Improving Our Relationship with the Environment Th

What is up guys welcome back to another episode of the Divi Curveau podcast and today I am joined by Michael the president and COO of one GCX. How's it going Michael? It's going well. Thanks for having me. Yeah. Yeah joining all the way from Dubai. I'm excited to dig in to everything that is one GCX. Let's talk first about your background. What got you into this

whole web 3 movement? I mean we got to take it all the way back to 2008. My brother in our CTO RA. He actually read the Nakamoto white paper when it was first released and we took a read and thought this is really cool and actually our father sent it to us and he's always been kind of into new tech plays and new technologies and really

likes to be on the cutting edge. So he sent it to my brother my brother sent it to me. We passed it around the whole family. We all gave it a read and thought man this could be really cool and then you know launched in 2009 and we didn't really we didn't buy any Bitcoin in the beginning. We didn't use it at all until about 2011

and then 2011. We're like this is just the coolest thing ever you know you can transact without anybody in between you you can go anywhere on the internet and do this and so that's really what kicked it off was just kind of this personal sovereignty free to movement of Bitcoin back in the day and from about 2011 through 2016 we didn't give it up per se

we just didn't thank much about it. And then in 2016 we got into defense contracting and security work information security. So some of our customers they said hey can we pay you in Bitcoin and we're like sure let's do it. And that really launched our financial interest. For Bitcoin and from there we just really dug into the technology of blockchain and DLT and what was going

on in the cryptocurrency space and as you know 2017 2019 it was just everything started to blow up and it get really big and we really wanted to support the Web 3 you know sovereign financial movements that were going on. Yeah yeah I mean I having gone through you know 1340 and then 1718 and now what's going on. It really it feels different than when it

was in 17 and 18 I wondered if you'd feel the same way because I've asked a lot of people about it and people all kind of feel differently about where we're at as a whole industry wide but it's it's so funny how it was it started as crypto everybody was just saying you know you're in the crypto space. And it's moved to Web 3 is the

terminology now that everybody's using and I think it's so funny how these words get thrown around and you having been around for so long you've seen it kind of move from this this hacker payment option to like this whole revolution. And I think it's it's really fun to talk to builders about what you've created but you know why why did you choose to to start one

GCX and and what is it and kind of give us a high level. Yeah we'll start with the what is it question first you know we're a centralized exchange and we trade cryptocurrencies we trade carbon offsets and commodities and we kind of our mission is to bring together the different kind of nascent markets like cryptocurrency like tokenized commodities like carbon offsets and bring them together it

to be people that are interested in doing their own kind of personal due diligence in terms of what are assets how can we use them to our advantage and how do they affect our relationship with the broader economy. And so really got into this that is building one GCX from seeing how there's so many intermediaries within finance you know it's a very big it's a very

bulky system and there are a lot of inefficiencies there's a lot of friction. And you know you're you're a person we don't have a say in what goes on at the currency level right we don't get to say what goes on at the treasury or the Federal Reserve or central banks. And so to see that we can kind of take a little bit of control over

how it is we perceive value from things like money and how we transact and what kind of assets we can build not just you know cryptocurrency as a commodity which we can talk about shortly. But carbon offsets and I've lived on a ranch almost my entire life although I did grow up a little bit in Dallas Texas as well so I kind of have this interesting

perspective on the environment and how we interact with it and what it means to ensure that our relationship with our environment is a healthy one so that it's it's benefiting us you know and I think the financial system for the past 100 years our industrial systems for the last 100 years have really kind of taken a I don't like to use the word extractive toll right

but like the consequences of the way that we interact with currencies and money and with our environment through the industrial revolution. I think we didn't think about how we should internalize the negative externalities of that industry you know externalities meaning the consequences from whatever it is that we're doing so for instance you know you pump some oil you put it in a car you burn the

fuel you have outputs at negative externalities such as pollution right and I think it's really interesting to me to be able to work with all these different assets to an envision just a much better much simpler not the word I use but more efficient and less friction systems you know. And I think a common thing in this space there's a really great debate between Eric Voorhees

