Interview: Perlin Project Manager Dorjee Sun on Bringing One Billion People to the Crypto Economy

During this year’s Consensus: Singapore 2018 conference, CryptoGlobe caught up with Dorjee Sun, project manager at Perlin, “the first practical, trustless and decentralized cloud computing marketplace,” that’s set to help up to one billion people around the globe have access to the crypto economy.

According to Sun, Perlin is set to help people earn up to $170 per year by simply using their mobile phones to power the supercomputer and make it globally accessible. During the interview he detailed how the organization is planning to reach its goals.

Among the details, Sun revealed Perlin is in talks with major organizations throughout the world, and that the cryptoasset’s blockchain is currently able to power “about 10,000 transactions per second.”

Perlin, according to its founder’s words, is set to offer cheap cloud computing services to clients, which could see it compete with e-commerce giant Amazon and its Amazon Web Services (AWS) offering. Below is the full interview, edited for clarity, consistency, and style.

Introducing the Project

Dorjee Sun: So we finished up our private sale, and our ledger. It's the first Avalanche consensus mechanism inspired by Avalanche, but it's now being changed in about 17-18 ways. That’s a big deal, because there are traditionally two fields of how to do these consensus mechanisms. And this is a new field that was put forward by the Cornell professor, Emin Gün Sirer.

If you look at the data, probably in two weeks/ by the end of this month, we'll have the finalized numbers. So we're about 10,000 transactions per second, which is still pretty fast.

CG: But the website says 1,600.

Dojee Sun: Yes, but we’ve really improved the performance. That's a big milestone that we've finished the visualizations of. We’re just really confirming the speeds, and the test should be done in about a month - it actually is mostly finished, but just, you know, fine cleaning, stabilizing, tightening it up.

Just to take a step back, our vision is that we will bring a billion plus people from lower per capita GDP to earn money by putting their phones and laptops into our distributed cloud, and then earning money.

Your compute power on this phone could actually be rented out when you're sleeping at night to do machine learning - AI computations - that would be taking money from say Amazon Web Services or Google Cloud. The idea behind this is, if you think about the bottom billion, they're on $1 a day. That phone would probably generate about $170 per year, if you were renting out the compute power for eight hours a night.

On top of that they would have web connectivity, they would have education they would have access to remittances through our token Perlin’s PERLs, [which] could be used as a store of value or transfer of value. That's really our vision. We are the first technically appropriate use case we see that can create earning. Earning, we think, is the killer app, because what do these one billion people need? They need money.

These are previously free distributed computing platforms where I can donate my computer at night, holding it at home, to solve cancer proteins, or [help] NASA Search for Extraterrestrial Intelligence. That's the vision. Coming back to the milestones, we've received funding from 200 strategic and institutional investors - Bitmain, FBG, a whole bunch of them. Also, big chat apps like a Kakao.

Perlin’s Expansion

CG: So you would integrate with existing apps?

Dorjee Sun: Correct. We looked at the full mobile stack and laptops, and we thought ‘okay, so we’re meeting with HTC today, will we be able to sign? Who knows.’ Besides, they only have X number of devices. Then there’s browsers, there’s games, there’s chat apps, etc. All of them will have their pros and cons.

We're still trying to find access points. Another access point is we've signed an MOU [Memorandum of Understanding] with the Prime Minister's Office of India, and we're in negotiations with telecoms, Bharti Aitel and Geo Telecom.

We are hopefully signing this week with Telkomsel which has 180 million users in Indonesia. That's the state-based telecom. I was with the Minister for Bangladesh, ITC, last week, and also with the Myanmar Minister. We’re [also] in negotiations with the new telecom providers in Nepal and Turkey. Right now, our coverage is about 2 billion people – in India, Indonesia, Bangladesh, Nepal, Turkey, Myanmar, Singapore,

CG: Do you have plans to focus on China?

Dorjee Sun: We definitely have a lot of support there, we think it's a hot market to penetrate. Fundamentally, every blockchain company has to look at customer acquisition. I don't know if you've ever looked at app adoption, but you what's the cost of acquiring a user? Do they stay on? Do they leave? What's the virality coefficient? Did they tell other people, what's the lifetime value of that client?

