I sat down with Jack Mallers on March 18th 2022 at the Bitcoin Takeover event held at Bitcoin Commons in Austin during SXSW to discuss his vision for Strike and global lightning adoption.
Video: https://bitcointv.com/w/47rmnUFD8oRUjepay3GUh1
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[00:00:11]
Unknown:
Focus this talk on just, you know, kind of what the lightning network means and what it means to be able to
[00:00:33] Unknown:
Thank you. Long time no see.
[00:00:39] Unknown:
What's up, Jack? Yo. Let's fucking go.
[00:00:46] Unknown:
Before we get started, show of hands, who knows what strike is?
[00:00:51] Unknown:
Yeah.
[00:00:52] Unknown:
Who uses strike? Okay. That's a great baseline. Let's go, my people.
[00:00:58] Unknown:
Take my hood off.
[00:01:01] Unknown:
So I guess we can, I mean, I was gonna start with your introduction? We have we were supposed to have 45 minutes. Right now, we have 38 minutes. I think we'll do, like, a tight 25, and then we'll do a q and a so you guys can ask Jack some questions. The format for that q and a, just I'm gonna point to you. You shout your question, and I'm gonna repeat it. And then you answer that question. Sounds good. I'm here I'm here for you guys, whatever you guys want. Awesome. So let's who knows what the Lightning Network is? Raise your hands. Wow. Okay. This is easier.
So when you look when you look at the Lightning Network, when you look at strike, how do you see Lightning playing into basically a global vision for your company?
[00:01:53] Unknown:
A mental model I enjoy, that I preach internally at the company. I like to think of it like the Internet just to, familiarize because, you know, I live through that. We all live through that. Kinda live through that. And what I mean by that is the Internet has an open distributed communication standard for the world. It offers free and instant communication of data packets to anywhere in the planet. The Internet, as this open standard, is better at publishing news than newspapers. But it's also better at radio than radio. But it's also better at television than television. Right? It's streaming video. And so what you saw is these independent communication channels that humanity had built to communicate with each other, which is a fundamental And there's no such thing as like, I want to send you a message. Oh, you're cross border? Nah, fuck.
That's gonna take me a long time. No, I could send a tweet and the guy next to me is gonna read it in 2nd and the guy in Japan is gonna read in one second. And I like to think of the Bitcoin and the light now. We're in the same way. Bitcoin and the lightning network is better at remittance than Western Union. It's better at payment processing than Visa. It's better at the issuing side of the payment than Chase Bank. It's better than the acquiring side of the payment than Chase Bank. And it's better at being the Federal Reserve than the Federal Reserve. And it's going to consolidate all these independent financial functions that we've built as a species onto one global standard. And so I gotta go on CNN. And, you know, I get what, 60 seconds to talk to Julia Chatterley. And so I like to do, you know, cross border payments is the most violent way to really it's like an education vehicle. It's like, holy shit, you can send a dollar received as a euro in a second and at no cost. But to be honest with you, it's like pulling up think of pulling up an empty email, like a email form, and you're gonna send an email.
In that email form, you have to say, this email is for firing someone. This email is to flirt with a girl. This email is going to Japan. This email is going to the guy next door. No. You don't gotta say shit. You type in the fucking words. You hit send, and it gets there in a second and for free. It doesn't matter. When I look at a lightning invoice, is it like, oh, I could see, by the way, that QR code, that's a tip, or that's a remittance payment to El Salvador, or that's a payment to Whole Foods? The fuck? No. It's the same thing. No matter where I send, it's gonna get there in less than a second for free. So the way I think about it is very similar to the Internet. I look at all the independent financial functions that we've developed consolidating onto one global open standard. That's, you know, the winners will be those that build the best experiences on top of it. And that's how we internally operate and optimize at strike.
[00:04:35] Unknown:
Like, yeah. So I mean, I kinda just kinda just jumped in here. I just wanna thank Jack for joining us. You're a very busy man. So, so obviously, obviously we both think that Bitcoin is revolutionary. That lightning is revolutionary on top of Bitcoin. When you look at it, from both an individual and a company perspective, like, what are the pain points that you're seeing in terms of I mean, you guys are probably the number one transactor on lightning. What are the pain points that you're seeing as a company?
[00:05:11] Unknown:
As, like, Lightning the protocol or just generally?
[00:05:14] Unknown:
I'm yeah. Anything?
[00:05:16] Unknown:
Both. Yeah. So the like like I was just hinting at, the way we think about it from the highest level at strike is best experience, best brand are going to be the winners of this open system. The world I want to enable is that Jack Dorsey, who I think is one of the greatest creators of our time, can compete equally with Jamie Dimon. And that's not the case today. And so the approach we've taken at strike is to be regulated, is to be compliant, is to move cash collateral is what we call it, dollars, euros, Starbucks points, whatever it is, to make for a very particular experience that someone like large merchants when's my Bitcoin 2022 speaking? So I gotta be careful.
Can can be interoperable with the thing. And so the legal and compliance and the education required to talk to some of the bigger institutions or nation states or whoever is usually the challenge. It's interfacing an open monetary network with the world that exists today. Outside. Yes. Not a secret to this crowd. The Fiat side fucking blows. Right? It's hard. But I think it no. Someone's gotta do it. Another thing I talk I only got one employee here, I think. But, yeah, the other thing I talk about is, we we pride ourselves on, the difference between a good human and a great human is doing the right thing no matter how hard it is. And so we look at a lot of the regulatory, the compliance, telling New York and the bit license what the lightning arc is and stuff. I mean, we take that very seriously just so that you can walk into Whole Foods soon, and you can buy your groceries over tour. Right? And so that is the world I want to enable for everybody else. Someone's got to take the bullet and do that work.
And so that's the harder part that people don't see. But I don't know. I mean, as far as the software goes, that's the easiest part in the world, right? I mean, as far as the Lightning Network in Bitcoin, strike has more employees than any corporation in the world because we're all building on the same thing. Like, I got all Square's employees. I got all MIT professors. Right? Yeah. I'm swimming in it. I'm only just paying 150 people. Not all everyone, but you know what I mean? So that part comes easy. Awesome.
[00:07:36] Unknown:
Yeah. So you talk a lot about, lightning, Bitcoin, open monetary network, driving fees down, driving remittance costs down, driving settlement times down, creating broader access. So let's jump ahead a little bit. You know, we're, like, 5 years down the road. Lightning's extremely successful. Strike's completely successful. That's not me, by the way, just for the record. And, Strike's very successful. Lightning's very successful. Maybe Bitcoin's not the standard money of the world yet, but we're getting there. How do you view how do you view your company in that type of situation where any other company can basically come in and join this open monetary network that individuals can use it in a sovereign way? Like, where is where is that competitive advantage in that like, how does a company exist in that kind of situation?
[00:08:35] Unknown:
Well, yeah. This is why I like the Internet analogy. What about the Internet? Think about it this way. How valuable would the internet be if Google was the only internet company? I'll tell you it wouldn't be valuable at all. I won't be able to search for shit that Google would be worth nothing. Right? So the the the thesis is very important. I actually just met, Cash App employee. I'm where are you? Yeah. It's it's a and it's a pleasure because the thesis is there's nuance in the thesis. You're like, oh, Jack's trying to conquer the world. He's a hoodie dressed as a his dad was part of the SIBO. Shut the fuck up. The the the thesis is a a network is the one that's going to defeat the Fed and commercial banks and card processors. It's a network but a network guys has to consist of participants, a network is only as strong as its participants.
