WSA: Good day from Wall Street, this is Juan Costello Senior Analyst with the Wall Street Analyzer. Joining us today are Carlos Moreira the CEO for WISekey International Holding Limited the company trades on NASDAQ, ticker symbol, W-K-E-Y. And we also have the CEO and co-founder for Casperlabs, Mrinal Manohar on the line. I appreciate you guys taking the time to join us today, gentlemen.
Carlos Moreira: Nice to be here, my pleasure.
Mrinal Manohar: My pleasure, thanks for having us.
WSA: Great. Can you guys introduce who the companies are and talk about the recent collaboration?
Carlos Moreira: Thank you very much for your time today. So my name is Carlos Moreira, I am the founder and CEO WISekey. So we are a Swiss cyber security company, as you mentioned, listed on the NASDAQ and our background is cyber security. So we are a company that provides security for both digital and physical assets. We have been working with many top companies in securing objects like drones, servers, mobile phones using microchip technology. That technology is pretty unique in the market, as you can from the object now generate a NFT. So that is a unique way to bring an object from the physical realm, the physical world into the metaverse.
You need to create a uniqueness in the Metaverse and for that, you need to mint a NFT. And the company has been working on this for many years at the beginning of the blockchain revolution, and we have something like 1.6 billion objects around the world already with those microchips embedded into it; those are cameras, video cameras, they are as I mentioned routers, mobile phones, and in the last years we started to play also with digital art and also combining the possibility of dematerializing physical art and luxury into the metaverse. So we are doing also that now for the luxury industry. And the compression with CasperLabs is that this needs to minted in blockchain and their blockchain is a blockchain that scales very well.
It is a blockchain that is fully environmental, it treats the energy in a very smart way. And we took the decision to integrate our cyber security and Casper block chain into one integrated solution which is the name of the NFT platform that we launch at the NASDAQ Times Square two weeks ago, which the name is WISe.ART, A-R-T. So this is like a NFT platform similar to any other up and see another platforms with the uniqueness that it requires a strong authentication of the asset then you want to dematerialize and convert into an NFT.
It also provides a very strong K-Y-C compliance processes to know your customer and ensure that only authenticated people can trade in the platform to avoid the latest issues on NFT platform, than they have been having lately, like losing NFTs or getting inside trading into the platform and things like that. We actually create a high end model that avoids these things to happen. So in that partnership model, we wanted to prove that this can be used for very high end NFTs. So we did several Wolfers so WISekey did the Wolfers of the first ever luxury watch that was minted last year, and there was a world premier. And then we did a several art NFTs and then we launched the WISe.ART platform in cooperation with CasperLab and also by bringing in Brooke Shields.
So Brooke Shields’ concern was her privacy and the fact that her pictures have been highly copied on the internet over many decades. And she obviously had concerns about that and she wanted to ensure that her assets, her digital photography assets could be protected with this new technology. And as a way to show that specific case, we created a very unique NFT which was minted using a crypto that was sent by a satellite. So those are IoT satellites that WISekey operates, that are being deployed.
We deployed them at beginning of this year with SpaceX, and those [indiscernible][00:05:10] satellites are used to trace basically the microchips and the NFTs, and they’re minted in the blockchain in a way that is real time. So we did these Wolfers by issuing that NFT from the satellite and minting that in the Casper blockchain and show evidence in the WISe.ART platform then this was recorded in a total high secure way, which basically creates the benchmark that we wanted to create for those type of complex transactions.
WSA: Mrinal, can you talk a little bit about Casper’s role in this?
Mrinal Manohar: Yeah, absolutely. Just to introduce, CasperLabs was the original developer of the Casper network, which is a completely decentralized public and open source blockchain. The Genesis of the Casper network was really the fact that there wasn’t an enterprise grade blockchain out there, something that could — whether you want to create NFTs, manage a supply chain, et cetera, you need something that is A: highly secure, B: has a very low energy footprint and matches all ESG standards, and C: a delight to program on and embraces open technologies such that it’s continually upgradeable.
So, we’ve raised about in total about 80 million dollars to date, the companies about three years old. We’ve published well, what we think is the most technically advanced blockchain in the world. And we were very excited to partner with WISekey because the NFT industry is moving away from people — when people think NFTs, they think, oh it’s a bunch of gifts of — or like an image of something like a monkey or something like that. But really NFTs can be used to authenticate and certify high end luxury products, like a luxury watch, cask of whiskey, what have you, but also a celebrities own intellectual property and lend a level of digital uniqueness that is absolutely immutable and shows that this object is this only one object.
Think back, like movies have been pirated, songs have been copied. Every attempt to create digital uniqueness has not really worked. NFTs are the first time where, as long as the celebrity has their public key and they’re the only ones who mint it, you can, 100% authenticate them, especially a digital object or a certificate is 100% that persons’. And that’s what got us really excited. This was a really great use case to show the actual true usage of an underlying blockchain for NFTs that make sense and secure high value products.
