The Pomp Podcast - Will Reeves, CEO of Fold Inc: Scaling Bitcoin and Solving Merchant Issues with Pizza

Episode Date: November 25, 2019

Will Reeves is the CEO of Fold Inc. and Lightning Pizza. In this conversation, Will and Anthony Pompliano discuss the lightning network, consumer products, how Fold is driving mainstream adoption, what they've done to solve merchants' issues with accepting Bitcoin, why Lightning Pizza became so popular quickly, and of course, aliens. BLOCKFI-----BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. CRYPTO.COM-----Crypto.com is a pioneering payment and cryptocurrency platform that seeks to accelerate the world's transition to cryptocurrency. With the vision of "cryptocurrency in every wallet", the Crypto.com App offers a full range of financial products with competitive pricing, well designed UX and high security. It is the best place to buy, sell and pay with crypto. COINMINE-----The Coinmine One is like an Xbox that turns your electricity into Bitcoin. You just plug it in, connect to wifi, and tap on the crypto you want. It’s so easy anyone can do it. Everything is controlled from the Coinmine mobile app and the Coinmine keeps getting better with over the air updates that add new coins, features and services to your Coinmine. Visit coinmine.com/pomp to get a Coinmine and earn crypto for powering a new world. ETORO-----This episode of Off the Chain is sponsored by eToro, the smartest crypto trading platform, and one of the largest in the world. Join 11 million other traders and create an account at etoro.com and build your crypto portfolio the smart way.

Whoa, before we get started, I want to go over the four sponsors for this episode who make all this possible. They're fantastic, so go show them some love. The first is the best URL in the industry, Crypto.com. They're a crypto platform with one goal, driving mass adoption. That's why we're all here, right? To get every human on earth a digital wallet and to get them using digital currencies. Crypto.com is helping people do that through buying, earning, lending, and a new card payment. Everything you could want is at Crypto.com.

They've been longtime supporters of Off The Chain and recently announced a new exchange. So go help them out, download their app from the App Store, or visit Crypto.com and tell them POM sent you. There's nothing better in the world than a company helping to drive global adoption of this new technology. Another part of global adoption is making sure that we secure the various blockchains with computing power. CoinMine has built the best consumer experience in mining. Hands down, no competition. If you want to help secure the blockchain and get started in mining, you can go to coinmine.com. Order a CoinMine, it'll arrive at your door, and you simply take it out of the box, plug it in, and connect to your Wi-Fi.

You'll be mining your favorite crypto in five minutes or less. It is honestly magical. I have one running right now here in the office, and it's super quiet, it's got no heat, and every person that comes in the office asks, what is that? Every single person asks. It's a CoinMine. The best part to me is that the CoinMind comes with a mobile app that's super slick and the company continues to push over-the-air updates to the device that add functionality, add tokens that can be mined, or increase the efficiency of the device. Similar to how Tesla does car software updates over the air, CoinMind's sending these passively to thousands of CoinMinds around the world on a periodic basis. Pretty damn cool.

When Farboot and the team pitched me on the idea of an Xbox or PlayStation-like box that could mine cryptocurrency in your home, I was immediately sold. I invested in the business, have a device personally, and keep telling people to go to coinmine.com so they can save a lot of time if they want to get started mining today. And CoinMine has a partnership with our third sponsor for this episode, BlockFi. BlockFi is one of my favorite companies in crypto because they allow users to deposit their assets in a deposit account and immediately start earning interest. Think about it. If you keep your digital assets on an exchange or in cold storage, you aren't benefiting from any yield on the asset. With BlockFi, they allow you to deposit crypto and then get paid interest on a monthly basis in crypto. Deposit Bitcoin and want to get your interest payment in ETH?

You can do it. Deposit Bitcoin and want to get your interest payment in Bitcoin? You can do it. The rates at BlockFi are currently some of the best in the industry. You can earn 6% interest on Bitcoin and you can earn up to 8.6% APY on GUSD deposits. I'm an investor in the company and think BlockFi is building really important and compelling infrastructure.

So go check them out at BlockFi.com. Again, that's BlockFi.com. And that brings us to the last advertiser of the episode, eToro. These guys have absolutely crushed it over the years. Their founder, Yoni, was one of the original Bitcoin OGs and has been ahead of almost every trend in crypto. He built eToro to help people buy, sell, and trade cryptocurrencies, but he added a few twists, social trading, copy trading, and virtual trading accounts. Social trading is a feature where every asset available on the platform has its own separate social feed where people talk about the asset, share trading ideas and analysis, and even include various charts or graphs. Virtual trading accounts is targeted at beginners. If you're just starting out and want

to try trading with play money, eToro will give you a virtual account with $100,000 in it to test, learn, and get comfortable. And so then that brings us to copy trading, which is by far the coolest feature. This allows you as a user to select any other user's portfolio to copy. If you see someone on the platform you like, you can set your account to mimic their trades. They buy Bitcoin with 5% of their portfolio, your portfolio buys 5% Bitcoin. They sell 50% of their Ether position, your portfolio does the same thing automatically. Copy trading is awesome, so go join the 10 plus million other traders on eToro and start trading all the most popular cryptocurrencies today. They're one of the largest companies in the space, and you can get started by going to

eToro.com. Again, that is eToro.com, where the entire team is ready to get you started in just a few clicks. And don't forget, go subscribe to the Off The Chain daily newsletter. You can go to offthechain.substack.com. I write a letter of news, analysis, and opinion every morning that goes out to more than 40,000 investors. See you there. What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Will Reeves is running FoldApp and Lightning Pizza, along with helping out at the Venture Studio Thesis. In this conversation, we discussed the Lightning Network, consumer products, how Fold is driving mainstream adoption, what they

have done to solve merchants' issues with accepting Bitcoin, and why Lightning Pizza became so popular quickly. Will also spent some time embedded at SETI, the Search for Extraterrestrial Intelligence, so we had a nice chat about aliens as well. I really enjoyed this conversation, and I hope you do as well. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion.

This podcast is for informational purposes only. All right, guys, I'm super excited. Will's here. You guys have built probably one of the most popular applications on Lightning Network and have a whole bunch of cool backstories and kind of views on the world. So thanks so much for coming in and talking about all this. Pomp, it's good to be here. Happy to talk about full Lightning.

I think we're going to have a good time. Yeah, for sure. The other thing before we get started, Will told me that he got engaged last year. And so we were swapping notes on the wedding planning, which is now going to become a thing in my life. So we'll see how this goes. It's important to share what you learned coming after you. It's an adventure, so happy to share. Most adventures in life I look forward to.

Describing wedding planning as an adventure, I don't know about. We'll see. It's one that you're going to try to hide from, but you've got to take it head on. All right. Let's talk about your background kind of before you got into crypto, Bitcoin. What were you doing kind of pre all that? So I'm based out of California. I've spent a lot of time down in Silicon Valley. My main focus has been building companies in payments, retail, consumer space. Started a company, building payment processing, kind of subscription stuff, and then moved quickly into building out systems for Google Store to launch that. And so I had a really wide variety of building companies myself, being embedded in some of the large Silicon Valley stuff down there that I've got to learn quite a bit from.

But really coming to Bitcoin was one of the best decisions I could have made. For sure. You remember the first time you ever heard about it? Oh, yeah. I was living down in Argentina. uh i was down there for about a year and there was a family party at the at the family that i was staying at and and uh one of the cousins uh was a security engineer down there and this was maybe 2011 or so um and he was telling me about this thing called bitcoin and he was he was uh

extremely bullish on it uh very early on and uh that was pretty much the first time i heard about it now he i've since kept in contact with this guy uh you know argentina's gone through a couple defaults since then and uh he not only has weathered that storm but uh come out uh uh pretty well and so like the idea bitcoin safe haven asset uh in turbulent economies was just a use case that just hit me right over the head yeah we had uh camilla russo who's writing a book on ethereum she was a reporter at Bloomberg, kind of 2011, 2012 timeframe. And she was one of the first people to talk about Bitcoin at Bloomberg because she was covering the Argentina markets and a bunch of traders and everything. They were talking about it. What was it like living in Argentina?

