Latest / Bitcoin for Financial Services Podcast / CFO Reveals the 4 Types of Bitcoin Treasuries

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CFO Reveals the 4 Types of Bitcoin Treasuries · Bitcoin for Financial Services Podcast

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Part of the reason I want to work with Bitcoin companies or wanted to and got into this space was they're the only ones, they're the only times I have discussions about like 20, 30, 40 years in the future that are like positive, hopeful, and where people are looking to build something.
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mental health wise I found it so much better the volatility is easy to deal with for the positivity
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that you get out of just the discussions and being around uh people who are actually like
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building with hope for the future bitcoin is a currency on the internet if you don't trust any
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other currency this is where you go it's going to outperform everything bitcoin could eventually
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be worthless every day is a good day to buy bitcoin bitcoin reached its highest price to date
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Bitcoin hitting a new high.
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It really has reached escape velocity.
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There is no second best.
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Who cares about Bitcoin?
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It's the only secure database that's ever been invented.
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Antisocial.
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Bitcoin is the real deal.
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Stupid.
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Everything is bullish for Bitcoin.
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Immoral.
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It's going up forever, Laura.
1:01
Fix the money.
1:02
Fix the world.
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Wide Work is a registered investment advisor,
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and the opinions expressed on the show are their own
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and do not reflect the opinions of the Silk LLC.
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Joining us as a CPA,
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and the opinions expressed on the show are their own
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and do not reflect the opinions of trusted CPA
1:13
or other affiliated firms.
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Welcome to the Bitcoin for Financial Services podcast, the show where sound money meets professional
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services. We explore how to build the financial services industry within the principles, ethos,
1:47
and values of Bitcoin. And today we have on the CFO from Block Rewards, Travis McDonald.
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All right, let's get into the episode.
1:58
All righty. Welcome back to another episode of the Bitcoin for Financial Services podcast.
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Today, I'm super excited. We've got Travis from Block Rewards and honestly wears
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several different hats have been uh very blessed to know travis i guess i don't know since sometime
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last year in 2025 um but you know i think that there's there's more to than meets the eye with
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travis and uh and so i'm i'm actually very excited to learn a lot of things uh today myself so
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travis thanks for thanks for joining us on the first day back i guess from from the new year break
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yeah that when you said uh yeah great great to be here man uh thanks for having me and yeah when
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you it took me took me a second there when you said last year 2025 i was like wait instead last
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year i went 2024 like yeah it's january 2nd so you know that's uh you're still still making a
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mistake when you write the year sort of thing yes great to be here man yeah i mean so i'm i'm
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excited because I mean, I keep hearing about block rewards, the company. And so I'm excited to hear
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hear more about that. And then I think we initially met, I guess, just in a Bitcoiner
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accountants telegram group through that. And so yeah, looking forward to this, I think that you've
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got a ton of valuable just background and knowledge to share with this space and kind of
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one of the core principles of this podcast is is trying to bring bitcoin into you know kind of the
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big boys table and uh yeah the more i hear about your background it's like okay you're gonna you're
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playing a big role in that in that uh piece so why don't you give us a background of like
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what you used to get into before you were in bitcoin i think that's an important uh kind of
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framework to start. And then I'm very excited to kind of hear once you made that switch from
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more traditional finance world and into the Bitcoin world and what you've been up to since.
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Yeah, sure thing, man. And yeah, I think that's, that's an important, I mean, that's part of the
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interesting aspect of, I think this podcast and just the discussions you're having is
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seeing that transition as people move from the TradFi industries and start utilizing Bitcoin.
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I know myself, it took about 10 years. I first heard about it in 2011. I went to Waterloo, went to math and accounting at Waterloo in my master's of accounting year 2011. I heard about Bitcoin. You know, it was already past CPU mining. It was into the GPUs. I had no idea what I was doing. Technically, I couldn't even like open the ports to figure out how to set up proper. And I just noped out at that point and was like, OK, cool.
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you know kind of dismissed it saw it again in 2017 18 um when a guy at at uh at the firm i was
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working at which i'll kind of get into in a sec uh he was investing in hud 8 and working at an
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accounting firm at the time everyone kind of dismissed it and then so i i again ignored it
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and then in uh 2021 had a friend who uh deals with some black market stuff and uh he was still
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using Bitcoin. And I went, oh, like I thought they would have shut it down because of the Silk
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Road thing I heard about. I thought I thought all of these, you know, FUD reasons were why it would
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have disappeared and it's still around. So I found I had to look at it then. But like I said,
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I was at an accounting firm. So my background, I've got my CPA. I got that in what, 13 or so,
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graduated 2011, did my time in audit, immediately noped out of audit and went into the transactions
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group. So that was focused on valuations, mergers and acquisitions and due diligence.
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This was all at Grand Thornton. So largely kind of private company focused. I got my CFA and my
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CBV, which is Chartered Business Valuator, as part of that group, and then essentially
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left the accounting world, or left public practice around 2021, which happened to be just as I
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mentioned, as I found Bitcoin. And so I was looking to get out of the public accounting,
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because I found just the partnership model and the approach to the business didn't work for me.
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I got out of there and started looking at fractional CFO work because I really wanted to help businesses, especially as they prepped for M&A and exits.
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And I saw a lot of this working in mergers and acquisitions for private companies helping them sell, as well as helping businesses value themselves as they were going through different tax or restructuring processes.
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And it became clear to me that just so many businesses weren't preparing properly for that process. And there was a lot of kind of money left on the table by owners by just not really taking a look at their internal processes and how to best prepare for a sale.
