Hello, everybody. My name is Daniel Prince, and I'm the host of the Once Bitten podcast.
This is a podcast focused on Bitcoin. It's my mission to interview as many people as I can
around the different aspects of Bitcoin and help people understand exactly what Bitcoin could mean
for them and for their families and for their future. I hope you enjoy the show. Thank you so
much for listening. Hello everybody and welcome to this episode of the Once Bitten podcast. Joining
me today is Michael Tanguma who's the CEO and co-founder of OnRamp Bitcoin. They offer you
multi-institutional, multi-jurisdictional cold storage for your Bitcoin. We get into all of that.
We ask, actually, Michael about his past, and it's up there on his LinkedIn profile that he used to work for WeWork,
and he has some very interesting stories about those insider days at WeWork
and leaving just a matter of months before they went under
and the big scandal surrounding that whole blow-up with Adam Neumann.
Thank you for coming on, Michael. Thank you for being so open.
And we also get into, of course, Bitcoin Paper Summer and his thoughts on Bitcoin treasury companies, which as somebody offering multi-institutional, multi-jurisdictional cold storage for your Bitcoin, you would think he's probably got a pretty good handle on and idea of what people should be doing in order to secure their Bitcoin and how to apply Bitcoin to a balance sheet on a company.
so before we get into all that thank you as always to the show sponsors if you're not stacking sats
you should be i'm sure you are by now but please make sure you do it in the best way you possibly
can if you're new to bitcoin obviously get out there meet as many people as you can bitcoiners
real bitcoiners you can do this by joining orange pill app download the app yes it's a paid app the
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And you can pay with Bitcoin.
You can pay via the Lightning Network.
It's like $4 a month.
It's not going to break you.
But the opportunity cost of not being in there means you don't get to meet Bitcoiners in real life.
Or you only get to meet them when you get to the conferences.
Talking of which, just been to Riga.
That was amazing.
Off to Helsinki.
I hope to see some of you guys there.
But download Orange Pill app.
Find out where your local meetups are.
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Go back two or three episodes and find my episode
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from loneliness after six years.
Please, again, make sure you're stacking sats the best way you can.
Get peer-to-peer if possible.
If not, there are going to be Bitcoin-only companies in your jurisdiction.
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Download the app today, use the code Bitten,
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It's your Bitcoin.
So relay.ch forward slash bitten, R-E-L-A-I is how you spell relay.
You have very much a similar kind of company offering the same services out in the US.
That's swanbitcoin.com forward slash bitten.
And again, use the code bitten when you download the app.
But please take self-custody of your Bitcoin.
If you have been stacking Bitcoin for a little while, maybe they're on an app or maybe they're on an exchange, get them into cold storage.
You need to have complete control over your Bitcoin.
You can do that by heading over to bitbox.swiss forward slash Bitten.
Using the code Bitten at checkout will get you 5% discount.
They have a new product coming out, the Bitbox Nova,
which I'm very much looking forward to get my hands on,
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I know it will be very secure and very safe
because this is what they are completely 100% focused on
and they've been around for a long time.
Now, are you using Bitcoin as a medium of exchange?
Do you want to start accepting Bitcoin for your goods and services?
You can.
Get over to plebeian.market and start shilling what you have.
And also, use paywithflash.com.
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for you to be able to start easily accepting Bitcoin.
So get over to paywithflash.com.
Lastly, hopefully, you're listening to this episode on Fountain.
Give me a boost over there. Say hi.
And listen to the episode I did with Kaz, K-A-Z,
because they've brought out a new podcasting experience,
and it's called Bubble FM, B-U-B-B-L.F-M,
where you can start curating your listening to topics.
So you choose the topic that you want the AI to listen out for.
Their technology behind that will listen to all of the Bitcoin content
and just clip the bits of that podcast that you want to listen to.
Maybe it's Bitcoin treasury companies.
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But if so, you might get an hour and a half opinion piece
from like 10 to 15 different people across 10 to 15 different podcasts
using bubble.fm.
Meanwhile, sit back and enjoy this rip with Michael.
All right, we are recording.
Michael, it's been a long time coming.
We've never had you on the show.
And I know as you were explaining to Lauren,
You've been listening to her ask the first question for many years back in the day as well when the podcast first launched in January 2020.
So, yeah, it's been around a little while.
So, well, thank you for listening.
And it's great to actually connect and interact with you.
Yeah, I'm excited to have the discussion.
And to be completely honest, probably most daunting interview from the question from Lauren because, you know, everyone's had such great answers.
my good friend you know parker perker lewis always has a wonderful answer to lauren's questions and
now whatever comes up i have to like live up to that i don't know if i can okay yes parker revels
in those questions doesn't he yeah okay lauren okay what do you have um so danny was telling me
on how you do like a lot or you've been doing a lot of projects and my question is what is your
favorite project you've worked on or projects oh that's a dangerous question because it's like
asking in front of all your children what's your you know your favorite child and you're
gonna piss somebody off yeah well no i do that all the time oh yeah yeah
it's a difficult one i'm going to take the easy route and say they're equally between on-ramp
been early writers. And I'll say on-ramp is important because I think multi-institution
custody. You've heard a lot of podcasts and conversations around gold and Bitcoin. I think
the thing that makes Bitcoin different than gold, and this is a little bit of a taboo topic, but
it's really the fact that you can insert governance. You can have at the protocol level,
at the asset layer. That's where gold failed. And so I think that it's that transformative for
Bitcoin and how it will be money globally. But then early riders, I say equally on the other
side, because I think capital formation, the way people have invested or built businesses has been
broken for a very long time. And it's something me and your father are probably going to talk about
when we think about Bitcoin treasury companies and the incentive alignment. And I think that
once you get back to the basics of the return of capital has to be sound. We had done this before
with gold we went away from it and the fiat in the dollar world that that also will equally be
profound and how society will change once everyone starts to just have a unit of account that we all
agree on and it's going to make everyone more efficient because a lot of businesses will just
go away so it's a it's a hard one because they're kind of both also really intertwined um
so i don't know hopefully that that was a decent enough answer yeah so early riders did you want
to explain to Lauren what early riders is and the listeners, obviously, that might be wondering what
that does. Yeah. So Lauren, on the honor side, it's financial services for Bitcoin. It's a private
Bitcoin banking. So for individuals that get exposure, need support, honor, you know, helps,
and we can talk more about that. And then early riders is think of it as like the investment bank.
It's the opportunity for our clients in the outside world that's looking to express their
view and getting an allocation into the Bitcoin world or the way that people will be building.
And so they invest, but it's all in Bitcoin. So it's denominated in Bitcoin. We take our fees.
If we don't make our investors any money, we get no fees. So we try to align everyone to be on the
same side of the table. We're in traditional investing, independent of what anybody's return
is, you're going to have your management fees and then some form of carry that's just above
kind of the interest rate on capital. Okay. So they help companies. Yep. Startups. Yep. Perfect.
Well done. How many other Bitcoin companies or projects have you worked on or launched or been
involved with? So we can get a kind of a rounded picture of how long you've been around the space.
Yeah. So I personally in the space, roughly 10 years, and then have been building infrastructure
around Bitcoin custody for a little over half a decade. My journey was a little interesting or
unique because I was in traditional tech before. So I was at Google and YC back companies.
And then I was at WeWork and I was actually learning about money while I was lighting money
on fire. I don't know, Lauren, if you're familiar, but WeWork has this famous guy, Adam Neumann,
and it was just an amazing salesperson and kind of destroyed a lot of capital.
um a lot of people they're like we'll see when i have podcasts i'll see the comments he's like you
should leave the we work part out it's like i love talking about we work because ultimately
the only way you can really build great things in life is you have to know how to do things right
and have taken those experiences but it's almost important how to know what not to do and to learn
from those experiences and so i came from that world and then uh met who we were talking about
previously uh parker because i was uh like all bitcoiners get in and you buy some explore not
all Bitcoiners now. Now Bitcoiners are buying some treasury stuff. But at the time, the old
school way to buy Bitcoin is you just bought the Bitcoin and it was on Gemini and I knew I needed
to get it off of an exchange. And so I couldn't be alone on an island with a little plastic device
for all my wealth. But I also knew I couldn't wake up one day in the exchange to say, hey,
Michael, we can't give you your Bitcoin. And so that led me to the collaborative custody rabbit
hole. It was Casa or Unchained, took a liking to Unchained because really, frankly, they were from
my home state, Texas, and right around Austin.
Became good friends with Parker.
He took a keen eye and like,
hey, when you move back, we gotta get you plugged in.
And I'm sure you know Daniel, Parker's pretty persistent.
I moved back home and he was hounding me Joined that business And that kind of how my journey really into building in the ecosystem started Helped for a bit on the 1031 side to establish that fund
Worked with Marty, Matt, and the guys there.
And then ultimately in 22, everything kind of just blew up in the kind of crypto digital asset world.
And it just kind of took a step back.
It was like, man, there's a lot of things that don't feel right here.
