The Wolf Of All Streets - Crypto Will Reach $9 Trillion In 5 Years | Peter Smith, Blockchain.com

Starting point is 00:00:00 Pretty wild. And I'm looking at your stats. 88 million wallets created. $1 trillion transacted. One third of Bitcoin network transactions. I can't even see your laser eyes through the camera, so I guess you're not. I've never posted a laser eyes photo. I thought it was like a super powerful, sort of game-changing innovation. And you created an explorer, right?

Starting point is 00:00:21 Which was basically this mind-blowing innovation because nobody could see what was happening on the blockchain we have to learn to be less greedy there's the real answer there are only two exchange ceos in crypto who have had their job for over a decade everybody knows brian armstrong at coinbase the other one is today's guest peter sm Smith from Blockchain.com. Peter started at the very beginning building products like a blockchain explorer so that people could actually see transactions to a wallet and then to a full service exchange, institutional prime brokerage and more. We talked about that long, long journey, what it was like to be in Bitcoin from the very

Starting point is 00:01:01 beginning to go through all of the cycles of the halvings, of the FUD, of the negativity, and what we can look forward to in the future. This is an amazing conversation with Peter Smith. You've been in the blockchain space and in Bitcoin since really the very, very, very beginning, right? I mean, blockchain.com was formed in 2011 when most people had never even heard the words blockchain and Bitcoin. Can you give me sort of your genesis story? How did you get started? I like to joke that I've been working on Bitcoin since before it was really a job. You know, the industry was not really an industry

Starting point is 00:01:45 probably until 2013, 14, maybe 15 even. There's just a lot of people that were really interested in the idea. This is a very different and special period of time. I got really interested in Bitcoin and the principles behind it from living in a lot of emerging market countries. So I've lived in the Middle East and East Africa. So this idea of there being an internet money that was beyond the control of a central bank policy, but also that you could transact peer to peer, I thought was like a super powerful sort of game changing innovation. And I wanted to be part of working on that. I met the other folks that, you know, my other co founders of blockchain.com, you know, my other co-founders of blockchain.com. You know, we started professionalizing the company, really building it sort of in 2013.

Starting point is 00:02:30 I originally thought that I would work on, you know, work on this stuff for a couple of years and then something else would grab my interest. But the thing that's really cool about crypto is that it constantly changes. You know, you are never bored. But now I've been doing it for over a decade. Then I would say that I feel like I know less today than I do when I started because there's so much more to know now. And I've been privileged to invest in a lot of the more successful projects,

Starting point is 00:03:00 help run one here. And that's kind of exciting in a way. That makes sense. I guess when you started, it was a very specific thing with a wide open world of needs, but it was just this one thing, right? It was Bitcoin and that's all there was. And you created an Explorer, right? Which was basically this mind-blowing innovation because nobody could see what was happening on the blockchain. How did you come up with that? Why was that the first thing you decided to work on or was it? I might have missed a part of the story. Yeah. So actually, the idea for the BlockExplorer was

Starting point is 00:03:34 my co-founder, Ben. He had this idea that it would be a lot easier to look up transactions and sort of a search product than downloading you know, downloading the whole text file from Bitcoin QT. And that if people could see Bitcoin happening, it would be more real. And I think that's definitely true. Like, even to this day, people want to see transactions happening, you want to see what's going on in the network. It's kind of one of the first things you need when you launch a new protocol is a block explorer to show people actually that it's real and that things are happening. And so that was his innovation, his idea. And it's still one of the most popular websites encrypted today, 12 years later. Pretty wild. And I'm looking at your stats, 88 million wallets created, $1 trillion transacted, one third of Bitcoin network transactions,

Starting point is 00:04:23 37 million verified users, 200 countries. It's insane. It's insane. That's actually kind of old now. There's actually now 42 million verified users. I think there's like 90 million registrations. We're very sort of honored that so many people have chosen to do crypto with us. So listen, I think we all have at least superficial understanding of the past. So let's talk about what's happening now in the present and what it means for the future. Obviously, it's been a somewhat huge year for crypto, specifically for Bitcoin with the proliferation of institutional adoption, the ETF, all the fun buzzwords and topics that we get to talk about on a daily basis. But did you ever think back then, I guess, that we would see this level of adoption? And how meaningful do you think this is? Actually, should we be excited about it? Some think we should actually view it as a red flag. Basically, what's your overwhelming feeling on sort of this institutional wave that's coming in?

