William Quigley from Opskins | WAX Token (Part 1)

Welcome to the Puck Venture Capital and Beyond. A show that explores the evolving landscape of the Venture Capital world. We'll have candid conversations with today's VCs and entrepreneurs who are shaping those changes. I'm Jim Bier, managing partner of Bier and Troff and president of CMG Advisors. This podcast brings change makers to the table to discover the inner workings behind decision making strategies and ultimately how they got to where they are today.

This week, we are out of the studio and in the field with a rare and exciting opportunity to sit down with William Quigley, CEO of OPSkins, and one of the leading venture capitalists funding the technology boom over the last twenty years. When we sell things that are in digital form, we, because of the technology, know instantly they got it. We can instantly, you know, get our payment for it. It can never be reversed. And so when you talk about where things are going, my belief is that more and more of the world's commerce is gonna be in digital form.

William invited us to a Santa Monica office to have an in-depth discussion about where the puck is going for investors and consumers in the paradigm shifting world of cryptocurrency. William, I wanna spend a little time today going over your background and what led you to cryptocurrency and ops skins. And I know your background, you're a successful MBA from Harvard, you worked at Disney, you went into the VC community, but how did your background work to get you to where you are today? You're right. I would actually go back further.

Okay. I think that the most important part of my career was right out of university, going to work for Arthur Andersen. I began in the Japanese banking practice. Arthur Andersen had a big, practice where we would focus on helping Japanese banks set up organizations in The US. We call them agencies.

They're sort of pseudo licensed groups that can do business with their Japanese customers, but on US soil. And, why that was valuable was because there was this belief at that point that Japan was gonna take over the world. Within my firm, Arthur Andersen, that belief was very, very strong to a point where things that were troubling were always dismissed as, but it's Japanese banks. They're the biggest in the world. In 1980, not a single Japanese bank was ranked maybe in the top 25.

In 1986, nine of the 10 largest banks in the world were Japanese by assets under management. And they were, you remember this, buying up the entire skyline of Los Angeles, buying a Rockefeller Center, buying a Pebble Beach golf course. They were buying everything. And I went in there looking at these assets and trying to audit them, very, very sloppy practices. But there was this underlying belief that Japan, in short order, was gonna be the biggest economy in the world, and we were all gonna be learning Japanese.

And it was a new paradigm, as you might have remembered. Valuation techniques and valuation approaches were no longer valid in this new paradigm. And me and my little 24, 25 year old friends who were going and auditing these things saw things that didn't make any sense to us. But we were reassured that we didn't know what we were doing and that they did. Well, in the end, as you might remember, by the early nineties, the crack started to show when it turned out that these banks who had been overpaying, overleveraging, had loan portfolios that were awful, were actually a house of cards.

And I sat back from that experience and thought, you know, I allowed myself to be told that because these people who had more experience, older, knew more, because they told me something, I discounted my own beliefs. And so that was really transformative for me. Right? I was like, okay. So it turns out the smartest people in the room are sometimes the dumbest people in the room.

And we won't even get into agency cost and incentives and all the other economic things that happen where people have incentives to do things even if they're not right and all that. So all of those things caused me to say, wow. There were these fundamental beliefs. There were very smart people who were saying they're true, but they weren't really being challenged. And right below the surface, the there was a lot of evidence that they were false.

So that led me you know, I did go to Disney, but, after Disney, I got involved with, you know, Idealab Capital, started, you know, the world's first consumer Internet venture capital fund. Very hard to raise money. People thought the Internet was goofy. Even a place where not only was there not likely to be a lot of money made, but weirdos populated it. Right?

And certainly, no real businesses were gonna grow up and be significant. But by you know, it was still fresh in my memory, the lessons of smart people being completely wrong. I looked at very basic things, like how easy it was to reach people. At Disney, which is a great consumer products company, we spent a lot of time on how to reach people, convenience, and the Internet seemed more convenient in a lot of ways than other ways that customers did things. So I thought, okay.

