Apr 19, 2022

The Bitcoin Payment Revolution – Bitcoin 2022 Conference 4/19/22 Transcript

The Bitcoin Payment Revolution - Bitcoin 2022 Conference 4/19/22 Transcript
RevBlogTranscriptsBitcoinThe Bitcoin Payment Revolution – Bitcoin 2022 Conference 4/19/22 Transcript

The Bitcoin Payment Revolution – Bitcoin 2022 Conference With Desiree Dickerson, Ivan Soto-Wright, Mike Brock, Ken Kruger, Bill Barhydt 4/19/22. Read the transcript here.


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Speaker 1: (00:18)
Nearly beer o’clock. Who wants a beer?

Audience: (00:23)
[inaudible 00:00:23].

Speaker 1: (00:23)
What? Who wants a beer? Come on. I want a beer. All right. Next up. We’ve got a really amazing panel, we’ve got the Bitcoin Payments Revolution.

Speaker 1: (00:34)
First up is my good friend Desiree Dickerson. Let’s have a huge round of applause for her pants. All right, next up we have Mike Brock. Welcome onto the stage Ivan Soto-Wright. Next up we have my buddy Bill Barhydt. And our moderator for the panel is Ken Kruger. Big round of applause, everyone.

Ken Kruger: (01:19)
Well, it’s absolutely great to be here. I’m Kruger, the founder of Moon. Also known as Pay with Moon, paywithmoon.com, the most private way to spend your Bitcoin in the world. And I’m joined today with some of the preeminent leaders in Bitcoin payments. And I’m really excited to talk about that.

Ken Kruger: (01:37)
Now the name of this panel is the Bitcoin Payments Revolution, and I think there is a real revolution going on in Bitcoin payments. I don’t actually think many of the people here today are aware of exactly what’s happening. A lot’s going on behind the scenes, a lot’s happening in other places geographically. So we’re going to dig into that today.

Ken Kruger: (01:58)
Now Bill at Abra, you have customers in over 150 countries. I really am curious to see what you’re seeing in the developed world versus the developing world, because I really think the developing world is where a lot of magic is happening right now with payments.

Bill Barhydt: (02:14)
That’s right. Absolutely. I mean we have almost a bifurcation right now of users, and I think it’s going to converge over time. But we have hundreds of thousands of users in Southeast Asia and Bangladesh, India, who are actively using Bitcoin and other cryptos now to move money around.

Bill Barhydt: (02:32)
What’s really unique about it is they’re using retail cash locations to convert Fiats to Bitcoin. So we’ve built on ramps in all of those markets now where in south America, central America, where you can walk into a retail outlet, convert cash to crypto. That’s totally different from our US and European business, which is much more wealth management driven, where we’re helping people manage hundreds of thousands and millions of dollars of crypto, helping them borrow against it et cetera. But I think they’re going to converge over time and you’re going to see this consistent global banking phenomenon take root everywhere.

Ken Kruger: (03:15)
Yeah, I think that’s really interesting because those of us in the more developed world in the United States, you can buy crypto by connecting your bank account or purchasing with a credit card. And Ivan with MoonPay, you really pioneered buying Bitcoin with a credit card. But I’ve also noticed that you’ve been adding additional payment methods specifically in Brazil. What are you seeing? How is it different with your user base when they buy bit Bitcoin?

Ivan Soto-Wright: (03:39)
Yeah, so more broadly we’re trying to connect a billion people into this world of web three and Bitcoin, and we need to make it as simple as possible for every single geography. So really you just have to look at it from a distribution point. Okay, you’ve got Visa and MasterCard with billions of people already on the network. That’s obviously an obvious place for us to start if we want to see more Bitcoin adoption. And then you can go country by country and you find out that Visa, MasterCard doesn’t have a hundred percent penetration. And then you just go very logically and turn on those different payment methods, so that’s exactly what we’re doing at MoonPay. We’re going country by country to build the very best converting experience for anyone anywhere in the world.

Ken Kruger: (04:19)
That’s really interesting. And I think Abra, you’re handling a lot of the point of sale with cash, you’re handling different payment methods. Now Mike, you are working with TBD, you’re working on TB DEX, right? I don’t know if many people here are familiar with TB DEX, can you explain a little bit about what TB DEX is and what you guys hope to achieve with that?

Mike Brock: (04:41)
Yeah, absolutely. TB DEX is our first project within our newest division TBD at Block. Its goal is to solve what I think of as the last unsolved frontier for unlocking the true decentralized digital payment economy. And so for those of you who have read the White Paper, and if you haven’t please go read the White Paper, I think it’s a great White Paper. We focus very heavily on the idea that solving digital identity is critical to ultimately bridging the physical digital divide that needs to be bridged in order to bring digital payments that we are here, that we all believe in the future of Bitcoin, to the daily life of individuals all around the world here, even here in the United States.

