Will Reeves - 00:00:00:
Most Bitcoiners are not on Twitter. They're not. They don't experience it as an intellectual exercise. They experience it as a tool to be used. The most sound ideas are created in the bear market. Once you remove a lot of the noise that happens in bull markets, you get down and get to your really refined value propositions with a really core group of people. Bitcoin's network effects is the most powerful marketing team we could ever have hired. Fold has a very small marketing team. We don't do paid marketing. Bitcoin does the marketing for us. And all we need to do is create a product that amplifies that. We need to be very clear about what the end goal is here, and it's in service of amplifying Bitcoin's core value proposition. It's not in extending or competing against a feature set that fiat has. Lightning has succeeded in a lot of ways. We know that there is a path to instant, near free, 24/7 access to payments borderless like it's there, we did it. But now let's remember what the whole big project is as well.
Kevin Rooke - 00:01:03:
Will Reeves is the cofounder and CEO of Fold, a platform that helps anyone earn Bitcoin rewards whenever they shop or use the Fold app. In our conversation Will explained the challenges of building a resilient Bitcoin business that can not only survive, but thrive in all kinds of market conditions. We discussed Fold's strategy of giving away hundreds of Bitcoin to its users, and then we explored the ways in which the Lightning Network will have to differentiate itself from other payment platforms if it's going to succeed. Will has also asked to have his share of today's show splits sent to OpenSats. So if you enjoy this show and if you learn something new, the best way you can support the show and OpenSats is to send in sats over the Lightning Network. You can use any Podcasting 2.0 app. There are dozens of them out there, but my favorite is Fountain. Before we get into today's show, just a quick message from our sponsors. Today's show is sponsored by Voltage. Voltage is the premier provider of Bitcoin and Lightning node infrastructure. Today's show is also sponsored by Stakwork. Stakwork is a Lightning-powered transcription tool that takes the best of AI and humans to create better, faster, and less expensive transcripts. We'll have more from Voltage and Stakwork later in the show. Hey Will. Thanks so much for taking the time to join me today. I'm thrilled to discuss all that you're building at Fold, but first, I want to give listeners a little bit of a background on you and your time in Bitcoin. Can we start with how you first discovered Bitcoin?
Will Reeves - 00:02:41:
Yeah, big question, but I would say, well, first off, Kev, it's good to be here. I'm glad we were able to get this done. I mean, my experience discovering Bitcoin was, I think, pretty similar to most people out there in terms of, you were touched multiple times before you fully fell down the rabbit hole. I grew up in the Sonoma Valley in Northern California, went to school in the Bay Area, and there in those times, Bitcoin had a pretty strong early community there, just mostly from the tech community, so you'd get a lot of this was just kind of ambient around you. And so I had some pretty incredible experiences there. I had friends, you know, at school when Bitcoin was just released, who would be talking about it. I really did not really understand it or pay much attention to them. I participated in Occupy Wall Street in Oakland for a while, was taking donations, learned how to operate a wallet and pay out. And from then I really just thought of Bitcoin as, hey, this is just the way, that Venmo, PayPal shut down, we're using this instead. And it was more just a utility. It was less, I think, being able to see the larger picture. Growing up in the Sonoma Valley, we are heavily reliant on migrant workers coming through during harvest to pick the grapes, and they come each year, no services. They live wherever they can and have really no support, even though they're kind of the backbone of that community. I was part of an organization that gave and provided services, legal services, healthcare, really anything that they have that could improve their lives while they were there to really help the community as a whole. And one time we would open up the organization to having people come through and give talks. And one time we had someone come through and talk about Bitcoin as a remittance tool, how they could make sure that when they send their money back home, that they were able to keep that intact as much as possible. Still, it was an interesting thing. Kind of touched me in a very personal way there. And I'm not sure how many people took them up on that back at that time, but certainly it was another moment. I was in Argentina, living with the family down there slightly after one of their defaults. And so one of the brothers in the family told me all about how he's saving in Bitcoin. And so you just had all of this really ambient effects of this tool continuously coming up without really seeing the big picture, but seeing it's used as remittance, it's used as an unstoppable payments, it's used as a savings technology. And from there you just start to say, it starts to build a position in your life that becomes undeniable something that you need to have curiosity about. And so I jumped in and got further and further involved in the Bitcoin community around the Bay Area. And from there, I was very lucky to be able to connect my background of building things, being an entrepreneur, bringing new technologies, new experiences to life, and was able to bridge that with something I felt very passionate about, which I came to be passionate about as a Bitcoin.
