Patrick Sells Interview - NYDIG's Bitcoin Solutions For Banks - BTC Savings Plan - Crypto Regulation

Patrick Sells Interview - NYDIG's Bitcoin Solutions For Banks - BTC Savings Plan - Crypto Regulation

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[Music] this content is brought to you by al grant which is building the future of finance al grant is one of the leading projects in the crypto industry it is getting significant adoption and investments this content is also brought to you by taxbit which is the leading tax service provider in the crypto industry i'm personally a tax bit user it makes it so easy to plug in my exchange accounts and calculate my crypto gains and losses so if you would like to learn more about algorithm and tax bit please visit the links in the description of the podcast and youtube video welcome back to the thinking crypto channel your home for cryptocurrency news and interviews with me today is patrick sells who's the chief innovation officer at nydig patrick great to have you on the channel thanks man uh great to be on and i love all the crypto hats you have back there i feel like i've got nothing but a boring white wall here well uh funny enough i got to tell you a quick story i recently interviewed anthony scaramucci and he roasted the hell out of me because he's like your background looks like you're a hostage and you should blink twice and need help so i took his advice and i decorated a bit so i appreciate it sounds like i need to apply the same advice well patrick um i want to learn about all the great things knight egg is doing with bitcoin and banks and uh a lot of my listeners and viewers as well we're you know i'm pretty excited to be speaking with you and i thought we'll kick it off with your background if you can tell us where you're from and where to grow up yeah you know um not really from anywhere actually i i moved about every two three years as a kid from l.a to london and everywhere in between but spent kind of the later part of my teenage years early adult years in rural indiana so i guess i'd claim indiana as home [Music] and what did you do before working at nida yeah about four years ago i got into banking for the first time i had started a technology consulting digital marketing company in college but always had a love of finance and how to think about new technologies and you know had met a bank called quantic and uh they were looking to really become more of a digital bank and at the same time a lot of my friends had you know started talking to me about bitcoin and cryptocurrency and it was something that i didn't really understand and frankly i didn't really want to do the work to understand i thought wow i wish i could just go to a bank and get a bitcoin rewards debit card or credit card and kind of the right opportunity came with this bank and so i moved to new york joined quantic as their chief innovation officer and set out on a path to figure out how to bring bitcoin and banking together wow um now along the way you mentioned some friends told you about bitcoin what was your aha moment where it clicked for you because some people hear about it you know it took me like literally like 10 times my friend kept telling me about it and i'm like whatever man don't talk to me about that and then i saw some articles and i saw about the price going up and then it had my attention what was your aha moment you know i think really for a long time it was just something that was new technology which i'd always had an interest in but i don't know that it really clicked until i got to nydig so when i was at quantic trying to figure out how to launch this bitcoin rewards card um which we did in the fall of 2020 we were the first bank to launch a retail bitcoin product nydig was our partner behind the scenes and so i came over to nydig and was able to here really get an understanding as to how to think about bitcoin as a form of money and what that really was about was being reminded of how to think about money i think that's something that's like so obvious in some ways that most of us just kind of skip or we don't you know take time to really think about like what is money and what how do i think about that and as i really began to understand kind of the fundamentals of money then really my the lights clicked and i realized that like money is bitcoin bitcoin is money and it's the best form of money and so that's really when the aha moment happened for me i think i you know began to then understand bitcoin the network and all the more just excited me and energized me to go you know to be in the space but yeah it was really about you know understanding money for sure um and i asked all my guests what they hold in their crypto portfolio i'm assuming you have bitcoin anything else that you're holding you know i i would fall in the camp of uh bitcoin maximalist um big believer in in bitcoin and so that's it's all i own um let's talk night date can you give us an overview of the company it's history mission and current services yes so our mission is financial security for all and we actually share that mission with our parent company which is called stone ridge holdings and i think part of how we see you know our role in creating financial security is by making bitcoin available to everyone um and so that's that's really our mission if you the history of nia dig as i mentioned we come from a parent company called stone ridge today we're one of three operating subsidiaries of stone ridge and and really the need for united was birthed out of stone ridge holdings own need you know back in 2014 2015 had begun accumulating bitcoin on our balance sheet and that wasn't very popular by institutions that looked like us at that time sure and got to a point where we didn't you know our auditors didn't know how to give us an audit or give us a clean audit because what's this bitcoin thing and so we asked them to help us go out into the market to find a counterpart that met our audit and regulatory requirements and we couldn't and so decided well we're not going to not own