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so I got into the fractional CFO work that way and then like I said that was right around the
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same time as I found Bitcoin so like kind of mid I bought my first Bitcoin May 2021
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left the firm in June 2021 started working on the fractional CFO stuff and as I did the you know
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the required 40 hours a week of Bitcoin podcasts I was just like wait this makes so much sense like
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why why aren't more businesses using this and really started to get into trying to understand
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how to make it part of the the financial framework for any company realizing that a lot of the fiat
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companies i was dealing with weren't necessarily there yet and that there was still a gap there
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so that's where i started really trying to work and find companies in the bitcoin space to work
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with because I was like, they're already there. And then I can learn more with them. And that's
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got connected to Scott Dietles, who's the co-founder here, because he had written a book,
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Bitcoin for Financial Advisors. He comes from kind of the health benefits space and was very
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much focused on how Bitcoin would start to make its way in for advisors in business and into the
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financial. I didn't know that about Scott, actually. That's really cool context.
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I think we've got it here, actually.
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Yeah, it's not it's not a huge one.
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Again, it's a fairly it's not that, you know.
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Well, advisors are busy, you know, and so honestly, that's probably the right that's probably the right link to book.
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It is.
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And I think it really makes the case that just I think similar to was it your last episode or two episodes ago where it was the fiduciary duty to to almost, you know, start looking into it and at least understand it.
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And I think you have seen that is just in the TradFi industry, we've gone from mentioning Bitcoin is a career risk factor to now not knowing about Bitcoin, not being able to speak to it is more the risk.
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um yeah so so i i think it was yeah it was kind of part of that so anyway we got connected and then
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when block rewards hit a point where they were needing the financial modeling and more of the cfo
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um and accounting service um they reached out to me and i i got involved that way and then it
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uh very quickly became this isn't a fractional role this is a full-time thing and and i i came
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on board full-time so okay so before that so so you got when you say you left the firm and you got
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into fractional cfo work were you taking on a handful of clients at that time and then block
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rewards ended up being one of those and then you went full-time with them uh essentially yeah i was
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working with uh uh there's a number of kind of uh companies who are offering the the fractional cfo
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and a number of other fractional services around that.
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So I had engaged with one of those,
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was working with them on a couple clients.
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They were very much the fiat focus and stuff.
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And that's where I was looking for,
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you know, Bitcoin opportunities outside of that as well.
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And as the block rewards stuff came up
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and started taking more of my time,
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I, you know, have essentially just shifted off
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and decrease the time with the fiat involvement
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and those sort of companies.
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So essentially, like I said,
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I realized I wanted to deal with Bitcoin
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and I was actually trying to find ways
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to discuss it with some of those fiat companies.
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And it was very much the like,
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no, what is this craziness?
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We're not looking to hear about this.
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And again, I was providing that service
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through a third party
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who acted as the middleman,
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managed the BD,
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managed a bunch of the resourcing and stuff.
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And so that also, you know,
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became a thing of,
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I can't, you know,
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just bring this in
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unless I go through them
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and convince them that,
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you know, here's how we can use Bitcoin.
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So it became more of a,
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these are the ones I was looking for.
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Yeah.
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Work with on my own.
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And again, the block rewards,
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you know, just the growth path
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that we've been on
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and where we're at,
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I think, on kind of employee incentives and businesses and employers actually being able
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to use Bitcoin.
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There's a lot of opportunity there and it was the right time to really focus on that.
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12:27
Well, I love what Block Rewards is up to and had a call with Scott, I don't know, a month or two ago.
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So, um, I mean, as our firm has grown and you try to build any business these days, as much as you want to try to automate things and, and all of that, you still need very high quality people.
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And I think one of the hardest parts about keeping one attracting high quality people and highly talented people, that's one thing is attracting them in, but also keeping them over a long, you know, stay at a company these days is almost unheard of.
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And so I want to ask you, I guess, first, how do you see that?
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Like, obviously, it's top of mind for every business leader is building a core team and continuing to build out the team of employees that help support the entire business.
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I guess, what did you see the incentive structure being pre-Bitcoin?
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And then what was the compelling case that was made through Black Rewards that can, you know, kind of flip that on its head and help the employers that you all work with now essentially extend out the lifespan of an employee with a company that you guys are working with?
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yeah so i i guess like where we've been and and really pre-bitcoin right like it's it all comes
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down to i think something that a lot of bitcoiners will be familiar with is just like the concept
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that the monetary system is you know broken um when you look at like wages real wages you know
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over time especially when compared to you know anything like housing and that sort of stuff it's
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just fallen behind um you we've generally just you know had it where people are not getting paid
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in good money they're not able to save they're forced investors it's just kind of a compounding
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of that system so i think bitcoin really what it does is just by fixing the money if you're
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compensating people in a money that actually holds its value. One, you're paying them in something
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better. Now, I think there's a couple aspects to this, maybe just to step back for a second.
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It's like, I think eventually all payroll goes to Bitcoin. Everyone's getting paid in Bitcoin,
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spending Bitcoin. That's kind of the way down the road. But there's a lot of transition period to
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get there. And, you know, that that also fundamentally is a different conversation if
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you're talking someone with disposable income versus not. But what I think Bitcoin's doing
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is and what we're doing with it at Block Rewards is really trying to use it to build tools and
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incorporate it into tools that employers can use to improve the compensation that they offering their employees So that takes a couple forms in terms of you can create stuff
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that creates a longer term incentive
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and really sit similar to like stock option plans
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and that sort of stuff
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where you're using Bitcoin to reward someone
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and tie them to the company for a longer period.
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And so, you know, they're incentivized to stay with you.
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There's an actual tangible real cost to them if they leave because because they lose some of that longer term incentive.
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And there's also ways that I think right now.
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You know, you see employers using a lot of tools to drive short term outcomes as well, right?
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Like the retention is a long term outcome.
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You want to do that because it keeps the institutional knowledge in your business.
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It keeps the person around who, you know, presumably if they're a good employee, again, assuming that you're doing your hiring right and bringing in a good person, if you're bringing in a bad person, you know, maybe you want to get them to go.