Kevin Rooke - 00:06:16:
Right now, when you had these first experiences, were you mostly resonating with the idea of Bitcoin as a medium of exchange, or did you see it as a store of value? I know the Argentina example, maybe that was more of a store of value. But were those first interactions with Occupy Wall Street and the Sonoma Valley, did they have any element of, like, this is going to be a tool, you can store your wealth in?
Will Reeves - 00:06:43:
My initial experiences were primarily around its use as an unstoppable borderless payments protocol. That's what it was. And I think there was always digital gold narratives around it. But when you're experiencing Bitcoin from outside of the Bitcoin community itself and outside of the echo chamber of the Bitcoin community, that’s really working on these narratives and bringing together these use cases and looking at it in totality, when you're just on the outside, on the periphery, and it's entering your life, everyone's life is very busy. There's so much going on. You have your own goals. And it came up multiple times as a tool of payments, an unstoppable means of transferring value more in my life just because of the things I was doing and the use cases it was resonating with. But as my example in Argentina, right when I go to a place where they're seeing sustained hyperinflation, have a history of that, I was more in the orbit of a place where Bitcoin was entering my life as a form of savings. And it's really about that was part of what was so incredible about my experience with Bitcoin and understanding its power was how it can be so many things to different people, but provide extreme utility in a way that just never existed before. And so in my personal life, it was about I saw more medium exchange use cases, but very quickly, as you jump in, you see all the things it can do. And really being on the outside of Bitcoin is a whole, most Bitcoiners are not on Twitter. They don't experience it as an intellectual exercise. They experience it as a tool to be used, and it's a very different form of experience. And that's how most people get drawn in, I think, ultimately. But I remember at the beginning these thoughts of, is it medium exchange? Is it savings technology that was less important than, hey, what's the use case at hand? What's the value that needs to be fulfilled right now?
Kevin Rooke - 00:08:49:
That makes sense. And so you discover Bitcoin, you found it to be useful, and then you realize, hey, I'm a builder. It's time to go build something. What were you trying to solve initially when you set out to build Fold? What was missing?
Will Reeves - 00:09:04:
Well, the initial the initial Fold has had many iterations and has had a few other names in the past. But Bitcoin Fold initially in its first iteration, and when I really came on and found my place was a means of buying Bitcoin peer to peer without KYC by selling gift cards or exchanging gift cards between people and turning that into Bitcoin. It was a way for really anybody could start to accumulate Bitcoin. You're not having to go by it at that time. Even the payment rails were not that great. Gift cards were actually a really good medium exchange to transfer and convert into Bitcoin. And we saw that have some good success there. Definitely it was early, the gift card market is absolutely rife with fraud. Talk about dealing with the two opposite means of payment. You have gift cards that are just so prone to double spending problems and fraud reversibility, and then you have Bitcoin. That is the absolute antithesis of that. And so it's an exercise in just being really good at managing fraud first and foremost. And so we moved away from that and saw, and this is when I was really starting to get deep into the Bitcoin community itself, was, hey, there's a lot of people around me that have Bitcoin. And these are miners, these are people who have been working for Bitcoin and living on Bitcoin, but there's really no way for them to express that value in the real world. And so we flipped the gift card bottle to spend your Bitcoin at Starbucks, essentially. This is before the BCH and fork wars. This is before most of the major altcoin explosions. And this is when, hey, Bitcoin can be many things. And one of those use cases that's not really just been looked at a lot. It was the payments method. How do we make this currency a real thing for real people to be in line, exchange it for goods in the real world. And so Bold started with that and with being a payments method. When you're dealing with people who are living on Bitcoin, you are very susceptible to the market cycles of Bitcoin itself. So when the market is in a bear, people stop spending. And so we saw that building a business in this way at that stage of life for where Bitcoin was, was difficult. You knew that the lows were going to be very low and the uptrends were going to be great. And also we got to see first and first hand on the front lines of the adoption cycles of Bitcoin. Each year it would get a little bit better. But ultimately we decided to pivot again into kind of what we see today in the form of Bitcoin and our rewards approach.