Let's see. Oh my God. It's a crazy city. It is one of those places that is a little bastion of Europe in the middle of Latin America. I had no idea what was going to be there. And so of course i land in a house full of tango dancers and so when you get into a situation like that you're going to see the heart of of argentina and so uh i had a pretty incredible experience hope to go back soon yeah that's awesome um and then so living argentina hear about bitcoin don't do anything at the time no this is just starting to follow it uh you know uh kind of from a curiosity standpoint um i came back and you know i had some other experiences you know i'm i'm from uh, Sonoma Valley where we had a big migrant worker population and I was active in building

out service, local services for them, housing, legal aid. And so we would bring people in to talk about, you know, uh, uh, and provide new services for these migrant workers that are coming in that are typically not paid attention to. And we had one guy come in and present on Bitcoin as a remittance tool, uh, which again was one of those things that, okay, borderless payments uh unstoppable you know censorship resistant use case and uh it was another one of those is like okay it's coming up again this is this is rearing its head and so it took about three or four major moments of experiencing it before i started to um not only basically put started put skin in the game start to follow it not only from a kind of intellectual standpoint

but uh start to follow the development and uh take a deeper look for sure and then so as you're going through that you're obviously paying attention to building payment technology etc at what point do you decide like hey maybe actually i want to go build in the space so the about two years ago is when i actually dove in and was actually starting to build uh before then i had been building uh peer-to-peer marketplaces how can you take two strangers bring them together and exchange a car exchange a home so essentially how do you have a big bag of cash and a very expensive asset and bring two people who don't know each other together and somehow come out with a happy transaction on the other side and of course there's issues of trust safety

and when you look at just even the payment tools that we have at our disposal most of them aren't necessarily built for that they're they're built for an intermediary to be there and so So there were a, you know, I would constantly be working in payments and retail, start to see the bounds of where, you know, our existing infrastructure kind of doesn't support these use cases and kind of starts to fail. I mean, I think it works in a lot of cases, but in some things, global transactions, trust based peer to peer payments are some of the areas where it was immediately clear that Bitcoin or technologies like it could present new solutions that would open up new opportunities,

new industries. And so I started to really focus on that. Got it. And then maybe talk through a little bit kind of the idea for Fold and how you guys got started and what that original vision was like. Yeah. I mean, so, you know, Fold really started off as Bitcoin is growing. There are more and more people with it. And, you know, when they have this, the idea is to show its use cases in the real world, you know, besides just, you know, hodling and which is essentially a private action that takes place kind of on an individual level. There was, you know, an idea of, OK, what other use cases this, you know, and so payments was a thing that people talked a lot about, you know, got to buy that coffee. And so Fold was originally built to enable someone to spend Bitcoin and get

their coffee. And so, you know, the success of that originally was that it provided a new social moment for Bitcoiners to show people around them in a real environment. Hey, look, I'm using this in the real world. It's a real thing. It's tangible. And for a lot of people trying to wrap their heads around a new asset, a new type of money, a transactable currency is something that's important to them, even though, you know, what we've come to learn is that the narrative has gone much farther with what Bitcoin can do and be. And so, you know, besides the ability to show, hey, friends, I just bought my Starbucks. We quickly learned that, you know, the as Bitcoin stood was just not going to be a transacting layer on on chain. Ten minute confirmation times means

that you're going to piss a lot of people off in the Starbucks lines. You know, high fees, depending on congestion, five dollar fees on a five dollar coffee. It just became obvious that that everyday transactions and small payments were just not going to happen on chain and so we knew that we had to kind of evolve with the narrative of bitcoin move with that and that layer two is where really where this use case was going to grow if it was going to grow anywhere and and so i guess the key piece to all of this was like in the early days of bitcoin like how did people actually you know drive adoption it was literally hey pull out your phone or get your computer let me get you a wallet and i'll give you some bitcoin yeah right it was this kind of

virality of money if you will uh was how a lot of early bitcoiners came into the ecosystems they heard it from somebody then that person said let me give you some uh and so it's a form of skin in the game ricks now have this asset that i own that has monetary value to it people pay attention and then you're hoping that they then meet somebody else tell them about it and then they go ahead and they give them some bitcoin and it kind of you know goes on and on and on and spreads to eventually millions of people. Right. I mean, what we what we've seen is, you know, that that moment of that giving moment had both skin in the game that you actually got people holding the asset, which is number one. What we've come to learn is one of the most important hurdles to

get over. Just give people some Bitcoin, give them some ability to watch the price action, watch number go up, watch it go down and start to harden them in that way and just build their curiosity about that. The other part is early days Bitcoin. It was it was a friend showing another friend so there's this other element of a this net viral network of trusted um uh um you know friends family that were just kind of spreading this gospel spreading this word and so it had this um viral element but also this kind of built-in trust with having someone you knew refer it to you and it was kind of a secret that was being told to you and so it had this you at that point, there's limits to how much that style of virality can grow. And so what we've

done at Fold and what I've been trying to focus on is how do we expand these ways of mimicking this virality? And, you know, ultimately is what we've seen over the past years is people tapping into existing industries, existing mechanisms of essentially money transfer and start to flow that into Bitcoin. And so for us, rewards is a big thing. If all the rewards in the US were instead of being distributed in airline miles and points given as Bitcoin, 16 million Bitcoin would have been distributed to people in the United States alone. So we start to see how we can take these existing behaviors that people do every day and kind of rework them in a way that doesn't make people change their behaviors, but gives new flows of Bitcoin to distribute it to more people

in shorter amounts of time. Yeah. And really the way that I think about kind of the adoption of a lot of this stuff is when people come in through price speculation, right? So price is going up or going down and people are coming in because they look at it as a tradable asset. That's a very different track or path to follow. And you come at it from a different perspective than if I earned the bitcoin or somebody gave it to me and i under with the understanding that it's money and i'm to spend this at some other point right and so i think a lot about like if you bifurcated the bitcoin adopters today let's call it 70 million people right one percent of the world's population give or take what percentage is the speculators right and here is hey this is a trading asset

versus the people who are here to use it as a currency and a purchasing mechanism, I think we would all agree, like, there's a lot of speculators, right? Oh, yeah. And the work you guys are doing, it almost feels like, one, you're trying to bring new people in to have them come in as that, hey, this is money, this is payment technology, et cetera. But two is you actually can pull some of those speculators over and kind of have them cross over into you can use this as money as well, right? So you kind of attack it from both sides.

There's no doubt that right now, primary use case, most people using it are using it for speculative purposes and the hodlers. I mean, essentially, you know, the way the way I think about it is that, you know, when once the first Genesis block was mined, the rudimentary technology to support hodling and the accumulation use case of Bitcoin was the technology was pretty much there. Send, receive and just wait it out. And so for us, it's really about looking at the new use cases to expand what we understand Bitcoin to be. And for the most part, the idea of earning and spending, the infrastructure just has not been there. It has not been possible to deliver a user experience that is at the expectation of mainstream consumers. And so for us, it's really about pushing at the protocol layer, at the application layer to start to test out that experiment of Bitcoin as a medium of exchange, but also to make it easier to earn. With Fold, it's not just about spending Bitcoin. It's about earning it when you're using your credit card, when you're using your USD, your fiat. And the idea is that we get to start, get that curiosity of the people that aren't there to speculate, that honestly get turned off by exchange environments where there's red numbers flaring green.