Mike Brock: (05:34)
When we’re going to talk about the payments revolution, I have a lot of terrible things to say about the US payments system. And from that perspective, we think that TB DEX offers an amazing decentralized solution for creating decentralized webs of trust in a fully decentralized way that allows people to essentially onboard themselves into that economy with a self sovereign identity, with full control over the credentials that they share with other trusted intermediaries or trusted third parties, if two sides of a transaction want to do business that way. And we believe that this is like really necessary.

Mike Brock: (06:15)
The funny example I like to give all the time is that if you are going to buy a teddy bear with Bitcoin from say an online retailer somewhere else in the world, it’s not really enough to know that they have a Bitcoin address or that they have a website. You want to know that they have some sort of reputation. You want to know that there’s going to be recourse if you send them the money and they do not produce the good that you purchased. You need a way in which to establish that social trust, because you are interacting with the real world. You’re literally sending money for a promise for someone to provide a service to you. A human has to do a thing. And that means social trust is such a necessary component of the future payment system working in a decentralized way.

Mike Brock: (07:01)
And TB DEX looks at that problem and says we need a way to do this doesn’t require any central authority. And so we looked to the internet that already exists, and we looked at the public key infrastructure that secures the web today that uses certificate authorities at their root. And we said to ourselves, “Well what if people could just organically build certificate authorities, essentially that they choose to trust? That wallet developers choose to trust? That liquidity providers choose to trust? That retailers choose to trust? And what if there was a messaging framework that we could build around that where people could build those trust relationships, and in those trust relationships create that social trust that I’m talking about? That ultimately brings down risk in payments and allows Bitcoin to fully come into its own in the full potential of what we want to see in the world, which is truly like decentralized, state free, not uncensorable, universal, ubiquitous money that you don’t have to ask permission to use. That’s our goal.

Ken Kruger: (07:59)
Sure. Now I’m willing to bet a lot of people here, they hear the word identity. Yeah, right? And they’re like, “Well, wait a second. How does that factor into decentralization?” For us for example, we go through painstaking efforts at Moon to have no KYC. So now how does that work on this decentralized network where there is some identity, how do we make sure that identity requirements don’t exclude people in the developing world the same way the centralized solutions do today?

Mike Brock: (08:25)
Yeah. It’s a really good question. And it’s a very big problem. The one thing I will say is nobody owns their identity today. Google owns your identity. Facebook owns your identity. Amazon owns your identity. Your bank owns your identity. You’ve given your identity to all these other players. You don’t have control over it, you don’t know what databases they’re sitting in, what third parties they’re sharing them with.

Mike Brock: (08:48)
And so that’s a really important point for everyone to sit back and think about. We establish social trust today by basically by letting other people own it. And that is also at the root of why the onboarding problem today is so hard, because we have centralized intermediaries that control the gateway into the financial system. And yeah, I mean I’m not going to it here and lie. I mean there are KYC rules that we have to comply with here in the United States, we certainly have to comply with them. But we also believe that at the end of the day, most of these KYC rules and BSA rules are risk based. So we get to make risk based decisions on what we trust and what we don’t trust.

Mike Brock: (09:31)
And our belief is in a self sovereign world where you can have entire constellation of attestations of the trustworthiness of someone, the fact that they’ve established reputation with other people in a secure way, actually allows businesses to increase their trust envelope of onboarding, which we think at least in the context of even say like here in the United States, we can actually onboard a lot more people.

Mike Brock: (09:59)
And you’re absolutely right, and the whole rest of the world that doesn’t even have the financial system we have here today. Yeah I mean, they need this more than ever because they… it’s not even just about government or institutions. It’s about we need ways to trust each other. To trust each other, to transact with each other. Because if you don’t have that, transactions by definition will be more expensive because the risk of fraud, the risk of nonpayment, nondelivery of goods or services has to be priced into the cost of the transaction. And so identity is so important to driving this to a place where any individual in the world can for free, without permission, access the financial system.

Ken Kruger: (10:45)
Yeah. I think that makes a lot of sense. Obviously there are a lot of transactions, you have to know that other party. And a network like that makes a lot of sense. So in the developing world we’ve discussed a bunch of different ways where you can buy Bitcoin. But there’s another way where I know a lot of people in the developing world are getting their hands on Bitcoin and that-

Ken Kruger: (11:03)
Know another way where I know a lot of people in the developing world are getting their hands on Bitcoin and that’s through gaming. And Desiree at Thunder Games, you’re making some really cool mobile games where it’s play to earn within Bitcoin. Can you tell us a little bit about that and what are you seeing in your user base in the developed world versus the developing world?