And so that's really what was sparked a lot of on-ramp and early riders and the stuff we're building today.
oh all right any further questions lauren i do not no thank you all right cool well thank you
very much great to meet you lauren even though i've heard you multiple times and uh have a good
rest of your day great to meet you too thank you have a good day bye-bye it's funny you brought up
uh we work because there it is right up on your linkedin and uh i i yeah i get what people are
saying it's like oh man you should take that down you don't want to be associated with but like what
was what was going on from the inside like what what when did you start kind of because i remember
it was such a huge thing and co-working spaces were the next thing right this was going to unlock
the digital nomads this was it was kind of all part of the sovereign individual thesis as well
and uh if people had already gone down the rabbit hole on that they could they were probably looking
at these things well this is this is the future and i remember watching newman and yeah very
persuasive character and money was being thrown at him left right and center it must have been
wild to be sitting on the inside of that and seeing that come in and yeah look what was your
role and when did you start kind of what's what's going on here it's a it's such a fascinating great
question. I don't get to talk about it enough. It was easily the best time I've had outside of,
I would say, unchained and what we're doing now. But if I had to put so far, because I think we're
just getting started on it, probably the best time in my professional experience. And the reason why
is because the thing that most people forget is that there's a reason why Silicon Valley and tech
companies are labeled and have the best and largest valuations. There's a field component to it.
But at the end of the day, you know, fiat, the dollar drives incentives. And so if you can pay, you hear about meta and open AI, they're hiring the best people in the world today at millions of dollars. And so those people, you're working with the best operators on the planet earth.
and so one of my key alerts is that we were it was the highest level caliber of people i've ever
worked with all my entire life like on rank is probably the closest and how we've really been
careful and who we hire but it was it was um because you're getting the investment bankers
you're getting people the people i remember specifically were like from linkedin for whatever
reason linkedin hired just absolute killers when they were back in the 2010s to 14s so we brought
a lot of people on because there was a vp of sales that came on and they kind of recruit from their
old girl crew. And the thing that's really sad is that we work as a concept is a sound business,
like to leverage vertical integration, to take a larger lease and then sub-parse it out and you
provide people flexibility. Like all of that is not a Ponzi. What turns into Ponzi is when you,
or not even a Ponzi, what turns into a bad business model and bad incentives is when you,
Well, you take multiple things.
You take one is MASA and a Japanese fund that is just required to go and blow, you know, just kind of like shoot capital out into anything.
And then you take somebody that's equally willing to accept it and say, we can go bigger and be very ambitious.
And then you take something that's physical constraints and you start to layer a lot of these things.
And that's how you ultimately, again, it all comes down to the incentives.
but before going to the direct question
when I realized it,
I will say that it honestly resembled
a lot of Bitcoin internally
because internally everyone,
if you remember the slogan was
to make a life, not a living, right?
And that's actually kind of like
what we're trying to do here.
It's right, to make a life, not a living,
like not to work, just to work,
but to actually do it.
I think you've done a good job
of inserting that like mix of it.
And I think of myself,
I have a lot of stuff going on,
but I just think about it living.
I don't think about it as work,
which is I think the goal
where we want to get to. And that's what people were subscribing to there. It's like people have
been tired of being at the McKinsey's and all these companies and making bland real estate and
cubicles. And you got there and it was activating this space. And it was things that Google and
others had picked up on. You want to be able to go there. The thing that they kind of missed that
we all know is you got to have more of the meaning is just the physical space. The work has to matter,
but that's what would matter for the people is that they were changing the world by making,
helping all of these companies insert the level of like that we were culture into them. So people
didn't hate their lives and enjoy going to work. And so people were passionate and they were 18
hour days. I don't know if this is widely known, but they used to have, thank God it's Monday
because in the culture was like, you would stay after work Monday. They had dinners and everyone
would be there and the people work late. And then they partied hard and they like,
we did a lot of stuff because all this capital being burned. So that's where it was like,
it was an amazing experience because you're also working with the best people. So you're learning
now where um what i really realized that it was all kind of like a fugazi really was um
it was interesting because i grew up in texas and i and i and it's not just texas i think but
there's probably a lot of places where in smaller towns meritocracy reigns true like you do what
you say you get rewarded you don't do what you say you don't get rewarded you have a stain people
recognize that they don't trust you. And then that's just how life works. And as we went,
because that was very early to WeWork in the enterprise side. So I saw us go. And as we were
scaling and it all just started getting really murky and hazy and who was getting promoted,
who was getting rewarded with the right deals. Cause we were working with the largest companies
in the world and it all just stopped making sense. But then what really started happening,
you see this across metrics as well, bankrupted BlockFi and others is ultimately when people raise
capital, it's almost like the same thing with the debt markets where more debt requires more debt
to keep it sustained in the same way as like if you invest in a company and they need more company
to get to profitability, the heuristic is they're never going to get to profitability because if
they couldn't generally have done it on the first or second round, there's no reason why more capital
is going to help. And so what happens is you get these metrics or KPIs that everyone's looking at
as the shiny star. And then as long as you can hit those metrics, the investors will go. And so
So ours were desks because we'd sell these whole buildings to Amazon and there would
be like 20,000 desks in the building.
And then sometimes you sell five desks because that was like, you know, just what a normal
small team would need.
So desk was the KPIs.
And so we started giving away desks for free or cutting on like for the first year on a
five-year contract.
It started getting so crazy.
But the thing that stood out is nobody really thought it.
There was only one other guy that I worked with.
He was super smart, grew up in Pittsburgh and was at Carnegie Mellon.
He was a mechanical engineer by trade.
So he just had some first principle thinking to him. And he just knew money didn't grow on trees. And we would just sit there and do these deals. We do our job, but we're like, this doesn't make any sense. Like none of this makes sense. God bless him. He stayed there a long time.
But where my story kind of gets fun is I recognized this in 18, found Bitcoin. So I was like, this doesn't even make sense. Even if I wanted to stay or didn't want to stay, I had already saw Bitcoin and realized there's a lot of people that naturally, once they see it, they got to get involved in some way.
So I had been just already, I go back to my 2018 emails and it's just emailing almost everyone.
And so I knew I was going to leave.
And in Q1 of 2019, we were, cause the hot thing, there were rumored to IPO for $48 billion
that summer.
And SoftBank was doing a tender offer to buy back some of the capital.
And so everyone internally thinks we're all like going to be rich and all stuff.
I'm like, this doesn't make any sense to me.
I don't know how this works.
And I found this other thing and it's a lot more liquid and all the things we know. And this is, you know, Bitcoin's $3,000 at the time because this is as the price is running down in 2018 and then 2019.
And I was like, there was opportunity cost to exercise the option. You have to put up front capital and then you have to take the shares and versus they were just going to buy it outright in cash. And then I had that money. And so I just like sold, you know, naturally sold the shares and had that because I already invested and was able to buy Bitcoin.
and uh and it's just a funny thing in my like hindsight because six months later like the whole
thing fell apart um so it was a very wild ride but it was very informative to everything that
i kind of do today because it's just you only get one chance to see that i didn't know it was
going to be the poster child of kind of the whole biot serp world i can imagine your colleagues as
well like what are you doing you're crazy just another six months we're gonna ipo we're all
going to be rich you know big titty pictures and eternal riches like that because everybody gets
swept up in that it's not just the icos and whatever else and we'll talk about bitcoin
treasury companies in a second as well but uh yeah i'm sure you had a lot of people
side-eyeing your decision then and um well look what happened we work falls over bitcoin's still
around and you're here building in the Bitcoin space, more companies. Yeah. I mean, it's kind
of been the thing I've always, it's never good at the time until hindsight, but I've always just
tried to be truthful to myself. Because at the end of the day, if you can't live with yourself,
then what are you supposed to do? And so I just remember it's always like a lagging indicator
because, and Peter Thiel's talked about this a little bit, even though I probably should stop
referencing him because recently he's not looking so good. But it's always the notion of like,
it's always going to be the out of the box thinkers do something. And then you'll see
like the investment bankers come in because they're always playing off of like the old thing
of like, you got to go to school, get the MBA. And now people don't go to school. It's the hot
thing. And very similarly, like going to WeWork, leaving Google to go to WeWork, my in-laws at the
time, my girlfriend's parents were like, that's kind of weird. That's like, what is WeWork and
all this stuff. And then WeWork was so hot over those two years. And then when I was leaving WeWork,
He was like, well, what are you doing? I was like, just trust me. When you're inside, you have a lot of additional data. And so, yeah, I think about it kind of ties into a lot of the stuff we're doing now. It's been a two-year slog, but it's starting to become a little bit more apparent of like, well, wait, maybe you don't want to hold all this money in your house. And maybe you don't want to leave it on a third party.
in the same way of like,
I had this epiphany the other night,
the other weekend.
I was like, holy crap, guys.
It's like, we fully intend to like,
you know, return to our hurdle rate
at Early Riders is 1.25X.
We get no carry if we don't return over to 1.25
for time value of money and all liquidity and all that.
But it hit me, it was like,
even if we like barely hit Bitcoin's return
or just slightly below wherever we sit,
we'll be the best performing fund out of all of venture.