It's stressful. It's confusing. It's expensive at times. And the utility is not necessarily immediately available to them. And so for us, it's about building the infrastructure to help people learn about this asset slowly, start to accumulate Bitcoin. They don't have to spend it. They don't have to have it. And they start to start to see this, you know, and the average user is about 500 satoshis or 500 000 satoshis a month right now um and so what we see is people start to learn about it people and then we get support tickets coming in saying hey do i spend this bitcoin or am i supposed to hold it you know what what do i do with this and so what we've essentially opened up is just an education machine for how to bring in people who haven't had experience with the

asset don't necessarily know what it is but are there to learn about it and so with fold what we're trying to do is create all these moments of education. What is a wallet? What's the best wallet for you? How do you think about spending it? We are totally here for the use case of accumulation, hodling, and everyone on the Fold team fits that bill. But we also know that there are very real use cases for around the world of spending it, using it in their daily lives. And we also are enabling that as well. We're doing that through incentives, not just telling you you should do it for sure so let's talk about what's the functionality available to me as a user of fold today so fold uh available app store android store download all mobile all mobile okay

uh we started off on the web but uh we're primarily focused on mobile um so you download the app uh sync credit card debit card and then from there we have uh right now currently 30 different merchants uh available amazon starbucks uber and uh you go about spending like you do you you know every day you're ordering coffee you're ordering a car you're you're making your amazon uh shipments and instead you do that with fold and what you do is you buy essentially prepaid credit into these stores so um you know you go into amazon buy a hundred dollars of credit which is automatically loaded into your amazon account and from there you're going to earn two to four four percent back in satoshi's instantly now on your next purchase you can decide hey i'm going to increase

my spending power and use that um bitcoin to supplement my next purchase or you can you can save it, accumulate it. And the idea is that we both accept credit cards, but we also allow you to spend Bitcoin via Lightning. And so one of the points of education that we have is that if you're spending with Bitcoin, you're going to get 3% to 4% higher, more cash back per transaction. So the idea is where you can kind of imagine what's happened with Cash App. You look at cash app and it is the number one uh financial app in the app store and in front of all of these mainstream consumers who may have never heard about bitcoin there is an entire tab about bitcoin teaching them about it exposing them to that and so the idea is that we're not beating over the

head about what to use bitcoin or what um you know how you should be using it but we're giving you an on-ramp to start to start to learn more about it and to take the next steps of actually um starting to actually use it and get onboarded into wallets, into the infrastructure, because there are behavioral changes of using Bitcoin versus what you might imagine with a credit card or something like that. Yeah. And the way that I take what you guys are doing, right, is I as a user want to spend Bitcoin, right? So I want to go in and use this monetary asset and I want to purchase a good or a service. So let's say that you are Starbucks, right? I want to spend Bitcoin. Immediately, there's a couple of challenges, right? So the first is I got to have Bitcoin. Second is I got

to understand how to actually transact that Bitcoin. The third is that the merchant has to be able to accept the Bitcoin, right? And then the fourth is the merchant's got to figure out what the hell do I do with this Bitcoin? Do I leave it on my balance sheet? Do I convert it, right? Kind of like more like FX type stuff. You guys, my understanding is you've taken a very kind of nuanced approach to solving those problems maybe just walk us through like a transaction what's technically happening when i have the fold app right and i say hey i want to buy this cup of coffee from starbucks like what is the the actual um kind of technical sequence that occurs so that you solve all of those problems in that transaction yeah i mean you hit it on the head it's it's a

confusing problem to solve and you can't tackle you know there are companies tackling all these different pieces but the way that folds done it is um so you send fold a payment whether that's through your credit card, or through your Bitcoin wallet. And we take the payment and convert that into prepaid credit at these merchants. And so you send us $10 and you want to spend it. Amazon will pull $10 of credit from Amazon down to you. And so what this essentially allows you to do is you can spend in whatever asset you want, USD or fiat, or USD, fiat, or Bitcoin,

and the merchant can settle in their internal store credit. And so the merchant doesn't actually have to think about onboarding and all these more complicated things about what it means to take custody of Bitcoin, what it means to convert it. And at a certain point, we got to figure out the exact things we're trying to solve because it can't solve everything right now.

And so we've really focused on solving the consumer side, creating an absolutely easy, simple experience to both earn it and to use it um, with the idea that we start to demonstrate volume to these merchants and we start to demonstrate usage. And the one thing that fold can do that is no other payment method can do right now is that when you use fold, um, you know, at say at a target, um, the, that fold user going through your store, uh, you know, from the merchant's perspective is the only user that's not subjecting you to, uh, processing fees from Visa and MasterCard network and has no ability

for a chargeback moment. So for retailers, that's a huge benefit. It's chargebacks processing is multi-billion dollar headache for these merchants every year. And so what Fold allows them to do is essentially experience the possibility of what this asset could do for them and by adopting it without going full in and actually having to build out that infrastructure. So we're essentially trying to build this case by proving out the consumer side, consumer demand, and then be able to take that to our merchant partners and start to say, okay, maybe this is time for the next stage of adoption. And is your thought process, so in that Starbucks is essentially not taking any quote unquote Bitcoin risk, right? They're not having to change out their POS system.

They're not having to worry about price volatility. They don't have to have a strategy for uh, kind of managing the Bitcoin, hedging it, uh, transacting it and exchanging it back to dollars, et cetera. But is the thought process that like, that's the end game where, Hey, let's let the consumers spend Bitcoin. And then the retailers don't accept it. Cause there's a lot of people who would say like, Oh, that's not really using Bitcoin as money, right? Like that's just like, you know, any other thing, why don't we just use seashells? And then the, uh, retailer just ends up with dollars. Or do you look at it as, no, this is the first step. let's get one side of the transaction comfortable familiar uh excited about using this etc and let's

solve the problem for the other side and then eventually we can get the retailers to accept the actual bitcoin itself and like it's kind of like a gradual um thing through the transaction or is this the end game where only one side uses it you know this is this is all an evolution and this is what fold is creating a product that is able to grow with the way bitcoin is growing in its usage. And we are on the ground because we allow you to accumulate it, spend it. We actually get to see these behaviors change. About 50% of people are spending their Bitcoin rewards. 50% are saving it right now. So when we think about where we go on the merchant side, we're going to go what makes most sense for the merchants and build for them. And so right now, settling in

fiat is the only way that we're going to start to make this case to those merchants and start to have them involved in this asset. Now, where it goes in the future, we already have merchants that have approached us and there are merchants currently today that are using it and taking on Bitcoin. Now, that's a very small minority of them. But when we start to look at where protocol development is and application development is, there are some use cases where Bitcoin can be used as an underlying asset in a retail transaction that is seamlessly in and out of fiat at different points. And that should support what the merchant's goals are, what they want to do. And so we are very close to a world where you can walk into a target, use something like Fold

with your credit card. The transaction is actually turned into a lightning Bitcoin payment. The merchant gets to then settle in the currency of their choice, Bitcoin or whatever it is. But it's giving efficiencies to both sides. So what happens is because the merchant no longer has processing fees and chargeback risk, they're able to push all of those rewards directly back to users to incentivize them. So the idea is aligning incentives here and how we can start to rework this. And the only way that we're going to do this is by having real world products that people are using right now in checkout lines around the country. And we get to see how behavior shifts and how it's changed and how we can tweak these incentives on both sides to kind of find the

correct balance. For sure. And I guess for you guys, part of the benefit here is it's not just Bitcoin only, right? You can use Bitcoin, but you can also use your regular credit card, debit card, et cetera, through the application. And so it's a little bit more consumer friendly, right? It's not this big like, oh, I have to learn Bitcoin to use this. Fold can serve just traditional fiat payments um and so the hope then is you kind of siphon some of those people off into bitcoin over time yeah it's it's you know about creating lowering the barrier to entry for both consumers and merchants to start uh and getting exposure to bitcoin and especially those that have been on have been on the sidelines of it so those you know we we figure there's about 88 million people just

in the u.s right now who want to have bitcoin who want to to want to have exposure to it but a fraction of that are people who actually have it because they're the ones going through exchanges buying it but there are people right now who want it it's just the ways that we're distributing it right now are turning some of them off are just blocking some of them from engaging with it and so it's it's it's our idea to increase the amount of ways that someone can gain exposure to it without changing any of their daily behaviors you know the idea of gift cards 93 percent of all Americans will use a gift card in a given year. It's crazy. 89% of Americans are in a rewards program. So what we're doing is taking existing behaviors, existing industries that

people are familiar with, comfortable with, and essentially co-opting that and imbuing it with kind of Bitcoin. And so the idea is that you are getting adoption from people who start to say, OK, maybe I'm not there at the point where I say Bitcoin is a better money or a better dollar. But Bitcoin is for sure a better airline mile or a better or a better reward point that's going to be debased by, you know, the company. And so it's just about creating a very slow way for people to gain exposure to it, again, without changing behaviors, both on the merchant and the consumer side. And to me, the benefit to a retailer here is I don't pay credit card transaction fees. So let's call that anywhere between 1.5% and 3% given your size. And then I also don't have the chargeback risk.