So the reason the internet is so valuable, Google gets better every single day because there's a high school course right now where kids are building websites. Right? I mean, it's an open system and right? And so, like, I think that you wanna be one of the more competitive experiences and brands. And as this gets more attractive to people, the competition for a very particular experience will heighten. Think about photo sharing. There are multi 100 $1,000,000,000 valued companies, Snapchat, Instagram, now TikTok, for how to share photos and videos, and they're very particular. Snapchat Snapchat is real time photo sharing. Instagram is memory based photo sharing. And so we, I mean, as a company, we just want to live and own a very particular experience as this network evolves. But I think it's very obvious that, there's going to be many. It's implied. If strikes the only big lightning hour company, we're fucked. I mean, in the same way, when I walk into Starbucks, I cannot use Western Union. And when I remit money, I don't use Visa. It's implied that one centralized company cannot do it all. But together, the like and people have asked me privately, like, why do you think Cash App is integrating the Lightning Network? I don't know. I could take my because the the reason I ask is why would you open up your customers to an open system? Cash Apps crushing the old system because they're great at building good experiences. And the thesis is that the value transfer away from JPMorgan Chase and Visa enables the capture for, you know, the squares and the strikes and potentially Facebook's the Amazons of the world like. So, yeah. Anyway, that's how I think 20 years from now, as long as we're one of the good experiences on top of this thing, it's probably a $500,000,000,000
[00:11:17] Unknown:
business at least. So, like, basically, the pie grows. Everyone in the pie grows with that pie, and you all benefit from it. But at the same time, like, each will have, like, kind of a niche.
[00:11:29] Unknown:
Yeah. Or, like, a unique experience. Same thing with the Internet. When I need to connect with my grandparent, I don't use Google. I use Facebook. If I'm, like, looking to, like, hit on chicks, I don't like you. Like, the I like the Internet to communicate. Think about all the ways I communicate with the world. Like in all the different apps I have on my phone. Like, there are different services that have a very particular experience that I elect. And the violent example of that is Facebook and MySpace. Like Facebook won that experience. And so you'll start to see consolidated demand for particular experiences and brands. But yeah, the pie, I mean, the, the difference between the internet and Bitcoin in this analogy that I'm doing, I also know I'm famous for a terrible analogy, so I apologize. But the, the, the difference is one is communication. The other's money.
The pie is much larger for money. Right. Everyone needs money. Yeah. Both are very foundational human rights. Another thing I love is, the Internet of re protected, reinstilled and enabled, permanent free speech. Which is very important. Can you imagine getting differing opinions on the Russia Ukraine war right now? Right. Hopefully, the New York Times publishes an opinion that I enjoy. That would fucking suck. Right? No, I can go on Twitter. I can go on the internet and I can collect communication information from the entire world. And in that same way, I also like that, you know, I can soon walk into whole foods and I could use a note over tour. I could use cash app. I use strike. I use her a fuck I want. And in that way, I I love those liberties protect as well. So anyway, it's how how I think about it. And, yeah, I'm sure there's a market for some non custodial tour. You know, that's not our market that we operate in. Those are the type of distinction decisions you have to type to chime in. Don't you think there's,
[00:13:21] Unknown:
Like with the current web model, when you see like these tech companies, when you see like you already mentioned cash app, but when you see like a Google or a Facebook, like their business model is, is essentially to lock people in. Right. And they make the switching costs extremely high. Like it's not just you can't just, like, wake up one morning and say, like, I'm gonna cut Google out of my life. Like, people are using the calendar. They're using the photos. They're using the emails, and they're they're they're completely locked in. If they get rid of Facebook, they lose all their friends and family contact information and whatnot.
The power of Bitcoin that you'd like to talk about all the time is is that it's this open monetary network that everyone can interface with. Do you think we will still see successful lock in models or will those type of models go away because they'll be not competitive against a company that is that is more open? Like, will we have closed lightning things happening in addition to this open monetary network, or will that just get dominated over time? No. There's no closed lightning thing. I have few few thoughts.
[00:14:27] Unknown:
The network effect that Google has built I mean, it's not the same. This is where my analogy may break a little, but it's very similar to I can't just delete Cash App and start using Moon Wallet. Cash App has my direct deposit. Cash App lets me pay my taxes for free. Right. That's a network effect that takes a lot of compliance, legal engineering, brand building, how much money they pay fucking Cardi B. I mean, that's a lot of that's a lot of shit that so it's not that simple either in the same way that I can't just leave Google. Maybe part of my life I could leave Google. Maybe I can use DuckDuckGo when I'm, like, searching for certain, I don't know, porn or something. But, like, it doesn't. Right? So, like, I think of it that way a little bit. Yeah. No. As a business, you have a right to build your moat. I think the difference for me, and this is when I was, you know, talking very early to strike trying to convince people that this is a business, is that the Internet, selling communication services has no native business model. It's very difficult to drive revenue in allowing humans to communicate, whereas selling them financial services is very natural and inherent.
So I know how much a customer's worth. I know how to make my I can go to a Costco, charge them 5 basis points to give them instant settled dollars over an open system where all 70,000,000 Cash App users can go pay, and they'll take 5 basis points. That's all gross margin profit. I don't have any intermediaries I'm splitting that with. Now that's a real business. Facebook's never had that. Right. So Facebook is deeply incentivized to hone you in and collect you and kind of like assault you in in ways. Whereas I think Bitcoin and lightning businesses will not have that problem. Selling money, is as old as time that you're right. Like Pierre and Bitzstein were just talking about that. So I think that that's very different. But no, I mean, a business's ability to build moat, to make the switching costs high. I don't have a problem with that.
[00:16:30] Unknown:
Awesome. So, I mean, you are pretty famous for opening strike in El Salvador, support for strike in El Salvador. It was your second country. Then the legal tender news came out. You also constantly whenever you tweet or strike tweets, you know, the the next message underneath that is when Europe, When you when you look at global expansion for strike, how do you view that strategy? How does what are the you know, obviously, the pain points are, like, the fiat world side of it. But, like, how do you look at that? Because usually I mean, I would think that most companies wouldn't pick the country with, you know, 6,000,000 people in it and, you know, basically no GDP.
[00:17:21] Unknown:
Yeah. No. I'm better off getting a bit licensed in that sense from a venture capitalist standpoint. Do you have a bit license yet?
[00:17:28] Unknown:
Almost. New York. You don't need one. No. I'm close.
[00:17:33] Unknown:
The how do we think about global expansion? Well, the cool thing, again, Internet analogy. Sorry. Fuck. I'm boring. But the Facebook is powerful because they have 4,000,000,000 users. Okay. What does that mean to a business that the worth of 1 user can be less because they have more? Right? That's a very powerful idea is that their target audience is everyone that has a pulse, and I guess is responsibly old enough to use their service or whatever the compliance guy says. So that's a very powerful concept. And we are the same way. There's a little bit of nuance in selling finance. Right. So there's a little bit more of like, how are we going to pull this off? And but I think people don't appreciate it. It's like, dude, just launch in every single country. Like, yeah, okay. Obviously, Jackass, I'm working on it. But the other thing to note is that when you look back 10 years from now, you're gonna be like, holy shit. Did that happen fast? I guess now that we're living in it and you're, like, refreshing Twitter every second, he's like, come on, give me the fucking dopamine hit. But it's like it. But but in reality, this is going shockingly fast. And so here's here's a tip for you.
El Salvador, Honduras. Right. Like, how do they get cash in cash out? There's no plaid. There's no there's no count. Right? There's no fucking no one has a bank, bro. How do I cash them in cash amount? Like, you gotta build local checkpoints. How do those scale? Right? I don't want to build a service that's hot for a second, but it doesn't scale. I mean, I'm here to build shit that matters. I'm not here to get retweets. So it's like, like, those are real problems that are I'm starting from scratch. And so I don't know. We think about it in in this, like the developed world, which is I think primarily United States, UK, EU.
And, we attack that very differently. Visa card, direct deposit. Cool thing is, though, all of our lightning services, our merchant acquiring services, all that stuff, it works the same. Right? It's one global open network. I don't have to, like, oh, shit. This this nodes in Europe. Well, I got it set. Not. I mean, it works the same. And then it's just about licensing and banking relationships. And then for the developing world, it's more about how do I build a scalable way to interface them with the world that exists now? And no one's looked at that problem for them in, like, 200 years. So I'm, like, dusting off cobwebs, like, shit. Okay. And, figuring it out, but it's getting figured out. So let's unpack that developing world a bit. So you said checkpoints.
