James Song On Venezuela Petro: "There's Nothing Really Behind It"March 3, 2018
Song’s focus has long been global. He founded Faircap Angels—Myanmar’s first angel investment group, and is presently a senior advisor at Faircap Partners, a Myanmar private equity firm. He is also the creator of Exsul, an AI-driven blockchain app delivering free basic education that is currently being tested at the Kutupalong Rohingya Refugee Camp in Cox’s Bazar, Bangladesh.
He talked with Block Tribune about various cryptocurrency and blockchain issues.
BLOCK TRIBUNE: You wanted to talk a little bit about the Venezuelan Petro, which, as far as I’ve read, has not been invented yet, but they’re forging ahead with their fundraising plans. Talk to me a little bit about what you know.
JAMES SONG: I suspect it’s just for fundraising, that there’s nothing really behind it. I think some of the insider conversations that I’m having, it’s really not interesting technology outside of a government trying to sponsor this thing. And it’s in the crypto space, so it’s just kind of an opportunistic ICO based around hype. That’s what it is for, probably a bankrupt government.
BLOCK TRIBUNE: Do you think it will ever launch?
JAMES SONG: Most projects don’t launch, you know, and the projects that I do see putting out any kind of product tend to be something akin to vaporware, things that won’t work, some technologies that won’t work. Just like IOTA, for instance. It can’t work because of the way blockchain technology works in general. And, you know, it’s capitalizing on hype and you can’t blame them. It’s an easy way to raise capital. There’s nothing wrong with vaporware, just because the experimentation is necessary, but there seems to be a lack of doing. There’s not enough teams actually doing things, like actually building things and putting things out and seeing if they work or if they fail.
BLOCK TRIBUNE: So basically if they manage to raise any appreciable sums, do you think other countries are going to follow?
JAMES SONG: Yeah, definitely.
BLOCK TRIBUNE: Do you see a trend toward sovereign coins?
JAMES SONG: Yeah, definitely. It’s definitely easy and then you could issue coins for a number of purposes and you could structure it a number of ways. For instance, you can issue a coin just to promote a land registry, for instance, where you on-board all the land titles in a country onto blockchain, so it’s difficult for land grabbing to occur. So like a military general couldn’t take this land away because, you know, by changing government records, which he has access to, because it’s all on blockchain, it’s all very transparent. That may happen in the future. It’s a good technology for governments all around and you could raise money behind it to get it down to a token issuance. And then, if you’re worried about, for instance, the selling of securities, if it was done privately through a third-part contractor, you would issue a token for the sale and then issue another token for the use of the land registry and then you’d probably have a token buy-back, something like that, to get around securities law. That’s probably how you would structure it.
BLOCK TRIBUNE: Is it any more dangerous for a country to issue a security of this kind? It’s one thing for a company that can dissolve and people fall into the shadows. But a country like Venezuela isn’t going anywhere. Is it possible through international courts that there could be recourse if they never produced a coin?
JAMES SONG: No, no, there’s definitely sovereignty, so it’s difficult to bring a government to court, especially for offering a product to investors in that country. I mean, you have pretty transparent understanding of ratings for a different country and for a different government. You know what Venezuela’s capable of doing as a government and their monetary policy in general, and it’s pretty obvious they’re doing it to raise money, not for any other purpose, because they’re having terrible inflation problems right now and it’s a way to try to stabilize it through experimentation, which isn’t so different in what we’re doing in America using quantitative easing.
BLOCK TRIBUNE: So, is it a good thing to sort of try this at least? I mean, that seems to be what I’m getting from you.
JAMES SONG: Is it a good idea for a government to try? Yeah, absolutely.
BLOCK TRIBUNE: Yeah.
JAMES SONG: I mean, it’s a new technology a government has to experiment with. Otherwise, they risk being very far behind and what happens now, especially with African governments with technology, they hire outside consultants, they come in and they charge an arm and a leg and they’re very expensive. But, they work very hard to get the government up to speed with blockchain, it’s new. So if you start working on blockchain projects now, you get ahead of everyone else. So, I think what they’re doing is pretty smart.
BLOCK TRIBUNE: Okay. Let’s talk a little bit about your company and your plans. Now you’re originally from Myanmar?
JAMES SONG: No, I’m American born, raised. I just worked in Myanmar for five years. The biggest problem Myanmar has is a lack of education infrastructure. So there are a lot of people, not enough schools, and even if you did manage to build the three or four thousand schools that the country needs, you don’t have enough teachers to kind of equip those schools to give it the kind of infrastructure students need to be competitive, especially in that region. Singapore’s within the neighborhood and Thailand, they have excellent school systems and you have to train people to be competitive with those people who can just, essentially cross the border and start working in your country.