I'll take a chance on this, and it turned out right as you know. After the Internet bubble burst, no one wanted to fund, companies that were Internet companies. I know you remember this, Jim. Many of these companies went out of business. Some of them had stock prices that were very, very low, but turned out to still be great values.

And we wound up at Clearstone, even ourselves, not necessarily focusing a lot on the consumer Internet at the time because we were worried that, well, we need to raise money and we need to raise money. After we put in money, we need to bring in new VCs. That's how venture capitalists work. We don't give the company all the money it needs. We just give it some upfront and then try to bring in other VCs along the way.

Well, if those guys are afraid of coming in, you have to be wary about what deals you do. So that's why the whole early and mid two thousands even then you had the financial crisis, late two thousands was not a terribly great time to be in venture capital. But there was a lot of disruption that was taking place even though a lot of the investors weren't paying attention. When I was in the mid two thousands on the board of an item trading company, digital item trading company, trading in game in game assets. I, learned a lot about that industry, how and why consumers across the world like to buy in game digital assets, trade them, arbitrage them.

We sold that company to a consortium of, private equity people. And my partner in that deal wound up taking a year or so off and then learned about Bitcoin in 2009. And so he said to me, there's this thing called Bitcoin. It's pretty cool. And I had worked in, of course, the consumer Internet as a VC in the late nineties, and there were this, what I would call, magic Internet money type of deals.

Companies that have now long been forgotten. Fluz was one. Beam's was another. These were companies that said, we're gonna create a currency that Internet people can use. And it was centralized.

One company produced a coin, so there was a trust issue. Well, what if they produce a lot more coins? But in addition, they didn't do a lot of the things that eventually Bitcoin would allow. And they didn't work out that well. So that was what I was thinking about when my friend and partner said, I'm gonna do this stuff.

So it took me two and a half years to take them seriously. I mean, that's an interesting trajectory. So tell me, as an investor, what are some of the areas in the crypto and Bitcoin world that you've worked in, and what are some of the challenges that you've seen along the way? So, you know, from 2012 to '20, call it mid twenty fifteen, all I did was crypto, both Bitcoin we call them cryptos, but for your audience, that's Bitcoin and other types of these decentralized currencies. All I did was either mine these coins, for those people who understand how Bitcoin works, you can mine the coins.

Started Bitcoin companies and crypto companies, we incubated them. We, created a a venture capital fund and invested in these companies and sat on lots of boards and dealt with all of the challenges of early stage company building and formation with a twist. And the twist was unlike the Internet, which the call it the non Internet businesses looked at and said, that's kinda goofy. Have fun, and, we're gonna leave you alone. There was a lot of very powerful businesses and institutions and governments rise of cryptocurrency, as small as it was.

I mean, the collective market capitalization of Bitcoin for many years was below a billion dollars and other currencies combined and then a couple of billion dollars. And then it had a tendency to crash. Something for the audience listening now, I know we've not seen a lot of them in 2017, but these things have a tendency to crash and crash to a great degree, where they will lose 90% of their value. Now they're resilient. They come back.

But for many years, it was oil wildcatting kind of people. I mean, even they would lose their nerve in this market. Bitcoin would go from a penny to 10¢ back to a penny. It'd be go from 10¢ to a dollar to $30 back to a dollar just constantly. It had one, though, enduring characteristic that I found very important.

There was a core group of people who had a Hodl mentality. And for the audience, what Hodl means is h o d l, hold on for dear life. That's a phrase we use in this industry. Hold on for dear life, meaning no matter how bad things are going, no matter how fast this stuff is falling, it's not only gonna recover, it's going to recover and grow above that. And whenever you have a core group of people who just say, I don't care what happens, at this price, I never sell, That creates a lot of stability, right, at the bottom level.

