The future of Bitcoin and Cryptocurrency

00:00And so you knew that there was a problem there. The consumer was suffering. And now you look and you say, what are the big oligopolies that need to be transformed? And that's kind of the way I've been investing recently. I sort of go, okay, what are they? It's like banking, finance, commerce. Commerce has Amazon. insurance, government, and healthcare. And you look at those and you go, okay, what technologies

00:35are around that can help transform those? And that's where you get into Bitcoin, blockchain, smart contracts, artificial intelligence, and surveillance. And you go, you put those together and you can create an insurance company with no people. You can, that's safer, better, faster, better service, cheaper than anything that we've got out there. you from it. And I know there's a ton of podcasts out there. So thank you for taking the time to

01:29listen to this one today. Now let's get into it. Today we're talking with Tim Draper, the founder at the Draper Associates, DFJ and Draper University, and one of the most influential people in the investment and cryptocurrency space. Tim helps entrepreneurs to achieve their visions through funding, education, the media, plus the government reform. His investments have included Skype, Hotmail, Tesla, Coinbase, Twitch, and SpaceX. And he's an early investor in Bitcoin. In 2014,

02:02he actually bought 30,000 C's Bitcoin from the US Marshall Service from Silk Road, which today would be worth around $1.8 billion. Today, we'll be talking about how blockchain and cryptocurrency will change the business and finance world. Just quickly before we get started, make sure to go ahead and hit that subscribe button so you get the latest episodes as soon as they're released. Let's get into it. Welcome, Tim. Great. Thanks for having me on your podcast. Really excited to have you here because you've been in the VC game since the 80s, quite successfully, actually.

02:35And so I thought we could just start there because you've invested in companies like Hotmail, Skype and Tesla. right so and this is back in the 90s and the 2000s what's your approach to choosing investments because you've seemed to have a pretty successful track record all the way back then yeah um it's fun to think about whether you know what what the magic was but um you know and all the way up to coinbase which looks like it's going to be one of the biggest companies in the world

03:08Yeah. But but here's here's what I always look for. I look for somebody who is really dedicating their life to something. And that thing is is something that is a little unusual, a little bit off, maybe not something that would be mainstream to start with. But it's going after a major problem. And then I like to look and go. you know where most venture capitalists you know are always looking for what could go wrong

03:40i don't worry about that all i care about it what what if it works how great would it be how really cool would this be and that's um usually enough for me to pull the trigger on on investment And you mentioned the internet and how we got involved early. Yeah. And I thought, you know, my mission at that time was to spread venture capital and entrepreneurship around the world. And I feel that that has been accomplished.

04:14And I was also capitalizing on the internet and how it's been able to transform communications and information and gaming, entertainment, media, all these industries. And I thought, wow, I really got an amazing ride there. And then all of a sudden, Bitcoin shows up. Well, but before we get into Bitcoin, just before we get into Bitcoin, because I just want to get kind of your thinking quickly, right? Because you seem to choose things that end up becoming something, right? Because lots of investors, they choose a lot of things that don't become anything, right? But you seem to have gotten onto the Hotmail wagon.

04:56And just for the listeners of the podcast, can you confirm that it was you who said to put that little line at the bottom of the emails to say to get your free Hotmail account, which became the viral marketing kind of the case study? I mean, all social media is tied to that one thing, which is great. Yeah, we didn't know how we were going to get the word out that we had free web-based email. And I said, well, why don't you just put it out on that web thing? and they said that would be spamming. And I said, well, wait a second, you're giving away free email.

05:30What if you put a little message at the bottom of everybody's email that says, and I told them to say, PS, I love you. Get your free email at Hotmail. And they were thinking I was out of my mind. And they pounded, I kept pounding, pounding, pounding. And then till finally they said, okay, we're going to try it, but no PS. I love you. Just get your free email at Hotmail. And I said, okay, okay, good. Uh, now we could have had a much more peaceful and loving world if we kept

06:02that little message, but in any case it spread to 11 million users in 18 months, uh, with zero marketing budget. And we had, um, it was the founder was from India and he sent one email to his friend in India and we had a hundred thousand registered hotmail users in India in about three weeks. Wow. So it was just exploding. And to, to that date that was the fastest growing consumer

06:33product of all time. And it was a, yeah. So yeah, I came up with our marketing and it spread and it was fabulous. And then we use the same thing when I invested in Skype. And, and then a lot of, you know, all social media, all these other kinds of technologies have all been able to take advantage of the idea of, you know, communicating for free around the world. And then producing value in other ways through advertising or just using that. The real value of that was that it

