Blockchain Sales & Marketing #1 – How The Blockchain Can Or Can Not Help A Business

Tai zen:  What’s up guys. This is Tai Zen. I’m broadcasting from Dallas.

We have a few business people behind this camera and they asked me to explain to them how the blockchain can help their business.

There’s a lot of people out listening and paying attention to blockchain because Bitcoin, Blockchain and everything is a huge thing out there in the media.

Everybody wants to know how the bitcoin or the blockchain technology or cryptocurrencies can be incorporating into their business and at what point they would consider doing something like that.

We have a one-day conference coming up on January 27th in North Dallas to go in-depth about that.

In this video, I just want to explain to you quickly some of the benefits of using the blockchain in your current business.

There are 2 themes when it comes to using blockchain: decentralization and censorship-resistant. Those are the 2 reasons that most businesses or products and services can benefit from this.

Decentralization simply means that there’s no middleman. Let’s just say that you are the business here. There is a customer over here and a customer over here. You’re the one in the middle.

For example, you are a bank business, escrows services, tournament operator and then anything like that.

This person does not trust this person and vice versa, so your business has to serve as the middleman in between both of those parties. That’s where the blockchain technology really helps solve that problem.

Right now, I’m broadcasting from North Dallas, right at the intersection of 121 and the North Tollway. They call this are “5 billion USD mile” that they’re trying to build. The city of Frisco has been tasked with the initiative of bringing 3 technologies to North Dallas: eSports, AI (artificial intelligence technology) and blockchain technology.

We’re happy that they have looked for us to help them with the blockchain portion, thanks to all our channel subscribers and everyone who recommended us.

I’m going to use the example of eSports simply because that’s very simple to understand. I’m just going to focus on this sector because that’s one of the 3 initiatives for North Dallas.

In eSports, a lot of companies such as yourself sitting right here. Let us just call this customer A and this is customer B. They want to compete with each other in a game like Call of duty or any game like that.

The problem is when this person pays 10 USD to join the tournament, the eSport company will take a portion of that, which is 2 USD. Therefore, there are only 8 USD left and that 8 USD goes into a pot. Now there’s a lot of businesses that run into this model.

For example, one of the recent projects that we’ve done really intensive research on called the Props project. YouNow is the name of the company? Full disclosure: we invested in their tokens.

We are video content creators and YouNow is a video content creation platform. In the past, they would do the same thing here. The owner/operator would take a portion. They would stand right here as the business.

When person A creates the content or so-called content creator for the content consumer which is the person viewing it right here, they would pay to this person right here. They would buy these virtual tokens called Gold Bars

let’s just say that they bought 10 USD worth of that token, among which 4 USD would go to the business and the other 6 USD would go to the content creator.

Content consumers want to donate this $10 to them, but the business in between it takes their cut.

In New York, they like to use the term rent-seekers. These guys are basically rent-seekers. In Texas, we just call that the middleman. The middleman gets his portion or his cut. Therefore, when you’re doing your eSports, you’re no different than YouNow.

Now, what they’re doing is they’re applying the blockchain and converting it to

In this new model, they are going to eliminate this cut. They’re only going to take a very small fraction. It’s negligible. It’s just enough to pay the software developers to update the system.

Usually, nobody minds that like because the software needs updating for security reasons.

Before, they were taking out 40%. Now, let’s say that they’re only taking out about 1% all. Even if they take 5% or 10%, no one has a complaint about that because the content consumers are giving the bulk of it to these guys.

However, these guys actually do something. They’re the ones responsible for updating the software, making sure the security is good and everything is working. Therefore, they do deserve to get something.

Now, YouNow is getting like 2.000.000 USD/month in that 40% cut that they take, so if they give up that, where do they make their money? Instead of getting the Gold Bars, they replace it with a cryptocurrency token.

Let’s compare the old and new systems. In the old system, they have what’s called Gold Bars. Now, it’s going to become what’s called a crypto token.

This works inside, so you have to take out your USD to get these Gold Bars to buy gifts for these content creators. However, the advantage of a crypto token is you don’t need credit cards. You can buy with Bitcoins or any of the 1,300 cryptocurrencies.

This right here only has in-network value, meaning that these Gold Bars only have value inside the network. Over here, they have external value or let’s call outside of the network.