bitcoin and so let's go build what we need um and that's really how nida got started it was turned into its its own entity in 2017 and i'd say really from 2017 until 2020 nydig was you know served institutions that looked like us um you know we had built everything in-house from derivatives to custody execution liquidity and so we were we were really a white glove um you know services for bitcoin and digital assets um and about the same time what had happened is while i was at quantic begin realizing what now is the main thrust that i did which was we could take this kind of institutional grade technology stack and wrap it in apis and now go bring that out to other institutions in a way that enabled them to serve their customers and employees and so you know a great analog is thinking of amazon and aws and i know a lot of startups like to use that as an example but the reality is is amazon had to solve the the its problem at the biggest scale possible and only once they were able to do that they were able to then turn around and let others take advantage of that infrastructure and so very similar with naidig stoneridge had to solve the biggest hardest problem at his time which was how does a real regulated institution own bitcoin and once we were able to solve that realized okay now we can go and take it out and so that part of our business um still exists uh and is thriving we call it institutional finance and we're working in a way that's kind of one-on-one for other institutions like bitcoin miners or hedge funds family offices to use our technology and services for themselves the the much bigger part of united which is the part that's probably less understood is what we call platform solutions and really what we're doing there is embedding a wallet inside of a bank or a fintech or a merchant anyone so that they can have a crypto offering to their consumers um that's pretty incredible and you have some a very uh big partners as well that are helping to accomplish the services that you're putting out and i interviewed one of them from ncr can you tell us a bit about ncr and your other partners like li payment network and how you're working with them sure so you know in the world of banks and credit unions and there's about five thousand banks and about five thousand credit unions something that's not usually understood uh by the mass public is that they don't have control over their digital applications most all the time you know 96 97 percent they're renting software from a service provider like an ncr or an alchemy or q2 ally fis fi serve and they are dependent on them for the user experience and so as you know that's part of why the banking industry over the last decade was slower with innovation fintechs you know had built their own digital applications that they controlled and so if they wanted to add a button or a feature it was very easy they could just go in and code whereas if you're a bank or a credit union you can't just go in and code the software right right like you and i can't log into netflix and say well i want it to look different we're dependent on netflix and so what we as we began to build out this business we knew that ultimately to make this really easy we needed to get the take the financial institutions the banks and the credit unions that wanted to do something and leverage them towards their technology providers all those partners we just mentioned so that ultimately it would be built at the infrastructure level and not require coding it comes now you can now think about being able to have digital assets inside of a bank or credit union as turnkey as they could have mobile check deposit right that's what those partnerships enable so now you know a bank or credit union in less than 30 days can begin to offer you know a range of bitcoin products and services and i i find that strategy very smart to your point to try to go get these banks or uh federal credit unions to adopt new technology it's gonna be pretty hard right you're gonna run into some friction but if you go into the already infrastructure they're running on like ncr and allied and so forth makes it a lot easier that's pretty cool um yeah a lot of people innovating in this space you know don't realize that and so hey here's this really cool code i have and you go talk to a financial institution well even if they love your technology or what you're doing they don't have any easy way of making it possible right and so the lack of understanding has stifled innovation in the industry whereas i think what we'll see this year is probably the greatest wave of innovation in the industry um in terms of the number of credit unions and banks now doing something with crypto and it's because enabled it at the infrastructure level yeah absolutely um now speaking of the banks and credit unions there's reports that you guys are working with over 300 if not 600 from certain reports i've seen i would love if you can give us um the ballpark number and it seems like it's banks and credit unions which are uh spread across the united states can you walk us through that yeah so you know we've got partners from the 100 million in assets about as small as you could be as a banker credit union up to the largest banks in the country where we are today is i believe that when 2022 finishes we will have over a thousand financial institutions banks or credit unions live and the reason why you've maybe heard different numbers is in different interviews or media opportunities you know well what about next quarter or by this summer and so kind of going back to that conversation around the technology partners not only did the integrations have to get done but then you have to get slotted into your queue to go live with it and there's kind of a roll out process i think you know the other comment is this industry really works like a herd and once you've kind of triggered that herd everyone then you know moves forward because there's kind of strength and comfort in numbers and so you know it's not inconceivable to me that there's many more than a thousand