Kevin Rooke - 00:11:59:
You've had the experience of going through a lot of Bitcoin bull and bear markets as a builder. Before we get into the vision for Fold moving forward, I want to hear some lessons that you've picked up from that time. Anything that you can pass along to the Bitcoin builders that are stepping into the Lightning Network today and maybe experiencing their very first Bitcoin bull and bear market. What kind of lessons did you pick up and how do you make sure? How do you build a resilient business that can handle the shocks of the Bitcoin industry?
Will Reeves - 00:12:40:
Yeah, this idea, I think, has started to propagate more as more builders have entered and experienced these cycles. But the most important moments for a Bitcoin company or Bitcoin builders are the bear markets. The bull markets are essentially all noise and speaking of fire alarms, fire alarms going off, rapid growth, just keep it on the rails. But really, Bitcoin companies are made in the bear market. Number one, the most sound ideas are created in the bear market. Once you remove a lot of the noise that happens in bull markets, you get down and get to your really refined value propositions with a really core group of people and users. These are not fly by night I'm just here for a moment and I'm gone. You understand who your user is, who your community is, what your value proposition is, and the structure of your business. Because the most important thing after building in a bear market is surviving the bear market. And so positioning your company to understand that bear markets will be here, the idea of the super cycle didn't materialize. And building your business with the concept of a super cycle, even being possible or present is setting yourself up for failure. It's very similar to how we talk about Bitcoiners in general and accumulating. Bitcoin is always be accumulating regularly by Bitcoin. But don't overextend yourself, don't over leverage yourself because all of those things, all of those effects will hit you extremely hard in the bear market and will make it likely that you won't survive. And so I've seen a lot of companies deal with the bear markets in many ways. The early years, like people just shut down and shut down their companies. Fold for a moment, actually totally shut down and stopped. Then you had this interesting moment when altcoins started to come in a really big way and they started to demonstrate the kind of financial power that they wielded by being able to print their own money. And so we had bear markets that would come and suddenly you would have altcoin marketing teams kind of flood into Bitcoin companies and say, hey, just list our coins, start building on our protocol. And for some Bitcoin companies, that was a means of survival. It was, hey, okay, we'll just start accepting this under the guise of, hey, we're going to increase our addressable market, we're going to give more utility to more people. But ultimately, it was a lot about survival. How do we increase our revenues, or most likely, how do we get people to cut us checks just so we can survive the bear market. And you have others that really plan ahead and build their business in a very low time preference manner of understanding that resources are going to be extremely scarce in bear markets. That even if there is Bitcoin venture capital money which has only very recently reared its head as like a real institutional thing where that's something you can count on. Prior to that, being a Bitcoin startup was extremely hard, especially with the rise of altcoins where all VC money was going to those projects for reasons that we all know, short time to liquidity, very lucrative for them. Bitcoin companies are low time preference, longer term plays. And so when you get into a bear market and you're a Bitcoin company, that VC money just evaporates and goes away. So you can't count on that either. And at the end of the day, you just have to count on your own fundamentals and so you have to build according to that. Build your team in the right size, always make sure you're not overextending how many people you have or else you'll be prepared for a major downsize which we're seeing across the industry right now. But the main piece of advice is to understand that this is the most important time of your company or what you're building in this bear market because the better you position yourself today, the more you're going to win during the bull market because that's when the big opportunities are truly made, but you can't take advantage of them unless you've done the work in the bear market.
Kevin Rooke - 00:17:10:
That makes a lot of sense now. How are you guys positioning yourselves today? Thinking about the future, thinking about getting ready for the next bull market, getting ready for more adoption, what are some of the things you're doing in this bear market to position yourselves for the next run?