Let’s say I have $100 with the Gold Bars and there’s nothing I can do with. Nonetheless, with these cryptocurrency tokens, I can go to the exchange and convert it into Bitcoins, into Ethereum or any of the cryptocurrencies are popular out there. Once I convert the Bitcoin, I can convert that into USD, YEN, EUR, GBP and they have a fiat value.

The out-network value has even more value because you can put it into USD.

The third is clearing and settlement. In the old way, it takes about 30 days to clear and settle all these transactions. In the new system, it could be quicker but in less than 24 hours.

They settle all transactions so that the content creators don’t have to wait till the end of the month to get paid. They literally just get paid the next day.

The other is scalability. This one here has a minimum limit. You had to earn like over a certain amount before you became a partner to get paid.

Let’s just say 500 USD. If you were a conference content creator and you did not have enough viewers to generate more than 500 USD/month, you didn’t get paid.

The reason is the accounting cost, which is the amount of money paid to the accountant to do all the accounting to actually pay that person, ate up all the money. Hence, they had a set of limitations that we’re not going to be able to pay you until you come over a certain limit.

Over here, there is no minimum limit. It’s very scalable. That means that someone only earning 5 USD can still get paid.

Person 1: Right now, Bitcoin and Ethereum have got the network congestion issues and the high transaction, so what would be viable alternatives in terms of cryptocurrencies that have low settlement costs and that scalability?

Tai Zen: There are several platforms out there. I mean as crazy as it sounds like there are professional platforms out there called Bitshares or like Cardano. They will allow fast transaction speeds for all this to happen.

The first advantage that people always ask is If I were to incorporate the blockchain technology into my business, what would be the biggest obvious benefit for our business?

I would say blockchain benefits. The first one is for multiple currencies.

Let’s say that you are the middleman here and all you do is accept USD.  If you don’t have the infrastructure or the accounting mechanisms in place to accept YEN, EUR or other countries’ currencies, it becomes a really huge hurdle, because there might be people that want to participate.

Let’s just talk about the tournaments that you guys are running. I’m going to move this down here, just a little bit.

Let’s just say that the eSport right here and you want a tournament. Here’s a tournament. You have all these competitors out here that want to compete.

Let’s just say that we have competitors A, B and C. Let’s just say that they all put in 10 USD to compete in the tournament. 2 USD goes into the middleman here.

This middleman of Esport company already pulls out a chunk, so only 8 USD left goes into here. 24 USD right there is the prize money.

This works in most Western countries like the US and Europe where people have credit cards and they can go online and pay the $10.

How about those people in Africa, Vietnam where they don’t have credit card systems? They can’t compete. They have access to a video game but they can’t compete in it. You guys can’t have access to that customer base simply because they don’t have a credit card system to pay for it.

By accepting Cryptocurrencies like Bitcoin, Ethereum, you automatically get multiple currencies, meaning you get a bigger customer base.

The question that comes to mind for a lot of businesses is that if I accept those cryptocurrencies, I have to pay all my employees and my staff with USD. There’s a bunch of exchanges out there to convert crypto to USD.

In the beginning, if you’re a business that’s new to cryptocurrency, you may just stick with accepting like Bitcoin and Ethereum. Matter of fact just goes to this site right here called and accepts the first the top 20.

Person 1: I just watched a video where you mentioned moving into different countries with Decred.

Let’s say that they want to expand their eSports company into China and all the local companies accept Neo or Bitcoincash. Could Decred put in a proposal to call on for an atomic swap to Bitcoincash or Neo from that?

Tai Zen: There’s a project out there called Decred. They were the first ones to do what’s called an atomic swap, meaning it allows you to exchange one currency for another one.

They have it set up on their blockchain to where it’s automatic. It’s using software instead of an actual middleman. They’re using technology and software to where when 1 person dumps in 1 Bitcoin and another currency comes out of it.

It’s going to create a piece of software contract based on the condition that 2 people don’t know each other and agree to put their cryptocurrencies in it. It’s all going to swap it and send it back to them.

This atomic swap that they invented relies on software, so everyone can see there’s no cheating.

Basically, I guess the easiest way to imagine it is a software-based escrow service.

When you just said start accepting cryptocurrencies, you have a bigger customer base because now you can pull in customers from all over the world that don’t have banking service.

Now, you hear a lot about the ICO (initial coin offerings) and crowd sales. It’s kind of like a Kickstarter to where you raise money to a lot of companies that have a working product or a working service.

