Unchained - Bloq's Matt Roszak on Necker Island: Connecting Multiple Blockchains, China and Tech Cooperatives

Episode Date: June 14, 2016

Matt Roszak, a venture capitalist for 20 years, discusses how his new company Bloq, cofounded with former Bitcoin core developer Jeff Garzik (from talks they began on Necker Island last year), serves enterprise clients and envisions a multi-chain future in which different blockchains can connect with each other. He also gives his thoughts on business models in a decentralized future and the influence China will play on the development of Bitcoin and blockchain technology. Plus, we find out what happened in his tennis game against Sir Richard Branson. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Forbes Podcasts. Hi, everyone. Welcome to Unchained, a Forbes podcast produced by fractal recording. Thanks for tuning in. Today, we're launching with two podcasts, both from Sir Richard Branson's private island in the Caribbean, called Necker Island. After today, you can expect one new show every other week. For one of our inaugural podcasts, we're talking with Matt Rosack, the founding partner of Talley Capital and co-founder of new blockchain enterprise company, Block, spelled B-L-O-Q, which aims to be the red hat of blockchain software to enterprise companies.

Matt tells us what he's up to in the blockchain space, as well as his thoughts on other events in the world of blockchain. Hi, Matt Rozak. Thanks so much for coming on my show. Thanks, Laura. Great to be here. So here we are on beautiful Necker Island in my hotel room, which is also equally beautiful.

What's been the highlight of the Blockchain Summit so far for you? And it can be either personal or not personal, but recreational or professional. I think when you come upon this island, you see it from a distance and it's this lush, green, beautiful island. And you see all these different animals, flamingos and lemur monkeys and turtles. And you kind of realize that if we were like movie producers, this would be the setting for this amazing island that we'd want to make a movie in this amazing setting. And a great setting for a movie about people who are about to change the world. Yeah, no doubt. It's such an honor to be amongst all these folks from industry and academia and banking and policy.

It's truly an amazing group of folks. Yeah, and I want to thank you in particular for coming during the recreational hour. But as far as I understand, I think you have a fun appointment after this. Yeah, I'm kind of trying to get mentally prepared. I'm playing Richard Branson in tennis right after this. And I just went to the gift shop to buy some clothes because I didn't really bring tennis gear. And so trying to get ready for that. Okay.

Well, good luck to you. Well, actually, yeah. I mean, yesterday he played the former prime minister of Haiti. And he's got games. So I got a lot in store from here. Right. Yeah. I saw.

And for our listeners, I'll try to give you the update. later on whether Matt won or not. Okay, so let's get down to business. Tell me about your company. And I'm interested to hear about it the way that you might pitch it to somebody. In this case, it's our listener, but maybe adaptive from what you might pitch to like an investor or potential client. Sure. And maybe as background, so I've been in the venture capital business for the last 20 years and along the way co-founded six enterprise software companies. So in areas of HR, video surveillance, public safety, and really had a lot of broad exposure selling to enterprise customers. And the opportunity that was kind of the catalyst for Block came about from my experience

in enterprise software. And then over the last four years now, I've invested in about 21 companies in the Bitcoin blockchain ecosystem. So lots of infrastructure players, wallets, payment processors, or exchanges, one minor in Bitfury, and gave me a really interesting heat map of what was working, what wasn't working. And the white space that really came about was this march of the enterprise in blockchain. Every global bank on the planet has pronounced their blockchain strategy. Fortune 1,000 companies are looking at this space, much like they were looking at Internet in the 90s to say, what's my Internet strategy?

now every CTO on the planet is saying what's my blockchain strategy. And so with that demand, with that interest, and seeing the kind of evolution of technology, my co-founder and I saw this as an amazing opportunity to really think through and develop these scaffolding layers, the software layers for enterprise customers wanting to manage blockchains and build blockchains. So much like if we were developing an internet stack of software and we said, what do you need to have to be online enabled? And, you know, kind of instincts would be content management, e-commerce, and you'd have all these layers of the onion that you would build out to enable people to go online. And so much the same where blockchain is just a raw protocol. And most enterprise customers don't want to go to a lumber yard and pick out lumber and hammers and nails.

they want finished product. They want platforms they could build off of and innovate and manage. And so that demand coupled with what's happening in the ecosystem, which you have a lot of developers, lots of innovation, lots of companies that are great products, great features. But we are taking this sweet approach, this product stack, and delivering it in a way in which enterprise software has been delivered

for the last 30 years to, to this unuser, which is productized, hardened, supported, maintained, and all kind of wrapped in a service level agreement. And some of that is not an innovation, a delivery mechanism to service these large global companies. But the innovation that we're driving is we're taking the font of innovation from open protocols like Bitcoin, like Ethereum, and we're delivering that in private blockchains and the blockchain management systems that these customers need.