Desiree: (11:20)
Yeah. I mean, to just kind of go off also what Mike was saying was we do need to onboard more people to Bitcoin. But I think one big piece and what we get out and I think a lot of people think games and it’s fun and it’s silly. But I think what we do is a very, very important part of this puzzle because a lot of people don’t care. A lot of people don’t understand. And to some extent, we need to save these people. We don’t have the time or they don’t just want to be self-sovereign. They don’t want to get on this Bitcoin bandwagon. And one way that we’re doing that is through mobile games and it’s fun, it’s free, very little to no KYC. And we can reach these emerging markets in new demographics.

Desiree: (12:06)
One of the largest growing demographics in gaming, especially mobile gaming is women between the ages of 35 and 50. That is also a severely underserved demographic when it comes to financial empowerment. So not only with emerging markets, but also these new demographics, we can reach them. I’m sure everyone in the audience, their mom or someone in their family is playing Candy Crush or Merge Mansion, what have it. And if you can actually just reintroduce that value layer to games, you can bring financial empowerment to these new markets, these new demographics, and so often these forgotten parts of our population.

Ken Kruger: (12:52)
Yeah. And I’ve played a good amount of games where you can earn Bitcoin. And I’ve actually found a lot of people from around the world playing those games with me because earning a couple SATS for someone in the US, maybe doesn’t make a big difference. But people overseas, that’s a huge amount.

Desiree: (13:07)
Yeah. And one really interesting thing that I always like to point out, we’ve had several people come up to us and say, hey, we won our first satoshi in your game. And we are very focused on making games that are fun to play even without the Bitcoin. So we have a lot of no coiners come to our games, don’t know anything about Bitcoin. But hey, I’m going to play mobile games. Why not win some Bitcoin? They come, they win 10 SATS, they win 1,000 SATS. Well guess what? Now they have skin in the game and you bet that they definitely go and they download a Lightning enabled wallet and we kind of usher them through their journey from, hey, this is a custodial wallet to now most of our users, they have cold storage and that’s where they put their earnings. So I think we’re serving a really interesting piece of a pie and that’s very, very early on in the user journey. But I think it’s absolutely essential to reaching these new parts of the population and bringing Bitcoin to these people. And I think that’s really powerful.

Ken Kruger: (14:09)
Yeah, absolutely. That’s huge. Now I think somewhat in vain with the developers/developing world is retail versus high net worth. And I know both Abra and MoonPay have both of these types of clients and probably offer very different types of services here. So Bill, I’ll start with you. What do you see in terms of Bitcoin payment use cases? What is the high net worth individual doing that’s different from the retail investor?

Bill Barhydt: (14:36)
I think they’re converging to be exactly the same thing. I think what’s going to happen is that Bitcoin will be ultimately seen. And we already have ironically a lot of people in developing markets and wealthy customers who are doing exactly this. They’re holding Bitcoin. They don’t want to sell it. To them, they intuitively get prices going up. It’s pristine collateral and they also don’t want to pay taxes. But again, the perception is or the belief is the price is going up and they’re borrowing against that. Right? So we’ll actually give you right now on the Abra app, download Abra, deposit your Bitcoin, we’ll give you a 15% of that value, right? As a cash loan and stable coin for free, no interest. And that’s the way Spend is going to work in the future, right? That instant on credit, which we’ll give you right now will be tied to Lightning channels.

Bill Barhydt: (15:29)
It’ll be tied to MasterCard Visa, American Express channels. American Express is I think our second largest shareholder at Abra. There’s a reason why. Everybody knows where this is going if you’re paying attention. A lot of people aren’t paying attention, right? If you are able to hold that collateral forever, not spend it in Bitcoin but literally hold it as Bitcoin, never sell your Bitcoin, you can get anywhere from a 15% LTV or 50% LTV loan in real time at the point of sale. That’s the future of payments to me. Right? Now, we already have users doing it by taking the loan manually and then figuring out, oh, I can move the USDC to my bank account if they’re in the US or cash out in other countries. And then they spend it. The last step for us is to then tie it directly to the point of sale, which is what’s going to come next.

Ken Kruger: (16:20)
Got you. Now, that’s really interesting. We’re going to come back to some of those points in a little bit. But Ivan, with MoonPay I understand you have a white glove service for some folks that are high net worth. But then you have the average Joe that comes along is just like, I got a credit card. I got to get in on some Bitcoin right away. Can you tell us a little bit about those different user behaviors?

