Michael Mathias came to Malta at the beginning of 2016, attracted to the country by what he describes as an “enlightened” outlook. “I was attracted to the leadership, which I realised was very supportive of blockchain and cryptocurrency, so that was very attractive to me as an investor.”
Mathias’ background is in financial services and technology, so it was quite natural that he would find his niche in the fintech industry. “Fintech, I would argue, encompasses the whole realm of blockchain distributed ledgers, technology, cryptocurrency; it’s all fintech so my background fits the two perfectly.”
He says he learned about Malta through word of mouth. “I’ve had friends who came here and they gave me very positive feedback. I loved the country’s entrepreneurial spirit.”
Malta’s reputation as a tech hub is growing, Mathias says. He has praise for Malta taking a leadership role in the industry: “I think the government made a brilliant move. They realised that there are certain industries that are growth industries that would love to be based out of a place like Malta, and it’s such a beautiful place even though it doesn’t have the advantage of a tonne of natural resources to build its economy with. So, instead it has to be very smart and promote itself as a country of foresight and innovation.”
“That’s the way someone who understands the dynamics of modern economies very well thinks, and who has backed it up with the right policy decisions that brought about a lot of growth in a short span of time. The whole fintech industry was waiting eagerly for the first country in the world to introduce a slate of legislation and regulations around blockchain and cryptocurrency; we were all waiting for someone to step up and do it. And it was Malta who did it first and I applaud the government for it.”
“I think this is a moment of incredible change. I see it as a total paradigm shift, and there are a lot of people that are in the legacy of financial services that don’t understand exactly how fundamental the change is.” According to Mathias, blockchain will eventually be even more all-pervasive than the internet, with every facet of daily life impacted by it.
Blockchain created the ability for an immutable, virtually impossible to counterfeit, unit of value to be sent through the internet. “So, until that point, because everything could be copied, there was no confidence in the whole idea. But blockchain all of a sudden made it possible to accurately keep track of that unit, so you knew that it wasn’t just manufactured somewhere.”
Decentralisation means the network operates on a user-to-user (or peer-to-peer) basis. Decentralisation is the essence of blockchain and it can be used in a myriad of applications. Be it smart contracts, file storage, governance, AML or KYC, blockchain holds a great deal of promise in each of these areas. The blockchain gives internet users the ability to create value and authenticates digital information. Its possible applications are literally endless. The forms of mass collaboration this makes possible are just beginning to be investigated.
“Imagine if you’re talking about a traditional currency like the euro. If you’re able to print one euro, then you’re able to copy it too, which means you can spend that same euro in more than one place and that’s what called the double-spend problem, which is a big problem to sort out. Blockchain is what solved that problem,” Mathias explains.
So how would blockchain technology change our everyday life? According to Mathias, essentially it isn’t the process that changes, but the values driving the way everything is done. “Right now, everything is done in a centralised way, meaning there is one company which runs that operation, one company that is commandeering those resources to provide a service. When you get into a highly distributed economy that is built on the blockchain, you distribute that power to the entire society.”
Another way blockchain could usher in important changes in the local context is in streamlining the process of purchasing property; in fact, a number of the larger real estate agents in Malta have already begun studying how they can utilise this technology to close the gap further between buyers and sellers. A practical application that is currently being explored is the creation of a system that gives stakeholders access to real-time data about the property industry, which is stored on the blockchain in a secure, easily distributed and immutable format. This would allow real estate professionals to uncover and analyse trends in the market, and use this information to adapt more quickly to changing market needs.
Through a distributed digital ledger, professionals in the property industry will be empowered to work on more projects at a quicker pace. The detailed ledgers will eradicate a lot of the bureaucracy that comes with the purchasing process - making it faster, more streamlined and profitable for everyone involved at the end of the day.
Mathias is also the brain behind Das33, a platform that uses blockchain technology to tokenise smart contracts in an immutable digital format. “It is a new way of aggregating resources for new enterprises, and to track results in a performance-related way,” he explains.
“What we’ve done with Das33 is that we’ve introduced an entirely new type of token to the world. A token that is based on a smart contract, so what it ends up being, essentially, is an if-then statement in tokenised form.”
Das33 is a platform offering fledgling companies the ability to access the resources needed to grow their enterprises without having to dilute existing equity or incur costly debt by introducing a unique digital token format, called “premium tokens,” on the DasCoin blockchain that enables a company to pay a predefined premium to token holders. Each token represents the potential for future value based on partner companies achieving key performance indicators. This is also a more effective way for token holders to participate in potential growth opportunities – and without sacrificing access to immediate market liquidity. Users can pledge cryptocurrency for the tokens via the DasExchange. Once a crowd sale is completed, tokens are released and can be actively exchanged.
One project using the Das ecosystem is Greenstorc, an exciting renewable energy solution harnessing heat from the ground. The project successfully used Das33 as its crowdsourcing platform. The process was simple: Premium tokens were digitally created on the DasCoin blockchain. Each token represents the potential for future value based on Greenstorc’s level of achievement of a designated key performance indicator, specifically in this case, the number of megawatts of production that Greenstorc creates.
Thanks to Das33, cryptographic resources were pledged by interested participants, who in turn received tokens corresponding to the project. Token holders are then paid a pre-defined premium once the designated KPIs are reached.
Mathias enthuses about the possible applications of the platform. “Take as an example the movie industry. A movie can do well, but sometimes the person that put in their money doesn’t even recover their initial investment because there are so many other costs and you’re always the last in line in terms of equity. There are so many costs that eat up any profits, and there are many ways to exclude shareholders since it’s all done in a very opaque way.”
“With a platform like Das33, every investor could be a token holder who gets one penny for every million dollars at the box office that this movie is going to do. That’s obviously a basic example, but the main idea is that there’s a distinct reward for achieving a particular key performance indicator, and this is usually box office sales. That opens a whole new avenue of capital, because now not only is the token tradable, there’s also a way to recover your funds. So there’s this very clear measurement that you can feel confident about as an investor in a risky project, so you would be willing to put more resources in because of the clarity and the liquidity.”
And that is the remarkable transformation that a premium token by Das33 can provide. “We’re bringing clarity to every business. It’s not a debt, it’s not equity - it doesn’t have anything to do with that, it’s literally a tokenised form of a business objective, which can be stored in a digital wallet like any other cryptocurrency, where the reward is paid automatically upon reaching that objective.”
Das33 has a lot to offer local businesses, he says. One of the local applications for the platform could be business financing, he says. Any entrepreneur can decide to use a premium token to finance their next big idea, and it can be applied to every kind of industry.
“It widens who gets to play a role and does so in a very democratic and transparent way: whereby an entrepreneur can propose a certain goal and investors receive a certain reward when they reach it. This allows people who would never dream of being able to invest in a business, to finally be able to do so. The current paradigm cuts out some of the opportunity that there is, but this way the money is not trapped and it’s completely affordable. ”
For more information visit www.das33.io