Will Reeves - 00:17:29:
There's a lot of things. So when we talk about this from a company structure perspective, I would say Fold is probably the smallest in terms of headcount company, smallest headcount in relation to the size of the business, the volume, the amount of users, I think, in the Bitcoin space overall. We're under 30 people, we're extremely small. But the idea is that we hire extraordinarily capable people who own large portions of the business and can operate very independently. It also means that we do not build a business that is going to be overextended by any means and we have to make hard decisions. We look at our treasury and make sure that we're constantly balancing the need for balance between operational capital versus our goal of being a positive sats flow, sat-stacking business and making sure that as much of our treasury is in Bitcoin at any time. That calculus always has to change versus where you are in what market cycle you're in. The stats that we stack now will be more valuable in the bull market, we know that. But also at the same time the value of actual fiat USD cash is higher than ever right now as well. So there's things like that that we think about operationally. There's also the idea of what your value proposition is. Fold started as a rewards company. We operate a debit card, we earn rewards. You buy gift cards and you earn rewards. And when you talk about that use case, it's one of the primary and highest use cases on the adoption funnel. It allows people to get into Bitcoin without a Bitcoin wallet, without knowing much about Bitcoin, without really risking their own capital, because that's really the perception of new people entering the spaces, it's an investment risk versus a safe haven that you may realize down the line. And so it removes a lot of these barriers to entry. So it's a really great top of funnel product. But when you talk about overall, what is the largest use case in the Bitcoin space, it's buying Bitcoin. And so we have put in the work now to understand we've created a wonderful top-of-funnel product, hundreds of thousands of people earning with us. And now we have just recently introduced the ability to buy Bitcoin. That is when you think about the concentric circles, that is the large circle, earning rewards is a smaller circle in that larger one. And so that is us preparing for the new bull cycle to come, to be able to absorb that new interest in buying Bitcoin once that bull market happens. But if we didn't build that now, we wouldn't have that ability and we would severely limit the growth potential that we would have in the next bull cycle. So, what do you do in the bull market? Refine your value proposition, expand your value proposition to match where the market is going, to capture more interest during the bull market, and position the company in a way that it's optimal for survival, it's a great place to work, and you're still able to ship. And that's all an exercise in balancing and learning almost on a kind of a week-to-week basis. Because as you know, this, even in bear markets, that's not just a universal stasis kind of operating, it changes absolutely every single day.
Kevin Rooke - 00:21:02:
Okay, so that's interesting that you see buying Bitcoin as a larger market in this new segment you guys are expanding into. Is it larger in the sense that there's going to be more people buying or just that there's more Bitcoin being purchased than being earned in rewards? Because I imagine Bitcoin buying as this small subset of people, basically only for investors or people who actually want to allocate their money, whereas I actually see a rewards product as being like anyone can earn rewards, right? That that could be for 8 billion people. So is it really just is it the dollar volumes or the Bitcoin volumes that you're thinking about as being a larger market when you're talking about buying Bitcoin?
Will Reeves - 00:21:48:
Yeah, it's a good question. I should have added this caveat, is that it's also the difference in the maturity of these two use cases, earning rewards is extremely early. Even the idea of when new people are joining this space, the primary people inflows of new users into the space over the last couple of cycles are people who essentially are chasing number-go-up use case. Like that is the absolute. It's not only traders, but it's people who want to buy Bitcoin as much as they possibly can and essentially get rich. It's a very clear kind of greed motive that's there. And buying is the more direct fit to that type of use case versus rewards, which is a longer term, smaller amount, kind of almost a micro DCA process. And when you think about that, the knowledge there is two things. It's either, number one, someone who's extremely early, not ready to just buy Bitcoin at the top of the funnel, but they just want to start earning it and kind of just, hey, I want to see what this is like. Instead of airline miles or hotel points or cash back, I just want to try this. Or it is people who understand the value proposition of Bitcoin deeply and understand that in any way they can stack Bitcoin they should be doing that, whether that's DCA earning it from their job or earning it from every purchase. They need to maximize the inflow of stats into their life. They understand that. But those two use cases historically in these last these couple of cycles are smaller than the pure motive of I need to buy and convert this to have a number go up moment and make a lot of money. And so it's both been smaller in terms of a total volume, but it also has been smaller in terms of the new entrants and it's matching against what those new entrants are looking for. Those new entrants have wanted to, especially in the bulls, I want to allocate and invest in Bitcoin. That's really what it was. I want to get a piece of this action. My friend is getting rich, or it's increased 2x, 3x. I need a piece of that. Rewards doesn't satisfy that use case as well as a smash buy does. And so historically that's been true. But the nuance here is that I believe the rewards will be the larger use case going forward. And that is as Bitcoin's use case settles more in the kind of mainstream consciousness of a necessary part of anyone's portfolio, and the demonstration of earning stats versus earning dollars or hotel points is just now becoming more clear than ever as the right move to make will get larger and will ultimately become, number one, a larger inflow from just retail customers, but also a larger number of people bringing into the space just in these earlier cycles. It hasn't had its moment like smash buying Bitcoin has. And so for us, knowing that that's there and a huge opportunity and almost 100% of Fold users go on to then buy Bitcoin through other companies. It only made sense for us to also offer that as a use case within our app, be able to capture that during the bull market. But our secret is that the use case of the earning rewards is a faster growing segment, though smaller at the moment.