For Bitcoin, from 2012 to $20.13, it rose from $10 to $1,200. And then there was one big exchange in the world. It had some problems, it turned out the exchange couldn't actually find all the coins people had given it, it collapsed. It's called Mount Gox. Bitcoin wound up dropping back to $100 or so.

Kinda wiped out a lot of people and eliminated a lot of the interest in bitcoin. It was just the hardcore followers at that point who wound up keeping in touch with it, working with it, up until frankly, 2016, 2017. Along the way, what we've seen is a lot of big problems that we have tried to address. Government looking at it, being threatened by it, banks and and others saying, how do we track people who own it? There's been worries about tax evasion.

There's been worries that Bitcoin can be used for illegal activities and so forth. Now my answer to that is always, well, a, first give us some time. We're building the methods to manage that. And b, people do the same thing with US currency and every other currency, so don't hold us to a higher standard than everybody else. Those were what some of us would call the dark times in '20, '13, '14, '15, and to 2016, where you had lots of volatility, lots of companies that were trying to get adoption of whatever they were doing and it wasn't happening, lots of new rules and conflicting rules.

I remember at one point, there were at least a dozen federal agencies in The United States who were saying, we're responsible for the regulation of Bitcoin. The IRS came out with a position paper declaring it it was property. And therefore, every time you owned a Bitcoin and sold a Bitcoin, you had to calculate a gain or loss. When you have currency and every time you use it, you have to calculate a gain or loss, it's impractical. And then different agencies said, oh, if you use Bitcoin, you need to collect this type of information.

Other agencies saying collect other information because it's a worldwide currency. You have different jurisdictions saying different rules. So it's been very, very hard to work with it. You've voiced a fair number of issues that the crypto and Bitcoin area face. Why continue to work with these currencies given these challenges?

So as a early stage venture capitalist who's invested in a lot of, like, new evolving technologies, one of the core rules I would say is anything new will will have its problems, and you will find at times you'll lose faith in even wanting to continue with it. And so the reason people will continue with it is if it does something incredibly useful, at least one thing incredibly useful or two things. Even with all the other problems, does it does it solve one particular problem incredibly well? Even if it comes with a lot of baggage. And Bitcoin does do that, and the other cryptos do do that.

They do a few things that are so valuable that even with all the other headaches that they impose on you when you use it, you accept those because the value it provides is so enormous. And that is, I think, the reason it's had its staying power and the reason it's had this core group that just keeps with it in spite of all of the people who've tried to squash it. You mentioned that it has certain things that are incredibly valuable. I've heard you speak about this before, but can you, just for our audience, give an example of where it's incredibly valuable? Sure.

I'll give you a couple. So I'm gonna assume that there's a at least a passing knowledge of what Bitcoin is to the audience listening. And if not, there's so many online resources they can go to. But it's a way of at a simplistic level, it's a way of paying people instead of paying them with PayPal or Skrill or any other payment method, a credit card. You send them, as a person, you send them, kinda like Venmo, you send them a Bitcoin, and they receive it in their sort of Bitcoin wallet.

Wallet. And what is unique to Bitcoin, and and I'll use the word Bitcoin and cryptocurrency kinda synonymously. Bitcoin is a type of cryptocurrency. Cryptocurrencies have certain properties. But let's just call it Bitcoin for now.

One of the things that is unique to Bitcoin is once somebody sends a Bitcoin to another person, that transaction is irreversible, except if the recipient wants to reverse it. And why is that incredibly powerful? It's incredibly powerful because we have this thing in in business and commerce we call counterparty risk. And that is where I do a transaction with you and you don't perform. So I say, hey.

I'm gonna send you a payment, and you say, great. And you, as a result of me paying you, you go and mow my lawn. Now what if I can, after you mow my lawn, hit a button and get my money back? Well, that's exactly how our financial system works today, and we call these things chargebacks. So I am allowed, if I use PayPal or a credit card or virtually any other form of payment, including a bank wire, company to reverse the transaction.