[00:20:03] Unknown:
Like, what is that? That's like a cash cash to
[00:20:07] Unknown:
what? Cash to Bitcoin or cash? Like, how does that look? Yeah. If I'm so, you know, the famed 70 plus percent of El Salvador doesn't have bank account. Okay. What do they have? Dollars. Okay. So how do I get dollars in a strike? Like, well, there's no Square Merchant there for me to, like how the fuck do I do that? Like, okay. How do you do that? Yeah. I'll walk into my local pharmaceutical or or the equivalent and, hey, I'd like this on to strike or I'd like to take this off. Like vouchers or No. Like, if I got a $20 bill Right. Here, and then the pharmaceutical guy is supposed to type something in and get it out. Right? And then but what you don't wanna do is build 5,000 of those and a 100 in each like, that's very expensive. Small businesses that already exist. Yeah. We wanna we wanna build a scalable way to give a great experience to these people on and off ramps for these people.
And then, yeah, stable coins, I think, are very interesting in the sense that I mean, like, here's the thing. You can't feel like why strike auto settle the dollars fucking like like you can't force someone. If someone wants to own Bitcoin, they will. If they don't, they won't. I'm not gonna sit here and forcefully jam Bitcoin on anyone's throat as far as the asset as a long term holder or something. If there are people that are living paycheck to paycheck in poverty, and are scared to live through what is to be known as real volatility of an asset. They they literally cannot afford it. I'm here to help people with Bitcoin find interesting ways to use Bitcoin as a tool that it is to empower them. Maybe in the United States that's letting you guys DCA by the hour at no cost. You got it. No problem. That's on us. Maybe in El Salvador, they need a way to make lightning payments with a cash collateral because they cannot afford a 20% dip because Barry Silbert tweeted something. They can't afford it. They cannot afford it. Right. And so, yeah, like, that's a real problem someone's gotta tackle. So when you talk about cash collateral, what you're saying is the your your balance on strike is USD.
[00:22:20] Unknown:
And when you send your send Bitcoin, if you receive Bitcoin, it switches to USD by default. You've gotten some flack about the use of stable coin for that. I think in Argentina, right? Argentina was your 3rd country. It was US. Was that right? Yeah. It was finally when strike got like big enough for people to FUD FUD us and stuff. So you wanna should we unpack that a little bit? Like, how you view that stable coin Sure. Integration?
[00:22:46] Unknown:
Okay. First of all, cash collateral. I like using that term because it's not dollars. I'm not like a dollar maxi. It's whatever you want to interface with this open network. So you get paid in dollars. You want to go to Whole Foods, you spend dollars to Whole Foods and Whole Foods receives whatever they want. The dollars, we're gonna take them and spit them out over the lining. Okay. Everyone knows that part by now. But it could be euros. It could be stable coin. It could be Starbucks points. The point is that strike is agnostic to the idea of what you wanna interface against lightning. I don't give a fuck. You wanna use Bitcoin over it? Great. I don't care. I think it's just a premier payments network to make payments. That's the whole point is it's better at being Chase and Visa than Chase and Visa.
Right. And that if a Cash App user wants to walk into Whole Foods and make a payment, Cash App user scans QR code, the Whole Foods receives the payment and Chase and Visa were not involved at all. It's settled instantly. There are no intermediaries that is going to scare the living dog shit out of them. At that Jack Dorsey is on the same playing field as Jamie Dimon, they're going to go straight to DC private jet stat. So that so that's my whole thing. And so cash collateral. So Argentina. Okay. They don't want to hold their own currency. They want dollars. Holding dollars and accessing dollars is illegal. Ladies and gentlemen, in Argentina, capital controls is not allowed as a regulated entity. It's like, why don't you tell regulations to fuck up? Okay, well, then all your strike accounts are going to get shut down. Like, what do you guys want me to do? So. Okay. What about a stable coin? Which, by the way, it's like, am I pro any shit coin? Anyone that's fucking followed me long enough. Will you guys stop it? The but am I? How about this? Am I pro Chase Bank?
Am I pro your Bank of America account? No. But that's what you guys use strike with. Right? I'm just trying. Give these people it's their Chase Bank. They wanna hold dollars. I cannot legally do that. And Tron, ETH, Chase, they're all the same fucking scammers that I'm trying to interface. Like, it's just a it's a giant fucking scam. That's it. Right? I don't care. Scam to Bitcoin and Yeah. We're working on making sure that liquid, USCTM liquid is is legal or doing it. I'm funding work to do it in a non custodial way, and maybe that's not even something strike offers, but I think it'd be HRF. I think it'd be valuable. So no. That's the whole context and the point.
And we didn't even have any, like, Tron or whatever the fuck in legal and Is it Tron? Is it Tron tether? No. We we are agnostic. Like I said, you want Starbucks points? You want because we Do they even have the option right now. Or is that a future? I initially did USDT ERC 20 because it was the most liquid. Right. It was what, cause here's, here's the other thing, like sitting here in your beautiful Austin home, like, well, that's scummy. It's like, okay, people that are like in poverty that are like, I have some of these. It's accepted and traded in the black market. They're using them. Yeah. So if you give me your, like, really cool, high, classy Austin version, I can't fucking use it. So I like and then we learned that they switched to Tron, they switched to Shiba Dooba 1. It's whichever one Andreessen isn't minting drilling monkeys on because he clogs the chain. So they just run around to whichever one. Lowest fees. They just change the lowest fees. Right. And so anyway, that's that's how it goes. And then regulators came and said, there are people on your app that the only way to get off the app is accessing the Bitcoin network. And that's kind of like that's date where it's compliance guy that's dangerous, is it? It's misleading is that they're holding tether. But when they send it out, it pukes out as Bitcoin. Right. And we're we got in trouble is like, okay, fuck.
And that's the only reason there was, like, you can withdraw over whatever
[00:26:51] Unknown:
stable coin was at the time. And I got you. Right. You added it. You added the stable They claimed
[00:26:58] Unknown:
they claimed I was being misleading.
[00:27:00] Unknown:
The Argentinian government did. Whatever regulatory body. Right. And, and
[00:27:05] Unknown:
so we, rushed it in. And as of now, actually, talked with them, explained why it didn't make sense, and now took it out. So anyway, that that's like the the thinking process is if people in Argentina said, you know, it really helped me out is Argentine peso collateral. Okay. I'll do that. Like, am I a fan of the collapsing currency? No, but you know, I just like want to help. So anyway, so I think of still coins and chase bank as the same. They're both scammers that I don't necessarily, my counterparty risk could be better. But
[00:27:42] Unknown:
I mean, before we get to q and a, just because I find this very interesting, do you do you you kind of make it seem like you envision that in strike in the future, you kinda choose like, the user gets to choose where that cash collateral is. Is that where you think it's going? Or do do you think it'll usually be like a default somewhere like in America, it'll always be USD and Argentina. It'll always be stable.
[00:28:04] Unknown:
You guys will see, some announcements come out. The these are all I mean, as I've described, Shitcoins are arbitrages on the trend. They're arbitrages informational arbitrages that the monetary expansion is forcing everyone else to save elsewhere besides a savings account. And if I'm Mark Andreson, how do I make money on that? I spent a lot of marketing dollars on pink coin and convincing the everyday person with Robinhood account that, hey, I invented Netscape. You buy this piece of shit. And the other thing is the the other thing is, this is very important as a regulatory arbitrage.
It's, it's illegal to sell someone a savings account that, you know, traditionally isn't property or dollars. Right. I mean, it's violently, disobeying securities law, but you know, our regulatory bodies are slow, passive. They never want to take risk. And so they're taking their time. And so that's what I describe as this arbitrage on the trend is a rush to save in something. No one knows what the fuck is going on. This room does not everyone else out on the street. And so they're buying Shiba do coin and he could get away with it. He Andreessen, but whoever can get away with it, because there isn't, they're just violently disobeying laws that are to protect people from this exact thing.
And so I think, sorry to answer your actual question, I think what's going to happen is these products are going to be done correctly. They're not going to be done by Justin's son. Who the fuck is that guy? I mean, that's absurd, right? I mean, if we're talking about like improving fine at the end of the day, we're all human beings at the end of the day, you know, we're tool builders being human and living in this world. That's what separates her from other primates is that a 100 years ago, the world was worse off than it is today. A 100 years from now, the world will be better off than it is today. And so we all are on the same page. And so I think real banks will start to issue.
