My guest today is actually me and my co-founder at Nomics, Nick Gauthier.
In this episode, we’re interviewed by the creator of the Crypto Cast Network, who goes by the name of Vortex.
This interview is a deep dive into the state of crypto market data.
In this episode we discuss:
- The issues faced when traders, analysts, market makers, and financial product creators try to procure clean and reliable data
- The problems of data inconsistency, data accessibility, and data decentralization when it comes to crypto asset market data
- Nomics’ origin story and what led myself and my co-founder to start Nomics
- Why Nomics.com is 100% built with the free version of our API, and how anything you see on Nomics.com can be down by you or a developer on your team
- What the technological setup behind Nomics looks like
- The future roadmap for Nomics’ free crypto market data API
Links Relevant To This Episode:
- Crypto Cast Network
- Trading View
- Planet Money
- Eric Meltzer
- Proof of Work
- Genesis Vision
Clay Collins: 00:03 Welcome to Flippening, the first and original podcast for full-time professional and institutional crypto investors. I’m your host, Clay Collins. Each week, we discuss the cryptocurrency economy, new investment strategies for maximizing returns, and stories from the front lines of financial disruption. Go to flippening.com to join our newsletter for cryptocurrency investors and find out just why this podcast is called Flippening.
Speaker 1: 00:25 Clay Collins is the CEO of Nomics. All opinions expressed by Clay and podcast guests are solely their own opinion and do not reflect the opinion of Nomics or any other company. This podcast is for informational and entertainment purposes only and should not be relied upon as the basis for investment decisions.
Clay Collins: 00:42 Hey. This is Clay, and I’m about to leave here in just a second for San Francisco to meet with institutional investors, customers, and partners. I’m really struck by how much I actually get done on these trips to the coast, and I’m contemplating just scheduling a recurring monthly trip out to San Francisco each month, even though it kind of pains me to be away from my daughters and family for even a few nights per month. Anyway, because I don’t have the normal amount of time to prepare for our traditional narrative long-form podcast, we’re going to do something a little bit different today. In fact, my guest today is actually me and my co-founder at Nomics.com, Nick Gauthier. In this episode, we’re interviewed by the creator of the Crypto Cast Network, who goes by the name of Vortex.
Clay Collins: 01:26 A few weeks ago, we did this interview for a YouTube show called Deciphered, which is really good, and which I highly recommend you check out and subscribe to. We liked the content so much that we asked if we could air a modified version of that conversation here for you today. The kind folks at Crypto Cast Network generously said, “Yes,” so here we are. You’re probably used to me being the one asked the questions, but in this conversation, we flipped the script. I hope you enjoy what happens when the tables are turned. This interview is a deep dive into the state of crypto market data.
Clay Collins: 01:57 In the conversation you’ll about to hear, we discuss, one, Nomics’ origin story and what led myself and my co-founder to start this company, two, the problems of data inconsistency, data accessibility, and data decentralization when it comes to crypto-asset data, three, why Nomics.com the website is 100% built with the free version of our API, and how anything you see on Nomics.com can absolutely be built by a developer on your team, four, why raw ticker data is so important to us, and five, the future roadmap for Nomics and the Nomics API.
Clay Collins: 02:32 I should note that I’m excited that you’re about to hear from my co-founder and CTO Nick, and this should give you some insights into how we think and operate as a business. Please enjoy this conversation between myself, my co-founder, and Vortex from the Crypto Cast Network.
Vortex: 02:57 Clay, how you doing today?
Clay Collins: 02:59 Hey. It’s great to be here. I’ve been following this for a long time. I’ve hung on at the edge of my seat during various huge moments in the history of Bitcoin, like SegWit activation and all kinds of different events, so it’s, I got to pinch myself a little bit here that I’m actually talking to you in real-time.
Vortex: 03:16 Awesome. Awesome. Let’s introduce Nick. Nick, how you doing today?
Nick Gauthier: 03:20 Doing great. Also really happy to be on the show. I’m a little more of a crypto newbie, but long time in tech, so hopefully I’m going to be soaking up about as much as I dish out.
Vortex: 03:29 Absolutely. Awesome, and we’re really glad to have you here. Let’s go, let’s get right into it, guys. Clay is the co-founder here of Nomics, and Nick is the CTO. I’ll ask both you guys first here a little bit of info, maybe a little bit of background info about you, and then maybe we’ll get into why you guys started Nomics, the company. First, Clay, maybe a little bit about you, and then we’ll go with Nick.
Clay Collins: 03:49 Yeah. Great. My background is in software entrepreneurship. Prior to Nomics, I co-founded a company called Leadpages, which is marketing technology, software as a service, is a landing page creator. We had a really great run there, and still are, so at that company, I grew us to over 50,000 paying customers. We raised 38 million in venture capital, built us to about 150 people in terms of the size of the company, and around that time, I realized that as an entrepreneur, I’m really comfortable in that sweet spot of like 80 to 120 employees. Past that, I’m probably not in my wheelhouse. I think it’s one thing to manage people. It’s another people to manage managers, and then it’s another to manage the managers of managers, and so at some point, I went to the board. I said, “I think it’s probably my time to stay on the board here, but for us to hire another CEO.” We ended up hiring our extremely competent and very experienced COO at the time to run the company.
Clay Collins: 04:52 Around then, I started talking to Nick. At my previous company, we acquired an email service provider called Drip, which is an eCommerce CRM, and we’re totally out of crypto land right now, but it was a great acquisition. It went really well, and we were looking to do another acquisition, and I wanted to buy Nick’s company. Instead, we decided to just start one from scratch here, which is Nomics. Without getting too much into Nomics, because I know we’re going to dive a bit into that in a bit, Nomics is not a cryptocurrency company. We’re not on the blockchain. We are a traditional kind of API business. We’re a data company, but we do provide an API that provides market data on crypto-assets, so we’re super excited about this space and having a lot of fun.