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If you're bringing in good people, you want them to stick around.
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You want to retain that institutional knowledge.
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And there's, you know, a significant cost to replacing them.
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So you want to avoid that.
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So that's kind of the long term aspect.
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In the short term, though, and medium to long, you want to also drive the behaviors that you want within your business. You want your employees operating in an efficient manner. You want them doing the actions that you know are going to result in the outcomes that you want.
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And I think Bitcoin offers ways to also improve that. And that's one of the things we're looking at is essentially micro incentives paid in sats that are more real time. And this is really looking at the fact that right now, you know, if you want to drive a specific behavior within your business, whether it's someone, you know, clawing in on time or showing up early or, you know, hitting a certain metric in terms of number of calls that day, there are systems that do that.
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but they're all, you know, points based.
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And then you have to save up your points
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and exchange them for a gift card.
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And there's generally a delay between the action
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and the incentive that they get.
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I think I was reading a thing recently on this,
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especially with regard to like referral bonuses,
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where they're like paid out,
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someone paid out bonuses six months,
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or basically like it from the time of the referral
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to the time of the bonus, it was eight months.
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and employees had to remember to go back and claim it.
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And it was just like, so it didn't drive,
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they noticed the referrals dropping
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because they were like,
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well, people don't actually associate the reward with this.
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They, you know, that time difference
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discounts the value in their mind.
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And so therefore it doesn't actually drive the action.
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And so with Bitcoin, Lightning, you know, Cashew,
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all the layers getting built on top,
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especially that allow for more of the instant settlement, there's opportunities to really create tools that can drive behaviors and incentivize behaviors in the short term, as well as the tools to drive retention over the long term.
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And then all of that is if you're paying people in Bitcoin and, you know, assuming they're able to save some portion of that.
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Well, if that appreciates over time, as we all here expect it to, then you're increasing their actual real compensation in terms of dollars.
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And, you know, especially for someone who made it previously wasn't able to save, but now they're able to save, you know, a small portion in Bitcoin because that's just what they're getting on top of what they, you know, their paycheck to paycheck that they're running.
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Now they're able to save a small portion and that actually creates, you know, a bit of a safety net for them over time, which means they're less stressed, which means hopefully they're showing up better at work and kind of creates the benefits that way.
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Um, just some of the HSA stuff and all of that, right?
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Like this is, it's all the connected health, um, aspect.
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Yeah.
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That point.
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So is block rewards, does, would it replace a gusto or an ADP for a client or is it more
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on the benefits side that plugs into the overall payroll software?
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So not, we, we don't currently replace those.
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Um, we, we, we have had discussions and are looking at what does payroll on Bitcoin look
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like and what does net pay and all of that look like um but i i kind of just leave it if we've
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had discussions around that i won't comment specifically on on uh on on kind of what the
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opportunities are or you know yeah anything that's coming there but um you know stay tuned
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on all of those fronts we're continuing to discuss these things um yeah i but to your point is i do
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think ultimately that like this is actually it's it's one of the the interesting discussions that
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has come up is where does bitcoin or where where does payroll itself go um and if you think about
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it like right now payroll generally is an employee loaning their labor to their employer for you know
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a two week period and then being paid at the end of it.
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Bitcoin theoretically enables, I mean,
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I can stream sats for listening to the podcast, right?
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Why can't I be streamed sats while I'm at the office?
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So like theoretically we could move to more real time pay.
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And you see this, you know,
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you see this to a certain extent already with,
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with some fiat products that are out there that are borderline predatory.
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But but you already see this, you know, the demand for instant pay.
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And I think that I don't know that we're ready for that yet because people haven't practiced and aren't trained to save because, again, of the fiat system.
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And so if you receive all of your money up front and don't save enough to make sure you can pay rent, then suddenly it's an issue.
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But I mean, this could get really interesting.
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Who knows where we're at 50 years from now?
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maybe I'm being paid as I, as I'm at the office working and I'm streaming sats to Netflix and my
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landlord and whoever I've got my monthly subscriptions and other stuff with. And like,
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I think it, it will change how we generally interact like that. Payroll is one of them where
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again, you could stream the sats. Um, so anyway, like, like I said, lots of interesting discussions
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here. Um, you know, keep an eye out for, uh, shifts in that industry. I think overall
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100 i mean i think that that's honestly one of the last frontiers of um of bitcoin really
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blossoming is is in the payments rail between employer and employee so i'm glad to hear that uh
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that you guys are at least uh you're thinking about that so that's that's really cool i talk
22:34
me through you know i'm an employer i you know i want to introduce this because i was even on a call
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I think it was last week with more of a traditional benefits company that was pitching a business owner on starting a 401k plan for I think about 50 employees.
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And, you know, even in that sense, there was like a financial advisor who was on the call who was like, oh, you know, we'll come and educate your employees on all these things about how they should invest and how this is a big value add for them as an employee.
23:07
how is block rewards, I guess, thinking about, cause you have to do kind of like twice the
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education, right? It's not only, Hey, here's why this is a benefit, whether, you know, it's health
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benefits or retirement benefits. Um, but you also have to educate on like, what is this underlying
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asset, um, that you're actually getting paid in, um, talk me through that. Cause I know that
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you've been in anyone who's been in the Bitcoin space long enough. It's hard enough to even
23:37
you know, educate anyone, let alone a group of employees that made that might just not be
23:42
something that they're, they're thinking about a lot. So curious how you guys are approaching the
23:46
education piece. Yeah. So that, that is an aspect of what we're building out. Certainly is a learning
23:52
management, uh, kind of section of the app. So we're, we're, we're building an app that should
23:58
be launched in the U S, uh, probably late this year. Um, that is the idea. Part of that will be
24:04
a learning management system that has videos and has content to teach people about Bitcoin.