Regulated stable coins. And I think companies like Blockstream will figure out a way to deploy a solution that has a different trade off. That's not as, centralized, and lives within a side chain. And then maybe with the work with HRF and what we're funding, people can figure it out in a non custodial way and those will compete with each other, but those are real solutions. Those aren't like let's hop to the next scam before Andreessen figures it out and clogs it. Right. Let's say a toilet, like before Andreessen comes and takes a big dump in our toilet clogs it. Like we gotta run around. So anyway,
[00:30:39] Unknown:
anyway, I think, I think we, I can speak for all of us. So we appreciate you going deep on that one. I know it's, not I mean It's not a may maybe a common question. It's been tough tough topic. I'm an open book. I I really am. Well, on that note, should we do should do a quick q and a? Yeah. Let's go. Anyone got any questions for Jack?
[00:30:57] Unknown:
Hey. First of all, thanks for I mean, it's almost a year of the day that that you gave that amazing speech in Miami. Thank you. You've got it, bro. You know, there's been a lot of journalism about the challenges in El Salvador. Some of it's FUD. There was recent one rest of world that interviewed a bunch of people down there. What would you say are the expected and unexpected challenges of what, El Salvador is trying you see as the things and the hurdles that they have to overcome right now.
[00:31:29] Unknown:
Mhmm. Mhmm. Trying to think how I answer this appropriately.
[00:31:35] Unknown:
So what are the non FUD things that we can serve? So I mean, I've been I've been open about this.
[00:31:41] Unknown:
Huge fan of the effort, obviously. A a big part of the effort, obviously. There were things, I disagreed with. Not to say I was right and anyone else was wrong or vice versa. But I think the concept of, like, a government wallet, I didn't necessarily agree with. I didn't want strike being any part of any of that because the whole point is it's an open network and you wanna incentivize entrepreneurs to build and create in a commercially incentivized way, capitalist way. And so a lot of those issues, I actually think it's a nothing burger. I think years from now, we'll look back and realize, you know, government is not best positioned to build a cutting edge financial service on top of software that's really diff I mean, like, how many employees does Square have? Like, it's hard to build this shit. I'm trying to do it myself.
So I don't I don't really pay attention to that stuff. I don't I never agreed with that in the first place. And so whether Chivo works or not, is that what you're alluding to? I don't I don't really care. I know. I think the initial part that was, I thought was very brave and naive and the whole government is, as Pierre and and Bitzy and Michael were alluding to politicians are marketers. You know, the president of United States, the biggest CMO position in the world. And, it's very it takes a lot of stones. It takes, it takes conviction and a very principled attitude and look on the world to do something so disruptive, when your job is to get reelected or to remain in good standing with your people. So that I think is the real challenge. I would assume if I had to guess why Chivo and why a lot of the stuff is they want to instill confidence in the people that they got this and they're not leaving it up to some kid in the hoodie who's always cursing and stuff. And so like that, I think, the relationship with the people getting buy in, ensuring that, you know, Bitcoin is volatile.
It, it is a journey that you go on. It is the rabbit hole that you seek yourself through. And, it is, that, that journey and how it relates to the political infrastructure that exists today, I think would be what I'm watching as far as like, what is out in the press and stuff. I just, it doesn't matter. It really don't matter as soon as like we figure out cash cash points and strike gets a little bit more stable there and cash app launches there and stuff like no one's going to use Chivo. Right. Okay. Like, you know,
[00:34:15] Unknown:
Awesome. I'm sorry for cutting you off. No. You're good. Any other questions? So the question for anyone who can hear is, essentially, if you could go back to 2019, 2020, tell yourself some kind of advice, what would you tell yourself? And, what do you see the path forward going? Forward. What are you doing today that you think is the most Right. Insightful? What are you doing today that you think is the most insightful or strategic? And if you keep this answer tight, we can do another question. If you don't, we can't. Well, fuck, man. I mean, I'm like,
[00:35:19] Unknown:
can't Yeah. Take a 2 hour shower after this. Most strategic thing we're doing today, I think fuck. Pressured. I think the acquiring side of the Lightning Network is underappreciated, and leaning into that is gonna be really, really important. I think yeah. The issuing side, I think, is relatively stable. And the acquiring side, like, being able to spend lightning at CVS and stuff is gonna be a really big deal. And leaning into that, that takes, like, a lot of you know, it's gonna take me a decade to convince the CFO of CVS to have Bitcoin on their balance sheet. So trying to figure out regulatory compliance and how that would work, that will enable the whole point of strike, if I can make the network as powerful as possible, we're gonna win. I don't care. I don't have competitors. Don't matter. As long as Bitcoin wins, I win. And so that's how I think I can advance, the Lightning Network as much as possible. As if you can walk into a store and use Moon, you could use your note at home, you can use Cash App, you can use Strike. That that'll be a huge deal because that'll be the 1st loaded pistol to visa and chase his head that they've seen in quite some time.
And then what was it? What would I tell myself 2 years ago? Yeah. I think, like, the biggest transit transition I'm so I would like college dropout, sitting in my dad's basement, the whole story. True story. Probably heard a 1,000 times from all the other entrepreneurs. And, I've gone from making every single decision, and I had a tough time transitioning to being a CEO, what it takes to be a leader. There's, you know, close to 200 employees at strike now. And, it it's, I've gone from making every single decision to just making sure decisions are made, but surrounding the company with people that are experts at making the actual decision. And that transition for me is just trusting more. You know, you like grow up alone in a basement hacking and you don't trust anyone. You know, it's like, you know, the underdog, I got this. And then, you know, if I were able to do that, maybe the company could have moved a little faster and stuff. So if I were to critique myself, that journey, was difficult. Just letting go.
[00:37:32] Unknown:
Thanks, Jack. One more question, Ben?
[00:37:50] Unknown:
I worked at Visa. I worked with you. Visa and Mastercard seem to be positioning themselves to, like, facilitate the GBDC to the government. Every central bank in the world is looking at the CBDC. But it's, like, inherently against smaller commercial banks, as you said. So what I'm curious is, like, they're they're getting ahead of it. They're they're positioned themselves to figure this out with the governments. What do you think commercial banks are gonna do? And, like, furthermore, how do you, like, really see this transition? We all want this point type of integration happening. Like, how do you really see it?
[00:38:25] Unknown:
So I I do I know there's, like I do, like, the Bitcoin, the asset versus network. And trust me, I know they're the same thing, but it's a it's a healthy divider. So Bitcoin, CBDCs versus Bitcoin, like, as a holding, people are gonna hold the harder money as time goes on. Right? And people are gonna spend the weaker money, whole hold and preserve and save in the harder money. And so that I think is is known, as far as using Bitcoin as, like, payments network to facilitate the way again, the way I think about it is if I can walk in a Whole Foods, I could use Visa or I could use Cash App. I could use Moon Wallet. I could use Strike. I could use whatever. And Whole Foods is getting if I use Cash App, Whole Foods is getting the dollars instantly. There's no MDR. There's no interchange. And Whole Foods is developed by Jack Dorsey.
It's a really or excuse me, Cash App. It's a really good experience for the consumer. You wanna live in a world where the market is free and the consumer preference is valuable because then the consumer preference and the consumer demand drives the winners, drives those that capture value. And so you want to live in a world where Jeff Bezos, Elon Musk, Jack Dorsey are playing on the same level playing field as Visa. And so I don't give a fuck what Visa and Central Banks are doing. I really don't care because as soon as I can get all the acquiring side interoperable with lightning, then it is fair fucking game and cash out can go pay Cardi B. Hey, when you go to CVS and you check out, you're getting 2% cash back and better rewards and experience. And then it is literally game fucking on. And the smaller localized banks love that, you know? Right. Like, like we had strike, we don't use JP Morgan chase. They don't back us. They kicked us out. Right. So that's how I see it playing out is if you live in an open free market open network, the best experience and the best brand will win. And I bet my life, I am actually right now betting my life that we as entrepreneurs, as builders, we want to bring that back to the United States of America. Let the people that are wealth creators, innovators, and, tool builders drive, the experiences that this, the citizens within this country use when they conduct finance. We got to put entrepreneurs back into the forefront of the, of the seat that drives our experiences every single day.
And not, you know, unlock the trap that, chase and visa and everyone else has set over the last 50 years. So that's all. Absolutely massive point to end it on. I just want to say, I appreciate you. I appreciate your work. Appreciate you. Appreciate you all. You guys, man, I had 2 years ago, no one gave a fuck about me. So thank you.