Ivan Soto-Wright: (16:39)
Yeah. I mean, for us it’s all about simplification of the user journey to get into Bitcoin full stop. I think Desiree brings up a great point around play to earn. I think that’s great in terms of removing the barriers. But for most people, they’re going to have to go through a certain set of sequences and steps. And unfortunately, I think it’s going to require KYC. One of the things that we’re doing that’s really powerful at scale is once you do KYC once with MoonPay, you never have to do it again across any of our partners.

Ivan Soto-Wright: (17:06)
So we’re really trying to reduce that friction because I think the reality is the governments really do care about two things. They care about being able to stamp out money laundering and they care about taxation. And as more and more income is created and wealth generation is created for the Bitcoin economy, they’re going to care about those things more and more. And so for us, when we think about those two distinctions of customers and what the behavior that we’re seeing today, most of it is really they want to buy Bitcoin and they want to have it in their own non-custodial wallet. They want to have possession of their private keys.

Ivan Soto-Wright: (17:37)
That’s very different than the use case that you might have instead of a PayPal or inside of a Venmo or inside of some of these other applications where you can get the exposure to Bitcoin and you see it as an asset class. I think the reality is we’re still far behind in Bitcoin in terms of seeing it for payments. I think obviously we see Lightning. I see the real opportunity for a coin is to be able to leverage these other blockchains and to be participating more broadly within the crypto ecosystem. I think Wrapped Bitcoin across other blockchains has a lot of potential. So I’m really excited to see that because then this can actually go beyond just being a store of value and being used as a means of payment.

Ken Kruger: (18:14)
Great. Great. Now, Bill, you mentioned stablecoins, right? And I think there’s a really interesting question we’re seeing. There are a lot of Bitcoiners here. They don’t want to hear about anything but Bitcoin. But stablecoins, there’s something really interesting happening there.

Bill Barhydt: (18:29)

Ken Kruger: (18:29)
So do you want to elaborate a bit on that? How should your hardcore Bitcoiner view stablecoins?

Bill Barhydt: (18:35)
Yeah. I mean, Michael Sailor talked about it himself this morning. So he and I have debated this many times. I think we agree on about 80% of this. And I think the dollar, the euro, the yen and the yuan are likely to survive. Maybe in digital form, maybe as private money in form of stablecoins or in the form of algorithmic stablecoins. I don’t know. I don’t really care. But what I know is I don’t want to sell my Bitcoin. So how does this all work if I know that my ultimate goal is to not sell my Bitcoin? Well, we’re actually to a certain degree all incentivized for the dollar to survive.

Bill Barhydt: (19:08)
Because the longer the dollar survives, right, and we’re actually reckoning in dollars, that means we can actually spend in the real shitcoin, which is the dollar and continue to hold Bitcoin and borrow against it. And as I said, we’ll give you that basically free loan against it today as long as you park the collateral at Abra. And I think that’s the future of payments. That’s where the stablecoin will ultimately come in because the stablecoin then lowers some friction on being able to spend that money that you borrowed in order to get against your Bitcoin in the first place.

Ken Kruger: (19:41)

Bill Barhydt: (19:41)
That’s all.

Ken Kruger: (19:42)
Yeah, very cool. And I don’t know if you guys saw or paid attention yesterday.

Bill Barhydt: (19:45)
Oh, yeah. Sorry.

Ken Kruger: (19:46)
Lightning Labs made an announcement now with-

Bill Barhydt: (19:48)

Ken Kruger: (19:49)
… Being able to send stablecoins over the Lightning network.

Bill Barhydt: (19:53)

Ken Kruger: (19:53)
I mean, that’s really game changing technology.

Bill Barhydt: (19:54)
Yeah. I mean, my team and I, we went through the demo step by step by step to make sure there was no trickery or anything going on. If you haven’t watched the video, it’s pretty impressive what they figured out how to do. And I think it’s going to actually extend the life of Lightning and actually may even move it into applications in the US that made more sense outside the US. So we’ll see. But I think I’m really bullish on Lightning. Maybe not the same way as everyone else. But I think that it does two things for us. One, there’s kind of what I call the schmuck insurance aspect of Bitcoin payments. Which is, hey, when it goes to shit in places the like Ukraine or Canadian truckers, that’s where sending Bitcoin in small amounts or using Lightning because you want guaranteed irrefutable evidence that there’s no irreversibility in this transaction.