BLOCK TRIBUNE: What led you there? Was it the educational needs?
JAMES SONG: No, I went there for the investment opportunity. I think investing in a new country that just opened up is very interesting. I got involved with an orphanage there, very early and I saw some of the challenges they had, especially with crony capitalism meaning, if you’re not in the right circle, if you don’t know the right people, you don’t get to participate in the economic growth and opportunity in the country and that happens all over the world, it’s not particularly unique to Myanmar but, the big problem with that is, that gets exacerbated if you don’t have educational opportunity so you can’t, for instance, do well enough in school where you can go to America and get a degree or go to the U.K. and get a degree and then come back and, you know, like elevate yourself to a different social class, you know, those opportunities don’t exist.
BLOCK TRIBUNE: What is the infrastructure like in that country?
JAMES SONG: Everything’s being developed. It pretty much starts from zero. They were closed off as a country because of a military dictatorship for 49 years. It just opened up practically around 2012 so, like they missed the whole internet revolution and everything, they missed email, Facebook’s the number one thing over there for news and internet but, not email, not Twitter, not Instagram because they just missed all of that.
BLOCK TRIBUNE: So they’re leaping right to social media, they’re bypassing everything else?
JAMES SONG: Yes.
BLOCK TRIBUNE: What is the political climate there?
JAMES SONG: It’s very stable. I think if you go there you’ll see, you know, like, these are just very simple people who just work and take care of their families and, generally very peaceful. There are some very terrible things happening on the border, border disputes with border tribes, and these have been ongoing disputes for many decades, and it affects less than one or two percent of the population but, they are terrible things and you hear about it in the news.
BLOCK TRIBUNE: What role does the military have in the country now?
JAMES SONG: They have a minor role. The military is very necessary just because Myanmar borders China and India and if you don’t secure that country properly, you risk, if you have a border skirmish, say for instance between tribes on the Myanmar and Chinese border, China could send in troops, you know, to stabilize, which means you have an invading force in your country so, the military needs to be strong. However, they control about a quarter of the government so, you know, it’s largely a democratic country.
BLOCK TRIBUNE: Let’s talk a little bit about your own coin and what your plans are for that. Tell me how you came up with the idea for it.
JAMES SONG:: Well, we were building technology so we could replace traditional education infrastructure and the way to replace good teaching from humans is using artificial intelligence so, we used a lot of artificial intelligence to optimize delivery of education content. For instance, you went to college and maybe you took two hours of physics everyday but, maybe that’s not right for you, specifically, maybe you’re better off taking four 30 minutes sessions of physics throughout the day and, maybe you’re not a morning person so you need those sessions delivered in the evening hours so, the AI kind of figures that out about you and delivers that content, you know, appropriate to you.
Where blockchain comes in is, we didn’t want to be put in a position, as a company, where we would have to authenticate and verify how well someone did in school. So, for instance, maybe you have a refugee living in Bangladesh who’s a doctor, who’s a very good doctor and maybe you have a doctor living in Boston, you know, who graduated from Harvard Medical School who’s also a very good doctor. How do you compare these two, you know, and how do you know what level of skill each doctor has? Well, if you do this skill’s assessment and you make it transparent over blockchain and you record how well they do, well you can make that open, open to audit to everyone so you can start comparing two people regardless of their background to see how well they do certain tasks.
BLOCK TRIBUNE: Tell me about ExsulCoin.
JAMES SONG: ExsulCoin is the token we use to not only record skills achievement. Meaning, instead of giving letter grades to people like A, B, C or D, we give tokens. An A token or a B token, so essentially, we pay people because the coin also acts as a cryptocurrency. We pay people to learn and that was also important to us because a lot of kids in the world, the families have to choose between educating the child, which costs money and sending the child to work, which deploys them to make money for the family. So we just wanted to pay kids to come to school.
BLOCK TRIBUNE: Okay. Your ICO plans
JAMES SONG: We pushed it back a couple of months to accommodate more private investors, so its upcoming in April 10th.
BLOCK TRIBUNE: Okay and, how long will it run for?
JAMES SONG: Until April 30th so, about 20 days.
BLOCK TRIBUNE:: 20 days?
What’s your plan for distribution of the coins?
JAMES SONG: Well we’ll have an ICO and then we’ll list on exchanges and then we’d get reserve about a third of the coins to be given away to our community for like a, we need to build a legal fund, for instance, just because refugees have different problems in different jurisdiction. 15% of the tokens go to refugees. None of the tokens are being reserved by the team. I pay for all the technology and development out of my own pocket and then we’re just doing the raise so we could scale just because we want to be able to deliver free basic education to everyone.
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