We've done mathematics or where we think is the more accessible market, [and] China's just a tough one. We are talking to companies, but we haven't actually inked anything yet

CG: From a client perspective: let’s say I’m looking to perform some cloud computing, what kind of savings do you expect?

Dorjee Sun: We can do 50%-80% cheaper. Right now, you've got Jeff Bezos: he has to set up a server farm, buy all of the computers, network them together and have stuff operated. That's how he creates AWS [Amazon Web Services].

Whereas we go to the poorest people who have devices and it's up to them. It's like the equivalent of Airbnb or Uber, Uber X. We believe that the economic incentives that we can provide would mean that the marginal costs of bringing on people in the developing world is very low. So we believe we can offer 50 to 80% cheaper

CG: With the same efficiency, speed, and reliability?

Dorjee Sun: Right now we’re testing use cases. If I'm a high-frequency trader that's running,  very time conscious, sensitive computations, I probably wouldn't be using necessarily what we're doing., We've got 15 partnerships confidentially, which we haven't published yet. For example, I met with big infrastructure companies: Exxon Mobil, Shell, guys like that.

They have huge computational requirements for predictive maintenance. Every hour their refinery is sending data, and their cycles are like one week to two weeks [apart]. Something like that is a no brainer. Plus they get to redirect the money to the local population, instead of sending the money to a multinational, trillion-dollar, billionaire-owned, Seattle-based company. So it's a CSR activity

CG: How flexible do you image DApps (decentralized applications) on Perlin being? Do you build anything you want, or are there limitations?

Dorjee Sun: We have a 10-year roadmap, and it’s always about being in the right place at the right time. We're quite patient in terms of when we think the supply and demand are going to mature. We are very confident because the demand for AI compute is doubling every 3.5 months, according to the CTO of Open AI.

CG: So I’ve taken a look at the whitepaper, has Avalanche been tested and peer-reviewed?

Dorjee Sun: I believe it was peer-reviewed, but you’d have to check with professor Gün Sirer. It was announced in such a spontaneous fashion that maybe it wasn’t, I'm not 100% sure whether it was peer-reviewed. But actually, our ledger is not 100% Avalanche. It is inspired by Avalanche. We’re currently undergoing the security audits and the reviews.

CG: OK. So how do you see the economics of PERLs playing out, with users generating a specific amount of PERLs and an incentive to liquidate to a local currency? From an investor’s perspective, do you see growth in value of these tokens?

Dorjee Sun: Absolutely. With all of these fixed supply tokens, the question is really like: will the demand for those tokens outstrip the supply? The way we look at it is, the addressable market for the cloud space is $300 to $500 billion by 2021, 2022 and 2023. So let's just say we’re able to get 1% to go decentralized. That would equate to $3 billion to $5 billion in demand. You could achieve a price per tokens that’s of a few dollars.

If you think about Bangladeshi workers in Singapore, they currently pay Western Union 15% for remittance. Actually, I think PERL tokens could end up being a store of value, or at least a transfer of value. If that's the case, we think that the token velocity will be much lower than Bitcoin, which is currently being high-frequency traded. Let's just say the token velocity is one or two, then you still going to have a token price of a roughly $1.5 to $3, something like that.

CG: From a security perspective, is all data encrypted?

Dorjee Sun: Yep. There's been a few academic papers, I'll get my CTO to send them to you. It's on the latest cryptography. Last year, there were a few papers in crypto in Asia that we based our privacy on, so in some ways think that it's safer than centralized cloud services which have been compromised by government agencies.

CG: So you can execute smart contracts, you can create DApps, it should be more scalable and faster than Ethereum – do you see the ICO market moving towards Perlin?

Dorjee Sun: It's a really interesting question. To be honest, we have not been actively promoting that, but it's a really good idea. I think that what most of the readers for CryptoGlobe would be understanding of is the wealth accumulation opportunity.

One of our pilots: if you think about me being a farmer in Indonesia and taking 10% of my income in PERLs, and let's just say PERLs appreciate significantly because of network usage, and then I decide to invest in other ICOs, suddenly a farmer has the ability to effectively participate in a growing asset class, which is the greatest form of social mobility, that currently is just not an offer for them.