Vortex: 05:41 Awesome. Awesome. Thanks for that, Clay. Let’s go with you, Nick. Tell us a little bit about your background.
Vortex: 06:30 Awesome, and awesome, yeah, we’re definitely kindred spirits there. I’m a web developer as well. Let’s get into a little bit more about what Nomics is. First, Clay, why don’t you go ahead and tell us a little bit about Nomics, the company, but also why you started, like why is this important to you?
Clay Collins: 06:45 Yeah, so Nomics is an API-first company. I think when people go to the website at Nomics.com, they see something that is ostensibly a CoinMarketCap competitor and a pricing website. It certainly is that, but we started with the API and with our data strategy first, and we built up from there. Even though we have price quotes on our homepage, and we’ve published our pricing methodologies, what we’re really trying to do is bring clean data to this space. When we first started analyzing market data in this space, we saw a whole bunch of different problems. One of the problems was just lack of normalization and just almost a complete crapshoot in terms of what you got. We saw exchanges that would go back and forth on ticker symbols for exchanges. We saw exchanges where, when markets were down, they’d persist the last candle, so they were actually giving you incorrect data. We saw exchanges where, when an API would go down, they would do things like just report zeros across the board, so zero for volume zero, for price zero, for open, close, high and low, all that stuff.
Clay Collins: 07:53 We wanted a really clean API in this space. We’ve taken inspiration from companies like SendGrid, and Twilio, and Stripe, just really hardcore API companies. We thought that this space deserved this, because most of the APIs that we saw here have been built as afterthoughts. Right? A company would build the website first, and then they do their API, or they build their exchange first, and then they build their API. We really saw a lack of an API-first company that was just obsessed with data cleanliness, data normalization, and data quality. That’s part of what we’re bringing to market.
Clay Collins: 08:29 The front-end website, so I talk about as having a front end and back end. The front-end website is actually something that we eventually plan to open source. Something that I’m really proud of is that Nomics.com actually runs 100% on our free API, so anything that you see happening on Nomics.com, you can build with the free version of our API, which has no rate limit. Right? You’ve got a lot of providers out there charging on a rate-limited basis. We completely remove those barriers. We cache the hell out of our endpoints. You can hit them as hard as you want. We’re not going to go down. We’re really proud of everything there and the transparency that we’re building in this space.
Clay Collins: 09:08 For example, if you hover over, I see it right there, if you hover over the little information icon for all-time high, so if you go to Bitcoin, for example, right now, and hover over that “i,” you not only see the all-time high, but you see which exchange the all-time high happened on and actually which market that happened on. Right there, it shows us, it’s reporting, I think that’s BTC to Korean won, the all-time high exchange is, I believe, Bithumb. It’s a little pixelated, but we’re a big believer in bringing transparency and quality to data in this space.
Vortex: 09:45 Awesome. Awesome, so let me ask you, then, Nick, what made you want to go ahead and work with this company? What made you want to start this type of company, this API company?
Nick Gauthier: 09:54 Man, there are a lot of really great reasons, and I think that’s sort of why you end up doing something, is because a whole bunch of different things all point to “yes.” Certainly, a huge factor that actually got me in the door to even talking about it is just Clay, his reputation, and his track record with Leadpages, and just knowing that partnering with someone who was that successful was really going to mean that this could be really different from other places that I’ve worked.
Nick Gauthier: 10:21 That was a huge factor. Another one is just the size of the space, like the amount of data that we’re ingesting, and the rate that we’re ingesting it, and I still feel like we’re not even getting started. There’s still so much data in this space right now, and cryptocurrency is just absolutely going to explode in terms of activity, so we’re going to see so much more financial data that we have right now and the ability to solve that problem, and of making that data usable and accessible to other developers like myself, is something that I’m just really passionate about. Making tools that are easy to use, convenient, and that developers use, is something that I’ve been doing for a lot of my career, working on like continuous integration and deployment services, and developer libraries, and even developer tools like video conferencing.
Nick Gauthier: 11:15 All that coming together was just like a really interesting, big problem to work on, and there’s so many facets to it. There’s our database. There’s our API. There’s Nomics.com, and all kinds of crazy stuff that we’ve got planned for the future.
Vortex: 11:29 Awesome. Awesome, so then let me ask you, Clay, maybe you could just go into a little bit more detail with, for me and the audience, about these issues that you say that most of these exchange data APIs have, because there’s really … I mean, there’s not a whole lot of them out there. I mean, there is only a few, so it does kind of make sense to go into that particular market, there is only a few. I’ve personally found that they’re not super great. I know you guys are traders and into bots and things like that, and we’ll get into, a little bit more into that, so you really want the robustness, but maybe you could go into some, maybe some actual detail-
Male: 12:04 Sure.
Vortex: 12:04 … or maybe even some experiences of some of these other data APIs that were so bad that you wanted to actually start your own.
Clay Collins: 12:11 Absolutely. I think a good place to start with this is just Nomics.com. There are some things, I think, that I don’t know that most people will see just right off the bat, but are pretty apparent. If you go to Nomics.com, one thing that I think pops out to folks who are pretty deep in this space is the fact that you can denominate the entire dashboard or any of the pages on our website in any fiat or, quote, “currency.” Right? It’s not just about Bitcoin, Ethereum, USD, Korean won. You can denominate any of our pages in any of the currencies. You can constantly shift back and forth between like where’s the center of the universe. That’s a pretty big deal. Another big deal is that on our homepage, on our dashboard, you can view that page in a variety of different time intervals. Again, I think that’s something new.