institutions live by the end of the year a lot of that though will depend on the technology providers and their ability to spin up this many instances wow patrick listening to you say that a thousand financial institutions including banks and federal federal credit unions will be able to offer bitcoin services that as a bitcoin holder makes me very bullish um tell us about the services they will be able to offer to their respective clientele these banks and federal federal credit developments yeah so i i think what we've tried to do is enable this concept of you plus bitcoin and so for many the starting point is hey let's get a wallet embedded the way that cash app or paypal offers it so your customers can buy sell hold right and then from there we can begin to expand into a broader range of bank products plus bitcoin so hey you can have a bitcoin rewards card instead of getting cashback or points right really cool that was the first thing created and the rewards i was earning in the first couple of months i had my bitcoin card were one and a half percent at the time but today that's about 10 back there's no card in the country that's 10 off right or hey i have a savings account and i'd like to get the interest paid to me in bitcoin um as opposed to dollars and or lending you know being able to programmatically borrow dollars from your bank at low cost the way that you could today from a coin base but being able to take advantage of the ease and trust of your financial institution and i think all this is important because if we as we understand bitcoin as a network and the more users on the network the more valuable the network becomes if we think about it you know access to bitcoin or crypto really hasn't gotten that much easier despite all the conversation happening there's still only so many places you can go to and so what we're trying to do is to make access you know multiples uh more available by using your bank or credit union and then also by these products like rewards or interest for someone who's maybe not felt comfortable buying bitcoin before okay well leave your money in an fdic insured savings account and take your interest paid to you in bitcoin that feels like a very low risk easy way to get started whereas for people like yourselves who love bitcoin it just makes it so easy to programmatically kind of begin to accumulate bitcoin in all kinds of ways in your life without having to think about it wow um i love it and i could just imagine because i'm thinking about my own parents who i've helped to buy bitcoin but i had to do it right but if they went to their local bank um which is like a county bank or citibank uh not a national bank uh and they were pro it was proposed to them hey take some of your interest payments in bitcoin or buy some bitcoin i can imagine they would say yes and very easily so because they trust that institution and they're much older um and would those banks custody the bitcoin or are you guys providing the custodial services yeah great question and your example of your mom is what i've you know been able to hear just thousands of times and what's been fun is even from bank employees or ceos or board members who all of a sudden now they're excited to be able to buy bitcoin for the first time because it's easy and it feels comfortable and feels trusted um you know versus having to take a selfie holding up my driver's license and figure out what you know what i need to do um in terms of the custodian yeah so that's what nydig's role is right so we have we can think of us as kind of partnering as almost sister financial institutions but through an integrated mobile app so when you go into your bank you can custody your dollars with your bank but then you can custody your bitcoin with nydig and so nydig is the provider because the legal provider and the the actual custodian and all those relationships um that's just amazing and it sounds like the rollout will be happening well a lot of these branches because i've seen some news items you know this uh credit union or this little bank uh via nydig uh is able to launch these services so the robot's gonna be happening a lot this year yeah there's probably one a day at this point uh we've had some days with two or three banks or credit unions going live and into production and i think we'll just see that continue to increase you know the number of fis per day going live very exciting time now a question i want to ask you and it's also a bit broader because we saw the fdic chairwoman if i'm not mistaken she was talking about uh helping banks being able to hold digital assets and being able to provide a federal insurance um service i if you want to call it that for that because right now they they do provide the fdic and insurance uh for cash so uh does that play come into play in any way and in magnitude of of the crypto regulations that we are maybe waiting on anything you can shed light on there yeah you know my sense from conversations with regulators and our partners is at a kind of meta level two things are happening one is a recognition that a lot of things taking place in the crypto ecosystem are probably being done illegally um you know i i'd comment here that there's this sense that crypto's not regulated and i can understand that view but on the other hand i think when you think about money in this country there's very well established precedent as to is this thing that involves money and everything is fits into one of three boxes it's a security it's a commodity or it's legal tinder fiat and crypto's obviously not fiat and so then is it a commodity or security and without going too down far down that rabbit hole i think a lot of things are being done in a way that isn't legal and we're seeing increased you know focus there from the regulators and so they need to stop all of that but in a way that doesn't cause adverse or systemic you know failure or losses to american custom consumers at the same time a real recognition that blockchain is a incredibly powerful and disruptive technology and it's not going anywhere