Banks and mainstream payment institutions aren’t exactly very friendly to the notion of free trade when it comes to guns and other industries they consider to be red flag. Enter the TUSC Network, a blockchain payment processing solution that enables crypto payments for gun businesses and other retailers. TUSC stands for The Universal Settlement Coin, a decentralized, non-ICO cryptocurrency that was launched in 2018. Crypto entrepreneur and personal liberty activist Rob McNealy joins Warren Whitlock on the podcast to share the details of this crypto payment solution and the unique benefits that it offers to gun retailers. They also talk about how crypto entrepreneurs can get mass adoption of crypto products – a long overdue prospect that has the potential to solve pesky problems like what TUSC is doing for the gun industry.
Listen to the podcast here:
Enabling Transactions When Institutions Don’t Want Free Trade With Rob McNealy
I’m here with my long-time friend and a great innovator in crypto and in many other things that we may or may not get into. He’s the Founder of TUSC. Rob McNealy, welcome to the show.
Warren, thanks for having me. How are you?
I am doing super. I’m here for my void as they say. We’ve been through a lot. On a former show of mine, you announced running for Congress.
That’s going back sometime in 2009, 2010 timeframe.
Everything you and your lovely wife do is always fascinating. We could spend an hour talking about that, but we’re here to talk about the distributed future that’s coming with emerging technologies. Number one being blockchain but also AI nanotechnology. I get to talk about a lot of things on this show but one that you’ve done particularly well at and one of my early samples of Distributed Conversations concept was talking to you about the switch OCC, which was brand new back in the day. You’ve been in this crypto game for some time. Before we go any farther, tell us a little bit about TUSC and then we’ll get into some implementations of your company and other technologies for what it means for society in the future. Give us the synopsis.
We started out originally as an ERC-token called OCC. We decided after about 7 or 8 months that we wanted to build our own blockchain to overcome some limitations of being a token on the Ethereum blockchain. We then recruited a new team, built out our blockchain and renamed it as TUSC, which stands for The Universal Settlement Coin. Some of the novel features about what we’re doing is we are a completely decentralized project. We have on-chain governance. There’s CEO, no LLC. We are completely decentralized. One of the things that is a little different about what we’re doing with TUSC is that we’d thought that one of the problems with a lot of other crypto products is that they weren’t designed for marketing.
We felt that a lot of crypto products fall short when it comes to how they market and getting mass adoption. We believe as a project that you can’t get mass adoption without TUSC marketing. It’s like getting the World Wide Web popular, AOL is what drove adoption of the World Wide Web. A lot of people don’t give them credit for that, but they sent out millions of these CDs with software and free minutes. That’s what got everyday people interested in the World Wide Web, even though the World Wide Web had been around for years before AOL picked up the mantle there. We believe that for adoption to happen, marketing is critical. One of the things that we built into our project is a thing called the marketing partner. The marketing partner is a term-limited and elected vendor that works for TUSC.
It’s not a voting member. It doesn’t have any say or governance or management. Its job is to grow TUSC like a startup. It gets a small automatic sliver of the block rewards to do that function. We were designed from day one to be viable for marketing. We decided how do you get mass adoption? We wanted to answer that question as a project. What we said is that we think if you’re going to go out and try to get mass adoption in the West, you need to focus on industries and people that have recognized problems with payments. For most people in the West, crypto doesn’t solve any problems for them. It creates problems, headaches, stress, learning curves and all this.
We said there are about seven industries in the United States that have a problem with payments. They’re all distasteful to somebody. That might be things like pornography, gambling, cannabis, CBD, pawnshops and things like that. Also, included in that list is the gun industry. We decided as a project, that’s the first market to focus our marketing energies on. That doesn’t mean that we’re going to stop with the gun world, but we’re going to start with the gun world because it’s a $50 billion industry in the United States. They have a very huge recognized payments problem that TUSC can solve. We aren’t gun guys in any way. We’re all passionate on the team about the Second Amendment. In addition to all those factors that would make it a good place to start is that the gun industry is the only one of those distasteful industries that’s protected by the Constitution.
You can make some arguments about pornography. Some people argue that pornography is protected by the First Amendment. Cannabis and pawnshops aren’t but guns are. If we started to actively promote TUSC to be used by cannabis, I don’t have any problem with people of any industry using TUSC. The long-term goal is to get everybody using it. If you have the appearance of facilitating payments for that industry, you could garner some attention from regulators, from potentially money-laundering for narcotics trafficking by the DEA. It doesn’t mean it’s true. It doesn’t mean they’ll get a case, but if you have to defend that, there’s a huge regulatory risk associated with that, even if you don’t find there’s something wrong.
I’ve seen different statistics about how much paper money have been used in the drug trade. Every $100 bill has a trace of cocaine on it. That may or may not be true. That’s not the issue. It’s the fact that it is a lot. The system of payments is not going to do much about the political situation on any particular industry. That’s what the currency is supposed to do. It’s to allow any transactions to happen, and then regulate the things you don’t want to happen. I’ve always been all for the idea of crypto. I’m not worried about whether there’s a Silk Road or whatever because those things are always going to be there. We have to prevent that activity whether or not it’s criminal or it’s using a particular technology.
