This episode of Money 3.0 takes a deep dive into Stellar, a decentralized payment network and protocol with a native currency called lumens or XLM.

Joining us to discuss the project is Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation. In this episode, Abra’s Bill Barhydt sits down with Denelle to talk about our new role and learn more about the foundation’s mission to unlock the world’s economic potential by making money more fluid, markets more open, and people more empowered.

Listen to the episode or find a full transcript below:

Bill Barhydt: Hello everyone. Bill Barhydt here. Welcome to another exciting episode of Abra’s Money 3.0. With me today in beautiful San Francisco is the Denelle Dixon, CEO and Executive Director of the Stellar Foundation. Denelle, welcome to Money 3.0.

Denelle Dixon: Thank you so much for having me.

Bill Barhydt: Denelle, I think a lot of people in the Abra audience or our listenership aren’t familiar with yourself, and how you got into this position at Stellar. So just introduce yourself. Where you’re from? What’s your background? How did you get into Stellar?

Denelle Dixon: Yeah, so Stellar, the SDF, the Stellar Development Foundation, which was founded by Jed McCaleb and others, Jed reached out to me about a year ago, so it was September of 2018 to talk about the Executive Director role. It’s a funny story that I actually thought he was talking to me about directors on the board, and I didn’t realize it was for the Executive Director role.

Bill Barhydt: I see.

Denelle Dixon: We were talking past one another for a bit. I was the COO of Mozilla. I had been there for seven years. I was running a lot of the different departments there, the revenue lines, the business, as well as just all the operations groups and policy.

Bill Barhydt: Now technically, Mozilla is a nonprofit, but it actually generates a fair amount of revenue, I assume because of search right?

Denelle Dixon: Yeah. So Mozilla is owned by a nonprofit, which is the Mozilla Foundation. Mozilla Corporation is the for-profit entity that I worked for.

Bill Barhydt: I see.

Denelle Dixon: And so while we have a single shareholder, so essentially we operate collectively as a nonprofit, and we generated a ton of revenue based on search and other…

Bill Barhydt: Right. Right, right. So that means Google and others will pay you to basically make their search engine the default of whatever the click-through revenue would be. You get a piece of it, I guess it’s how that works right?

Denelle Dixon: That’s right.

Bill Barhydt: Right.

Denelle Dixon: That was the vast majority of revenue among other revenue lines that we were working on. The interesting thing for me as I did a lot of the … I did the policy work for Mozilla, so I spent a lot of time talking about the open web, and trying to help to figure out how we could improve the ecosystem holistically. So it was much more the nice thing that I used to always say when I worked at Mozilla, and I did the policy piece, was it’s so phenomenal to be able to think about something other than just our products and the good for our products, and that we could think about the good for the ecosystem at large.

Denelle Dixon: And so that’s what we did. A couple of things when Jed came to talk to me that really resonated deeply was that this is a relatively nascent space just in terms of if you think about the way we call it’s the internet for payments with respect to something like Stellar and blockchain generally. And there’s a lot that you can actually use that we did wrong on the content side of the web, is the way I like to call it, that we can actually try to do differently here.

Bill Barhydt: What would be an example of something we did wrong?

Denelle Dixon: I think that privacy is a really good example of what we did wrong. I was a really strong advocate of self-regulation for years and years and years, and I think that we created a bit of a monster for ourselves in terms of what we see today. A lot of challenges with self-regulation. But also now we see regulation all around the world that sometimes conflicts and sometimes instates. So it’s even all over in terms of potential opportunities to conflict. And had we actually just created a standard and had it regulated at the outset, lots of regulation could have followed from that.

Bill Barhydt: Right.

Denelle Dixon: And I think that that’s one of the things that was a really stark realization for me is when I thought about blockchain, a lot of the challenges with it is that there’s this dark cloud over some of the things just because of history, but regulators don’t really understand it and are just trying to become familiar with it. And we have an opportunity to provide education to create stability in the ecosystem, whether that be based on what tokens are or that be how you’re regulated when you’re a network that the network isn’t regulated, but endpoints are. There’s lots of opportunity there to be able to help create stability so that people aren’t operating in this gray area.

Bill Barhydt: Yeah, that makes a lot of sense. Now, as a quasi outsider at the beginning of your tenure here at Stellar, I’m sure you looked at all the other projects that are out there. Why was Stellar in particular exciting to you, and how did you feel that the organization and technology was able to differentiate itself in a way that was attractive to you?

Denelle Dixon: There are two, I think, areas on that. First, I think about the structure as being really important. I love the fact that we have structured ourselves as a nonprofit nonshareholder entity. We pay taxes, so we’re not a 501C3, but the thing that’s important to me about that is that there are no dividends that are paid. There is not a group of people that are going to become enriched as a result of this activity. And so we can separate ourselves a bit, which is frankly a lot of what I was able to do at Mozilla. I was able to talk about the ecosystem and policy from the standpoint of I do have a product in the market, but I’m also not looking just out for my product. I’m looking out for the market. And so I feel like our role allows us to be able to create this network but to advocate not just for what we want to do, but also what’s going to benefit the network at large.

Bill Barhydt: So this idea that you’re doing a lot of things in the background for the greater good, that the user of Mozilla might not have even understood, known about, certainly not seen, resonates here as well, right? Because there’s a lot of things that have to happen in the background for this stuff to become useful to the average person that they may not understand ever happened.

Denelle Dixon: That’s right.

Bill Barhydt: Is that a fair statement?