and in order for real institutions to feel comfortable about betting here and investing here and rolling out products you need really clear rules and so one sense it's how do we and we want and they want america to lead innovation here the way we led the internet and so one sentence we need to quickly stop the bad stuff and put in clear rules but at the same time we don't want to do that in a way that comes at the expense of americans um and so i think and all of that you kind of bring it down a level what's what's happening now across the various regulators and the regulatory bodies is okay how do they or how do we collectively think about what's happening and what is this thing and once we can agree what it is then it becomes really clear who should regulate it and what rules apply for it and so i think you know what we're going to see and we've seen is this continued emphasis on the maturation of that apparatus so that institutions can go forward um and i you know that's something we get asked often about well what about insurance for bitcoin and crypto and the reality is while there is a you know a nascent in insurance market it's not really tested uh indicate in the court of law or how it plays out and that is i think one of the the shortcomings in the industry today but i know ourselves and others and the crypto ecosystem are working on figuring out how can we build something there for people and so i you know i would like to believe and hope that there is a real insurance solution whether it's private or government uh you know sometime in the next 12 to 18 months for sure um and i think we're seeing at least some progress where more members of congress are becoming bitcoiners or they're buying bitcoin i think just ted cruz just did um and and the center senator cynthia lummus has been a holder bitcoin so you know it's great to see members of congress coming together both sides of the island hopefully they can get all these things worked out and and bring some clarity to um the market not over regulate like you said light touch but clarity what what can banks do what can they hold what's where the guard rails so on and so forth um i want to ask you about the news we got in december of your nid's one billion dollar funding round can you tell us about that and who participated and as well as how will the funds be used moving forward sure you know great testament to the to the knight business and the team here to have that type of raise happen and the vote of confidence i think core to our approach around raising money has been to raise money from strategic partners or people that we're doing business with that share a long-term view of the ecosystem you know those of us that have been around in crypto for a while you can remember the days of 2018 in the bear market and i think thinking okay yes there may still be some chop in the water ahead of us but ultimately there are real institutions and companies that are betting big in this space and we want to be partners in the long run and so the majority of that money came from the partners that we have you know companies like fis and fiserv new york life mass mutual the fintech affirm you know the buy now pay later guys mini banks and and credit unions and others kind of across the ecosystem as well as the the lead in that round has been a great partner of ours uh wescap who led the round and so um as we think about okay now what are we doing with that billion dollars we've just raised it goes back to kind of the analogy i shared of our origin and history and amazon and aws now we've built this thing and we've built it into the infrastructure at the infrastructure level of the financial system both in america and globally and now we need to bring that to life right and so how do we stand up a thousand banks you know that type of fintech adoption has never happened before ever in in history and so it's at a scale that's never been done that requires a lot of people and a lot of bodies as well as i think ultimately part of our role is to help provide education and be a trusted voice in the ecosystem but you know the other and the other comment i'd give you is we think about the united business and where we're going and this mission of financial security and bitcoin for all the banks and credit unions are a very important vertical that we are focused on but we also see the opportunity to do similar things and all kinds of other verticals and really do make bitcoin available so whether that's corporations merchants at payments uh payments companies and so part of it's also to build out of additional verticals and new product use cases for sure yeah i can certainly see uh other industries needing the same infrastructure that you're providing to banks and credit unions um are is there plans to go beyond the united states so you know late last fall we announced the acquisition of a lightning payments company called bottle pay bottle pay is based in the uk um and that was intentional both for the technology and the team uh that bottle pay had put together but also our plans as we begin to think about really what's needed at a global level so you know right now largely focused in the u.s but our eyes on the world and i think as we get go through 2022 and 2023 ultimately we know the way to create financial security for all is by bringing bitcoin to the whole whole world and plan to be active accordingly now are going speaking of going beyond bitcoin um are there plans to eventually offer other digital assets aside from bitcoin yeah so i think the way we think about that is this kind of philosophically believe that bitcoin is unique and different amongst the in the digital asset world and in particular the role it is playing and will play in the financial future i think commercially we have chosen to say we are regulatory first you know fundamentally we see this as an equal parts exercise in regulations as technology and i think that's a bit unique to naidig and the ecosystem and at a platform level we're agnostic so the way that i kind of would translate that