Focus this talk on just, you know, kind of what the lightning network means and what it means to be able to
[00:00:33] Unknown:
Thank you. Long time no see.
[00:00:39] Unknown:
What's up, Jack? Yo. Let's fucking go.
[00:00:46] Unknown:
Before we get started, show of hands, who knows what strike is?
[00:00:51] Unknown:
Yeah.
[00:00:52] Unknown:
Who uses strike? Okay. That's a great baseline. Let's go, my people.
[00:00:58] Unknown:
Take my hood off.
[00:01:01] Unknown:
So I guess we can, I mean, I was gonna start with your introduction? We have we were supposed to have 45 minutes. Right now, we have 38 minutes. I think we'll do, like, a tight 25, and then we'll do a q and a so you guys can ask Jack some questions. The format for that q and a, just I'm gonna point to you. You shout your question, and I'm gonna repeat it. And then you answer that question. Sounds good. I'm here I'm here for you guys, whatever you guys want. Awesome. So let's who knows what the Lightning Network is? Raise your hands. Wow. Okay. This is easier.
So when you look when you look at the Lightning Network, when you look at strike, how do you see Lightning playing into basically a global vision for your company?
[00:01:53] Unknown:
A mental model I enjoy, that I preach internally at the company. I like to think of it like the Internet just to, familiarize because, you know, I live through that. We all live through that. Kinda live through that. And what I mean by that is the Internet has an open distributed communication standard for the world. It offers free and instant communication of data packets to anywhere in the planet. The Internet, as this open standard, is better at publishing news than newspapers. But it's also better at radio than radio. But it's also better at television than television. Right? It's streaming video. And so what you saw is these independent communication channels that humanity had built to communicate with each other, which is a fundamental And there's no such thing as like, I want to send you a message. Oh, you're cross border? Nah, fuck.
That's gonna take me a long time. No, I could send a tweet and the guy next to me is gonna read it in 2nd and the guy in Japan is gonna read in one second. And I like to think of the Bitcoin and the light now. We're in the same way. Bitcoin and the lightning network is better at remittance than Western Union. It's better at payment processing than Visa. It's better at the issuing side of the payment than Chase Bank. It's better than the acquiring side of the payment than Chase Bank. And it's better at being the Federal Reserve than the Federal Reserve. And it's going to consolidate all these independent financial functions that we've built as a species onto one global standard. And so I gotta go on CNN. And, you know, I get what, 60 seconds to talk to Julia Chatterley. And so I like to do, you know, cross border payments is the most violent way to really it's like an education vehicle. It's like, holy shit, you can send a dollar received as a euro in a second and at no cost. But to be honest with you, it's like pulling up think of pulling up an empty email, like a email form, and you're gonna send an email.
In that email form, you have to say, this email is for firing someone. This email is to flirt with a girl. This email is going to Japan. This email is going to the guy next door. No. You don't gotta say shit. You type in the fucking words. You hit send, and it gets there in a second and for free. It doesn't matter. When I look at a lightning invoice, is it like, oh, I could see, by the way, that QR code, that's a tip, or that's a remittance payment to El Salvador, or that's a payment to Whole Foods? The fuck? No. It's the same thing. No matter where I send, it's gonna get there in less than a second for free. So the way I think about it is very similar to the Internet. I look at all the independent financial functions that we've developed consolidating onto one global open standard. That's, you know, the winners will be those that build the best experiences on top of it. And that's how we internally operate and optimize at strike.
[00:04:35] Unknown:
Like, yeah. So I mean, I kinda just kinda just jumped in here. I just wanna thank Jack for joining us. You're a very busy man. So, so obviously, obviously we both think that Bitcoin is revolutionary. That lightning is revolutionary on top of Bitcoin. When you look at it, from both an individual and a company perspective, like, what are the pain points that you're seeing in terms of I mean, you guys are probably the number one transactor on lightning. What are the pain points that you're seeing as a company?
[00:05:11] Unknown:
As, like, Lightning the protocol or just generally?
[00:05:14] Unknown:
I'm yeah. Anything?
[00:05:16] Unknown:
Both. Yeah. So the like like I was just hinting at, the way we think about it from the highest level at strike is best experience, best brand are going to be the winners of this open system. The world I want to enable is that Jack Dorsey, who I think is one of the greatest creators of our time, can compete equally with Jamie Dimon. And that's not the case today. And so the approach we've taken at strike is to be regulated, is to be compliant, is to move cash collateral is what we call it, dollars, euros, Starbucks points, whatever it is, to make for a very particular experience that someone like large merchants when's my Bitcoin 2022 speaking? So I gotta be careful.
Can can be interoperable with the thing. And so the legal and compliance and the education required to talk to some of the bigger institutions or nation states or whoever is usually the challenge. It's interfacing an open monetary network with the world that exists today. Outside. Yes. Not a secret to this crowd. The Fiat side fucking blows. Right? It's hard. But I think it no. Someone's gotta do it. Another thing I talk I only got one employee here, I think. But, yeah, the other thing I talk about is, we we pride ourselves on, the difference between a good human and a great human is doing the right thing no matter how hard it is. And so we look at a lot of the regulatory, the compliance, telling New York and the bit license what the lightning arc is and stuff. I mean, we take that very seriously just so that you can walk into Whole Foods soon, and you can buy your groceries over tour. Right? And so that is the world I want to enable for everybody else. Someone's got to take the bullet and do that work.
And so that's the harder part that people don't see. But I don't know. I mean, as far as the software goes, that's the easiest part in the world, right? I mean, as far as the Lightning Network in Bitcoin, strike has more employees than any corporation in the world because we're all building on the same thing. Like, I got all Square's employees. I got all MIT professors. Right? Yeah. I'm swimming in it. I'm only just paying 150 people. Not all everyone, but you know what I mean? So that part comes easy. Awesome.
[00:07:36] Unknown:
Yeah. So you talk a lot about, lightning, Bitcoin, open monetary network, driving fees down, driving remittance costs down, driving settlement times down, creating broader access. So let's jump ahead a little bit. You know, we're, like, 5 years down the road. Lightning's extremely successful. Strike's completely successful. That's not me, by the way, just for the record. And, Strike's very successful. Lightning's very successful. Maybe Bitcoin's not the standard money of the world yet, but we're getting there. How do you view how do you view your company in that type of situation where any other company can basically come in and join this open monetary network that individuals can use it in a sovereign way? Like, where is where is that competitive advantage in that like, how does a company exist in that kind of situation?
[00:08:35] Unknown:
Well, yeah. This is why I like the Internet analogy. What about the Internet? Think about it this way. How valuable would the internet be if Google was the only internet company? I'll tell you it wouldn't be valuable at all. I won't be able to search for shit that Google would be worth nothing. Right? So the the the thesis is very important. I actually just met, Cash App employee. I'm where are you? Yeah. It's it's a and it's a pleasure because the thesis is there's nuance in the thesis. You're like, oh, Jack's trying to conquer the world. He's a hoodie dressed as a his dad was part of the SIBO. Shut the fuck up. The the the thesis is a a network is the one that's going to defeat the Fed and commercial banks and card processors. It's a network but a network guys has to consist of participants, a network is only as strong as its participants.
So the reason the internet is so valuable, Google gets better every single day because there's a high school course right now where kids are building websites. Right? I mean, it's an open system and right? And so, like, I think that you wanna be one of the more competitive experiences and brands. And as this gets more attractive to people, the competition for a very particular experience will heighten. Think about photo sharing. There are multi 100 $1,000,000,000 valued companies, Snapchat, Instagram, now TikTok, for how to share photos and videos, and they're very particular. Snapchat Snapchat is real time photo sharing. Instagram is memory based photo sharing. And so we, I mean, as a company, we just want to live and own a very particular experience as this network evolves. But I think it's very obvious that, there's going to be many. It's implied. If strikes the only big lightning hour company, we're fucked. I mean, in the same way, when I walk into Starbucks, I cannot use Western Union. And when I remit money, I don't use Visa. It's implied that one centralized company cannot do it all. But together, the like and people have asked me privately, like, why do you think Cash App is integrating the Lightning Network? I don't know. I could take my because the the reason I ask is why would you open up your customers to an open system? Cash Apps crushing the old system because they're great at building good experiences. And the thesis is that the value transfer away from JPMorgan Chase and Visa enables the capture for, you know, the squares and the strikes and potentially Facebook's the Amazons of the world like. So, yeah. Anyway, that's how I think 20 years from now, as long as we're one of the good experiences on top of this thing, it's probably a $500,000,000,000
[00:11:17] Unknown:
business at least. So, like, basically, the pie grows. Everyone in the pie grows with that pie, and you all benefit from it. But at the same time, like, each will have, like, kind of a niche.