07:11was immediate distribution. And that's why Microsoft wanted to pay so much for it. And so you're quite entrepreneurial at heart. Yes. You're a person that runs the VC funds and a professional investor, but you're also quite an entrepreneur, which is why you seem to be good at finding these opportunities, it seems, because it's a pretty good track record. And I'm trying to understand your headspace in terms of how you think about these things, because someone that's

07:44had as much success as what you've had, there's something about that, which I'm trying to understand before we start talking about the blockchain stuff, because it's that kind of mindset, which I am really trying to get into. And so- So think of it as, yeah, when I was, Um, I, I've always felt like, um, there's, there may be a better way. And, uh, and I've been, uh, I've always had good resistance to peer pressure.

08:18And, uh, and so I'm always looking for, um, when people ask me, is the answer a or B, I always look and I say, well, wait, that isn't even the right question. you know, we really want, you know, it's, it's Z, it's something completely different. And if you, if you always get to that, I think it, it makes you happier and you can be more honest with yourself if you aren't just saying it's A or B because somebody asked you if it's A or B.

08:51I usually feel like, well, wait a second, let's, let's get back to the basics and let's figure out what, you know, What's the fundamental issue here? And at Draper University, we say there's a sort of a six-part program where we start by saying, what's the biggest problem that you see in the world? And then how are you going to solve that problem? And then how are you going to turn that into a business? See, so we go to the fundamentals. Then how are you going to make money in that business? And then how are you going to make your customer into your sales force the way we did with Hotmail?

09:24Um, and, and so we put that package together. It's, it's starting with the fundamentals. Fundamentals are really like, what's the real problem before you go into like, would you rather be on Facebook or MySpace? What's the real problem? Yeah. We want, you know, what do you want to do? How do you want to deal with? Um, and then, then all of a sudden it's like well we want to see pictures on the screen we want to do something innovative we want to

10:00find find old friends whatever it is then you go oh that's what you wanted and twitch my god we invested in justin tv really extraordinary guys started that business but um it was just you know people showing each other what their day was like. And then they realized that the real problem or the real opportunity was that a lot of people were using it. 40% of the people were using it so that they could watch other people play

10:33video games. And then they said, aha, that's the problem we're trying to solve. That's the opportunity we're trying to capitalize on. And then they focused just on that. And then Twitch, of course, And then Twitch. Okay. And so multi-billion. Multi-billion. Yeah. And so you look for kind of areas where there are companies that are solving large problems that potentially haven't been solved before, which is the example of all the companies

11:05which I have spoken about so far as part of this introduction, right? They're all companies that seem to be doing things that are novel that haven't been done before. And the opportunity is big. And so that seems to be your MO for the kind of companies which you want to be part of, right? And they tend to be competing in areas that are where the incumbents, the oligopoly, is making a lot of money but not providing good service.

11:39And so Skype completely transformed long-distance telephone carriers. I remember paying $50 a minute for it. I remember that as well. Yeah. And all of a sudden it's free everywhere. And now we can see each other as we are today. And so you knew that there was a problem there. The consumer was suffering. And now you look and you say, what are the big oligopolies that need to be transformed?

12:11And that's kind of the way I've been investing recently. I sort of go, okay, what are they? It's like banking, finance, commerce. Commerce has Amazon. Insurance, government, and healthcare. And you look at those and you go, okay, what technologies are around that can help transform those? And that's where you get into Bitcoin, blockchain, smart contracts, artificial intelligence and surveillance.

12:42And you go, you put those together and you can create an insurance company with no people. That's safer, better, faster, better service, cheaper than anything that we've got out there. And what is government but a bunch of insurance companies? So you can transform government. banking's being transformed by Bitcoin alone. The bankers freaked out when it came, but then they realized, you know,

13:13you got to get on board or you're going to lose your clients. So when did you see the potential of the Bitcoin currency and the blockchain industry across the board? How long ago was that? Well, it came before that because in 2004, or something like that. I talked to this guy from Korea and he said, yeah, half of Korea is playing this game lineage. And I said, really? And he said, yeah. And it's so important that I've hired

13:44a guy to be my avatar when I go to work. And I said, whoa. And so then I started to think, whoa, so people are using fiat money to buy virtual goods. And then I thought, and there's going to be money in those games and it's going to be virtual money. And then I thought, well, virtual money would, you know, digital money would go across from game to game and then there'd be a whole new currency. So I was watching for it and I thought it would be game to game, but it turned out that Bitcoin showed up and all of a sudden you had a completely trusted, controlled environment.