Clay Collins: 13:01 I think the core problems fall into three different categories. The first category is data consistency. The second category is data accessibility, and the third problem that we solve is data decentralization. Maybe data decentralization is a great place to start. When we first started operating in this space, we found that integrating, and this was about 10 months ago, we found that if we integrated with 11 exchanges, we could get 50% of the volume in this space. Right? Exchange volume. Now, about 10 months later, we need to integrate with about 40 exchanges to get 50% of the exchange volume, so in a matter of like 10 months, we needed to almost 4X the number of exchange integrations in order to capture that 50% of market volume. Of course, we have plans to integrate with a lot more than that. We’re seeing this problem that, like hedge funds and traders not only need to build new integrations with exchanges, but they need to constantly be sort of swapping out the exchanges that they integrate with in order to maintain a decent picture of what’s happening in this space.
Clay Collins: 14:11 One interesting statistic is that of those roughly 40 exchanges that comprise 50% of volume in the space, about 40% of those were started in 2017 or later. Right? We know that Binance has only been around for about a year, and about 11% of those 40 exchanges that comprise 50% of the volume in this space, 11% of those exchanges were started in 2018. It’s just absolutely crazy how much work someone has to do if they want to stay on top of data in this space. One of the reasons why we built Nomics was, we found that traders, or hedge funds, or family offices and institutional investors, would hire a data science person to find opportunities in the datasets, but instead of spending their time actually finding opportunities, they were spending all of their time cleaning up data, maintaining that data, normalizing that data, instead of actually making money with it. That’s the decentralization problem, is that it’s just becoming more and more dispersed over time. That’s one problem we solve.
Clay Collins: 15:18 The second problem that we solve is data accessibility. We’re finding that a lot of these exchanges and data sources in general are becoming more and more rate-limited over time, so more and more stingy about how much access they’ll give you to their data. We found this out the hard way the other day when we decided to reingest all of our trades on Bitfinex and found that it would take about six weeks to ingest all the historical data on Bitfinex. If you’re a fund and you’re looking to analyze a trade, be prepared to sit behind some of these rate limits for weeks at a time in order to be able to backtest your strategy and figure out if it’s going to work. Data’s becoming less accessible, and there’s just becoming more and more of it. We have billions of trades now, and it’s just not possible to store that entire trade history on your laptop, so it has to be in the cloud, and for most funds and most investors, it needs to be immediately accessible rather than accessible after six weeks of ingestion, and you might have gaps, and you might miss some of it.
Clay Collins: 16:22 The third problem that we solve other than the decentralization and accessibility problem is this consistency problem. We see exchanges change tickers, day in and day out change your data schemas, all kinds of things. One of the examples there is, we have a customer that operates a real-time trading environment, and they were looking at an arbitrage opportunity around that. The only problem is that that, on one of the exchanges where they were looking to make the trade was Basic Attention Token, and on another exchange, it was BatCoin. Right? It looks like a potentially huge opportunity until you realize that these are very different tokens. Another example of this is, we were looking at an exchange that listed a pair called USD to USD, and they didn’t delimit between what the two coins were. That’s either tethered to USD, or USD to true USD. You just don’t know, and so you can beat your head against the wall trying to figure this out.
Clay Collins: 17:22 Another issue is just timezones. I tell people we’re like sort of a boring basics kind of company. There’s a lot of fancy distributed things that are happening. We’re really about nailing the bread and butter and getting the boring basics right, because we think that kind of utility company approach is what’s needed to be successful here, so we see trades being stamped with Korean timezones, UTC, across the board. In many cases, the APIs don’t even tell you what timezone they’re happening in, and also, these times have various level of precision, so sometimes it’s to the millisecond. Sometimes it’s to the second. Sometimes it’s to the minute. It’s just really frustrating to figure out what’s happening in this space, so these are the types of problems that we solve, and they really-
Clay Collins: 18:01 These are the types of problems that we solve, and they really fall into those three categories.
Vortex: 18:06 Yeah, so it sounds like … I mean, one of the biggest problems is the fact that it’s just so early days. We don’t have a whole lot of institutional data, right, from, or at least institutional quality data, so it sounds like one of the missions that you guys are doing is to literally clean up data for the entire space, for the entire crypto space. That would be awesome, because, like you say, there is just so much fragmentation right now.
Vortex: 18:30 Because Bitcoin is so grassroots and so early days, we have hundreds, literally hundreds, of exchanges across the world. Bitcoin derives its price from the spot price of all of these hundreds of exchanges. It’s not like traditional assets that we can just go look at a single institution and be like, “Oh, okay, that’s where most of the value is.” No. It is really, really, really difficult, so having something like this, it seems, is very, very useful, very, very powerful, even, to be able to plug into all that data.
Vortex: 18:55 Now, you guys are also saying that you are having no limits and stuff, like you guys are trying to … Because you’ve experienced the frustration of what it’s like to work with traditional data companies, with traditional API companies, so it sounds like you’re coming from more of a modern era where we want to give everything away, at least have a free tier, where everything has to have a free tier so that developers can at least start building with things. That’s how the modern era works.
Vortex: 19:20 I know, I’m sure Nick is aware of that as well, being a web developer, like all the APIs that we need to plug into these days, I mean, whether it’s Google Maps or whatever it is, they all have free tiers so that we can at least get a product, an MVP, something up there for our customers to begin, because they want to feed you. Right? They want to give you a little bit, and if you need more, then they’ll give you more, and more, and more.
Vortex: 19:39 That’s the modern era, and I’m for the most part okay with that until, of course, we have crazy centralized solutions with no more competition, so now they’re just charging insanely outrageous rates, because we have a lot of problems with that. We did interview SuredBits just recently on … They were trying, what they were doing is Lightning, per request, they’re doing data, API is similar to what you guys are doing, but they’re charging per request over the Lightning Network.
Vortex: 20:07 Maybe we’ll talk a little bit about that, but that’s, because they’re trying to solve this problem, too, of, all of this centralized data, they’re trying to kind of democratize that, but you are trying to put all of this data together and democratize it too, but also clean it up and make it accessible. That, I think, is really cool. This is, it fits really well into that. I’m really excited about the actual data in the crypto space becoming more and more open than any other space, and the crypto itself being the driver of democratizing all this information, like with technologies like the Lightning Network.