And so I don't change anything in my system. I eliminate two of my biggest headaches when it comes to payments. And my customer can still buy the exact same products. There's probably a world where some retailer could get really innovative or aggressive and say, hey, we're actually going to incentivize people to use this rather than traditional payment methods. I don't know if that's to a discount or loyalty points. There's all kinds of things that they could do, but it's almost like the retailer, once they realize the value proposition, they could actually help drive the adoption because it's better for them. This is a huge trend in retail right now. credit cards right now are increasing their processing fees. Really, it's 2% to 4% is

really what a retailer could expect from any given transaction. And those are showing no signs of slowing down. So much so that you have retailers like Walmart who are creating their own POS systems to try to get around this. Because right now, the credit card rewards are in such a competition that credit cards are giving more and more cash back. And what's happening is that's going more and more on the retailers to actually pick up the bill and so what's happening is these retailers are now have a headache and are actively seeking alternatives walmart just developed one that goes through your ach and that's how you pay at walmart so people we know that this is a problem that retailers are facing and that they are actively

looking for alternatives and the way that we think about this is that you know it's either the Visa or MasterCard giving you your rewards back, or it's actually Walmart directly giving you your rewards back. And depending on who's controlling the payment, that's who controls the reward. And so at this point, Walmart is deeply incentivized both to eliminate chargebacks, which is a huge multi-billion dollar issue for them. But when you're a low margin business, processing fees quickly eat up. And so you start to think about, okay, if we can start, instead of maybe paying two to three percent to processing companies and maybe we just give that exact two to three percent as rewards back to our own customers suddenly we have our deepened our

relationship with our own existing customers we are not beholden to rising processing fees and we've eliminated chargebacks and so again it's all about not beating people over the head about what's great you know bitcoin and all it's it's purely about numbers and incentives that the tack that we're taking. For sure. When you guys started the company, you actually went through a venture studio rather than, you know, raise kind of angel funding, especially in the beginning. Maybe talk a little bit about that venture studio, kind of how that model works and why you guys chose to pursue that. Yeah. So Fold came out of Thesis, which is a venture production studio. The idea is that it builds at the application layer and protocol layer on top

of Bitcoin specifically, but works on some other protocols as well. And the idea is there's a lot of knowledge that can be shared across projects, especially at such an early stage of the industry where the idea of being able to harvest as much learnings, share UX ideas and thoughts across a broad base of use cases allows you to excel much faster. And so the idea is that Thesis was created to launch these use cases, to test these ideas. Can we change the way people accumulate Bitcoin? Let's not think about the exchange. Can we create and co-opt the idea of rewards and payments and create that as a whole new channel that benefits consumers and merchants? Okay, let's go test that. And so we launch product into the market. We get immediate feedback and we see where that idea is going. Is there immediate traction? Because the idea is not we're not building for the next, you know, a product that will work in 20 years, 10 years. We're building for products that are businesses today.

And so the benefit of a venture model like this is that we actually get the freedom to test this in a market that right now is super nascent and that we get to kind of battle hard before we go all in and go all in for venture that may not lead to a spot that we want to. And we're here to dedicate our lives to this. So we want to make sure the projects we're working on are solid, have promise, and actually have somewhere to deliver value today. Would it be fair to say the venture model or venture studio model has less pressure in the beginning, so it's more of a kind of experimentation and testing than if you went out, raised capital, and like, we have to make this work? The only way a venture model works is if you actually have people committed who have either been entrepreneurs previously and have a direct use case they want to test or they have brought products to market. Or it works when you actually have an idea that you know already has traction and that you can just kind of add a little bit more fuel on the fire and see where you can go for next year. And so it is one of the things that doesn't work in all contexts. It's not right for everybody because the most important thing is to have skin in the game.

And so the way that we built the thesis model is that every lead of a vertical, so myself, I'm running Fold, has skin in the game. That is your project. If that project is not there, then maybe there's another thing that you can go do. But the idea is that you're that you are very deeply committed as if you are raising funding for this. And essentially, instead of getting a larger angel or seed, it's something that's much smaller amounts so that you can have a place and kind of a laboratory to test this. And you do it in much smaller time frames. We're talking under six months. And then from there, once that's validated, then you can spin out, go look at seed.

And that's that's what folds us down. And we just announced our seed funding with some incredible partners in the space back in October. Tell us a little bit more about that, right? So you guys had used the Venture Studio model, kind of tested a bunch, figured out, hey, there's some traction here. We think that this has got some legs to it. What was kind of the decision-making to spin out? Like, were there certain milestones you were looking for? Or was it more of just, hey, we're going to have to raise outside capital and, like, really go put a full effort behind this?

And so that was the driver. Yeah, I mean, it's first of all, proving at a base level, you know, is there a path to a sustainable business here? Are we going to bring on partners where we know that we have a very good idea of how to make this into a business today and change and execute on a larger vision for tomorrow and the years after? And so for us, it was really important to make sure we came in with proof points that just were able to be blatantly obvious for any of these partners to bring on. OK, you say that you can change behaviors and create a new way for people to earn Bitcoin. OK, let us know what the numbers are. How many people are doing this? How many have done that? How much are they earning?

What are they doing? What are they spending it on? okay um you you say that layer two lightning is going to be the future of of uh bitcoin retail payments prove us that well we launched lightning pizza to be like okay we're going to prove that we're going to launch a real world service on top of lightning and show that not only that can lightning handle transactions that aren't you know a couple satoshis but 25 50 and launch that on a nation nationwide service that anyone can use we launched lightning pizza explain what that is so Lightning Pizza was a layer over Domino's Pizza that allowed Lightning payments.

So essentially, Domino's built on Lightning. So anybody could use the Lightning Network to have Domino's Pizza delivered to them, order it in store, and essentially, it gave you all the ability to interact with a real world service nationwide, see, hey, are these users just in a pocket of New York or San Francisco? Well, we launched it and found that nearly every state in the country had activity in ordering Domino's pizza over the Lightning Network. I just love the name Lightning Pizza because it was Lightning Network, but also Lightning Fast in terms of getting the pizza to your door. It worked in all the ways.

I mean, right now, you know, Lightning Pizza for us was like an experiment, a project to figure out not only internally for us, is Lightning at a mature enough level to actually launch a real world service? But it was also about resurrecting the meme of Bitcoin and pizza again. And to see, okay, we're at a different point in Bitcoin development and protocol development. Layer two is finally here. Let's see if the pizza use case can actually work now. And so we launched that. We had thousands of orders in the first days after this. We didn't even know how many people had Lightning wallets.

