DigitalBits Foundation Networks Blockchain Companies In Open Source Consortiumbr>
The DigitalBits Foundation is an open source project that provides development resources, infrastructure, events and education via a global transaction network and protocol. Loyalty program operators are able to tokenize their respective loyalty points as digital assets on this decentralized network and users can trade these various digital assets on-chain. DigitalBits latest addition is a partnership with Cogeco Peer 1, a global provider of business-to-business products and services.
The Foundation’s vision is to see the DigitalBits blockchain help solve portability, security and liquidity issues with certain digital assets, such as Loyalty and Rewards programs, and help generate additional value for consumers, businesses and certain charitable organizations.
Al Burgio, the founder and CEO, talked with Block Tribune about the organization.
BLOCK TRIBUNE: Tell me in your own words what the DigitalBits Foundation’s mission is.
AL BURGIO: Similar to the Linux Foundation or the Ethereum Foundation. They’re advocates of a particular open source project. In our case, it’s the DigitalBits open source technology and project and really promoting the benefits, the usage, so it’s education, events, supporting research and development, providing grants, developing ecosystem, fostering that developer ecosystem, and so forth.
In terms of it’s mission, it’s ultimately, to build that ecosystem help drive network effect, not just within the developer community, but amongst enterprises, and then ultimately, consumers in using the technology or the applications that leverage this technology.
BLOCK TRIBUNE: So in order to do that you’re bringing together a coalition of companies to provide various services, I take it?
AL BURGIO: Correct, yes, so we recently established a partner ecosystem program. There’s two different categories within that ecosystem, and we’re up there evangelizing to those respective categories and getting them to support this mission in their respective fields, in their respective businesses. Obviously, recently, we have this announcement that we are making [inaudible 00:02:06] one of the latest companies did to come onboard.
Ultimately, we want to see, in the case of businesses and technology companies, leverage the technology, integrate the technology if it’s to a pre-existing application or service, and/or promote it to their enterprise customers, as well. In a sense, think of it as also an example of categories of a company of, let’s say, Red Hat, as an example, right?
One of the things that Red Hat … Well, when it came to Linux was that they were able to help enterprises and technology companies consume free and open source software. In the case of the foundation, the foundation the neutral entity, it’s out there to endorse those that are supporting this technology but it’s not there to provide those services.
Quite honestly, enterprises are not gonna want to contract with this foundation. They need companies that can back an SLA entering to commerce with them and provide these commercial services. So we’re there to foster that ecosystem that can help this grow, this technology find it’s way into business and society.
BLOCK TRIBUNE: Are you a true foundation? Are you a non-profit?
AL BURGIO: Yes, true non-profit.
BLOCK TRIBUNE: Okay, so how does it work for companies that want to align with you? Do they have to pay an upfront fee? Or do they pay you per customer?
AL BURGIO: Yeah, so today there’s no fee. It’s totally free. We are there; it’s obviously in the early stages of this technology. So we want to not have such barriers. We’re there to really support those that are interested in joining. So we’ll support them in any way that we can, in let’s say joint marketing helping them pursue the technology as well, and what have you, and ultimately, integrating it into their product portfolio, integrating it into their application that they may have and so on.
BLOCK TRIBUNE: So, if there’s no fees, how is the foundation funding itself?
AL BURGIO: So the foundation is being capitalized in two key ways. From a founder perspective I provided initial support to the foundation to get it established and so forth. There has been, in terms of creation of technology, a developer ecosystem that contributed to the open source technology so that part the foundation, initially, didn’t have the overall burden to, let’s say … It didn’t have the need to pay developers to see this open source project come to light. In addition to that when, obviously, blockchain technology so when the blockchain network went live, the genesis block was produced. In essence, the native digital asset or the native crypto-currency of this blockchain was mined, or pre-mined, by the foundation itself.
A portion of what was pre-mined is for the benefit of the foundation in leveraging that allocation in such that it has … Look, in essence such that it’s capitalized. It’s able to capitalize itself and fulfill it’s mission.