Vortex: 20:42 Let me ask you this. Because, Clay, maybe I’ll ask you first, Clay, and then I’ll ask Nick, but let me ask you, you’re trying to make all this data free. You say things like, “Hit our endpoints as hard as you can, guys,” things like that. How are you making this free, and how much, how free really is it? Like is there, do you guys have a tiered structure? Because how are you guys going to have the business model, or maybe what is the business model? How are you guys making a free tier, and what is the business model for this?
Clay Collins: 21:09 Yeah, so great question. We get asked this all the time. Someone will sign up for our API, and we’ll say, “Hey, Nomics.com is built on the free version of our API with no rate limits,” and that’s the question we get. The first thing we tell folks is that we welcome you to create a competitor to Nomics.com, the pricing website, with our own API. We don’t see you as competition, because we are, first and foremost, an API company. The way we pay for this is, is with our paid plan, and our paid plan is for institutional investors. What that comes with is order book data and raw trades. We’ve found that the kind of person that’s looking for summary-level data is very different from the person that’s looking for like literally every single trade in every single order that’s happened on every single market on every single exchange, going back to inception. We feel like it’s a pretty fair sort of plan here where you can do a lot with our free plan with no rate limits.
Clay Collins: 22:05 I think we’re giving away more than almost anyone out there, and we’re really sensitive to sort of the rent-seeking issue. I think in centralized environments, like in the United States, we have a handful of stock exchanges, and because they have all the data, there’s a whole bunch of rent-seeking activity that happens on top of that data. We don’t think that’s a good way to go, and we don’t see the data going in this space, for the most part, because there’s so much churn among exchanges in this space and so many new exchanges popping up. We’re finding that exchanges see their market data API as really a distribution and marketing channel. Right? Like there’s no way that folks are going to know what markets you have available or what tokens you’ve listed unless you’re making your market data API available for free. We do charge for some things. We think it’s a pretty fair plan.
Clay Collins: 22:53 Another thing that we charge for is for running white-label versions of exchange APIs. We’re working with an exchange right now where we’re going to be running their market data API. They just send us a few very primitive data streams, and from those very raw, primitive data streams, we can give them dozens of endpoints with various candle sizes, all-time high information, a whole bunch of different things based on that very raw stream, and we charge the exchanges for that, but we charge them a lot less than it would cost for them to make a very high-quality market data API from scratch. Again, we think that’s fair. Ultimately, we think there’s a ton of opportunity here. We’re just about to the end of our series A financing. We’re raising a $3 million round, and we’re really excited about what we’re going to be able to do with that as well, so we see this as a space where you can give away a lot for free, but also where there’s a lot of value to be captured as well. It just comes down to pricing and how you conceive of value and what you charge for.
Vortex: 23:59 Yeah. I hope maybe somebody takes your data, your API, and makes a competitor to TradingView, because, I mean, TradingView is great, but they’re starting to get expensive, and they’re starting to even get a little bit slow on some things, so I hope that somebody can take this data and make some more TradingView APIs, because TradingView, that’s why there’s only one TradingView, is because this data, like you say, is expensive to be able to get to hold on to, and so hopefully … Well, not just expensive.
Vortex: 24:24 Well, the reason why it’s expensive is because, like as you said, the complexity of getting all this data together, of aggregating it all together, of indexing it all together, and all of that craziness, so yeah, so that makes sense. If you solve that problem, then somebody can just throw up a front end, some kind of website, and hopefully make a competitor to TradingView. That would definitely make my day. Let me ask you, Nick, on this, on the technical side, being the CTO, what is your guys’ setup to be able to handle these millions of requests per second platform? Are you guys on a Microsoft stack? Are you guys on a cloud stack? First, tell us the actual server setup, for example, maybe, and then maybe go into a little bit more about the actual technology itself.
Nick Gauthier: 25:04 Yeah, absolutely. I don’t think we’re quite at a million requests per second just yet. We’re a relatively new company, but when Clay says, “Hit us as hard as you can,” we think we can handle it, but I might cry a little. Yeah, no, we’re really ready for it, and I think what Clay had mentioned before is that a lot of these exchanges, their market data API is an afterthought or something they see as a requirement for people to be comfortable using them. Right? But their bread and butter is actually creating the exchange. All the executions, the accounts, orders, doing all that work, and then for them, it’s like, “Oh, we have to make this API so the data can be accessible, but let’s just make something simple. We’ll put some rate limits on it so we don’t really have to scale it or work too hard on it, and that’ll be enough for people.” Right?
Nick Gauthier: 25:51 With Nomics, we really want to make this data way more accessible, and what we’re bringing to the table is the fact that making APIs over data like this is our bread and butter, so this is what we’re good at. This is what I’ve spent my career doing. In our case, our API is actually designed very carefully to line up with both the way that we index our data in our database so that our queries are incredibly efficient, and also with the HTTP side of the API being something that’s very easy to cache. What that means is that when thousands of people are asking us for current prices of all assets in USD, which is like a really common API request, we actually only have to hit our database once every 10 seconds, because we make such a heavy use of caching that all of that is cached so far up in the request cycle that we can serve that incredibly easily.
Nick Gauthier: 26:46 By the time it actually gets to the database, that’s like a five-millisecond query, because all that data’s already been prepared, so everything all the way through has been really carefully thought out and carefully prepared, so at every layer, as you, if you are able to break through the cache at every layer, you’re hitting the next layer of cache. We’ve tuned this thing really thoroughly to be able to handle this kind of load, which is why we’re building something like Nomics.com that we expect lots of people to be hitting that all the time and refreshing that data every 10 seconds on our homepage. We just have a ton of confidence in that, and we’ve, even though we’re still serving, we’re serving a lot of customers, a lot of requests, we still haven’t had to scale our infrastructure up that much yet, because it’s already so fast as it is.