So, you know, shout out to Blue Wallet. About 75, 80% of all orders came from Blue Wallet custodial solution. But it also proved, you know, lowering the barrier to entry into these wallets was an important thing. Now, long term, is that where we want to be? We'll figure that out. But the idea was that right now, Lightning can provide a base payment layer for real world services and it can work without breaking. Yeah. And as you guys built this, one, it was just cool to see the community kind of rally around it. Right. I think it was just kind of a cool thing. And a lot of had to do with the pizza and Bitcoin memes, but also it worked. Right. And so you could actually go on and use it. Talk to me more about the Lightning Network itself, though. Right. Like, there's a lot of different things that you could overlay on, you know, the Domino's APIs and their website and say, hey, you know, use XYZ different payment method. like why the lightning network and kind of give me an understanding of like how you guys see the

state of where we are yeah it was it was interesting i just went to the uh light first lightning conference in in berlin uh about a month ago um and it was one of those great moments for a kind of state of the union state of affairs about where we where we are in the space and um i have to say i've been blown away by the speed of development and um where we've come in the last year alone with where we are at lightning and so number one there's a validated uh large developer community focused on this so that's you know when we talk about um building new protocols one of the most uh important metrics is the developer community and um activity um people you know dedicating their their work towards it and it was plainly obvious how many people are there

building on various use cases for what lightning can be messaging on top of lightning payments instant settlement for trading decentralized exchanges all of these various things and so for us we've chosen to explore lightning from our our perspective of retail and adoption and so uh the best part about the berlin conference was that it was both a celebration of all these different use cases and how far we've come but also a sober look at just what challenges are there. And by no means is this production ready. Domino's is ready to take this on as their primary payment system. We don't expect that to be that for a little bit. So for us, the benefits that we see going forward with Lightning are essentially three things. It's

instantaneous settlement, which has implications both for retailers and businesses to be able, the idea that you can settle and have your money on your books that you can spend on new inventory, new marketing, and have that capital just ready to deploy, which right now you're waiting a couple weeks to do, which changes how you do business. It has implications on the trading and exchange side of instant final settlement. There's great talks. Jack Mollis just has done a great one about really how revolutionary instantaneous settlement of Bitcoin actually is. And so there's the instant settlement. There's also bringing Bitcoin to low fees. So, you know, down to a couple Satoshis there, which opens up a bunch more use cases,

micropayments, streaming payments. The thing is that Lightning is not just about replacing an incumbent payment system. It's about fundamentally changing the fundamentals of what a payment system can be that are far beyond the capabilities of what we currently have today. Already, it's demonstrated use cases that are just not possible from an existing credit card transaction or any other payment system we had. So we really are looking at Lightning for those competitive advantages and how we can leverage those to take advantage of existing problems. Like we just mentioned the rising processing fees, chargebacks. How do we take the things that Lightning can bring and no other payment system can do? And how do we start to introduce those to the people that need

it most. Want to know who has the best URL? Crypto.com. That's right. Crypto.com. They're a crypto platform with one goal, motherf***ing mass adoption. That's why we're all here. We're trying to get crypto in every wallet. Crypto.com is helping people do that through buying, earning, lending, and card payment. Everything you could want at Crypto.com. Go help your boy out. Tell Pomp sent you. Download the app or visit crypto.com. Pomp's got you always. Ever wanted to get into mining and didn't know how? Don't worry, your boy Pomp's got you. Everybody got some electricity and Wi-Fi. All you got to do is go to coinmine.com. You buy a CoinMine. It's like an Xbox or a PlayStation that helps you turn your electricity into Bitcoin. That's right. You purchase it. It

shows up at your doorstep. You pull it out of the box. You plug it in, connect to your Wi-Fi, five minutes or less you're mining bitcoin all you have to do is control it from the mobile app they provide and then you receive over-the-air updates that add new coins and new features on a consistent basis kind of like how tesla does over-the-air updates and updates the car software just you're updating your coin mine consumer mining made easy that's right go to coinmine.com tell them pomp sent you and thank me later one more word from our sponsor blockfi their new interest account allows you to securely deposit your Bitcoin or Ether at BlockFi and receive 6% annual interest paid monthly in cryptocurrency. This rate actually compounds. So you receive a

6.2% APY, which is very attractive given the alternatives. So you can actually take your Bitcoin, you can deposit it with BlockFi and get paid an interest rate of 6% in return. Go check out blockfi.com slash pomp again blockfi.com slash pomp to sign up and start earning interest on your crypto today and the lightning network itself i think one of the big uh kind of knocks on it right now from the uh the not even detractors as much just the skeptics maybe is oh you can't really put a bunch of bitcoin through the system um it doesn't work uh it's not as fast as promised all this kind of stuff like the one i'd focus on the most i think is the probably most realistic detraction is you can't put a lot of throughput today right so

we were talking a little bit before we started recording but maybe just describe like why that is today and explain kind of how that's been a self-imposed thing more from like a safety of the network versus technically it's not possible yeah you know this is absolutely a hard cap that's been imposed by on by the protocol development and for good reason you know this is a fledgling network and it relies on robust participants in there that can route payments, hop to Pomp, to me, to someone else who Pomp can figure out a settlement. That requires a network that has enough critical mass to be able to enable seamless payments that you can count on 99% of the time. Now, when you have an early network, you just don't have the network participation yet.

Now, Lightning has been growing and is very quickly going to be on track to get there. But in these early days, it's not. And so the idea is self-imposed stealing on how much a given transaction can be. Right now, I believe it's around $400 with where we are with Bitcoin and Lightning. So it provides some problems when people want to buy airline tickets through Fold. But it's for good reason. It's, number one, keeping expectations real. not over-promising, which is a hallmark of other crypto projects in this space,

and just about being a way that we can both take users on now, introduce them to Lightning without putting them at risk. And so all of the issues with channel capacity, transaction size, and even just the tooling to support a Lightning node, things like this, and manage that, those have active solutions that are incoming. There's AMP, which is going to allow you to break payments into much smaller payments and route that as your payment. And there's new tooling out there that just makes spinning up a node, managing it much easier and simple so you're not losing any money. And so the idea is right now there's really been no major case of any major loss of funds, which to me is incredibly surprising given how much activity and commerce is actually going on on the Lightning Network right now.

And so a lot of these are self-imposed, and they are because we know the solutions, we know generally when they'll come, and when they will, we'll start to see those self-imposed limits start to relax. Because the Lightning Network is 18, maybe 24 months old? In terms of, yeah, I mean, you know, when does when does it start from a paper or from, you know, the first kind of release? You know, I'd say a good benchmark is, you know, 18 to 24 months. I think that's I think that's right when people actually started to really build on this as a production environment. And so given where we are today, like there's actually been pretty good progress, right? There's, you know, thousands of nodes and kind of people have really built a number of wallets. There's been tens of thousands of people who have adopted it and started using it.

And there's been applications built like Lightning Pizza. And so, again, is it Visa today? No, of course not, right? But in two years or less, it's pretty incredible, the progress, especially given that it is done by kind of a loosely coordinated group of individuals on the Internet that have built this global product that's going after, you know, some of the largest uh settlement networks in the world yeah it's it's um it has been incredible to be a part of and and to see and so um you know we have not only seen massive explosive growth in it but we've also seen there was a moment where a couple headlines saying oh the you know the amount of uh active nodes has gone down for a while or the amount of you know fees has gone down so is

that is was the network healthy and actually it was a sign of maturity for this network that people are getting smarter about how to manage funds, how to have more efficient infrastructure so that it can start to move to the next level. And so we're only going to see more and more use cases developed on top of it. There's some incredible stuff of USD to lightning invoices, which essentially opens up the possibility that anybody currently with a credit card or bank account could be spending at retailers at an exchange with their usd but it is actually being settled as a bitcoin payment so that on both sides it's instantly settled on on the side protecting the actual receiver but on the it doesn't require any behavioral change from the actual initiator of the

payment and this would be us dollars into the system converted to bitcoin across the lightning network converted back to us dollars exactly yeah so it could be converted back to us dollars it could be settled and kept in a Lightning channel. The idea is that you're really leveraging some of the, again, competitive advantages that Lightning and Bitcoin just present that the incumbent world does not offer. There's nothing like it. And the only way is to actually shoot actual gold to someone at the speed of light and then have it settled in that way. There's just really no support in any of this infrastructure yet. And so the things that I'm most interested are really exposing and going right after these competitive advantages that just are not