and SBF actually current current time talking about it is sort of relevant but the debate was around like regulation and how these things are going to be regulated so I'd love to get your kind of hot take on on this because I think because it's there's in the US you know you have the SEC that's doing securities and then you have the what's the name of

the one that's see. Yeah see FCC so commodities securities so in your take how how do we do this you know in a responsible way where we're allowing for some sort of regulation you guys are super airtight with how you're doing things and I'd love to get your perspective. How these things should be viewed because you're dealing with these carbon credits and you're dealing with cryptocurrencies

so how do you view it. Yeah well first of all luckily a CFTC has ruled that Bitcoin is a commodity right so it's not a security and I think if you look at what is a security it's a financial tool or an asset backed by the value of something else right and so I think it's a financial tool or an asset backed by the value of

something else right and so I think that's a really good idea. It gets really tricky to determine if something is a security or a commodity so let's step back just for a second and say what is the role of government regulation. The role of government regulation is to protect the consumer that's it right it's not to push adoption it's not to steer a market although that

happens significantly. It's consumer protection and so if something's going to be classified as a commodity or security if you look at the way that the SEC and the CFTC regulate one tries to regulate before things happen whereas the other regulates from a historical precedent right so the CFTC is the latter. They look at events that happen and say here's what happened during this event how can

we present malfeasance and fraud from taking place in the future. Whereas the SEC seems to take a more I say proactive role although proactive makes it seem like a positive thing. I think the CFTC likes to assume problems are going to be there and then try and intermediate before they happen. And so this has a lot of consequences within the market and this is why you

know speaking of Sam you know he's talked a lot with the SEC and his his stance personally seemed really unclear but he seemed to be in favor of working with the SEC over the CFTC. I have some thoughts as to why that may be but I don't actually know his motives behind it but I think it's safe to say that cryptocurrency as a whole I like

to view it as a commodity just right off the bat and then there are case by case specific currencies that could be classified as securities and if they are then the SEC can and has the authority to step in and regulate after that. Got it got it. Yeah it's such a a top of mind subject right now I mean everybody's kind of trying to come up

with ideas and figure out what how all this plays out with you know the third largest exchange going going down in a big flame. So I think there's so much to be discussed there but going back to one GCX I want to talk about the you know the whole carbon concept and and how you guys are approaching it because I've heard rumors I've heard all sorts

of kind of kind of crazy things about how these these credits work but I'd love to get it from you an expert as to how how these work and what they are for people listening in and then on top of that what the net zero economy is that you guys are referring to. Yes. So the carbon markets are they're actually very interesting. So carbon we do

carbon as an asset 100% right and something that you can produce through quote unquote thin air and I'll get into why I say quote unquote thin air at a moment and you can put that value on your balance sheet and so let's just take a look at at oil for a moment to drill a barrel of oil it costs approximately half a ton of carbon just

to do the drilling right and so for every two barrels of oil now one carbon one carbon offset which is a standardized one ton of oil. So that's a very high number of carbon sequester from the atmosphere could be attached to that barrel of oil as a financial transaction and now we have two products and the price of those of that that package goes up. So

an increase in the price and volume of products within an economy in which the monastic price stays the same increases velocity. All right and velocity to me as an economist is how we determine where is is not the way obviously but it is one great way to determine how well an economy is doing. So you know a lot of people like talk about GDP and G&P

and those are important markers and metrics but velocity is really the most important one because if you don't increase money supply and you have an increase in price and an increase in volume of transactions that means people are spending everyone's perception and what's going on in the economy is usually quite positive. Okay so that's one part of the conversation right there. On the other side changing

balance sheets to reflect naturalistic capital has been proposed really for the last 10 or 12 years but recently world governments are kind of seeing the value of putting naturalistic capital on balance sheets right that would include the ability to farm land the oil that's under the ground minerals, rare earth minerals, rock, soil, water etc. So we're quantifying the value of land. I wouldn't say more strictly

but more broadly right so if you go to the middle of taxes and you're in the desert you know it may look like this is just a piece of trash land it's just a piece of dirt there's no soil there's no production no one's even mining on it right now is there any extra value to that land right and there is there's minerals under there there