WSA: So why do you guys believe that this “creator economy” matters to Wall Street and investors.
Mrinal Manohar: I can go first. So first off, it’s the best version of copy protection that’s existed. As mentioned with the invention of the MP3 and digital video files, movies, music, et cetera, got heavily pirated and no one’s really built a great version of copy protection. So as a result, now you can copy protect anything. So if an artist or a creator has an asset that they want to sell, like whether it’s the first print of a video, whether it’s a unique song, it doesn’t matter if everyone is able to access it, ownership is related only with that one single NFT, because it’s digitally unique and provable.
So copy protection is really first and foremost, and that’s where the story starts. Second, it allows a lot of dis intermediation, meaning as a result of being able to create your own NFT, where you sell your IP and how you sell your IP is completely dependent on what platform you choose. It’s truly the creator’s own product. And as a result, they’re not beholden to any specific venue. They can create their own website, go through several NFT platforms that are out there, and that enables a high degree of flexibility. And the third thing that’s really important is because this is all programmable via smart contracts, you can do really, really interesting things. I think of artists like Vincent van Gogh, et cetera, the value of the art went up significantly after he died but he still died a pauper, unfortunately.
But imagine there’s an artist today and basically they create an NFT around their art which matches a physical object or it’s a digital art piece, and embedded in the contract they say every time it’s resold 10% of the Delta and price goes back to the artist. That way you’ve created a hugely participatory system where the artist can continue to benefit from the increased value of their work. And really you can do anything you want, that was just an example about like taking a rake, but because it’s all programmable you can make these underlying NFTs really, really smart and disperse funds at security level, lock transfers to certain jurisdictions, you can do all sorts of things in a completely algorithmic and programmatic way.
Carlos Moreira: Yeah. And this is Carlos, just to complement the message. The experience — we are Cyber security Company, and as you know the cyber security sector is booming now with the current situation because the world is becoming more and more complex. While you have a physical war going on, you also have a difficult one that is less visible, but is there and needs to be taken care of as all the major infrastructure are on the internet already. So cyber security is growing and is one of the fastest growing sectors. Blockchain is an amazing enhancer for cyber security, as you can now enter into more crypto oriented type of cyber security model. And the NFT is just one of the consequences of that merge between cyber security and blockchain.
And last year the market for NFT was already 40 billion dollars and is going to be doubling to 80 billion dollars by the year 2022. And the major drivers are going to be not necessary NFT arts and selling paintings, although there’s a niche market, and this was the beginning, there was the first market, but what is going to be driving the expansion is what you call NFT of everything, means NFT of infrastructure, NFT of objects and they are now connecting to the internet, what you call IoT, Internet of Things. There’s 1 trillion objects that they’re connecting now to the internet. All these objects require a strong authentication, because you don’t want to compromise a non-secure non-trusted object.
Once it connects with the others, you can compromise the entire infrastructure, and for that you need a strong authentication, you need the micro chips that we sell, but also you need the possibility of creating a dig digital credential certificate of that object on the metaverse, and the metaverse as everybody is saying, is going to be huge. The only way that you can create value and you can monetize the metaverse is by creating a presence on the metaverse, the metaverse that is authenticated presence.
So whether it’s you as a person, whether it’s your object, whether it’s your watch, whether it’s your house, your intellectual property, all that needs to be certified digitally, and those NFTs when they are minted create a presence on the Metaverse. So in the future, transactions will happen on the Metaverse. So you will be buying Metaverse experiences, you’re going to be renting rooms in the Metaverse, you’re going to be renting a conference facility, you will be renting a space, you will be renting holidays, and all that requires NFTs that will be related to the physical destination, physical object, physical conference. So this is a big opportunity. The fact that we are with CasperLabs, we are very early. I think this combination between cyber security and blockchain was not necessary there before.
I think we are the first companies and they are merging their know how and their IP to create that platform that puts us in a very strong position towards the future. Again, as you know, valuations of companies like Up and See, they are a hundred billion dollar mark up for the companies obviously investing in companies like CasperLab and WISekey with the current valuation is a much better, and I will say cheaper than investing in those very high end platforms that they promise a lot and might deliver very little because they are not solving the critical issues, which is, as I say, is to secure that everything that goes into that Metaverse through the blockchain process is secure and authenticateable.
WSA: Yeah, certainly. And the announcement with Brooke Shields kind of flew under the radar there, with commencing of war in the Ukraine. Can you talk a little bit about how that transpired and why it’s such a major milestone?
Carlos Moreira: So the announcement was very big because the announcement with Brooke Shields was actually the activation of the platform. So that was the test, the real live test on how the combination between WISekey and CasperLab platforms could deliver a very high end NFT. The NFT was minted from space, so that adds another complexity because you need to synchronize the satellite in a way that while the satellite was crossing the United States, they have to send a code and its collected and with that code you create a crypto, which is then the one which is minted in the Casper blockchain.