is knight today does actually support more than just bitcoin and our institutional business not in our kind of b to b to c business or platform solutions world but as the regulatory clarity comes to other tokens and are they being done what is it is it a commodity is it security and is it being done legally once we have that clarity then we would make the asset available on our platform and then partners of ours could choose to say we want to enable that or not as an offering to our end consumers and so i think with the rate of kind of focus and build out we're seeing from the regulators you know very much envision a world where we will be able to uh make available a couple of other digital assets this year that could all change but you know that's kind of what we're planning on yeah uh that's exciting i can't wait to see um and as you mentioned certainly the regulatory clarity is needed there around you um many of the all coins um tell us about the announcement we heard i think it was just literally last week of the bitcoin savings plan and the ability for companies to easily auto transition salaries and things to bitcoin that's pretty exciting yeah uh very exciting this was actually something i began working on really during day one on the job uh and so to see it come to life has been exciting you know what realized was look people and we've seen it a lot in the news from celebrities and athletes you know taking part of their pay in bitcoin and thought okay let's create a solution that works for corporations to feel good about what you know they're doing and so what it is is a optional benefit that allows companies to say to their employees hey you can take a percentage of your you know your net pay and automatically allocate it to bitcoin you can change what that percentage is at any time you can stop it but it's an optional benefit it's a really easy way for a company to say okay here's something we can do and i think it's important because when we look at consumer research and the stats people are very much you know willing to take have the same job in the same pay but would do would switch companies for one that offered you know bitcoin payroll as part of the compensation package um and also you know you know with how tight the labor markets are allowing companies to have something new and innovative is important and it's also just a great way that at the end of the day like why 401ks work for us to save money and hsas is you're taking away the friction of having to make a conscious decision on payday and you can make one decision and then kind of forget about it and that's really what you know trying to do here as well is help people begin to allocate you know part of their compensation to bitcoin yeah i love it uh i would certainly do that um if i had that option even years ago i would have been allocating um and is this available to pretty much any company that wants to opt in or are there any stipulations you know public private things like that yeah no we have companies that have i think three employees signed up up to companies that are hold hundreds of thousands um and the way we built it is that it doesn't require an integration and so it's very very easy to roll out especially if you're a small company that's one of the things you know here often well how hard is it going to be or what if i don't have a you know a super large hr team but then you hear similar kind of concerns at really large companies which is well whoa how am i going to roll this out and the reality is it takes no time and it's very easy to do and so any kind of company public private any size non-profits you name it can use the product for their employees and would it be similar to how your currently set up with the banks and credit unions where you're custodying the bitcoin for their respective users or is it a different type of account no exactly right you know kind of going back to this concept as bitcoin as a service or an embedded wallet what we're trying to say is hey company here's an embedded wallet that you can make available to your employees it's all powered by nydig and takes advantage of then i dig you know we use a 100 cold storage custody solution and the institutional grade platform we built is what's being leveraged and so we are the custodian and there's a lot of comfort in that but making it really easy and seamless for the company and the employees now you covered a lot of the things that we can expect this year but i did want to ask anything else on the 2022 roadmap that you want to give any hints on you know one of the things that i'm spending a lot of my time on and it's excited about is what we're doing in the rewards and loyalty space and so really kind of our our case study of this was landry's largest privately held group of restaurants from morton's steakhouse to bubblegum shrimp and a bunch of you know chartwell and ocean era and when the streams of landry's is their loyalty program i think they have around five million members in it but you know if you think about a loyalty program the value that your points get for you really never go anywhere but down or maybe stay static at best and so if all of a sudden now you can take your points and have them denominated in bitcoin versus dollars um really powerful for the the bitcoiner those of us that understand it but again it creates a really low friction point for someone to maybe own bitcoin for the first time or to experience bitcoin for the first time uh by saying hey i'll take these points i have and convert them to bitcoin and for the company it's super powerful because now all of a sudden if you think about like boundaries or any restaurant or you know loyalty program you're a part of you don't have a lot of reason to log in every day right like unless i'm using it i'm probably not going to log into it but what we're seeing is that okay you put bitcoin there and the price of bitcoin and this concept you're logging in every day now and that's so important from for a business to be able to stay top of mind to their consumers and so really fun