Denelle Dixon: That’s exactly right. So from my standpoint, and we don’t need to take credit for all of that work because the good thing is, is that the network’s growth, not just our network, but frankly blockchain generally, especially if it’s actually focused on the good of the cross-border transactions in allowing the unbanked to have more access to even the current financial system, those are things that it’s good for everyone to be able to get there. And so the work that we can help to do by laying that foundation from a regulatory standpoint, not just domestically in the US but also extra territorially I think is a really important space.

Bill Barhydt: Yeah. Now, you mentioned the structure as a nonprofit as being interesting. What else about the Stellar model was interesting to you in making the leap from Mozilla to Stellar?

Denelle Dixon: I think that the second area for me is the technology. I spent a lot of time, again, having understood blockchain generally and having spent some time while I was at Mozilla looking at this, I understood the different types of consensus and the proof of work, proof of stake, and then obviously the Byzantines federated agreements. One of the things I did is I spent a lot of time understanding the network and what Stellar had to offer. And for me, the idea that you could actually have a network that prefers safety over likeness is a really important part of what we don’t have in all networks.

Denelle Dixon: I think that what I mean by that is that if the protocol, if there gets to a place where there can’t reach consensus, that it’s not going to allow it to fork. And so we won’t have two competing chains that will run with potentially duplicative transactions. It’ll stall. And some people might not like that, but from my standpoint, it allows us to be able to describe to frankly an audience that would care about it, which are our regulators, that this is how it actually will happen.

Bill Barhydt: Has that ever happened?

Denelle Dixon: It did. We had it in May, that it actually stalled for 60 minutes.

Bill Barhydt: 60 minutes. And do you know why that happened?

Denelle Dixon: It’s actually that we did a great I think blog post on this to describe it, but it was an output of really pushing decentralization because when you have to make sure that all of the validators are updated and everybody is working with the same codebase. And so there were validators that didn’t have the same codebase, and that weren’t working on the same…

Bill Barhydt: I see.

Denelle Dixon: We were able to get it back up and running, but it’s exactly the kind of thing that we prefer to happen.

Bill Barhydt: Right. So just to be clear, we got that back up and running. Who’s we in that scenario, and what does it mean to get something back up and running in a decentralized model when it stalled?

Denelle Dixon: Right. So there’s a tier-one validator channel, and the validators have to all make sure that they’re communicating. And that’s what happened. So when I say we, I don’t mean SDF, I mean the network. We were able to look at it and say what’s happening here? And get the validators all aligned in that.

Bill Barhydt: And in theory, the network is set up to do that automatically, install itself as one would say.

Denelle Dixon: Yes.

Bill Barhydt: Got it.

Denelle Dixon: And I think that one of the things that I … That was a part of it, just the way that we’ve developed the Stellar consensus protocol, the preferences in the protocol, the notion that you can have multicurrency on here. And so it’s not preferring our currency, the native currency, which is the lumen over anything else. I think those are all things that from a technology standpoint, I felt like it created a really nice opportunity. Again, getting back to my roots in terms of openness and transparency and really caring about standards and creating those, the network opportunity, all the things resonated to that.

Bill Barhydt: Yeah. So you really dug in to understand what was going on behind the scenes, and how it all worked. I don’t know how else to put it, but you basically, you also inherited a genius when you walked in the door.

Denelle Dixon: Exactly.

Bill Barhydt: How’s that going?

Denelle Dixon: Are you talking about Jed?

Bill Barhydt: I’m talking about Jed. I was curious to see who you thought I was talking about, but yes, I’m talking about Jed.

Denelle Dixon: I have to say, one of the things for me too, I’ll just be very honest about it, is being a woman in Silicon Valley and in technology, a lot of times we happen to be the women behind the men who are doing the work. And we don’t need to get into that…

Bill Barhydt: I’m okay with that. I don’t care about that.

Denelle Dixon: This has been a lot of my career, and one of the things I didn’t want was to have that. If I was going to take on the CEO role in an organization, I wanted it to be that I was the CEO.

Bill Barhydt: Sure.

Denelle Dixon: One of the things that Jed and I did, we had dinner together. We spent time together before, and we talked a lot about these issues, about how this would be, so that when I got here, I wouldn’t be surprised, and he wouldn’t be surprised about how this was going to be structured.

Bill Barhydt: Like, oh, she was serious about that.

Denelle Dixon: Right.

Bill Barhydt: Yeah.

Denelle Dixon: I find Jed to be just incredibly unique in terms of the folks that I’ve met in the Valley, and founders in the Valley, about how he recognizes his strengths, and also the things that he doesn’t do so much.

Bill Barhydt: I hear this over and over again. It’s very impressive.

Denelle Dixon: It is. And I just have such great admiration for him, respect for him. I think it goes both ways in terms of him for me. And so things have been phenomenal since I came. I mean, that’s one of the things that you worry about when you come. I’ve worked with many founders over the years, and everybody’s got their uniqueness and their quirkiness. But I think one of the most important things is that you can feel respected on both sides. So I respect him for everything that he’s done with respect to this and other things, but also for what he continues to do for the organization.

Bill Barhydt: How long have you been here now?

Denelle Dixon: Almost seven months.

Bill Barhydt: Seven months. Do you have an opinion on what the key challenges are for Stellar over the next one, five, or ten years? I’d love to hear your perspective on that.

Denelle Dixon: We just had our first conference, which is our first Stellar- focused conference, and it was really phenomenal in Mexico city where we had almost 400 without actually creating a lot of marketing around this — 400 folks come to the conference to spend time together and with us. And I think the largest challenge is just capitalizing on the momentum. I feel like we’re just on this precipice of this all just blowing up in a really positive way, not just for Stellar, but for blockchain. And I think we need to capitalize on that, but we need to do it very strategically and methodically. I talk about our mission, and I think that the mission, focusing on the unbanked and creating access to the global financial system is phenomenal, and when you find a mission, it shouldn’t be something that can be achieved in five years.