Bill Barhydt: (20:49)
And that’s where it makes a lot of sense. Okay? But for those of us who may be in a position where we don’t have to spend it, I don’t want to spend it. I want to huddle it. I want to hoard it. Right? Selfishly. So that’s where the lending in order to facilitate payments. Now think about this for a second. Sorry. Think about this for a second. We now have figured out in the Bitcoin community a global solution to credit because the United States has a very evolved credit system. You may not like it, but we have it. Now, by using Bitcoin as collateral, we have a guaranteed way to establish credits in countries where there is zero credit today. Most countries in the world operate payments on a debit based system. By having a pristine collateral in India where gold is generational wealth, we can now make Bitcoin the generational wealth and you can tap that wealth at the point of sale as opposed to today, where it’s in a drawer, in a shoebox, under the bed, whatever. So to me, that’s the future of banking.

Ken Kruger: (21:51)
Wonderful. Desiree, I want to get your thoughts on this. You were at Lightning Labs, you heavily used Lightning in your products and everything that you were building. Do you imagine someplace for stable coins within the…

Ken Kruger: (22:03)
Do you imagine some place for stable coins within gaming? Or do you think people just want to earn Bitcoin and that’s it?

Desiree: (22:07)
I think it’s really interesting question. And obviously like, love Taro, love everything that the team, my family has put out and super proud of everything that they’re doing. But yeah, I mean, I think there’s interesting use cases and I’m personally very excited. Thunder is Bitcoin only, and we will always only be Bitcoin only, but right now it’s like a very difficult… Yeah, right. Now is a very difficult time as I branch out and go to gaming conferences, spoke at CES centers, there is just so much like NFT, blockchain gaming coming my way and our users really don’t want it, honestly, they really don’t. But now that you can begin to issue these assets on top of the Lightning Network, that kind of opens up this new possibility and it is very, very interest. Obviously we’re taking it very slow before we introduce something like that.

Desiree: (23:05)
But something we think a lot about is the circular economy and games. And that’s what’s so beautiful about the Lighting Network, it opens so many worlds of possibilities because of micro transactions. And so I think it’s going to be a beautiful addition to these in-game economies, these circular economies that are starting to be created. And so, yeah, I think Taro is a huge, huge step. And one thing I wanted to tag onto what Bill was talking about is that I know I hide all on my Bitcoin too, and I am like shopping at Amazon all the time because I’m like, I am never selling my Bitcoin. But you know what I have found in our community, I have started using these micro payments in order to enable micro tasks.

Desiree: (23:58)
So we’re very small, we’ve only been at it for about five months and the marketing department unfortunately is just me and so there’s only so much I can do in a day. So I’ve started outsourcing a lot of our marketing to our community. And our marketing is actually very powerful, we’ve grown our Twitter following by 80%, just from me being like, “Hey, I’ll send you a hundred stats if you create a really good meme that I’ll credit to you and I’ll throw it up on Twitter.” And so it’s really cool. Like I am finding in our community that we are fully transacting with Bitcoin. We’re paying out in Bitcoin and we’re receiving Bitcoin from our players. And I think that’s, I don’t know it’s really interesting and I think there’s something there.

Ken Kruger: (24:46)
Yeah. Absolutely. Now that we’re on the topic of Lightning Network, I know obviously Thunder Games using Lightning. Blocked is using Lightning. I got to ask you guys, Ivan, when are you going to have a Lightning on your platform?

Ivan Soto-Wright: (24:59)
It’s on the roadmap. It’s coming soon.

Ken Kruger: (25:00)
On the roadmap.

Ivan Soto-Wright: (25:01)
It’s coming soon. Yeah.

Ken Kruger: (25:02)
Great, great. And Bill.

Bill Barhydt: (25:03)
So it’s going to be a fun year for us. We have trade, earn, and borrow are our existing products at Abra. Earn is where you can park your Bitcoin, earn up to 7% interest. Borrow is what we already talked about, where you can borrow against your Bitcoin. Internally, we’ve formed a fourth group, which is called Abra pay, which is kind of getting back to our roots, because I used to run a remittance business. And it’s going to be an awesome year. And let’s just say that we’ve got some really cool announcements and the way I think we’re going to use Lightning, I think is probably the best application for people today, right? The average consumer to integrate in their life, maybe in a way that they don’t even notice, but that I’ve seen to date. So, I’m super excited about how the team has figured out kind of traditional payments, point of sale, cards, Lightning, person to person, and it’s really coming together and I’m going to stop there because my team will kill me if I keep talking.

Ken Kruger: (26:03)
Well you heard it here first folks.