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And like I said, we're dealing with various micro incentive stuff. So there will be,
24:17
you know, ways to drive people to go through that content and consume it.
24:22
Okay, nice.
24:24
And so that's kind of for educating them. And then the other part of it is, you know,
24:30
with more and more companies putting Bitcoin on the balance sheet with that stuff, we're really
24:35
trying to make sure we're targeting companies where the senior management and where there's
24:41
already some of it instilled, at least as an understanding at the upper levels and where
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they might be looking to make it more a part of the culture, which then that's that tone from the
24:52
top. Just if your management is saying, hey, yes, this is something we're implementing, we think you
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should get it or you know we're at least offering it to you we think you should learn about it
25:02
that you know that makes it a more welcoming environment from like the employees being
25:07
willing to learn and and feeling like this is something that um you know an authority figure
25:13
in their uh you know boss or boss's boss or the ceo or whoever is is championing and championing it
25:22
uh is is kind of giving them the okay that like yes this isn't a scam you're not this this isn't
25:30
ftx you know this isn't like any of that that stuff um right so yeah that's good so i guess
25:38
honestly it leads right into yeah in order to pay employees with bitcoin presumably the business has
25:45
to hold the asset on the balance sheet you know if 2025 was oh no then no they don't that's who
25:52
we're finding like from a from a like where they're at with it it's there's the that's the
26:00
the easiest person to talk to is that that senior manager who already gets bitcoin who wants their
26:06
employees to get it that sort of thing um but we we've made the product really focused but and and
26:13
what we're still designing is is really focused on making it accessible to everyone so even companies
26:19
that don't have Bitcoin on the balance sheet
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or aren't using it in the business yet
26:24
could still do this
26:26
and have their employees hold some Bitcoin
26:30
on this platform
26:31
and still use it for their compensation
26:35
without necessarily having to buy it themselves
26:38
and worry about the account for it
26:41
or gains or anything like that.
26:43
Now, that's, you know,
26:45
depending on the product
26:46
and like some of the longer term incentive stuff,
26:49
might require them to actually hold it, but that's built into kind of how the product is designed.
26:56
Whereas if it's kind of Bitcoin payroll or into what we call our Bitcoin savings plan,
27:02
which is kind of the 401k like product where it's just every paycheck, you're taking a portion of
27:09
your net pay, using it to buy Bitcoin, and the employer has the option to match a portion of
27:17
that. It's a taxable benefit because, you know, the government hasn't recognized this as a register.
27:24
This isn't an actual registered account. But that version of it, they can just do with fiat flows.
27:32
And then the employee receives Bitcoin, but the employer doesn't have to kind of worry themselves
27:38
and delve into that accounting headache if they don't want to yet.
27:43
no that's awesome so you're saying an employee that just wants to get paid in bitcoin or some
27:51
of their benefit coming in bitcoin the upper echelons of the company doesn't even have to
27:56
bought in they just have to i guess sign up with black block rewards to be set up and then and then
28:03
it can flow that way that's awesome okay i love that because i think yeah trying to make that
28:09
barrier to entry for anyone, be it an employer, any kind of corporation, any kind of individual,
28:17
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28:59
Well, I guess going into Bitcoin with corporations, I mean, it was such a hot topic.
29:05
I was even, I was just, of course, it looked like a golfer.
29:09
I just came from playing golf.
29:10
And the guy I was playing golf with, true accountant, you know, January 2nd, got to do it.
29:17
So what we were talking about how this year or this past year, I should say, was, you know, all about all of the buzz was about Bitcoin for corporations, Bitcoin on balance sheets of corporations.
29:30
and man it just it's in so many ways it was like it seemed like another stain kind of on our shirt
29:40
of of like on bitcoin's journey and so i'm curious and i don't i don't know if i saw you in in new
29:47
york at the bitcoin for corporations or not no it was uh well i know that one was in orlando but
29:54
there was another one that was in new york scott was at the uh florida one i think but i yeah i
29:59
I wasn't able, I didn't make it out to those.
30:01
I also didn't even make it to the, the, to the space in, uh, in October.
30:07
I know that one.
30:08
Cause it was the same weekend as the Canadian Bitcoin conference.
30:11
I know we had, we had our overlap and honestly, I did not even.
30:15
Yeah.
30:15
That's kind of on us.
30:16
So I'll take, I'll take that the heat on that one.
30:19
Oh, I mean, dude, there's so many conferences.
30:21
You can't, I don't think you can schedule a conference without conflicting another conference
30:26
at this point.
30:27
Like it's not.
30:28
Well, it's just funny, though.
30:29
There's so many strong Bitcoiners who are Canadian.
30:34
So we definitely, we're going to make sure we don't overlap this coming year.
30:38
But I guess all that...
30:40
I personally appreciate it.
30:42
Okay, yeah, yeah.
30:43
All of those conferences, though, be it the one in Orlando that Saylor put on.
30:48
But then there was another one that like Julian put on in New York That would have been I think in October November that were just it was so heavy on this whole like lever up Bitcoin in the balance sheet
31:02
And, you know, obviously, you know, there's just some of them that completely fell apart.
31:08
And I'm just curious as someone from your seat, that's like, Hey, we're, we're trying
31:14
to educate business owners and convince board of directors to, to like take interest in
31:20
this um i don't know is there is there any way that you think that it could have gone different
31:26
to with with how it was handled in 2025 be it with corporations adding bitcoin to the balance sheet
31:33
yeah and and i'll uh i'm just i'll stop stop me if i start ranting too much but it's a personal
31:41
of mine the whole bitcoin treasury company um like i i think it's a misnomer that people are
31:49
kind of bucket throwing everything into one bucket and not really looking properly at it and in that
31:55
sense because they're all just painted with the same brush and everything's like it's a it's a
32:01
very oversimplified view and then you have some of them perform poorly and people aren't really
32:07
understanding what they're buying and in that sense I think you're right like it really was
32:11
kind of a it was a net negative almost i i'd say um for kind of really beyond you know micro
32:21
strategy meta planet maybe there's you know maybe similar or something like that but um
32:26
i and i think where where it comes from is just again it's it's a it's a misunderstanding and
32:31
and oversimplification of the industry there's profitable companies using bitcoin as a savings
32:38
vehicle, which is really just the recapitalization of the balance sheet.