[00:11:29] Unknown:
Yeah. Or, like, a unique experience. Same thing with the Internet. When I need to connect with my grandparent, I don't use Google. I use Facebook. If I'm, like, looking to, like, hit on chicks, I don't like you. Like, the I like the Internet to communicate. Think about all the ways I communicate with the world. Like in all the different apps I have on my phone. Like, there are different services that have a very particular experience that I elect. And the violent example of that is Facebook and MySpace. Like Facebook won that experience. And so you'll start to see consolidated demand for particular experiences and brands. But yeah, the pie, I mean, the, the difference between the internet and Bitcoin in this analogy that I'm doing, I also know I'm famous for a terrible analogy, so I apologize. But the, the, the difference is one is communication. The other's money.
The pie is much larger for money. Right. Everyone needs money. Yeah. Both are very foundational human rights. Another thing I love is, the Internet of re protected, reinstilled and enabled, permanent free speech. Which is very important. Can you imagine getting differing opinions on the Russia Ukraine war right now? Right. Hopefully, the New York Times publishes an opinion that I enjoy. That would fucking suck. Right? No, I can go on Twitter. I can go on the internet and I can collect communication information from the entire world. And in that same way, I also like that, you know, I can soon walk into whole foods and I could use a note over tour. I could use cash app. I use strike. I use her a fuck I want. And in that way, I I love those liberties protect as well. So anyway, it's how how I think about it. And, yeah, I'm sure there's a market for some non custodial tour. You know, that's not our market that we operate in. Those are the type of distinction decisions you have to type to chime in. Don't you think there's,
[00:13:21] Unknown:
Like with the current web model, when you see like these tech companies, when you see like you already mentioned cash app, but when you see like a Google or a Facebook, like their business model is, is essentially to lock people in. Right. And they make the switching costs extremely high. Like it's not just you can't just, like, wake up one morning and say, like, I'm gonna cut Google out of my life. Like, people are using the calendar. They're using the photos. They're using the emails, and they're they're they're completely locked in. If they get rid of Facebook, they lose all their friends and family contact information and whatnot.
The power of Bitcoin that you'd like to talk about all the time is is that it's this open monetary network that everyone can interface with. Do you think we will still see successful lock in models or will those type of models go away because they'll be not competitive against a company that is that is more open? Like, will we have closed lightning things happening in addition to this open monetary network, or will that just get dominated over time? No. There's no closed lightning thing. I have few few thoughts.
[00:14:27] Unknown:
The network effect that Google has built I mean, it's not the same. This is where my analogy may break a little, but it's very similar to I can't just delete Cash App and start using Moon Wallet. Cash App has my direct deposit. Cash App lets me pay my taxes for free. Right. That's a network effect that takes a lot of compliance, legal engineering, brand building, how much money they pay fucking Cardi B. I mean, that's a lot of that's a lot of shit that so it's not that simple either in the same way that I can't just leave Google. Maybe part of my life I could leave Google. Maybe I can use DuckDuckGo when I'm, like, searching for certain, I don't know, porn or something. But, like, it doesn't. Right? So, like, I think of it that way a little bit. Yeah. No. As a business, you have a right to build your moat. I think the difference for me, and this is when I was, you know, talking very early to strike trying to convince people that this is a business, is that the Internet, selling communication services has no native business model. It's very difficult to drive revenue in allowing humans to communicate, whereas selling them financial services is very natural and inherent.
So I know how much a customer's worth. I know how to make my I can go to a Costco, charge them 5 basis points to give them instant settled dollars over an open system where all 70,000,000 Cash App users can go pay, and they'll take 5 basis points. That's all gross margin profit. I don't have any intermediaries I'm splitting that with. Now that's a real business. Facebook's never had that. Right. So Facebook is deeply incentivized to hone you in and collect you and kind of like assault you in in ways. Whereas I think Bitcoin and lightning businesses will not have that problem. Selling money, is as old as time that you're right. Like Pierre and Bitzstein were just talking about that. So I think that that's very different. But no, I mean, a business's ability to build moat, to make the switching costs high. I don't have a problem with that.
[00:16:30] Unknown:
Awesome. So, I mean, you are pretty famous for opening strike in El Salvador, support for strike in El Salvador. It was your second country. Then the legal tender news came out. You also constantly whenever you tweet or strike tweets, you know, the the next message underneath that is when Europe, When you when you look at global expansion for strike, how do you view that strategy? How does what are the you know, obviously, the pain points are, like, the fiat world side of it. But, like, how do you look at that? Because usually I mean, I would think that most companies wouldn't pick the country with, you know, 6,000,000 people in it and, you know, basically no GDP.
[00:17:21] Unknown:
Yeah. No. I'm better off getting a bit licensed in that sense from a venture capitalist standpoint. Do you have a bit license yet?
[00:17:28] Unknown:
Almost. New York. You don't need one. No. I'm close.
[00:17:33] Unknown:
The how do we think about global expansion? Well, the cool thing, again, Internet analogy. Sorry. Fuck. I'm boring. But the Facebook is powerful because they have 4,000,000,000 users. Okay. What does that mean to a business that the worth of 1 user can be less because they have more? Right? That's a very powerful idea is that their target audience is everyone that has a pulse, and I guess is responsibly old enough to use their service or whatever the compliance guy says. So that's a very powerful concept. And we are the same way. There's a little bit of nuance in selling finance. Right. So there's a little bit more of like, how are we going to pull this off? And but I think people don't appreciate it. It's like, dude, just launch in every single country. Like, yeah, okay. Obviously, Jackass, I'm working on it. But the other thing to note is that when you look back 10 years from now, you're gonna be like, holy shit. Did that happen fast? I guess now that we're living in it and you're, like, refreshing Twitter every second, he's like, come on, give me the fucking dopamine hit. But it's like it. But but in reality, this is going shockingly fast. And so here's here's a tip for you.
El Salvador, Honduras. Right. Like, how do they get cash in cash out? There's no plaid. There's no there's no count. Right? There's no fucking no one has a bank, bro. How do I cash them in cash amount? Like, you gotta build local checkpoints. How do those scale? Right? I don't want to build a service that's hot for a second, but it doesn't scale. I mean, I'm here to build shit that matters. I'm not here to get retweets. So it's like, like, those are real problems that are I'm starting from scratch. And so I don't know. We think about it in in this, like the developed world, which is I think primarily United States, UK, EU.
And, we attack that very differently. Visa card, direct deposit. Cool thing is, though, all of our lightning services, our merchant acquiring services, all that stuff, it works the same. Right? It's one global open network. I don't have to, like, oh, shit. This this nodes in Europe. Well, I got it set. Not. I mean, it works the same. And then it's just about licensing and banking relationships. And then for the developing world, it's more about how do I build a scalable way to interface them with the world that exists now? And no one's looked at that problem for them in, like, 200 years. So I'm, like, dusting off cobwebs, like, shit. Okay. And, figuring it out, but it's getting figured out. So let's unpack that developing world a bit. So you said checkpoints.
[00:20:03] Unknown:
Like, what is that? That's like a cash cash to
[00:20:07] Unknown:
what? Cash to Bitcoin or cash? Like, how does that look? Yeah. If I'm so, you know, the famed 70 plus percent of El Salvador doesn't have bank account. Okay. What do they have? Dollars. Okay. So how do I get dollars in a strike? Like, well, there's no Square Merchant there for me to, like how the fuck do I do that? Like, okay. How do you do that? Yeah. I'll walk into my local pharmaceutical or or the equivalent and, hey, I'd like this on to strike or I'd like to take this off. Like vouchers or No. Like, if I got a $20 bill Right. Here, and then the pharmaceutical guy is supposed to type something in and get it out. Right? And then but what you don't wanna do is build 5,000 of those and a 100 in each like, that's very expensive. Small businesses that already exist. Yeah. We wanna we wanna build a scalable way to give a great experience to these people on and off ramps for these people.