to be able to kind of innovate in a world where you can use bitcoin to drive a traditional p l strategy um and that's so that you know when you there's all kinds of extensions of it from rebates and gift cards and rewards and bitcoin and i just think you know tremendous opportunity to make bitcoin available to more people and really powerful from a business perspective so you can see you'll see a lot more coming from us and new partners in that space yeah you know just thinking from the business side that's a great retention and engagement play i think even paypal had uh reported when they had added crypto services they saw their traffic and return traffic uh really increase significantly so love that and like you said some of those rewards nothing happens to them no one cares but now they have a reason to care which is awesome yeah i log into my landry's app every day now to see what the value of my points are and we see that happening with landry's user base the bitcoin rewards member is multiple is more engaged than the non-bitcoin rewards member for sure um okay let's switch over to the crypto market at large um i want to talk about a bitcoin's adoption we're seeing corporates putting on their balance sheet you guys are helping banks and credit unions offer services around it there's a bitcoin mining boom in the united states after the china ban and uh el salvador has made it a legal tender we're seeing bills being introduced by states looking to make it a legal tender what is your take on the growth we're seeing and do you see the uh continual growth you know this year and next year and so forth yeah you know so one of the analogies i think helpful to think about bitcoin is not only do you have this tremendous form of money but it's built on network network and network theory and when we look to okay how do we understand the value of any network you can use metcalf's law which tells us that the value of the network is directly proportional to the number of nodes on the network in other words how many users not about super users or not is just simply users and so when we think now about okay what are other networks that we've experienced i think airbnb or uber are great examples i remember when airbnb started and i wanted to go on vacation to the bahamas and there was like one option and it didn't quite look like it fit what i was looking for right and that was true for a lot of us but now you log into airbnb and you look at the bahamas and there's a hundred options right and that more likely now that we'll use it and once you experience it maybe you're more likely to put your home or a room up on airbnb and now airbnb has more listings than the top seven hotel companies combined right it's an open network and so we think about bitcoin and what's happening at either an institutional level a country like el salvador access in america what we're really doing is adding users or nodes to the network and that's what's driving the growth and the value in it and what we know about networks is they kind of hit you know a certain velocity when they just take off right and now uber is everywhere airbnb is everywhere and so i think as more users and this is what the beauty of bitcoin is is as more users get on the network every participant in the network benefits because the value of their bitcoin is going to go up and so i think as that continues to happen and access is fundamentally made easier we're just going to see an even more rapid expansion of adoption of bitcoin around the world now on that note um not asking for a price prediction but rather do you feel we are still in a bull market cycle given bitcoin's pullback but we're seeing a bounce now any thoughts on uh the outlook for 2022 yeah you know obviously that's the the a million dollar question in many ways um or a million satoshis i think there's obviously speculation and leverage in bitcoin today i think that what will happen is as more users get on the network the impact that that speculation or leverage has will continue to compress and we'll see a more stable price and also a continually growing price now there may be things in the market from regulatory actions that causes things to set back or broader market economy things happening that affects all assets but ultimately it's hard for me not to envision a world where bitcoin doesn't have its best year ever in 2022 sure um what are your thoughts on nfts and the markets well i should say the nft market booming it's certainly a branch off the crypto asset class and wouldn't i dig you know are you guys thinking about nfts exploring anything there it's great question i think the idea of nfts is a great use case as to the power of blockchain technology and being able to assign have ownership in a digital world um and so i like a lot about nfts i think that being said there's a lot happening today in the nft world that like makes no sense to me uh and i struggled to really get it but you know whatever we'll figure it out as we go um i think in terms of knight eggs role it's something that we're looking at i mean our heritage is that of financial services and we're focused on you know financial security and so i think part of the lens by which we look at everything we do is how does this help create financial security and i think we look at bitcoin and very clearly say yes that makes sense you know being in the business of you know digital ownership may not be the thing for united may be the thing you know i think we're open uh but not something that we're actively focused on largely because it's not super clear yet how it aligns with you know our mission as a company yeah for sure it's still in its early phase and i myself still don't know what to make of it and you know i i don't want to buy a board ape but i do believe in the technology um of being able to show digital ownership but where that goes you know beyond bored apes and ninjas and whatever it is we'll see yeah exactly um what are your thoughts on the metaverse you know a lot of folks have different opinions i personally believe we are in