Starting point is 00:05:22 I remember 10 years ago when the first ETF stock started. So it was a long road to the ETF for me. We haven't actually seen institutional adoption yet, which is going to be kind of a non-consensus view. I've talked to a lot of the folks working on the ETFs. Most of the buyers of the new buyers, so it's not Grayscale, but the new guys are actually retail investors. So they're not seeing like giant XYZ asset manager buying a hundred mil block of Bitcoin yet. They're seeing a lot of retail orders for that product. Basically people putting them in their retirement accounts and Roth IRAs and all that, donor advised accounts, that kind of stuff. Much older demographic than is sort of our demographic. We have a tendency to have very

Starting point is 00:06:11 young customers, but we haven't actually even seen that institutional wave yet. We are seeing institutional products, which is different than adoption. I think that's really important because it's going to lead to institutional adoption in the future. I didn't feel like all of this was inevitable when I started working on crypto. I think that's really important because it's going to lead to institutional adoption in the future. I didn't feel like all this was inevitable when I started working on crypto. I thought that the most likely scenario was that it died, but that it would be like a good worthy attempt. My confidence in crypto really built after the first crash and comeback. It was like, okay, if we can survive that, we can keep surviving that. And indeed, like it's still been, you know, boom and bust, boom and bust.

Starting point is 00:06:48 But if you kind of draw a line through that and average it out, it's just straight up into the right. And I expect that to continue. I expect there to continue to be big cycles, massive corrections. And it's worth having the perspective that, you know, the whole crypto market today is still very small, a couple trillion market cap, but most of that market cap is uncirculating FDV. So I prefer the circulating market cap of crypto, which is much, much, much lower. And so it's still really small today. When you think about it in the perspective of perspective of global finance or even the

Starting point is 00:07:27 size of the gold market cap or a single tech stock, it's pretty small today and it's got a long way to go. And so I think there's probably another 10 years before we get to sort of a financial ecosystem at scale and sort of the full vision that a lot of us saw and the potential that we saw 10 years ago is fully realized. I think this is a 20-year journey. Another 10 years. If there's 10 years left, what are we lacking right now that we need to reach that scale? Because we're only halfway there. Obviously, that means that either we haven't marketed ourselves particularly well to bring everyone in.

Starting point is 00:08:07 Maybe their infrastructure doesn't exist yet that we would need to operate at that scale. What are the things that you think we need to build or see in the next 10 years to reach that point? One, we've nowhere near the level of ubiquity. Ubiquity is like, you know, not everyone uses WhatsApp as their primary messaging app. But it's very rare to run across someone who doesn't have WhatsApp installed. If you go out and you're in normal social circles, not Bitcoiners or crypto people, and you're like, hey, let me send you a stablecoin to pay you back. Most people don't even have an app or know how the

Starting point is 00:08:42 stablecoin works. Ubiquity is driven by how easy it is to use and consumer trust. And that kind of brings me to marketing. I do think that the industry has historically had a marketing problem because in many ways, they're most famous for our disasters. The average person is more likely to have heard of Sam Bingman-Fried than Brian Armstrong. Sure. Right. That's a problem. The history of crypto is defined by our gigantic blowups, which are mostly fueled by greed. And so I think as an industry, if we want to be long-term successful, if we want to truly build a global financial system for the internet, we have to learn to be less greedy.

Starting point is 00:09:30 We have to think more long-term. And we have to be a lot more rigorous about calling out people and companies in our space that are not sort of adhering to that vision and very clearly separating them. We have a lot of self-inflicted wounds, obviously, at SBF is the biggest one. 2022, obviously, we saw the major contagion with countless collapses of platforms that you're sort of alluding to. But there's also the non-self-inflicted wounds and the just outright false narratives that perpetuate around the asset class, right? We still see certain politicians talking about how we're going to boil the ocean or we're primarily being used to fund terrorism. So yes, I think that we have a problem of negativity

Starting point is 00:10:18 of our own doing, but there's also for some reason a sort of very negative stigma coming from very loud voices. Why do you think that still is at this point? I think in some ways it does come back to greed. Like more, like there was a lot of discussion in crypto circles about like how things might not be right at this player or that player last summer round. But, you know, people were in a lot of deals with them. Like they wanted access to the deal.

Starting point is 00:10:44 They wanted access to the party. They wanted access to the party. Humans, we want to be cool, right? And calling out bad behavior, no matter what sector or thing you're in, is basically the definition of not cool. Nobody likes the short sellers on Wall Street, except for journalists. Maybe podcast hosts. But it's hard to not be cool, right? And I think this is something even I needed to reflect on. I should have done a better job about expressing my concerns about some of the counterparties in the space.

