Crypto Investing #74 – 4 Software Engineering Points To Consider When Evaluating A Crypto – By Kirk Ballou

Tai Zen: What’s up guys this is Tai Zen. With me today I have Kirk Ballou, the owner and founder of an app agency called Touch Titans in the city of Dallas. Say hello Kirk.

Kirk Ballou: How’s it going, guys.

Tai Zen:

We’re cruising from Dallas down to the city of Austin to meet the honorable grandmaster legendary world-renowned,

And we’re cruising down the Interstate 35 here, we’re passing a sign that says Austin is 60 miles away. So we have a few minutes to goof-off here in the Tesla on autopilot, it’s a 100% autopilot.

Kirk Ballou: We’re on autopilot now.

Tai Zen: But it’s not the autopilot version that’s like the top of the line right. Is it the one where you just sleep while the cars driving?

Kirk Ballou: No they don’t have the one out there. This will drive you on the highway but they haven’t rolled out the one that will get you from the house to the highway.

Tai Zen: And they’re testing that now in California?

Kirk Ballou: They do have that in California.

Tai Zen: Now in this video guys, I wanted to get Kirk’s perspective because he just started investing cryptocurrencies this year, and he’s a software engineer, he owns a company that builds software for a lot of Fortune 500 companies like you mentioned Home Depot, Red Bull.

Kirk Ballou: Red Bull, CNN, NatGeo, Microsoft.

Tai Zen:

So I’d say you’re not like a rinky-dink in your garage F agency, you build professional software for Fortune 500 companies.

So when I want to get your perspective and I think that it’ll help the audience and the viewers out because we’re a Cryptocurrency investing channel.

From your eyes as a software engineer when you look at these different cryptocurrency projects, what are you looking for before you invest in it?

You build software, and these cryptocurrency projects are nothing but a software project. So what are some of the keys to success because you have a lot of businesses and startups come to you so that you can build software for them.

And what do you see are the ones that are the common characteristics of those software projects that succeed versus the ones that fail?

Kirk Ballou: Well when I first got into it, I found Ripple and saw there’s an actual business plan. Now I knew with the supply being 100 million and half a penny was still a very low valuation for the amount of traction that they had at the time. They had 51 banks in Japan.

They had actual customers. A tangible use case. So it’s similar to how we evaluate startups, we have startups come to us all the time to build apps.

And if it’s a company where the entrepreneur coming to us has expertise on what they want to do and they have an actual road map of how to execute it, they have a much higher chance of success.

We have guys that just sort of like “I have an idea, I want to do an app”, the majority of the time those guys aren’t going to do well. If they’re coming to us and they’re like “I’m an expert at physical fitness and I want to make an app for physical fitness”, that makes sense.

And it makes even more sense if they’re like, “I’ve got 100,000 followers on Twitter, I’ve got a built-in note”, so a real use case of this is Jeff Austin.

These guy has been on Comedy Central that we built an app for him, it’s all around doing Twitter hashtag games. He already had an audience of 40,000 people following him on Twitter. We built this app to help drive traffic to that.

That was the one that did really well. So you look at those factors before you dive in like the Cryptocurrency, is there a tangible real-world use case. Also, the team, do they have a link to it?

Tai Zen: So let’s talk about the real-world use case. Can you name one that you feel it has a real-world use case from a software engineer’s perspective?

Kirk Ballou: Bat token. So there’s a real-world problem where Facebook and Google have the majorities of the advertising is in their control. Most people to advertise use their platform.

Bat token solves the problem. There’s a lot of click bots and things that throw off the numbers where people don’t really know if they’re getting the money out of their investment.

Tai Zen: So when people advertise on Google or something, and someone’s clicking on the app, they don’t know if it’s a real customer clicking on the ad or if it’s just a robot, software out there that’s clicking on the app, and then Google it’s charging you for it. But you don’t know if it’s a real customer. If it’s a real customer, then the businesses don’t mind.

If it’s a real customer that click on the ad and then they decide they don’t want to buy the product or the service, nobody says anything about it.

But a lot of businesses have problems with if they don’t want robots, software out there clicking on those ads, and the business has to spend money on it and then they’re not getting any customers or any product sales out of it.

Kirk Ballou: And there’s not a good way for them to verify the value they’re getting out of it. So Bat token solves it from the user side, the users saying I’m only exposing the data I want to expose, as opposed to you tracking my every move.