14:21the decentralized part was even better uh even more than you could expect and then the blockchain was this thing that kept perfect records there isn't a better banking system in the world and uh and i got very excited about it i bought a bunch of bitcoin how much did you pay for it back then because i remembered it back when i first heard about it well four dollars a bitcoin But then it disappeared in the Mt. Gox thing where they disappeared the money and I lost the whole thing.

14:53And I thought, oh, too bad. Well, that's the end of that. Well, maybe there'll be another one comes along. But no, Bitcoin didn't disappear after that. And I thought, my God, that's like they had 60% market share on the trading and they just stole the money or disappeared the money. And I thought, Ooh, this, you know, this is gone, but it wasn't, it dropped only 10% on the news. And, and I thought, Oh boy, people really need this. And that's when I really dug in.

15:26And it was about 2013, wasn't it? I think I bought the auction money in 2013. I think it was like 2011, 2012 when I was, I was sort of buying some and learning more and building and trying to figure it out. And a real light bulb went off when Sebastian Serrano went through Boost. And Boost is an accelerator my son created.

15:58And he went through Boost and he said, yeah, I've lived in Argentina all my life. And my parents' fortune has been built and then disappeared three times in my life. And I'm only 30 years old. And he said, so currency manipulation is almost worse than, you know, one of these African governments that comes in and says your money, you know, I'm taking your business from you with guns.

16:34So anyway, he said Bitcoin is our savior. There are only 21 million of them. They can't inflate out of it. They can't print money and destroy my value. I can build a business that has great value and no one can take that away because it's global and it's frictionless and can move from one country to another. Sure. So he got very excited. He created something called Ripio, which is one of the leaders in Latin America. It's like the coin base for Latin America. And I thank him periodically for all that he's done because he basically guided.

17:20You know, there were other things you could do remittance across border. You do micro payments. You can do things you can't do with the currency. I mean, and and it is more trusted, more stable. All those things. People say, oh, it's very volatile. And I say, what are you talking about? One Bitcoin is worth one Bitcoin. It's all these other currencies that are very volatile as they slowly disappear from use. And then they say, well, so are you going to sell your Bitcoin? And I say, into what? What am I going to do? Take the currency of the future and trade it for the currency of the past?

17:57It's like taking dollars and converting them to Confederate dollars or taking euros, converting them to French francs or drachma. I mean, you don't want those. Those currencies are no good. No good, yeah. And so I'm very excited about the future. I think we're going to have a currency that is global and no longer tribal. You know, all our currencies were tribal. We used to all be tribal until the internet came on. The borders really meant something important.

18:30Like, you don't cross this border or else we're going to have a war. Now we want to cross the borders because we want to trade. And that all came with the internet. And now with Bitcoin, we have something to trade with. With, with. But so back in 2014. that's trusted on both sides of that border. Yeah. Back in 2014, when Bitcoin was around $400,000, you predicted it would get to $10,000. And I think people were making fun of that statement. And all those people have it in their words now, right?

19:00And because it got there a few times already now, and now it's at $60,000. $55,000 today was 60,000 a couple of days ago. So you seem to know something that others don't. Before we get into the rest of the conversation, this is just a question I want to ask. Where do you see its value going in the next three to five years, let's say? Well, so I, yeah, in 2013, Bitcoin was about 200.

19:32And I made that prediction that it would hit 10,000 by 2017 on Fox News. So we actually- Ah, so you did it publicly. Yeah, of course. Yeah. And then, weirdly, about three years to the day, it hit 10,000. And it went beyond that, came back down to about 4,000 in 2018. And I predicted then that it would hit 250,000 by 2022.

20:03And I'm saying the end of 2022 or early 2023, we'll see it hit 250,000. and um and i'll tell you the reasoning i have every industry goes through this sort of thing where you kind of go it goes up to a point and then it drops back down kind of a pipe point because everybody's saying oh my god this is going to be so great and it's everybody's excited about it but it's not ready yet it's not ready for prime time yet and so then it drops back down

20:35Well, all those engineers are working and building and making it so that it fulfills its dream that that was at the top of the hype curve there. And and then it goes way beyond what anybody ever imagined. And so I mean, I think the $250,000 might be conservative, but I felt that it would get to a point after all the engineers had figured out that they could, you know, once they had figured out how to put it together, like take the blockchain, turn it into a balance sheet and an income statement,

21:13and be able to tax with it, have the ability to accept it as retailers, you know, and have the transactions happen as quickly as they do with Visa network. That it would be that this only represents like 5% of all the market for currency. And I thought, well, yeah, it can definitely hit that. And then I actually think from there, it goes up steadily because it's going to be needed.