Starting point is 00:11:22 We were very fortunate that we were able to navigate things like the FTX explosion with minimal damage. But as an industry, we really do have to step up. I think that is people like me, CEOs of, you know, major companies in the space. I think that's people like you, you know, with a very big following on your podcast. I think we all need to be more rigorous in sort of who we let carry the banners in our industry. How did you survive all of that contagion? You guys seem to have come out completely unscathed. Not many did. I could be wrong. Do you still offer an earned product? We do. We have an earned product. It's not available in the United States.

Starting point is 00:12:05 Of course. Well, we're not allowed to do anything here. Very few fund crypto products are available in the United States. We are much more conservative than most. It's easy to say, harder to put into practice. But to give you an example, we have a seven person board. We have three independents on it. The guy who is the chairman of our audit and risk committee was the controller of the currency, which is the federal banking regulator. Our lead director is the lead director of Walmart, the largest company in the world by sales. We tend to be very principled, very conservative and build up a lot of the apparatus around that that forces us to be.

Starting point is 00:12:50 Most of the bad risk decisions that others made, I couldn't have made because someone above me would have canceled them. But that involves me sort of voluntarily handing over power, right? Which sometimes is, it may be less fun for me, but it's really necessary for the health of the company and the health of our customers. We also have the, you know, collective trauma and wisdom of having been through so many market cycles.

Starting point is 00:13:17 You know, I tell people that like being a crypto CEO is a great growth opportunity because two out of every four years, no one cares about you. One year, you're an absolute genius. And one year, you're an absolute moron. And that's unusual, right? Like in a normal tech company, it's kind of like a little more consistent every four years. And so you get practice. You get some practice. Well, you're talking about the four-year cycle, of course, which surrounds the having that we all love to talk about. We have a halving coming up right now. So do you get to look like a genius in the

Starting point is 00:13:48 next six to nine months? I don't know if it's the next nine months. I think it might be a little further out. I think 2025 might be the genius year, but who knows? I try not to get too attached to it in either direction. Well, yeah. I'm not saying you're counting on price to go up so that you can look smart. It was just sort of my cute way of saying, do you think that the four-year cycle is going to continue on because everybody knows the halving is in April-ish and usually that means- Yeah, it's funny. I think this is my fourth halving. Which is crazy.

Starting point is 00:14:22 In every halving, we have this discussion, is the price baked in? And we're like, yeah, I remember last one, we're like, it must be baked in. Everybody knows this now. It has to be, we all know. Yeah. It has to be. Yeah, when it wasn't baked in. I do expect that, you know, the crypto market cap will be four or five times higher five

Starting point is 00:14:43 years from now than it is today. When does that happen? I don't know. I think generally speaking, like, you know, buying crypto in the year before the happening is a, usually a great idea. So long as you can hold onto it for a year or two afterwards, when you've been doing one of the side effects of doing crypto as long as I have is like, you have conversations again and again, to the point that sometimes when I search my emails, I find myself like I almost have a relevant email that I could just copy. Yeah.

Starting point is 00:15:13 Like there's probably a podcast for me before the last happening. We're having the same conversation. I'm glad that I'm so original. It doesn't feel great. But hey, what are you going to do? No, but you know what's funny is that, funny is that even here in Paternalia Blockchain, we're having this conversation. It must be priced in.

Starting point is 00:15:30 Is it? Is it not? Let's find out. This time we'll have the ETF narrative overlying it, though. Overlying it, we'll be able to say, well, we have this much AUM coming into these, and that's really what's happening. So it wasn't the having, which means we get to have this conversation again in four years, which is good. We get to repeat it and

Starting point is 00:15:50 I'll invite you back in four years and we'll talk about the same thing. But you did mention can't offer anything fun to Americans. I made that joke and you agreed. Are Americans ever going to get full access to this asset class in your opinion? Ever is a very long time. CFDs are a very popular product overseas. Contract for difference. US investors still don't have access to them. But Robinhood was able to roll out options, which is wild to me.

Starting point is 00:16:20 Like CFDs are not allowed, but options are. Okay. CFDs are basically much easier to understand options. Yeah. But, you know, got there eventually. I think it just takes time. Will US investors ever have access to like a 50X perpetual? Probably not.