Kevin Rooke - 00:25:27:
Makes sense. One thing I want to touch on is, in your app today, you have a few different gamification features. You got a Fold wheel. You can kind of spin it. It's less of a finance app to me. It's more of a fun app, like it's a game app. Right. Can you speak to some of the lessons you've learned from this gamification strategy? And is this something that you poured over to your Bitcoin buying product as well?
Will Reeves - 00:25:59:
Yeah. So, what we're doing here in terms of Bitcoin adoption, you realize a lot of this is about changing behaviors. And a lot of these behaviors are learned over a long period of time dealing in the fiat world. And those behaviors run very deep. They are ingrained, and it's very hard to change behaviors. As a builder, that's one of the things that I've always known. Building, is building a great product is changing behaviors or altering them in some way and bringing them to a new path. And it's not easy to just do a full frontal assault on existing embedded entrenched behaviors and have them just change overnight because they downloaded your app or they're using your service. It's an exercise in changing someone's mind. How do you change a mind? And that is involved with education, which is a huge piece of that. But education takes time. And just look at my own experience with getting into the Bitcoin space, multiple very clear moments, understanding a huge value proposition for Bitcoin over multiple years. That's what finally brought me to a space of where, number one, I want to spend my life working on it. I want to save in it. I want to do that. That takes a very long time. As a company, I can't necessarily wait that long of a time. So you do things to accelerate that. So how do you change minds? How do you change behaviors? And one of those things is through some of these tactics of incentives and gamification that we use, because the difference between fiat and Bitcoin. So how do you convince somebody to earn a reward that I can't print more of? So, airline miles, hotel points, people can create new marketing incentives and say, 100,000 points. When you sign up today, 1 million points. You sign up today, 100 million points. It doesn't that's that's all fake money. It's all pure marketing. But the ability to print allows you to have this really powerful marketing ability of just ratcheting up numbers just for the sake of they have more zeros at the end of it. How do you convince someone of something to earn something that doesn't give me the operator a marketing ability to print more Bitcoin. How do I compete against that? How do you compete against the fact that Bitcoin is a low time preference asset, that when you're earning it, you should be thinking of a five-year minimum time horizon? How do you convince them that your rewards may go down 60%? How do you convince them that the volatility of Bitcoin is a positive thing? You know, we have a lot of new people entering the space and Fold, they'll write in support tickets, the value of my rewards has gone down. Why is that the case? How do you convince somebody that they should be saving the rewards that they have instead of just immediately turning it into an airline flight or something like that? There's so many things that are very, very different versus how the fiat system works, versus how we need users to operate in Bitcoin. How do you convince a user who's used to earning rewards on a custodial platform with their bank see their cash back, it always sits there, and then they push it to their statement. How do you convince them that, hey, we want you to not push it to your statement. We want you to take those rewards off our platform and self-custody it. Well, what is self-custody? Why would I ever do that? So, all of this is such like along the entire way, there's so many educational aspects, but also behavior changes that people need to make to really make use of real Bitcoin. Real Bitcoin is self-custodied Bitcoin. And that is not an easy thing. And so we use incentives and gamification to, number one, be at the top of the funnel as a means to reduce as much friction as possible to getting and accumulating Bitcoin. The wheel: every day, open it and earn Bitcoin. Just have Bitcoin be something that's on your mind every single day. And I can't tell you how many people have sent a screenshot support ticket saying, I have set up an alarm every single day, and everyone in my house, from my kids to my husband and I, we all spin together. That is a