Denelle Dixon: You want it to be something that you can ladder up into. And so you take it off in bite-sized chunks. And so the most important thing is that I think in the challenges, but also opportunities is for us to really focus on creating the endpoints on the network. I think about the network truly as like a web that’s sitting in a window. And you need to attach the web to all these different places on the window to make it stick. Those are our anchors. And so we need to bring anchors to the network, and we have many, but bring anchors to the network in all the regions that we’d like to be able to have application layers, provide services. And so it’s a really key focus of ours and we really need to dig in on that.

Bill Barhydt: Why do you think crypto and Stellar specifically is uniquely suited to address this democratization of access that is in the mission that you described for Stellar?

Denelle Dixon: Yeah, I think about that a lot because you see a lot of other phenomenal businesses take on the task of doing it. And I think that it doesn’t mean that blockchain is the only way to do it, but I just find the speed at which Stellar and blockchain generally can solve this problem, I mean literally doing transactions in five seconds, and making it simple for the end-user. On Stellar, you can issue a token that you want to be a closed-loop, meaning that if an organization in Tanzania decided that if they own the various different entities and they want to issue tokens for their consumers or for the folks that work for them and make it simple so they can get it, it can be done so quickly. It’s just simple. It’s a few lines of code. I just think that this technology allows for standardization, it allows for that kind of openness, and it feeds into the existing financial system. It doesn’t try to displace it.

Bill Barhydt: Sure. I’ve always likened this a little bit to TCP/IP. The average person listening to this doesn’t understand what TCP/IP is, but it is basically democratized access to information. And this is a hard question, so I’m sorry for setting you up a little bit, but how do we go from TCP/IP taking 25 years or 30 years since the advent of the web to basically being this technology then in the background is democratized access to information be the web to crypto doing the same thing for financial services that people don’t even have to understand all the mumbo jumbo, they can just use it?

Denelle Dixon: I don’t think it’s actually that hard if you’re focused on … The network layer is there, it’s already set up. We need to get the endpoints on there, and we have many already, but we’re focused on that. I really believe that this just gets down to the basic tenant of focusing on the user, and what value and what needs does the user have. If you focus on application layers to solve user problems instead of to be like … People talk about sometimes is that killer app. Well, it’s not a killer app unless it’s actually solving a user need and a user problem, and doing it in a very simple way. Blockchain actually allows for simplicity. But it’s funny when you look at well sometimes that are not focused on consumers who aren’t in the Blockchain space already, then they do seem a bit more complicated. So you just have to get back to that simple tenant of creating applications that are really focused on the user and whatever your target user is.

Bill Barhydt: And does your focus need to be on the developer of those applications, or does it need to be on the applications themselves, or all of the above, or more than that?

Denelle Dixon: For SDF we are very focused on the network layer. That’s clearly our bread and butter and our strength.

Bill Barhydt: Yeah. And when you say network layer, we’re talking about the tier one validators, the protocols, all of it.

Denelle Dixon: Yes. Supporting all of that. I look at us, and so the way that I articulate this because it’s hard I think when people think about a network, we shepherd the code base, but we are responsive to all of those folks who are already validators or developers on the network. So we respond and we provide. I think it was really awesome. And this is one of the things that I think demonstrates the decentralization of a network is that there we just … In terms of inflation, the inflation was disabled on the network. Inflation had been something that was in the network since its inception, and it was recently disabled, I think it was October 28th. And the way that it was disabled was we had listened to all the threads and the developer communications on this for years and finally said, okay.

Denelle Dixon: And we also had someone who submitted actually a proposal for how to do it. We provided that codebase out to the validators and said, “What do you guys think? There’s a vote on October 28th, which is just part of the process. And you vote on whether or not you’re going to accept the new code.” So from what I talk about how we’re working, and they voted to accept it. And so then the inflation was disabled. That’s how you work in a decentralized framework. And our job is to watch the network, collect the feedback, and provide this out there. That’s the first thing. That’s our bread and butter, and we’re really good at that. We can actually work with the network to create a better opportunity. I think the second layer that we’ve taken on in terms of at least for the next several years is really focusing on the application layer by building a wallet.

Denelle Dixon: And so we announced that also at Meridian in Mexico city. And it’s not something that we are focused on for generating revenue for us, although I do think it has to generate revenue because then it shows the value for others, how they can do it to generate revenue. So it’s a very important model that I think you have to put in play thinking about how products work. And so we are focused on the application layer, and working … We understand the code base, we understand the platform and how to work with it, and so we’re developing that. So we are in that case focused on the end consumer. The rest of the time we’re mostly focused on developers, regulators, folks who are not yet developers on Stellar who we want them to be. So lots of different audiences, and I think we need to get this done right. We need to pay attention to all of them.

Bill Barhydt: Yeah. How do the regulators look at SDF itself? Are you a regulated entity, or what is your relationship then? Regulators is a very broad term, right?

Denelle Dixon: Yeah.

Bill Barhydt: So how does that work for you?

Denelle Dixon: We’ve spent time with regulatory bodies, folks that do regulate like FinCEN and the Fed, and folks that actually do provide regulation of various different pieces, and also different areas in the DOJ. Those are traditional regulators, but we also have spent time with the policymakers, which are the domestically and extraterritorially focusing on Congress people and senators. To talk to them and their staff about it. We are not a regulated entity because we are … And I don’t think the network layer should ever be regulated. If you regulate the network layer, it’s like regulating the internet. And you really should be creating that standard that everybody can cooperate with and connect to. But I think it’s important that regulators and policymakers understand that countries know how to regulate currency. They’ve been doing it for years.

