Latest / CRYPTO 101 / Ep. 722 Why AI Will Force the World to Use Crypto with Blockchain.com Founder Nic Carey

Transcript

Ep. 722 Why AI Will Force the World to Use Crypto with Blockchain.com Founder Nic Carey · CRYPTO 101

0:06
[SPEAKER_02]: Welcome to the Crypto 101 podcast.
0:09
[SPEAKER_02]: I hope everyone is having a fantastic morning or evening because no matter where you are, you're certainly in the right place here today.
0:16
[SPEAKER_02]: You know how it is over here.
0:18
[SPEAKER_02]: We love the pull industry, leaders from all over the crypto and finance space, pick their brain about what they're doing, what they're seeing behind the scenes.
0:27
[SPEAKER_02]: I can get the inside scoop on what's going on and we got to give a quick shout out here to Super Producer Tivo.
0:32
[SPEAKER_02]: He has been pulling in the best of the best, the cream of the crop in terms of guests here recently and we got another one here today.
0:39
[SPEAKER_02]: So I've got to get my kudu, my kudos, to Mr. Tivo over there.
0:43
[SPEAKER_02]: But today we're joined here by Nick Carrey.
0:45
[SPEAKER_02]: He is a co-founder and vice-chairman over at blockchain.com.
0:49
[SPEAKER_02]: Nick is also a co-author of the future is decentralized as well as an entrepreneur and a co-founder and chairman of SkysTheLumits.org, which is a leading non-profit digital business accelerator.
1:01
[SPEAKER_02]: A Nick, pleasure to have you, and excited to be able to talk to you here today.
1:06
[SPEAKER_02]: Well, thank you, Brendan, and Tvo's great to be here.
1:08
[SPEAKER_02]: Absolutely, there's so much to unpack here.
1:11
[SPEAKER_02]: I mean, blockchain.com has been around for a long time.
1:14
[SPEAKER_02]: You guys are, I mean, I stable of the space.
1:17
[SPEAKER_02]: You guys have the name blockchain.com.
1:19
[SPEAKER_02]: But clearly, you're doing a lot behind the scenes.
1:21
[SPEAKER_02]: I want to make sure that all the listeners are familiar with what you're doing.
1:24
[SPEAKER_02]: But also a lot of the things that you're seeing and a lot of the companies that you're working with and what's going on.
1:31
[SPEAKER_02]: Because I think a lot of the retail listeners that tune in here are always so curious
1:38
[SPEAKER_02]: So kind of just like the scoop that they're getting, but I got to break us off here with a little bit of a nice breaker.
1:44
[SPEAKER_02]: How hard was it to get the name blockchain.com because I'm thinking about that today.
1:49
[SPEAKER_02]: And I was thinking about it as we were going through like a rough outline for this.
1:53
[SPEAKER_02]: So that had to have been so hard to get your hands on or am I wrong?
1:57
[SPEAKER_00]: It's a good story, it's probably a better one for some pints at a bar, but so we actually had a predecessor project called Blockchained.Info, which many of the OGs in our space will remember, it was the sort of the first Bitcoin block explorer, and it kind of defined the, you know, taxonomy of block explorers themselves, the UIs for those things, and that was started very early on October 15, 2011.
2:25
[SPEAKER_00]: We had a big internal discussion after a few years, like, in between some of the nerds, and some of the marketing people, and some of the branding people, and it made sense to rebrandasblockchain.com.
2:38
[SPEAKER_00]: There's some interesting history with that domain.
2:41
[SPEAKER_00]: It may be one of the most valuable domains in the history of time.
2:45
[SPEAKER_00]: It was purchased in Bitcoin, back in the earliest days of the industry, and we're proud of making that contribution commitment.
2:54
[SPEAKER_00]: it then became confusing for some people.
2:56
[SPEAKER_00]: We call it positive brain confusion because everyone was talking about the blockchain and using that, you know, ubiquitously with sort of the neat and naming of the technology.
3:06
[SPEAKER_00]: But long story short, everything that we develop and build and all the product and consumer and institutional experiences that we offer now are all under the blockchain.com umbrella.
3:15
[SPEAKER_00]: But when we were early days, there were just a bunch of nerds working
3:20
[SPEAKER_00]: And then we consolidated everything under that domain, and so now we just call ourselves blockchain.
3:25
[SPEAKER_02]: Wow.
3:26
[SPEAKER_02]: Yeah, I mean, what?
3:27
[SPEAKER_02]: Since 2011, is that right?
3:29
[SPEAKER_00]: Yeah, that's right.
3:30
[SPEAKER_00]: We celebrate our birthday.
3:31
[SPEAKER_00]: Our cake day is October 15th when we registered the website.
3:36
[SPEAKER_02]: tell you what, that's early.
3:39
[SPEAKER_02]: Earlier than me, I thought, I always think, oh, you know, I found this stuff early on, uh, 2011 is the early early days.
3:47
[SPEAKER_02]: So, uh, Kudos to you.
3:49
[SPEAKER_02]: We love to see how much you'll build and how long you've been around.
3:53
[SPEAKER_02]: We love to see OG players.
3:55
[SPEAKER_02]: Uh, I say anyone ever reach out to you in regards to that name.
3:58
[SPEAKER_02]: I feel like that has to be
4:00
[SPEAKER_02]: probably the second most sought after title.
4:03
[SPEAKER_02]: I'm thinking Bitcoin is probably first, right?
4:06
[SPEAKER_02]: Bitcoin.com or just the handle Bitcoin and then I'm thinking blockchain is probably second place or somewhere up.
4:12
[SPEAKER_02]: Yeah, how are we?
4:13
[SPEAKER_00]: We've had some unusual offers for that thing over the years, but obviously that's our namesake and it's our baby and we were sort of there first.
4:23
[SPEAKER_00]: a little bit like, you know, the game of monopoly conquering land, conquering domains is very important for us, making sure we were protecting that was a huge deal.
4:32
[SPEAKER_00]: And it's been a challenge because obviously lots of firms started buying up all these derivative domains and that caused lots of confusion.
4:39
[SPEAKER_00]: They're also bad actors doing that.
4:41
[SPEAKER_00]: So we've always been very keen to defensively and aggressively defend our brand, but it is it's been a long effort.
4:48
[SPEAKER_02]: Yeah, I believe that it has.
4:51
[SPEAKER_02]: Well, let's run through the the the top level first here.
4:55
[SPEAKER_02]: But the listener is out there who maybe just aren't as familiar with what you do and, you know, how you operate, can you give everyone a high level overview of what you do at blockchain?
5:06
[SPEAKER_00]: Yeah, thanks, Brandon.
5:06
[SPEAKER_00]: So for those that don't know, we were the first kind of company really to form and build a data analytics service, but that's sort of a euphemism for what now most people call a block explorer is basically a search engine for looking at a public blockchain now back in 2011 those only one it was a Bitcoin blockchain.
5:23
[SPEAKER_00]: So all of the ways of looking at address histories, the charting you witness some of the key economic metrics that people are interested in.
5:31
[SPEAKER_00]: address distribution, how frequently funds move around all those things.
5:35
[SPEAKER_00]: We were listening to the community users at BitcoinTalk.org and just building all that stuff for free in the public open source and that was always kind of in the DNA of the business.
5:46
[SPEAKER_00]: Now in 2011, using Bitcoin was really annoying if you think it's still confusing now.
5:51
[SPEAKER_00]: a decade ago is much harder and so we were persuaded that one of the most important things we could do would be to build a UI for on-chain activity and we did that by building the world's first non-castodial wallet and that was a really key piece of architecture that was software enabled and the past you would have to host it yourself.
6:13
[SPEAKER_00]: We did it in a way that was kind of web-enabled so you could access it like you would paypal or other services you're used to from web too.
6:19
[SPEAKER_00]: We were also very early in the App Store, which became a famous story a few years later, when Apple temporarily censored crypto wallets.
6:28
[SPEAKER_00]: But we were in there for a great duration of time, built Nandroid wallet.
6:33
[SPEAKER_00]: Those are some of the key pieces of componentry that we're most kind of well-known for.