BLOCK TRIBUNE: How much did you raise in that initial offering?
AL BURGIO: That part we haven’t disclosed yet. So that’s not something we’re releasing this week.
BLOCK TRIBUNE: Okay, how are you vetting these companies that are going to be part of the ecosystem?
AL BURGIO: Initially, it starts with outbound as opposed to inbound. What I mean by that is we’re targeting, initially, organizations, so enterprise, technology companies, developers that we feel would be able to make a good contribution in supporting this.
From there we see it more evolving to where it becomes a combination of outbound as well as inbound. With inbound we’d, obviously, have to follow a strict vetting process. But I would say in the beginning, we kind of targeted who we felt would be ideal. In some cases, it’s a function of having a prior relationship, having done business. For example, in the case of Cogeco, in the last company I had founded … I would say that really representative of the entire managed cloud industry I know extremely well, globally.
So many of these multi-billion dollar companies had massive desire to have my prior technology that I’d founded in their facilities. They wanted to work with it. They saw the competitive advantage so as a result of this, there are these pre-existing relationships. We kind of swimmed in that pool first to kick this whole off.
BLOCK TRIBUNE: What is your background?
AL BURGIO: I’m a serial entrepreneur. I started in the Internet industry in the ’90s, so pre-bubble 1.0 internet. At that time my area of focus was e-commerce online media, and I kind of moved down the technology stack. The last company I founded, I pioneered what’s known as “Interconnection 2.0.” This is how enterprises and cloud and other organizations can directly connect to the core of the internet and completely bypass public internet.
So companies like AWS, Google, Microsoft and many others, now enable this for enterprises to directly connect to them not over the internet. And the method by which this is all done, I pioneered, and many of these companies I just mentioned were my customers. I grew this … Raised over 70 million dollars in venture capital. Worldwide we expanded into over 170 data centers worldwide. A lot of that was driven by their demand to have our technology in their facilities. That company, ultimately, got acquired … Acquired by PCCW, large multi-national headquartered in Hong Kong. I think they’re worth 30 billion dollars or so.
When it comes to internet infrastructure, internet security which in those areas I do also have a number of patents and so forth, very familiar with the underlying architecture of the internet, how it was built and this became relative to what we’re doing now. A very key category. So manage cloud and so forth.
What I would say is that from the point of view of the enterprise and software companies, it’s less about hardware vendors cause they’re not touching their hardware anymore, right? They’re going to cloud providers saying, “Hey, here’s an application we want to use whether it’s distributed ledger technology, operating system or what have you.” The managed cloud providers have to have this proficiency and knowledge and how to use this technology, support it for their enterprise customers, for their application software customers.
This is a key category among the other categories that I’ve mentioned where we want to make sure … What I would say the digital supply chains for this technology, there’s no bottleneck. We are in essence trying to establish a standard for them by way of this technology as being one of the key technology that’s in their portfolio that they are all proficient in.
BLOCK TRIBUNE: Why did you decide to structure your venture as a foundation rather than setting up a traditional company while trying to network all the services?
AL BURGIO: What I would say is that I didn’t necessarily have that exclusive perspective. I just felt it was an important thing to have in the equation. That we have this neutral foundation and in effect, gave birth to it.
If we take a modern example, I’ve been using Red Hat and Linux as an analogy, but a more current example is the Ethereum Foundation and ConsenSys. One of the co-founders of ethereum, Joe Lubin, who was initially the Chief Operating Officer, the Ethereum Foundation also co-founder then went off and founded ConsenSys which became kind of like a modern day Red Hat in helping companies now consume the ethereum technology.
Similarly speaking, I didn’t have an exclusive focus on just giving birth to this open source project, this blockchain network and it’s foundation. Equally so, one of the key contributors is a company by the name of Fuse Chain which is a commercial organization that I also founded. In my day-to-day area of responsibilities, beyond being a serial entrepreneur, investor, so forth I have founded one of the key supporters in this ecosystem which is blockchain technology company called Fuse Chain.