Denelle Dixon: And the good news is that actually all the entities that touch fiat on and off are already regulated by wherever they sit and whatever bodies they have to engage with. And so even having that kind of fundamental knowledge being transferred to folks that are focused on blockchain and get a little bit concerned about the use cases and how it’s going to complicate their lives, I think their lives are actually not any more complicated because they know how to regulate currency. This is an endpoint that they already have regulations for. All these different folks who touch fiat on and off. So then the next thing is to get them comfortable with the idea that a lot of times what you’ll hear is, well, what about that consumer?

Denelle Dixon: That consumer who gets either there’s a money laundering piece that they can somehow… or they lose their lumens. And the good news is that in blockchain, whereas not with when you had money, paper currency over to someone, you don’t have a record of it unless you write that up and take a picture or do whatever. Blockchain has a record, it’s open, it’s transparent. So even having those kinds of conversations really changes the dynamic. But at the outset, we’re not regulated. And also our wallet is a noncustodial wallet, and so we’re not from that standpoint from the application layer.

Bill Barhydt: Very interesting. That leads to a question right there. A lot of Blockchain crypto protocols out there, Jed and the team have been at this for a while, what, in your opinion, separates Stellar from the other crypto and smart contract protocols that are out there? And do you see that changing over time or do you think that’s defensible? And does it need to be defensible, whatever that is?

Denelle Dixon: This is maybe where I differ with lots of folks out there. I believe competition allows for innovation and creativity, and I feel like we constantly need that in our world, and we need it. I felt the same way at Mozilla. We need to have really interesting competitors out there so that we can focus on. So what makes Stellar different, I think is our corporate structure. I also think that the cost, the scalability, and the speed at which Stellar allows transactions to flip through it is something that is unique.

Bill Barhydt: Okay.

Denelle Dixon: The consensus protocol itself I think it’s different, and it’s very interesting from the developer’s standpoint.

Bill Barhydt: Why is it interesting? Why is the consensus protocol interesting from the developer’s standpoint? That’s an interesting statement.

Denelle Dixon: I think that a lot of developers will come in, and they’ll try to understand why do we have this? And if developers really care about the decentralization because that creates trust, the consensus protocol allows for decentralization in a way that allows the developer to have choice. So for example when you become a validator, you get to choose who you trust in the network. We don’t give you a list and say you must trust these people. That’s not our role at STF. You get to go through the Tomo files and decide I’m going to trust this entity or that entity. And you do it based on how they are viewed in the validator community. And I feel like, and we like it when folks want to be tier one developer de validators on the network, who care about this and they want to promote the decentralization, these are things that they look at, and I think find different-

Bill Barhydt: What’s their incentive by the way?

Denelle Dixon: Well, I mean this is the interesting thing because being a validator creates a very strong and robust network. And if you care about decentralization, which by the way, not every company probably … One of the things I used to hate when I was in Mozilla is everybody would say it’s the web, and everybody needs to care about the web. And so when we built with HTML five, everybody would be like, well they have to care because it’s HTML five and it’s the web. And I was like, consumers don’t care about HTML five. They want what’s good for them. And so with a validator, the incentive to be part of the validator network is that you are actually creating robustness in the network itself.

Denelle Dixon: And you actually have a vote on how the network is going to continue. That’s the incentive. But does every company that builds on Stellar need to care about those things? I’d like them to, but at the same time, it’s the same with HTML five. They might not care so much about decentralization and how that works. We care, and we think that that actually creates that trust that makes sure that there’s not one centralized body, including ourselves that have control over this network.

Bill Barhydt: Do you ever think about like, okay, … I was talking to somebody about this pending conversation last night, and we were talking about what decentralization means. To me the ultimate litmus test is, is there a viable off switch? Meaning if somebody put a gun to your head and said, “Shut it off,” could you do that? Could you actually shut off Stellar today in some definable timeframe? If Joe regulator walked into the office and said, “Okay, to know. I’m calling BS, shut it off.”

Denelle Dixon: Yeah. So we could pull our validators from the network, and the network would still run. That’s the only thing we-

Bill Barhydt: What do you mean? SDF’s owned validators.

Denelle Dixon: SDF’s validators, we can pull from the network, and it would still continue.

Bill Barhydt: Right. That means that coming to you to say shut it off is no different than in theory coming to me to say shut off Stellar. And I have nothing to do in theory with owning the network because it’s not ownable is what you’re saying.

Denelle Dixon: And we think that it’s incredibly important. So we could send a message to the tier one validators and tell them oh, they shut it off …

Bill Barhydt: Sure. But why would they do that? Right? It would be again, no different than if I sent them the same message.

Denelle Dixon: I think that one other thing that’s really important about to create that notion of robustness is to make sure that okay, so SDF’s validators can now be pulled, and their network would still run. How many other tier one validators can be pulled to make sure the network still runs? And so that is the metric that we continually focus on to make sure that … And that’s why it’s important to have validators in the network so that we can eventually get to the fact that what if 50% were pooled, would the network still run? These are questions that we ask ourselves all the time.

Bill Barhydt: Yeah. So segue that into the mission and what has to happen next. So what are the key initiatives for Stellar in the coming months, and along the path of becoming that kind of democratized access to financial services platform?

Denelle Dixon: Yeah, I think that we need to continue. What we did is we readjusted ourselves in terms of the amount of lumens that exist in the world, and certainly the amount that the SDF held.

Bill Barhydt: Why did you do that?