6:37
[SPEAKER_00]: And by the way, like those early adopters that came in,
6:41
[SPEAKER_00]: from 2011 to your era to the other cohorts.
6:45
[SPEAKER_00]: Those ones became very interesting client segments over the next decade.
6:50
[SPEAKER_00]: And so we have evolved our product offering significantly since then, but I'll pause there because it's sort of interesting like that first era, we call that like a vintage of crypto adopters.
7:00
[SPEAKER_00]: A lot of people describe as OGs that were very early.
7:04
[SPEAKER_00]: They understood non-custodial to be paramount
7:07
[SPEAKER_00]: feature in a network of self-sovereignty for digital assets and early days, Brendan, most people may not remember, but we had a lot of problems.
7:17
[SPEAKER_00]: Centralized services were being compromised.
7:20
[SPEAKER_00]: Those are famous hack at Mount Gox.
7:22
[SPEAKER_00]: Those are hack at Becoinika.
7:23
[SPEAKER_00]: There were compromises happening all the time.
7:27
[SPEAKER_00]: And partially, that was because when you store a lot of valuable things in a centralized space, you increase the incentives to breach it.
7:35
[SPEAKER_00]: You also had nefarious and bad actors operating some of these things.
7:39
[SPEAKER_00]: It was very confusing to consumers.
7:41
[SPEAKER_00]: And so we've always taken a made sure that we've had a self-custodial offering so that you can do everything on chain as was intended by Satoshi and really in the spirit and the philosophy of crypto.
7:55
[SPEAKER_02]: I think it's very well said when we think about especially the last year or so here it has been a crazy one right you have all sorts of positive adoption and fundamentals But then we go on the roller coaster in terms of price action and maybe just like scary catalyst and in terms of price right people have been on this roller coaster of up down up down up down And then recently it's been a little bit more down but regardless I mean I think a lot of good has happened obviously some bad has happened
8:23
[SPEAKER_02]: What has stood out to you the most here in the last year or so?
8:27
[SPEAKER_02]: There's really caught your eye in regards to the whole industry.
8:32
[SPEAKER_00]: Well,
8:33
[SPEAKER_00]: So if you fast forward from 2011 to today, you know, blockchain.com went from a few hundred thousand users to having a hundred million people that have downloaded or used a blockchain.com wallet.
8:45
[SPEAKER_00]: And if you look at the market cap of the industry, it went from, you know, it would look like a tiny alternative asset class to something wildly more important into the financial infrastructure of the future.
8:56
[SPEAKER_00]: And that's because it's always on
8:58
[SPEAKER_00]: It's operating 365 days a year and allows people to basically sort of ingest global geopolitical challenges risk adjustments liquidity making payments instantly and so it's really kind of found I think a great home for where where we are today.
9:16
[SPEAKER_00]: Now, if you had told me five years ago, Brendan, that Bitcoin and crypto would be a multi-trillion dollar asset, like I would have been thrilled, and I think if you zoom out, sure there have been pretty strong fluctuations, but even the guys at Berkshire Hathaway watch their stock drop by 50% several times in their careers.
9:35
[SPEAKER_00]: It's just that it's happening on compressed time tables now, because we have an always on infrastructure that can adjust and accommodate to wildly
9:46
[SPEAKER_00]: You know, there are many things happening fundamentally though over the last 12 months that I think, again, if you just observe them and accumulate the impact of those things, you can have a lot of optimism for the direction of travel for the industry and also for digital assets generally and I can speak to some of those themes specifically, but probably the kind of three categories of narrative for the last 12 months.
10:11
[SPEAKER_00]: are very quite institutional adoption.
10:14
[SPEAKER_00]: Now, institutions sometimes means native crypto users that have come along this whole journey and have now come up the financial wealth curve and are acting a lot more like high net worth individuals like family offices or even building their own businesses and investing in everything from football clubs to property to alternative assets.
10:36
[SPEAKER_00]: And they
10:38
[SPEAKER_00]: So that's a whole category and we've built a product around that called blockchain wealth.
10:43
[SPEAKER_00]: That's for people that are OGs that had so much risk on and were totally exposed to crypto.
10:48
[SPEAKER_00]: And now, guess what?
10:49
[SPEAKER_00]: They're trying to buy their first home.
10:50
[SPEAKER_00]: There may be trying to figure out how to diversify some of their wealth and they want to do that via crypto native capabilities.
10:57
[SPEAKER_00]: And so,
10:58
[SPEAKER_00]: We have that year of blockchain.com.
11:00
[SPEAKER_00]: It's a product I'm proud to use and one that I helped lead here and it does everything from being a classierish for you.
11:05
[SPEAKER_00]: You can call someone.
11:07
[SPEAKER_00]: You've got advisory services.
11:09
[SPEAKER_00]: You can do securities advisory services.
11:12
[SPEAKER_00]: We have 247 over the counter trading.
11:14
[SPEAKER_00]: We have preferable rates for lending.
11:16
[SPEAKER_00]: You can even
11:17
[SPEAKER_00]: collateralize a cash loan if you need to to buy a property or home.
11:21
[SPEAKER_00]: So these are some of the things that our oldest customers are sort of looking for.
11:24
[SPEAKER_00]: So that's one thing and we're not the only ones doing that but we're proud to offer that especially because those oldest vintage customers have been with us for over a decade now and they hold billions and billions in Bitcoin.
11:36
[SPEAKER_00]: So, beyond that, you also have the Tradvice base, which because of the regulatory clarity, especially out of the United States, are all building up products.
11:45
[SPEAKER_00]: If you look at the jobs available in the industry and specifically Tradvice that are looking for crypto expertise,
11:53
[SPEAKER_00]: That's a major category of hiring happening right now, and that's because they're all rushing to build stuff internally, so they can offer that to their clients.
12:02
[SPEAKER_00]: Actually, that's a good trend.
12:03
[SPEAKER_00]: It opens up market access, and I'm not surprised by those dynamics whatsoever.
12:08
[SPEAKER_00]: So you've got wealth clients moving in, you've got the trade-fi space being kind of built out.
12:14
[SPEAKER_00]: And then, if you just look at all the announcements that are happening from the oldest players and operating businesses here,
12:22
[SPEAKER_00]: They're building the next generation of products and services people are expecting.
12:26
[SPEAKER_00]: It's everything from perpetuals on chain, which blockchain.com just announced.
12:31
[SPEAKER_00]: We're announcing snap markets.
12:34
[SPEAKER_00]: Literally tomorrow, so we're so excited to share this news here.
12:37
[SPEAKER_00]: These are on-chain wagering systems that you can go in and take a view on.
12:41
[SPEAKER_00]: price activity, new events, cultural events, and more.
12:45
[SPEAKER_00]: So if you've heard about prediction markets, this is an even faster or on-chain more natively crypto offering that our team has been working on, we're very proud to announce that here live with you guys.
12:57
[SPEAKER_00]: And so if you look at the speed at which innovation is happening, I have never seen it be so voracious.
13:04
[SPEAKER_00]: And so all these things coming
13:07
[SPEAKER_00]: plus the AI advantages and the kind of ways that computer systems are going to be interacting and exchanging value.
13:14
[SPEAKER_00]: I think it's a good time to be optimistic.
13:16
[SPEAKER_00]: And of course, crypto goes through cycles of expansion and crypto goes through periods of correction, just like them.
13:23
[SPEAKER_00]: Global markets go through bull markets and bear markets, crypto does the same thing, tends to lead them and that's because the people in our industry are really dialed in locked in and paying attention to the trends and the details that move the needle on the little things.
13:40
[SPEAKER_00]: man.
13:40
[SPEAKER_01]: It's such an incredible story just how you guys have grown from blockchain.com, blockchain explorers, wallets, institutional service provider AI.
13:50
[SPEAKER_01]: I mean, now you're a full suite of products and services for literally everybody who's not just
13:57
[SPEAKER_01]: a crypto person, but for everybody who's just an individual investor, you know, period, you know, folks could come in and whether they're an allocator, an institution or individual, they could get out a lot from blockchain.com.