21:50More and more people are going to be using it, and they'll use it not just for a store of value, not just for remittance, not just for micropayments, but as a currency. And so it's going to have that value. It'll just keep going. There's so many parts I want to talk about. So I'll try and keep it to the topic, which I said before, because I'm interested in a few of these points. But if we're talking about the mass adoption of crypto across the economies and stuff like that, right?

22:21At the moment, it is a store of value, right? So people don't want to spend it because at the moment it's going up. So if you'd bought whatever, a car three months ago for $10,000, but it was the one Bitcoin, that car now, you'd be like, well, that would have been a $60,000 car. Right. And so when do you think it will stop being a store of value and start being a currency? Because right now I wouldn't want to spend it on anything because I'll know that maybe it's going to triple in price in three months, in six months, in like a year.

22:53So when do you think that will happen? Well, I mean, that's what makes it a horse race is that there's always somebody on the other side saying it's coming to an end. And when they do, then they say, then they'll go ahead and spend theirs. so i i'm not um i'm a hodler and i'm an acquirer so just for the because i look and i just for the listeners um the person that's a hodler is someone who holds on for dear life it's a blockchain statement because of the fluctuations over the past five years a hodler yeah sorry and uh and

23:27and i'm also looking and saying well how much how much fiat cash do i need to make all my capital calls and support my family and that kind of thing. And then what's left, and it's either in startups or it moves into Bitcoin. And that's been my investment strategy, my personal investment strategy. But what's happened is a lot of these things have happened. So Crypto creates a balance sheet and an income statement off of the blockchain. So a tax authority can go in and tax you in

24:03Bitcoin if you have like Bitcoin walled garden business. And then OpenNote allows any retailer to accept Bitcoin. And it's faster than the Visa network. You know, my big hope is that I am going to be able to raise a fund in Bitcoin, raise a fund, say pay me in fiat, turn it all into Bitcoin, then invest in Bitcoin and all these startups, and then have all the startups pay their employees

24:34and suppliers in Bitcoin and have the whole thing on a smart contract so that we keep perfect records, not just between me and my investors, but also between me and my entrepreneurs. and so that the entrepreneur can easily show, look, here's how we've spent the money. And so I can keep an eye on how people are spending their money. And I can say, well, what about this? And he said, oh, yeah, that was a mistake we made back when.

25:06How about this? And he says, oh, I didn't really see that. And we've got to figure out how to tighten that up or do something with it. That kind of thing is very difficult to do with fiat and banks and entrepreneurs. But if the whole cash flow is all done in Bitcoin, it can be automatic. And you won't need the accountant, the auditor, the bookkeeper. You don't even need the lawyer for the whole thing because it would all be building a smart contract.

25:37So that's the vision I have, at least in my world. I imagine in the Hollywood world, they're thinking, oh, my God, that means we can pay all these people by just giving them a Bitcoin wallet and dropping the money in as it comes into the business. That's like magic. All of a sudden, there's trust in that system. Right now, there's no trust in Hollywood. No actor, producer, assistant to the lighting guy has any trust for who the people who are managing it and handling the money and doing whatever.

26:16They always feel like they get these checks in the mail for 25 cents. I don't, this isn't right. But if it's a Bitcoin wallet, it just drops in, doesn't touch any people. There's no room for corruption. It's exactly the way it should be. And there will be thousands of other industries that are all doing different things, doing their business in new ways because of Bitcoin. And that's what I wanted to understand is, you know, so what problems does the blockchain

26:50solve or does Bitcoin solve, right? Because like, are we specifically talking only about Bitcoin or are we talking about like any of the cryptos? Say, for example, Ethereum, Litecoin, or any of those other ones? Are we talking only about Bitcoin right now? Well, Bitcoin is the one that has a limit on how many there are, and it's also the most decentralized. And it's the one with the most engineers and entrepreneurs working on it. And it's the one that if you're a retailer, that's the one you're going to accept first.

27:25but these other currencies have uh have certain purposes special purposes i sort of look at bitcoin and i say well that is the amazon and these other currencies they are the other e-tailers but but uh the other the other currencies are all you know doing really cool things And we're investors in many of them. Tezos has a new way of governing and a new way of keeping on the block. The blockchain for Tezos is proof of stake rather than proof of work, which means it doesn't require all that energy to make it happen.

28:13And they're set up really well for smart contracts, which is Ethereum's favorite thing. So Tezos, I have great hopes for. A&T, the Aragon, is a token that allows you to, through crypto, create a jury. And that jury, that could just as easily be a voting system. It could lead us toward a liquid democracy.