Starting point is 00:16:37 But I think that's probably an okay thing. I think they want to just know that they'll even be able to trade all the coins. Forget even how much leverage we'll be able to use on them, which, by the way, would be a nice thing for them to add in a safe manner. But we don't even know what coins we're in theory allowed to trade yet. And I think that a lot of people still just want that regulatory clarity. I would have to imagine as the CEO of a platform operating in the United States, that's a pretty big topic on your mind. Yeah, I would love some regulatory clarity in the US. I think it has gotten better over the last 10 years. This is like a chat we were having with the legal and policy team. There is more clarity now than there has been historically.

Starting point is 00:17:21 Still not great. Most of our business is actually in Europe. The clarity in Europe and in Asia, where we also operate, is not great. Most of our business is actually in Europe. The clarity in Europe and in Asia, where we also operate, is very high. Like we know exactly what we're dealing with. It's still pretty unclear where it's going to be in two or three years in the US. And I think unfortunately,

Starting point is 00:17:37 not a lot happens in election years. So we're probably looking at 2025, 2026 for regulatory clarity. Do you think it will materially affect the next few years of the industry, which party is elected or which candidate is elected? Yes, it does. It probably matters a lot, not just which president is elected, but the composition of the Senate.

Starting point is 00:18:03 The interesting thing about crypto is neither party has really adopted a pro crypto stance or an anti crypto stance you have like pro crypto people in the Democrat party, pro crypto people in the Republican party, you have anti people in both. It's really not become like a partisan issue in the sense of neither party is really carrying the flag for crypto, which is really interesting. Yeah, I think you have members of both parties that are carrying the flag for crypto and maybe just a vocal minority in one party that's raising an anti-crypto army, let's say, in theory. Although when you do polling, most Americans are actually quite supportive of crypto.

Starting point is 00:18:49 So from a polling perspective, there's not like an anti-demographic on crypto. I agree, which makes you wonder why any politician would do something that's likely going to be politically unpopular. I have my theories. I don't often tin hat them in public, but it genuinely makes me wonder why a progressive person would think that an asset class that helps poor people would be bad at the most basic level. No, it is a mystery. I'm not going to get you to talk about politicians, am I? I don't expect you to. I don't do it either. Honestly, you kind of brought up the fact that it's an election year and nothing gets done. We're going to be last in

Starting point is 00:19:31 the United States, I think, to offer any clarity around this asset class. You mentioned that Europe obviously is ahead of us. Interestingly, I remember the first iterations or conversations around Mika was terror, horror, worst thing ever. But then as the United States got worse and worse and worse, it seems like the vibe was, well, just give us some clarity. We don't even care if it's bad. And now people seem to think Mika is pretty great or at least totally, totally, you know, acceptable. Well, the regulatory process outside the United States is a lot less political. It's very loaded here. You know, we've got people having Twitter wars about it, you know, CEOs of companies

Starting point is 00:20:15 with regulators, and it's like a high drama situation. Most other countries, it's not. It's more of an administrative process. When, you know, Sam meek of them worked on for many many years we've been active on it for many many years and it has changed significantly over those years is it everything that we would have wanted no is it a reasonable workable solution that will keep investors and customers safe and allow innovation to flourish? Yes. Getting there was a long process. And there was quite a few companies that really put in the work

Starting point is 00:20:53 to make that happen. So I think not only has the US gotten worse, you're right there, but also the MECA proposal got better. And I think the duality of that's important to recognize. It got better, and it's still not even as good as some of the more favorable jurisdictions where it seems that everybody is moving or at least building, obviously, United Arab Emirates, Singapore, people even talking about Hong Kong, right? I thought that China bans were our biggest problem. Now we're talking about adoption in Hong Kong. How do you go about cherry picking jurisdictions and expanding your business around the world when the regulatory environment is different everywhere? We look at the size of a market, right?

Starting point is 00:21:33 There might be really friendly regulations and I'm going to make up a city, Peterlandia. But if there's only eight residents in Peterlandia, it's not a very interesting market, right? So first of all, we're always looking at how many customers can we serve? What's the market opportunity? And then secondly, what's the amount of clarity that we have? I'm really blessed that general councils in crypto are often in a very unstable position. The guy that leads our legal team has

Starting point is 00:22:00 been with the firm for over four or five years now. The guy that leads policy has been with me for seven years. So I lean on them really, really closely. And they've been able to really do quite well on the strategy side of licensing and regulatory. It is a huge part of your job as a crypto CEO and as a crypto company, stinking through regulation, making sure that it's workable.