And from the advertisers’ perspective, it’s in the blockchain, they’re able to verify. These are unique users that are experiencing this, and it targeted traffic. So that’s where you’ve got a real tangible use case.

Tai Zen: So in the cryptocurrency world, whenever you talk about a cryptocurrency there’s always going to be these trolls and people that assume that you are paid by them, to talk about their coin.

It doesn’t matter if you’re an investor in them or you’re paid by them, at least we disclose that so people know about it.

Kirk Ballou: I bought some, I sold it all a while back because there were other coins I wanted to get into. I don’t hold any Bat token.

The creator is Brendan Eich, is the guy who created a JavaScript. So I’m a fan of him but I’m nothing to do with his company.

Tai Zen: So I always say this, from our channel perspective if you guys hear us talk about a Cryptocurrency, always assume that either myself, I’m invested into it, or they are a sponsor of our channel.

So I always say that, just a disclosure. You don’t run this channel so you don’t have to disclose anything but you did so I appreciate that.

I don’t hold any Bat tokens and they don’t sponsor our channel. So you feel that’s a real-world use case, that has a real-world application.

So how do you have an example of something that you think is a joke, you don’t think it’s a scam but you just don’t see a real-world use for it, off the top of your head?

Kirk Ballou: There’s a lot of tokens out there that are just a whitepaper and hype, and you look at the GitHub for the coin and it’s nothing’s been done yet. So there’s a lot of cases like that, I don’t a call anyone out but there’s a lot, you can point to it like that.

Tai Zen: So basically you’re a software engineer, so you look at their GitHub where they store the software code and you can look at it and tell the log of when they last updated the software.

So myself, I’m not a software engineer and a lot of our investors are not software engineers like you and Leon are. So when you look at the GitHub, what specifically are you looking for, besides the updates, what else are you looking for?

Kirk Ballou: The website, you can expect it’s gonna have some hype in it. So when you look at the Github, it’ll list how many contributors to what they call a repository, when you create a coin and there’s a repository for that coin, you can see if it’s 5 people working on it or 1 person working on it.

One thing I look at that’s a red flag, on GitHub, up at the top right of a coin. When you look at the repository, if it says 1 contributor and there are only 10 check-ins, obviously that’s a coin that hasn’t had a lot of attention. So that’s definitely something throws the red flag to me.

Tai Zen: So from a software engineering perspective, you know what GitHub is for. Can you explain to our audience what is GitHub, are they new to Crypto and now they hear about GitHub, what is that?

Kirk Ballou: Basically, a way that teams work together on software, it stores the source code out in this cloud that GitHub secures.

And when you open source that’s like a coin or an ICO, that’s where other people can go in and look at the code that they’ve written and you’re able to see the number of check-ins, you can see what they changed, you can also see how many contributors to that coin.

Tai Zen: So basically if you create a cryptocurrency, and GitHub is a place where you would store all the software code for it, and that’s where anybody that wants to contribute to the project can go there, create an account and add their code to your software project.

Kirk Ballou: A lot of you are like where you can contribute, but the team might have to accept your contribution before it would be merged in, that kind of thing.

Tai Zen: And so it’s a directory, basically or a resource where all that is stored so everyone can work on it. And you can see the updates and modifications, the older versions, newer versions, the test versions, and everything.

So basically you’re going there to see, on their regular website they might announce that they’re doing all this and type it all up and everything, but you’re going to the GitHub repository where their software actually being stored at. And you’re checking to make sure somebody’s actually working on it.

Kirk Ballou: And you might see that I’ve run into ones where the last check-in was 2 years ago, and they’re hyping it today like something’s happening.

Tai Zen: But it hasn’t been updated in 2 years. So that the viewers have a reference point because if we just say that it hasn’t been updated in a while or there are not enough contributors, they’re not going to have a reference point and not understand that.

So for example, Bitcoin and Ethereum are the most popular repositories out there on GitHub. What is the number of contributors on Bitcoin, is there like 100 people working on it, 1000 people?

Kirk Ballou: There’s a lot. Just like you would evaluate a startup, it depends on what you’re comfortable with.

If it’s 1 rock star developer, if it’s Dan Larimer doing it, I’m comfortable. If it’s Vitalik, I’m comfortable.

Tai Zen: Or like Gavin Wood who wrote Ethereum.