Denelle Dixon: We did that because we actually did a bottoms-up analysis of what we needed. I will tell you that for me, when I first got here, we had, I think it was 68 billion lumens that were sitting on the giveaway side that we needed to give away. I did some analysis just by looking at organizations that give money away as that’s their job and that’s their goal. And I know that these are lumens and not cold hard cash, but they operate in some of the same way. And so I did an analysis about what their op-sec look like, and about how much time they spent focused on that. And I really looked at what we were trying to do here, which is focus on the technology piece as well as putting the grease into the network, which was what those worlds giveaways for all about.

Denelle Dixon: We did a bottoms-up analysis to look at what do we need, and how can we actually get the lumens into the market in a faster way when Stellar was originally created? The network, the intention was that within the first five years, all of the lumens would be given away. And while we did some really great airdrops and we provided lots of use for I think some end users who did wonderful things with them, airdrops are not simple. And especially in today’s world where when you do an airdrop and then you’re doing airdrop and people then say, well, there’s a bunch of debt accounts that exist at that organization that’s doing that airdrop. Let me try to get in there and reopen those debt accounts. And it creates stress for the entity that’s doing the airdrop too because of the technical-

Bill Barhydt: So you end up with abandoned lumens, which don’t serve anyone.

Denelle Dixon: You end up with abandoned lumens, and then you also end up with a lot of technical challenges when they’re trying to hack into [inaudible 00:27:59] all the accounts, and then it just creates that. We still think that giving real users like humans lumens is a really important thing, but we looked at how many we need, and how many need to exist in the world. And so we burned 55 billion. We now have 50 billion that exist in the world. 20 are already in the public hands, and 29 sit in ours. We broke those out. We broke them out into different accounts. And when we did that, we did it based on what is important. So if you think about what we need to do, what SDF needs to do itself, we’re going to launch the wallet. That’s a big focus of ours. It’s focused on Latin America.

Denelle Dixon: It’s open-source code so that others can take the code and build the same thing, and we would support that. And I think that’s important because it’ll demonstrate that the use case, this is a wallet that’s focused on dollar savings. And it’s a use case that it’s important for some folks that have volatile currency, and also for folks that don’t have access to a bank. That’s an important piece that we need to do. We need to continue to focus on the currency endpoints, and making sure that there are on-ramp and off-ramps for businesses, application layers, anybody who wants to be able to transact on Stellar. We also need to make sure that there’s liquidity in the market, which will help with the currency endpoints piece too.

Denelle Dixon: And I think honestly, and to focus some effort on marketing for what we call partners, which are not really partners, but folks that build on our network to help them to market their products. Those are the things that we’re focused on doing. I talk about it as being very vocal about what Stellar is, and what stellar can offer, what are the reasons why someone should build on Stellar, and what it can offer to them. That’s one of the things we need to do so that folks can see, oh yeah, if I built on this, then I can actually change not just my business but change the lives of users.

Bill Barhydt: Yeah. If all of a sudden there was a killer app out there, your wallet or other services, and a million people were using Stellar really actively, like every day, would it work?

Denelle Dixon: Yeah. I mean, we believe that the scale exists for that, and we’re constantly pushing ourselves. One of our strategic pillars is to focused on the robustness of the network, and robustness includes security as well as scalability. But we think it would. Now what you need to do is then say, okay, well what about 10 million users? What about a billion users? And you need to plan that out. And that’s one of the things that we are also focused on. You also need to think about use cases, and what I used to call emerging technologies, which frankly maybe Blockchain used to be one. And so what do you need to do on the network to … Do you need to think about privacy? And in a different way that we have payment channels that you can use to some extent for this. But financial institutions might not want to show all of their cards to the world by showing what channels and how much they’re transacting in a day-

Bill Barhydt: Do you think that will work, the payment channel model on Stellar?

Denelle Dixon: Well, we’re working on it now to see if it will. There’s also we have another-

Bill Barhydt: Why might not work?

Denelle Dixon: I think it will.

Bill Barhydt: Okay.

Denelle Dixon: I think that payment channels will work. I don’t know that it solves all of the problems that businesses might want to-

Bill Barhydt: Like what? What problem might it not solve?

Denelle Dixon: I think that it will obfuscate. If you think about what banks might want to, if banks were on the network, what they might want to obfuscate is how much money is being transacted that.

Bill Barhydt: Sure. So a little less about scalability, and a little bit more about owning their piece of the network exactly.

Denelle Dixon: Exactly. They just don’t want their competitor to see how much they’re transacting. And I think payment channels could work for obfuscation…

Bill Barhydt: Sure. Okay.

Denelle Dixon: But I also think that there could be areas of privacy, like privacy even on the consumer level that aren’t achieved in the same way. We have another project that we’re focused on. What does that look like in terms of a privacy-focused open network and how to do that?

Bill Barhydt: Yeah. I’ve been wondering about once the regulators do understand these second-tier or second-layer technologies, do they start to view them as money service businesses? Because clearly there is an off switch on layer two. And I’m not sure that anybody knows the answer to that yet, at least not based on what I’ve seen. It’s just so early.

Denelle Dixon: Yeah. I mean, I do think that it’s really interesting if you focused on regulators in the US and also policymakers. There’s a group that focus on just the consumer protection side and are very worried about whether or not consumers can be protected in this model. Like with your keys and all of those things. Well, all that stuff actually existed in other models before. The web was part of that too. You lose your password, how do you get it back? These are things that there are fixes for. And so we can get past that. I think that the potential for regulators to want to have more control exists every day on the web and the content side from an encryption standpoint.

Denelle Dixon: Just think about that debate, a debate that I find it’s just so important I think for the world to be talking about encryption and why we don’t want governments to have an ability to get in the middle, and to be able to have an open line to those communications. I think we need to be prepared to have those discussions I think earlier versus later. That’s another thing I think we did wrong in the content side is encryption wasn’t something that we talked about why that was so important all the time. It was just table stakes for a lot of communications, and I think it’s still the same here. We just need to have those conversations.