14:11
[SPEAKER_01]: And I'm curious from when you co-founded, uh, blockchain.com was this always the road-mapper did things kind of change.
14:18
[SPEAKER_01]: What are some of those inflection points or pivot points that really define your business?
14:23
[SPEAKER_00]: Yeah, it's a great question, Bryson, and thank you for asking.
14:25
[SPEAKER_00]: I mean, our business has matured just like you've matured from the point you're 12 years old to work.
14:31
[SPEAKER_00]: You are now, and I hope most importantly, you have to listen to your customers.
14:37
[SPEAKER_00]: It is a basic rule of business, but your customers are your best teachers, and also their expectations and what they want to do change over time.
14:45
[SPEAKER_00]: So in the earliest days, being a non-custodial wallet was incredible product market fit.
14:51
[SPEAKER_00]: Trusted systems basically violate the trust of their customers by having compromises by poorly designing systems or sort of proving that, you know, when you run centralized infrastructure on a protocol is entire point is to mitigate risk to decentralization, you create huge conflicts of interest and so.
15:09
[SPEAKER_00]: We always want to make sure that people can have firm control over their funds, manage it through a wallet if they desire to.
15:15
[SPEAKER_00]: And then exercise different degrees of custody if they desire to as well.
15:19
[SPEAKER_00]: And we've seen that because some customers prefer to have a very lockdown but custodial environment that is shared and then we have institutions that need
15:28
[SPEAKER_00]: off-chain, deep, cold custody services for protocols, so emergent L1's NL2's, the partner with us for custody services, get that type of product offering, and then you really have this whole spectrum of clients now.
15:42
[SPEAKER_00]: From the retail user to people emerging into wealth to full wealth clients,
15:46
[SPEAKER_00]: to institutions that increasingly look like publicly traded companies.
15:51
[SPEAKER_00]: So just like people at home now are sort of sitting around the table going, God, fuel is expensive, food is getting more expensive.
15:57
[SPEAKER_00]: I'm earning some dollars.
15:58
[SPEAKER_00]: What can I do about that?
16:00
[SPEAKER_00]: Well, you could buy some Bitcoin.
16:02
[SPEAKER_00]: You might want to buy other digital assets, like digital exposure to gold.
16:07
[SPEAKER_00]: Among other things, you may want to allocate into trading strategies that are neutral in their risk, but give you a risk moderated return.
16:16
[SPEAKER_00]: And so these are the types of things that were usually only available to the ultra rich and people that had access to private bankers on Wall Street or Canary Warf will now from the palm of your hand you can have access to the same thing whether you're an individual or an institution and we aim to serve this collection of customers.
16:34
[SPEAKER_00]: I mean, grow the market segments of digital adoption broadly.
16:37
[SPEAKER_00]: Yeah, absolutely.
16:39
[SPEAKER_01]: And I'm so excited as well about the, the snap markets, the prediction markets that you guys are building, what, what's going into this, you know, how long have you guys been building?
16:47
[SPEAKER_01]: What can users kind of expect?
16:50
[SPEAKER_01]: And also, you know, is this something that anybody anywhere in the world with an internet connection could use?
16:56
[SPEAKER_01]: Or is there certain stipulations on who can access this?
17:00
[SPEAKER_00]: Okay, so for those that haven't been paying too closely attention, prediction markets have sort of found a product market fit over the last 12 months, but there's still sort of tedious to use that can be kind of slow making predictions over things over a long duration of time requires a lot of patience.
17:16
[SPEAKER_00]: And we're trying to shorten all of that, make it much faster, make it more dynamic, and also make sure that at the end of the day, you're on chain and empowered to engage with these capabilities,
17:27
[SPEAKER_00]: on your own terms.
17:28
[SPEAKER_00]: And so we're very proud to announce stat markets.
17:31
[SPEAKER_00]: We're going to start with a prediction market specifically for Bitcoin's price in a contest that basically resets every 30 seconds, where individuals can come in and wait during take of you.
17:40
[SPEAKER_00]: But this is just a very first one of many that will be releasing into the coming weeks and months.
17:46
[SPEAKER_00]: So we're extremely excited about this.
17:48
[SPEAKER_00]: Ultimately, prediction markets are about forecasting and data and analytics and sentiment.
17:53
[SPEAKER_00]: And markets are the true arbiters of truth.
17:56
[SPEAKER_00]: as it relates to so many different topics in the world.
17:59
[SPEAKER_00]: So we're proud to do this in a crypto native way in one that really honors the foundations of decentralization and self-custodial services.
18:07
[SPEAKER_00]: And also do it.
18:08
[SPEAKER_00]: We hope for hopefully in a way that it's fun and engaging.
18:12
[SPEAKER_00]: We'll have a historical troll box as well.
18:15
[SPEAKER_00]: Yes, yes, yes.
18:16
[SPEAKER_00]: And make fun of people or the troll box back.
18:19
[SPEAKER_00]: Or encourage them, yeah.
18:21
[SPEAKER_01]: What kind of things can people be, I mean, I don't know, do you call it betting, speculating, investing in terms of these snap markets, is it going to be sports, political events, the weather in Tokyo?
18:35
[SPEAKER_01]: What's going to be the things that people will be predicting?
18:39
[SPEAKER_01]: And then what will be sort of the oracle mechanism?
18:42
[SPEAKER_01]: Are you guys going to be using certain, you know, secure data feeds from the likes of chain link, or is it going to be more centralized there?
18:52
[SPEAKER_01]: How are you thinking about that?
18:53
[SPEAKER_00]: Yeah.
18:54
[SPEAKER_00]: The best way to look at it is snap marks this sort of will appear into the future over any sort of event.
18:59
[SPEAKER_00]: The first one we want to do, though, is really to honor the crypto native in honor Bitcoin as sort of the best Paris predictor and earliest mover in the financial world and then opening that up across a variety of other categories.
19:13
[SPEAKER_00]: Now, you've seen some problematic interventions, I would say, from a guy blowing a hairdryer on a weather system outside of the Charles to Gaulle airport, manipulating a local weather market.
19:23
[SPEAKER_00]: So the trusted sources for data and these systems is concerning.
19:28
[SPEAKER_00]: And I think it's something that deserves a little more caution before you just start opening up markets for literally everything.
19:35
[SPEAKER_00]: And we'll take a more thoughtful, cautious approach.
19:37
[SPEAKER_00]: And the other one that's obvious is that not a rigorous
19:43
[SPEAKER_00]: I'm actually quite optimistic that certain jurisdictions will lead in this, though, in Europe, to one of those, the United States is sort of coming, you know, I think along on the journey here, but, you know, people are familiar with different capabilities for accessing these services.
19:58
[SPEAKER_00]: If they're in a geoblocked jurisdiction, however, some jurisdictions, we will obviously adhere to local rules around.
20:06
[SPEAKER_01]: Yeah, absolutely.
20:08
[SPEAKER_02]: You know, when it comes to all this, it seems like everyone wants to get in on it, right now.
20:13
[SPEAKER_02]: You saw it really start with, like, polymark it, you know, calcium made their way in.
20:17
[SPEAKER_02]: I was reading earlier this week that Hyperliquid just started adding this as well.
20:22
[SPEAKER_02]: You know, now you even have like, traditional brokerages like Robin Hood saying that they were going to add it.
20:27
[SPEAKER_02]: And then you have some of like the big asset managers being like, wow, we could be open to this down the road.
20:32
[SPEAKER_02]: I don't know if you guys saw that.
20:33
[SPEAKER_01]: I even heard Bitwise and Round Hill were trying to launch ETFs that settled to binary decisions on prediction markets that the SEC just this week said we need to keep reviewing this a little bit more before we launch it so it's not green lit yet but I was like that's an interesting one.
20:52
[SPEAKER_00]: I think this is a good example of how, you know, the competition in our space was really sort of from startups over the last 13, 14 years and a lot of them.
21:02
[SPEAKER_00]: Some of them raised money others, you know, we're so organized, but and then you had protocols is like a completely different business model for getting network effects, but one of the dynamics that no one's really sort of.