Starting point is 00:22:25 You know, it's definitely something that I wouldn't have predicted how much time and effort and how big a part of my life it would be. You know, a decade ago, we're all starting out. I mean, what does that look like on a day to day basis? Is it meetings with politicians, meeting with regulators? Is it just your life is owned by lawyers? How does that actually play out when you're trying to run a business? I've got, I've got to imagine you've got like more, more lawyers and employees at this point. No, no, I definitely have more employees than lawyers.

Starting point is 00:22:54 That's good. You're winning. But you know, it's close. No, I'm kidding. I would say that probably 10 to 15% of my time spent on it in a good week. And there are some weeks where that's more like 80, 90. I mean, that seems like a monster waste of time. You know, sometimes it can feel that way, but it's, it's really important long-term work. You know, it's not, and this is kind of what it comes back to. I was talking about being oriented for the really long-term versus the short-term. That work is super important in the long term. You know, it's not as important in the short term. But yeah, I'm here for another 10 years.

Starting point is 00:23:31 Yeah. Maybe longer. Come on, man. Maybe longer. You can't give us an expiration date. You know, we're going to be here doing this forever. We're going to have a conversation in 40 years. So obviously we've got it could happen man there's only two of us that have been ceos of crypto companies for this long now you and

Starting point is 00:23:52 brian armstrong armstrong was he 2011. we both have over 10 years i mean that's wild and i think the next longest is maybe at eight seven or eight years you're like a unicorn i mean it's really crazy what do you think of how many there have been and how much turnover there's been at a is maybe at eight, seven or eight years. You're like a unicorn. I mean, it's really crazy when you think of how many there have been and how much turnover there's been at a number of exchanges. It's really a testament, I mean, to what you've built. So I think we all know what you've built. Now, let's say we go into this Goldilocks zone where you can kind of do whatever you want and we get regulatory clarity and all these wonderful things. What do you want to build blockchain.com into a perfect world? I know there will be restrictions in the real world, but ideally you've got this full exchange, you've got an earned program,

Starting point is 00:24:34 you've got the wallet, you've got the blockchain explorer, you have a prime brokerage, institutional side. What else is there to build? We serve 2000 institutional clients around the world. We got started in this really simple goal. It's still the goal. We wanted to help people be in the crypto financial system. We wanted to be a company that when you wanted to do something in crypto or later on a fund or a foundation or an institutional client, that we could provide a high level of service to enable you to do that. So we really view ourselves as very customer driven, very customer demand driven. We view ourselves as enablers, not in a bad way, but as enablers, like we empower you

Starting point is 00:25:17 to be part of the crypto ecosystem. And so, you know, a lot of times people ask me like, what do you want the company to stand for another five, 10 years? I'm super proud of the fact that we've like never broken a trade on a customer. A lot of times people ask me, what do you want the company to stand for another five, 10 years? I'm super proud of the fact that we've never broken a trade on a customer. We've never not honored a withdrawal. We've never put up the gates. Our site has triple nine reliability, which is very hard to do in crypto.

Starting point is 00:25:38 We are a reliable, safe partner to people and institutions that want to be part of the crypto financial system and you know five years from now 10 years from now 50 years from now i want that to be our reputation the products that we deliver are going to change the services that matter to people are going to change the customer demand is going to change but that reputation and that delivery is the thing that we're going to stick to over the next 5, 10 and 50 years. Pretty crazy. You mentioned you and Brian Armstrong. And I just remember, I didn't get until 2016. But the meme of the first four to five years, maybe still currently of my crypto journey was, I can go on Coinbase. And if the

Starting point is 00:26:22 exchange is down, I know that something volatile happened with Bitcoin. I don't need to look at a chart. I just know that if Coinbase goes down, that something's going on. Right. And so not having those outages when the biggest exchanges of the world, some of our biggest blockchains do is pretty, pretty crazy. How I got to ask you, so you mentioned you do still have a yield product as Americans can't use it. How do you safely offer yield in crypto in 2024 after everything that we saw over the last few years? Yeah. So we mentioned we run a prime brokerage. That's where people are going long and short. We still provide that to institutions. We do it on an over collateralized basis.