I agreed to give you a a Bitcoin to mow my lawn. It's a big lawn. And you mow it. And now I can turn around. And if it wasn't Bitcoin, if I paid you with a credit card, I could reverse it.

And your only your only recourse is to go to court. Right? What that means is, because this happens all the time, by the way, and it's an interesting thing. People who run companies, restaurants, hotels, ecommerce sites, we deal with this every day, this concept of chargeback. So when someone buys something from us and we ship them a product, we hope they don't, once they get the product, reverse the charge.

As a result of that ability, and we call this a counterparty risk, as a result of that, we tend to not want to do business with everybody. We would prefer to do business with people who we can trust and who we don't think will do that. Well, if you limit who you do business with, the only people you trust are people you can get at if they do something like that. You, of course, have a smaller pool of customers. So Bitcoin eliminates that.

Once I send you your payment for mowing my lawn, you mow my lawn, that's it. I can never get that back. It's called irreversibility or immutability. That's a powerful, powerful feature of Bitcoin. There's another powerful feature of Bitcoin.

We'll call it permissionlessness. Meaning, you need no one's permission to open up a Bitcoin wallet, consider it like a Bitcoin bank account, and start to pay people. There's nothing else like that in the world. You wanna open up a bank account, the bank demands all kinds of information about you, and one of those is a government issued ID. They require that information to be presented, and they can, without any particular reason, fire you as a customer.

But most people I know don't have a problem turning over information to a bank or credit card company. So it's a funny thing. I remember when I first got involved with with cryptocurrencies in 2012, people, generally people in New York, Los Angeles, San Francisco, London, would say to me, who needs this Bitcoin thing? I mean, you say I can use it for payment. But, William, I've got credit cards.

They're coming out of my wallet. I got 10 of them. I got bank accounts. I got PayPal. I got Scrill accounts.

What do I need it for? And I would always say, you don't. In fact, you're irrelevant. It is not for you. It is for the other 4,000,000,000 people on this world who don't have the privilege of having anything they want when it comes to access to financial systems.

So that permissionlessness that anybody who has an Internet connection and a web browser can create their own Bitcoin wallet and can become a Bitcoin payer and a Bitcoin sender. That's powerful. There are many others, but those two are really powerful. What's interesting about the notion of accessibility, I remember Steve Street when he started a company that's now called Green Dot was going out and saying something very similar, which was for us bankers, we didn't need a credit card because it was easy to get, but he was going out and doing prepaid credit cards for the lower income people that had bad credit and then selling them to all the department stores and Home Depots and this other stuff and built a major business doing that, but, again, on a scale that is compared to what you're talking about. So now we understand this demand, and there's 4,000,000,000 or more people that could utilize this, and I get that.

And you've actually, because you're in the gaming world, which we can talk about, are actually giving people a place where they can, quote, buy and trade virtual goods and so forth. But Amazon owns 45% of the web right now. Billions and billions of dollars for most people are being bought through places like Amazon. I was at a thing recently called the summit, and people were talking about cross border transactions. And Bitcoin solves the whole conversion issue of being able to have to spend all the money from converting to dollars to pesos or otherwise.

But one of the big issues is, for instance, is shipping. I was asking this person from South America, well, what's the challenge? I mean, if I wanna buy something on Amazon, I just go on Amazon. If I'm now able to pay in Bitcoin, I buy the good and whoop. And they said, does not work.

And why is that? Well, how do you ship it? You don't just price in $15 FedEx to South America. There has to be a warehouse it has to go to. There has to be economies of scale.

So from the perspective of real goods, we're not there yet. But you're ahead of the time. You're dealing with virtual goods, which don't have a shipping problem. That's right. And so so I'd like you to tell the audience a little bit about the use of these borderless transactions with cryptocurrencies and how that's actually playing out in the real time world of virtual goods.