Nick Gauthier: 27:32 To drill down a little bit into our infrastructure, we’re, the API side of things is using Go, which we found to be incredibly fast, incredibly parallel, and really low-resource-intensive. I mean, our API servers run with like, I don’t know, it’s something like 30 megs of RAM. It’s ridiculous. They’re these tiny, lightning-fast, compiled servers.
Nick Gauthier: 27:56 It’s running on top of a Postgres database right now that has layers, upon layers, upon layers of computed data, so every time you’re doing a query, every single query from every API call is directly against an index. A lot of the times, it’s as simple as like a select-star kind of query, which pretty much means, if you’re not too familiar with SQL, that we’re just saying like, “Give me exactly what’s already in the spreadsheet. Don’t do any computation.” That makes these queries incredibly efficient and fast for us to serve, so the API servers just barely have to do any work when they serve this stuff up.
Nick Gauthier: 28:34 Most of our customization is around asking for things like, “Which currency are you interested in, or which market, or which time period?” Those are all very simple filters for us to apply on the data, so we’ve really thought out this API to be not only really powerful and really customizable, but also through our entire stack to be heavily optimized. That’s how we’re able to really hit these speeds. We don’t care about rate limits, because if you ask for prices, we’re giving you the same cached response. I don’t care if you ask 1,000 times a second. I’m just going to give you the same thing directly out of memory. I don’t have to do any work for you, because all this stuff is so heavily cached.
Nick Gauthier: 29:10 That starts to, I wouldn’t say break down, but things start to get more labor-intensive when you get down to the really high-detail data. That’s actually where we also have determined our pro plan starts, which is all those individual traits. Like if you wanted like a year of Bitcoin, you’d probably be talking hundreds of millions of trades. Right? If I did that with one API call, I’d be sending you like megs of data. It’d be a whole ton of work, and so that’s not something we can just give away like both from in terms of the value that it’s delivering and the customer, who it’s for, but also, technically, it makes it a lot more challenging. That’s also a part of that delineation, but yeah, that’s end-to-end, like how stuff’s set up right now and why we’re really confident in our stack.
Vortex: 29:59 Let me ask you this, then. What is the technology setup? You mentioned SQL, so Microsoft SQL. Is it a Microsoft stack?
Nick Gauthier: 30:05 Oh, post-
Vortex: 30:05 Are you guys on Azure, or is everything in your own data center, and what is the server operating system and the languages that you guys are using?
Nick Gauthier: 30:12 Oh, no, we’re Postgres is what I said.
Vortex: 30:15 Oh, okay.
Nick Gauthier: 30:16 Postgres. We’re all on open source technologies. We’re running on a hosting provider called Heroku, which is a platform as a service, so they automatically are handling the containerization and scaling of all of our services. Since we’re a small, new company, it’s really great to be able to outsource that part of our operations right now before we move to something that’s a lot more highly tuned. They are actually running on AWS, so the AWS [crosstalk 00:30:42]-
Vortex: 30:42 I was going to say, yeah, I was going to say Heroku is AWS, so that is essentially your cloud-
Nick Gauthier: 30:48 Yeah. Yeah.
Vortex: 30:48 … platform of choice.
Nick Gauthier: 30:49 Except they give you really wonderful sliders that we can literally drag sliders, and it scales us, and so that’s just been a wonderful feature there. Their Postgres is the same thing. We can do … I don’t know if you’ve ever seen exchanges go down for database maintenance, don’t I-
Vortex: 31:07 Absolutely.
Nick Gauthier: 31:08 … but we’re actually able to do completely zero downtime database maintenance switchovers, so we can upgrade our database and even upgrade some of the ways that we compute our data or the tables, and we can do those in parallel and then do a completely smooth switchover with no downtime for our API. We’ve actually done it a couple of times to be able to scale-
Vortex: 31:30 Well-
Vortex: 31:31 Is that because of a custom setup, or just because of something Heroku natively supports?
Nick Gauthier: 31:37 Postgres natively supports it through their replication. They have like the primary, secondary replication. Heroku just makes it really easy, because you just run a couple command lines, and it helps you through those steps without having to actually set up all the different configuration files and IP addresses and all of that from Postgres. It’s kind of a combination of the two. Postgres allows us to do it, and Heroku makes it easy.
Vortex: 32:00 Awesome. Awesome. Very, very cool. What is the language, and I guess it is Node.js, then, that you guys are mostly displaying or serving data with?
Nick Gauthier: 32:09 It’s Go, Golang-
Vortex: 32:10 Oh, Go. Okay. Got you.
Vortex: 32:42 Yeah. That’s pretty powerful, because I can tell you that, as a web developer, that’s one of the things that’s so annoying is, is that damn freaking cross-domain error when you’re trying to, especially when you’re trying to implement multiple APIs, and then when you’re doing local testing, it can get really crazy, so having that just kind of native, it’s just that one step further that kind of, in my opinion, shows that this is like a development company run by developers.
Nick Gauthier: 33:05 Yeah. Yeah. Yeah.
Vortex: 33:06 For the most part.
Nick Gauthier: 33:06 Because, like yeah, our CORS, Cross Origin Resource Scripting, I believe. Our CORS setup automatically whitelists like localhost and 127.0.0.1 and 0.0.0.0, so you can develop really easily, and then we have a whitelisting system to make sure that your account and your key is protected, so somebody can’t steal your key and then launch their own site. We have like just enough security that it keeps everything in line, but not so much that you’re going to feel locked down or make that development really difficult, so you can literally make index.html and start typing in it, and open it in your browser. That’ll work with our API, so we make it super easy to start.
Vortex: 33:44 Awesome. Very cool.
Nick Gauthier: 33:45 Yeah.
Vortex: 33:46 Let’s go with Clay, then. I think, Clay, you had something to say, and then I’m going to ask you guys a couple more questions. First, go ahead, Clay.
Clay Collins: 33:52 I was just going to briefly mention that although we started off with the technologies that Nick mentioned, we’re moving to a fairly hardcore financial data infrastructure, so Cassandra, and Kafka, and essentially that whole stack is where we’re kind of in transition to at the moment.