Bill Barhydt: (26:05)

Ken Kruger: (26:05)
This is where the action happens. So, I think a lot of us are with our companies we’re integrating with the traditional financial system, right. There’s not a whole lot going on. Desiree you’re an exception, I think you’re just giving out Bitcoin. But for a lot of us we’re integrating with the traditional financial system. We’re not in the Bitcoin circular economy. So thinking ahead, how long are we going to be in this hybrid system? As opposed to where we all want to end up in the future of this hyper bit colonization? Do you want to take that away?

Mike Brock: (26:40)
I think a long time, right? I mean, I think that’s probably not the answer that a lot of people want to hear. And actually I think this was a really good point like that you made before, around how Fiat is going to continue to be a way in which a lot of payments continue to be made with. And I have actually said on the record, I think like Bitcoin is maybe like the best thing that ever happened to Fiat, in the sense that like it’s actually creating a real choice. Where people can choose to off ramp from the system that limits the policy flexibility that central banks have to abuse their balance sheet, to abuse quantitative easing. It’s actually going to force central banks to have a lot more discipline, so they can maintain their currency and like maintain their tax regimes. That’s actually something that I think is like actually like very, very likely, and I think a very, very positive outcome from having like self sovereign currency like Bitcoin. And I think obviously that it speaks to imbalances and wealth that have distributed due to in equal access to capital.

Mike Brock: (27:50)
But one thing I think that really is also needs to be said, is that from the perspective of the existing payment system, I don’t think people realize this. When people talk about transaction costs, I don’t think they recognize like how the actual cost structure of our Fiat based payment system really, really works. We talk about debit transactions like ACH, like wire. At the end of the day, payments are debt, they are promises for future settlement. And you say, “So what?” Like the system like works. But there’s like this really crazy side effect of this that most of us don’t think about. There’s 11 million Americans who don’t have access to a bank account today in the United States for various reasons, usually due to lack of creditworthiness. Why do you have to be creditworthy in order to have a checking account? You have to be creditworthy in order to have a checking account because the payment system attached to that checking account is fundamentally based on credit.

Ken Kruger: (28:53)
That’s right.

Mike Brock: (28:54)
And you can find yourself in overdraft, you can find reversed payments. You can find like there’re these things called forced posts. There’s actually no way to guarantee that a bank account won’t go below zero as long as that’s… Which is a feature that’s imposed by the infrastructure of the payment system, on the banking system, meaning that there’s an actual price that has to be amortized over the banking system. And the answer that the system has come up with for that, is to just not bank 11 million people. And I think that’s like a really crazy moral quandary that sits in front of us.

Mike Brock: (29:29)
And one of the things, that’s actually the reason I fell in love with Bitcoin, because when I was working on Cash App years ago and we were trying to build a bank that we could onboard literally 100% of people. And I slowly started to figure out, wait a second, this payment system is boxing me in, it’s making it impossible for me to bank certain people. And that was when I realized payments as credit, which all payments are in the system is like the greatest albatross on the people who are at the lowest end of the economic rung. And I think that’s something that people like really need to recognize.

Bill Barhydt: (30:08)
Yeah. It actually costs somewhere between 10 and 20% of your income to be a cash consumer in the United States. Let that sink in for second. Most of us actually earn yield on our assets. That group that Mike’s talking about, literally 10 to 20%, it’s just poof, it’s gone. And there’s a better way. I think again, Bitcoin represents, it actually fund… I used to, I also come from the fixed income world years ago and it fundamentally represents a new way of thinking about the entire credit system because you have pristine collateral that can work equally for everyone.

Ken Kruger: (30:51)
Yeah. Yeah.

Ivan Soto-Wright: (30:52)
Yeah. And I think just another point is, our systems are archaic and I think history repeats itself. I think we can look at other disruptive technology trends. The one I always talk about is telecoms, right? We still probably have our AT&T bill, our Verizon bill, even though we have this amazing technology called voiceover IP, that dramatically brought down transaction costs for long distance phone calls. We opt into use using this system over time, we started with Skype, years later we’re now at the kind of Zoom era, but you still have that parallel system. And I think that’s exactly what you’re going to see here for many years. You’re still going to have the ACH, all these inefficiencies, but over time, people will opt into a system that’s more efficient. And it’s up to us, it’s up to the entrepreneurs to build incredible applications that people are actually going to use and find those benefits to opt into this new system.