I’d like to point out though that any retail sale of a firearm in the United States is a heavily regulated process. This is important especially to some of your international readers that don’t understand. There is no gun show loophole and all this stuff that you hear about in the news. If you’re going to buy a gun from a retailer, you have to go through a background check here through the federal government. The interesting thing and why TUSC fits an interesting niche here is that the federal government doesn’t regulate how you pay for guns. The background check process and the approval processes have nothing to do with payments. If a gun retailer in the United States would accept cigarettes for a gun, you could sell the gun for cigarettes or a bar of gold, silver, Bitcoin, a check, cash, credit card, or whatever the retailer is willing to accept.Whereas banks shut the gun industry out as a red flag industry, TUSC welcomes it with open arms. Click To Tweet
The problem of the gun industry in the United States with the payments is that the banks themselves have taken it upon themselves to label the gun industry as a red flag industry, as though they were illegal like cannabis. What happens is all third-party payment options like PayPal, Square, Stripe, Venmo, and all these other services through their terms of service actively prohibit gun retailers from using their platforms. What happens is that in this industry, they’ve been the platform from all those third-party payment options. On top of that, they pay high credit card fees. They have bad chargeback problems. They get no appeal because of that red flag stigma that the industry has. TUSC fits and fulfills and solves those problems nicely in the United States.
Getting back to the larger market issue, in any transaction, it’s making it simple and fair, allowing the marginalized groups to be able to use a payment system they can trust. It seems like the biggest problem is having something that easily recognizes as using a dollar or using a credit card. I don’t know if you agree that that’s a problem. What will make people accept that they are either carrying around a card, a piece of paper or pin code in memory that they will be able to go anywhere and shop with the alternate currencies that we have?
At least our strategy and our thinking on the issue is that we as a group don’t have the crypto world so far. We’re a big small industry. There are not a lot of us. If there are about 1 or 2 million people worldwide that are into crypto, I’d be surprised. How do we get mass adoption as a group? One, you need to start with people and focus on groups that have recognized payment problems. You’ve got to start there. That’s different in the third world than in the first world. If you go to developing nations, they have a different banking problem than we do. They don’t have banks in a lot of places or easy access to banks. Payments are a bigger pain for the average individual there. Out here in the United States, we don’t have a payment problem. Everybody’s debit credit cards work, Venmo works, and all these different third-party payment options are all available here. Crypto doesn’t solve any problems that way, except for people or industries that are specifically locked out of the banking industry or have high fees.
If we’re going to get adoption, we need to focus on two things. One, we need to focus on people that have problems that they recognize but two, we’ve got to get the retailers vested in solving the problem. Ultimately as a project, we’re looking at supporting retailers and we view the gun retailers as our customers. We don’t just look at them as users but actual customers. We want to provide customer support to those retailers. One of the things that we’re looking at and what we’re developing are all the little pieces that a retailer would need to implement TUSC in their system. That’s not like, “Here’s a link to some manual somewhere. Good luck.” We want to provide customer support. We want to bring in the tax piece because tax tracking is a big problem in the United States for taking crypto payments as a retailer. We want to come in and bring all these slick payment gateways so they can plug right in. We’re talking to all the major point of sale providers to the gun industry right now about integration into their existing point of sale systems.
To us, we want to encourage the retailers to incentivize their own customers to pay them in TUSC. We were just providing all those on and off-ramps and friction points. We’re trying to smooth that out. For instance, because a retailer pays high fees in the gun industry, if they can incentivize by giving their customers a discount by paying them in TUSC and then provide the easy on-ramps for their customers to buy TUSC. If they immediately pay with TUSC, then they’re more likely to get people to use TUSC and adopt it as a payment mechanism. Part of that is also long-term we’re trying to laser focus our energy in one industry so we built an ecosystem where people might not want to have to even get out of TUSC. You look at what Amazon did. I’m old enough and we both were around when Amazon started back in ‘95. They were a bookstore for a long time until they were disruptive and got traction in that space before they went out into other industries. We think that getting crypto adoption, we have to do that as well. We have to get traction in one place and then we’re going to work out to other industries. That’s how we’re going to get there.
I had an account. How I got it, I can’t recall. It was complex. I didn’t have a bank merchant account. I had something else I set up back in the ‘80s and for years I was doing that. The internet came along and I wanted to be able to accept payments in the mid-‘90s when I started looking at this. All of the documentation and the APIs had been written in some way, but trying to figure out why there needed to be a gateway before we even talked to the merchant card people who then talked to my bank was mind-numbingly boring if not overly confusing. It took until we had things like PayPal to be able to do it better. Now, somebody is setting up and they get a Square account. They’re able to start up in the business the same day. I see that we need the same thing in taking crypto where putting out a sticker on my front door saying “I take crypto,” or putting a logo on my website is not going to take care of it. When somebody goes to check out, it’s got to be a system that they can click and buy and it works. Is that part of what you’re referring to as marketing or are you marketing beyond that?