28:47A lot of interesting things can happen there. So then what are the problems that blockchain solves then? So is the finance industry the main thing right now? So the blockchain keeps perfect records of Bitcoin, but it also can keep perfect records of data. So that data can be anywhere from anything from, yeah, this purse is legitimately Hermes to this piece of art is, you know, the one that really counted.

29:21So it can be like an NFT around art. It can be an NFT around music. It can be any number of things. And it can keep permanent records. So it can keep a record of you, of your health care, of all the things that have happened in your health care. And it's permanent. It doesn't change. It can keep a permanent record of it. It can be your driver's license or your diploma or your real estate license or nursing license or whatever.

29:54And so anything that you need that is permanent. It can also be like collectors, baseball cards or whatever. So there are some great applications that are coming up for the blockchain and NFTs. Smart contracts are really cool because they allow you to set up a contract that is indisputable. It's in software.

30:25It's built in. And you see how the waterfall flows. You see how, you know, if this, then this, it's all set up like a software package. And so there's no wiggle room for people to, you know, create a dispute. And that'll save us countless hours in legal work. So there are a lot of great applications coming with these new technologies.

30:57And then when you can add things like artificial intelligence and surveillance, that has the ability to change the whole insurance world. because I could have an insurance package that I provide. Right now, the way insurance works is you pay your premium, pay your premium, pay your premium, then you issue a claim, and then you fight the insurance company, fight, fight, fight, and then eventually the insurance company, somehow there's a settlement.

31:29Well, what if you put it all on surveillance and that surveillance could either be on your body for a medical issue or on your house? You could pay your premiums in Bitcoin on a blockchain and then build it into a smart contract that when surveillance saw that your house burned down or the doctor said you've got some disease, the check doesn't even have to come. The money would just drop into the Bitcoin wallet and you'd have enough to rebuild your house or to pay for medical expenses.

32:07So this is and think about that in terms of government. Government is what is it? It's all insurance. It's health care insurance. It's workman's compensation insurance. It's unemployment insurance. It's Medicare. It's your your welfare and your pension and social security, all that stuff. And it's all insurance. So governance can be very thin and very and very complex. competitive, very accountable to its people and very fair because it can all be done on this blockchain.

32:45So, yeah, you asked about the blockchain. You got more than you. No, no, no, no, that's exactly what I was after. So, are there examples of kind of how it's changed the world today? You know, like other examples of how the blockchain or the crypto or smart contracts have actually changed how we do business or how we live today? Yeah. Well, we have a company called BitPesa in Africa, and they translate Nigerian Naira for Tanzanian shillings, and they do it on the Bitcoin block.

33:29They changed the Naira to Bitcoin and then the Bitcoin to shillings and so that the rails are in Bitcoin. And they've done it with many countries and now moving off the African continent, going to Southeast Asia, other places. And they've done incredibly well allowing these people to do business in their own currency, but then translating it and storing it, maybe holding it in Bitcoin makes it so that it's a it's a trusted system that otherwise maybe wouldn't have a lot of trust to it.

34:08And then, you know, here's how it really changes the world. If you're, let's say you're in Africa, or, you know, one of the bad places like Venezuela or wherever, and you've got a bad dictator, and you and anybody who builds anything of great value, the dictator comes in with the military and takes it away from you. Or it's just Nigeria where the Naira just drops in value 50, 70% a year. And so that any value that you create, any value you want to hold and you've created with your business just disappears over time.

34:51So what they can do now is they can operate in Bitcoin. and these people are operating their whole businesses in Bitcoin and they're storing their value in Bitcoin. And that value can be all, you know, it's out there on the wires. It's out on the internet. So it gives spirit to people who otherwise may not have spirit. They think, oh, if I do anything and build anything of value, the government's just going to take it from me.

35:21So I'm just going to live for today. those people are now saying i can build something and i can hold that value what about um for countries that are a lot more stable like the us and the uk and australia you know so what does it take for it to change how we do business here well the us just printed how many trillions of dollars making all your dollars worth less. And that's what happens. And then,

35:53you know, if it gets out of hand, you get inflation and that inflation compounds. And then you start getting the same thing. People don't want to work because if they build anything of value, It's taken away from you through inflation. So no country is immune. And all countries, you know, look, we're smart. Everybody, all these business people in the world, they're smart. They look and they say, well, wait, that country's doing something wrong.