21:12
[SPEAKER_00]: clear on how it'll affect market adoption and innovation in this space is just now the track five businesses and track five companies, especially in the United States can custody can offer products like how are they going to enter this space?
21:25
[SPEAKER_00]: And I think it's a big question Mark still.
21:27
[SPEAKER_00]: I mean, when people talked about track, track, I, you know, adoption of the last few years,
21:32
[SPEAKER_00]: it really paled and comparison to the structural changes that are now in place that enable them to directly market provide customers their product offerings.
21:43
[SPEAKER_00]: I think they're going to probably stay quite conservative and they'll kind of incrementally add things, but the fact that they're available, we're competing with Goldman Sachs and Morgan Stanley and JP Morgan and their conversation
21:57
[SPEAKER_00]: you know, OG crypto companies in those discussions to me is a wild validation of the space, but more importantly, the asset class and the tooling and innovation that is necessary to basically drag the economy and the financial infrastructure out of a physical world.
22:14
[SPEAKER_00]: And into a purely digital one, and that transformation is really happening now, we had to get them really uncomfortable with how these capabilities could dramatically, I would say, compete with them and disrupt them.
22:29
[SPEAKER_00]: And now the laws of change and now everything can be a real competitive field.
22:35
[SPEAKER_02]: I love it.
22:36
[SPEAKER_02]: It is.
22:36
[SPEAKER_02]: And it will be super special to see how this continues to evolve over the next couple of years.
22:43
[SPEAKER_02]: Because you're seeing everyone get interested, right?
22:45
[SPEAKER_02]: You see institutional, you see retail.
22:47
[SPEAKER_02]: It's one of the really good things about your position is that you get to have interactions and experiences with both sides.
22:55
[SPEAKER_02]: Have you seen any kind of divergence between what retail and institutional players have been doing over the last year year and a half and then what they're actively doing right now?
23:09
[SPEAKER_00]: It's a good question, Brendan.
23:10
[SPEAKER_00]: So some themes, I would say that really old users that have been in crypto for a long time, and you can witness this on-chains.
23:18
[SPEAKER_00]: You can really kind of study the behavior and the psychology of the earliest adopters.
23:23
[SPEAKER_00]: They're all in, they're not selling.
23:25
[SPEAKER_00]: They're basically building up their positions or, you know, sort of, I would say diversifying them across new crypto-powered capabilities.
23:33
[SPEAKER_00]: And so, again, that sort of fits in this, like blockchain wealth, client segment.
23:36
[SPEAKER_00]: You've got, I would say, as more tepid new adopter crypto user today, they tend as kind of emerge from, I would say, jurisdictions or markets where there's a real foundational need for always on instant quick payments online.
23:52
[SPEAKER_00]: And so, whether that's been stable coin adoption and especially emerging in front of your markets or sort of
23:58
[SPEAKER_00]: flaring up of pockets of different digital assets like tawn the telegram native digital asset which is up 30 or 40% in the last 24 hours.
24:07
[SPEAKER_00]: The reasons for those things if you're looking under the hood, because they provide capabilities it
24:13
[SPEAKER_00]: really needed by large communities of users.
24:16
[SPEAKER_00]: In the Telegrams case, they've got almost a billion active users that's more widely used in Twitter and they've natively integrated with digital asset called Tom.
24:24
[SPEAKER_00]: And so they're making a bunch of sort of improvements to that, reducing fees and increasing the staking yield and a bunch of other things.
24:31
[SPEAKER_00]: And you're seeing some real, I'd say, fit to purpose improvements on some of those things.
24:37
[SPEAKER_00]: When it comes to institutions, it's a wide range of conversations and a good example of that is just in the last five, six weeks here at BlackGenercom.
24:47
[SPEAKER_00]: We partnered with the digital asset treasury business here in the UK called Stax.
24:51
[SPEAKER_00]: It's backed and supported partially by one of the most prominent political leaders in the UK who also really understands crypto, understands that
25:06
[SPEAKER_00]: and this is a great opportunity for blockchain.com to provide the infrastructure for a publicly traded company to stockpile and build a position into specifically Bitcoin.
25:16
[SPEAKER_00]: Now, we do that for a variety of other digital assets, but that's a really interesting new economic participant that was not here a few years ago.
25:24
[SPEAKER_00]: And those are just some of the emergent sort of examples of both retail users sort of behaviorally doing things based on the jurisdiction or their circumstances, but also institutional players, political actors, and more coming into the industry, putting their money with their mouth is and they actually, they aren't just doing this because it's fun or clever.
25:44
[SPEAKER_00]: They really foundationally understand that digital gold, especially Bitcoin,
25:49
[SPEAKER_00]: um, is a particularly interesting hard asset to own in a diversified portfolio of other assets and they are talking to the public about that.
25:57
[SPEAKER_00]: They're talking to constituents and they're even talking to political institutions about it.
26:02
[SPEAKER_00]: And so if you told me again 10 years ago that this is the kind of degree of discourse that we would have, um, I would not have believed or predicted that.
26:10
[SPEAKER_00]: And so to me, we've made a huge amount of progress, um, as an industry over the last decade,
26:16
[SPEAKER_00]: colossal amount of effort to go through over the next few decades, as we finally and completely finish retooling the plumbing of financial services, get settlements down to seconds, enable widespread access to all asset classes, whether it's U.S. equities or perpetuals or custody services or prime brokerage services or, you know, a private wealth type of services and
26:46
[SPEAKER_00]: to have the best financial offerings that makes sense for them.
26:50
[SPEAKER_00]: And all of that will be sort of partnered with now AI tools that will really work carefully hand in hand at the sort of interface layer with the customer to make sure they're getting things that are desirable to them.
27:04
[SPEAKER_01]: Wow, there is like so much to dive into in that nugget that you just said, I encourage everybody just to pause and just rewind for two minutes or three and just re listen to that because there was so many things we could double click on there, but I want to double click on Bitcoin's narrative and why people are buying it and holding it.
27:23
[SPEAKER_01]: And what I've seen over the course of, you know, almost 10 years here in crypto, it's like everybody holds crypto for a different reason.
27:31
[SPEAKER_01]: Maybe the big banks are holding it because they think that, hey, we got new products that we could monetize.
27:35
[SPEAKER_01]: Maybe the pension funds or the endowment funds are saying, oh, we want to put 1% in and it's a unique diversifier.
27:41
[SPEAKER_01]: We could get better risk adjusted returns.
27:44
[SPEAKER_01]: folks in, you know, Turkey or Zimbabwe or any other country that's, you know, fierce facing extreme inflation, they could escape that sort of inflationary regime and buy Bitcoin and anybody can.
27:57
[SPEAKER_01]: And so there's so many reasons.
27:59
[SPEAKER_01]: And I heard you say the digital gold thing, you know, people are looking at the price of Bitcoin throughout the most recent geopolitical crisis.
28:07
[SPEAKER_01]: And it's been the best performing asset apart from oil.
28:09
[SPEAKER_01]: And so I think one thing that's great about Bitcoin, and I want your opinion on this part particularly, one thing that's great is like it means so many different things to so many different people.
28:18
[SPEAKER_01]: However, sometimes it trades like a tech stock.
28:22
[SPEAKER_01]: Sometimes it trades like risk on.
28:24
[SPEAKER_01]: Sometimes it trades like risk off and people don't know how to think about it in their portfolio.
28:28
[SPEAKER_01]: Some people are like, oh, it's not used for payments.
28:30
[SPEAKER_01]: And so, how do you make is, how do you make of it like, you know, why are people buying and holding Bitcoin?
28:36
[SPEAKER_01]: And is that going to change is one narrative really going to glob on or will it continue to be a Morphus?
28:45
[SPEAKER_01]: I mean, you've been here for since I think 20 to 11 or 2010 pretty much since blockchains began, so I'm sure you've seen the evolution of how people think about crypto.
28:54
[SPEAKER_00]: Yeah, you're right, like the the the the the reasons people get comfortable with buying a Bitcoin for the first time.