Bill Barhydt: So what gets you angry when you think about our cryptocurrency world, what happens at Stellar? Is there something that just boils your blood that if you could snap your fingers it would just change immediately.

Denelle Dixon: Nothing gets me angry. I just feel like I’m super opportunistic about what the future has for this. I don’t get angry about things. I do get frustrated because I think just the history and the notion of Blockchain being one of those things that are throwing the middle finger up to everybody who’s out there in the world trying to regulate and do good for everyone else, it’s sort of like a perspective that’s been received by many, and that frustrates me. I have conversations. I was sitting with my chief of police in my hometown. We played baseball together on a softball team this summer, and he was like, “Oh, cryptocurrency. That’s just really bad for money laundering.” And I was like, “Really?” Because you actually now have a transaction that you can see. And you can actually get to either of the endpoints to get to the lumens on the other side.

Bill Barhydt: Sure. My impression is the FBI loves Bitcoin.

Denelle Dixon: Exactly.

Bill Barhydt: Yeah.

Denelle Dixon: But do you see like that was the perspective even though it doesn’t have any … So those things frustrate me, but I understand it’s our fault. One of the things I always believe is that when you’re dealing with these issues, when the public has a different perception, it’s because we haven’t done our job of explaining what’s the real value. And that actually for new technology is incumbent upon the folks who are developing the new technology.

Bill Barhydt: Sure. But I would say also back to our earlier analogies, that was the internet in 94 and 95 as well. People thought the internet was porn and gambling, was never going to be useful, certainly not for accessing educational information and watching movies and all those things especially given that we were on dial-up modems, and obviously that’s wrong, and that’s been proven wrong. And the question is, how will that be proven wrong here, and will that path look like to proving the same thing wrong or that that simply was a matter of ignorance at the time?

Denelle Dixon: Yeah. But again, I don’t think that we did our part then. I’ll just be honest and say that I started working on the content side of the web 25 years ago, and I think we had a little bit more arrogance about ourselves that you actually can’t understand this. We understand it better. We understand things that you’re never going to get.

Bill Barhydt: For sure. I mean, in Netscape we were so arrogant.

Denelle Dixon: Right.

Bill Barhydt: It was unbelievable how arrogant we were.

Denelle Dixon: It’s the history of it. And we thought, oh, we’re not going to let you tell us what to do on privacy because you actually don’t understand what cookies are.

Bill Barhydt: Right.

Denelle Dixon: I mean, these are things that if we think about our job today, and if we really want this technology to be something that’s accepted, it’s our job to be able to articulate these things. When I was working on net neutrality, when I was working on encryption, one of the things I would always do is go home to my kids and say, “Let’s have a conversation. Tell me. Let’s talk about this.” So that I could explain it to them in a way that they understood, which sometimes we did it in pictures or graphics. So that then I could come and I could say, “Okay, this is how we need to talk to people about it.” And it’s actually something that’s super useful for us to do. We aren’t the smart ones here. We just happened to be deep in something. There are a lot of smart people out there. And my view is we can benefit from their questions, their thoughts, and we can actually make this better.

Bill Barhydt: Sure. And honestly, history leaves clues. And having done this for 30 years, the one thing I’ve seen time after time is that the technologists who are passionate about the technology often lacked just the general interest in explaining themselves, in evangelizing the technology because a lot of them are simply here for technology sake, which we need that to a certain degree, but that doesn’t solve the problem that we’re talking about. It just helps make better technology.

Denelle Dixon: And it actually creates more of the problem.

Bill Barhydt: It does create more of the problem. That’s right.

Denelle Dixon: Even if it’s not arrogance in it, it’s just like, Oh, it’s really hard. It’s really hard for me to explain this to you. It’s so funny if you think about the consensus protocol, and there are many diagrams that you can look at it, and I’ve actually gone through that and talked to my kids about why it’s important that we have it, and how it works. And I do think that we need to have more of those conversations. I always say, if you can’t explain something in two minutes, in simple words that are going to make sense to everyone, not using all of the stupid acronyms that we somehow create, it’s not worthy of a conversation. We need to make it simple.

Bill Barhydt: Sure. But in the context of like a credit card, which is I think is an analogous transaction, the most the average person either wants is capable or interested in understanding is, is that a bank gives me a card. They wouldn’t use the phrase issue. They would say, I got a card from my bank. And they would say the merchant accepts my card. That’s it. The idea of an issuer, an acquirer, a merchant processor, and all the other layers in between are just completely uninteresting to the average consumer unless they happen to work in the payment space.

Denelle Dixon: Or until it needs to become interesting to them. And that’s if you think about privacy, we said that about privacy. We can fix this for everybody and nobody needs to care about it. We got this. And then clearly we didn’t. And I’m talking we holistically as the whole network that was working on it at that time. And so it becomes important to people at some point. And I always talk about privacy as my perfect example as like it only is important when actually something happens to you that you need to actually fix it.

Bill Barhydt: Sure. You’ve been hacked. Everybody in crypto cares about noncustodial wallet after they’ve been hacked, which is why Abra has stopped even trying to explain that. We put content out there, we point people to it, but until you’ve been hacked, it just falls on deaf ears.

Denelle Dixon: But see, this is the important thing. You put content out there, and sometimes we stop putting content out there.

Bill Barhydt: That’s true.