So my co-founder, Jeff Garzik, who we actually had some of the kernel of the idea last year here at Neckar Island. Subsequently, we had another meeting about Block, and one thing led to another. And given Jeff's experience at Red Hat for over a decade, it was a very natural intersection to say, let's start this company and really kind of, kind of harness this demand and this technology.

So it was very intuitive for us to get kicked off. And now we're about seven months into the ballgame. So tell me why you chose to co-found Block with Jeff Garzik. I think we kind of found each other. I was the director, Jeff's first board member at Dunvegan Space when he launched a company to develop a software system on a non-terrestrial basis. with CubeSats, Cube Satellites, and outer space. And then when we met last year, we saw this opportunity to build out this technology stack for the enterprise.

But Jeff, I mean, he's a core developer. He's been at Red Hat for 10 years. He's a tech visionary. And starting the company with Jeff was just an incredible honor. And we built the company around his energy. we started with people. I mean, and Jeff was the key catalyst to each and every hire that we've had. And that really sets a trajectory of the company, the culture, the ethos.

And, you know, our first, you know, 15 hires are going to affect our next 15 and our next, you know, 60 hires after that. But we wanted to make sure out of the gate we had the right people. And so Jeff has been able to attract some of the best engineer. in the space. We brought on board Andreas Schilbach, who runs the Bitcoin J after Mike Kern left, the Bitcoin project. Now Andreas is managing that repository. He's the inventor of the Android Bitcoin wallet. We've got a guy named Paul Storch, who's kind of the brains behind drive chains. And each, we have Jordan Kruger, first female data scientist in the blockchain ecosystem. So we've got lots of amazing engineers, core developers, and building out a great team at Block.

And I kind of owe all that to Jeff and kind of his energy that he brings to this ecosystem. Yeah, I met both Jeff and Paul. And they were both just so great and so funny. And I really, really enjoy talking with them. And how did you hear about Bitcoin and blockchain? So in 2011, I was a co-founder of a social gaming company in Singapore called V-Wawa. And if you're in social gaming in Southeast Asia, you're dealing with payment processing in Philippines, Indonesia, Korea, Malaysia, all over the place. And there's a lot of friction in payment processing, and they have gaming credits and all this stuff.

And then Bitcoin came on the scene, and it was almost like, truly, it was like, that's like magic internet money. How is that even possible? and then you realize that you could mine this, and that's like a digital golden goose. It's almost like I discounted it out of the gate because I was like that's almost too perfect of a solution. And so much like anything else, whether, you know, Laura, I tell you about a favorite restaurant in mine that you have to try and like, okay, fine, but if 10 other people tell you, like, you're going to drop everything and go to this restaurant. Bitcoin was much the same to me where that was my first exposure. I kind of discounted it quickly. And then over the next six to nine months, I kept getting reference points of Bitcoin.

And then so by 2012, I basically, you know, I did what I tell everybody else is like, lock your door, turn off your phone and study this technology, learn about it. And slowly got into the ecosystem and started investing in companies and quite frankly building my education set in the space and engaging with amazing entrepreneurs. which certainly led to the journey I'm on with Jeff Garzik at Block. And so it's an honor to be a contributor in this ecosystem. And we've got a lot of work ahead of us. So it'll be fun. Okay. Great.

I'm kind of curious. A lot of corporations are choosing to go with private blockchains. Many of them prefer that because it's maybe more the equivalent of like choosing to build an intranet, it feels safer. Why have you staked your business on public blockchains, which are more like internets? And are you finding that enterprise companies are reluctant to go that route, and how do you overcome their concerns? Yeah, I think it's a great question. It's part of the phenomenon that we're seeing now.

Certainly in the last year, year and a half, you could not have predicted dynamics like the march of all these banks or Ethereum coming from a crowd sale to now a billion-dollar market cap. And so the ground shifts in this space, and you really have to be prepared for that. Some of the common denominators, at least for a block, is part of our go-to-market, is we believe it's going to be a multi-token, multi-network, multi-chain world. And so private blockchains, like you are looking at rightly, is they're intranets. They are closed systems and very purposeful because a lot of these industries, a lot of these companies are in highly regulated industries. And they see the innovation. There's a regulatory framework that they have to behave and play in. And they're conscious of that.