29:03
[SPEAKER_00]: Really ranges for a huge number of reasons.
29:08
[SPEAKER_00]: And so it's one of my favorite things to do is to educate people about Bitcoin in the first place, but I never go into asking them about.
29:16
[SPEAKER_00]: You know,
29:16
[SPEAKER_00]: how confused they are about or anything like that.
29:18
[SPEAKER_00]: I just asked them what their goals are.
29:21
[SPEAKER_00]: What are your goals for managing your family's money, your wealth, your personal savings, and then I listen to them and it's really important because individuals have different fluency with money.
29:33
[SPEAKER_00]: It's one of the topics it
29:34
[SPEAKER_00]: Americans are a little more comfortable talking about a lot of cultures or not, and even in America, it's kind of a taboo subject in some places, but everyone, you know, graduates from school, if they're lucky enough to do that, and they have to go into the real world and they desire to earn income and earn money.
29:50
[SPEAKER_00]: Where does it come from?
29:52
[SPEAKER_00]: And why does the dollar have value versus the pace over, is the euro versus some other currency?
29:57
[SPEAKER_00]: And unfortunately, this stuff is not taught in school.
30:00
[SPEAKER_00]: Financial literacy is really not something that's emphasized.
30:03
[SPEAKER_00]: And so most people enter this with a brave and asymmetry against people that are really studying it.
30:10
[SPEAKER_00]: And so you can look at economics, you can look at modern banking.
30:14
[SPEAKER_00]: And then there's just investing generally
30:16
[SPEAKER_00]: And so I share all this because one of the most important questions in the world is what is money and where does it come from and you know money pre exists written word, you know, you can find burial sites in northern Scotland where there are pearls and beads that come from the Middle East that are 8,000 years old so what's important is to understand money is basically a shared understanding of how we exchange wealth over time using.
30:42
[SPEAKER_00]: tools, which is a euphemism for technology.
30:46
[SPEAKER_00]: And we tried a lot of different things.
30:47
[SPEAKER_00]: We've tried beads.
30:49
[SPEAKER_00]: We've tried feathers.
30:50
[SPEAKER_00]: We've tried coins and paper.
30:53
[SPEAKER_00]: And in the age of the internet, you know, being able to exchange precious information by laterally with anybody else, it can be done now.
31:01
[SPEAKER_00]: And that's through a digital asset and using an infrastructure on a blockchain.
31:05
[SPEAKER_00]: And so,
31:06
[SPEAKER_00]: Bitcoin pioneered this concept and Satoshi, you know, wrote a white paper who was the kind of originator of this alternative financial system called Bitcoin peer-to-peer electronic cash.
31:18
[SPEAKER_00]: Now, we're not going to have a great philosophical debate about where we are today.
31:22
[SPEAKER_00]: I'll just share that that white paper sparked a wild amount of imagination about what kind of features you would want your money and financial system to possess in the age of the internet.
31:34
[SPEAKER_00]: Well, you'd want it to be counterfeit resistant.
31:36
[SPEAKER_00]: You want it to be indestructible.
31:38
[SPEAKER_00]: You want to make sure you can transact with anybody else instantly, basically, for free.
31:42
[SPEAKER_00]: You need to have settlement with finale.
31:44
[SPEAKER_00]: So I can't send some money to Brendan
31:48
[SPEAKER_00]: And so you have to have all of these capabilities that are built on thousands of years of knowledge and investment and losses across categories of different economies.
32:00
[SPEAKER_00]: And I think Bitcoin really has burned its place as a trusted.
32:05
[SPEAKER_00]: alternative to other historically safe assets, like real estate or gold.
32:12
[SPEAKER_00]: So there's a lot of people talk about Bitcoin being digital gold and not necessarily being a digital cash instrument.
32:20
[SPEAKER_00]: And there are factions in the crypto space that have strong opinions about all of that.
32:25
[SPEAKER_00]: But at the end of the day,
32:27
[SPEAKER_00]: We've proven this thing can work, and I think Bitcoin sits nicely in a portfolio for people, as a hedge against many other alternatives, but it is one that's very liquid.
32:38
[SPEAKER_00]: And so you've got people that are very trusting and believing in the long-term around sound economics.
32:45
[SPEAKER_00]: And that's a position you have because you believe that things are scarce and rare, they command a market price.
32:51
[SPEAKER_00]: And Bitcoin has those features in it.
32:54
[SPEAKER_00]: There are also people
32:56
[SPEAKER_00]: oil on the weekends and don't have a way to do that.
32:59
[SPEAKER_00]: So they have to own a bunch of Bitcoin in order to potentially sell that down and basically hedge a bet that they've made about something else and so Bitcoin right now is acting as an entire collateral offering for around the clock trading and hedging around another thing.
33:15
[SPEAKER_00]: So unfortunately you get, you know, very clever speculators, you get hedge funds.
33:20
[SPEAKER_00]: operating in the space and more.
33:22
[SPEAKER_00]: But at the end of the day, that volume increases and also think the conviction around using these technologies improves over time.
33:31
[SPEAKER_00]: And Bitcoin's our oldest digital asset, it has a long operating track record with the most amount.
33:37
[SPEAKER_00]: of technology from a security perspective operating in the background.
33:41
[SPEAKER_00]: And so because of that, and it's name recognition and having, I would say, help crystallize the industry.
33:48
[SPEAKER_00]: It's still a really good place for people to dabble and practice, learning about crypto or digital assets as an asset class.
33:56
[SPEAKER_00]: It would make sense to own a bit of Bitcoin.
34:00
[SPEAKER_00]: Yeah, absolutely.
34:01
[SPEAKER_01]: And I love that framing of Bitcoin.
34:05
[SPEAKER_01]: You know, it trades 24-7 people use it, you know, many different kinds of investors use it as, you know, sailable assets over the weekend when markets are closed.
34:14
[SPEAKER_01]: And so it makes sense for it to change, you know, it's trend and it's regime pretty regularly and not be as consistent because there are so many, you know,
34:25
[SPEAKER_01]: traders and different kind of investors out there that are changing their stance.
34:29
[SPEAKER_01]: That's what makes a market, differing viewpoints and differing feces evolving over time.
34:34
[SPEAKER_01]: And so that's really cool color.
34:37
[SPEAKER_01]: But I'm also curious about your user base that you could speak to, particularly, in terms of like where you see their interests gravitating towards.
34:46
[SPEAKER_01]: Um, your institutions, your high net worth are these folks really primarily focusing, you know, we'll call it 90% on Bitcoin and then 10% wanting to learn a little bit about crypto.
34:55
[SPEAKER_01]: Or do you see more of an even split with people saying, hey, Bitcoin, we were sold on that.
35:00
[SPEAKER_01]: We want your offerings for that.
35:02
[SPEAKER_01]: But also tell us a little bit about defy.
35:04
[SPEAKER_01]: Tell us a little bit about RWA's and how we can actually grow more into crypto in blockchain.
35:11
[SPEAKER_00]: Yeah, great question, Bryce.
35:12
[SPEAKER_00]: And so again, it really comes up to this like financial fluency curve, and when you go through, I would say the kind of basic foundations around sound economics, why things like gold, why things like Bitcoin and property actually share some similarities, except that crypto is borderless, global instantaneous settlement in trades 24.7.
35:33
[SPEAKER_00]: If someone thinks that gold is interesting or that owning physical properties is interesting, they can almost always be persuaded that there's something quite interesting about Bitcoin.
35:42
[SPEAKER_00]: Now, that's when you have the opportunity to continue evolving the conversation and there are lots of pathways for doing that.
35:50
[SPEAKER_00]: It might be diversification, it might be the alternative use cases, it might be stablecoins, and then you can explain that there's even more
35:58
[SPEAKER_00]: sophisticated capabilities, especially for individuals that really understand market structures.
36:05
[SPEAKER_00]: And that's where defy comes in that I think the most risk on, you know, innovators and crypto really took the market in a very interesting and just such a compelling way.
36:18
[SPEAKER_00]: DeFi still in a lot of ways to me feels like where Bitcoin was in like 2012 or 2013.