Denelle Dixon: And so we need to continue to put content out there. And also the simplicity of when you’re talking about Blockchain, people go, oh, like it’s just so complicated. Actually, no, let me show you a picture of the ledger. And if you show them the ledger, they’re like, oh, I get it. This is the block. And then it moves into a chain. And actually it’s not that complicated. Yeah, there’s encryption and there’s cryptography and stuff that goes on, but those aren’t … My point is if we ever stop putting content out there, that’s when we create a larger problem for ourselves. Because you point your consumers to it, they might not care until they do. And that’s the thing that we need to-

Bill Barhydt: And we never know what the impetus might be for …

Denelle Dixon: Exactly.

Bill Barhydt: I mean, obviously getting hacked is one impetus, but as we evolve, I hope there are others, and I just have no idea what they might be. Turn this microphone here into a crystal ball, 2020, hat do you think is going to have happened by the time we’re sitting here and having this conversation in November of 2020?

Denelle Dixon: I think we might be hard-pressed to have regulation, although if we do, it’ll be in the latter half of the year just in terms of tokens, and to create some stability in that space. I think that’s a potential that it won’t happen till the latter half of the year. I just keep hearing more and more and talking more and more to central banks, and I do feel like there’s the potential that central banks are going to issue, like we’re hearing about in China, their own tokens.

Bill Barhydt: Do you think that China is literally developing this from scratch? I don’t know that they’ve actually said publicly how they’re doing that. Have they forked Stellar or some other codebase? Do you have any insights, any rumors?

Denelle Dixon: I don’t, although I will tell you that I think that the Chinese are just phenomenal in terms of how they are able to develop technology, and much of it is by looking at what’s out there and either replicating it or utilizing it. So I wouldn’t be surprised if there’s not a fork somewhere.

Bill Barhydt: Yeah. Have you seen other governments or have other governments approached you about how to create national currencies using technology like Stellar?

Denelle Dixon: We’ve talked to many central banks all around the world. Something like in Africa. We actually just someone at Meridian in Mexico city from Canada. And the central bank there, they’ve obviously looked at this a lot. They’ve spent a lot of time on it. Clearly, he wouldn’t say whether they’re going to issue something, but I believe that that is the next thing that we’re going to see.

Bill Barhydt: Somebody from the Fed made some comments, I was reading this in the MIT journal a couple of days ago, that they were skeptical of the value of a dollar token from an American perspective. They could see how it would add value globally, but they were a little skeptical from an American perspective. If that person was sitting here, what would you say to them?

Denelle Dixon: I would say that are their currency is not just in America today. And this allows them … I think that there are also really nice use cases in America for a USD back token.

Bill Barhydt: What would be the killer use cases for USD back token?

Denelle Dixon: Well, I mean, if you think-

Bill Barhydt: I mean we obviously have that with tether and others today.

Denelle Dixon: Right. Well, I mean, we on the coasts and everywhere, and then here in Silicon Valley, we think that everyone has a bank account. Everyone has access to that. Well that’s just not true. So this actually gives a very simplified opportunity for someone who they can access it, and they don’t have to go to a financial institution. If the token exists, they could actually get it in our wallet, and they can have it without having to do those things that they have to go in and show their IDs to all of these different banking authorities. I think it actually does have an opportunity here that could be super useful. And also for all of the folks here who want to send US dollars or a token that has US backing to their families elsewhere, this gives them a huge opportunity to do it. So I think it has impact on citizens that exist here. I think we’re already seeing this happen with dollars in the paper, and in the currency that exist today. And so why not have the Fed have a bit more understanding of what’s happening with their currency?

Bill Barhydt: I could put a little bit of a skeptical hat on and say, hey, well wait a minute. The Fed technically, even though it’s called Fed, isn’t really a government organization in the traditional sense. It actually sits somewhere in between the banks and the government. And you might say, well, their incentive to have a system that runs outside of that world is pretty low because then they lose control or their reason to exist maybe even mitigated. And a lot of people today simply don’t trust the banks. If you remember what we went through with the … I forget what it was called.

Bill Barhydt: The people protesting outside the Wall Street banks a few years ago in 2008, 2009, that sent a message that people just don’t trust the banks. We track net promoter scores and Abra, and there are banks with negative NPS scores. Now in English for listeners, that means if they add a new customer, by definition and average, that customer is actually detracting from the overall brand value of the bank. That is insane. It seems like on the surface that they would not be incentivized for that to happen because people who don’t trust the banks would now have options. Is that a fair way to look?

Denelle Dixon: I mean, I think that that is a way that they could look at it, but I also think it depends on if you’re actually trying to enhance the financial system. And even those banks would have different opportunities to have different business models. I’m not saying that this is the right thing to happen, by the way. I actually find it … I don’t know. I love the idea that it’s multi-currency, multi-asset for anything that anybody wants to put on it, and that it creates a competition right now.

Bill Barhydt: Right. That’s the word. I think when you said that earlier, that’s what resonated with people. Is that we have competition in every aspect of society except for money.

Denelle Dixon: I know.

Bill Barhydt: Why is that? Why is there a central bank? Why can’t there be either multiple central banks competing from my Mindshare, or decentralized versions of that, that are competing from my Mindshare? And I think it’s definitely happening clearly with the nutty anarchists out there who, who basically see Bitcoin above all else. But I think that the average person post-2007 sees that the federal reserve doesn’t exist to stabilize the value of your money. They exist to stabilize the economy in theory. And they’ll do that at the expense of your money if all else fails. That has given people pause to say, hey, well wait a minute. Maybe there’s a better way and they don’t know everything about my perspective, and their focus is on their perspective, which is basically the banks come first, and maybe the people come second. And the best way to deal with that is competition.