And then, if I can get you to kind of speculate a little in terms of where do you see this going beyond skins and these kind of virtual art items right now, if you can look into the future and have any Okay. On that. So I'll explain to the audience that I'm the CEO of a company called OPSkins. And OPSkins is a marketplace, think of it like eBay, but instead of people putting up, you know, shoes or jewelry or whatever it is, old sports equipment, they put up virtual items. So for people who play video games, you know you get these virtual items.

And some games allow you to trade those with other people. So we are a platform where we allow people to come and list their item, their in game video item. It could be a magic sword, a shield, whatever it is, and people can come and buy it. Our marketplace takes in over maybe 50 different what we call fiats. And fiat means the paper money that you all use, the the money that governments issue.

We call it fiat money. So when you have to take in that much money and by the way, we take that in because we operate in a 100 countries. And so everybody in every country we operate in likes to use their local currency to buy stuff. If we want to serve those customers, we have to be able to accept that currency as a deposit. So we allow people to deposit these different currencies, and they then give us this currency, so we have to do something with it.

Well, we like US dollars or maybe euros, so we then have to convert that into US dollars and euros. And throughout the world, all banks and financial institutions, they're experts at converting from one currency for another for a price. Right? Everybody gets their vig. And that price is so staggering in terms of the amount of money that is made by banks and financial institutions converting from one currency to another.

It'd blow your mind. I thought it was probably about $750,000,000,000 every year. Now out of a $90,000,000,000,000 global economy, annual global economy, you're like, oh, yeah. It's not that much. I believe now by talking to some others that it's probably closer to 2,000,000,000,000.

So banks and and institutions take somewhere between 750,000,000,000 and 2,000,000,000,000 every year for offering you the ability to exchange from one currency to another. It's a lot. And by the way, as you mentioned, bitcoin and other cryptocurrencies because it works cross border, because you just keep it in its native state of Bitcoin, you don't have to do that conversion. You save a lot of money. Because so consumers really win here.

But our company allows people to trade these digital goods. And as you point out, Jim, what's nice about that is, as a result, if you're in China, you've got a a guy in China selling an item and a guy in Germany buying an item. Normally, the guy in Germany who is buying it, we have to wait until you package it up, put it on a freight carrier or whatever, send it over to Germany, it takes time and all that. So that's fine. We do that.

But it's much faster if I'm selling you a digital item. Right? I can just send it over the Internet. And that's what we do. And it turns out, in terms of the use case for Bitcoin, from an e commerce perspective, I think it's the ideal use case.

Because where Bitcoin really shines is in allowing people to not have to convert from one currency to another. And when do you do that? When you're buying from someone in a different country. But there's a risk. The risk is when you send someone a virtual item, once they have it and they get it instantly, if you've paid for it with, let's say, traditional fiat currency, you run the risk that once they get it, you can never get it back.

Right? Because it's digital, so they have it in their wallet. You can't get it back. You also if you were to do this with traditional, like, a credit card payment or, let's say, a PayPal payment or something like that, you would want to because of the risk of charge back. You would wanna wait until you had validated that maybe the credit card's not stolen or maybe that, you know, there's only so many days you have before you can do a charge back and then you can't.

So it would normally, if you're doing a cross border transaction like this and you don't know the customer, you would wait until, you know, you've gotten paid and you'd held it for a certain amount of time before you would release that item. Because our items are virtual and because using Bitcoin, the transactions are immutable, what it means is, you know, how long does it take for me to send you a, you know, a tennis shoe box to China? Probably takes a couple of weeks. I can send you a virtual tennis shoe instantly. And I can send you a lot of them.

So the volume that we can do in transactions, because it's all digital, is basically the speed of light. And so while Amazon ships a lot of stuff, I ship it much faster at a much lower cost. I ship it at a price that's so cheap it can't be measured. Why? Because I'm just sending it over the Internet.

I'm sending an image. And the fact that these things cost a lot of money, you know, some of these items are a few cents, some are tens of thousands of dollars, it turns out to be a pretty big market. My market is about $50,000,000,000 annually and growing, and the business didn't exist in 2012. I mean, that that's amazing. So where do you think this is all leading to, and how is your business affected?