And like all this money will come in
because of that, because there's a notion of the heuristic of being more principled and efficient
and cost of capital is not 2% or 6%. It's something much higher. And that discerning is
what creates great companies. So it's this notion of like just swimming just slightly ahead of the
puck before the rest of the market is like how you can act. And then you get to galvanize because
you pull all the people that like see it. When we launched multi-institution, there's a couple
guys that are with us today that saw it right off the bat. And it's because it's crystal clear.
and that how you build like an actual movement And then eventually the market like oh so odd It like everyone going to repeat back that Bitcoin was so obvious 21 million in a land of infinite capital But we know that not how it worked
And there was a whole bunch of crypto whitewashing
that's going to happen between now and there.
And probably PubCo treasure whitewashing too
if it plays out in the way that maybe we think it will.
Yeah, absolutely.
Okay, right.
Let's move to, well, on-ramp.
I think most people are by now pretty much aware of what you guys do and what you offer.
But and if anybody wants to do a deep dive on that, they can go back.
I've had Andy and Jesse.
They've come on the show before to talk about OnRamp at length.
But if you just want to give people a quick update as to what OnRamp is and the services that you offer and any updates.
Yeah, for sure.
At the core, HonorM operates like a private banking experience.
So for individuals all the way to endowments and institutions, we work with the first UK
pensions.
Now, increasingly, Pupco's are coming to us.
But the kicker is it's all built on multi-institution custody.
Multi-institution custody, it's kind of the hybrid between self-custody and the assets
are on-chain, verifiable, cold storage.
But you don't have to participate or manage any of the cryptographic material.
and then it also is the it has the simplicity of a single custodian like when you onboard to a
coinbase or a single entity you get that same experience or fidelity um i personally get very
excited about it because i think about there's different analogies in text history whether it's
the browser or um the browser the telephone these used to have to like connect wires uh
and like to to do across like the the country and there's one other analogy that was just
recently coming across oh the computer um if you really like go back in time and see like how they
had to create the punch cards and the mainframes and you had to like write the code for the certain
piece of software to do it like that's what you can we're going to look back at the analogy and
i had to talk people through during my time at unchained on collaborative custody because no
wealthy people want to hold all this capital in their house and they did they definitely didn't
want to do it at ten thousand dollars they 100 because we're all working like crazy at 100k and
imagine 250,000. And so that's kind of our core pillar is like, okay, how do we build best in
class products and services with Bitcoin ethos in mind as far as decentralization, fault tolerance,
redundancy, but also just build with like the future in mind because it's kind of like an
interesting thought experiment. It's like nobody, we would think it's crazy if we told everyone,
you're insane for not holding all your gold underneath your mattress or geographically
segregated, but we feel okay to tell people, oh, you should just hold all your Bitcoin self-custody
because that's the right way to do it.
And gold and Bitcoin are fundamentally the same thing
in that sense.
You could take possession.
Maybe it's a little bit easier to take possession
of all your Bitcoin,
but the concept of threat vector still exists
that if somebody knows where you're at
and he knows you have access to all this money,
there's a reason why you have controls.
And so I actually enjoy this concept or this topic
because the most educated and like friends of mine
think we're all nuts, right?
Because we're like, wait, there's a different way.
And I just don't like being in consensus.
Like it's not that I try to be outside of consensus.
It's just like, that's just already,
the consensus means that the market has already decided,
like we're there and then we all agree on it.
And I feel like there's everyone agrees
that self-custody is the thing
or we're going to trust a third party custodian.
And I don't think that's right.
An example of this is like proof of reserves.
Like nobody ever gets to articulate
how proof of reserves is,
it's kind of like a fallacy
because proof of reserves,
sure, I can do proof of reserves today,
but tomorrow if all the assets were stolen
because my internal team colluded or somebody hacked me.
Well, what was the point in proof of reserves?
Like inherent to multi-institution custody is proof of reserves.
And something we don't even talk about yet
is you can actually attest and have provenance
around that single address by three independent institutions
or five if we do a 305,
that that address is actually underlying,
belongs to that person by different institutions that did it
because they've already onboarded them.
And so these are just concepts that were just a little bit early,
But as the price rises, it's natural that people will look out for the best solution because it's their money.
So from memory, you had three institutions.
Has that changed now?
Have you got more?
Yeah.
So we have four live today.
So it's OnRent, BitGo.
BitGo, it's sadly like they're one of the best custodians in the world.
They have over $100 billion in assets under management.
They're going to IPO, but a lot of the Bitcoiners don't know.
So they're really great at what they do, but also from a Bitcoin perspective, people know.
CoinCover based in the UK, and then Tetra Trust, which is a Canadian qualified custodian.
So that's important as well, because they're geographically dispersed, which is something, again, if people are looking at a multi-sig setup with the collaboration of OnRamp,
that the first one of the first questions are going to be, well, you know, a 6102 attack and
all of a sudden all exchanges in the US are told no more withdrawals under any circumstances.
So that wouldn't matter if you're in an on-ramp situation because you've got the other two or
three now outside of the US that are able to sign those transactions and get your Bitcoin to you.
Yeah, that's exactly right.
There's some other things that if that ever happened, they're going to go for single exchanges
first because it's the easiest.
There's a lot of building in Bitcoin where you want to, and I learned this at Unchained,
whenever you build a product in a space, you want to take yourself out of the place to
rug the client or be rugged, right?
So being as a single custodian, I could never go to sleep if I had all of my client's assets
because if my team colluded or if the government came to me, I could group.
So that notion underpins a lot of what we do in the sense that if something like what
you described happened, there's going to be a lot of smoke around people, which are all their assets,
but there's also the thought of, or the logic of violence kind of changes because it's like, well,
it's also not an omnibus wallet. That's something that people forget that in traditional custodial
models, whether it's Coinbase, Unchain, I'm not sorry, Coinbase, Fidelity, I don't know if River,
I think River's also more than likely, yeah, they do because they put it on chain,
is it's an omnibus wallet. So if there's ever anything that happens to it, whether it's
collusion, hacking, or government, it's a very easy target to go. And it's similar to corporate
treasuries versus the way we do it is every wallet is on chain requires its own multiple
key ceremony by multiple institutions. So it's a little bit different. We have a Latin American
key coming online, Middle Eastern key coming online, another US big firm coming online.
And then we're actually going to be doing lending with another firm. And there's like four or five
other things like coming that are public there's been a lot of stuff working in the background but
uh yeah it's been it's been a very fun ride so if somebody listening is now interested because they
they do want to protect their stack a little you know more securely than they have they are not
comfortable with buying three separate different wallets setting up the multi-sig dispersing them
among friends or family or whatever and they're thinking well yeah on ramp i've probably got a
half decent service here, it's definitely worth them checking out. What would be the, like the
fees, what would be the walkthrough process? Yeah. So I think one key thing is it's not all
or nothing. Like everyone has their own risk profile and threat vector. And so some folks
that are worried about their family recovering and all of that, they put a large percentage there
and others may be not afraid of that, but are just afraid of whatever reason they just want
access to that. Then they split between, you know, self-custody and third party. We all agree
self-custody is what makes the whole system work. And then you can oscillate too, based on what
you're concerned with. The onboarding experience is something to take a lot of pride in is from
our engineering and product team. Historically, when you onboard to any of these, you know,
multisig in itself is a really industrial style product. This is why collaborative custody took
off because for somebody to really build their own multisig wallet, not only to create, you know,
have three different Xpubs, three different private keys, geographically segregate all that,
think about recovery, and then make sure they're all backed up via the right wallet configs and
wallets is not easy and not to mess it up. So that's where collaborative custody comes in.
But where collaborative custody kind of falls is you still push all the burden to the individual.
So they have to, like, if they lose it, they're out of the game. But it's also inherently full
of a bunch of friction because you have to ship the device. You have to go through onboarding,
And you have to make sure the person is familiar with that.
So it used to take us two to eight weeks to onboard people.
And then a lot of people left their assets on BlockFi.
Because once you get onboarded, you still have to inherently understand what you're doing.
Because the reason why you're using that is to have no single point of failure.
So if you're relying on the third party partner and they go away, well, what was the point?
You might as well just trust the Coinbase or whatever, because if you messed it up.
So we onboarded two to eight minutes.
If you're in the US, if you're outside, it takes a little bit of KY.
like, um, we, as they go through manual or review, but we're actually going to streamline that. So
in about four to eight weeks, U S or international meal, the onboard in a few minutes. Um, and, um,
we started like 1800 bucks a year. So if you just have under 500 K and then it kind of scales up
depending on like amount of white glove treatment you need, the, one of the big things people use
this for is inheritance, because that's been the hardest thing, um, is just the notion of
like us as individuals, when we adopted Bitcoin, we were much younger, right? And as we get older,
like life just gets a lot more serious. Our kids grow up and they need to naturally be able to
inherit something if something happens to us. And then it's just unfortunate, but we've seen
increasingly post COVID, a lot of people, it feels like have been, you know, passing or getting sick.