BLOCK TRIBUNE: I know this doesn’t really affect you because you’re not really providing the services so much as networking companies that do this, but the regulatory climate has been really up in the air, at least here in the United States, and there’s some questions elsewhere. How does that affect the general approach of companies that are coming to you?
AL BURGIO: We just briefly speak to the technology then I can definitely answer a question. We’ve built a general purpose blockchain. On this blockchain you can tokenize assets. Those tokens that have been … It can be a digital asset or a digital representation of a physical asset, right, as a token on this blockchain?
All these tokens can co-exist on chain. It can be transferred. They can trade on chain and so forth. You can also use blockchain for fast for pavements or reminisces or what have you. Anybody can go on and do everything I just mentioned either one or multiple things. Having said that, there’s one particular use case that we feel strongly about.
I shouldn’t say just exclusively one but one that we’re putting efforts behind … Let’s say evangelizing to enterprises and software companies in this category and that’s the loyalty rewards base. It’s loyalty points. We’re not operating that loyalty program percent. What our focus is to help support that category in consuming blockchain technology, specifically, blockchain in tokenizing their pre-existing program. So, loyalty points are a digital asset today but they’re kind of legacy. They’re not backed by blockchain, per se, and have all those inherent benefits.
In that particular case, there is established precedence, I would say, in how conduct of a digital asset like loyalty points operates in some countries such as the United States. A lot of that falls under the jurisdiction of the FTC and so forth not necessarily the SEC.
Again, depending upon, let’s say an airline like American Airlines handles the issuance of those digital assets. If they are doing it in the normal course of trade I would believe that’s under FTC not necessarily SEC. And so, I would say that from that perspective, it depends on the actual business and what they intend to do with their tokens at the end of the day.
In our particular case, we do have … just like ethereum, there’e ether and how you need to have ether to use their blockchain, right, to make smart contracts, to transfer, etc.? Similarly speaking, the native token on our blockchain, or the native crypto currency, is also called digitalbits all lowercase. On chain, it’s symbol is XTB and you need that to pay for all transaction fees. So if you want to create a token transaction fee, if you want to transfer token or digitalbits itself. All that has to be paid with some digitalbits.
This has very much the characteristics of the utility token. Our foundation domiciled overseas in Europe. It’s not in, let’s say, at the moment, within the realm of the United States in terms of from the point it’s founded and created. Having said that, that doesn’t mean we’re excluding the United States. We’re very much including that market from a loyalty points perspective. The manner in which we are going to market is not necessarily through an ICO. It’s really more in a private manner, private business, enterprise go-to-market, and what have you to the extent that our capital requirements have been funded privately in a fully compliant, regulatory exempt manner.
BLOCK TRIBUNE: Tell me the significance of the Cogeco partnership.
AL BURGIO: Yeah, with regards to this latest announcement, one of the key things that companies like Cogeco Peer 1 bring to the table is not simply adding this technology and their desire of being in the forefront of innovation with blockchain, and not simply just having it coded to their customers but they also bring to our community is the fact that, they as well, will be spinning up core blockchain nodes or core DigitalBits blockchain nodes worldwide across data center facilities. And further decentralizing and distributing this blockchain network. So they enhance the overall security and also demonstrate their commitment to this blockchain by actually doing what I’ve just said. They have data centers across, for example, Canada, Vancouver, Montreal, Toronto and in the United States markets like L.A., Miami, D.C. area and so forth. In Europe, like London.
In all these markets I’ve just mentioned and more, they will be spending core blockchain nodes as well. An example of this last year we saw with Stellar and IBM where IBM followed through with doing something similar and spinning out stellar blockchain nodes. Cogeco was on the first that were announcing that it’s committed to doing this. There is obviously others that are following so that’s a very important thing to note with regards to putting into the market a real enterprise grade blockchain technology.