They're also conscious that tech and software evolves over time. So they need to, for the most part, get blockchain enabled, you know, and kind of jump into the pool and run financial, non-financial use cases and really start to swim in this pool, a pool of innovation. And over time, you're going to see a constellation of chains. And everybody has an opinion of the Bitcoin protocol, Ethereum, Hyperledger, R3, Skorda, chain has an open source protocol. I view all that as innovation.

I view all that as an incredibly important stepping stone, an investment of time, energy, and money to get this broader fabric, this broader blockchain fabric that we'll see, which in my mind will be a constellation. of chains. We'll see lots of chains for industries, geographies, different assets. But over time, what you could imagine is that there's got to be interdependencies, there's got to be connectivity. And that connective tissue is very important software. That connective tissue is what's going to really create this network and this constellation of chains that'll be the money layer, the data layer, secure and private data layer over the internet.

And so are you saying that block is creating that connectivity layer? Yeah, absolutely. Yeah, it's one of the fundamental things on our go-to-market. So the font of innovation really comes from public networks. That's where developers want to change the world. That's where they wake up in the morning and say, we want to build the new frontier of the movement of money or data. And so you harness that in the way you engineer an architect private blockchains,

It's knowing full well that there is going to be interdependencies and connectivity between public and private blockchains over time. So, you know, you might be trading something on a private blockchain. And everybody in that chain, the traders or the market participants might trust each other, may not trust each other. There might be auditors involved and they have to hash data to some public chain so that could be verified by a third party. So there's going to be utility interdependency. and that's one of the most trivial examples of how they could interrelate. But the other dynamic that we will find with the interrelationship between public and private is security. And what's truly a secure, immutable ledger and an unhackable protocol and all these dynamics that play into that.

And if you're building a private blockchain that's going to have certain pros and cons in terms of security and the use case, that it's trying to solve. But if you could find a way to tether that private blockchain with certain security elements of a public blockchain, which has much, much broader and deeper security benefit, then this whole ecosystem really starts to build lots of momentum in steam. So, you know, it's, like I said, it's an amazing time of innovation, and we're seeing lots of investment and innovation within enterprise customers every single day trying to explore this where it goes, I think it's going to benefit the whole ecosystem given that amount of

attraction and effervescence and investment. Good things come out the other end of that. Sometimes things get scrapped and you find a new center of gravity and you move towards that, And that's how things go. And, you know, when the Internet was being developed, you know, everybody didn't have the right answers. They're gravitating towards certain elements. And then you kind of see gravitational pull around certain protocols,

around certain layers of the Internet. And I think we're in the middle, not even in the middle, we're at the beginning of that vis-a-vis a blockchain. Okay. So you guys also work on private blockchains, not only public ones? Correct. Oh, okay. Okay.

So who are some of your clients and what are examples of projects they're using the blockchain for? We're under NDA with lots of clients, but from a industry standpoint, it's no surprise financial services, supply chain, healthcare, and insurance has been probably one of the brighter spots in terms of a propensity to kind of look at that industry and make some significant change. And as I mentioned earlier, the demand for this technology and trying to figure out how it applies to their internal business systems. I think we're going through a phase of blockchain where it's almost like companies are, you know, and I'm going to give abstract examples. None of these are customers, but I'll give you like an evolution of what's happening now. Lots of companies are coming to what I'll call the blockchain peddlers. Let's call it the chains, the block streams, the R3s, the digital asset holdings, the gems, the blocks of the world. And most companies have all these folks in their lobby with contracts and proofs of concepts.

They're all getting signed up and they're all testing. And they're all looking to see what sprouts some, what blossoms, and then they'll start putting more water and sunlight on the ones that start to take shape. And for the most part, lots of them are looking at ways, and I'm going to give this abstract example of their Walmart and they want to optimize their supply chain. They're going to say, oh, how do I get better days outstanding or inventory turns or a margin or supplier? you know, finance enhancements. And that's kind of, I would say, optimization. And then some people will say, well, I don't want to be a Walmart. I want to be an Amazon.