Before we go into the crowd seller, I forgot to mention something.

The first thing that a business can do is just accept cryptocurrencies as payment.

The second thing is there is a virtual token or a virtual good. For example, in Farmville, if you have a shovel or an ax, you can sell to somebody else inside that game for the tokens inside that game.

The point, tokens, virtual goods, virtual products, virtual currencies. Those things are inside the game and have no value outside the game.

Those businesses are perfect for replacing it with a cryptocurrency token, because the minute that you replace those in-game tokens with a cryptocurrency token, it automatically has value outside the network.

Let’s just use yours as an example.

What is the token that people are using inside this network that you’re building? – USD.

In your case, if you just accept USD or EUR and don’t accept payment from people in Africa or China by simply opening up your business to accept cryptocurrencies that allows people from the unbanked countries…

Person 1: What do you think the main decision points on? Do you create your own token like what Props did or just accept existing crypto if you have a business model like this?

Tai Zen: I think every business should accept cryptocurrencies as payment by default. Business is in business to make money. If people want to give you more money, I mean you should open up the doors to let more people give you more money.

If you say no to that, why are you in business? We accept any currency like in other than 1300 cryptocurrencies on the market. We prefer the ones at the top 100 simply because there’s more liquidity.

If somebody calls us up and says they want to buy 1 of your courses or cryptocurrency trading and investing programs with number 100 cryptocurrency, we would accept it.

Anything that we can use to convert into USD or Bitcoin, we will accept it.

Person 1: My point is he’s got an existing business based on Fiat using USD, so whether should he do an ICO or create a token?

Tai Zen:  The first question is whether you have some kind of virtual product exchanged inside your network or your platform?

Person 2: You use a USD to imagine buying another USD. There’s no name to it right now.

You’re putting in 1 USD and it’s listed as 1 USD. When you’re entering a tournament with that USD, we’re giving you USD back out, then you can change back into 1 USD.

Tai Zen: Basically, you’re using a real USD to buy a virtual USD for competing in the tournament.

When I hear that, that just sounds crazy. I would say replace this whole system with a cryptocurrency. Just completely replace it with some type of cryptocurrency now.

There are several things that you can do. The die-hard Bitcoin fans out there will tell you hey just accept Bitcoin and you’re done.

However, that’s not as easy as it sounds because you have no control over the Bitcoin network. Your team can’t program it to do what you needed to do to suit your business.

For our business, we just accept Bitcoin as a payment. In your case, because there are a tournament and all kinds of other conditions that go along that token, it’s not just being used as a currency, it’s a medium of exchange in your gaming world.

Person 2: We have our own ecosystem.

Tai Zen: In that case, what you would do is you would create your own token.

You can go to like the Ethereum network and you can create what’s called an ERC20 token or you can go to the Waves.

What you would have to do is you would have to go to a blockchain.

Let’s say there are different blockchains out there and Ethereum is one of those blockchains. You would go on there and create your tokens on top of it.

The advantage of that is that you don’t have to build out the infrastructure. It’s very easy and just like 5 minutes.

Another platform that you can use is called the Waves platform. They just had some a bunch of new updates and supposedly they can do transactions faster than Ethereum.

Everybody claims that they’re faster. I’m not a software engineer so you have to go do your research to see which one is actually really faster.

Person 2: Is Litecoin one of those?

Tai Zen: Litecoin is not one of those. The Litecoin network is not designed for things to be built on top.

They are like highways in America. There are certain highways in America that you cannot build anything near it and vice versa.

Ethereum, Waves, NXT, Bitshares and Stellar are platforms are designed so that people can build the tokens on top of it.

Full disclosure: If you hear me bring up any coin, just assume that I’m invested in it. Therefore, there’s going to be a bias there. As a matter of fact, our channel was the first channel to ever talk about NXT.

Person 2: Let’s say we build our coin on top of Ethereum and we have a tournament. When a person puts in 10 coins and so does nine other people, which is an initial transaction to the tournament, would that be a transaction on on the Ethereum network or would it only be at the end where they’re trying to take the tokens out of the platform?

Tai Zen: It would be set up how you want it. You can program it to do whatever you want it to do. With Bitcoin and Litecoin right now, you cannot do that.

That the reason why people are building all these different cryptocurrencies.