Ken Kruger: (31:39)
Yeah. And I think we’re very beneficial right now in in the Bitcoin community. If you look at a lot of the sponsors and companies participating here, it’s a lot of people representing the traditional organizations. I remember Ivan, we were hanging out in 2019 and you were like, “Oh, I’m going to go meet with Visa, try to get them to, you allowed me to do this thing.” And I was meeting with Visa about other things and it was a hard sell. And now they’re here trying to sell us, on their solutions. And I think what’s different about this revolution as opposed to anything else is that they see the writing on the wall. In the same sense that they don’t want to go the way of Yahoo when Google came along, they see Bitcoin that they want to be as much a part. I don’t know if they fully get it just yet, but they’re open to it, which is good. And I I think that takes us a long way.

Ivan Soto-Wright: (32:22)
But you can’t ignore their distribution. Their just-

Ken Kruger: (32:24)
Oh 100%.

Ivan Soto-Wright: (32:24)
…so large. There’s no way for us to get to a place of this Bitcoin and Crypto economy without leveraging these distribution points of Visa, MasterCard, American Express, and the payment methods that already exist. And that’s why we’re so fascinated with how do we make it easy as possible in every single country full stop to get into the system? And it’s going to be a monster job. It’s not going to be a one year job. It’s committed over the next decade to bring as many people into this ecosystem as possible, but it’s going to be a lot of hard work.

Ken Kruger: (32:51)
Yeah. I think the narrative back in 2013 was very much Bitcoin layer, one dis intermediate Visa and MasterCard. And I think that’s kind of been dismissed at this point that this is a very, very long term-

Ken Kruger: (33:03)
… been dismissed at this point that this is a very, very longterm game of a hybrid system and we’ll just kind of have to see where that takes us. So along the same lines of these centralized systems that we have to work within within gaming. Now I did some research about a year or so ago, I have some mobile games that I made and I was like, “You know, I want to put some Bitcoin in there.” There are some gatekeepers in the same sense we have some gatekeepers that we have to work with, there are gatekeepers you have to work with, and they are Apple and Google and Epic and Steam and they haven’t been too friendly so far with allowing these play to earn games into their app stores. How do you deal with that? What do you see? Do you see that changing? What’s going on there?

Desiree: (33:46)
Yeah, it is quite a challenge and it is something that we’ve just learned to accept. Kind of like this hybrid model that you’re speaking about and one of our big things is at the end of the day, we want our games to be accessible to everyone and there’s no more logical on-ramp to Bitcoin than going to the app store, going to Google Play, downloading an app, downloading a game, it’s a flow that everyone in this room is familiar with. It is a flow that everyone with a smartphone is familiar with, and if that brings you to Bitcoin, I think that you really cannot argue against it. And so we have just learned to kind of work around that and we have a ticket system with a daily raffle where you win your Bitcoin and it’s working and it actually … We have a wonderful behavioral psychologist on our team who kind of thinks through these game mechanics and user incentives and it works but it gets us around those restrictions of sending Bitcoin within this app and paying out to our users, but I do think that they are slowly, slowly kind of loosening their grip. So you can now do pay for in-game assets with cryptocurrency in a browser, right? And they show up in your game. It’s not great, but again, it’s a start.

Desiree: (35:10)
And so there’s no way to beat them if you don’t work with them first. So first, integrate, and then burn it all down. And so that’s kind of my approach and … So we’re going with hybrid for now, and yeah. I mean that’s what we’re doing and eventually hopefully we break down the walled gardens and we can empower players. I mean it is so, so clear that the next social network is gaming and whatever you think about metaverse, like there is a metaverse coming, I think it’s going to happen in games, and there needs to be an inherent value layer in these games and so I think it’s … a slow go and it’s a battle that we just have to fight with people and not against them and I think the hybrid comment that you made is exactly how we’re approaching the problem.

Ken Kruger: (35:58)
Yeah. Now within play to earn gaming, I think the biggest one everybody’s heard of is Axie Infinity. It’s wild. So what I want to know is when are we going to get the Bitcoin equivalent of Axie Infinity?

Bill Barhydt: (36:09)
We already do. The biggest play to earn game in the world is Bitcoin mining.

Ken Kruger: (36:17)
That’s a good way of thinking about it.

Bill Barhydt: (36:18)

Ken Kruger: (36:19)

Desiree: (36:19)
It’s true but I mean speaking to a lot of people in traditional gaming who really, really want to push away what we’re doing and I’ve been able to orange pill a few people but they hate what blockchain and gaming and NFT does to gaming because it strips away that pure joy of gaming. And you see that. The market, the target audience for blockchain games is not traditional gamers. Traditional gamers don’t want these games. I mean it’s just we’re seeing evidence of it again and again and again and so there’s an audience for Axie Infinity, it’s people who want to play to earn and it’s a game. Or it’s not a game, it is actually a job and I think that’s what’s …

Desiree: (37:05)
Really interesting thing that’s happening in the gaming industry now is like how do we change the way that players are compensated for their time, how they’re compensated for the in-game content they create without stripping these games of the pure joy of play. And I think that’s very, very important and I think that’s what … Axie Infinity is super fun, it’s cute. Honestly, I think they’ve done an incredible job but at the end of the day it’s a value sink and it is a job. There’s no doubt about it, and until that changes, like how that becomes sustainable, but it’s not what we’re working on and I don’t think that is what … The avenue that Bitcoin should go down in gaming.