And so as that happens, it's kind of like directly correlated to Bitcoin's price rising,
right? Like as Bitcoin's price with time goes, we all also see mortality. And so a lot of
individuals just feel that and inherit in our solution, there's no extra cost. They just come
in and they set up what's called termination on death certificates. And that effectively helps
bypass probate. So we can set up trust and do all that. That's easy. But if a lot of people just
don't do it because we're young and think we're going to live forever, so they can just naturally
put that in. And so God forbid something happens, their family would be able to show up and they
could have the right death certificate and go through the procedures. And then each of the key
holders would authenticate and then sign to move the assets yeah i remember that being a very slick
process like it didn't take much time at all uh you know to to set up the um the descendants uh the
the uh am i right like yeah yeah and what you're keying in on is something that like i think
probably will be a key theme of stuff we talk about in the the corporate treasury stuff is that
like the reason where the the computer was so profound or interesting and like why jobs they've
been just going down this rabbit hole of of you know him and what he's what he's done i don't know
why he's always previously looking at henry ford um but where he really found profound was that you
can take like it was he was looking at these different errors and the eras and the way that
they transition in and um how he saw computers giving like the power to a man of like a hundred
plus men from a productivity perspective, but it was very cumbersome and clunky.
And the idea in his head and what he tried to push through his products was ultimately the ease but accessibility and what it meant for the individual the empowerment it gave And we know this is what
Bitcoin, the individual, like I want to change our company slogan to be like, allows your
journeys to come true, but we can like, team won't let me do it. And we're not ready. But that's what
I really think of like what Bitcoin does is it gives people the time to take a step back, right?
To get off the rat race and ultimately express their view of what they should be doing in the
world. The problem is that it's been inherently so hard to get material exposure because of
everything we're talking about here, only the hardcore people understand what we're talking
about. It's very hard to discern all of this. And there hasn't been an easy way to click a button
and park material wealth or start and then put more and more with no friction to your point
when it comes to inheritance, like a Fidelity or Coinbase account. This is why corporate treasuries,
ETFs have been the fastest growing products in the space is because they feel very similar to
the existing market. And until we get there, we're always going to be in this like weird niche where
people are going to adopt inferior products and get rubbed. And so that's what I think has been
essential to this process. And we've been growing like crazy. Most people still don't know who we
are, but we're going to kind of change that. We have a lot of things in the plans from like a
public kind of digital aspect. All right. Very cool. So Bitcoin treasury companies,
it's the big, we've almost shifted away from core versus knots now that that seems to have
settled down a little bit. But that was a really interesting part of Bitcoin's history as well.
And it will flare up again, I am sure. Bitcoin treasury companies have definitely taken
the headlines over the last month. What's your stance on them? How do you define a Bitcoin
treasury company? Where do you think the nuance is being completely missed?
Have you heard any of my takes on this? Not really.
No.
I've been talking a lot about it, so I just didn't know. I mean, would it be okay if I'm
curious your thoughts?
Yeah. So I think there's a scale. Obviously, there's a scale to everything. And you have
What I'm passionate about is mom and pop stores, small to medium-sized enterprises, your local pub, your local cafe, your butcher, your baker, your candlestick maker, the people that you are interacting with each and every day, family businesses.
It's so freaking important for them to start getting Bitcoin on their balance sheet, whether they are selling their goods and services for Bitcoin or using capital each month.
that they put some profits that they can take out of the business into the business,
just so they can stay alive and be around in the next 5 to 10 to 20 years' time,
and then pass that business down through generations like we used to have.
But Bitcoin would be able to apply that in real life.
And at the other end of the scale, you have people that are spitting up companies
out of nowhere that are offering no goods or services and never have done and are just
raising cash to buy as much Bitcoin as they possibly can.
And that doesn't make much sense to me at all.
And we're getting all of these new metrics being thrown around like MNAV and people are
losing their minds.
And it's like I came for the Austrian economics and stuck around to day trade MNAV.
And people are losing sight of what we're here to do in my estimation.
And then there's everything else in between.
So as a Bitcoiner, as someone who is invested in Bitcoin and looking to invest in Bitcoin.
So what's happened here in the UK, which has been very concerning.
A lot of people here in the UK have pent up cash.
Cash they cannot access until they, and they're about to change the rules until they're like 58, 68.
I can't remember.
Whatever it is, it's years away for most people.
But that cash is there and they can't use it and they can't allocate it to Bitcoin.
So what they've been doing is allocating it to Bitcoin mining companies or MicroStrategy, for example.
That's why a lot of Brits hold MicroStrategy stock, because they can pull up their pension provider and say, please invest into MicroStrategy.
And it's done very well for them.
But now these new companies are coming online saying we're going to stack Bitcoin onto the balance sheet.
There's a couple of them here in the UK, and they've gone mad and they've gone absolutely bananas.
and then they've just fallen out of bed again.
Because I don't think it's being done properly
and I don't think it's being done with the right intent.
But I can't tell.
I just get in the spidey senses.
So that's very interesting,
especially when you've got people like David Bailey,
who has his UTXO fund management,
looking at spinning up Bitcoin treasury companies,
or for want of a better word,
rescuing zombie companies in capital markets
in every country that he could think of.
It sounds like a total pump and dump to me.
And if you're pumping
and then dumping on unsuspecting retail,
that's one thing.
But if you're pumping and then dumping
into people's retirement accounts,
that's a whole nother level of mental gymnastics you're going to have to you know live with for
the rest of your life so there's something very strange going on here it feels very ICO days
and it's concerning but back to what I said at the beginning please if you're small to medium
size enterprise business if you're a mom-and-pop store don't be put off stacking bitcoin into your
balance sheet that's definitely something that you should be looking at yeah i uh i think it's
really well said i think i think that's directionally what's happening um that my thoughts
kind of mirror in the sense of generally everything's good or everything is good this is kind of the
nuance what's happening here is everything's good for bitcoin and ultimately what you just
described if it puts Bitcoin to a million dollars and then it crashes, well, it's at a different
scale, but that awareness is going to drive more adoption to Bitcoin if we would have got to 250.
So that's the sad part, right? Like that everything's good, even though it's not good
for the Bitcoin or the holder. Now, what you said about businesses resonates very deeply with me.
One of our portfolio companies, Acropolis, is exactly this. It's like business treasury,
because from SMBs all the way to corporates, they naturally need, there's a bunch of things from buy,
sell to governance, to consensus with the organization, to how do you manage volatility?
How do you lend against it? And I had a very similar, I grew up in the area that's been
flooded right now in Texas. And I have some property out there and I was at a small taco shop
and it was during COVID and all of the market prices for the tacos, like the tacos were
generally just like static, right? It's tacos, like how does it change? It's not like beef where
you go to barbecue and then like the beef is always, or now we've always moving. And they had
bunch of tape on the prices and it was because they had to change the thing and it hit me it's
like these people i care about them they need bitcoin because the only way they're going to
survive is if they hold a better form of money but then also how they'll thrive because they'll buy
out the taco shop across the street that is not you know they're just going to be able to out
compete them and so it's underpinned a lot of the stuff that we're doing and also kind of what
you're driving at is you just need it to exist um so that's the the natural part now around the
corporate treasury i think why we're probably both and like there's a sentiment around it
is we probably you tell me if i'm if i'm wrong or if i'm missing something is
we probably expected it off of wall street but we didn't so we expected that because that's just
natural but we didn't expect the individuals because what's embedded in this trade is what
you're saying is most people because if they are if they aren't if we're wrong then show us your
book, show us your Bitcoin, you convert it into the shares and show us how you're going to lock
them up for 10 years. Because if not, then what you're saying is, right, is that you get in early,
you're going to effectively dump on others. And we didn't expect that from the people that were
trying to educate Bitcoin. I understand why they're doing it, because at the end of the day,
there's been very little money to be made in this space as an educator, and people have done a lot
of work. And so it's sad. But at the same time, to take that, it's almost like affinity scamming
on your reputation to take to these companies, they should know better. And it ties into the
people like us, even that are paying attention. I remember I was at the block. I didn't touch on
this, but back in like 2019, at a very small time, it's how I met like Matt O'Dell and Parker. I was
like at the block for a very quick stint. And I could have, I remember they were talking about
Solana and all these tokens and could have bought them at 80 cents and 50 cents. Cause they had,
you can see pattern recognition. They're like tech companies. You can see the vibes, right? You can
see the teams behind them and you can make some money. But back in the day, and we had to do this
thought experiment specifically with Parker. It's like, there's a lot of mental gymnastics you have
to do when you're going to trade. There's not only, I'm not going to go in any specific order,
but there's not only taxes you have to do. You have to be outside of the market. You have to,
it clouds mental headspace and what you're supposed to be doing because you have to get
out of the trade. You have to be a good trader because nobody knows when to get out. If I was
in MSTR, I would never know when to get out and it would just be sitting there.
And so versus, so it's the same thing with these insiders that people that follow the space are seeing these new things, whether it's in Canada or UK or wherever, and they may make some money.
And then this insidious part about this is you start to, and this is why I can never allocate to them. So I can always speak objectively to it is like, well, then you naturally, you have to make, you start to see this.
You always know when people start posting on Twitter in positive lights, because, you know, they started to put their own portfolio into it.
You have to start to rationalize why it makes sense.
And the sad part, and this is the last thing I'll say about this
because we were talking about it last week.
We talk about it every week now at this point on the podcast we do is
the Bitcoiners are fine in this.
Because if you think about it, we all understand what money is
and then we understand what speculative assets are, at least most of us.