could be oil and gas the ability to produce say carbon offsets or farm food production and the few other things that we're going to do is we're going to do that. We sure that can be quantified as well and so we have this shift economically to incorporating naturalistic capital into our balance sheets and so companies can do this quite easily today through carbon offsets. Now you

say why would you want to do that? Well there are multiple reasons. Top three primarily though are that regulators worldwide and it's coming to the States at a different pace but it's already happening are proposing regulations on carbon usage right and so from the from the front side of this it seems like we'll now have to pay to have an extra asset on our books to

take care of a problem that may or may not be as big as they are promoting and so that's kind of a big question for people is like what the heck isn't that zero and why is it that every single government is pushing for this I'm talking about climate change and all these sorts of issues and I can't speak to why a lot of these leaders

are so adamant about the climate change topic with in carbon and all these sorts of things I have a slightly different position than I think a lot of the world leaders do but I still look at carbon offsets as an asset. So you know the SEC has been proposing that public companies have to list their emissions and so what's going to happen is public companies you

know if you're you know people think about like excellent banks on the face but even black and decker or any public company on the Russell 1000 basically they're going to have to show what their emissions are and so all these frameworks are being worked out kind of as we speak and after the proposals go through for disclosing excuse we disclosing our emissions the next step will

be to regulate how much emissions can go in and out of that entity and this is where you know my view on what's happening is very different I don't think that companies should be penalized for their production I think that that's an inappropriate way to do anything in an economy. Honestment is usually never the best way for large institutions but instead of thinking about it like

a punishment we can look at is an opportunity to promote healthy environmental works. You know yes right now it's under the kind of guise of carbon itself right but everything on earth is made out of carbon I don't think it's the poison that they all try and act like it is but I think that the frameworks around carbon carbon offsets says specifically are going to bring

about other assets that we can produce through productive works on the land to create more value for our economy. And that's all very long winded so that what I'm trying to really get down to is carbon offsets work has to be done to make a carbon offset come to creation right so you have project developers you have certifiers verifiers broker dealers and buyers and sellers right

so it's a it's a fairly large mechanism of from creation to completion right well that entire time value is being produced and attained to that entire chain and so in the future I don't think we're going to have a lot of the the middle individuals I mentioned there I think it's I think I believe it should just be mostly project developers figuring out how to certify

without too many certifier verifiers getting in the way you know and then getting that product to the market which would be those buyers and sellers and traders so in a project development for a nature based solution we're looking at someone who is assessing a piece of land they're saying I can plant this many trees I can rehabilitate grassland I can ensure proper water irrigation they can

do all these steps to enhance the carbon sequestration ability of that piece of land right and so when you look at and that pretty much always results in a positive impact in our environment specifically so you know trees are a perfect example they give us oxygen but they take in carbon and they convert it to wood right some trees so that's obviously a positive thing that

could take place and so these projects you know a lot of people think that carbon offsets they're worthless they don't mean anything nothing happens they're just made up and it's like well the concept yes has been created it was made up but physical work has to be done for that carbon to be sequestered and once it's sequestered it's represented as a serial number and that serial

number is verified and then sold on the market so getting into blockchain and DLT and these types of technologies you know it seems like a great marriage between the two where we can account for these inputs and outputs of carbon at the moment which I think will transition to other environment to last but we'll stay with carbon for a moment here we'll be able to track

our carbon input output and by doing so we can improve our relationship with our environment through these projects to create better farmlands to create better solutions on desertified land and develop technologies that are improving our environmental health which has a direct impact on our health you know cleaner air better water better food that's good for everybody great explanation and that actually helps me a lot understand

how this how this works there's like a whole supply chain coming from the production and that's really really fascinating and I've read about like Bill Gates and some of these big philanthropists buying up tracks of farmland and all of that with the intention around something around carbon offsets at least from what I understood that could have been just a random fake news article that I got

on my Twitter feed but I I'm curious as to because I really like this topic of the offsets and that companies should be incentivized to you know add these to their sheets and be able to show like hey we're being responsible by adding these on to our balance sheet and we're going to keep producing for the economy but we're also going to be adding these on