32:43
I think Lynn Alden had a great article on that that was just speaking about how in the
32:50
low interest rate environment that we've had and with everyone doing share by like it's
32:57
just become give the money back to shareholders, lever up the balance sheet, don't hold a
33:03
significant amount of actual capital because that's not yielding a real return.
33:08
Bitcoin allows the recapitalization of the balance sheet and for profitable companies to actually save. And that's just, you know, using Bitcoin as part of your capital stack and your long term planning and actually having a savings vehicle just like for any individual.
33:25
Then you've got the capital arbitragers and, you know, potential future Bitcoin banks, which is like MSTR, who like they're arbitraging on just, you know, the general capital market's ability to access Bitcoin's returns.
33:41
And so they're structuring different products to give different things to different parts of the market to generate investment interest from that and then turn around and buy Bitcoin with it.
33:52
maybe that becomes a Bitcoin bank thing. I think that's a whole other, like, what does that look
33:58
like? Um, but that's, you know, just essentially making money and arbitraging the shift from trad
34:07
or from fiat to Bitcoin over time. So I think that also has to morph as that transition happens,
34:14
which is where I say, maybe those are the Bitcoin banks, whatever that is. Um, then you've got the
34:19
Bitcoin investment companies that are like actually investing in the ecosystem using Bitcoin as a hurdle rate.
34:25
That's kind of just a Bitcoin, you know, that's that's essentially a hedge fund or investment fund that is using Bitcoin as it's.
34:37
Denominating in Bitcoin, right, rather than fiat.
34:40
So, you know, are you earning a return in Bitcoin terms?
34:43
And then you've got the meme companies who are just riding the hype.
34:46
But like those are the four like there are four categories there. There is not one Bitcoin treasury company. There are four different ways that people have put Bitcoin on the balance sheet and are using it as part of their treasury. But like that's that's it's a vast oversimplification to just paint them all with one brush.
35:04
and then because doing that people aren't understanding the differences between them
35:11
which then leads to missed like expectations gaps and where they fail to to live up to the hype
35:18
um and i mean yeah some of them have i think also just been like it's been an excuse to to pump so
35:27
it seems it seems a little too pump and dumpy it seems a little too you know i'm an influencer let
35:32
put some money into this and use my name it it feels very shit coiny in that sense to me so um
35:40
i i like i like people actually defining what their business is saying here's how we're using
35:46
bitcoin and being like very clear about how it fits into that structure and i i feel like it's
35:52
very much been used as just a hype word bitcoin treasury company pump the stock and and try to
35:59
make money off it. So it seems like morph beyond ease. Yeah, no, absolutely. I mean, so when you're,
36:05
when you are like sitting in with client from the CFO role or outsource CFO role,
36:12
how are you, and maybe let's start with one of these big, like a company that's already,
36:17
you know, Bitcoin focused, maybe that's part of their customer base. Maybe they're earning
36:21
some in Bitcoin, maybe they're mining. Um, I guess, how, how are you helping them think through
36:27
how to manage the Bitcoin on the balance sheet.
36:31
I mean, and maybe we just focus on mining
36:33
or whatever direction you want to go.
36:35
But it's one of those things where, you know,
36:37
sometimes you're just accumulating,
36:39
sometimes you're accumulating and you're needing to sell.
36:42
Are you all dealing with that much from your role right now
36:46
or any thoughts on that?
36:49
So we're, Block Rewards itself is still in the startup phase.
36:53
So we're again, like it's very different, I think, depending on the stage you're at. If you're a profitable company saving in Bitcoin, looking at it as part of your capital stack, then I think it's you're looking at.
37:08
And I think actually, really, this is true for anyone.
37:12
It's what are your short term needs?
37:14
What are those denominated in?
37:15
Denominated in?
37:16
Sorry, if I can speak.
37:18
And then what are the assets you're using to cover those and making sure that you're not having, you know, potential mismatch there where the short term volatility in Bitcoin means you're unable to, you know, meet your immediate liabilities.
37:33
so I think like viewing it as part of working capital you know if you've got bills you can pay
37:41
in bitcoin even that's where you're still subject if they're denom if you're paying them in bitcoin
37:46
but they're denominated in the fiat currency then it's really the fiat currency that you're having
37:51
to worry about because that's you know the value you're having to pay so I think from that
37:58
perspective, you know, the working capital management is one thing. The long-term capital
38:05
management is another. If you're using it as part of planning long-term projects and just your
38:10
overall capital stack, then, you know, it depends how you're able to use it. If you can look at
38:17
selling it off as you need to shift, you know, the level of risk and your exposure to that
38:24
volatility, you're starting to see the Bitcoin backed loans and like maybe it starts to become
38:30
part of some asset backed lending stuff where you've got it as part of the collateral you're
38:36
putting up and that can change the rates. So I think this is also something that, yeah, if you're
38:42
using it in the short term versus using it as long as part of a like five or 10 year capital
38:46
planning project, you know, that can look a bit different. We're also going to, you've also seen
38:51
so many derivatives come in, especially on the mining side, right? Like this is one that
38:56
anyone in that space, I think needs to be looking at what are the hash rate and other derivatives
39:03
out there that I can use to help, you know, plan and make my business more efficient.