offered that provide huge savings, efficiencies, and other benefits for both consumers and merchants, traders, speculators. And the cool thing is that the Lightning community is developing on all of these use cases right now. And so Lightning is going to make trading better. Lightning will make paying better. Lightning will make hodling better. There are a ton of things that just is all in service of of essentially adding more value to the base chain and this is again like in we talk about in a you know in you know a decade is lightning gonna be it um we're betting it will you know we know it will happen in some layer two solutions so there there could be a world where another protocol is developed but right now um there is no reason to believe

that lightning won't be that solution right now the idea of going from u.s dollars across lightning network and back into dollars, it almost makes the dollar transactions non-censorable U.S. dollar transactions, right? Which is a pretty interesting thing to think about where things like the Lightning Network or the Bitcoin network can change the way that even fiat holders interact with money and the financial system. It provides an instantaneous bridge for the currencies that people currently hold, whatever that may be, any type of fiat, US dollars, euros, and creates a way for essentially an atomic swap into any other currency around the world. And so it's not just US dollars, but it is any currency. It is any asset that Lightning can facilitate instantaneous

settlements between different actors around the globe, transacting in different currencies with zero conversion fees on both sides. And so obviously the visas, the MasterCards, in the legacy banking system, like that's a pretty big threat to what they're doing. Fold obviously could be a large threat to some of the payment incumbents as well. Anything that you've seen there in terms of how kind of the markets responded to what you guys have built so far? So I can tell you that these incumbents are paying attention. We are actively in communication with a couple of those networks that you just mentioned. And we know that they are not only paying attention, but they're running their own experiments. Um, and so for us, we, we, you know,

we, we see what, what the technology we're developing is could be, um, you know, something that threatens their business model, but we're also seeing them start to build. Now, I don't think they're going to be able to build as fast or as, um, as, um, you know, intelligently as people who had skin in the game, who are, you know, with their ears to the ground and really leveraging and having no essentially incumbent business model to protect. So I do know that they're thinking about this. And I will say, I think in 2020, we're going to hear about some partnerships that are going to involve incumbents and start to directly introduce them indirectly to these, you know, Lightning Network and other developments. For sure. And, you know, look,

It's certain, I think, reporters are getting smarter about asking these people these questions. Yesterday, the news broke that the PayPal CEO, he owns Bitcoin, right? And he only owns Bitcoin. And some of that is probably, hey, I want to see what this is all about and learning and experimenting. Some of that's, I'm a believer, right? And so it's interesting to see that. Another aspect that I find really interesting about Fold that maybe the incumbents have a different approach is around privacy, right? And so the incumbents have historically been very susceptible to data breaches, cybersecurity attacks, et cetera.

You guys are taking a different model as to how to protect consumers. Maybe describe a little bit about what the incumbents' challenges are and then how you guys are solving that. Yeah, I mean, historically, you know, Fold has been working in the checkout lines of these major retailers for a while now. So we understand that. We're also a company that comes from the Bitcoin world. And so there are certain values from Bitcoiners and those that are wanting to use a product like Fold that they want to see in the product. And the interesting thing is those values present some incredible opportunities for consumers worldwide. So you think about when you go swipe your credit card at a merchant, your location, your name, your transaction details, your payment details are all then given to the store, your bank, the store's bank, the payment processor, any rewards program that you're using.

And maybe, you know, you're using a financial planning app like a mint or something. And so that one transaction is then being distributed, all of that data across to all of these different actors who have various varying levels of security and commitment to actually protecting your data. And they're almost all of them are licensed to resell that data to, you know, who knows who. And so the idea is that it's we're living in a world where our data is just freely given in a world where 50 percent of retailers are compromised every single year. Hundreds of millions of Americans' data is compromised in these acts. And so this leads to huge issues with fraud and has real impacts on credit scores that can have real impacts when you're not taking a more private, secure approach to these types of transactions. And so what Fold has done is not just slap, you know, use Bitcoin in payments and rewards, but it's taking the ethos and the values of Bitcoin and also providing that to payments and rewards. And the way that we're doing that is essentially ensuring that when you use Fold at a retailer, you are not leaking any of that data to them.

The retailer is only seeing a payment from Fold, and your credit card only sees that you're paying Fold. And so it makes it pseudonymous, so you're not tied to the things that you purchase, so advertisers can be overly targeting. And you're not, for the most part, you're not leaking your private and transaction details that can be susceptible to attackers and advertisers alike. Mm-hmm. Do you think that that will eventually force the traditional payment systems to be more worried about privacy and they'll move to these models? Or do you feel like they have to stick with the model they have because of the innovator's dilemma? Yeah, I think it's that. If there's any trend that you can see over the last couple of decades is that the more data that you can suck up from your consumers, the larger company you're going to be more successful. And that's just what

we've seen in the business models, the number one purchaser of this purchasing data at point of sale is Google. The reason why they're doing that is trying to create that full picture of what you're searching to what you're buying and ultimately create better ads for you and more targeted ads. And so we know that the trend has been overwhelmingly to get as much data from consumers as possible. But what that has also done, it hasn't seen at the same time secure infrastructure that's being built to make sure that data is protected and stored correctly and what happens is is that the pendulum has just swung far too much to one side so much so that these retailers now are so susceptible to these hacks that there's overwhelming evidence that

when consumers uh data is compromised and a given store is named in that compromise uh was is named as the kind of culprit of where that data was compromised users don't go back to that store upwards of six months they it actually changes their spending behavior which is a huge hit to a lot of these companies and we're only seeing this types of these types of compromises accelerate and so i think very much so that this is on their radar about number one we need to be better at what we do with data number two companies like apple are coming out about protection and privacy making these overtures of saying hey we're going to win more business ultimately when we put the customer first and so i think the narrative is starting to change um now how fast that that

does depends on how fast companies like fold and others in the space that are doing things like this grow when you look out 10 20 years what's your kind of vision for where the lightning network goes what does it become um i think the lightning network what we're already seeing an interesting thing is it's it's uh the the use cases are are diversifying there's messaging being built on unstoppable messaging being built on unstoppable money. We're seeing people release stable coins and interoperability on the Lightning Network. And essentially, it is this network that allows instantaneous settlement across parties interacting on this network in a way that has implications for a wide, wide amount of use cases that will affect people in many ways in

their lives so what i'm looking at it from is that this is a way as bitcoin grows in an asset as bitcoin is more widely distributed more holders are there as the idea of how to use bitcoin starts to settle and it becomes more of an asset that people are holding but not only that are being more and more incentivized to use in their daily life that lightning network will become the way that that is used i think that the majority of people being onboarded into bitcoin in the next five years are probably going to be onboarded through layer two as opposed to going on chain and so i think number one the most obvious thing is that it's going to change how people experience bitcoin for the first time uh it is going to be the layer that people are onboarded directly into

and it's going to be the layer in which provides a user experience that is at the level if not beyond what they expect from existing incumbent options. And so I think it will soon be at a point where people, mainstream consumers, could be interacting with the Lightning Network and not even know it. And this could be in the context of, again, trading, retail payments, anything.

Yeah, it's super interesting to think through kind of where we're going, right? Understanding what the challenges are today. Same question, but for Fold. Like, where do you see it 10, 20 years from now? So with Fold, we want to introduce Bitcoin to mainstream people. We want to make Bitcoin accessible. To regular people who aren't down the rabbit hole yet.

Yes. And then be the vehicle to drive them down that rabbit hole. And so for us, we are committed to the growth of this asset class in general. We are supporting and here to support the values that the base protocol is already presenting to the world and accelerate that through mass adoption. And so for Fold, we not only hope to change how people are paying and being rewarded, but we also hope to change how we think of those systems overall about a focus on how do we have a payment processor that's not built on fees? How do we have a reward system that's not built on data harvesting? How do we take not just Bitcoin and apply that to payments and rewards, but the ethos, the values of it? And so what I would hope for Fold is that we are giving the same amount of value that people may see today from using and transacting in the ways that they do, but we're keeping them safer while doing it.