So we're all fine with if you have your stack and you take a little sliver off
and you play a little penny stock,
like no harm, whatever.
You can go speculate.
The problem is that we forgot
what it's like to come into this space
and get thrown into the wolves
with all these different things.
And this is like the biggest wolf trap
because this isn't an ICO.
This is like everyone knows they're 60-40
and to be able to click a button
to take a little bit of their equities
because equities map perfectly
to what they're doing
because their equities
with their holding Bitcoin.
And to say, I get my Bitcoin exposure,
we don't have to deal with the keys
and all of that.
And that they should know better
because that's how the market's going to come in.
So any way they're rationalizing it is effectively just hollowing out what Bitcoin actually is as money versus a speculative asset.
And I think that's where we're both and some other folks that have been maybe not as loud about it are feeling why it's not in the best interest of the individual.
Yeah, absolutely. And you've got big interest backing these things.
Like in the case of 21 or XX1, whatever it's going to be listed as, you've got Cantor Fitzgerald behind that.
Like this, this is Wall Street.
This is the pinnacle of Wall Street. This is
as pointy as it gets.
Those guys, they know like this,
they're not on your side.
They are not your friends, these people.
Like they are here to financially engineer something
for themselves.
That is the, and if you're gonna,
you are going to be last to the trade.
As like you said, you're gonna have to time it.
You're gonna have to get in.
You're gonna have to get out and lose some sleep
and most likely lose some Bitcoin. And from the investment point of view, how much money now is
getting sucked into this stuff that, as an Austrian economic person would look at it,
like the opportunity cost on the other side, all of these companies that are now not getting this
capital because this hype cycle is in complete froth territory already and we're only we're only
what a few months in yeah that's what scares me the most is we're only a few months in um
i will say there's a little nuance to this in two aspects uh one is maybe this was always the way it
was going to go in the sense that you know there's a there was always something very poetic about
everyone gets Bitcoin at the price they deserve because there was something around the Elizabeth
Warrens were the last to get it rightfully so because they just had benefited from a fiat system
and the boomers things like that but maybe it was a little naive in the sense that there were going
to be large bag holders that were going to play the fiat system to get it but what I will say so
like maybe this was always the way it was going to go and there is some nuance in that like
there's a probable bet that I think a lot of these things de-lever because it's just nonsensical for
corporates pensions because they hide under that corporates and pensions are adopting them. And
they're like, sure, at the margins, they're doing strategy because of liquidity profile. But like,
there's a reason why all these companies are creating communities, you know, create communities
for pensions and institutions. But I can make a case that this becomes the standard for all
companies, specifically public companies, because Bitcoin is going to be inserted into, you know,
all markets and products to help to deleverage, right?
We see this with bet bonds.
We see this with, you know, corporate treasuries or like strategies in general.
If you have a bunch of products and services and we're suffering via deflation AI, like
you naturally need something to absorb that, to stay alive.
So there's a case to be made that it'll just be soonly like understood.
You get penalized if you're a public company that doesn't hold Bitcoin and then they'll
have a premium because they have more.
like i can see that play out um but there's two things to call out one is they'll still blow up
because they're they're humans running the show and there's a lot of things happening under the
scenes and that's why they don't under the under the covers of like where the custody sits because
a lot of them aren't actually custody they're trying to make additional margin or additional
they don't talk about it but where i benefit or where i can go to bed happy at night is um at the
end of the day, it ends up in a fairer system, right? So like if the company or the individual
across the world buys Bitcoin at a million dollars, a hundred thousand dollars or five
million dollars, sure. Ideally they bought it lower and they could benefit. But the reality is
they've done that if it wasn't at the price point, the liquidity profile and awareness.
But it's a meritocratic system. You can't make more of it. And then the only way to get it from
the individual is to deliver value. And so sure, the fiat setup could have let them have it in the
same way you win a lottery ticket, but most people give the money back because they didn't actually
make it. And so I just think as the natural order of things like gravity in the water flowing,
this money will be delivered back to the market. Now, I don't know how, but I know they won't do,
unless they're very good allocators, they won't do productive things with the underlying how
they're proposing that they're going to do. And so it's just kind of, I've been just trying to
work through this and it's just kind of like trying to work through life, right? Like there's
just nuance and there's no black and white. Yeah. And then the last part of this, which people aren't
because it's all fun and games at the moment, right? It's all about number go up and there's
a new IPO coming soon and I've got to get on on this and there's a new company announcing that
So I've got to get on in that one.
I want to be part of the pipe deal, all of this kind of fiat jargon, which is sad to listen to.
But what happens when in 18 months' time, 24 months' time, whatever it is, we have the rollover on the Bitcoin price?
So the underlying asset all of a sudden starts tanking.
Like we know it always does if you've been around long enough.
And of course, this time it's different, bro.
wall street's in and they had these guys that are holding this bitcoin on their um balance sheet
as bitcoin treasury companies purely bitcoin treasury companies how do they manage that
what are they going to do are they going to panic are they going to start fire selling into the
market how's that going to affect all of the other businesses that hold in bitcoin on their balance
sheet what's the what the headline's going to be coming across cnbc and squawk box there's going to
be blood on the street, and it's all going to become one big mess. And it could really
fully affect not just now the Bitcoin price, but the bosses across the world as well,
because a lot of them are going to be hyped up on the back of a handful of companies
that have been stacking all this Bitcoin, and now it's completely rolling over.
I mean, you literally just described why OnRamp was launched. I didn't really want to launch OnRamp. I kept looking at this problem of self-custody or third-party custody, and I saw everything blow up in 22. I had a firsthand seat of all of it and was like, well, we're just going to redo this.
Like I, in my opinion, I know you like to get a little conspiratorial, so I'll just do it a little bit on the side is that was kind of the dry run for what you're describing.
And there's actually historical precedent from the tulip bubble to the Great Depression to FTX that this is just a capital reallocation and it's a way to move money.
and so you naturally have the hype cycle it comes into centralized entities it happens to all go away
and you quote animal spirits and everyone chalks it up and there's a bunch of people that end up
and what really has helped me go down this path it's just random nothing's random so it wasn't
randomly but i watched uh have you ever seen cinderella man no fantastic flick i think you
and lord love it um it's basically about a boxer that had won everything and then the great
depression happened he put all of his money this is back in the 20s all his money into the stock
market and um they lost everything and it's just like sad because it's a it's a it's a movie about
the guy's redemption and coming back and he's cinderella man because he's the man of the people
that he gets his way back but um it really gives you a firsthand experience it's a very humble
uh humble movie because you start to realize like the value of money the value of counterparty risk
and I started looking back into the Great Depression
and it's actually astonishing
where they talk about buy now, pay later
and a lot of these things on ships
where you'd be able to trade
it's very similar to a mobile phone when you're on vacation
because when you're on a ship
all these people would turn into traders
everyone turned into a trader
it's very similar to the Weimar stuff
and I think what ultimately is happening here
what people are going to recognize
is that Bitcoin is money
and all these other things are securities
and they're not money.
They're not stores of value.
They're not like Bitcoin isn't an investment.
It's a way you preserve your capital.
And that's the big reformation
or renaissance that's happening.
And that's the big,
the dislocation that people are forgetting
that like you can have these companies run.
But if you wake up one day
and the government seizes their Bitcoin
or it's hacked and you just go to zero
or the deleveraging
and you just lose all of your wealth
where conversely,
you can just hold the money.
Maybe you don't realize the game,
but you also protect your wealth.
And that's a big thing that I think a lot of people,
you brought up, like there's reputation.
A lot of the Bitcoiners are already wealthy.
Like, what are you chasing?
This kind of ties back to like biblical stuff
and like false idols.
Like you're just chasing like wealth
that you don't even necessarily know
why you're chasing it because you're already good.
And if you sell your soul for more money,
like what was the point?
My lights just turned my auto lights.
But yeah, I think it's just a big
kind of reorganizing of society and like what value is.
And I always love the gold and Bitcoin or money and everything else is credit.
And it's just the rest of the market's not, like hasn't woken up to that.
What's incredible to me is the people that are showing up now on this carousel.
You've got Pomp throwing his hat in the ring and raising God knows how many tens or hundreds
of millions of dollars.
How many scams does that guy need to be involved in and promote before people just stop throwing money at him?
It's incredible.
Yeah.
It's just hard because I've seen a couple of these firms and they all leverage that they're going to be different by offering financial services and they're going to be doing other things.
So like inherently in buying Bitcoin, in leveraging, because a lot of this comes down to the marketability of the individual and the work that they've been putting in for five to 10 years.
Because the guy's a hustler, right?
He just like works.
So he's able to leverage that in his connections to buy Bitcoin.
He sees everybody else doing it.
So it's an opportunity.
So I just have a difficult time in figuring out like, do you blame them?