Vortex: 34:11 Oh, very cool. Very cool. Okay, yeah, because that’s a little bit, makes a little bit more sense than AWS, because it just seems, for financial data, you don’t want to run all of that through AWS. You want to have your own sort of internal server setup, or at least … I mean, sure, have your own internal server setup and have that geo-replicated, but this is financial data. You don’t want to have that stuff living across the cloud. Usually, traditionally, that’s what happens is, people in traditional financial systems, they have the main server center, which then gets geo-replicated over a couple server centers around the world, but it’s not living in the cloud, per se, right, because, of course, that’s just on someone else’s computer. That’s where the security breaks down a lot on that.
Vortex: 34:53 Okay, so that’s interesting. Very cool. Let me ask you this, then. Clay, what are some of the future features that you guys have coming down the line? What are some of the features you guys want to begin integrating next?
Clay Collins: 35:03 We started off with squeaky clean and ultra-normalized exchange data and raw trade data. I think we’re the only aggregator that I know of that provides normalized raw trade data. We just recently launched order book data for our paid plan, so we’re going to be adding more order book data over time, and from there, we’re going to get to blockchain data and on-chain data and then make our way to L2 solutions. We also, in the medium term, plan on integrating bot platforms, so we think of bots very similar to how an exchange might operate. You’ve got an exchange at the top level, and then you’ve got pairs on that exchange. With bot platforms, it’s roughly similar. You have the bot platform, and then you have bots operating underneath it, which the performance of those bots can be measured over time, and reported, and somewhat audited. We also [inaudible 00:36:04]-
Clay Collins: 36:00 And reported, and somewhat audited. We also plan on adding a variety of indexes. There’s a whole bunch of, you know sort of crypto versions of the SMP 500. We’ll be adding those. So, yeah that will occupy us for a couple years.
Clay Collins: 36:15 And then also adding a variety of technical indicators for analysis on top of the existing data, like a correlations end point maybe with a time lag in place. You know, there’s a whole bunch of EMAS, SMAS. There’s a gazillion of these things. So, we’ll be adding those as well. But, yeah that should keep our roadmap pretty full for a bit.
Clay Collins: 36:37 And then on the front end, with Nomics.com, there’s about a million pages we’re looking to add to that website, so pages for every single pair on every single exchange, you know with the order book data included in every single language. We want folks to be able to drill down to a pretty atomic level when they are viewing data in the space.
Clay Collins: 36:59 And then, of course, everything we do on Nomics.com is viewable and serves as sample code for folks who are using our API.
Vortex: 37:07 Yeah, that’s really cool. To be able to dogfood, you know, your own product there with front end interfaces like Nomics.com. That’s a really cool idea.
Vortex: 37:16 So, let me ask you this then, do you guys plan on doing any type of… because you said, you mentioned layer tooth solutions stuff, is something like serving requests, you know per satoshi something you guys want to do? Being able to pay over the lighting network, you know per request?
Clay Collins: 37:32 Yeah, we think so. You know we’re not going to be super cutting edge with that stuff, you know we’re a traditional API company. So I think when the technology matures, we’re going to be likely to do it. But we’re probably not going to be early adopters of that stuff. We serve institutional customers who are pretty conservative in traditional businesses. And that’s generally how we operate. But –
Clay Collins: 38:03 Yeah, that would be awesome –
Vortex: 38:05 So yeah you may want to –
Clay Collins: 38:05 That would be super cool.
Vortex: 38:06 Check that out –
Clay Collins: 38:07 That’d be super cool, so we should talk more about that. Yeah, that’s super exciting. The ability to have anonymous customers paying in like tiny fractions of a bitcoin per request in a streaming fashion, yeah that’s super awesome, right? These streaming payments, we’d love to be able to do that. Yeah, I mean that’s –
Vortex: 38:28 That’s what Sherd bits is working on, so maybe … because their not really a data company like you guys, they’re a data processing company, or a servicing company, right? They’re trying to democratize data through their lightening. So, your data is an example of data that could be democratized that way. You know, definitely check out the episode of that guys on –
Clay Collins: 38:46 Awesome
Vortex: 38:47 We did interview, Chris I believe his name was, from Sherd Bits, so definitely check out that interview and then of course I believe he’s on twitter of course on sherd bits. So, check that out if you want more information on that.
Vortex: 38:58 But then, let me ask you this then, do you guys have any plans for, to integrate with decentralized exchanges?
Clay Collins: 39:04 Oh yeah –
Vortex: 39:04 Any way shape or form –
Clay Collins: 39:05 Oh yeah –
Vortex: 39:05 That you can tell us a little about that.
Clay Collins: 39:07 We’re in talks with a bunch of them right now. We’ve been fairly just kind of like mercenary in terms of the exchanges we add, starting with the highest volume exchanges and working our way down. So we’re absolutely adding decentralized exchanges.
Clay Collins: 39:22 We have a spec on our get hub account that actually outlines how an exchange might integrate with us. So, all an exchange has to do is just stand up like two end points and we can crawl their entire trade history. So if there’s any exchanges listening to this that would like to have their data integrated with us, it takes one to two hours. You stand up a couple of end points, you don’t need any permission from us. Just shoot us an email with your end points and we’ll get you added in no time.
Clay Collins: 39:51 We’ll either be doing the integration ourselves or, you know if you’ve got a junior dev whose got a couple three hours, send him to our spec and get him cranking on it.
Vortex: 40:01 Awesome, very very cool. So then maybe we can move on to the podcast. You guys also have a podcast over there called the flippening.
Clay Collins: 40:09 Yep.
Vortex: 40:09 And maybe you can tell us just a little about that, Clay, and then we’ll close it out with a couple of market questions for you.