If you're a farming Indonesia you have two choices, either plant something or cut down something and sell There's no ability to invest into Facebook shares or other forms of wealth accumulation. So the short answer is we have not actively pursued ICOs it's just because I think that regulation is going to change things.

When you raise it, I think it would be very powerful as a proposition if developing countries could also participate in wealth accumulation. Obviously, they’re not very sophisticated so you need to make sure they don’t get scammed. I mean just imaged that: ICOs for the billion. That’s pretty cool.

Wealth Accumulation Opportunities

CG: I think the key point, which I didn't really appreciate from checking out the website is the fact that you're essentially allowing something like universal basic income.

Dorjee Sun: But just think about where we see it. And this is also like, when Uber or Instagram nails the iPhone as being the device, which would then save their photos/GPS, location-based apps into stratospheric use cases. we're predicting ubiquity of web, you know renewable energy, ubiquity of energy, and then cell phones.

The greatest incentive, I think, for people who are poor is: children, health, education, you know, betterment. We did a call with the head of Telenor in Bangladesh today. What if you could provide them with free tele health services, right? So they've got health, some income access, then what about education? What if they could get educational components?

It's really “how do you create that type of platform” as opposed to just: "we have this side chain, blah, blah, blah interoperable, yada, yada, yada," which, you know, really could use adoption. But if I can say to everyone, hey, earn $170 a year and get a free phone, and all you have to do is plug it in every night. I think that that's a really rapid adoption.

CG: As for the mainnet launch, do you have an estimated launch day?

Dorjee Sun: February of next year is what we say externally, but we hope to hit testing in January. What we've inked with most of our partners is a 12-month adoption. The idea of actually have devices earnings in 12 months, that’s our goal.

CG: So you aim to be embedded in the devices? You wouldn’t download an app?

Dorjee Sun: We're trying to do devices, we're looking at browsers, we're looking at apps. My line in Indonesia has 40 million users. We talked to them about trying a pilot - we just looked at any access point, but obviously the easiest is direct download.

CG: So for people looking to invest, do you when the public sale is?

Dorjee Sun: Most likely it's reliant on the market. We're not strapped for cash. We are really just omniscient of, I think, right now it's such a negative environment, and that's why we haven't announced a lot of our successes. It’s kind of like shouting off a cliff, like throwing eggs against a brick wall.

We think that unless there's some stabilizing, mild upward trajectory towards the end of the year, for a public sale we're probably thinking two months but we're not in a hurry to rush it out because all our investors understand that it's a long hold.

CG: Final question: Can you summarize where you hope to see Perlin in 10 years?

Dorjee Sun: In 10 years time, Charlie, mark my words: I'll be 51 and we'll have one billion plus people generating some income and hopefully utilizing that tool to provide education and opportunity. Low cost remittances, store value transfers across the most underprivileged nations. Effectively also hopefully providing the younger market with devices as well so a billion users into this ecosystem. It's gonna happen.

Brazil Is for Blockchain but Against Crypto

Brazil, or the Federative Republic of Brazil, is a Portuguese-speaking state in South America with more than 200 million inhabitants. It is in fifth place among all countries of the world in terms of area and sixth in terms of population.

The Brazilian economy ranks ninth in the world in terms of nominal GDP and seventh in purchasing power parity. The country is a member of the UN, G20, WTO, Mercosur and the Union of South American Nations, and is also one of the BRICS countries.

Despite the active development of IT in the country and massive investments in this industry, large investors and financial institutions have preferred to stay out of cryptocurrencies. Brazil has tightened crypto control: investment funds are now banned from buying cryptocurrencies, and banks have demonstrated unfriendly attitudes by blocking the accounts of cryptocurrency companies and crypto owners.

Nevertheless, Brazil is actively integrating blockchain technology into its infrastructure and economy and even launching its own instant payment system. More on that in the article written by Solomon Brown, Head of PR for Freewallet, a cryptocurrency wallet developer.

Cryptocurrency Regulation in Brazil

Interest in the crypto industry is growing in Brazil, and regulation is slowly catching up. The main managerial authority that currently deals with crypto companies is CADE - Council for Economic Protection of Brazil. Regulators have still not taken decisive action. They first showed their willingness to do so in November 2018, submitting for consideration a bill on the taxation of crypto assets.