Well, Amazon's like a 20-year-old concept. The real benefit of this technology will be when companies say, I want to be an open bazaar. I want to jump over these traditional channels, these traditional blood vessels of commerce or of finance, and say, I want to create a decentralized network. And that's, you know, at the end of the day, that's what Black. blockchain is. It's a, you know, a better name for it from my standpoint. It's a, it is a network enablement layer. It's a network enabler, you know, and you look at this from the heat map, even geographically, where China is, is starting to become a major player and investing

lots of capital and time and energy into blockchain companies and the space broadly defined. And, you know, kind of the current state of play, you know, we're in the year you're the monkey. But the current state of play for China and Bitcoin blockchain is all the stuff we read about where, you know, most of the mining happens in China, most of the trading happens in China. But the entrepreneurs, the VCs, the multi, the conglomerates, the tech companies, and the government are all very self-aware that the real opportunity here is in the software, the data, and the applications that can be built on this. And take that a step further from a macro standpoint, you know, how do you, you know, if you're China or you're

in the EU and you're seeing the blood vessels of value today of traditional finance between Swift and DTCC and others where you want to leapfrog over that, you know, and just like going into a developing nation and how landlines were leapfrog to mobile, this is what blockchain can do to traditional either business models or flows of, of, of, you know, of money globally. Okay, so there's a lot in the answer that I want to unpack. The first thing is, can you describe OpenBazaar for listeners who might not be familiar with it?

OpenBazaar is a decentralized marketplace. So it's like a cooperative. You know, it's like the other analogy that you don't really hear about in terms of blockchain, it's a cooperative. It's a technology cooperative. You know, market participants all benefit out of that network that, that, that, that gets developed and, you know, much like, you know, I don't know, the cooperatives that we know of today is like, I don't know, true value and ace hardware, you know, we're all cooperative.

We're buying nails and hammers cheaper and we all benefit from that. In this case, you know, the, what you're trading can be anything. And OpenBazaar is creating marketplaces and kind of decentralizing an eBay, if you will. You know, they've, you know, to a certain extent, they've, they've even taken the, you know, the Silk Road model and made it a 2.0 version of that in certain ways and, you know, created this open source marketplace. And now we're focused on all the other value-added services around that marketplace in terms

of how to help merchants and others participate on that. So I think we're going to see more and more of those types of initiatives. That's where I think this technology really changes companies and industries. and current, you know, participants that play in the middle, you know, whether you're in exchange or, you know, or a broker or otherwise. I think that's where this technology really, you know, creates, you know, levels a particular playing field. With Amex Platinum, you have access to over 1,400 airport lounges worldwide. So your experience before takeoff is a taste of what's to come.

That's the powerful backing of Amex. Conditions apply. So I'm curious. You were saying that, you know, maybe there might be a company like Walmart and then they look at this technology and they're sort of thinking, oh, maybe it can make us more like an Amazon. And then you said that for them to be really far thinking with it, they should think that, you know, maybe they should try to become an open bizarre. And yet when I look at open bizarre, I just wonder what is the business model there? You know, if you are essentially creating software that allows people to connect peer to peer, how are you going to make money from it? You know, because the reason that, um, you know, eBay is very successful, is that they're constantly taking a cut. They're the central place to go. But if OpenBazaar is just you create the software and it allows people to connect with each other directly and you're cut out as the middleman, then why would a business go that route? This is a great question, Laura. And this is actually, you know, amongst other players in the industry, one of the most talked about dynamics is what are the economics of a blockchain?

So you're a blockchain enabler and you're setting up this new way to train. trade, you know, I'll just say gold or whatever on a blockchain. And how do you make money as a blockchain enabler and a technology company here? And there's a very, you know, there's a variety of ways to look at the economics of that, whether it's a transaction fee as part of that network so the market participants say, you know, we're going to go after this particular industry on a private blockchain basis and say it costs X to get into this network and it costs Y every time we make a transaction or maybe the technology enabler is one of the market participants. So, you know, it gets one of the benefits of a seat, if you would as at an exchange. And these are, you know,

would be new, new kind of decentralized exchanges, decentralized networks. And so. I'm sorry. And when you say that they would be a market participant, like in what way, they would become a seller on their own network? If everybody on the chain has a one-tenth interest, maybe the technology provider has one of those seats, and it gets the economic value of that. So the cost to develop it, launch it, service it, is going to have,

that technology enabler is going to have an equity interest in that particular chain or network or blockchain. What I'm not following is you're saying that you can launch something like an open bizarre, which is a decentralized company, and yet people can still take equity in it? Well, that's a public. That would be a public marketplace. So, yeah, it's just launched and market forces prevail. Whoever wants to participate on that participates and buys their goods or services

cheaper and more efficient because there's no middle person. On a private basis, when you're saying we want to focus on. this particular asset or this particular element, then there's certain economics involved amongst the participants because we're all trading gold and we're either the biggest banks or what have you. And the economics for the technology enabler could be anything from an upfront fee, transaction fee, or equity in the consortium, much like, you know, quite frankly, R3 has equity in a consortium that it's built. And so it's not too dissimilar of a concept. Okay. So it's like open bazaar and yet with a central actor.