In our roadmap over the next 6 to 12 months, our focus is building those relationships with on and off-ramp providers and improving our liquidity. We have identified the partners that we do want to work with. Some are interested in working with us now and some say that we need to wait a little longer and grow a little more. That’s the plan. We know what we want to look at, what we want TUSC to look like, what features we want, and we have identified those players. We’ll get there. It’s just a matter of time. Things take time.
That’s marketing. The ease of getting set up once they decide to do it you’re not going to leave them high and dry. Your first customers will be the ones that already have a terminal point of sales system in place where this could be added. Technically, that’s a lot easier than it was when we were trying to figure out how to take payments on the internet at all. If it hadn’t been for eBay, we wouldn’t have PayPal. They wouldn’t have survived at the time. There was a reason they have a lot of transactions. I remember when eBay came out and they wanted you to connect with somebody, buy the item and then pay off with a check or something external to the program. It was near to impossible.
The way I look at making a payment with crypto, I find 99% of the time when I buy something and I’m looking for the option to pay with crypto because I want to support the movement, I see nothing. There’s no way to do it. Amazon is not taking a tiny sliver of my Bitcoin. It’s easy with one click to go ahead and buy something. It’s great that you’re focusing on that first and then it goes to the world. Is there a lot of competition in this market? Are the banks fighting for you or against you or trying to do the same things themselves?In order to get mass adoption of cryptocurrency, you need to find people with payment problems and retailers who are vested in solving them. Click To Tweet
The banks are the ones that created the problem. They’re the ones that have locked the gun industry out. They’ve made it clear to most of the gun world that they’re not interested in the gun world business. We view our competitors as Visa, MasterCard, PayPal, Square and Stripe essentially. That’s who we’re looking at fulfilling the void that they’ve left because these people have left the industry. There are other crypto projects out there certainly that could do this, but they’re not focused in a way to do the marketing and to do the outreach to the community. I’ve seen this a few times. There are big Bitcoin guys that are gun guys and they’re like, “We need to go out there. Gun retailers should use Bitcoin, not your project.”
I go, “Let’s talk about it at the SHOT Show in January.” We’re not going to the SHOT Show but TUSC is going to the SHOT Show. We’re meeting, talking and hearing about the problems from this industry. We’re in that industry. To me, if your project is not going to an industry, they don’t deserve the business of that industry. You need to earn their trust and their respect. You’ve got to communicate with them. I know at SHOT Show in 2020, there were a couple of blockchain projects that are trying to do gun-tracking on the internet, but there was no crypto payment project represented that we could see anywhere in the SHOT Show. They certainly weren’t in some of the other conferences like the NRA Conference and the Gun Rights Policy Conferences. There’s nobody from any other blockchains that even go to those two.
Can I pay for my NRA subscription membership with TUSC?
You will be able to soon but not yet. We’re not focused on retailer integration yet. It’s a little further down our roadmap. We haven’t done any outreach to the NRA, but we have talked to other nonprofits and charities in the space. We do have a charity component built into what we’re doing. I think that’s going to come in time.
I have some personal experience with family members working in the cannabis industry. The movement of cash even for one small worker is a problem of it being a cash business. She’s managed to get a debit card of some sort. I haven’t figured out how they made that legal. Talking to people who were working on those problems, it’s the whole industry people will want. It creates other problems like a legal cannabis shop is now stuck with having to protect a huge amount of cash because they can’t do business with the bank. I like your theory looking for a regulated too much or out of date, and fixing the problems there. That’s what’s attracted me to TUSC more than anything. That and you have the best T-shirts. That’s important too. If I were to go out into the world, people would see me in a TUSC shirt often. How’s it going as a startup? Are you seeking funding, taking funding, going to do funding later or any interesting side note to the investor?
We aren’t a company. There wouldn’t be anybody to give investment money to. Our tokens are fully distributed. If someone wanted to buy TUSC as an investment, which isn’t something that we hype because we want people to use TUSC more than hold it. That’s contrary to what everybody else is doing right now but that’s our focus. They’d have to go on an exchange and buy it. I don’t have any TUSC to give you as much as I would love to sometimes. We’re fully distributed, up and running, got a working product, building out a bunch of different things. As far as investors go, people would have to be retail investors and buy it off an exchange.
You’re the rare business I talked to that isn’t either looking for funding or looking for top of funnel customers. I would imagine if someone that’s in the realm of what we’re talking about was looking for a partnership, they could contact you, but you’re not even looking for that. You’ve got the marketing laid out with the right partners at least at first. At some point, marketing to the masses will become more important. We’ll save that for a later episode. If someone wants to connect with you, what’s the best way?
Check us out at TUSC.network.
TUSC, The Universal Settlement Coin. We’ve been talking to Rob McNealy. It was fun as always. You can check out more episodes at DistributedConversations.com. Please share this if you like it. I look forward to talking to you next time.
About Rob McNealy
Rob is a dynamic serial entrepreneur, with years of in the trenches startup experience. Technically oriented, but savvy enough to cross interdisciplinary divides, his talents includes identifying opportunities, solving difficult problems, and creating value whenever possible.
His passions include Cryptocurrency, blockchain technology, podcasting, shooting sports, metal art, welding, entrepreneurship.