On May 31, 2019, the chairman of the Brazilian Chamber of Deputies ordered the creation of a commission to consider cryptocurrency regulation in the country. The commission is tasked with overseeing the digital asset industry. Also, the Brazilian Federal Revenue Office (RFB) has issued new rules requiring cryptocurrency exchanges to inform the regulator of user transactions in order to detect tax fraud, local news outlet Livecoins reported.

The guideline states that cryptocurrency trading platforms in Brazil have to inform the agency about the movement of user funds in cryptocurrencies and comply with the requirements of standard 1.888 / 2019, published last May, “whenever the monthly volume of operations exceeds 30,000.00 Brazilian reals ($5.140).” In addition to the transaction volume, operators must also provide additional data including the citizenship of the owner of the digital currency, his place of residence, registration number and a description of the crypto assets used in the transaction.

At the moment, there are no other specific laws regarding holders: those who store crypto without transferring their assets to fiat don’t have to pay income tax. Some investors have to report to the tax service — there is a provision requiring you to pay a 15% income tax on earnings of more than 35,000 reals per month, which is approximately $6,000.

Meanwhile, the four largest financial agencies in Brazil have teamed up to create a regulatory sandbox and develop regulation for new technologies, including blockchain. The Ministry of Finance, the Central Bank, the Securities Commission and the Superintendent for Private Insurance of Brazil announced their intention to put together a set of rules for fintech and cryptocurrency businesses.

Regulators said the new rules will affect Brazil's securities, finance and capital markets. In addition, institutions will create a normative sandbox to facilitate new developments in technology.

A new regulatory initiative came soon after the announcement of plans to establish a Cryptocurrency Regulatory Commission in Brazil. Although new regulatory efforts are defining the boundaries of using cryptocurrency and blockchain technologies in business, many cryptocurrency sellers are still not classified in the financial market.

The Minister of Finance has hailed the benefits that DLT technology has brought to Brazil's financial markets, also mentioning cryptocurrencies and ICOs in the field of finance. Brazil currently has the largest number of cryptocurrency users in Latin America and ranks fifth in the world in this respect. According to experts, at the end of 2019, 8% of the Brazilian population owned some form of crypto asset. But with all that red tape, a basic question arises: How do locals buy cryptocurrencies?

Cryptocurrencies in Brazil: Where to Buy and How to Spend

Local Bitcoin Exchanges

Despite the government’s bearishness, Brazilian cryptocurrency exchanges and exchangers still exist and are operating, but not actively enough, compared to the countries that are more friendly to the crypto industry. Here is a summary of the volume data of Bitcoin buy and sell transactions collected from 40 local exchanges, such as BitBlue and Braziliex.

According to Cointrader Monitor, a local website monitoring cryptocurrency quotations in Brazilian brokerages, exchanges reported having handled 395,209.48 Bitcoins from January 1, 2019 to March 31, 2020. The highest volume exchange was demonstrated by MercadoBitcoin with 120.889.34 Bitcoins traded, corresponding to 30.58% of the national market.

The day that registered the biggest Bitcoin movement in the period was June 26, 2019, with 5,070.38 BTC. And the day with the least movement was January 1, 2020 with 64.90 BTC. Analysts suggested that the downtrend might be a consequence of cryptocurrency companies having lost credibility due to litigation with their clients.

Talking about the BTC trading volume, it is interesting to note that the 2020 numbers are encouraging, compared to the figures from the first quarter of 2019.

img 1.png

Source: CointraderMonitor

From January to March 2019-2020, the national Bitcoin market saw a 32.64% increase. Thus, if the trend continues, we can expect a volume of more than 480,000 Bitcoins traded in Brazil in 2020.

These figures prove a considerable number of Brazilians are sticking to local crypto services, exchanges and wallets. Nevertheless, the country is in Freewallet’s top 20 list by number of users, which makes us extremely proud.

What to Buy for BTC

In the Brazilian city of Fortaleza, citizens will be allowed to pay for public transport with cryptocurrency, according to Cryptoglobe, which cited local media. The Ceart State Autonomous Carrier Cooperative (COOTRAPS) announced that a new function for buying tickets via QR codes will appear as part of a special application. Currently, debit and credit cards are the supported means of payment.

