickly because they are also plentiful in this space.”

Another funny and ridiculous event Joshua shared was his experience having to watch the DAO attack unfold in real time. “One of the most interesting events was the DAO hack on the Ethereum blockchain. It was like living in a Science fiction novel. ‘The DAO’ was a project where people would send 1dollar worth of eth into a smart contract and that gave you 1 dollar worth of voting rights for what this fund could invest into. You had millions of dollars locked up in this smart contract. The mantra of the day was that code is law. But then someone managed to find a loophole in the law enabling them to steal all the money. To pull this off he had to move all the coins from the main DAO contract to a daughter contract and all the money had to stay there for 1 month because that was programmed into the rules set in the original DAO contract. After 1 month he could send the money to himself and have full control. Watching all these people clammer to find a solution before the month was up was amazing. The entire ETH market cap was tanking every day getting closer to the day when the hacker could take full control of the funds. It was fascinating if you are into economic theory and watching it all go down from the sidelines.  Eventually, the ETH team and miners decided to fork the chain and reverse the entire DAO. This choice showed that Ethereum was reversible if the right people wanted it to be, casting a shadow of doubt on ETH that it was truly decentralised. This is the thing, the moral choice was hard. Do you let a hacker steal funds or do you destroy the reputation of your chain by reversing a massive mistake? Very interesting meditations.”

According to Joshua, one thing that people always get wrong about blockchain and crypto is promoting the narrative that blockchain is good, while bitcoin is bad. “The meme of Blockchain good, bitcoin bad is something that started to show it’s head in the media in 2013 or 14. I’m so tired of hearing it. It’s stupid because it’s like saying poker is good but playing cards are bad. You need them both to work together to be useful. The other misconception is that cryptos that are mixed or anonymous are only used by criminals. This is ridiculous. Business owners need private money otherwise customers could find out how much the shop paid/marked up or where they buy stock from. There is also a big danger for people if everyone knows how much money they have control over. Privacy is important in money, in fact, it is so important that many argue that money doesn’t work if it is not private.”

Experience, they say is the best teacher, but that’s stale news. Lots of people now know it is much smarter to learn from those who have been there, done that. Joshua agrees that having mentors is a smart thing to do. “Over the years I have met super intelligent and successful people. When Vaultoro got accepted into TechStars, a world of amazing mentors was also introduced to us. Meeting other CEOs, other CTOs and discussing issues and having asked for them has helped us very much. Remember folks, the path to success is not lit well and laden with huge potholes. Why should you fall into them if you know people that might have already fallen and can shine a light on how to avoid them on your journey as an entrepreneur.”

Joshua is always thinking up and actualizing new ideas, keep up with him on LinkedIn and check out his latest project, Vaultoro.

 

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About Author

Faith Obafemi is a digital content consultant whose work revolves around FinTech, cryptocurrency, blockchain and smart contracts. For the past two years, Faith has been providing educative and engaging content for projects in the space. She helps to filter the hype and highlight the potentials of the novel technology. When she's not hashing content for her clients, you can find her learning Solidity and HyperLedger Fabric, or watching Korean series!

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