39:09
So I think it's just, yeah, it's, it's still early stages. And I would say it's, I don't know that
39:15
I've got like a, here's general, like, here's the way it should be used, but it should just be,
39:20
It should be part of that discussion of, you know, view it as another currency, view it as highly volatile.
39:26
But what do we have our assets and liabilities denominated in and where does it make sense as part of that stack?
39:34
I know at Block Rewards, one of the things we've done with it is actually used it as part of trying to drive our raise.
39:43
And so we've, and I think this is one of those things of like anyone, anyone looking at raising money and, and in this space, especially can look at how can I use this to, again, make, make something that works for investors and works for the company.
40:01
And so part of what we've done is we have a debenture that's offered that's a convertible debenture that a portion of that went on funding, a set percentage of that of the funding that comes in is used to buy Bitcoin, which is then held in a wallet with a custodian that's verifiable.
40:25
like you can view it on chain. It's a cold wallet. It is with a custodian. And part of the reason for
40:31
that is that in the debenture agreement, if the investor goes to that custodian with documentation
40:40
of an event of default, they are able to claim that Bitcoin as security directly from the custodian.
40:47
And so what that's done is we've got a convertible debenture out there that, you know, converts at a valuation that we might not be able to validate today.
41:01
But in three years at the end of the debenture, we expect to be a fairly conservative valuation.
41:07
But it defers the actual decision for the investor on whether to invest at that value until later.
41:14
In the meantime, it gives them an instrument that is producing. We've got a cash or a PIC option as far as how they want their interest paid. So they can either be getting a portion of their capital back or they can be receiving additional equity as they go.
41:32
But then making that final decision on do they want to convert or do they want their cash back at the end of the term? And in the meantime, they've got the partial Bitcoin security there, which as Bitcoin appreciates means their loan is actually increasing with the amount of security over the term of it.
41:51
Um, so it gets them, lets them be, you know, very confident that they'll at least receive the fiat denominated principal back along with whatever their interest payments are over the course of the, of the term.
42:05
Um, and then, you know, also means they don't have to fully buy into the valuation that we're discussing today.
42:12
It's a future valuation.
42:14
So it also removes some of the kind of need for due diligence and really digging in on that valuation today.
42:20
because it's a future valuation that by the time we get there,
42:26
we should have more than validated.
42:29
And so then they're able to convert at essentially a discount at that point.
42:33
But relative to today's value,
42:35
it's actually less dilutive than offering equity for us.
42:40
So it works great for them and works great for us.
42:44
And so again, I think this is where we're in this transition period
42:49
from strictly fiat to strictly Bitcoin,
42:53
in that transition period,
42:55
you can use both tools and ways
42:58
to kind of create these products
42:59
that wouldn't work under, you know, 100% either.
43:04
Like if you're purely fiat,
43:06
you know, this doesn't work.
43:09
If you're purely Bitcoin,
43:10
this doesn't necessarily work.
43:11
It's this transition period.
43:14
There's a lot of opportunity there.
43:17
Yeah.
43:17
Yeah. Well, I mean, I've spoken with founders now. You kind of have to time it. But I mean, I've spoken with some folks that like Bitcoin helped extend their runway by quite a bit. And so that's one very interesting thing to consider. But then, you know, it can very easily say, well, maybe it shrinkens or, you know, compresses your runway as well. Right. So.
43:40
So yeah, it definitely can.
43:42
It cuts the volatility can cut both ways.
43:45
That's part of where and you're right, like this, this would apply on this product as well.
43:50
Like we've issued it with a three year term and we're we're with the investors we're talking to are expecting that over these three years, Bitcoin will appreciate if you were doing this, you know, right at a market top where people were expecting it to decline.
44:06
You know, maybe that's a different discussion.
44:08
but also at market tops, people generally aren't thinking it's going to pull back.
44:14
They're just FOMOing in.
44:15
So it actually could work really well as a sell there, their expectations.
44:22
But you're right.
44:22
You have to look at the timing on any of these.
44:28
But again, if you're looking at the timing and you're understanding who you're talking to,
44:33
who your universe of investors is, at that point,
44:36
It's how do we construct this in a way that works for them? Right. Like we've set it up with the interest rates we've set it up with and the security percentage we've set it up with.
44:46
You know, you can look at do you have a call option on there such that you can do an early redemption, like call and put options for early redemption from either side.
44:57
you know you could look at you know under what terms you know what what is considered a default
45:03
or what what allows them to claim the security you could even look at doing that in partial terms or
45:09
something like that like there you could really get into kind of fine-tuning this to work for the
45:16
company as well as work for the investors and an understanding of like what are the potential
45:22
outcomes we're planning for and therefore you know making sure that this structure works under all of
45:27
those or where your pitfalls are.
45:57
term to learn more or book consultation visit satoshipacioli.com where do you kind of see
46:05
us going i mean i guess this is the new year's the new year show that you're leading off 2026 so
46:11
i think it's only appropriate at least to throw it out there to say like you know where do you see
46:18
bitcoin going uh specifically in like maybe track like how do you see it keep coming into the tradify world uh and maybe we we specifically focus on 26 it was so weird again i was talking with uh with that
46:33
guy i played golf with um today bitcoiner it was like man 25 i mean it's one of those like you
46:41
couldn't have really put together a more bullish year in terms of news and and everything that
46:47
happened with the administration changeover and all of that. It feels to me like something is
46:54
brewing. But I'm just, but obviously I think a lot of investors, there's just a lot of an
47:02
uncertainty of what's going to happen overall, be it currency debasement or macro or wars or AI or
47:12
whatever. And so I'm curious to get your thoughts on how you kind of see things trending with Bitcoin.
47:19
Yeah. Continuing to increase its foothold inside of more traditional finance circles going into 26.