Denelle Dixon: That’s right. And I think that one of the things that I reflect on when I think about central banks issuing those tokens is does that still allow room for stable coins out there? It’s one of the questions that I think we need to figure out. And I think that because as I said, I’m not sure that Central Bank is doing so. In the US, it might not be necessary. There are other countries where … And Central Bank issuing a token could actually ease of use for the transactions within that country could become so much simpler and straightforward, and then people who don’t have access to going to these financial institutions could. Totally different world in Zimbabwe and Tanzania and all these. So there are places where it actually means something. I don’t know. We have to think about how all this impacts things.

Denelle Dixon: Not that I think that we’re going to have a huge amount of impact on whether central banks want to do this. I think China stepping into this creates challenges for all of these different countries to have to react to that. But I do think that there’s going to be movement there, and I think that we’ll see movement in 2020. And whether it’ll be the right movement is a question. One of the things that I mentioned to the gentleman who was from Canada or the Canadian Central Bank was, well what about if you just issued a token and didn’t allow it outside your borders? I don’t know. You can’t do that right now with your current currency because you don’t have control over somebody, whether they drive across the border with your Canadian dollars. But what about if you did that? I think that’s probably not the right thing, but I’m just … There are different controls that you can put when it’s a digital token on a Blockchain.

Bill Barhydt: Interesting.

Denelle Dixon: And so I think that you need to think about all of these different pieces.

Bill Barhydt: I’m sure the Chinese government has thought about that a lot.

Denelle Dixon: Confident.

Bill Barhydt: Yeah.

Denelle Dixon: Yeah. So I don’t know. I just think that this is a space to watch, and I still think that with this there are a lot of assets that are issued on Stellar for example, or that could be issued on other Blockchains that are still highly valuable even with the issuance of the Central Bank token.

Bill Barhydt: You talked about your kids. What do your kids think about cryptocurrency, and Stellar, and all of this. I mean, I talked to my kids all the time about this. I’m curious as to how yours thinking about this.

Denelle Dixon: My kids, they became deep fans. I have three boys.

Bill Barhydt: Oh, so do I.

Denelle Dixon: And my partner has two boys. So we have five boys [crosstalk 00:47:56].

Bill Barhydt: Oh my God you got a [inaudible 00:48:00] bunch.

Denelle Dixon: Yeah, and we talk about this issue.

Bill Barhydt: Wow.

Denelle Dixon: And so when I was at Mozilla, we had spent so much time as you know, just giving the Netscape piece, like we are deeply committed to openness, and net neutrality was a lot of discussions that we would have to try to bring it down to that level and encryption-

Bill Barhydt: And for them it was a lot of blah, blah, blah, blah.

Denelle Dixon: It’s funny, a lot of it was that, but then my middle son did an Isearch project they have to do in I think it’s their sophomore year, and he did it on net neutrality. And he’s like, “This is a really important issue mom.” And I was like, “Yeah, I know.”

Bill Barhydt: Wow. That’s super cool.

Denelle Dixon: Something that matters. In the crypto space, I have to be honest and tell you, we spent time talking about what I was going to do before I came here, and they were kinda like, “Yeah, I don’t know. This is all new and different.” But then my oldest son who uses Kiva and he gives loans on Kiva, he puts some of his money there, he was like, “Mom, what about if something like Kiva was done on the Blockchain? Wouldn’t that be just so much easier?” I think it just comes in waves. They just figure things out as it relates to them.

Bill Barhydt: Sure. Because the Kiva model was very important to him.

Denelle Dixon: Exactly.

Bill Barhydt: And clearly he sees that if this went global faster, it would be more interesting and more helpful. I love that. I mean, we’ve had the conversations. My oldest is 18, and he actually when he was 16, was already getting money back from friends in Bitcoin who didn’t have bank accounts. I’m not really sure how they got the Bitcoin in the first place, either from parents or whatever, but they definitely were when they owed each other money because they bought something … One person who had a credit card would buy something in a gaming environment, and they would pay each other back in Bitcoin.

Denelle Dixon: So awesome.

Bill Barhydt: That was simply a need that they had, which would then cause some questions about why are able to do this, but not deal with the banks. That led to some conversations, but to your point, it’s really about what makes it personal to them?

Denelle Dixon: That’s right. And that’s why I always, I mean, I feel I’ve learned more from having kids about my life, and how I want to do what I want to do in my work. But I do think that it really has taught me that it only becomes important when it becomes important, but the information needs to be out there and available. When my son wanted to get onto Snapchat, I was like, “You need to go read every bad thing that’s ever happened with someone on Snapchat.”

Bill Barhydt: Well that could take a long time.

Denelle Dixon: “So that you can figure out whether you need to …”

Bill Barhydt: That’s a good strategy because it could probably take him years to read all that. And by the time he reads it, then [crosstalk 00:50:20] it’s not your problem anymore.

Denelle Dixon: No more, yeah.

Bill Barhydt: Anyway, the first question I’m going to ask you a year from now when we do this again is going to be where are we [inaudible 00:50:29] that competition? And are we seeing some light at the end of the tunnel? Has the tunnel gotten shorter or has the tunnel gotten longer? But I think this has been an interesting year in terms of waking people up, and I think Libra was part of that. And now we’ll see if people fall back asleep or if we really start to see some competition in the system both from a banking and monetary system. So Denelle, thank you so much for joining us on behalf of our awesome audience, and we look forward to supporting Stellar within the Abra community and hopefully having you back in the near future to talk about what’s happening.

Denelle Dixon: Great. Thank you so much for having me. It was really fun.

Bill Barhydt: All right. Thanks, everyone, and we’ll see you soon.

Speaker 1: Thanks again for listening to the Money 3.0 show. We hope you liked this episode as much as we did. If so, please subscribe to the show wherever you get your podcasts, and be sure to download the Abra app wherever you get your apps.