metaverse 1.0 because a lot of our identity is already online um but as far as creating worlds where we can go in from a vr standpoint or oculus whatever it is i guess that's what's being built now but what are your thoughts on it you know i actually probably uh got interested in vr before i did crypto um six or seven years ago i began to actively explore the space and was just blown away by what i experienced and learned and realized that in many ways i think vr ar holds the same transformative power that you know the the printing press did as a really another means of communication another dimension of communication uh so i i would say i'm very enamored with and uh focused on the technology of it i think metaverse is a pretty and well done rebranding of kind of a messy internet world we live in today and trying to recast all of that in a more aspirational exciting innovative space i think many of the largest internet companies you know have gotten hammered over data and privacy and the stuff that's happening on their platforms and so let's use this as a chance to say hey kind of forget about all of this let's focus on where we're going that part feels like very creative branding uh and not wrong because i do think that's where the world is going um you know in terms of what to make of it a little bit harder to tell i think so much of what you know is going to be required is ultimately how is that technology distributed to us as individuals right and as that gets easier and takes new form factors i tend to think that will be the key for the quote unquote metaverse coming into all of our lives um in some of the possible scenarios that folks have been talking about could you envision um a metaverse virtual reality version of certain stores or malls and you're essentially walking through and you can go shop and you can buy things with bitcoin um and other digital assets do you think we'll eventually get there at some point yeah you know i i do when i don't know like going back to my kind of story i remember six or seven years ago being at a vr studio uh content creation studio and being able to walk into you know a store and look at different outfits and say like i want that and now it just gets it will get shipped to me you know obviously there's something about that that's deeply attractive and exciting but you know it's been seven years and that's no really more easily done today than it was then so i do think a world like that happens in terms of using bitcoin or digital currencies to make the a payment or a purchase i think that happens as well because i think money is becoming digital and so it only makes sense that the two things go kind of hand in hand but i don't know that the metaverse uniquely drives crypto payments or bitcoin payment any more than just what's happening naturally i think one of the things that we have to you know think about is for all of the advancement in technology and the wonders of it like at some level how do we want to think about ourselves in terms of being cyborgs and how much of a cyborg do we want to become right like i was thinking about this other day a cyborg is nothing more than part human part computer and i don't know my mom's phone number i am completely reliant on a computer right and i don't know how to get to the airport i'm completely reliant on a computer and that's made my life more efficient in many ways but i think there's just this kind of kind of meta question no point there of like how far do we want to take that uh and i don't have an answer for it but i do think it's one thing we have to as a society figure out as we think about what's coming yeah absolutely and i've i've honestly thought about what you're saying because i grew up i was born in the 80s i grew up in the 90s before the internet was a big part of my life and i remember how to get to a place with directions that i we had to actually remember phone numbers now it's gone i can't it doesn't i go to my phone and and you know we trained our brains to to behave in that way exactly and there's good things about that but there's also like okay that could become a runaway train and what is the best thing for us as humans is a is a deeper question for sure now since we're talking about uh digitization and the token economy and and all these things we see central banks around the globe are building central bank digital currencies or taking a blockchain tokenizing the fiat on top of it what are your thoughts on this uh seems like it's inevitable they're all building it and will it be complementary to crypto you know to pick up on your word inevitable i think if we look at our lives in the last 12 months probably 99 of the money that you or i were either paid or spent was actually nothing more than pixels on a screen and so the reality is is we live with the digital dollar today but if you take off that user interface you have this very complicated and antiquated system powering that you know we have trucks and vaults and all printing presses and all these things and so okay could if we've already adopted this concept of a digital dollar practically could you now recreate that in a far more efficient way underlying it i think the answer to that is yes and like that just makes all the sense in the world and is exactly what's happened with technology and innovation over the last several decades and so i do very much think we'll have a digital dollar um in terms of what it means for crypto i don't you know i i don't think it's really that's just a more efficient way of having fiat and today we have fiat but like i still denominate my life in bitcoin and i still want bitcoin because ultimately i see it as a better form of money than fiat um but you know so i don't see the digital dollar replacing bitcoin any more than the dollar today replaced bitcoin or stopped bitcoin from happening and so i do see a world where both fiat and bitcoin coexist and that's especially true probably in countries that have strong central banks and economies whereas countries like el salvador and many around the world for