36:23
[SPEAKER_00]: Which as long as they only have these like mysterious magical compromises and it's very difficult to explain and it puts a lot of onus on you know the developers and the firms that have created some of these capabilities to
36:36
[SPEAKER_00]: explain away why that won't happen again, you know, or how it'll, you know, how they'll correct for some of those problem sets, whether that's, you know, smart contract exploits, individuals just accidentally screwing something up or fat fingering a problem.
36:50
[SPEAKER_00]: So these are real challenges.
36:52
[SPEAKER_00]: And so every time one of those things happens, it makes, you know, institutions, especially, I think a little bit more skeptical about specifically using D5.
37:00
[SPEAKER_00]: But here's the good part.
37:02
[SPEAKER_00]: We know that the traditional financial system, when it screws up, the losses are socialized to absolutely everybody.
37:11
[SPEAKER_00]: And these are things that in the long term create a terrible mal incentive for the participants of that system.
37:18
[SPEAKER_00]: They know they can get away with basically anything in the long run and that's why after the great financial crisis, where no one was really ever properly held to account, you just create these perverse incentives in the economy and even though DeFi definitely has some challenges, it's a self-correcting mechanism, the market structure and incentive for DeFi.
37:40
[SPEAKER_00]: products and services, whether it's a lending protocol, a prediction market, a decentralized exchange, are to constantly improve and harden their infrastructure and make things that are better and more useful for their customers.
37:52
[SPEAKER_00]: We're on the other side, but see, arguably the exact opposite of that.
37:56
[SPEAKER_00]: And so I think if you're to morally sort of invest in one system versus the other, I'm much more comfortable personally with the D-FI one, but this conversation sometimes can't be explained in a headline.
38:08
[SPEAKER_00]: You're not described below the surface.
38:10
[SPEAKER_00]: You need to look at history and you need to understand incentives.
38:13
[SPEAKER_00]: Now, it was one thing Charlie Munger always said, if you understand the incentives, you can understand the outcomes.
38:18
[SPEAKER_00]: And so one system has proper incentives to continue to improve, although accountability is high
38:26
[SPEAKER_00]: and I know which one I'd rather operate it.
38:28
[SPEAKER_02]: I mean, so much to unpack there, you've been through every bear market and every bull market, and that's something that I don't think many of our other guests can claim that kind of thing.
38:40
[SPEAKER_02]: And something that we've been debating internally is just the whole idea of the four-year cycle.
38:46
[SPEAKER_02]: Right?
38:47
[SPEAKER_02]: Is this just another normal four-year cycle?
38:50
[SPEAKER_02]: is there something different about this one we go back and forth not only with our analyst team but we have members of our community.
38:57
[SPEAKER_02]: I'm curious to get your thoughts on this like do you think that this is just another normal for your cycle or is there something different about this one?
39:06
[SPEAKER_00]: Oh, Brennan, it's a great question.
39:09
[SPEAKER_00]: It's not one.
39:10
[SPEAKER_00]: Yeah, look, here's all address that.
39:14
[SPEAKER_00]: For those that are not familiar with this, it's worth re-explaining it.
39:17
[SPEAKER_00]: But basically Bitcoin had a fixed and limited supply of tokens that it would issue over a four-year cycle and every four years, the amount of tokens that would be issued to the validators or minors of the network that help secure the transaction history would decrease by 50%.
39:35
[SPEAKER_00]: So just like if you were to create a hard asset that was very valuable and limited and supply in the Earth's crust, like gold relatively evenly distributed, there's a fixed amount of it.
39:46
[SPEAKER_00]: And every year, people go out and get some, but there's less and less of it over time and it requires more and more effort and energy to acquire it.
39:53
[SPEAKER_00]: Bitcoin used some of those same thermal dynamic principles in its design.
39:57
[SPEAKER_00]: And so we're now entering the next happening
40:02
[SPEAKER_00]: two-year cycle.
40:04
[SPEAKER_00]: So what is historically happened is every four years, half the amount of Bitcoin gets released in the market, their speculation it goes into that about how valuable it will be if there's less supply and if there's less supply and an equal amount of demand, prices go up.
40:20
[SPEAKER_00]: So, what's this cycle?
40:22
[SPEAKER_00]: This cycle is a little bit different.
40:23
[SPEAKER_00]: It doesn't look exactly like the last ones, but some things are rhyming, and the good news is this is very predictable, unlike speculating about whether or not the Federal Reserve or the ECB or the Bank of England or the Bank of Japan are going to change their economic policy.
40:40
[SPEAKER_00]: We know exactly what Bitcoin's going to do.
40:42
[SPEAKER_00]: and so what happens inevitably though is we start the countdown clock and everyone starts to talk about what's going to happen and economists and analysts and special teams all come up with their predictions and because of that we get to educate an entire new investor class every four years about this special moment and about the economics of hard money and so to me it's always kind of a
41:11
[SPEAKER_00]: And, you know, I think we'll have another one of those now, especially in the context of all of the kind of broader geopolitical problems, the labor dislocation that AI is going to bring the argument that, you know, maybe computer systems are going to need some kind of always on payment system or all going to be interesting narratives in the next happening cycle.
41:32
[SPEAKER_00]: And so the fact that it hasn't
41:33
[SPEAKER_00]: the overall trend in market price, maybe hasn't mirrored previous cycles.
41:40
[SPEAKER_00]: I think it is well early into the next sort of education phase around specifically Bitcoin and the impacts Bitcoin has across crypto in general.
41:50
[SPEAKER_00]: So I'm enthusiastic about it generally, but that's kind of how I think about that.
41:54
[SPEAKER_02]: You know, that's what we need a prediction market on.
41:57
[SPEAKER_02]: We have prediction markets about all these other things.
41:59
[SPEAKER_02]: We need a prediction market on is this a normal for your cycle?
42:03
[SPEAKER_02]: Or is this time different?
42:04
[SPEAKER_02]: All right.
42:05
[SPEAKER_02]: We're going to make one for you.
42:07
[SPEAKER_00]: There we go.
42:11
[SPEAKER_01]: Love it.
42:11
[SPEAKER_01]: Well, look, I've got a little lightning round of questions that I've thought about, and I wanted to get to your opinion on because it's not every day that we get to speak to somebody who's so entrepreneurial and so found or focused.
42:26
[SPEAKER_01]: And somebody who's just weathered the storms of crypto and done it with grace and been able to have such a successful firm.
42:35
[SPEAKER_01]: And so are you open to a little lightning round
42:41
[SPEAKER_00]: Let her rip.
42:42
[SPEAKER_00]: I'll try and be free.
42:43
[SPEAKER_01]: Okay, uh, I'm thinking about some of these like it's going to be hard to distill this down in a 30 seconds, but that's what makes it fun.
42:50
[SPEAKER_01]: All right.
42:51
[SPEAKER_01]: So the shot clock.
42:52
[SPEAKER_01]: Yeah.
42:53
[SPEAKER_01]: So what belief about crypto?
42:56
[SPEAKER_01]: Did you hold strongly in 2011?
42:59
[SPEAKER_01]: You no longer believe.
43:01
[SPEAKER_00]: What belief did I hold in crypto in 2011 that I no longer believe?
43:06
[SPEAKER_00]: I'm starting with the hardest question first.
43:09
[SPEAKER_00]: Yeah, that's a good tough line.
43:11
[SPEAKER_00]: One of the things that was really pleasant about the earliest days of crypto was that it really felt like everyone that was participating was sort of on the same side.
43:22
[SPEAKER_00]: And it was us against, you know, the, you know, evil corporations, institutions and, you know, rent seeking financial system.
43:31
[SPEAKER_00]: And we all sort of saw ourselves, I think, maybe identified in that way.
43:37
[SPEAKER_00]: And then, you know, basically three or four years into building firms in the industry and some of the politics, I think if you wanted to really slow down adoption, you would have found ways to turn,
43:50
[SPEAKER_00]: and I think some of that happened and I think that competition is absolutely important and necessary and I'm in a very competitive person and however I think there's sometimes a little we
44:07
[SPEAKER_00]: We've struggled to act in unison against wider, more dangerous adversaries.