And then, yeah, stable coins, I think, are very interesting in the sense that I mean, like, here's the thing. You can't feel like why strike auto settle the dollars fucking like like you can't force someone. If someone wants to own Bitcoin, they will. If they don't, they won't. I'm not gonna sit here and forcefully jam Bitcoin on anyone's throat as far as the asset as a long term holder or something. If there are people that are living paycheck to paycheck in poverty, and are scared to live through what is to be known as real volatility of an asset. They they literally cannot afford it. I'm here to help people with Bitcoin find interesting ways to use Bitcoin as a tool that it is to empower them. Maybe in the United States that's letting you guys DCA by the hour at no cost. You got it. No problem. That's on us. Maybe in El Salvador, they need a way to make lightning payments with a cash collateral because they cannot afford a 20% dip because Barry Silbert tweeted something. They can't afford it. They cannot afford it. Right. And so, yeah, like, that's a real problem someone's gotta tackle. So when you talk about cash collateral, what you're saying is the your your balance on strike is USD.
[00:22:20] Unknown:
And when you send your send Bitcoin, if you receive Bitcoin, it switches to USD by default. You've gotten some flack about the use of stable coin for that. I think in Argentina, right? Argentina was your 3rd country. It was US. Was that right? Yeah. It was finally when strike got like big enough for people to FUD FUD us and stuff. So you wanna should we unpack that a little bit? Like, how you view that stable coin Sure. Integration?
[00:22:46] Unknown:
Okay. First of all, cash collateral. I like using that term because it's not dollars. I'm not like a dollar maxi. It's whatever you want to interface with this open network. So you get paid in dollars. You want to go to Whole Foods, you spend dollars to Whole Foods and Whole Foods receives whatever they want. The dollars, we're gonna take them and spit them out over the lining. Okay. Everyone knows that part by now. But it could be euros. It could be stable coin. It could be Starbucks points. The point is that strike is agnostic to the idea of what you wanna interface against lightning. I don't give a fuck. You wanna use Bitcoin over it? Great. I don't care. I think it's just a premier payments network to make payments. That's the whole point is it's better at being Chase and Visa than Chase and Visa.
Right. And that if a Cash App user wants to walk into Whole Foods and make a payment, Cash App user scans QR code, the Whole Foods receives the payment and Chase and Visa were not involved at all. It's settled instantly. There are no intermediaries that is going to scare the living dog shit out of them. At that Jack Dorsey is on the same playing field as Jamie Dimon, they're going to go straight to DC private jet stat. So that so that's my whole thing. And so cash collateral. So Argentina. Okay. They don't want to hold their own currency. They want dollars. Holding dollars and accessing dollars is illegal. Ladies and gentlemen, in Argentina, capital controls is not allowed as a regulated entity. It's like, why don't you tell regulations to fuck up? Okay, well, then all your strike accounts are going to get shut down. Like, what do you guys want me to do? So. Okay. What about a stable coin? Which, by the way, it's like, am I pro any shit coin? Anyone that's fucking followed me long enough. Will you guys stop it? The but am I? How about this? Am I pro Chase Bank?
Am I pro your Bank of America account? No. But that's what you guys use strike with. Right? I'm just trying. Give these people it's their Chase Bank. They wanna hold dollars. I cannot legally do that. And Tron, ETH, Chase, they're all the same fucking scammers that I'm trying to interface. Like, it's just a it's a giant fucking scam. That's it. Right? I don't care. Scam to Bitcoin and Yeah. We're working on making sure that liquid, USCTM liquid is is legal or doing it. I'm funding work to do it in a non custodial way, and maybe that's not even something strike offers, but I think it'd be HRF. I think it'd be valuable. So no. That's the whole context and the point.
And we didn't even have any, like, Tron or whatever the fuck in legal and Is it Tron? Is it Tron tether? No. We we are agnostic. Like I said, you want Starbucks points? You want because we Do they even have the option right now. Or is that a future? I initially did USDT ERC 20 because it was the most liquid. Right. It was what, cause here's, here's the other thing, like sitting here in your beautiful Austin home, like, well, that's scummy. It's like, okay, people that are like in poverty that are like, I have some of these. It's accepted and traded in the black market. They're using them. Yeah. So if you give me your, like, really cool, high, classy Austin version, I can't fucking use it. So I like and then we learned that they switched to Tron, they switched to Shiba Dooba 1. It's whichever one Andreessen isn't minting drilling monkeys on because he clogs the chain. So they just run around to whichever one. Lowest fees. They just change the lowest fees. Right. And so anyway, that's that's how it goes. And then regulators came and said, there are people on your app that the only way to get off the app is accessing the Bitcoin network. And that's kind of like that's date where it's compliance guy that's dangerous, is it? It's misleading is that they're holding tether. But when they send it out, it pukes out as Bitcoin. Right. And we're we got in trouble is like, okay, fuck.
And that's the only reason there was, like, you can withdraw over whatever
[00:26:51] Unknown:
stable coin was at the time. And I got you. Right. You added it. You added the stable They claimed
[00:26:58] Unknown:
they claimed I was being misleading.
[00:27:00] Unknown:
The Argentinian government did. Whatever regulatory body. Right. And, and
[00:27:05] Unknown:
so we, rushed it in. And as of now, actually, talked with them, explained why it didn't make sense, and now took it out. So anyway, that that's like the the thinking process is if people in Argentina said, you know, it really helped me out is Argentine peso collateral. Okay. I'll do that. Like, am I a fan of the collapsing currency? No, but you know, I just like want to help. So anyway, so I think of still coins and chase bank as the same. They're both scammers that I don't necessarily, my counterparty risk could be better. But
[00:27:42] Unknown:
I mean, before we get to q and a, just because I find this very interesting, do you do you you kind of make it seem like you envision that in strike in the future, you kinda choose like, the user gets to choose where that cash collateral is. Is that where you think it's going? Or do do you think it'll usually be like a default somewhere like in America, it'll always be USD and Argentina. It'll always be stable.
[00:28:04] Unknown:
You guys will see, some announcements come out. The these are all I mean, as I've described, Shitcoins are arbitrages on the trend. They're arbitrages informational arbitrages that the monetary expansion is forcing everyone else to save elsewhere besides a savings account. And if I'm Mark Andreson, how do I make money on that? I spent a lot of marketing dollars on pink coin and convincing the everyday person with Robinhood account that, hey, I invented Netscape. You buy this piece of shit. And the other thing is the the other thing is, this is very important as a regulatory arbitrage.
It's, it's illegal to sell someone a savings account that, you know, traditionally isn't property or dollars. Right. I mean, it's violently, disobeying securities law, but you know, our regulatory bodies are slow, passive. They never want to take risk. And so they're taking their time. And so that's what I describe as this arbitrage on the trend is a rush to save in something. No one knows what the fuck is going on. This room does not everyone else out on the street. And so they're buying Shiba do coin and he could get away with it. He Andreessen, but whoever can get away with it, because there isn't, they're just violently disobeying laws that are to protect people from this exact thing.
And so I think, sorry to answer your actual question, I think what's going to happen is these products are going to be done correctly. They're not going to be done by Justin's son. Who the fuck is that guy? I mean, that's absurd, right? I mean, if we're talking about like improving fine at the end of the day, we're all human beings at the end of the day, you know, we're tool builders being human and living in this world. That's what separates her from other primates is that a 100 years ago, the world was worse off than it is today. A 100 years from now, the world will be better off than it is today. And so we all are on the same page. And so I think real banks will start to issue.
Regulated stable coins. And I think companies like Blockstream will figure out a way to deploy a solution that has a different trade off. That's not as, centralized, and lives within a side chain. And then maybe with the work with HRF and what we're funding, people can figure it out in a non custodial way and those will compete with each other, but those are real solutions. Those aren't like let's hop to the next scam before Andreessen figures it out and clogs it. Right. Let's say a toilet, like before Andreessen comes and takes a big dump in our toilet clogs it. Like we gotta run around. So anyway,
[00:30:39] Unknown:
anyway, I think, I think we, I can speak for all of us. So we appreciate you going deep on that one. I know it's, not I mean It's not a may maybe a common question. It's been tough tough topic. I'm an open book. I I really am. Well, on that note, should we do should do a quick q and a? Yeah. Let's go. Anyone got any questions for Jack?