Well, I mean, that would be a, yeah. I mean, I think there's public networks like an open bazaar and there'll be private networks like, you know, a quarter for example. You know, that's a private network that has market participants and R3 is one of the beneficiaries of that in terms of fees or transaction fees or equity stake in that in that enablement layer. So there's different ways that you could take a bite at the Apple on the private side. On the public side, so back to OpenBazaar, you know, the evaluated services around the edges of that network and some of the concentric circles, whether it's marketing or peer-to-peer lending or other merchant services that they provide for a fee, once the network effects starts to take shape with OpenBazaar, I think that's the opportunity for.

them is how they start building these evaluated services. Okay, yeah, I did hear that, like, one business that people could, you know, that they could have an actual business model with that generates revenue would be to maybe provide reputation services on a decentralized marketplace like OpenBazaar. Yeah. To say, like, I can vouch that, you know, this is a seller with, you know, reputable ratings and stuff like that. Okay.

So then I wanted to go back to, you know, what you were saying about China, which was pretty interesting. You kind of made a bit of a comparison between what we're seeing with, like, the mining and the training volume and then you, and then the startups. But I wasn't sure actually if you, or the startups and the regulators and et cetera,

but I wasn't sure if you were making that between China and the U.S. or saying within China, there's this difference. I think within China there's that difference because it does have a strong ecosystem of mining, a strong ecosystem of trading of this new digital currency. And that's a phenomenon. That is something that lots of people in China have as a market signal

that there's this new innovation. And by the way, we're the market leaders in mining it and trading it. And so that's kind of created this dynamic where people are exploring what else is beyond that. Even the mining companies there are saying, you know, these boxes with the blinky lights are not going to last. forever. Maybe there's bigger chip companies that and dive into this space for the next, you know, five or ten years. But along the way, what are the other opportunities within

the space? The soft layers, the connective tissue, the data layers, the innovations in terms of how do you scale, you know, the Bitcoin blockchain, how do you do smart contracts with Ethereum, how do you do stuff with, you know, the public private ledgers? And so, you know, the signal that we've seen coming out of China is that they're aware of the opportunity and they're definitely investing and innovating aggressively with blockchain technology. Oh, interesting. So tell me what you think of kind of what my not super well-reported observations are, which are that they're really interested in the currency. But when it comes to blockchain, I'm seeing more of that activity in the West.

And yet you were saying that you see blockchain activity there. Yeah. No, I mean, there's an entrepreneurial and investment momentum that's happening outside of certainly mining and trading. And you're seeing certain Chinese investors making bets on companies in the U.S., starting companies in China, and even dynamics. like China Ledger launched. The six largest exchanges by the ex-CTO of the Shanghai Stock Exchange was launched last month. And you're seeing China Ledger as a thing, as a market signal.

There's no technology there. There's no necessarily thing that was launched beyond a propensity to say, let's organize an effort to explore this technology and see how we could harness it for the benefit of this. of this trading environment in China. And so there's enough signals that have come out, certainly over the last six months since the beginning of the year, that have, and, you know, we've been to Beijing and Shanghai and Hong Kong and Singapore all over the region and continue to see that firsthand in terms of that dynamic where the energy and focus on these other layers are very,

are happening. Okay. Yeah. I mean, tell me if I'm wrong, but it just feels like they are interested now. Like I am obviously aware of some of the investments they've made

and are still making. But it feels like they're just a step behind. And I have no doubt that they could very quickly catch up, but that's my read on things. There's enough signals from the beginning of the year to the untrained eye to see the dollars. the platforms, the headlines, and some of the other activities that are happening that they're changing their game. They're not just saying we're satisfied with mining,

we're satisfied with trading, we are going to innovate, we're going to invest, and we're going to see what the next chapter this book looks like, and not only the what it looks like, but let's also be participants in writing it because now they have enough clout, you know, from the mining and trading perspective, now they're, big participants. As the discussions and dialogue with the scaling dynamics in Bitcoin, China was a very important participant at that table and will continue to be. And so there's lots of, you know, some people, you know, either discount China or don't have it as part of the discussion. It is part of the discussion. It is part of this ecosystem. It's a global ecosystem.