44:12
[SPEAKER_00]: And I think that's been a little bit sad and a little bit challenging in our industry.
44:16
[SPEAKER_00]: But I guess the belief would just be that I had hoped that we would all sort of remember who the big adversaries and bigger problems are.
44:26
[SPEAKER_00]: And sometimes we've done a little too much civil warring.
44:30
[SPEAKER_00]: And maybe that was necessary, I don't know, but it certainly wasn't helpful in some ways because it confused consumers and, you know, cause a lot of, I would say, reputational damage internally to the industry.
44:43
[SPEAKER_01]: Yeah.
44:43
[SPEAKER_01]: No, very well said.
44:44
[SPEAKER_01]: That was not where I thought you were going to go with it, but I think that's a great one in early where you think, you know, we've all got this common enemy.
44:50
[SPEAKER_01]: Everybody's on my side, right?
44:51
[SPEAKER_01]: And then you're like, oh my God, there's going to be the Protestant Revolution and then the, you know, all these different revelations and you've got all sorts of different sects and soon you can't even recognize people who you thought were on the same aisle as you.
45:04
[SPEAKER_01]: Yeah.
45:04
[SPEAKER_01]: So very interesting.
45:06
[SPEAKER_01]: So inversely, what is sort of one conviction that you had.
45:11
[SPEAKER_01]: in the early days that has carried through and become even stronger today.
45:16
[SPEAKER_00]: I went to a bank this weekend.
45:19
[SPEAKER_00]: I needed to pull some cash out.
45:20
[SPEAKER_00]: They didn't have an ATM.
45:21
[SPEAKER_00]: I had a weight in line.
45:23
[SPEAKER_00]: I had to show an ID.
45:24
[SPEAKER_00]: I had to put an append.
45:26
[SPEAKER_00]: I had to be asked a survey just to get some cash out of a bank and it took me like 25 minutes.
45:31
[SPEAKER_01]: And it could only get out of a tiny certain amount of what you actually have in there, too, by the way.
45:36
[SPEAKER_00]: It was crazy.
45:36
[SPEAKER_00]: And then I'm being upsold on all this crap.
45:38
[SPEAKER_00]: I really don't need.
45:39
[SPEAKER_00]: And I was just so reminded of the elegance and the beauty that crypto sort of stands for.
45:47
[SPEAKER_00]: And, you know, I got into all this because I was so persuaded really by Satoshi's vision, originally around building and always on financial system that was an alternative to the traditional one.
46:01
[SPEAKER_00]: I didn't like what we were inheriting.
46:03
[SPEAKER_00]: I graduated in 2007, right into the Great Depression.
46:06
[SPEAKER_00]: I watched all of our, you know, most established institutions basically betray their trust with users, socialize as a colossal amount of loss, you know, start printing money out of thin air to quantitative easing and introducing all these confusing terms.
46:20
[SPEAKER_00]: And I believe that it would be noble and worthy of building something.
46:25
[SPEAKER_00]: They would enable all people regardless of the circumstances of their birth.
46:28
[SPEAKER_00]: to be able to send receives secure training exchange digital instruments of wealth.
46:33
[SPEAKER_00]: And Bitcoin was sort of the first thing that did that, and then it's gotten wildly more interesting.
46:38
[SPEAKER_00]: And I think if that purpose and vision was there 14, 15 years ago that persuaded some of the earliest people to put their careers into this, you know,
46:48
[SPEAKER_00]: that conviction is stronger today than ever.
46:50
[SPEAKER_00]: We've gone a good distance on that, but we have so much more to go still, and it requires building things responsibly.
46:58
[SPEAKER_00]: I think they're useful and valuable to customers, listening to them, and then behaving in a long term way that adds value.
47:04
[SPEAKER_00]: And so, I expect this to be my life's work, and I'm committed to that.
47:09
[SPEAKER_00]: That conviction is stronger today than at any point in time.
47:13
[SPEAKER_01]: beautifully said.
47:13
[SPEAKER_01]: Now you've been through like we said multiple boom bust cycles pretty much every single one that's ever existed in crypto so who better to ask than what separates companies, crypto companies in particular that survive from those that disappear every cycle.
47:30
[SPEAKER_00]: What's the most important one here, Bryce, is the Dino harm principle.
47:35
[SPEAKER_00]: So you've got the Hippocratic oath for doctors and you've got a Dino harm principle to customers.
47:40
[SPEAKER_00]: And the firms that get this wrong, that see their customers as products, then don't align building things in an incentively aligned way.
47:50
[SPEAKER_00]: Centralized too much risk.
47:52
[SPEAKER_00]: You know, and disobey the foundational principles of crypto in the first place, if you build rent seeking systems here, if you're arrogant and think that controlling people's custody of of money and data in the long term is the right call, you are building on a foundation that was designed to.
48:11
[SPEAKER_00]: materially disrupt and change that paradigm and unfortunately there are people that come into this industry that raise money That sell a concept and they're very persuasive and some of those characters have historically been the greatest villains in our industry and unfortunately have caused significant consumer harm in damage and and so those are the ones you got to look out for
48:35
[SPEAKER_00]: And it is important to understand that the foundational principles and philosophies of this merchant and disruptive technology, and then pick your own path with it, but this is why working with firms that have been around for a while, even though we're starting to sound like the older boomers of the crypto space, there's a reason why that's a thing, and building trust in this space is exceedingly difficult, and it starts with always taking care of your customers.
49:04
[SPEAKER_01]: love it, couldn't have said it better.
49:06
[SPEAKER_01]: I didn't know if you were going to go that route or leverage.
49:09
[SPEAKER_01]: So you just avoid leverage.
49:11
[SPEAKER_00]: Also dangerous.
49:12
[SPEAKER_00]: Yes.
49:12
[SPEAKER_01]: Also dangerous.
49:14
[SPEAKER_01]: Now I want to ask a question.
49:15
[SPEAKER_01]: I don't want to bring up any bad vibes or bad juge or whatever, but I always find something interesting from asking this question of successful entrepreneurs is what was the hardest lesson that you've learned in your entrepreneurship journey?
49:28
[SPEAKER_01]: What was the hardest lesson?
49:31
[SPEAKER_00]: Uh, Bryce has a good one.
49:33
[SPEAKER_00]: Um, I depends, you know, I am asked this question, you know, sometimes, and also trying to help younger or earlier stage entrepreneurs navigate the answers to their, their own stress and things.
49:44
[SPEAKER_00]: Uh, I think it's one of those things where like, you do have to kind of put your mask on first before you help others, really understand your why, like, why are you here?
49:51
[SPEAKER_00]: And, um, whether you're pursuing an entrepreneurial endeavor in crypto or in AI,
49:58
[SPEAKER_00]: or helping your parents change their business and modernize it, make sure you're really there for reasons that give you a lot of purpose.
50:06
[SPEAKER_00]: And if you've got that, then you can overcome huge amounts of stress and obstacles because you've got a real reason for doing it.
50:15
[SPEAKER_00]: And so that to me, it was probably one of the biggest most important observations across my entrepreneurial journey.
50:22
[SPEAKER_00]: And then
50:23
[SPEAKER_00]: I think other than that, a lot of people will say this, but you just have to do a great job with your team and your customers.
50:30
[SPEAKER_00]: So your team is going to be critical and help and provide the best offerings and services for your customers and your customers or your best teachers.
50:39
[SPEAKER_00]: So listen to them, you'll be okay.
50:42
[SPEAKER_01]: Yep, absolutely.
50:43
[SPEAKER_01]: Take care of your customers, take care of your people.
50:45
[SPEAKER_01]: Two more questions, and then Brendan has a closing question for you, but I was curious, just in terms of what you think will bring the next, call it, 100 million users to crypto.
50:57
[SPEAKER_01]: Will it be,
50:58
[SPEAKER_01]: Hey, men's and stable coins will it be, you know, the investing and speculating opportunity will it be gaming or something that we're not even talking about, maybe even like AI and the next 100 million customers won't even be humans, they'll just be agents that will be economically as powerful who knows.