Starting point is 00:27:03 There were times in the past when we provided under collateralized or structured products. We no longer do that. And so we run very sort of very conservative, the yields are lower. We also do staking, right? So some people would rather be in a liquid earned product than a staking product. So a lot of the earned assets are staked and that's basically how we do it. And then on some things, we don't even earn anything on the assets. We just pay it as a customer acquisition tool. That makes sense. You said that you have 2,000 institutional clients, which seems like an exceptionally high number when we talk about there being no institutional

Starting point is 00:27:40 adoption yet. But I'm assuming these are pretty much crypto-focused funds and companies and not the mainstream. Is that a correct assumption? It is. We also do have mainstream TradFi clients, but they do represent a minority of our business. The majority of our business is other crypto companies, funds, high net worths that we're very privileged to provide services to. Talking about that, and you talked about how we have institutional products, but not really institutional adoption. When I brought up the ETF, what do you think is going to trigger them? Or I should say, what do you think is going to get

Starting point is 00:28:17 them to finally pull the trigger and view Bitcoin first? Let's not even talk about the rest of it, but to really view this as a treasury asset, as a benefit to the Sharpe ratio of your portfolio, all the things that we know are true. We have the ETF now, right? So the rails are there. The plumbing is there. Now we just need them to care. Well, we don't need them to care, first of all. Bitcoin and crypto have done just fine without them. That's true. I think what will cause them to care is performance. Humans are mostly motivated by greed or avoidance of pain. As asset managers start putting Bitcoin into portfolios and it's successful in driving

Starting point is 00:29:01 portfolio performance, that's greed, right? Other people are then going to allocate because of fear. Fear that they're going to underperform the people that have Bitcoin in their portfolio. Bummo. That's how it works. Like, it works that way with retail, it works that way with institutions. Humans are almost always in markets doing things out of greed or out of fear. And, you know, usually the late, you know, the best and most bold investors

Starting point is 00:29:28 exclusively do things out of greed. But, and greed doesn't have to be bad. Greed is like conviction and the potential of an investment. I'm going to do this even though it makes me feel uncomfortable. Like, you know, buying Bitcoin at 18K was probably uncomfortable

Starting point is 00:29:41 for the people that did it a year ago. It was for me. Yeah. Yeah. Yeah. I remember buying some Bitcoin around 21 and I was like, I think this is the bottom. And then I bought it and then immediately the market's like, well, nope. But I have to imagine you've got a pretty low cost basis considering your starting timeline. Yeah.

Starting point is 00:30:01 It's come a long way since I started buying Bitcoin. But I've bought Bitcoins at all kinds of prices. I bought Bitcoin at sub $100 and I bought Bitcoin at $40K. What keeps you buying? Most people would say, hey, man, you accumulated a bunch of Bitcoin under $100. Listen, I'm not implying you never sold any. I have no idea. Maybe you did. Most people I know who were in 2010 were like, $1,000 Bitcoin, I'm out of here, right? And sold everything. So I'm not going to presume that that's not the case. But what keeps you buying Bitcoin? I mean, it's like consistently one of the best things in my portfolio. Like you tend to add to things that go really well, right? And also, I think it becomes a compulsion.

Starting point is 00:30:40 Like just buying Bitcoin. There's the real answer. I finally got the real answer. The first one, the first one was the canned answer. The second one is religion. And yeah, religion. And like, you know, I got to buy it in the, in the,

Starting point is 00:30:53 in the, in the bottom year, you know, I got to buy some more coins. You got to. Do you think that there will be a point where you don't view this as something you need to continue to add to? I mean,

Starting point is 00:31:02 we see like the sailors of the world, right? He, I, the guy's never stopping. Right. And I think all of us have a little sailor in us. In my book, that guy's like, he's still, you know, from my perspective, that guy's still like a, he like just joined the party. He's a noob. Totally.

Starting point is 00:31:17 He's a noob. He says that actually, you know, like I think one of my last interviews with him, he called himself a freshman in Bitcoin. He actually openly acknowledges that. Yeah. I think he's about to go to sophomore status. Yeah. Pretty good. I'm like, I'm at least a junior now. If you're a junior, who's a senior? There's people that predate me. You know, a handful. I will probably always be buying more crypto. It is really hard to imagine stopping. I think I would only stop buying crypto if I didn't believe be buying more crypto. It is really hard to imagine stopping. I think I would only stop buying crypto if I didn't believe in the vision anymore.

Starting point is 00:31:49 Well, you said obviously that it's more complex. There's so much more. You understand it less than you did at the beginning. Now, does that mean that you dabble beyond Bitcoin? Oh, yeah. I'm not a Bitcoin maximalist at all. I can't even see your laser eyes through the camera. So I guess you're not. I've never posted a laser eyes photo. And one of these people is less passionate about Bitcoin and more passionate about human economic freedom, as I kind of mentioned. So obviously, because of that whole different crypto assets, some of them becoming the de facto standard would be better than others in my book. But I don't really care.