Bitcoin does one thing very well, which is the payment method, but now it’s not being used for that anymore. It’s being used as a store of value, which is, in my opinion, it’s going against what it was originally designed for.

These other ones right here are designed to do what you’re asking to do, because you want those tokens to do several different roles not just serve as a currency.

The advantage of the blockchain is you can program it. These networks right here will automatically do the clearing and settlement for you.

In other words, it’s just like accounting in your company. Now, every time 10 USD goes in or 2 USD goes out, you can actually create this what they call a smart contract, which is a piece of software that has a bunch of conditions to automatically do your accounting.

I wish they wouldn’t have called it a smart contract. I wish they would have called it a conditional contract or an automated conditional contract. Instead of a paper contract where you need humans to execute that contract, this is a software contract where you automatically.

Once you put that software up and, when somebody pays 10 USD to join your competition,  it automatically puts a portion of it goes to this account and the other goes to this account. Then, you can dictate that when the winner comes out, it automatically takes the money and puts it in the winner’s account whether you are there or not.

The reason why that’s a huge benefit because there’s always a trust issue when humans involved. By automating this into software that automatically does it based on the conditions that you set originally, these competitors are confident to put their money in your tournament.

Now here’s the downside to you though.

It’s good for this, but if the middleman is not making any money anymore, what are incentives to keep this whole network running?

When they do a crowd sale and they do they issue the ICO in-network token, the middlemen will normally keep a big portion of those tokens in the house so they benefit from when the tokens go up in value.

Person 2: By releasing tokens into the market?

Tai Zen: No, by holding it.

Whenever people want to join the tournament, they’re going to have to buy those tokens.

It’s like going to Chuck E Cheese’s restaurant where they have all the games that you can win prizes. They have the Chuck E Cheese’s tokens. You need those tokens to play all the games in there. However, when you leave the Chucky Cheese restaurant, those tokens don’t have any value.

The something is happening with your eSport tournament right here. By replacing your virtual USD with a cryptocurrency token, it actually has value outside of your tournament.

The reason why those tournament tokens would increase in value is people need it in order to compete in a tournament.

Person 1: Let’s say we now have our alternative token. When somebody comes to the platform and wants to play in tournaments, but they don’t have any tournament tokens, can they buy the tournament tokens from the site?

Tai Zen: Like the portion that you own, you can actually sell those on their site.

Let’s say that I’m from the creator of Call of Duty. I want you to run this tournament for us. We’re putting up 5000 USD to run this tournament.

With this token-based economy, I don’t have to come to ask you. That’s the other benefit of decentralization. It is permissionless.

Let’s say that I want to come on to your platform and run a tournament and I want to set some crazy rules. However, you won’t allow that and you’re censoring me to do so.

Hence, I set the conditions and you can’t do anything because I already own some of the tournament tokens. I’m putting up 5,000 tournament tokens to run this tournament, so I can set the conditions on how I want it. It becomes a platform for people to run gaming tournaments on, so you are no longer in control.

Nonetheless, when I buy those 5000 tournament tokens, it increases the value. Obviously, there’s a demand for those tokens now.

Does that help?

Any other questions?

Person 3: Right now, Ethereum can do 15 transactions a second; Bitshare can do like 2000 transactions a second, and Stellar had a thousand transactions a second. Do you know other cryptos that have that scalability?

Tai Zen: I would also look at Cardano. You can also go to a company called IOHK, you’re a business and ask for a gentleman named Charles Hoskinson. He’s a CEO and founder of IOHK. He’s also one of the 8 former co-founders of the Ethereum Network.

Full disclosure: we invested a lot of the cryptocurrencies into his company. If you want blockchain build for your business, for your company, you go to him and they build it.

They’re, in my opinion, one of the top companies in the world to build blockchains for businesses. If you just have an idea for it, but you actually don’t know how to actually build the blockchain, you should go to an agency or a company like IOHK which stands for input/output Hong Kong.

Charles Hoskinson has over a hundred people working there and what they do is build a blockchain for you, so you just tell them the specs that you want and then they’ll build it for you.

If I don’t know anything about blockchain, that’s what I would do.

The other thing when we talk about censorship-resistant right now is there are certain people that cannot compete in this tournament.

I don’t know you guys have 18 years and older rules.