51:13
[SPEAKER_01]: So what's your answer on that?
51:14
[SPEAKER_00]: Yeah, I'm sure you've heard some different perspectives on this question, Bryce.
51:19
[SPEAKER_00]: Look, I think almost everybody that's entering the workforce today and setting up their first digital bank account to receive a salary, most of those people are going to use a digitally native service.
51:30
[SPEAKER_00]: And so you're going to get millions of users signing up for everything from blockchain.com to all the other companies that are Neo banks or new banks.
51:37
[SPEAKER_00]: After that, I do think you're going to see a large number in a prolific number of economic agents that are AI agents.
51:48
[SPEAKER_00]: They can't set up a bank account, they can't go to Bank of America or Wells Fargo, but they can instantly set up a wallet.
51:55
[SPEAKER_00]: You can give them a budget and they can start to perform activity.
51:58
[SPEAKER_00]: I think that category of economic actor is going to be wildly, it's going to grow wildly.
52:04
[SPEAKER_00]: And then, you know, the other ones are sort of, you know, market dependent, but a good example is we've seen wide-scale usage of things like stable coins, especially in emergent markets like Nigeria and Ghana, where we've expanded to in the last year, just speaking specifically from blockchain.com's perspective, while those consumers and those regions sometimes care about, I would say, like raw crypto,
52:29
[SPEAKER_00]: like Bitcoin or digital gold access or even tokenized access to U.S. equities via our partnership with Ando.
52:38
[SPEAKER_00]: The stablecoins are really interesting to them.
52:39
[SPEAKER_00]: And that's because they'd rather, you know, transact and digital dollars that they can save and store and move around instantly.
52:45
[SPEAKER_00]: And so, you know,
52:47
[SPEAKER_00]: And here's the last one, Bryce, if everybody that owns crypto today sets up five other people with a crypto wallet and sends them two bucks five bucks ten bucks just to show them how it works will hit a hundred extra million users by the end of the month.
53:04
[SPEAKER_00]: So, that's the challenge that I always encourage people is that if you want this salt to work better, like bring your friends in, set your mom up, set your dad up, set your friends parents up, and just give them a small amount and like watching the value of that, you know, move around in real time.
53:20
[SPEAKER_00]: does sort of trigger this oh you know what there is a global market for data and infrastructure and edge and you know now I kind of get it and so it's really on everybody that owns some to become an advocate to help educate and ultimately if everyone that owns some crypto right now set up five other wallets in the world it wouldn't be a hundred million users price we would pass a billion and a half users in the next year and that would have some wild
53:47
[SPEAKER_00]: implications for the market prices.
53:49
[SPEAKER_00]: So my challenge to everybody is just go be a little bit generous, set up some people, send them a little bit of crypto, whatever you've got, and teach them how to use it.
53:59
[SPEAKER_01]: My last sort of thought there is that you were speaking to the choir.
54:04
[SPEAKER_01]: I mean, crypto 101, you send them some crypto also send them a link to crypto 101, YouTube channel or Spotify, and they got the cash, they got the education,
54:14
[SPEAKER_01]: and you're all rocking and rolling.
54:17
[SPEAKER_01]: I know we're up here at time and so Brendan, any last questions that we have before we let Nicholas go for the day.
54:25
[SPEAKER_02]: Yeah, you know, I was just thinking, as we wrap up this podcast, we're also pushing into the almost the second half point of this year.
54:33
[SPEAKER_02]: Uh, it's been a wild ride here in the first five to six months, the time of recording this.
54:40
[SPEAKER_02]: Uh, Nick, I'm just curious, you know, what are you looking forward to as we approach the second half of this year?
54:46
[SPEAKER_02]: Is there any kind of big crypto market milestones or anything else?
54:50
[SPEAKER_02]: So you're watching out for it.
54:52
[SPEAKER_00]: Yeah, great question.
54:53
[SPEAKER_00]: I think in the US, we're still sort of in this confusion about whether or not major legislation will pass.
55:00
[SPEAKER_00]: It sounds like some compromises have been made and it's still possible that that ends up, you know, to be voted on over the next couple months.
55:10
[SPEAKER_00]: And I think
55:10
[SPEAKER_00]: Generally, while there's a lot of debate about the nuances of this bill, the fact that the US legislator is even contemplating it and arguing on behalf of an industry that is fighting against a much more powerful rival and everyone knows they actually need to future proof the US economy.
55:26
[SPEAKER_00]: It's a very important dialogue, and the good news is it's partially and mostly bipartisan in an era of extreme different political opinions and in always on frustrating,
55:38
[SPEAKER_00]: social world.
55:40
[SPEAKER_00]: There's one area here where there's some cooperation happening.
55:42
[SPEAKER_00]: And so I'm looking at that.
55:44
[SPEAKER_00]: But that's not going to be deterministic about the future of digital assets or innovation or crypto.
55:50
[SPEAKER_00]: I think it would help especially bigger actors that are currently not able to participate from having some confidence.
55:56
[SPEAKER_00]: If they have to sit on the sidelines for another four years, that's okay.
56:00
[SPEAKER_00]: The incumbents and the digital assets space will continue to grow and build market share.
56:05
[SPEAKER_00]: And so it's sort of a win-win from my point of view either way.
56:08
[SPEAKER_00]: Um, the other kind of key themes this year, uh, I'm, you know, really interested, uh, again, in products that consumers are engaging in, interacting with and desiring.
56:17
[SPEAKER_00]: And so everything, um, from asset management offerings to snap markets, um, prediction markets, uh, in more perpetuals on chain, things that, you know, sort of plug in to, uh, that the most important foundational nature of crypto all very exciting, the fact that most,
56:34
[SPEAKER_00]: stable coins are all on layer one blockchains.
56:38
[SPEAKER_00]: I think was an incredibly strategically valuable thing that happened in a market structure element that I think is widely underestimated.
56:46
[SPEAKER_00]: And I know it's a broken record, but last but not least, the amount of innovation that will happen
56:52
[SPEAKER_00]: digital agents performing economic activity on behalf of individuals, families, businesses or even weirder organizations of software, I think it's almost impossible to predict, but I can predict that it will grow, that will find always on utility from that.
57:09
[SPEAKER_00]: And if you ask agents and AI systems, what the preferred form of money is, you can do this on your own.
57:17
[SPEAKER_00]: They'll tell you digital assets in crypto because the features going back to the very earliest point of our conversation or what are the capabilities you want your money to have.
57:26
[SPEAKER_00]: Well,
57:27
[SPEAKER_00]: AI has looked through all the history of mankind and it knows it doesn't want to use pearls or beads or physical artifacts or coins or paper money that can be inflated to death.
57:38
[SPEAKER_00]: It wants to use digital assets and so in that category alone and any one of those things kind of working out I think is very optimistic and so if you put them all together you know you can have a little bit of a maybe a scaffolding for how the rest of the year could go.
57:54
[SPEAKER_00]: Beautiful.
57:55
[SPEAKER_01]: Man, this was incredible and we are so grateful for the time that you spent with us today.
58:01
[SPEAKER_01]: Every sort of link or related information that our listeners need will be in the show notes.
58:07
[SPEAKER_01]: So go ahead and please click through there.
58:10
[SPEAKER_01]: But Nick, do you want to shout out any quick domains or Twitter accounts or blogs before we let you go?
58:18
[SPEAKER_00]: Thanks, Bryson Brenner.
58:19
[SPEAKER_00]: I appreciate the opportunity to come and share a little bit of our perspectives.
58:22
[SPEAKER_00]: Blockchain.com has been around for a long time.
58:24
[SPEAKER_00]: We've been serving the oldest crypto, OGs, to the newest ones, to institutions and everybody in between.
58:31
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58:34
[SPEAKER_00]: You can follow us on those handles on all social media as well.
58:38
[SPEAKER_00]: Thank you very much.
58:39
[SPEAKER_00]: Awesome.
58:39
[SPEAKER_00]: Take care.