Do you just explain it?
do you go and do what like I think some people are going to rationalize is like there is a version
that this becomes the norm right and some go away and blow up but then the capital moves to other
companies because the equity system has so much capital right that's stored in people's wealth
and that they're going to look at these companies and it's almost like how you look at revenue
and the multiple of revenue it's like revenue plus bitcoin is your multiple valuation and like
we actually might be Luddites. I still haven't figured it out. Like I have to think about this
because we're allocators. And then it feels simply just think about like, you know, you have to just
rationalize it. And then there's, there's another component to this of you don't actually have to
play the game though. Like no matter what, because I think about this with, we talk about it,
we have a podcast that talks about like investing in a sound money and standard. And, and there's a
notion, I'm sure you're familiar with like Uber and what Masa did with these companies,
they call it the money cannon. So the way that they would position, if you want my investment
Uber, you have to take it at these terms or take this amount of money because everyone's
incentivized throughout the whole structure to just deploy more money so you can raise more money.
And it's like, sure, Travis, if you don't take it at Uber, well, we're going to give it to Lyft.
And people like to think that that's not a decision, but there is a decision
because you don't have to play that game.
Now there a game that Silicon Valley wants people to play and that you expected and maybe you got too far on that journey It why we been very careful with how we built OnRim but there a version where the beauty in life is designed around constraints So you can maybe not play the exact game
but you can counter position and offer different services. Like when a company's big, how do you,
how do you beat them? It's like, you get more of a spoke, you get more white glove,
you do things that the CEO of a large company can't do. And then you start to find wedges in that.
so i still again like there's a balance of do you play the game to get the capital to be able to
influence your position because you can't do that unless you have the same capital markets or at
least somewhat equivalent or do you just completely shift and the only way to win is to play a
different game uh i don't think there's a right decision to be honest i think everyone's going to
be personal based on like their bias and how they think about like company building
yeah and um well there's no stopping it to your point earlier it's here uh maybe it was inevitable
um but uh i think the warning to the listener is try not to get caught up in it there is definitely
a hype cycle on this stuff and uh tread carefully stay humble stack sats self-custody multi-sig do
whatever it is to keep yourself safe and your Bitcoin safe because there are certain people
out there, these big companies, the ETFs, they want your Bitcoin and that they'll find clever
ways in which to help relieve you of your Bitcoin. And I just don't want to see that happen.
There's been already too many horror stories. We've been around long enough to know people that
have lost their Bitcoin and in bad investment decisions or bad setups or just leaving it on
exchanges or whatever. There's a bunch of different ways that you can do it. And, you know, selling
out of Bitcoin to raise capital, to buy into one of these, that would be, that's a bad idea.
And, you know, good luck to the small companies, the companies out there that are just looking to,
and even the startups.
There are certain startups out there in the Bitcoin space.
They raise a little bit of funding
and rather than just go out there
and buy the best marketing and dev team they can buy,
they will put a certain amount of it into Bitcoin
because they know that's going to lengthen their runway.
And that is a prudent thing to do.
Does that make them a Bitcoin treasury company?
Not in my eyes.
That just seems...
Yeah, what is the definition of a Bitcoin treasury company?
So here's a good question.
Here's a good question.
You know, it's great you brought that up because here's the nuance.
So I'm sure you have an affinity to the startup that's trying to deliver value and build the best product.
Well, what happens?
And this is a completely unbiased question, just thought experiment.
What happens when they say, oh, there's market demand, go reverse public via merger or whatever, and you can raise more capital to accelerate your business without dilution?
Are they a scammer?
You see, like, that's what I think.
I don't think Pomp is going into it, like, trying to scam people, per se.
I don't think a lot of people are trying to go into it or scam people.
I think you're going for an opportunity.
Now, I do think there's people you've referenced at PBR going in directly as a scam, and they see this, and they see ICOs.
But also, those people have generally already blown themselves up in crypto once, and so it'll probably happen again.
I liken all this to the lottery.
It's like nobody ever keeps the money at the lottery because it wasn't their money.
They just got lucky.
And it's the same thing with the people that make the wealth and you take it away, they'll remake it.
They're actually not that concerned.
It sucks, but you'll make the money back if you know how to deliver value to the world.
I think the core thing that we probably both agree on is important to call out is this is a testament to how murky the fiat system has gotten, that financialization, that people forgot how to actually deliver real value to the world.
and especially Bitcoiners
because like the reality is like,
you know, if I was an influencer
and it wasn't doing this,
like I'd probably do the same thing.
It's like free money that you look at,
but it's because people forgot
how to think like about
how do you deliver value
and create value
and work to deliver the value
that's not financial engineering.
And then the other side of that is,
and I can't help but liken it to COVID
because COVID was such an insane proposition
of like how they lock people away.
You would never think
that could have happened before COVID
until it happened, right?
We still probably don't believe that.
It just seems weird.
Is the very similar thing with counterparty risk
because the gold bugs always understood this.
They just didn't have the right time horizon
is you want eyes on the gold.
You want delivery on the gold
because the paper gold was ultimately not going to be called
and they live through understanding,
you know, not only 6102s,
but just like the notion of paper gold
and counterparty risk.
And so there's a reality that we're all just assuming that everything ends up okay in the traditional system because we've lived through, but everyone knows in Latin America countries or Lebanon or Cyprus and all these places that have just had bailings or all their capital taken, try to tell them, do you want a corporate treasury or do you want the underlying?
And it's like 10 out of 10 times they want the underlying.
So there's just also this notion of we're all just swimming in this water boiling that we think everything's okay until it's not. And you just wake up like that movie in Cinderella Man where all your life has been taken. It's like, is the risk really worth it? That all these different levels of risk that could happen where the assets lost and you end up with nothing. To your point, the retirements that can get wiped away. Like it's just, that's the thing that I think we've kind of all forgot.
One of the counter arguments I've heard from people who are a lot closer to this than I am, and from people who I greatly respect, is when I ask the question, what economic good or service are they bringing to the marketplace?
What value are they offering? And it's invariably the answer to that question is they're building a bridge between the fiat space to the Bitcoin space where all of this pent up demand, all of this money, this wedge of capital can now cross that bridge and enter into the new Bitcoin system, so to speak.
and I can't really square that one away.
I have to ask who's building the bridge?
Who built that bridge?
You've got to look at those individuals and those companies.
Who did they build it for?
Who's it really targeted at?
Has it been tested?
Financial engineers aren't bridge builders.
Has it been tested both ways?
You know, if you send money one way across that bridge, is it going to come back the other way? And who's charging the toast? If you look very closely, if that's the service, if the bridge is the service, they're the questions you really have to start scrolling through.
It's a fantastic metaphor because that's why I think this ultimately all comes crashing down.
It's the simple notion that let's just pretend it is institutions and all these most sophisticated investors that can't get exposure.
One, I think that's kind of crazy.
Like at the margins, maybe they want certain price exposure directionally or downside protection.
but if like people just want Bitcoin exposure.
So you're saying that they can't figure out
how to get the best Bitcoin exposure.
So they have to default to this.
So that's the first assumption.
Like that's probably not true.
But then the real thing is that everyone coming into the space,
it doesn't matter if it's a pension or an individual,
always comes in with funding money,
with like the stuff in their pocket,
the stuff they find, it's cash app, it's ETF.
We all know it doesn't matter who they are
over a long enough time horizon,
And as the price appreciates, counterparty risk happens or they get educated.
And it's generally a confluence of all those.
They end up increasing their exposure because it's the best performing asset of all time.
And then they ultimately seek out the best solution.
So if that tracks with all these people that are going to be allocating, that are trying
to come across this bridge, they're going to run across because they understand the bridge
is halfway broken and come into the things that we've been talking about, whether it's
spot custody, multiple institutions, multiple jurisdictions, you get the synthetic version,
You get underlying Bitcoin without all of the actual dirt in that product of the other one.
So it's to your point, like this is at minimum where I ultimately have landed with this is just a short little blip into the market, being educated on like what they actually want.
And it's just a product of it's so hard to understand Bitcoin.
And how do you like actually take delivery of material amounts that this is that like mini bridge, but it's not the place where people are going to leave all their money because it's nonsensical.
if a pension or endowment or a family office parts 3% and it ends up as 15 or 30%, they're
just going to be like, oh, leave it with them on that single custodian.
And I hope everything goes right when they see everyone else around them, because this
would also give that nobody else blows up.
Nobody else uses too much leverage.
Nobody's custodian goes down, that they're naturally going to revert back to more sound
solutions.
It's just, again, just pure game theory on how it would end up.
And, you know, I've had Sam Robertson from Cartwright, and he has been very influential in helping a UK pension fund allocate some of their assets under management and set up with you guys, with OnRamp, a custody solution that they are fully 100% happy with, you know, collaborative multisig, institutional multisig.
So that there is a way for, if that's a UK pension fund that's doing that, there is already a way to get exposure to Bitcoin, to the actual asset.
I'm pretty sure they wouldn't be buying a ticker symbol that has exposure to Bitcoin and just leaving it.