Clay Collins: 40:15 Yeah! So, flippening is the first and original podcast for institutional crypto investors. Our goal is to be like the planet money of the space. One of the things I’m especially proud of is the security token documentary. It’s a three part audio documentary. We interview a whole bunch of folks. A bunch of it’s scripted, there’s a lot of cuts. We spent over 100 hours putting that together.
Clay Collins: 40:42 So, we definitely don’t put out contact as frequently as you do. For example, our … which is like, oh my gosh, I don’t know anyone can. I’m totally, like bow down to your, I don’t know what the word is, prolificacy?
Vortex: 40:57 You’re too kind, Clay. You humble me.
Clay Collins: 41:00 But, so we put out content a little bit less often. But we try and do sort of like reference material on a given topic. So, we have a podcast on security tokens. It’s a three part podcast. We have a podcast on quantitative crypto investing, we have a podcast on index funds. We have an episode on, you know momentum investing and sentiment based investing.
Clay Collins: 41:22 So, we try and take deep dives on these broad topics. Usually those podcasts are at least two episodes deep and have a lot of editorial interjections added. Me cutting in from the editors booth explaining some ideas or concepts. And, overall it’s been pretty popular. We’re usually in the top 200 in the business section in iTunes, like we are right now.
Clay Collins: 41:45 It’s worked out well from us. A lot of our customers have come from listening to the podcasts. Each episode right now is getting roughly 50,000 downloads. So I had this insight when I was at consensus. The insight was that there was about 10,000 people there and it cost them several millions of dollars to put that event on. And at that time I was lamenting how much time it took to produce each one of these podcasts, but then I realized, you know, it only costs about 1,500 bucks to 2,000 bucks to produce each podcast episode. Which is fairly expensive, right, if you include my time that’s how much it cost. But you know, we’re getting 50,000 downloads. So, roughly the same coverage as consensus per episode. So, in terms of you know, sort of reach per episode or the cost per person reached, it’s actually a pretty good deal and it’s done a lot for us as a business. So it’s something we’re going to continue doing even though, every once in a while I’m up at midnight on a Friday cursing my life. It’s been something really rewarding.
Clay Collins: 42:49 We just started something that’s new with the podcast which is a monthly wrap up with Eric Melter of the proof of work podcast. So we’re doing a monthly, sort of audio version of the proof of work newsletter. I’m really excited about doing that. It’s going to be our first toe dipped into topical content, we traditionally haven’t done that. But it’s fun and I’m enjoying it.
Vortex: 43:12 Awesome awesome, well let me just ask you this then, Clay, because I want to switch gears a little bit before we close this out and ask you a question about maybe the financialization of bitcoin. Maybe you can just broadly give us your take on that because you guys are in markets, you guys are trading, you know traders. Maybe you can just give us what your outlook is for the financialization of bit coin.
Vortex: 43:32 Do you see ETFs coming? Do you see this as a good idea? Where do you see this going in just maybe in the next year, going into 2019?
Clay Collins: 43:42 Yeah, so my view on the bitcoin ETF is somewhat similar to that matrix meme, where it’s you know, you’re telling me in the future this is going to be worth a lot of money. And then I forgot exactly how that goes, but the quote is, “by the time this happens, your life will be denominated in bitcoin.” And I think, I really don’t care with the ETF happens. I don’t know that it’s really going to open up that much in terms of opportunity and I truly believe that by the time the ETF goes live, it’s not going to be relevant anymore.
Clay Collins: 44:16 I think the ETF is going to go live when enough people at the SEC own bitcoin and can essentially front run the upside that comes from the ETF. Which essentially means we’ve got mainstream adoption. We’ve seen, you know JP Morgan talk about a bitcoin trading desk, Goldman Sachs talk about a trading desk. We’re getting inbound inquiries from all kinds of companies that we have NDAS with about their trading desks.
Clay Collins: 44:43 So, this is all happening and like anything else, it takes a while. What I find really interesting is, like the gold, okay the freaking gold ETF didn’t even happen until, I believe the early 2000. It wasn’t even in the ’90s it was like the early 2000s.
Clay Collins: 45:04 So, if it took that long to get an ETF for gold, like how long is it going to take for bitcoin? I really don’t know, but investors have a way of buying stuff that they think is going to make them money and I’m just not worried about the space. Bitcoin is eating the world and –
Vortex: 45:22 Yeah, that’s what I see it as too. I just see the demand, you know the demand is there so you know, whether … that’s why I see the financialization of bitcoin important. Not because bitcoin needs it or anything but just because it’s the next phase of bitcoin and it really represents the next phase of bitcoin.
Vortex: 45:37 So, that’s really cool. You know, I try to tell people, but Bitcoin doesn’t need the ETF, doesn’t need wall street, but wall street really really wants bitcoin. The investor demand to hold this asset, this brand new digital asset, this asset class, the first new asset class in decades. It seems like it’s just a no brainer.
Vortex: 45:54 But like you say, it doesn’t really matter. Bitcoin doesn’t really care. It’s going to happen either way, but I like to get people’s opinions especially who are into markets, who discuss these types of things.
Vortex: 46:04 But it sounds like from you, that you see the investor demand, you see it happening, no matter what. You see people on the ground working with this stuff, you working with this data. It’s going to happen, just a matter of time.
Vortex: 46:22 Let me ask you this, Clay. Maybe comment on that real quick because some people don’t believe me when I tell them OTC volumes always dwarf spot price –
Clay Collins: 46:28 Oh my God –
Vortex: 46:29 There’s a reason why spot price is a spot price, because this is what the traditional regular investor, that’s how they get in. But OTC, that’s a whole different thing, that’s designed to be you know orders of magnitude more volume. So maybe you can just talk a little bit –
Clay Collins: 46:44 And there are many days in which OTC volume dwarfs exchange volume, like it’s really quite insane what’s happening. We’re trying to get OTC desk volume added to Nomics, but these folks just don’t want to share it. And when I say OTC volume, I’m not talking about some dude on telegram in a group saying they’re an OTC desk. I’m talking about these real OTC desks.