When it’s permissionless, anyone can participate. If someone’s 13 and they’re qualified to play in the tournament, it’s not up to you. It’s a decentralized network. Nobody owns it.

Once you create it and you put it out in a wild, no one owns it. No one runs it. It just automatically runs by itself.

There are certain places where we’ve talked about the things that a blockchain does help. Now, we also have to talk about the places where the blockchain does not do anything.

The way technology works are the client is connected to a server somewhere, which means if I want to do something on Facebook, I have to connecte to their server and pull data from it. If I want to join this tournament, I have to connect to your server farm to pull data from it.

When you get into the blockchain technology, it’s no longer a client server relationship. It’s a peer-to-peer relationship.

Whether they’re big guys or little guys, they’re all connected to each other like that. It’s all over the place and that distributed network is a lot harder to build than a lot of people think.

That’s why I’m saying if you are looking at doing this, you should outsource blockchain companies like IOHK and let them do it, so you don’t have to worry about computer security. That’s a huge issue because if your network gets hacked, you lose all the tokens.

Person 2: The B to B part though is built into the Ethereum. It works itself, so you’re not creating that right?

Tai Zen: A lot of the heavy lifting is already done for you here. You just build on top of it. That’s something to keep in mind.

Any other questions?

Person 1: No for me. I think this really helps to explain the kind of initially going into the whole crypto and endorse your business…

Tai Zen: That’s the question right there. When is it not a good fit for your business?

I’ll give you some examples of where some businesses try to apply the blockchain and to me, it is just bullshit. There’s no need for that.

For example, I have a virtual reality company contact me just like you did. They said that they want to build a website like YouTube by using blockchain.

I said well YouTube right now runs without a blockchain.

They said they wanted to open up a virtual reality website, where people just upload virtual reality videos up there, so you can put on your virtual reality glasses and just watch the videos.

I said I understood, so go build your website and tell people to start uploading all their virtual reality videos to it.

They said they wanted to make a blockchain-based website like that.

I said you just create a database or an area where people upload video virtual reality videos. Why do you need a blockchain?

That’s not a good use.

Another company in Africa need our help on this project where they are looking to do an ICO by using a blockchain. We’re going to build this network of Wi-Fi antennas around Africa in undeveloped areas to build this badass high-speed Wi-Fi network.

I asked them why you needed blockchain.

They said they needed the money to buy all these antennas. When we successed this Wi-Fi network and started charging people to use those Wi-Fi antennas, the profits were going to divide among all the token holders.

In the U.S, that’s considered security. That’s no longer a utility token like I just explained to you.

Make sure you consult with a securities lawyer. If you don’t have a securities lawyer, let me know I can introduce you to some.

From my understanding, it was very obvious to me that when you promised somebody that you’re gonna give them a portion of the profits from your company. That is definitely security.

You got to get registered with the Securities and Exchange Commission and follow the rules of your country when you’re doing that to be able to issue a security token out there.

I told the guy that you were issuing a token and promising people that when you made money from all installing all these Wi-Fi antennas, you would distribute profit equally among all the token holders. That was security.

He didn’t realize that he was like we’re not in the US, so it didn’t matter, but it is. If you’re dealing with US customers that buy your tokens now you are under US jurisdiction so don’t do that.

Before you do this setup, it might be helpful to just talk to a securities lawyer to make sure that have your plan laid out and whether it is a security or not. That’s one of the legal issues that I would make sure that you guys look at.

Any other questions?

Person 3: You had one more example like that?

Tai Zen: Let’s take MLM, multi-level marketing for example. An MLM need sales people and sales trainers. They don’t need blockchain. There’s no reason to have a blockchain.

Usually, those that are requiring a blockchain-based token to operate their MLM are very fishy.

Person 3: They don’t have your 4 key points.

Tai Zen: No. Because MLM needs somebody to do the sales training to recruit people. I don’t see why you would need to be decentralized in an MLM scheme. I don’t see why you need to be censorship resistant because most MLM they don’t censor anyone if you want to join their network they allow you to.

Person 3:  Yeah, very helpful.

Tai Zen: Thanks for watching this video. If you like these videos on how to use blockchains in your business and include your business, go to

Subscribe to our newsletter and we’ll still have more videos like this. If you need help or have questions about how to incorporate the blockchain into your business, give me an email me or whatever.

I’ll see you guys in the next video.

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