billions of people their you know their central bank currency or their local tender is not a very good form of money at all and so it makes all the sentences in the world to say forget about this let's just go and use bitcoin yeah absolutely um and do you feel that um and this is that's probably a tough question the term hyper bitcoinization um maybe that's already happening i i don't know you know hindsight is 20 20 but looking ahead and what what's happening right now do you feel that we're gonna see some other countries follow el salvador's move and like you said some some central banks may be holding bitcoin in their balance sheet the same way they hold gold uh and and could that be the spark of hyper bitcoinization i don't know if i articulated that well yeah now i heard you're saying i think every time something like that happens it gives comfort to others to do something i don't know that any single instance in and of itself results in the hyper bitcoinization because again i go back to a network networks aren't driven by super users so it's great that a corporation will buy a billion dollars of bitcoin or a central bank will put it on its balance sheet that symbolically represents and means something very very important but that's actually no more valuable to the network necessarily than the person who buys a dollar's worth of bitcoin for the first time right now i think where you know kind of that breaks down a little bit is the reality is if you have a friend we all have friends in our lives who are more influential than others and if that influential friend is the one who went on airbnb for the first time of our friend group it's much more likely that the rest of us join airbnb and so i think the role that you know el salvador has played or tesla or micro strategies that they act themselves isn't more valuable than the person buying a dollar but the influence they have on bringing others to the network is incredibly valuable but again i think what why where in bitcoinization or the hyper victimization will happen is again less about any individual node and what it's how easy or not is access to the network and that's really what the focus needs to be on to bring the world that the financial world that we all many of us want it's we have to make access more possible and all kinds of ways um you know i've never heard anyone break it down like you did there um but thinking of it is the the person holding ten dollars in bitcoin um as well as the person holding a billion dollars the network effect and um one might be more influential than the other but it regardless you need both of them and yeah yeah mathematically they have the same value a billion dollars in a dollar makes no difference to the network you know in and of itself but again there's a different level of influence to bring others onto the network and that is important uh and a very important role so i think you need both access to the network but also influencers if you will or examples as hey look you can do this too i'll kind of figure out the hard stuff first which is how does a country roll it out how does the central bank go in it how does a corporation own it how does a pension own it how does an insurance company own it you figure out the kind of zero to one stuff and then it makes it a lot easier for everyone else to follow all right i want to hit the wrap-up questions here got another metaverse question for you if you were to create your own metaverse what would the theme be about that's a good question um i love art and music and the how they inspire different emotions and so i would probably build something around the two of those and how do you bring them together and not just in sight and sound but in feeling and physical feeling how to use the electrical stimuluses and if you know to create certain moments um and so i think something in there is what i would go build how about yourself uh you know i'm into space and sci-fi i've talked about wanting to do something star wars related i know it's kind of nerdy or blade runner 20 20 49 type of world like that um not not too dystopian obviously but just i guess the architecture the the uh the flying cars things like that that that would kind of be my thing uh rapid fire questions favorite food uh anything spicy anything with goose pepper in particular favorite musician or band i don't know that i have a favorite musician or band i truly love music and poetry and lyrics and so i love to listen to all kinds of music because i like the way you know different genres and artists weave words together and so it's really just a love of poetry and music more than any particular artist or genre uh favorite movie um good will hunting is what usually comes to mind um love how the characters were developed and played out uh and so much what that story is signaling one that i watched recently i really enjoyed was coda c-o-d-a uh children of deaf adults i just found it deeply inspirational and positive uh i love goodwill hunting one of my favorite movies um favorite book uh you know i love a lot of books here as well i think one that's always had an influence well it's one one that was very influential was when money destroys nations gave me a really helpful way to think about money and history and what is happening around me um i also really enjoy uh the ultimate hitchhiker's guide to the galaxy it's kind of a classic throwback uh and figuring out that the answer to the world is the number 42. very cool and you may have answered this but you know when you're not working at night dig what are you doing for fun as a hobby uh well like bitcoin 24 7 life at night right now is a pretty 24 7 lifestyle uh hobbies i love to run and i also love to shop uh i love just seeing creativity and art expressed through clothes and jewelry and shoes and just the different takes that people have on it awesome patrick pleasure chatting with you thank you so much for joining me today next time it's been great really enjoyed it [Music] foreign

2022-02-12 23:24

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