47:27
Yeah. I mean, I, yeah, 2025, the, the, all the tail for all the tailwinds, the fact that it ended
47:35
up being a red year um is uh is that's bitcoin doing you know what bitcoin does which is exactly
47:44
the opposite of what you think it will do sort of thing um yeah in terms so
47:49
that is to say like i have no idea what price will do so god only knows there like i i'm not
47:57
really my any if anyone who listens back to any of my price predictions for 2025
48:01
should know that I don't know what I'm talking about, um, in terms of price. Cause who knows?
48:07
But, uh, in terms of adoption, I, I think it's, it just continues like to, to be, I, I, that,
48:16
that seems like kind of a weasel out of an answer, but I think at this point it's like, I, I go to CFA
48:24
events and meetups, or at least especially when I lived in Vancouver, I was. But I would say that
48:32
when I got into Bitcoin 2021, 2022, and again, market bottom 2022, I would go to those events
48:41
and wear a Bitcoin shirt and just trigger people into asking me about it and get into discussion.
48:47
By the way, for anyone who goes to CFA events or interacts with CFAs,
48:51
ask just get a group of cfas around and just ask them what is money define it for me and it's it's
49:01
really entertaining to get into that discussion in trad by circles because as much as everyone
49:05
deals with money and deals with like nine figure deals no one has defined it at a first principles
49:11
basis possibly ever like i know it was bitcoin that got me to do that for the first time um but
49:18
To get back to your question is, I go to those meetups now and I still try to trigger the CFAs. The new way I do it is by telling them that I'm 100% allocated to Bitcoin and that's the lowest risk allocation you can have for a portfolio because it's the everything ETF, right? Everything divided by 21 million, Bitcoin is the everything ETF.
49:38
But I've had to shift it to that to really get them to think about it in that way, because they're no longer just hearing Bitcoin and going like, oh, that's correct. And like, they don't have the automatic FUD response that, you know, I know in 2022 was there, you know, even just a few years later, a few years later now.
49:59
So it's, there's some interest in it.
50:04
You know, you're seeing the investment advisors and all of that.
50:07
You know, it's almost where the default now is to have some allocation there.
50:13
You know, you've heard that you guys have had the discussions in the last few weeks around how, and as we mentioned, the fiduciary responsibility is to know about it now.
50:23
Like, so I think that just continues.
50:26
with that as you continue to have companies like block rewards and others starting to build ways
50:33
that employers and others can use it i think it just you know sure maybe we see some pullbacks
50:40
and some like when it's hyped or or not based off of narratives and and other things um but i think
50:47
you're starting to see where you know businesses that are using it are using it in ways that lower
50:53
their costs and increase profitability.
50:58
So as long as you continue to have that work and people are continuing to develop products
51:04
that businesses can use to improve their business, that's what they want.
51:10
And Bitcoin just continues to be a part of that.
51:13
And as the tools are developed that allow it to be obfuscated more into the background
51:17
and for it to be presented in a way that people are already used to,
51:21
then I think it just kind of continues that infiltration into the system.
51:30
Yeah.
51:31
I think...
51:31
I guess...
51:32
Sorry, just on that, one of the biggest risks is what we've seen with the samurai guys and that
51:38
and the attacks on privacy and the attacks on ways we can use Bitcoin where if it infiltrates in,
51:44
but it's in a very regulated manner and a very managed way and you can't escape that,
51:50
Like that's, that's one of the bigger risks I would see to like Bitcoin as, as overall, um, you know, it's used long-term. Um, so that that's just with that integration, I think that it's not to say that that's all positives. Like, I think there's a lot that people have to look out for there, um, and make sure that we're not taking short-term wins that set up for long-term pain, right? Like still, still have that low time preference, even as we try to develop this stuff.
52:20
yeah i mean yeah even one of the conversations so i so i played golf today with a bitcoiner and
52:27
a non-bitcoiner but the non-bitcoin guy has dabbled in it and made some fiat gains and gotten
52:33
out and he's kind of you know he's like i'm so smart because i've you know i made ten thousand
52:37
dollars in bitcoin and then and then i got out and um but it was all inside of an etf and one
52:45
One of the conversations we had towards the end was kind of like the risk of all of this Bitcoin consolidating into BlackRock's hands.
52:55
That's something that I'm really trying to keep an eye out for for 26.
53:01
And especially with the conversations we're having with advisors.
53:04
It's a hard conversation because they their whole AUM model is to keep their clients inside of something like an ETF.
53:13
Right.
53:13
So they can keep charging on that.
53:15
And so they're never going to recommend a client take, you know, full self custody of
53:21
their Bitcoin because, well, well, one, maybe they shouldn't do that because they've been
53:26
so babied their whole, their whole life, right.
53:28
That they don't actually know how to custody their own assets.
53:32
But two, their advisor would always, you know, strongly discourage that kind of behavior
53:37
for their own incentive structure.
53:39
So it's a tough thing.
53:40
I mean, it's an uphill battle for guys like us to, you know, to try to educate people.
53:45
And even if they take that step to say, okay, I am going to allocate into it specifically
53:50
how they do that is also extremely important.
53:53
So yeah, I think we'll, we'll keep an eye on that.
53:58
That's where the tools, that's where the tools need to continue to develop.