We're putting the consumer first and we are enriching them, rewarding them more than they ever have in the past. And so for us, it's not just about bringing and putting Bitcoin in people's pockets, but bringing the values that we have learned from this asset that this community has developed and rallied around and put that at the very core of of these behaviors and institutions that historically haven't put that first. Yeah, it's taking a long term view. And you said it earlier, it's putting the customer first, right. And it's understanding that if we do right by the people who use our products, then over a long period of time, they'll remain loyal, we'll build a sustainable business around it will align in a win win situation. And if you do that for long enough, everyone else kind of the flash in the pan's come and go, right. And you're kind of the last person standing. But you're also the largest player. And it's pretty tried and true method, but it takes a lot of discipline. Yeah, I mean, it's, you know, I've been an entrepreneur building, you know, products for a while. And what what I found is that it is it is a whole new game when you're building, not just, you know, building a business that's hard enough for anybody. But when you're building a business in a space like this that is also growing, that is also nascent, that the there's multiple levels now that you have to that you're there's extra levels that you're now having to think about and pay attention to macro events around the world that could directly affect how your product works in a day to day retail transaction for somebody. And so for me, it's really the only way to create a sustainable Bitcoin business is to look long term. But right now is to deliver the right incentives and economics today. And so it's a challenge to both have this long term vision of where you want to be and all the things you want to change while building a business that delivers value today.

For sure. Before we wrap up, I always ask a rapid fire set of questions. What do you think is the most important company in Bitcoin or crypto? other than Fold? I would say right now, Cash App has done an incredible job at introducing new people to the idea of Bitcoin in a Trojan horse capacity that is taking the idea of the old Venmo send and receive, and then having Bitcoin front and center there. And not only that, having a commitment to educating people about the asset as well. Do you think that Cash goes outside of just send, receive, buy, and hold?

Are there other things that they could do? Oh, absolutely, I think. If you're Jack, what do you do? If you're Jack, you take it slow like he has been. It's pretty incredible. It is. I mean, and I say take it slow, and actually you look at that. You look at any other companies, in fact, doing this very quickly.

But I would say you continue to take it slow. The main benefit that you can bring to the space is provide a simple, accessible on-ramp for those to get involved in the space. And then from there, you'll introduce them to a whole world of people like Fold, developing new use cases and value for that. But right now, the most important thing is to create an easy and safe way to onboard people into this asset, change the way that people have been historically onboarded into it.

Yeah, there's a saying in the military that is slow is smooth, smooth is fast, right? And I think that's like the perfect kind of quote for what Square's done. Absolutely. Is they've just been very deliberate about every action. They've made good decisions. They haven't chased things. My favorite is when he gets asked, you know, are you going to create a crypto? And he always responds with, hell no, right?

Not no, but hell no. So what's the one regulation that you would change or improve if you could? Oh, man, this is an easy one for me. The current tax implications of spending Bitcoin, the idea that people are exposed to capital gains and the reporting is onerous. It is single-handedly hampering a massive use case of what Bitcoin could be. And I do believe if that was changed, the narrative about what Bitcoin could do. how much could grow would would would drastically change now i would say that there are technological solutions that are coming on the horizon that are going to whether the regulation comes or not will

will help push that forward but um that alone would would would be an incredible help for the space for sure um what's the most controversial thought you have in all of bitcoin um like you believe it and everyone else is going to disagree with you that um hyper bitcoinization is a wonderful idea, but I do believe it will always, one of the benefits, a real benefit of Bitcoin is providing a counterbalance

to the existing financial system that we have and that instead of entirely replacing, it will live alongside and provide a level of balance, control, counterweight that will ultimately allow the benefits that can be brought

from both sides and allow them to coexist. Do they coexist in silos forever or is there kind of like a merging into a new system that takes the benefits of both? I think there's a merging, but what it does is provides fundamental controls on, you know, especially the world that we live in now and, you know, MMT and quantitative easing and money printing. It provides a check on that, almost like a balance of power that will make sure that this pendulum doesn't swing as far as we've seen it. and gets us into these kind of constant crisis mode that we're currently living in. Yeah. What's the most important book you've ever read? Most important book I've ever read. Um, oh man, let's see. Um,

I mean, my favorite, I think one of the most recent books that I have read was, um, uh, um, Mutual Aid. What's that? It's a, it's a book by this, uh, guy named Murray Bookchin. And it's, It's suggesting that the way that people evolve and develop and societies develop is not through this idea of kind of ruthless competition, you know, me over you. But it's actually when incentives align to have cooperation over wide groups of people that is not about, you know, the winner takes all that real, real progress happens when incentives and culture is able to align in a way that is about mutually benefiting each other in a society. And it's really rare and hard to get that. And we've only seen it happen a couple of times. But what I love about that is it shows so much about where we are in this space. What essentially Bitcoin has done has been an incredible way to align incentives over a broad, diverse group of people in a way that I think is ultimately going to be enriching for everyone.

Yeah, it's pretty interesting. What's the worst book you've ever read? What's a book you read that you're just like, that sucked? you know i you know i read um i don't this book didn't suck but uh i think just to be a uh provide kind of contrarian opinion like sapiens i think you're not impressed i it's i mean for how much play it got i think but you know it was fun i think i took a lot of things from it but it's just one of those when you look at the hype and you're there it's it's very easy to be like i think we went a little overboard on this it's a safe answer when people say like you know what

book have you read recently by saying that it it brings a lot of like oh you oh you must be intellectual oh you you know yes sure um aliens speaking of sapiens uh believer non-believer you know this is one of my favorite questions that you ask um partly because i actually spent a couple weeks at the seti institute oh man let's go all right spill spill the beans so i don't know if you know but um so uh jody foster who was in contact right uh i spent about a couple weeks with the actual jody foster the real life jody foster who carl sagan wrote the book about wow up at the hack creek observatory in northern california and uh it's set he's in the middle of nowhere you drive out there takes several hours to get there cell service cuts out suddenly

radio it's only some apocalyptic preacher and then that starts to cut out and then it's radio silence and that's why they've chosen this area and so you go there and just a group of scientists come up there they started in the 70s and now has you know was funded by um one of the microsoft guys um and they have been on the forefront of looking for uh radio pulses around the um around the universe and seti searched for extraterrestrial intelligence exactly is that what it is right yeah okay so uh this is based out in california but there's there are uh installations everywhere And it's actually a place that has historically been funded, publicly funded. But there was a time when, you know, I think it was a Republican senator came out and said, look at all these Democrats in California funding, looking for aliens and spending all your tax money.