Clay Collins: 47:11 We were trying to, so we would like to integrate with some of these OTC desk and oh my gosh, just the paperwork and the back and forth and the [bizdev 00:47:18] and it’s just like, it’s a lot of work. We’re going to try and make a go of it, but it’s a lot of work.
Clay Collins: 47:22 So I went in this room with a bunch of traders, and I was like, “Hey does anyone here operate an OTC desk?” And like 20 people reached out and they were like, “yeah, I’m an OTC desk.” And I was like, “Okay -”
Vortex: 47:33 What’s the volume that you do then?
Clay Collins: 47:36 Okay, crypto loopcage –
Vortex: 47:39 Oh my God.
Clay Collins: 47:39 Where’s your website?
Vortex: 47:40 Yeah, that’s funny. And maybe that’s why some people are actually thinking that OTC is not real or you know it doesn’t do very much volume. But we’re talking about real OTC desks, guys. You know, where family companies go to, where institutional investors go to, where large high net worth individuals go to. Where they need thousands of coin. This is where they go to. They don’t go on the freaking open market spot price. You know –
Vortex: 48:11 Yeah, they’re just going to move the whole thing for one trade, so that’s just now how its done and that is why we have OTC markets, that is their main utility so very very –
Clay Collins: 48:20 [Overland 00:48:20], Genesis, Circle, those guys are, oh my gosh, they’re making so much money. I wish they had public financials because I think it would blow most people’s minds.
Vortex: 48:30 Absolutely, I mean this is what we’re seeing just demand continue to skyrocket for Bitcoin. I mean, people are like, “the fees are low because nobody is using bitcoin,” and it’s like, no dude there is a lot of people using bitcoin. The actual transactional volume is somewhere like, where it was last summer, but still that’s because we’re batching transactions now. That’s because we have segments helping with low feels and now we have lightening. Tons of transactions happening on the lightening that we can’t even account for how many.
Vortex: 48:55 So yeah, it’s getting crazy. The demand continues to surge. That’s what we’re seeing. I think you can agree with that, Clay.
Clay Collins: 49:03 Absolutely.
Vortex: 49:04 We’ll just ask Nick maybe, to just close that off if he has any final comments on the discussion here today and then we can close it out. So go ahead, Nick.
Nick Gauthier: 49:11 Honestly, I get almost all my crypto news from Clay on the podcast. So, Clay is like my crypto currency news and market information API and I just parrot back what he says so I’m obviously not going to add anything there. Yeah, I’m definitely more of the code nerd of the discussion, but no I really enjoyed hearing you two talk about OTC desk data and all that stuff for a little while. That was entertaining for me.
Clay Collins: 49:36 Nick is a data janitor. He’s just kind of in the back rooms cleaning up –
Nick Gauthier: 49:40 That’s so true.
Clay Collins: 49:41 He’s got his name badge on that says, Nick, you know –
Nick Gauthier: 49:44 I have literally made a good chunk of my career out of taking really crappy code situations and data situations and making something usable out of it, so that’s, you know I was mopping the floor while you guys were talking about fun future money stuff.
Vortex: 49:58 Awesome, awesome. That’s why we pay Nick the big bucks, guys.
Vortex: 50:01 Alright, I just want to say thanks everybody for listening. I think we can close it out. We really appreciate you guys coming on. Clay, why don’t you tell us more where we can find out about you and then we’ll ask Nick.
Clay Collins: 50:12 To find out more about Nomics, just go to Nomics.com. So that’s the suffix of economics, n-o-m-i-c-s. From there you’ll find a link to our API. We’ve got just a fantastic free version of the API, check it out. Hit our end points really damn hard. We also have a telegram group for support for the API, so we … I think for a free API I might dare say we have the best support, for a free API out there anywhere.
Clay Collins: 50:38 We also have a podcast called the flippening. You can just search for flippening podcast and you’ll find us. And we’re active on twitter. We have a policy of replying to everyone. So if you just send us anything anywhere, you will get a response from us. Sometimes it takes a bit, but you will always hear back from us.
Vortex: 50:54 Awesome, Clay. Thanks so much.
Vortex: 50:55 And Nick, where can we find out more about you?
Nick Gauthier: 50:58 Best place to find me is in our telegram group. So, I mean if there’s anything technical that you want to know about. Any questions about the API, you need help using that, we have an API group and we also have our core Nomics group and you can always message me there. But then I’m also on twitter as Ngauthier and that’s mostly about code, coffee, cat pictures. That sort of thing. So if you’re looking into tech stuff and crypto stuff, definitely through telegram is the way to find me.
Vortex: 51:24 Awesome –
Clay Collins: 51:25 And that’s at Nomicstelegram.com. You don’t have to know the t dot range, just go tot nomicstelegram.com and that’ll forward to our telegram group.
Vortex: 51:32 Nice. That’s handy. Nomics telegram group.
Vortex: 51:35 Alright, very cool. Well thank you so much, we really appreciate you being on the show. Thank you so much everyone in the chat. And we really hope you guys learned something new today.
Vortex: 51:44 Talk to you guys later.
Clay Collins: 51:55 Okay, that wraps up this interview. I hope you enjoyed it. Next week we’re going to hear from Sam McIngvale from Coinbase custody to explore the state of institutional crypto custody from a number of angles. Stay tuned.
Clay Collins: 52:07 That’s it for this week. To sign up for our free crypto newsletter, listen to other episodes, or get the show notes form this episode, please visit flippening.com.
Clay Collins: 52:16 I also invite you to visit the startup that funds this podcast, Nomics, spelled n-o-m-I-c-s at nomics.com.
Clay Collins: 52:23 Finally, if you got value from the show, the biggest thing you can do to help us out is to leave a five star review with some comments and feedback on iTunes, stitcher or wherever you listen to podcasts.
Clay Collins: 52:34 Thanks for listening and see you next week.