That would be insanity.
so the bridge would work for those guys yeah and but you're keen in on you'll appreciate this this
is the incentives of the existing legacy system is sam and cartwright are world-class and they're
sophisticated they lived through the gfc so they understood counterparty risk they needed to get
rid of all of it what's sad is that there's a lot so uh for anybody listening cartwright is a pension
intermediary generally pensions endowments will naturally work with other consultant firms to help
vet asset managers, products, and different things like that. And they set different geographical
regions based on the clients they serve. And so we had a great experience there, but then we've
also worked with consultants in the US and they get very close to particular firms on the asset
management side without naming them. And I've sat in rooms and debated with the large firms,
like these are 20 plus billion dollar like consultant firms. And when you get that large,
you naturally have connections
via the existing asset management products
that have been created Top 10 basket of cryptocurrencies are now the next thing you seeing a lot of these crypto firms and VC firms starting to like play this trade into the treasury companies And so it goes back to the incentive model of maybe you get it like a taboo to bring up
spot Bitcoin, B, you may only get a very material or in material position versus like a treasury
strategy. And especially if you can get in earlier in your connections, because there's no getting
connections to Bitcoin early. Like these things are a little bit different if you can see them.
And so to your point, there's a lot of this like legacy kind of like connectivity based on capital and names that you're getting.
You will get these pensions and others into these trades because the consultants are incentivized to park them into that versus that.
I see this firsthand.
So it's a but the alternatives is like, again, it all is going to shake out in the same way that FTX shook out.
And there's a bunch of, you know, dirt or mud on the faces of the like, I forgot what it was. It was like multiple Canadian pensions that had allocated to FTX. Sequoia is another great example. They're like a blue chip world renowned VC firm. And they have that stain that they'll never get off. And so that's the idea about what we're talking about. Even if we're wrong, we can at least go to sleep at night, saying we didn't necessarily participate or put people in and talked about it.
versus if it all blows up,
well, like that consultant firm has been around
for X number of years, that reputation,
the firm and the people put them in there.
It's like, well, where was that risk?
Nobody told me that there was all this embedded volatility
or counterpart risk and inserted into this product
you put me in.
And I'd love to know how they're custodying it, right?
You guys, you would have a front seat
that you've built a product
that they should be beating your door down.
It's like, hey, we're about to go public.
Like we're about to put like tens of millions of Bitcoin on our balance sheet.
We do not want to be the self-custodian.
We need a multi-sig, a multi-institutional setup.
Are they coming to you?
I know you can't name names, but you must be thinking surely that there's going to be a knock at the door soon.
No, so we are.
Like that's the beautiful part is most people don't know who we are, but sophisticated Bitcoiners do.
And so the way our product has always ended up, whether it's on-ramp or early riders, and I got lucky in the sense of it's been the most surprising is we have the most sophisticated clients.
And it's after talking to them and learning this, and these are people that work at the largest institutions of the world that have their own custody that use us for their personal stuff.
Similarly, the pubcos have started onboarding, but these are pubcos that are very sophisticated and are looking at this that already had businesses.
They're leaning into it. So they already had businesses that were publicly traded. They are adopting more Bitcoin. Their stock is performing because of that.
But they also understand everything we're talking about here and are saying, we want your solution.
And I don't know if they're thinking about it this way, but the way we're going to start pitching it is like it's also going to be a net benefit because when people start blowing up, capital is going to flee from these things that are opaque.
And so we have enterprise products that are already live, but we haven't really marketed.
So there's going to be a lot more for just anybody from an SMB all the way to a PubCo that would use our solutions.
And it's not just multi-institution.
It could be a three or five in the future.
It's rules-based controls, permissions, multiple wallets, all the things you would need as a corporate business to manage a treasury.
But where you're keying in on is there's a lot of companies that will never work with us.
and it's not the same, but it kind of is.
It's like my thesis on why microstrategy
will never show where their underlying Bitcoin is.
It's not about counterparty risk
or like anything outside of,
they want optionality to do things with the underlying.
And a lot of these Pupco's right now
are actually doing that.
So spot Bitcoin and the equity premium
is not enough for them.
So they're trying to generate more yield on the underlying.
That's just a hundred percent of fact.
and we'll see how that shakes out.
Yeah.
I mean, we didn't really mention MicroStrategy too much
in this whole conversation about Bitcoin treasury companies
and what Mike did back in,
well, when he announced in September 2020,
August 2020, whenever it was,
when he made that first buy,
that was literally putting cash they had
on their balance sheet into Bitcoin
to keep a company alive in a time that was very, very, you know,
you didn't know what was going to happen.
We were in very, very stormy waters,
and money was being thrown around left, right, and center,
all of this quantitative easing.
Nobody knew what was going on.
We were all locked down.
And, yeah, Mike just wanted to keep, from what I could tell,
wanted to keep his company alive and look after his employees.
And now five years later, that's a completely different story.
They've gone through the process.
They understand the asset way deeper than they did back then.
Obviously, they have their strategy days and they're trying to educate as many people as they possibly can about how best practices to put Bitcoin on the balance sheet.
That just doesn't seem to be what's happening with these new ones that are getting spun up.
they're going they're trying to sprint before they can even crawl right it's taken mike and
his team five years to get to this level of sophistication
yeah i know and then that brings up a good point in that i think like at a minimum there's probably
three core buckets and what we're talking about here and it's like micro strategy with the
immaculate conception like there was one to get this size of bitcoin and play off of that reflexive
flywheel for capital markets and the volatility and all the products they're creating. And then
I think that there's like natural pubcos that already were existed and had some type of company
and then they're leaning into it. And then I think there's the last layer of like the whole co
that just comes in to buy Bitcoin and then has some different incentive. And they're different
because there's some that maybe want exit liquidity, right?
For their own, like to make more Bitcoin.
But I think you referenced some here that like,
there's a lot of capital that sits outside.
That's like, I don't want to say it's black,
but it's capital that isn't in the financial system.
And if you can generate it outside
and then park it into the financial system
via like, you know, the publicly traded company,
and then you can start to leverage,
you know, to lend against that, create derivatives,
then it gives you a way to bring it in.
Like there's just different incentive models
dependent on where people are.
This is without naming,
but you probably know what I'm talking about.
Like there's different angles
to why people are doing this.
And I think we're just getting started.
So there's probably going to be more.
And this is where it ties back to
maybe this was always the way it's going to play out.
I think that will be probably the most interesting
is somebody eventually will get hacked
or they will blow up because of leverage
or the volatility.
And it's going to be really interesting
to see where the flight to quality goes into the different pubcos, like a micro strategy
versus where the kind of like, it's going to be like reflexive with the stock price.
And then do you rebuy the Bitcoin?
Do you sell the Bitcoin?
Like what happens to these companies?
Because I think it's in, we live in this momentum, narrative-based culture, right?
Vibes.
And so as fast as things go up, we all know as quick as they can come down.
And it's like, what is that going to look like?
is the thing that I think we're probably trying to all figure out.
Yeah, that's a great point.
I mean, the genie's out of the bottle, right?
Or the toothpaste is out of the tube.
You're not going to put it back in and something is going to happen.
There is going to be a big blow up.
There'll be an Enron style Bitcoin treasury company,
or there'll be a founding team that just disappears or something off into the sunset.
And all that capital will, I mean, it would have set the flywheel in motion
because that money on the periphery will still want in.
But now the due diligence will be a lot deeper.
And that's where companies like MicroStrategy have stood the test of time
and people love them or hate them.
It doesn't really matter.
Here they are.
And they're still listed.
And they're still the same team.
And they're still the same CEO chairman.
And they've still got the same business analytics product
that is being offered into the marketplace,
that's probably where that money is going to be attracted.
Yeah, I think the other side is
if the market can grow fast enough
to create products for these different models
to actually generate revenue
and justify holding Bitcoin.
So I'll give you an example.
It's a company we were looking at
and there's multiple out there trying to do it
where you're ultimately allowing,
It's in the US, but I think this probably exists globally where the majority of a lot of people's wealth sits in the equity in their real estate.
And so to take some conservative leverage out of that real estate, I think we all agree similar to equity markets.
Like real estate, maybe it corrects, but it can't really delever because it would just be chaos in the world in the same way like the equity markets crash.
And so the idea is if somebody holds, let's just say they have a million dollar valued home and they had $500,000 in equity in there, they could take some conservative portion of that 500K, purchase it, the company would purchase Bitcoin on their behalf, and then they participate in the upside.
right well you have to get the other side of that market which is the dollar liquidity to buy the
bitcoin or the bitcoin and so it's actually a very interesting product for ogs or large bitcoin
holders to park the bitcoin and then participate in some of the upsides right like you know if you
park dollars your bitcoin and then has the price moves you get to you get your bitcoin back plus
whatever the additional i don't see anything wrong with that like i think that's a natural
forces of the market will grow and Bitcoin's going to get infused in all these things that are
overpriced as far as like had a monetary premium. And it's like, well, how fast does that happen?
Because I do think that will help some of these companies be able to justify. I think that's
their vision of what the early some of them that are trying to do something interesting.
But the problem is like, we're still so early in infancy in Bitcoin's market. And then the problem
with being in infancy in Bitcoin, the Bitcoin market and the products is most of them won't
blow up when you first start because bitcoin's like this radioactive stuff that we've seen this
in wall street like you try to lend against it and everyone blew up like something very proud of
is that a chain we never suffered one loan loss billion dollar plus book never suffered one loan
loss never suffered uh that's unheard of and retail lending everyone blew up and it's because it was
transparent leverage bolting institution all these like natural kind of things that we know
are kind of core to building in the space well these people don't know that and uh even bitcoiners
coming in don't know that because a lot of people were Bitcoiners at BlockFi or other companies,
but they just build off of fiat world. They're thinking in very 2D ways of building versus 3D.