And so it's the more innovation, the more of a global layer that we're creating with that specific public ledger, the better. And what influence do you think that China will end up having once they kind of get the blockchain stuff going? You know, as far as I understand, in terms of peer to peer payments, they're far ahead of where we are. You know, it's a big part of the culture already. I think in general, sort of this movement of money is like a big part of the culture, as we see. with the trading volume and, you know, just this interest in mining. But, you know, now that they're showing interest in blockchain, where do you see that taking the development of blockchain technology and Bitcoin?

Well, I think it's a great question to see what's going to happen now with some of that. And I think the peer-to-peer lending phenomenon in China, the mobile wallet dynamics, like, you know, a lot of the innovations and ways in which the money has moved there is a lot more easy and frictionless than certainly the U.S. or other parts of the world. I think that stems from some of the lighter touch regulation. Some of that is laissez-faire. This means if weird dynamics show up with either some fraud or hacks or whatever, that regulation will come down for a better consumer protection. But for now, there's lots of innovation on the,

the deck of a mobile phone in China. If you look at that, you see lots of peer-to-peer lending, lots of digital wallets, ways to move money, messaging apps that are innovating with money. And that's, you know, that's being done on scale. I mean, if you look at some of the platforms with Alibaba or Tencent, those are being done at scale. And that's exciting innovation because, you know, historically lots of innovation came from

the U.S. who was photocopied in China. Now we're seeing some innovations in China that can apply to the rest of the world, which, you know, that's a different dialogue these days. And that's exciting. But, you know, from the regulatory standpoint, I think that's a keystone issue in our ecosystem. You know, it's something that I think globally has been relatively laissez-faire. Certainly the U.S. has been very welcoming to Bitcoin and blockchain technology. And we see that continuing. The Chamber of Digital Commerce has done amazing work, educating, and engaging with regulators, not only three-letter agencies, but members of Congress, and going on both sides of the aisle to really help regulators, policymakers, appreciate the power of this technology, the potential of this technology, and we're in the early days. So, you know, if you look at technology shifts of railroads, telephony, internet,

You always had effervescence. You always had massive investments, whether that was a fear I'm missing out or, you know, innovation. But you always had certain effervescence and even bubbles happening. And that's rife with fraud and other issues. And then the regulatory pendulum sometimes swings. So my swing is a little too hard. And that's where I think, you know, platforms like the Chamber help regulators, policymakers, understand this technology and really help calibrate that pendulum.

so it doesn't swing too hard, because if it does, that will usher in an impact innovation, jobs, and investment, and quite frankly, may push that to other geographies. And, you know, the debate is always, oh, is the next Wall Street going to be in Singapore or Zurich? Or, you know, and I always find that to be interesting. I think, you know, we've got a long way to go before we're going to see those types of sensitivities. I think this technology is super impactful. And we're not talking about internet where, you know, revolutionize commerce and communication and, you know,

to build an app and share a picture of my, you know, cat or dog with you is one thing. But if I'm going to move value, move money, title to my house, $100 million of Apple stock or, you know, my digital identity or my health records, those form factors, those trust factors for people are way higher. And so the systems and the engagement and the adoption of those systems is going to take a, you know, a slightly different pace. But once it does, you can see the benefit and the kind of the new, you know, again, blood vessels of value and data movement getting really exciting.

So I want to go back a couple questions ago to what we were talking about with China and we were talking about their culture of, you know, kind of just trading money more between each other. and, you know, on their own to make money. And, you know, you started to say that, or, you know, you tell me if this is where you were going, that we're seeing startups that are coming out of there that could potentially influence our behaviors. And yet, like, I have reported a little bit on this, and I don't pretend to be any expert on Chinese culture. But from the few, you know, people that have spoken with, it seems like that really is a part of the culture there. to do those kinds of things in a way that it's not in the West, you know, to to borrow money from somebody to go gambling or to come home from work and day trade. And so, you know, what, how do you

see those startups kind of like bringing that culture here? Because I, and you tell me maybe it doesn't need to be a culture change. Maybe maybe there's some value proposition that is just so obvious that once it gets moved over here, it will, you know, gain adoption. Yeah, I mean, I think, you know, some of the ways in which wallets and the peer-to-peer lending and not sure exactly about the gambling piece, but some of those form factors and the presentation layers and the apps, quite frankly, that are developed there, are very engaging. And they, you know, they don't pop up here because I think a lot of those areas cross over, lots of regulatory hurdles here on the peer-to-peer lending side or certainly on the gambling side. And so there is, you know, regulatory

friction in terms of doing that. I see that dissipating over time. I think the notion of a digital wallet is going to evolve over time. I think right now, like Apple Pay, for example, is training wheels for the next true mobile wallet and, you know, where you kind of manage your identity and assets and, you know, not just, you know, your airline miles or a credit card that you, you know, kind of duct tape to your Apple Pay account. You know, real microtransactions and, you and, you know, different, you know, peer-to-peer lending with different digital currencies. And the wallet, I think, over time, will become the browser of the blockchain, the browser for your kind of interaction with the world. You know, the wallet will become your kind of personal data layer where, again, assets and money and identity and all these things starting to come into play.