Ivan Soto-Wright: (37:48)
And you could also approach that question from a different angle, why does Bitcoin not have an application that rivals Axie Infinity? Why don’t we just wrap Bitcoin as a reward to Axie Infinity gamers? That’s also a potential opportunity. I think the opportunity for Bitcoin is multi-blockchain. I do think there is an opportunity to take the Bitcoin, wrap it, and put it across a bunch of different blockchains and it is the scarcest form of value that is the number one asset in the crypto economy today and so I just think we can think of different ways that we can distribute that mechanism to others.

Ken Kruger: (38:21)
Yep. Yep. Well I want to close this panel out, I want to give each of you an opportunity to talk about what is the most exciting thing that you see on the horizon. Maybe not too far out, but something that may surprise the audience that you see coming maybe at your company or within the industry. Bill, why don’t you start us off.

Bill Barhydt: (38:37)
Sure. I think the biggest opportunity in Bitcoin right now by far is lending. Clearly the number one use case for Bitcoin over the last two years has been yield, download [inaudible 00:38:49], you’ll earn up to 7% of your Bitcoin but I think where this is going is like I said, everyone is going to want to hold Bitcoin and they’re not going to want to sell it and they’re going to use it at the point of sale for payments to buy a house. We’re doing down payments for mortgages, borrowing against your Bitcoin today, and that’s the future of banking is borrowing against your Bitcoin. Don’t sell your Bitcoin.

Ken Kruger: (39:11)
Yeah. Ivan?

Ivan Soto-Wright: (39:12)
The biggest opportunity is to connect more [inaudible 00:39:15] and more places around the world into Bitcoin. We have to think about as I mentioned before all those distribution points, how do we make that simpler. It’s a giant optimization function and we really just need to be focused on the conversion. One of the values that I have inside of MoonPay, we use this word kaizen, which literally means change for better, and what we think about is those 1% incremental improvements every single day that can lead to 3,000% gains over a year and so it’s just that mindset of we’ve got to constantly work at this. This isn’t like a set and forget, this is done. This is a constant journey for us to bring as many people into this economy as possible.

Ken Kruger: (39:51)
Mike, I know you’re working on some far-out futurist stuff, man. What are you –

Mike Brock: (39:56)
No no no. I mean we’re going to be doing some really, really big things in decentralized identity over the next year. I think it’s one of the most exciting spaces to be working in. It certainly is very important for our goals around Bitcoin but it’s I think just in terms of the internet itself and what we’ve seen in terms of the concentration of power and these large platforms and services and how we’ve given so much control over our lives away to those very few companies in those account models, in those sticky like very, very hard to break network effects that are there is such a big problem that I believe decentralized identity is one of the biggest tools coming down the line that is really going to start to address these really, really large systemic problems that we have today and obviously we are focusing on it from a money angle but I believe that the impact of decentralized identity is fundamentally going to change our relationship with the internet over the next five years.

Ken Kruger: (40:59)

Desiree: (41:03)
Yeah Mike. My I guess closing thought would be … I mean people, look around you, the world is burning. It is an absolute shit show and it’s our responsibility to save our friends and family around us and if they are not buying Bitcoin, if they don’t understand Bitcoin, it’s your responsibility to onboard them. I mean I think what we’re doing, making it super easy, my mom, my dad, they all play my games. Obviously because they have to but I know other people’s moms and dads do too. So take it upon yourself when you leave this conference and make sure the people around you are buying Bitcoin and they’re buying into their future and I think if that’s the one thing that you can take away from this conference and all the people that you meet here today, that’s one of the best things that you can do.

Ken Kruger: (41:54)
Yeah. Absolutely. And I think I’ll say, one of the things I’m personally most excited about is seeing Bitcoin used in the developing world more and more. I hear from people every day around the world that reach out and say, “Hey, we need a solution to help us here. Our currency is complete trash. Help us out,” and I think that everybody here that’s building, we’re doing some really important stuff and a lot of folks in the developed world may not see what’s happening but those of us building, we see that there is a major difference taking place. So buy Bitcoin. Thank you very much.

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