And that's what I ultimately think of multi-institution. It's this notion of it's a
three way to build what historically was If you were going to buy a horse 100 years ago you just gave somebody in exchange your gold It the same thing we do today We send the Bitcoin to a third party We hope to God they give it back to us And there just a new architecture now for all of us
Yeah. It's going to be an interesting 18 months, mate. It really is. And I'm here for it,
obviously. I hope there's not... I hope my worst fears don't come to pass. Let's put it that way.
I hope I'm being too overcautious.
I hope I'm being too conspiratorial.
And everything's going to be fine.
And, you know, Wall Street's going to come.
And Bitcoin is going to do its thing.
And turn clown world back on its, you know, it's going to right the ship.
But, look, I came from that world.
I came from Wall Street.
I know what these people do.
I've seen inside that particular company that we mentioned earlier.
and uh yeah that that's that's where my concern is coming from so again warning to the listeners
just stack sats stay humble take self-custody and uh keep educating yourself but i will like
now ask you the final question michael if you've got one last orange pill left to give to somebody
who would you give it to and why i mean if the first person that comes to mind is the orange man
Mr. Donald Trump, because it seems like he has the ability and what's happening to really shake
things up for better or worse. And he obviously doesn't understand Bitcoin. And I think what he
does understand is himself and his legacy and the notion that he could, if he really truly understood
what it meant, not only for his own personal finances, we know they're making small allocations,
but to really materially move in that direction and then figure out a way to really embrace what
we're doing or what's happening here, it'd be pretty transformative. But I don't think he
really understands what Bitcoin is. He's too busy spitting up meme coins on Solana, right?
So that's the problem. Yep. His network around them, I think they're all opportunists. It
encapsulates everything we talked about here is Trump and the team. So we see them just getting
exposure everything it's bullish sentiment in the sense that they know what's coming
i think there's no way the next 18 months don't end up i mean shouldn't say no way but would end
up in favor of the price but it's at the cost of like uh you know how much learning and how much
touching the stove our individual's gonna have to do and then we didn't talk about this but where it
ends up in the uh sentiment because we saw post ftx how much the sentiment was against bitcoin
even though it had nothing to do with Bitcoin.
It's like if the deleveraging really does happen,
how much of the sentiment is going to happen
or shift around Bitcoin and how it's controlled
to make sure it never happens again.
It could be a very nasty byproduct.
Well, yeah, if that does happen,
then the opposing party are going to use that big time,
big time attack on a crypto friendly president, right?
It happened on your watch.
You can just see all of the headlines now.
So yeah, the next four years,
we could be going into another hard crypto winter,
for want of a better word, Bitcoin winter.
So yeah, tread carefully, guys.
Michael, how can people get a hold of you
if they want to learn more about OnRamp?
I actually saw just recently,
it looked like you guys were trying to add to the team.
So if you've got anything you want to announce there,
just let the listeners know.
Yeah, I appreciate it.
If folks are looking to build in this space,
whether they have ideas core to what we're doing,
I talked about here, but in the right way,
please reach out.
But then we're also hiring across our portfolio companies
and at OnRent.
So again, if you want to build in the right way,
you can reach out.
My Twitter handle is mtanguma
or michael at onrentbitcoin.com.
And yeah, we're always open to feedback,
things we can do better,
or if we can make introductions.
It's still so early.
So I always appreciate the DMs or the emails
and happy to, you know, route them or jump on a call if it makes sense.
Excellent.
All right.
Well, thanks for coming on, Michael.
Thanks for giving up your time.
Thanks for building Bitcoin businesses for us to use.
And yeah, well, let's catch up again soon.
Yeah, definitely.
Thanks for having me on, Daniel.
Take care.
There you go, guys.
Thank you so much for listening.
And thanks again, Michael, for coming on.
If you want to go and check out what they're doing over at Early Riders,
we talked about that.
That's the venture capital fund that they are funding Bitcoin builders with.
like you said right there, shoot him a DM, reach out or OnRamp, go and look at what OnRamp are doing.
They're offering you this service where you can, they'll set up the multi-sig for you.
So it's a very low lift and you know, everything's a trade-off and I'm sure you're going to lose some sleep
over something at some point throughout your Bitcoin journey.
So just keep it as basic as you possibly can
and utilize the tools and services that are out there when they present themselves.
And OnRamp, I would say, is definitely worth your time going to check out
to see if it's a service for you and to get that multi-sig set up.
So you might be able to sleep a little bit easier
if X amount of your stack is locked away somewhere else.
These services exist for a reason
and it is of course up to you to do your own research.
There are other tools and services out there
and Michael's even worked for some in the past.
So Unchained, as we talked about,
was part of his journey
and with his good friend Parker,
who Parker now is over at Zaprite.
So zaprite.com,
they offer you a way to start accepting Bitcoin
at your business by issuing invoices.
They've built that issuing platform so you can start issuing invoices for absolutely anything and link it directly to your hardware wallet.
And hardware wallets, like we talk about at the beginning and the end of every show, Bitbox is a great tool for you.
So if you are taking self-custody, even if you're easing yourself in and you're only going to be single SIG for the moment, that's absolutely perfectly fine.
We do this one step at a time.
And if you're brand new to Bitcoin or you've been around for a little while and you've not taken self-custody, you absolutely 100% should do.
Bitbox is the best way for you to get going.
You can find videos on their own website or even on BTC Sessions.
He'll walk you through on his YouTube channel how to set one up, how to use it.
They do have a new product coming up, the Nova, which I'm very much looking forward to seeing.
So get over to bitbox.swiss, check out what the Nova is, what it offers you, how it differs.
It is a Bitcoin-only piece of hardware and something you definitely should take into consideration
if you've not started taking self-custody of your Bitcoin.
What else is left to say here?
Bitcoin Paper Summer marches on.
If you don't know what Bitcoin Paper Summer is,
It's this latest craze of venture capitalists finding a founder somewhere in a far-flung land to be sent enough money to buy a company that is already listed on the stock exchange but probably unprofitable.
they take that they buy that company they might even keep some of that board on there and then
they start using the venture capital fund to start buying bitcoin and then pumping the stock
in that nation wherever it is listed on whatever boss or exchange it is and uh and using the
headlines to to create some kind of uh traction it's it's a strange one uh it's happening you can't
You can't stop it happening.
Now, this is not the way I would like to see Bitcoin companies stack Bitcoin.
What I'd like to see is your mom and pop store that you are trying to orange pill on the street,
start stacking Bitcoin on a monthly basis with some of the profit that they have made
in a much more dignified manner, I would say,
rather than just trying to chase this dangled carrot
and there's this cheap fiat VC money that keeps coming into this space.
What's going on as well is very worrying.
This is spilled over into shitcoin land already.
And I read a report in the Financial Times recently.
£888 million was raised by a company that is being headed up by Bob Diamond,
disgraced CEO of Barclays, who had to resign during the LIBOR scandal,
is now running a token called HYPE.
and that is going to be the token that some of these companies are going to be putting onto their balance sheet.
So this is going to get very frothy, very weird, very quickly.
Stay out of the way of it, stack your sats, remain humble, tune out of the noise,
take self-custody and you will just be fine in a cycle or two.
That is just how Bitcoin works.
Fiat around and find out is the new saying on the street,
which I'm trying to meme into existence
because if you fear around with any of your stack,
you will find out.
Bitcoin doesn't care.
It humbles everybody that touches it.
So just remember, stack safe.
Stay humble.
Up your listening on the Bitcoin podcast scene.
Get over to bubble.fm, B-U-B-B-L.fm.
Curate your 40 hours per week of podcasts.
I've got a podcast episode with Richard Greaser
coming out soon from The Bugle.
I'm looking forward to releasing that one
and what else
is left to say? PayWithFlash.com is the best
way for you to start accepting Bitcoin
for your goods and services
and ah, I forgot
to shill, I forgot to shill
one of the best
podcasts in the space
I still hope you're all listening
and I sincerely apologize to
Nanya Bidnis who
we've started cross shilling
each other's podcasts just out of friendship
just out of relationship building. He's been in the space for much longer than I. He's been running
a podcast for much longer than I. He's released over 1100 episodes. He's a machine. He gets it
done almost daily. And he reads the news that you can use. He does not cherry pick. He reads
absolutely everything across the space. And then he explains what's going on. And he keeps you up
to date. He will keep you up to date with every single release of every single Bitcoin treasury
company around the world. And then he will explain to you whether he believes this is a good one,
an indifferent one, or one you definitely need to steer clear of. He will have the same kind of
thoughts on this as I do. And that is, please just self-custody your Bitcoin. Sleep easy at night.
Look into the multi-sig options if you want. You certainly should consider that. I mean,
It doesn't cost you anything to visit a website.
Get over to onrampbitcoin.com.
And yeah, that's the last thing I really want to say.
If you're going to be in Helsinki, please come over and say hi.
Look forward to seeing you there.
And thank you all for listening.
I ran out of music ages ago.
Take care.
See you later.