[00:30:57] Unknown:
Hey. First of all, thanks for I mean, it's almost a year of the day that that you gave that amazing speech in Miami. Thank you. You've got it, bro. You know, there's been a lot of journalism about the challenges in El Salvador. Some of it's FUD. There was recent one rest of world that interviewed a bunch of people down there. What would you say are the expected and unexpected challenges of what, El Salvador is trying you see as the things and the hurdles that they have to overcome right now.
[00:31:29] Unknown:
Mhmm. Mhmm. Trying to think how I answer this appropriately.
[00:31:35] Unknown:
So what are the non FUD things that we can serve? So I mean, I've been I've been open about this.
[00:31:41] Unknown:
Huge fan of the effort, obviously. A a big part of the effort, obviously. There were things, I disagreed with. Not to say I was right and anyone else was wrong or vice versa. But I think the concept of, like, a government wallet, I didn't necessarily agree with. I didn't want strike being any part of any of that because the whole point is it's an open network and you wanna incentivize entrepreneurs to build and create in a commercially incentivized way, capitalist way. And so a lot of those issues, I actually think it's a nothing burger. I think years from now, we'll look back and realize, you know, government is not best positioned to build a cutting edge financial service on top of software that's really diff I mean, like, how many employees does Square have? Like, it's hard to build this shit. I'm trying to do it myself.
So I don't I don't really pay attention to that stuff. I don't I never agreed with that in the first place. And so whether Chivo works or not, is that what you're alluding to? I don't I don't really care. I know. I think the initial part that was, I thought was very brave and naive and the whole government is, as Pierre and and Bitzy and Michael were alluding to politicians are marketers. You know, the president of United States, the biggest CMO position in the world. And, it's very it takes a lot of stones. It takes, it takes conviction and a very principled attitude and look on the world to do something so disruptive, when your job is to get reelected or to remain in good standing with your people. So that I think is the real challenge. I would assume if I had to guess why Chivo and why a lot of the stuff is they want to instill confidence in the people that they got this and they're not leaving it up to some kid in the hoodie who's always cursing and stuff. And so like that, I think, the relationship with the people getting buy in, ensuring that, you know, Bitcoin is volatile.
It, it is a journey that you go on. It is the rabbit hole that you seek yourself through. And, it is, that, that journey and how it relates to the political infrastructure that exists today, I think would be what I'm watching as far as like, what is out in the press and stuff. I just, it doesn't matter. It really don't matter as soon as like we figure out cash cash points and strike gets a little bit more stable there and cash app launches there and stuff like no one's going to use Chivo. Right. Okay. Like, you know,
[00:34:15] Unknown:
Awesome. I'm sorry for cutting you off. No. You're good. Any other questions? So the question for anyone who can hear is, essentially, if you could go back to 2019, 2020, tell yourself some kind of advice, what would you tell yourself? And, what do you see the path forward going? Forward. What are you doing today that you think is the most Right. Insightful? What are you doing today that you think is the most insightful or strategic? And if you keep this answer tight, we can do another question. If you don't, we can't. Well, fuck, man. I mean, I'm like,
[00:35:19] Unknown:
can't Yeah. Take a 2 hour shower after this. Most strategic thing we're doing today, I think fuck. Pressured. I think the acquiring side of the Lightning Network is underappreciated, and leaning into that is gonna be really, really important. I think yeah. The issuing side, I think, is relatively stable. And the acquiring side, like, being able to spend lightning at CVS and stuff is gonna be a really big deal. And leaning into that, that takes, like, a lot of you know, it's gonna take me a decade to convince the CFO of CVS to have Bitcoin on their balance sheet. So trying to figure out regulatory compliance and how that would work, that will enable the whole point of strike, if I can make the network as powerful as possible, we're gonna win. I don't care. I don't have competitors. Don't matter. As long as Bitcoin wins, I win. And so that's how I think I can advance, the Lightning Network as much as possible. As if you can walk into a store and use Moon, you could use your note at home, you can use Cash App, you can use Strike. That that'll be a huge deal because that'll be the 1st loaded pistol to visa and chase his head that they've seen in quite some time.
And then what was it? What would I tell myself 2 years ago? Yeah. I think, like, the biggest transit transition I'm so I would like college dropout, sitting in my dad's basement, the whole story. True story. Probably heard a 1,000 times from all the other entrepreneurs. And, I've gone from making every single decision, and I had a tough time transitioning to being a CEO, what it takes to be a leader. There's, you know, close to 200 employees at strike now. And, it it's, I've gone from making every single decision to just making sure decisions are made, but surrounding the company with people that are experts at making the actual decision. And that transition for me is just trusting more. You know, you like grow up alone in a basement hacking and you don't trust anyone. You know, it's like, you know, the underdog, I got this. And then, you know, if I were able to do that, maybe the company could have moved a little faster and stuff. So if I were to critique myself, that journey, was difficult. Just letting go.
[00:37:32] Unknown:
Thanks, Jack. One more question, Ben?
[00:37:50] Unknown:
I worked at Visa. I worked with you. Visa and Mastercard seem to be positioning themselves to, like, facilitate the GBDC to the government. Every central bank in the world is looking at the CBDC. But it's, like, inherently against smaller commercial banks, as you said. So what I'm curious is, like, they're they're getting ahead of it. They're they're positioned themselves to figure this out with the governments. What do you think commercial banks are gonna do? And, like, furthermore, how do you, like, really see this transition? We all want this point type of integration happening. Like, how do you really see it?
[00:38:25] Unknown:
So I I do I know there's, like I do, like, the Bitcoin, the asset versus network. And trust me, I know they're the same thing, but it's a it's a healthy divider. So Bitcoin, CBDCs versus Bitcoin, like, as a holding, people are gonna hold the harder money as time goes on. Right? And people are gonna spend the weaker money, whole hold and preserve and save in the harder money. And so that I think is is known, as far as using Bitcoin as, like, payments network to facilitate the way again, the way I think about it is if I can walk in a Whole Foods, I could use Visa or I could use Cash App. I could use Moon Wallet. I could use Strike. I could use whatever. And Whole Foods is getting if I use Cash App, Whole Foods is getting the dollars instantly. There's no MDR. There's no interchange. And Whole Foods is developed by Jack Dorsey.
It's a really or excuse me, Cash App. It's a really good experience for the consumer. You wanna live in a world where the market is free and the consumer preference is valuable because then the consumer preference and the consumer demand drives the winners, drives those that capture value. And so you want to live in a world where Jeff Bezos, Elon Musk, Jack Dorsey are playing on the same level playing field as Visa. And so I don't give a fuck what Visa and Central Banks are doing. I really don't care because as soon as I can get all the acquiring side interoperable with lightning, then it is fair fucking game and cash out can go pay Cardi B. Hey, when you go to CVS and you check out, you're getting 2% cash back and better rewards and experience. And then it is literally game fucking on. And the smaller localized banks love that, you know? Right. Like, like we had strike, we don't use JP Morgan chase. They don't back us. They kicked us out. Right. So that's how I see it playing out is if you live in an open free market open network, the best experience and the best brand will win. And I bet my life, I am actually right now betting my life that we as entrepreneurs, as builders, we want to bring that back to the United States of America. Let the people that are wealth creators, innovators, and, tool builders drive, the experiences that this, the citizens within this country use when they conduct finance. We got to put entrepreneurs back into the forefront of the, of the seat that drives our experiences every single day.
And not, you know, unlock the trap that, chase and visa and everyone else has set over the last 50 years. So that's all. Absolutely massive point to end it on. I just want to say, I appreciate you. I appreciate your work. Appreciate you. Appreciate you all. You guys, man, I had 2 years ago, no one gave a fuck about me. So thank you.
Introduction and format of the talk
The Lightning Network and its role in the global vision for the company
The competitive advantage of a company in a world with an open monetary network
Putting entrepreneurs back into the forefront
Expressing appreciation
Acknowledging personal growth