36:29They're printing too much money or they're not operating well. They're living beyond their means or whatever. And so then they go, okay, I'm going to move to another country. And so we actually created something, the Draper Innovation Institute. It's draperhero.org. and you can look at all the countries. You have so many companies, don't you, Tim? You have so many. This is a nonprofit. This is a nonprofit. And you can look at all the countries

36:59and you can see which ones are good places to go and innovate. And it turns out on the whole, the U.S. is still number one, but it's fast on its heels are Singapore and Switzerland. And then you see countries like Turkey starting at about 80th and then they drop to like 140th because this guy comes in and says, I'm taking everything and Bitcoin's illegal here and whatever else.

37:35Whenever you see something like that, then you go as an entrepreneur, you say, oh, I'm going to go to another country. And that's why there's a mass exodus from Argentina going into Uruguay. It's the reason there's a huge brain drain out of Turkey. There's been a brain drain out of Greece for years and years. It's really because you're looking, if you're an entrepreneur, you can now move. And you can operate anywhere and you can build your business in Bitcoin and build your value in Bitcoin and hold it.

38:13So then for these mainstream companies that, you know, they're operating in our fiat, you know, they are traditional, but they know this blockchain thing, the crypto thing, it's coming, you know, I should start preparing somehow. right? But they already have this operation that is running. They've got staff, employees, they've got offices and stuff like that. How does a company like that start to embrace this

38:44technology now, you know, rather than they wait too long and some startup comes and eats their lunch, right? Like, you know, like how does a company start to do this? Okay. Let's say, well, I'll try two different angles here. One is if you're a fiduciary and let's say you're Apple's CFO and you're looking at whatever he's got, they've got 10, hundreds of billions. $250 billion offshore or something like that. Yeah. Cash. Billions of dollars.

39:14And it's in fiat. And you realize that the US government just printed trillions of US dollars. So all of those billions of dollars just dropped in value. and you think, oh boy, if they do that again, it's going to drop again. And if it starts to be a spiral, we're going to have a problem. And we hold all this stuff and it's getting to be worth less and less as we sit here. Well, in that case, you would say, well, I want to buy Bitcoin because I need to hedge against inflation.

39:47Because you know, there are only 21 million Bitcoin out there, but the dollars can keep being printed, depending on which government it is and whatever. Okay, that's from the fiduciary point of view. So buy some Bitcoin and store some of the cash reserves into Bitcoin, step one. And that's where, you know, Elon did that with some of the Tesla cash because he said, oh, you know, they're printing these dollars. We need a hedge. And then so did a bunch of other people.

40:19And then Micro Strategies made it a huge part of their asset base. And it grew. Now you invest in that company. You're actually investing in Bitcoin as much as you are the SaaS product. But then there are some that are saying, well, look, I'm assuming this much inflation, so I'm going to buy this much Bitcoin. And they're the ones who are really paying good attention to the money.

40:50And they're not just sort of seat of the pants. And so the fiduciaries, that's one way. Yes. The other thing that's happening is on the consumer side. And Elon hit it on both sides. He said, and we accept Bitcoin for these cars. And I think he may be using OpenNode, too, because the transaction speed is incredibly fast. So if you use OpenNode, you don't have to pay the banks two and a half to four percent when somebody swipes a card.

41:27And so I think the retailers and e-tailers are going to go, we accept Bitcoin because it's going to save us two and a half to four percent, which seems not like not that much to the consumer. but to that retailer retailers run a very thin margin margin that could like triple their profits if they can get all their customers to buy buy it in bitcoin and if bitcoin continues to increase in value it's even better but most of those retailers sort of go okay we we're going to

42:02accept bitcoin and then uh but we got to make sure that 80 percent of the money we bring in is fiat and the other 20 can be Bitcoin and we can store the Bitcoin, but we, um, we, we need the fiat to run our business or now, or now I was about to ask you that question, but eventually, eventually it's going to, you know, be a, a full, uh, a crypto wall garden and then they won't need the fiat anymore. And by, and at that point, when, when we look and we go, I, you know,

42:34retailers are going to be saying things like, well, I don't take fiat cash. I only take Bitcoin. And that will be the turning point where all of a sudden people will be just trying to bail out of their cash and moving into Bitcoin. And that's when it, I mean, it goes through the roof. We will have extraordinary prices on Bitcoin at that time. So just on that point, just to clarify. So basically, like you're saying, take a proportion of your sales in Bitcoin, but store that, right?

43:10Because if you're going to keep exchanging it, it can be volatile because of the fiat currency, right? So store the sales in Bitcoin, but accept it. And then in time- I'm not giving them any advice on how to run their business. No, no. But I'm just trying to kind of understand how you're thinking about it. But I think that is what people are doing. You know, at Draper University, we take we've been taking Bitcoin for years. Two guys who paid in Bitcoin basically paid for the school for about four years. But but we we accept Bitcoin through open node and we accept it for rent in Hero City.