and, you know, the identity model specifically tethered to, you know, a blockchain, for example, I think it was one of the greatest use cases that we have. Right now, we, you know, go into a store to buy a pack of gum and if you use your credit card, they might ask you for your driver's license. And right there, you've given way too much information than you should have. You should have just, my money is, you know, green or whatever and execute the transaction and leave. Same thing when you go into a bar, you're over 21.

You apply for a mortgage. It's a different set of credentials. You get a job, a different set of credentials. You go to a hospital, entirely different set of data that's shared. And so this partition identity stack, this wallet, this whole dynamic of our digital ID on the supercomputers we have in our pockets is, I think, going to have tremendous innovation afforded to us by blockchain technology and the cryptography and all the benefits in that particular data stack that's, you know, that data stack that's. how we call our identity and our digital wallet. All right. So you have a lot of experience in helping to develop and investing in technology.

What parallels do you see in the way that this technology is developing with, you know, what you've seen before? And how can we, how can blockchain companies do better this time around? Well, I, uh, it's, it's pretty amazing in my lifetime. I've seen, um, I remember, uh, going to Kmart on my BMX bike and buying a Commodore Vic 20 computer. and storing my programs on a cassette tape that was connected to a, I don't even know what color screen I had, but I had that experience. I had a mobile phone that was in a, you know,

mini briefcase that was over my shoulder. It was a big brick phone. I remember using the internet when, you know, there was pre-browser days where you had to go on things like Gopher. And so seeing tech in the early days. and, you know, not necessarily seeing the, you know, the 10, 20-year benefits that it gave us at those exact moments in time. But now that I've seen some of the evolution, some of the ways in which tech has really changed in all of our lives, when blockchain came on my radar, I immediately resonated with it in terms of the way in which this technology is going to change. the movement of money. It's like the true invention here is, is for the first time ever, we have the freedom to convey data or value privately and securely for the first time without

a middle party. So no bank, no visa, no B of A. And that's, that's a big invention. That's a big thing. It's like life, liberty, pursuit of happiness type of game changer. And so with that, and seeing technology evolve, everything from the early internet to to where we are today, I know we're in the early days of blockchain. So since you deal with a lot of corporations, I'm curious. What are the problems you see in the way that they're looking to adopt this technology? What could they be doing better in their approach? I think they're actually, given where the technology is, given where the opportunity is,

they're doing all the right things. They're spending time, energy, and money. And they're getting started versus, you know, there's, I mean, there's two schools of thought. just like let's wait, let's wait to this technology develops and let's, you know, call a big IT consultancy or IBM or Microsoft and then, you know, in five years we'll just buy something off the shelf. That might give them a competitive disadvantage. So I think, you know, much like the internet changed lots of, lots of industries, you know, newspaper, you know, voice over IP, communications. Most of the CTA.

sitting in companies today have gone through that. They've seen that evolution. They've seen that disruption. And there's winners and losers at the other end of all of those transformations. And so there's lots of education going on. There's lots of experimentation going on. And nobody hasn't necessarily figured out, but everybody wants to be in a room and at the table and trying to figure out what's the best way forward.

And, you know, banks have not had a great relationship with technology. I think when the Internet showed up, they duct tape their systems to the Internet. Then they were pressure tested in 1999. And then mobile telephony came out. So mobile banking was a dynamic they had to react to. And then other pressure testing in 2008. And now FinTech has become in vogue for investors. You know, there's new platforms on the...

on the table between mobile telephony and everybody having that supercomputer in the pocket to do things that they couldn't do before. Blockchain technology, digital currencies, peer-to-peer lending, robo investing. So, you know, the bullets have been whizzing by their ear, and they're very self-aware of that. Now, it's like a machine gun with all the innovations in FinTech, because FinTech entrepreneurs are saying before it was really hard. hard to build a company that's going to compete with a bank or an insurance company or what have

you. But now the technology has evolved to a point where they're coming in on the edges or doing innovative approaches towards solving a problem, which has never happened before. So fintech is in vogue right now. Bitcoin blockchain has certainly helped that as a catalyst, but we're all seeing all these innovations on our iPhones that are, you know, targeting the status quo targeting banks and they're reacting and the way they should. They need to innovate. They need to partner. They need to build a community, a fabric of tech and partnerships and relationships.