54:01
Like, like I was here, like, again, this was before my time, but like, cause I got, I was
54:06
class of 21 but like seed words bip 39 was what 2015 i want to say it's like before that you know
54:13
for the first six years of bitcoin's existence you didn't have 12 or 24 words you had you know
54:19
some private like some paper wallet with like a huge string and so i think the the continued
54:26
development of the tools and that's that's where i'm like we need those tools to be able to be
54:32
developed in ways that also promote the permissionless and privacy and decentralization
54:38
and don't drive us towards that centralization. But if those tools can continue to be developed,
54:45
it'll allow people to use it in a way where, again, it just pushes some of that complexity
54:50
into the background. There are trade-offs around that, of course, but I think that's
54:57
kind of the direction we go is it just gets easier to use so that people can use it with
55:01
in it like you see this with bit key right like they're they're trying to make it where
55:05
you can have a version of self-custody where you're not having to do the the 12 word backup
55:11
and i i don't i haven't dug into it too much i don't really have any opinions on that other than
55:16
like okay people are doing it in different ways that might make it easier for some segment of the
55:21
population. And so, you know, now more people can, uh, can, can actually, you know, participate in
55:28
that. And I think for companies, same thing, like we're starting to see now the tools get developed
55:34
for like, you know, um, like where you could have multiple members, multiple key holders,
55:42
and then swap one out because, you know, maybe you've got a couple of board members and some of
55:46
your senior management and like, here's your key holders for your corporation.
55:51
And then one of them leaves and you need to replace them, you know, tools to easily allow
55:56
that where it's not now a huge risk of, okay, we've got to spin up a whole new wallet and
56:02
everyone's got to replace their key.
56:03
And we transfer all of this over here.
56:05
Like you've now got it.
56:07
Okay.
56:07
We just swap out the key and we're good to go.
56:10
Um, so again, I think just continued development of those tools is what will
56:16
also allow for the increased adoption at the corporate level, because as it gets easier to do,
56:23
you know, now there's less cost to the organization for implementing it. There's less risk for them.
56:30
You know, it becomes an easier thing to say yes to from a governance perspective.
56:36
Yeah. All right, man. Well, this is great. I would say if you could, okay, so if there's any
56:43
kind of, you know, CFA, really anybody, CFP, CPA, any kind of professional three-letter person out
56:49
there that's listening, I would just be curious to get your thoughts, you know, in a summary of like,
56:56
what was it, you know, was it a good decision to jump off of Tradfire world and go into Bitcoin
57:01
world? Like what, what does that opportunity look like for you? And then, and then lastly,
57:07
maybe just, you know, anything else that you want to mention about Block Rewards, if someone's
57:11
interested in working with you all today like what does that look like especially if they're
57:15
canadian-based are you guys up and running on that side today yeah we do have the so we do have the
57:20
bitcoin savings plan operating uh in canada um anyone's what so i i'm anyone who wants to to
57:28
ask about anything with regard to block rewards um feel free to reach out to me it's travis
57:33
at block rewards.com um we do have that product up and running uh in canada as i said we're looking
57:40
at launching an app in the US later this year,
57:43
so that they'll probably, you know, late in the year.
57:46
But there will be progress and stuff coming around that.
57:50
I'm actually going to speak to you and the team there
57:53
about some of the demo stuff we've got coming
57:56
and getting some eyes on it.
57:58
So you may have a sneak peek there.
58:00
But yeah, anyone who's interested in hearing more about that
58:06
and seeing what we've got coming
58:08
is welcome to reach reach out to me.
58:12
Like I said, it's coming in the US.
58:14
We do have a limited version right now in Canada,
58:18
but there should be more coming there as well.
58:22
Sorry, that was the block awards piece.
58:24
Oh, anyone with a three letter designation,
58:27
was it a good idea?
58:28
A hundred percent.
58:29
Great idea.
58:30
Like I, I, I think you see this generally just again,
58:37
The money is broken. Everyone's living in this broken system. The amount of nihilism and just negative thoughts on the future that I generally see from anyone who's solely focused on TradFi and how terrible inflation is and just where everything's going.
58:57
and I know that was a little more my mindset too like I found Bitcoin part of the reason
59:02
I want to work with Bitcoin companies or wanted to and got into this space was
59:07
they're the only ones they're the only times I have discussions about like 20 30 40 years in the
59:13
future that are like positive hopeful and where people are looking to build something to help
59:19
that it's the only none of the fiat companies I worked with were looking to like plant the tree
59:25
for their, you know, grandkids to, to grow up on sort of thing that I've only heard that
59:30
discussion in the Bitcoin space.
59:32
So, um, like mentally just mental health wise, I found it so much better.
59:38
The volatility is easy to deal with for the positivity that you get out of just the discussions
59:44
and being around, uh, people who are actually like building with hope for the future.
59:50
So, um, I love it, man.
59:52
All right.
59:52
That's a great place for us to end.
59:54
So Travis, thank you seriously so much.
59:56
One thing I wanted to throw out there, because Brian, Brian Hirshfield wrote Bitcoin for
1:00:00
institutions.
1:00:01
So anyone who's got three letters after that and read that book, it's, it's also not too
1:00:05
long, but, um, I think was a really good, good take on like how some, how some of this
1:00:11
is going to work into corporations and institutions and, and even gets into some of the like deferred
1:00:17
comp and long-term retention stuff that we're literally looking at at block rewards.
1:00:21
So just wanted to throw that out there as a quick recommendation for anyone.
1:00:27
Yeah, no, that's great.
1:00:28
We'll make sure that we link that to Amazon or something in the show notes.
1:00:34
Solid.
1:00:34
Well, this is great.
1:00:35
I learned a lot.
1:00:36
I learned a lot about you.
1:00:37
I learned a lot just about the entire landscape.
1:00:39
So and I know we're working together offline and all of that.
1:00:43
So I echo what you're saying now.
1:00:46
Probably today.
1:00:47
So that sounds good, man.
1:00:49
All right.
1:00:50
Well, thanks so much, Travis, for coming on and we'll talk to you soon.
1:00:53
Okay.
1:00:54
All right.
1:00:54
Thanks, man.
1:00:55
Thanks for having me.
1:00:56
Talk later.
1:00:57
Absolutely.
1:01:02
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1:01:04
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1:01:27
We'll talk to you next time.
1:01:46
you