43:50We accept it in all sorts of different ways. and it's an easy, frictionless way to get Bitcoin. We store all 100% of that. But if I had to run my business hand to mouth, I would hold on to the currency that I can still buy the food with. And until that's Bitcoin, once that's Bitcoin,

44:20then there's no reason to hold any government cash. So basically the first one is like the fiduciaries just store a portion of their cash into Bitcoin as a hedge against the inflation rates and potentially the currency rates and so on. That's the first one for the second one is just accept Bitcoin as a way that consumers can start to pay you for the products or services and then have a strategy for how much you keep and then how much you convert back to funding the operation. Is that

44:58right? Yeah. And as an investor, as a venture investor, I looked at all that and I said, I've got to buy some just for my fund. And so I bought some Bitcoin, some Ethereum and some maker just for the fund so that it could have this kind of a hedge against inflation separate from all the startups that are operating currently operating in fiat.

45:30So I really like your thinking around the accepting of Bitcoin as part of the standard operation. And I think there's also, just to the listeners out there, not a lot of your competitors are going to be doing this. So aside from the fact that this will open up a whole other market for you, it's cool. And it's a way to really stand out from this crowded marketplace that we're in. You know, by just saying, hey, we accept Bitcoin. That could be a point of difference in like a place where every insurance company

46:00sounds the same, talks the same, you know, just says the same thing. There's one that now accepts Bitcoin, you know, like that might be like an interesting way to stand out, especially because it's so competitive these days in the digital space. Um, um, but how do you, um, aside from cryptocurrencies, you know, but you talked about smart contracts and distributed ledgers and all that type of thing, you know, so are there places where these companies can start to invest in to blockchain solutions to improve their operations?

46:35Yeah, we backed some of those companies early on and it didn't take off because it takes a lot of handholding to get a company to change what is right now a database to turn that into a blockchain system or NFTs. It's years of effort. Um, so, so that part hasn't really taken off the idea that I can store all my data on the,

47:10on the blockchain and it's gotta be data where you need permanent records. So there are specific uses that are more valuable than, um, than a normal database. You want to, you want something that will not change. If you have some data that you never want to change, that's perfect for the blockchain. If you have data that's moving in and out, changing all the time, then you don't want that for the blockchain.

47:41So health records are great. Historic financial records are probably fine. Anything that stores it permanently. And then authentication is possible on the blockchain. And that's where, you know, you can put a private key on every piece of art or every whatever that anybody has, and then you can authenticate it.

48:21Okay. So, yeah. So anything that seems like a permanent record, that is the kind of thing that is good for the blockchain. But like you said, it takes years of time to do, and it changes how the company fundamentally operates. So it's almost in the too hard basket for lots of these organizations, right? And so does that mean then that it's a lot of these entrepreneurs that are creating startups in the blockchain and the crypto fields that are there to support these larger companies. That's really how this starts to shift things. Is that

48:57a fair statement or is that just wrong? So I'm not sure I get that question, but I can kind of spin it a little bit. I actually think that the existing businesses, Think of big, huge businesses as big, huge boats. And they're in the ocean and they can turn maybe two degrees without messing the boat up too much.

49:28And think of startups as these little boats that can turn 180 degrees without even blinking. I think that the major changes in the new industries are going to come from the small boats. they're going to come from the entrepreneurs. And so you're going to see interesting, all sorts of interesting things happen around NFTs, around the blockchain, whatever. And then some of the, and first there'll be consumer products

49:58that people kind of go, oh, that's really cool. I can try this. And then over time, eventually it hits the enterprise and then the enterprise starts saying, well, we need to use this for this. Got it. Um, and so it's, so would you say that these types of companies are more companies that will, um, but disrupt specific industries or that they will support them in different ways? They'll be both. I mean, some, some startups, uh, really, uh, I mean, the best startups create kind of a

50:34nice wedge into an industry and then they slowly grow that wedge. Some startups are just creating products that provide better services for their customers, their corporates. it's sort of the difference between, you know, these consumer brands, Facebook, Google, Apple, whatever, and the corporate brands that are kind of the SaaS products, Salesforce and Microsoft and

51:11others, IBM. Those are the ones that help the corporation become something successful. They are slower in general to move and adopt new technologies than the consumer is. The consumer can just sort of say, I'll buy that. And so the consumer usually comes first. The consumer comes first. Okay. That's interesting. It's interesting. I'm just trying to get kind of the listeners' heads around kind of,

51:42so how can they start to prepare for this change that is happening? It's happening. it's starting with Bitcoin, but that's just the start. Let's just talk quickly about, okay, so now I'm trying to find some blockchain solutions, right? Okay. So now you talked about the balance sheet software, but there's all these supporting blockchain solutions that can help organizations improve how they serve their customers or how they manage their Bitcoin. how does a company choose a reputable company to work with?