So that combination of satellite, cyber security, digital identity, and blockchain was never done before and there was a [indiscernible][00:16:29], it sends a very strong message because celebrities have been trying to get into the NFT world some of them with very bad experiences because the platforms they develop is sometimes with the companies and they just customize the platform around their names which did not succeed. Actually many of them they were hacked, and this is the worst thing that can happen—your NFT gets hacked. So the message by celebrating that at the NASDAQ was also powerful because as you know, the NASDAQ is now embracing blockchain technology, which was not necessarily the case a few years ago.
So they are coming into a conclusion that this combination of cybersecurity, NFT blockchain technology is actually the future and they’re encouraging company like us to come in and announce this type of projects there, which sends a very strong message to the financial sector as obviously the next generation of companies growing to become, the next multibillion dollar companies are going to be companies that can act as a platform, as an ultra-secure platform. And these are the assets that goes to WISekey and Casper network as combined.
WSA: So as far as the goals here for the next six months, what are the companies hoping to accomplish? What are the milestones that the financial community should keep an eye out for?
Carlos Moreira: So the company is integrating artists now. So we have something like 300 artists into the platform. We are going to be adding more–which usually happens on daily basis now. We are going to be organizing a very big event in Dallas in May where we’re going to be further discussing how this platform can be used for complex NFT and transaction on NFTs. We will have further — [indiscernible] [00:18:32] is another one due in June in a space summit and that’s a very unique exercise. We’re going to be creating blockchain nodes on satellites. So this has never been done before. So that means that the node itself could be integrating into a satellite connection.
The vision there is that in the future blockchain nodes can be distributed not only on earth, but also in space and interact between themselves using high level cyber security. The platform will continue expanding the number of content. So the number of NFTs, the type of NFTs, and as we do that we will be also further integrating the cyber security elements of the uniqueness in the WISekey cybersecurity platform WISer and CasperLabs. The objective is to become world leaders on this. As I said, we enter into this very early and grab the market as fast as we can, as we know that this market is going to be very, very big and it’s a market that requires very, very strong cyber security. WISekey is a 22 years old company.
So we have been doing cyber security, all our existence. I was also in my previous career doing high end cyber security for the United Nations. So our DNA is cyber security. We are behind all the major cyber security projects in the last 22 years, like e-voting for citizens, like issuing encryption for financial service. So all that expertise and knowhow and IP, and patents are now being vocalized into the development of this new platform incorporation with CasperLabs.
Mrinal Manohar: Yeah, on our end really for the next six months, our focus is — we’re working with several fortune 500 companies, be it NFT, supply chain, tracking, complex financial assets, anything that a blockchain can be really, really helpful with. We have a unique model where we consult directly and can build hybrid networks for them. And so that’s going to be our focus for the next six months along with, we are publishing a major upgrade to the network, call it Q3 of this year which would bring even more technical differentiation to the industry. And that’s going to be our focus for the next six months.
WSA: Yeah, I appreciate that. So before we conclude here gentlemen, why do you believe investors, the financial community and the general public should keep an eye out on the companies today?
Carlos Moreira: From my experience, investors–especially nowadays– should seriously bring cyber security and blockchain technology and NFT into their portfolios. Because if you are an investor in anything else, like health, like financial tech, like eCommerce you going to need cyber security companies like WISekey and blockchain companies like Casper integrating themselves into solutions that could protect basically the assets that you have invested in. Every day you see situations where people are getting hacked, intellectual properties being so compromised, fake news all over, so the world is getting more complex as there’s no trust anymore.
And digital trust disappears, and it’s going to get more and more difficult to regain. And if you are an investor and you have to invest in anything in your portfolio, you want to ensure that you also have cyber security and blockchain companies, they are there because that will solidify the rest of your portfolio plus create a very interesting potential upside. The technologies are converging, so now you have cyber security, AI converging, you have IoT and data converging, you have NFT and blockchain converging. So in the future, if you are running a cyber-security portfolio or you have a tech portfolio, you want to make sure that you are investing in the combined power of those technologies and not only one single one.
Mrinal Manohar: Yeah. On our end of course, we’re not a public company, but I strongly believe everything that Carlos said, but enterprise usage of blockchain technology is very, very under penetrated right now. While the industry is very highly regarded and at a high valuation, it’s mostly enthusiast retail consumers. And what I’d say, pet projects, there isn’t like a major insurance company, a major supply chain or FMCG company that’s fully embraced blockchain and what the technology can do for it. I do believe over the next decade or two this will be one of the largest emerging markets in the world, and that is enterprise use of blockchain, and it’s just getting started. And it’s definitely something people should be excited about because it actually brings true fundamental value to people who use it.
WSA: Well, we certainly look forward to continue to track both companies’ growth and report on the upcoming progress. And we’d like to thank you guys for taking the time to join us today and update our audience on your most recent news. It was great having you on.
Carlos Moreira: Thank you very much for your interview as well.
Mrinal Manohar: Thank you, Juan.