When we sell things that are in digital form, we, because of the technology, know instantly they got it. We can instantly, you know, get our payment for it. It can never be reversed. And so when you talk about where things are going, my belief is that more and more of the world's commerce is gonna be in digital form. Meaning that right now, Amazon ships a ton of physical items.

Right? And they are getting hyper efficient at the point they build micro distribution centers. They even have a fleet of drones that are gonna move this stuff. And to compete with Amazon, you must build distribution centers all over the world, be really good at logistics, and have drone fleets and all that. What's really fascinating about technology is I and Amazon have Amazon has no particular advantage over me in logistics, which is pretty amazing when it comes to shipping digital goods.

For all the tens of billions of dollars that they have invested in infrastructure and logistics, the supply chain management, that provides them not one iota of advantage over me since we all have access to the Internet, and I can send something just as fast. That is why I chose to work in the non what I call the non physical item space, sending digital items. As a small player, when you first go and you're looking at all the giants, I've done that for many years as venture capitalist. How do you compete with the big guys? You have to either even the playing field or you have to have an advantage over them.

In this case, you can only move things at the speed of light, we're in digital form, and you can't move it faster, but no one can move it any easier than me. That's the reason I picked the shipping of digital items to be where I focus. And as I said earlier, with Bitcoin, because you save people all the costs of currency conversion and the contracts are mutable, so I don't have to worry about chargebacks. It's a good business, and, it's easier to operate than a physical business. Let let's go back to digital goods for a second and focus on the following.

There is a world of people out there that are in the gaming world or otherwise trading and living with digital goods, so to speak, and have seen how that's growing dramatically. I also have thought about the use of digital goods from the perspective of if you wanna buy somebody a shirt, for instance, on Amazon, and you're shipping it for them for their birthday present, and it's a medium polo shirt or lululemon shirt, and they're gonna return it. If you gave them a digital copy of that shirt that they could at some point redeem, you could trade that shirt back and forth, and they'd have this they'd own this right to this shirt. And if they don't if it's not the right size, they could exchange it. Right?

So you've saved all that money in time. They get it instantaneous. So I've seen it from the perspective of, okay, there's a rule there. But when you talk about this universe of digital goods and you think about the trillions of dollars or, you know, that are traded and bought in the area of I mean, real goods like shoes and all this other stuff, how do you see the world of digital goods morphing, if at all, or expanding expanding into what we are currently ordering on the internet. Yeah.

So what will happen is with, augmented reality, right, it's not here yet, in the way we want to, but it'll certainly come. And, I'm gonna assume most of your audience knows augmented reality, which is, you know, virtual, or digital, representations of objects and whatnot that also coexist with our real world space. And you could imagine for something like you said, you buy a t shirt on Amazon, you get it. One of the things Amazon has had to perfect is how to make it really convenient to return things. Because when it comes to clothing, we know there's fitting rooms in every retailer, which is really valuable.

You put them on, it looked okay, but when it's on, it's too tight or whatever. So what you could imagine is an augmented reality token that comes with the physical t shirt. But you get that first, and you you literally adorn yourself with this augmented reality based t shirt, which is, has all of the size, the dimensions of the original t shirt. You overlay it on yourself and you see, oh, it's actually too big or it's wrinkled or whatever it is. I don't like the fit.

And even if that was a, you know, reduced returns by 2%, right, and you hope it would do a lot more, you would imagine how much of a savings you would get from a logistics standpoint because to send you that augmented reality to drive is tiny, tiny cost. Right? The amount of electricity that it takes. So we're not there yet with the technology, but it is coming. I thought the, advances in augmented reality would be further along today than they they than they are.