52:19Because there's so many, there's like thousands of them at the moment, right? And lots of them like kind of solving the same thing. But how do you choose a company to say, that's a good solution? That's what I'm going to put, you know, the resources into? I'm not a good one to ask that because I am doing a portfolio approach and I invest in 10 companies, assuming that five of them go out of business. Okay. And so I'm not saying which one, I'm not trying for perfection.

52:56uh now as as a customer of some product where i'm actually paying dollars for a product i'm going to be very discriminating and try to figure out with you know how to use it and what what it can be used for and how i can help my customers with it uh but uh i i think i'm pretty much the wrong candidate. Okay. So where would somebody go? I think a CIO or CTO of a big

53:27business is probably the one to check on that kind of thing. So where would somebody go then to find these solutions? Because they're not easily, I guess, identifiable through mainstream channels, right? And so, you know, so where does somebody go to start to find them? Yeah, you mentioned one thing about trust. Trust and freedom are what make great countries. I mean, that's all there is to it. And that is also what makes great companies. and if you are building a great company

54:02and you provide great trust from just not just how you treat your employees but your suppliers and your customers and everybody, then you're building something of amazing value one brick at a time and you go, and if you're creating more freedom for people, you will be more successful. in the two country models are Singapore for trust and South Korea versus North Korea

54:32for freedom. Freedom just works and trust just works. So how do you find the supplier that you can trust? It's usually the one that's successful. They're the ones who have customers who love them referrals all that okay so it's the same process if it's a raw startup they're always trying to figure out how to

55:03gain credibility with a customer but that first customer in this new world is not as hard as it used to be to get because there are a lot of people that are willing to like okay we'll try it we'll be your beta customer we'll try this thing out We'll see if it works. What is the thing which you are most excited about in terms of Bitcoin and the crypto industry over the next 10, 20 years, you know, like far into the future? That's funny.

55:36Three things came to mind. One is Coinbase because they have taken the high ground. And, you know, if you've got the high ground on a business, it's good for generations. So one is Coinbase. Two is the decentralization of everything, which includes decentralization of free speech, of money, of everything. And we have a company called Unstoppable Domains that allows us to buy. You can buy Alex.Crypto and put whatever you want on there and put your wallet on there and put your whatever.

56:13and it's all secure and no one can come and say, you know, you, they can't stop you from saying things that you believe. Um, and that's, uh, I think that's incredibly valuable for the world. And I mean, it's what made the U S the U S is the free speech thing. I think that was important as anything. After all, you're in media, you, you like free speech. Um, and then, uh, the third is Bitcoin. And I just think that this, you know, and the altcoins, I mean, a lot of these

56:47altcoins are going to be very exciting, very interesting. They're going to be doing new things with them. You know, DeFi is just the beginning, the decentralized finance is just the beginning. There are many, many new applications that are coming along. So yeah, stay tuned. I think if I, But yeah, if I were to pick three, those are the three. Cool. Coinbase, unstoppable domains kind of thing, the decentralization of everything, and Bitcoin.

57:21Great. And if there's one thing that you want the listeners to do, a site to visit, book to buy, a place to go, what would you like them to do? Well, you watch Meet the Drapers. That's our show on TV. We have 12 million viewers and you can buy, you can invest in the companies that we interview. It's like Shark Tank, but you can invest as a viewer. And then I wrote a book, so go look it up. It's how to be the startup hero. And then the other thing is for the women, only one in 14 Bitcoin wallets is owned by a woman.

58:01I think once the women realize that they can save two and a half to 4% every time they swipe their credit card at retail, women control 80% of retail. It's going to be full speed ahead. And so I encourage women to go out and go to get a Coinbase account and buy some Bitcoin. Buy some Bitcoin. Yeah, great. Tim, thank you so much for coming on the podcast and talking everything about crypto and kind of how it's going to change the world.

58:34I so appreciate your time today. Thank you so much. Terrific. Thanks for having me. Thanks, Tim. Bye-bye. Thanks for listening to the Growth Manifesto podcast. If you enjoyed the episode, please give us a five-star rating on iTunes. For more episodes, please visit growthmanifesto.com forward slash podcast. And if you need help driving growth for your company, please get in touch with us at webprofits.io. Thank you.