COOTRAPS is also considering adding cryptocurrencies other than Bitcoin. City authorities want to increase the efficiency of the payment system, reduce its cost and attract more people who will use this service. This is a way to reduce bureaucracy and make the system easier for users with the help of crypto.

In December 2018, Oásis Supermercados began accepting cryptocurrencies as a payment method. Now, shoppers in Rio de Janeiro can pay for purchases with Bitcoins, Bitcoin Cash and Litecoin. For this, the supermarket chain is working with CoinWISE. In this arrangement, the withdrawal of cryptocurrencies to fiat occurs every three days.

In Brazil, more and more local companies are beginning to support crypto. Clients of the Technisa construction company can get a 5% discount when paying with Bitcoins. Bitcoin Cash and Litecoin are accepted by transport companies Brasil Sul and Viação Garcia and metro operator Metrô Brasília.

In 2017, Dash announced a partnership with the Brazilian platform CoinBR. After that, the altcoin began to be accepted in 13,000 stores. Earlier Dash announced a collaboration with the Uphold platform.

According to a statement by Dash CEO Ryan Taylor, this will allow 94 percent of the population to use tokens in everyday life. Simultaneously with these events, the digital currency rate has more than doubled, since November 2017, when the coin was worth $300.

Analysts even believed at one point that, due to its widespread distribution in Brazil, the price of the altcoin would rise to $1,000, which wasn’t that far-fetched back when the price was around $840.

img 2.png

Source: newsbtc

But, as we all know, nothing lasts forever, and Dash is currently trading around $74, according to CryptoCompare.

Brazil: Blockchain for Good

Unlike crypto, which hasn’t been warmly welcomed, blockchain is employed in many Brazilian social institutions.

In early September 2019, the first birth certificates were issued exclusively through blockchain technology without having to go through registration in the registry office. A new type of registration project was developed by technology company Growth Tech in partnership with IBM. Registration is done through Growth Tech’s Notary Ledgers platform, which provides virtual notarial services.

The Brazilian Ministry of Education has proposed the creation of a blockchain platform for the issuance of digital certificates of education among non-state universities in order to combat the falsification of diplomas. Brazil Education Minister Abraham Weintraub said the government is considering this opportunity. The resources for financing the development of the platform will come from private educational institutions themselves, as they will be solely responsible for issuing diplomas.

In addition, to implement this measure, the ministry will require universities to create independent departments responsible for managing the blockchain-based platform. Local media have also reported that at least 14 private universities have already shown interest in the government’s proposal. Gilberto Garcia, the former president of the National Board of Education, said the initiative also includes all educational institutions in the system, which will support the concept of transparency that the blockchain can offer.

PIX: The Prospects of Cryptocurrency in Brazil

Brazilian cryptosphere has had a bumpy road due to the slow development of crypto regulation in the country. For instance, recently the XDEX Brazilian cryptocurrency exchange, owned by the largest brokerage company in Latin America, XP Investimentos, announced its closure. And it’s not the only company that has had to make this difficult decision due to disappointing market forecasts. A lot of cryptocurrency companies have had  to continue fighting banks in order to be provided with financial services. Just recently the Mercado Bitcoin exchange won its court case over a bank closing its bank account this March.

Nevertheless, the government is eager to implement blockchain decisions to improve the lives of its citizens. For instance, this February, the Central Bank of Brazil launched the PIX instant payment system which uses QR-codes and doesn’t require personal data. This initiative is a tool to fight against alternative digital payment means, including cryptocurrencies.

The system, which involves all state banks, will allow for almost instant payments using mobile applications, Internet banking and ATMs 24/7. Hopefully, this measure will add to the blockchain adoption that’s happening right now in Brazil. And, who knows, maybe after PIX proves the benefits of anonymity and cashless transfers, cryptocurrencies will also get regulated and be welcomed by the state.

Featured image by sergio souza on Unsplash

Solomon Brown, Head of PR at Freewallet. Drawn to the blockchain space by a belief in its ability to restructure global finance and passionate about telling stories, Solomon cut his teeth in blockchain startup promotion before joining Freewallet's Team in 2018. LinkedIn