And they're doing lots of the right things in sitting where they are. And, you know, at the end of the day, banks, they manage risk. That's what they're really good at, right? And so they see this as a potential challenge, and they're stepping up to the plate and investing and trying to evolve. And the last piece on that is, you know, human beings, you know, we have these blockchain networks, these trustless protocols, which is true. And there's also a dynamic where, you know, as human beings, we trust brands.

You know, and sometimes we trust brands behind the, Some of brands are evolving. The brands 20 years ago or maybe not the right brands today. But we trust brands. And I just saw something that people stay with their bank longer than they stay with their marriage. I think it was 17 years, an average bank relationship in the UK. Average in the UK is 11 years. So it's more of a, it makes you kind of smirk when you hear that.

But people trust brands. And so that's going to take another trust factor in another element. and to kind of disengage from that world and go into this next new digital world where there's a new brand that emerges that people are going to start trusting. Okay, so the last thing I was curious about was what would you kind of recommend to enterprise that's looking to take advantage of this? Like you said earlier that, you know, we're going to see winners and losers under this. What do you think is going to separate the winners from the losers?

I think technology is a difficult animal sometimes to, to, you know, jump on and harness and ride sometimes because you know you sometimes you do it too early you're too early you do it too late you're too late

and here I think you need to get started I think you need to get engaged I think you need to jump in that pool and much like we all have a mobile phone in our pocket and we're mobile enabled and now any new app that you recommend I recommend we could download we start using

and then you know 50 100 500 million people start you know messaging or sharing photos or anything on that app. And I think right now we need to get companies and industries blockchain enabled. So they're ready for the innovations that happen on the horizon. You know, if we were talking about building Uber in 1998, you know, we'd kind of be out of luck because a lot of the, those layers of tech, those very important layers, and it's like

payment processing, GPS, iOS, all these interstitial. layers that have been built up and hardened. Some are invisible. Some people will never know about, but that's what enabled Uber to be Uber when it launched. And we're doing the same thing in blockchain. So all those layers to make application development, to make the utility of the blockchain easier. And we don't talk about blockchain. We just talk about we're moving money or moving data. I have a digital identity. And oh yeah, it's secure, cheap, fast. And, you know, those are the selling points. Not that it's SMTP or HTTP or anything like that.

That doesn't sell to certainly my mother or brother or sister. You know, you have to really make the use case shine in the way it should. So I saw that you've produced the rise and rise of Bitcoin. How did you come up with that idea and come to do that? Well, over the last four years, I, I spray paint of the industry with 21 bets in the space. I've been an investor, and that's quite frankly give me a good education on the space. So everything from investing to starting companies, serve on the board of BitGiv charity in the ecosystem,

was the first financial sponsor of the Chamber of Digital Commerce, helped produce the rise of rise of Bitcoin. And so I'm very passionate about the space. So any way I could get into this from Indiesel, industry, philanthropy, advocacy, arts. I gave Richard Branson a Keillara coin. And that's a piece of artwork in the space of the physical Bitcoin, which is kind of funny because we're talking about the movement of digital money. And I'm like handing out, you know, Bitcoin in a very analog way. But that goes to the storytelling in the space. And I think, you know, listen, the Bitcoin blockchain is not an intuitive technology to wrap your, your, your, your, um, you know,

brain around, but the storytelling, the physicality of a Bitcoin, and hearing that, I think, is always helpful when you, can I engage with people and want to talk about this new technology frontier. Thanks for joining us today. For those of you who are curious about how Matt's tennis game went, and just to let you know, he's 6'5 and athletic. He told me that he got creamed by Richard Branson, which gives you a sense of just how athletic and good at tennis, Sir Richard Branson is. And I guess he also told Matt that he's been playing tennis ever since he bought the island, which was 30-some years ago. So that's probably why. If you're interested in learning more about Matt and his work, check out the show notes, which are available on Forbes.com. And please review, rate,

and subscribe to the show if you like what you're hearing. Thanks again. You just enjoyed a Forbes podcast. To learn more about our other shows, visit Forbes.com slash podcasts. Thank you.