And as any venture capitalist knows, you may you make a bet on a certain technology, and often you don't understand where all the roadblocks are. And and, you know, right now we're hitting a lot of roadblocks. But we, I don't know in the next two years, but certainly in the foreseeable future, ten years, this will be a reality. So if you have augmented reality that allows you to buy shoes and clothes and these artworks and see where they're gonna fit in your ass, I understand where understand where you in terms of how it would save them billions of dollars. I get that.

But then go back to now that I've decided I want it, right, I still am buying a real good, so to speak, that is gonna get shipped to me that I can't, quote, unquote, use my credit card for. Right? So in terms of the use of cryptocurrencies and in the ability of the cryptocurrencies to solve any a a problem there, is there a role for cryptocurrencies in the world of having to still ship these real goods? Of course. I'll give you I'll give you an example.

Let's take Amazon. Right? So Amazon, like most most ecommerce companies, because they're sending physical goods, they're actually more of a regional powerhouse. They're not a global powerhouse. Right?

So a lot of people are familiar with eBay. You know, when you buy something on eBay, for the most part, the people buying are located in The United States. There is a European eBay and whatnot. But it's because of logistical problem, most people don't wanna spend the money to have the thing shipped. And then if you do send the thing overseas, for the buyer, if they have a problem, they have to go and incur the expense of shipping it back.

Right? So most ecommerce companies are regional. It turns out most payment companies are regional too, and that's because they deal in the local currency. There are major, major brands that, let's say, like an Amazon, that the world does trust. Right?

And I'm gonna get into a topic here called asymmetrical risk. And asymmetrical risk means one side trusts the other, but the other side doesn't trust them. Right? Let me give you an example. Amazon is a great global brand.

Somebody in Kenya probably is not worried if they were to send money to Amazon that Amazon wouldn't take the money and steal it. Most people would say, yeah, I can trust Amazon. Now, does Amazon trust the guy in Kenya? Well, they may not have a good way of identifying people. The credit reporting and and, the the payment processors may not be too, advanced, or they just may not have good ways of getting into the APIs there.

So Amazon says, you know, I know you trust me, but I don't know who you are and I can't trust you. So in that case, what Amazon could say is, hey, you, your customer in Kenya, you'll buy, you know, this new radio from us and we'll ship it to you. But we can only do that if we know the credit card you're gonna use or the payment mechanism isn't gonna be charged back or isn't stolen. And therefore, if you send us Bitcoin, we're happy to deal with you. Now, normally, you might say, well, the guy sending the Bitcoin might say, well, I'm gonna send you my Bitcoin.

You're gonna have it. It's immutable. But what if you don't send me the package? So in the case of major multinational brands where they're highly trusted, but they may not trust everybody else, Bitcoin is an and other cryptocurrencies is an amazing way for them to solve it. This, by the way, did happen to us at OBS cons.

We redlined a substantial portion of the world before we could use cryptocurrencies. There were places where we didn't have adequate payment processors, where we didn't really understand what the laws were about chargebacks. And so we just didn't feel comfortable taking someone's deposit because we then send them a digital item, they go away, the credit card's stolen, the items reversed, and we're left holding the bag. Now what we do is we say, well, you're in a country where we don't have good payment processing, where we don't have good verification of credit worthiness and whatnot. But we'll gladly deal with you if you send us a cryptocurrency.

So I foresee lots of big international brands going and saying, we're happy to ship and send things to places we haven't before, provided you pay in a crypto. And we we we eliminate this counterparty risk that exists, and we allow people to be able to enjoy whatever these big brands are able to sell, when today they can't. Do you see the blockchain and cryptocurrencies being an existential threat to Amazon down the road? I would say this about that. In that particular area, the the movement of digital items, a lot of the investment that Amazon has made in infrastructure and logistics is not gonna give them a competitive advantage.

So what I would say is, they will do and continue to do incredibly well shipping physical products, but they will need to develop a strategy for dealing with non physical items because they have no obvious competitive image. Next week, join us for part two of our illuminating conversation with William Quigley to discover the true meaning of smart contracts and the real value of digital gold.