Kirk Ballou: That’s where you base it on, part of that too is what’s the street cred of the developer behind it.

Tai Zen: So speaking of street cred, or the ability or the skill. When you talk about street cred, you talk about the skill of that software engineer. So in your mind how do you rank a software engineer?

For example, I’m not a software engineer, I’m just a bum software engineer, I just use software, the engineer doesn’t go along with the word software.

So if I’m at the bottom of the scale of software skill, when you say someone’s a rock star like Gavin Wood or Vitalik or one of these guys, what are we talking about, how do you measure these guys in your mind to say that’s a rock star?

Kirk Ballou: They’ve got the LinkedIn on their website, you can see have they worked at Fortune 500 before, or do they have other major projects under their belt, or is this their first venture into Crypto. You look into their background, “is this a professional level software engineer”.

Tai Zen: Because we got a lot of guys right now working in their garage or their mom’s basement, one of these ICOs that raised 10, 20, 50 million dollars. And the public doesn’t realize that these guys are just a bunch of clowns living in their mom’s basement.

I’m serious, it cracks me up sometimes because these traders out there that claim that they’re cryptocurrency traders and they make a lot of money.

But your concern if they’re making such good money from cryptocurrencies, why are they asking for donations. It’s like there’s a contradiction, something doesn’t match up.

Because we don’t ask for donations on our channel, nobody on our channel asks for donations, we tell people to give the donation to other people that ask for it, but we don’t need it.

Going back to the software engineering side, so what are other things that you look at in a cryptocurrency project besides the GitHub, besides a real-world use case, besides the GitHub activity. What else do you look at, just off the top of your head?

Kirk Ballou: Platforms usually do well. This is investment advice if you look at a Neo or an Ethereum or an EOS, platforms that other developers can go and build applications on top of, that’s a new level of functionality above something that’s just a Swiss army knife of use cases.

Tai Zen: So can you give a couple of examples or maybe some examples of either one so that the audience has a better understanding of what you’re talking about.

Kirk Ballou: If you look at Siacoin, they’ve got a good use case of taking something that file storage is… Almost every startup you could think of is either using Amazon or Heroku for file storage.

Where Sia is using blockchain for file storage, it’s a similar service to what you see with Amazon S3 or it’s got blockchain security, and it’s actually cheaper than using Amazon. So that’s where you’ve got a really good use case to grab a piece of market share.

Tai Zen: So you’re saying that Siacoin is a single use case.

Kirk Ballou: But it’s a good use case.

Tai Zen: It’s a real-world use case and you’re saying it’s a single use case, but you don’t consider that a platform.

Kirk Ballou: I mean I consider EOS or Neo where you can build, you can create your own coin on it, you can build applications on it. Just like with Ethereum you can build smart contracts to do escrow. Definitely, those have more value than just a coin that has a real-world use case to it.

Tai Zen: So basically just a quick recap, you look at the real-world use case of that cryptocurrency project and see if there are any real-world uses for it and then number two, you look at their GitHub activity and then number three, you look at whether it’s a platform or a non-platform.

Kirk Ballou: And also the total supply, if it’s on major exchanges, I’ve noticed coins that are over a billion have a lot of resistance, there’s very few, they’ve gotten over $1. So that’s another major factor.

Tai Zen: So the supply of the coin. And why do you think that’s an issue, why do you think that the ones that, have a billion-coin supply have a harder time getting into a higher price versus the ones that have a lower supply?

Kirk Ballou: Well if you look at it, they need a certain level of volume and traction to get the price up there. If you look at Ripple, they’ve had several months of awesome news and it’s taken all that, I think they peaked at like 44 cents.

You put that much good news behind a coin with 100 million supply, and I’d think it’d be a lot higher. When you’ve got a total supply that big, I look at it as a table with 100 billion coins, you have a lot more weight to carry the whole thing up.

Tai Zen: All right, well guys Kirk is a professional software engineer in the software world like I always say I’m not one of those real Asians that know math and science and software engineering as these guys do.

So I just wanted to talk to Kirk and get his perspective on how he looks at software development and hopefully that will help you guys make a better investment decision when you guys are looking at different cryptocurrency projects out there.

So thanks for watching this video, if you guys like it give me a thumbs up if you guys don’t like it give me a thumbs down so I’ll know not to make them. And we’ll look forward to seeing you guys in our future video.

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