companies the top 1000 public companies they already report their emissions scope one two and three scope one two and three emissions are the carbon input outputs scope one would be like direct production so like drilling oil would be scope one the transportation and use in production of that product would be scope two and then scope one two and then we're going to be able to do

that. Three would be the kind of half-life or life length of the the usage of that say tool so which is actually very hard to calculate and we can talk more about that but the scope one and two is pretty easy to calculate and 60% of Russell 1000 companies right now are voluntarily listing their emissions. So you know 60% is pretty good and so the SEC

said maybe in the next few years we should have everyone report what their emissions are you know public company said is the interesting thing is Europe is is is their further ahead in this agenda for carbon. You know they've been talking about this for a decade heavily and a lot of those public operations over there already list their emissions and have offset their emissions. You know

we're talking big companies Pepsi Heidi can you know Nestle etc a lot of these very large conglomerates there they're already doing this and I think the reason that they were so quick to adopt this is because they saw the value of having an extra asset on the books and having a way for them to finance land based projects. You know I that's another thing I didn't

mention is like. It's great that we can hold this asset on our books now right so whether your pro or anti net zero or climate change or any of these things just the basic financial asset of having another asset on your books i'm that's going to stay. It's not profitable it's great right and so based on supply and demand and and if you look at carbon

offsets as a as a financial tool for financing land based projects it's also another beautiful thing so it's like if individuals want to purchase a piece of land. And it's it's it's it's unerable right now they can't farm anything on it right. Well what they could do is you can buy a cheap piece of land and work with your lender and say I'm going to create

this many carbon offsets. Over the next 10 years and this is going to pay you know XYZ for my loan and then it will be turned into arable land. This gives us a whole another avenue for financing land projects and I think that that is really cool. Wow very interesting and residential wise because I've always been fascinated by you know land buyers doing things like buying

up a piece of land and then reprimanding it and then selling it for like 10 times what they paid for it you know just that simple fact that they could just change what it was used for and sell it to somebody they could use it for that. There's just so much brilliant creativity that goes into stuff like this and I really appreciate the the details that

come out of it. And even as simple as going to your lender and saying like hey this is this is an alternate use for the land that I'm going to do not like a part of it. I'm going to do not like a parking lot or a campsite or something like that it's actually a really really cool and financially savvy way of approaching investing in land.

So that kind of takes us to the to the finale here we talked a lot about the zero emissions and I love the detail that you went into I'm sure everybody listening really enjoyed understanding it from a high level and really simplifying it down. But what are you excited about you know you've been in this space for a long time. You read the original white paper

back in the day. You've seen all the all the comes and goes the the Mt. Gox's the the FDX's. What are you get excited about when you get up in the morning what gets you just so hyped. You know you mentioned creativity there at the end and I think that's really what drives what we're doing at one chase X it drives me internally I love the

creative aspect of business and I love that. Working in finances has been pretty transformative because you know I don't think people truly understand what money is you know it's like money or the dollar is shorthand for value and value is shorthand for energy and energy and shorthand for like our human psychic will driving us towards this mass conscious vision that we have. And I think people's

consciousness is expanding their creativity is kind of coming out and saying wow I can use you know carbon for for a different purpose other than a punishment right. It's not just attacks on the public it's not that at all it's it's it's a way to creatively finance projects to do good works on the land and my wallet. You know I think that's really cool and I

think the whole entire crypto movement is it inspires me every single day because there are humans philosophically going on on Twitter and all these different spaces and podcasts all around the world where people get to put their ideas into the public space we get to beat them up and debate them for as long as we can and tear them apart and put them back together and

say okay let's work together and build a brighter future and I think that that no matter what is is what this whole thing is all about you know. Awesome well where could people go and learn more about one GCX. I'd say the best route is one GCX.com we also have a Twitter and one GCX global where I'm trying to get a little more active on that.

Twitter and in a website we're constantly updating and updating the exchange so keep keep keep keep an eye out for for all the updates. Right on sounds good. Well wherever you guys are listening on iTunes or Spotify the links that Michael mentioned will be in these show notes but thanks so much for coming on and sharing everything that is zero emissions. Thank you.