Starting point is 00:32:29 If somebody's like, hey, you ended up having a very middle class life, which is going to happen either way, but crypto becomes ubiquitous, human economic freedom flourishes as a result, but none of the stuff you own becomes all that valuable. Is that okay for you? That would be okay. Yeah. You know, maybe I'd start a podcast. That'd be my monetization scheme.

Starting point is 00:32:55 It's really a non-for-profit, I have to tell you, but it's a bad plan. Continue. Yeah, we run a loss-making podcast at blockchain.com if you'd ever like to do the reverse interview. It's amazing.

Starting point is 00:33:06 Actually, I think I'm perfect for that job. But yeah, okay, continue. Yeah, we can interview you on the blockchain.com pass about your podcast. That would be very entertaining. But look, so I'm way more on the human economic freedom side. I hope Bitcoin works out

Starting point is 00:33:24 because it has a huge market advantage. It's super secure network, very hard money. A lot of things I love about Bitcoin. A lot of things that I think are a challenge, future problems, things that are going to have to be dealt with. And that's why I think it's important to have more than Bitcoin out there in the world. I think that competition makes things better. And actually, as someone who most of my business is Bitcoin related revenue, I am probably 60%.

Starting point is 00:33:51 I think it's really important that there are other crypto protocols out there for competition. Like, and it's one of the things that drives me like nuts about the Bitcoin maxi movement, which seems to be dying off now is like, don't is like, we want all these other coins to exist because they're going to make whatever comes out the other side stronger. I mean, I literally say something to that effect all the time. Like if it's such a big threat to Bitcoin, then maybe Bitcoin isn't as great as you think it is. I think Bitcoin is as great as you think it is, by the way. But like But why is the existence of something that's effectively completely different such a threat to Bitcoin?

Starting point is 00:34:30 It's not. Yeah, it drives me nuts. People are like, Bitcoin is amazing. It's going to change the world. It's the best coin ever. Also, no one should compete with it. Like, what? But we're all here because free markets.

Starting point is 00:34:42 Oh, when they start cheering for the regulators and to get cracked out at other things, that's the one that always gets me. Really libertarian and permissionless unless it's a thing I don't like. Please do regulation to make my bag go up. I'm like, what? I spend a lot of time in the EVM space, so Ethereum and all its many wonderful derivations. I'm also, you know, I wasn't a big Solana, I wasn't spending a lot of time on Solana four years ago, but I've spent a lot of time in the Solana ecosystem over the last year. I love a crypto project after it's come back from like the brink. Yeah. And Solana definitely came back from the brink in a big

Starting point is 00:35:24 way. And the user experience it delivers is really interesting to me. Can also say all kinds of things I'm concerned about with Solana. But like, it's definitely worth spending time on. I'm sure you do as well. And you know, the team there responded in a fantastic way. So yeah, I'm interested in lots of coins that are not Bitcoin. The Game of Thrones, what is dead may never die mentality. I agree with you, actually.

Starting point is 00:35:47 I think that they showed incredible grit and incredible dedication and that their community didn't really abandon them. I think the narrative abandoned Solana because people just thought they were inextricably tied to Sam and to FTX. But what they've managed to build through all of that, it's really remarkable. And I, like you, I also think there's downsides. I'm not even like a huge Solana homer,

Starting point is 00:36:13 but you have to step back and give them credit where it's due. Yeah, and I mean, look, like, they responded to that situation A-plus to them and deserves a lot of respect. I think, you know, where it goes next is interesting. We're all going to watch. You know, a lot of my friends are major Solana bulls. Let's see.

Starting point is 00:36:34 But they're really delivering a lot of value to users. And I have a lot of a lot of respect for that. And seeing seeing the growth of that and the growth of products like, you know, like the on-chain trading products on Solana are the best on-chain trading products in the industry. Yeah, I think that once you actually start using it, it's hard to dislike it after you've used things in other ecosystems. It really is just incredibly fast and smooth and they're starting to solve those UX, UI problems. Now, listen, that's your approach as Peter, the enthusiast, but Peter is the CEO. You can't list all this stuff, right? You have 73 pairs total on blockchain.com when I opened it up. How do you decide what you can and can't list? I don't.

Starting point is 00:37:20 How does somebody at blockchain.com who works for you decide what you can and cannot list? There's a token approval process, which goes up to a approval committee, which is sort of compliance, legal, business, product, and tokens go through that process. Yeah. And is that basically like your own version of what's likely to be deemed a security at some point? Well, no, because we mostly list stuff outside the US. Yeah, we're looking at a variety of factors.