So it kind of dampened the system for a while. That's a pretty good sell to the people, right? It was genius. It's the easiest thing you could have done. And so that actually generated a lot of private interest in it. this is when you got a lot of the microsoft guys in there and it's kind of created a resurgence in in this search and so um well i went up there we started to increase the radio bandwidths of which you could search from because you really you're looking through this what's called the the trough

of the specific radio bandwidth that you can listen most clearly as as um as widely as possible and we were working on that i got to just see these guys working and just hanging out you know went out for drinks and just got to just be embedded with them and so i was why'd you go uh because i was writing a story on them uh i was up there and had been you know i was a journalist and far in my in my past um and uh so i went up there and you know they have this thing in the back of closet they have this big uh refrigerator it's too super dusty on top you open it it's full of champagne interesting and that champagne is being saved is being saved for that day wow there's this like interesting you talk about subculture like

bitcoin has an interesting subculture seti also has an interesting subculture yeah what were like the the biggest surprises so you're going up there right you get embedded uh with people who are literally searching for extraterrestrial intelligence so you already kind of probably have some preconceived notions etc but what was the biggest surprise i mean i went up there thinking i would you know see this dark room with all of these like beeping lights and just like um you know spatial maps happening and like a lot of energy and it's really just a bunch of a bunch of people sitting in like super drab office um nothing sexy about it uh for hours on end just working to make the most minute of improvements and there there's a it's a similar thing it's a

it's a major project it's one of the only scientific fields that you can dedicate yourself to that has seen no measure of progress yet they still have dedicated their lives to it there was a uh a gentleman who came on the podcast and he said every human has two questions at some point in their life one is what happens after death and two is are we here alone yep right and the are we here alone is actually uh the one that hasn't become religious right that what happens after death is much more of a religious question um but the are we here alone is much more scientific and the part that uh amazes me is you bring together so many intelligent people um and they think and believe so many different things like they literally argue and they will

tell you you know we've never been in contact there's no radio waves there's no anything uh and that same person will turn around but let me show you this you know piece of material that we can't explain right and so it's interesting but to me the part um that i always go back to is it would be one of the greatest scientific breakthroughs of our life is the person or the group that contacts or identifies extra structure your life and mathematically there's a very high probability that it's out there um do you think with the time you spent there this is more of a we might not have the tools to actually be able to probe far enough or is this a there's so much like herd mentality everyone's looking at it the same way we just may be wrong in our

approach so far yeah i think uh we are one of the things i learned is how actually limited we are it's really cool to see when you you know again there's so many parallels to bitcoin community space like the promise of what it could be could be massive but when you actually start talking to the builders and the people there they're super very realistic about the challenges and that have to overcome and the limitations that they have very rational very rational and you have to be that way but else you have to have that split mind like you just talked about of also keeping an eye on the larger vision um and so i kind of am at the thing where right now our tools seem like they are so very limited to do this where we would have already been we would have been

approached farther if there was an advanced civilization and so the best bet that we can be thinking about now is finding a civilization that is it is less advanced than us and even at a kind of microbial level if anything um and so uh it's it's one of those things where they're both preparing for linguistically how to speak to extraterrestrials when they get here but also knowing that maybe they should be tooling their tools for looking for lower stage civilizations as well that's incredible to hear that not only is seti looking for extraterrestrials but they're also preparing what happens if they come here oh yeah this is so follow uh seth show stack he's also he's one of the guys all the hollywood films go to but his i think at one point his title

was uh like head of extraterrestrial communications or linguistics it's pretty badass name i have absolutely if uh if you could aspire to any title i think that guy's one i might just change my fucking title to that right now actually you speaking to the airways like this could that could make sense um and you know it's but it's it's this this group is incredibly uh smart they are you know most of them are out of stanford there's a lot over here on the east coast but their lives the lifestyle is actually really great there's arecibo in puerto rico there's hat creek up in northern california there's a couple over here in greensboro and um you know they're just there's some in hawaii they're they're hopping to these incredible locales

um on the hunt for aliens but living a good life while they're at it yeah it's uh it's the one thing that fascinates me is just um odds are they're out there you know are we gonna find them? Are they going to find us? And, uh, and then knowing they're there kind of identifying this as fact is a big deal. Um, but then obviously being able to, uh, interact is, uh, is the part I'm personally most interested in. And, uh, my fascination with this all started with one simple question, which is, uh, do you think that aliens have pets? I would, I'd have to say yes. I would absolutely have to say yes. And maybe we will, hopefully we don't become their pets in the future and they find a new pet shop here um i would like it to maybe be the other way around

yeah um but uh yeah i'm gonna go for a hard yes on that it just it feels like it's some it's the part of the aliens no one ever talks about right because we all think like the little green man showing up but like is he rolling up with you know pets or is he coming alone awesome what uh what one question do you have for me to uh to finish up so um you know we you have you have builders coming up here and and you know they're all hyping shilling their own projects um where do you feel is the most um uh exciting new development in the space coming from like what what right now is like we we know that it's you know speculation all that but like what is a new um kind of uh take or insight that you have that you're you're paying attention to yeah um

um so i'm going to answer this probably not the way you want me to but uh it's a non-technical thing and uh it's the time elapsing that allows for the legitimization of bitcoin and what i mean by that is you know 11 years ago white paper gets published to most of the world they would say you know quote unquote nerds and they're you know cryptographic experts they're people who are kind of on the fringes of society for the most part you know uh it's not like uh cnn was covering the you know cryptography mailing list right uh type thing today you know this year in 2019 we've seen the president tweet about it we've seen congress and senate hold multiple hearings we've seen congressmen who literally have said you know on this uh on the congressional floor uh you can't

stop bitcoin it's unstoppable right that was amazing yeah you see you know and and the two to me that they get you know probably not enough credit are warren davidson and uh patrick mchenry right like i mean they're full-on bitcoiners like they see the future they get it they're they're behind it etc um you see countries even like china right russia uh venezuela right that are again uh approaching this as not a question of hey is this going to be a thing and more a question of like what are we going to do when this thing is a thing yeah right and so to me like that's been the big leap over the last two years is it went from like oh what are you like crazy people on the internet doing like you know oh the reddit community you know they've got some new thing i

don't know they got bitcoin they got dogecoin right now there's been like a true separation i think in the legitimacy of oh bitcoin's real right like the president tweeted about it um and there's probably still a lot of questions and kind of like maybe it's a thing maybe it's not with everything else like when i talk to institutional investors they don't talk about anything other than bitcoin yeah like they and some of us they don't know right so they actually don't even know the names of other things uh or to ask about them and some of it's just like in their mind bitcoin is like the most legitimate thing that they could put in their portfolios they're trying to understand it um so to me like that's been the biggest development uh what i

don't know is like how much farther can it go right like yeah there's like some big things like you know central bank puts it in their reserves or our country says it's a you know a recognized reserve currency um two countries start like trading and settling in bitcoin right like like there's some of these like big big moments um maybe a country comes out and says hey you know we just put $2 billion into an energy project to mine Bitcoin, like that type of stuff. Those are like, I still think pretty far away.

I don't think that stuff's going to happen tomorrow. But, you know, look, I've been told by multiple people around the world who, you know, would be in the know there's many countries that are mining Bitcoin, right.

You know, and all this kind of stuff. Again, it's just like every day, it's like 1% improvement, right. Or 1% more legitimate. And then you look back and,

you know, we're 11 years in you're like hey man like cnbc can't get enough of this yeah right and like now they're talking about price right and so they're not talking necessarily about the the things that um you know around adoption or things that you guys are working on etc but price then gets to what are people actually doing with it which gets to mining which then gets to adoption which you know i'm waiting for who's the first news station that reports during earnings season the bitcoin transaction volume for the last you know three months and compares it to venmo paypal apple pay you know everything else like to me that's where you get a really really interesting um

dynamic because now it's not just hey bitcoin as an asset it's bitcoin as a payment product is reaching mainstream yeah um and so i think that's kind of like that whole thought process or you know conscious stream is uh something i'm paying a lot of attention to because i think it's really really important uh because it elicits the capital into the system to let everyone go build i i couldn't agree more there's been a palpable shift this year i believe in that in that way and yeah let's get back to building minting new bitcoiners i mean part of what we are here at fold is also it's not just about getting more people with bitcoin but it's about establishing an electorate of people with bitcoin that have those values defend it in in the public sphere

and slowly and then all at once you know absolutely where where can people go find more about uh fold or find you on the internet so uh folds available android app store um you can find us at foldapp.com uh and you know you can always reach out to me if you're ever having any issues have some feature requests you know i'm at w l r v s um give me a shout and uh you we are building for you all so uh don't uh don't be a stranger go download the app all right man thanks so much to do it again it's been good hey everyone pop here if you like this episode of off the chain and want to help us take crypto to the top of the apple spotify and other podcast charts please do us a favor and rate review and subscribe to review simply go to the off the chain homepage

scroll down until you see the five blank stars taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on off the chain.