Starting point is 00:37:50 And we collaborate really closely with other industry participants as well. That makes sense. So you got anything big coming this year? I asked you about the five, 10 year vision, but is there anything you know, before we're done here that you guys have that you're really excited about or that you're building or integrating? Yeah. So we launched a couple of things recently that I'm pretty excited about. One is called blockchain.com pay. That is basically an on-ramp for other DeFi wallets. So our history is

Starting point is 00:38:18 in the DeFi wallets side. We built this brokerage platform that today is one of the top brokerage platforms in the market. It was really built to be part of and partnered with a DeFi wallet experience, which makes it pretty different from a lot of brokerage platforms. We've gotten requests for a couple of years to extend that to other players. We launched that product, Q4. We've got a bunch of big partnerships coming out over the next two quarters on that front. And I'm really excited to do that because we're going to help other DeFi wallets onboard people into crypto.

Starting point is 00:38:52 And so very aligned to our mission of increasing access and letting people just choose the best product that they want. So I'm really, really excited for that. And then the other thing that I think is going to be really great this year is we're opening up local operations in Nigeria, which is one of the top three crypto markets in the world and very complicated to service customers there. We have a lot of them there, millions and millions, and figuring out how to operate there in a compliant compliance safe manner, it's been very challenging. But we're getting very close to a local rollout in Nigeria. And I'm really excited about that. One of the biggest challenges there, just

Starting point is 00:39:33 top end, is it just completely like dealing with the government and regulator and things like that? Or is it the actual people's access to internet or banking and all the magic problems we would sort of imagine in Africa. Yeah. You need to do compliance differently. You need to do identity verification differently. You need, you know, there's a license that you need to get, like it's top to bottom, just a completely different world in Nigeria. And why are you so committed to getting that done with all those roadblocks? I can't believe it's, I mean, I know that they have massive crypto adoption there, but I know that the actual numbers

Starting point is 00:40:05 and volume itself is not huge. Is that just about the ethos of expanding this to everywhere that you can in the world where people actually want it? Well, actually, the numbers are huge. That's one of the misunderstood things. I was under the impression it wasn't. But more importantly, millions of customers there. And I want to serve our customers well.

Starting point is 00:40:25 So we're going to figure it out. The stories I've heard about Nigeria, Ray Youssef, who used to be at Paxful and others. I mean, it seems like that's one of the few places in the world where people are using this as a full complimentary financial system and nobody's talking about it. And the usage does not go up and down with the Bitcoin market.

Starting point is 00:40:47 It is not correlated to the price of Bitcoin. Every other market we're in is highly correlated to the price of Bitcoin, whether dollar or their local currency. It's not correlated in Nigeria. So if there's any users that we should be supporting, it's those ones. Yeah. I've had a few people who just continue to say that we're all looking in the wrong markets. We're all focused on the regulators in the wrong places.

Starting point is 00:41:10 It's all misdirection and that this is all going to build in Africa and South America. And it sounds like that's legitimately the case. I don't think it's all going to happen there, but I think they're way more important than people realize. Yeah. I love that. So can we have another conversation when you guys launch in Nigeria and talk about how that went and what the challenges were? I think that'd be really compelling.

Starting point is 00:41:31 Yeah, for sure. That's probably like, probably by mid-year, I'll know enough to tell you. That sounds awesome. We're going to definitely do that. And where can people follow you after the conversation

Starting point is 00:41:40 and check out everything at blockchain.com? Yeah, so the website is just blockchain.com. Super easy. I gave it away. I gave it away. Yeah. My Twitter is one more Peter, all words. You can find me there and you can also find blockchain at Twitter at app blockchain. Much more active Twitter feed than mine. But yeah, I, and I love hearing from customers. So, you know, drop me a note on Twitter or wherever else. I'm always happy to interact there. Well, listen, man, I appreciate you taking the

Starting point is 00:42:13 time. It was an awesome conversation. People know we sat down in Singapore and we had like seven minutes. It wasn't person, but it was very, very quick. And so I guess at this point in 2024, when you meet the CEO who's been around this long, you say, congratulations on existing. So to end, I say, congratulations on existing. It's a great feat. Well, thank you very much. I appreciate it. And thanks for having me on the podcast. I'll look forward to talking to you in the summer. Awesome. Thanks, Peter.

The Wolf Of All Streets - Crypto Will Reach $9 Trillion In 5 Years | Peter Smith, Blockchain.com

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