collective social moment that now Fold has created where Bitcoin is being talked about within a group of people, and to build a community and to build Bitcoin in a social movement is all about people and community. So, number one, gamification incentives to make Bitcoin top of mind every day in a social context. The next is, how do we use incentives so that people can earn Bitcoin and withdraw that? So, we incentivize you to withdraw your Bitcoin. We incentivize you to be spending it. So, you're at the register and you have the choice when you spend, swipe your Fold card, you can either opt for a flat rate or you can spin. 95 plus percent of people opt to spin. And what that does is now you're at a cash register in a social setting and you're having this social kind of phenomenon moment where other people are involved and so your cashiers are spinning for you, or your kids in line are spinning for you. Your kids are now saying, hey, I want to go shopping with you and I want to spend. It creates these incentives and these gamification creates a social phenomenon that did not exist before. That all is in service of bringing Bitcoin top of mind. And that has been incredibly powerful for us because, number one, we know that our path to growth is being very in line with Bitcoin's natural adoption cycle and network effects. Bitcoin's network effects is the most powerful marketing team we could ever have hired. Fold has a very small marketing team. We don't do paid marketing. Bitcoin does the marketing for us. And all we need to do is create a product that amplifies that on Bitcoin's behalf, but also so that we can benefit from that growth as well. For us, we look at first and foremost, incentivization gamification is all about changing behaviors and bringing Bitcoin top of mind.
Kevin Rooke - 00:32:22:
Makes sense. Now, I've been looking at the Fold numbers on your site. You share how many sats have been sent out in rewards and it's just this like constantly ticking number. And so I've seen, I believe the last month or so, you guys have been giving away about 30 million stats a day or 0.3 Bitcoin per day. That leads me to the next question of how do you figure out whether or not that is a worthwhile expense for Fold? Right? You're starting to get some pretty big numbers, especially when you denominate it in Bitcoin. And if you're thinking about then the lifetime value of these customers and maybe even the lifetime value of the customers denominated in Bitcoin, how do you know? What frameworks do you use to think about whether or not paying 30 million sats a day in rewards is a valuable strategy moving forward?
Will Reeves - 00:33:19:
Yeah, I think one of the big questions that will always be there is Fold’s business model the most genius way of building a business on top of Bitcoin, giving it away for free, or will it go down as the most idiotic in terms of how much Bitcoin you gave away looking back 20 years from now? And the easy answer to that is Fold’s from the ground up, and this is a very important piece of operating a Bitcoin business, is to create a model where incentives are aligned with your user base and your customers. The more Bitcoin that our users earn, the more Bitcoin Fold earns. The more Bitcoin that Fold earns, the more we can put it into our own treasury and satisfy operational costs that we have. And so the entire business model from every time you swipe your card, Fold is sharing with you a portion of the fees that we get and we generate from you doing that. Every time you buy a gift card, same thing. Every time you buy Bitcoin, same thing. So, the more that number goes up, the more our number goes up, the happier that we are. And right now, the primary thing, I think, stopping fold from having 20 million users today is the fact that Bitcoin has an expected value today for most people of, you know, if you look at this, you know, spot prices right now, 17, $18,000. If you ask someone on the street, they'll probably say $1,000. If you ask a Bitcoiner $100,000. That perceived value of Bitcoin is extremely large. And that spectrum is all related to how much you know about Bitcoin, how much you're educated about Bitcoin. And Fold is operating with two main primary customer bases. It is people who want to be able to stack stats on every single thing they do and maximize that in every single way. Having perceived value of Bitcoin today being $100,000, at least, to the very new user who sees it as being essentially maybe $1,000, maybe a couple hundred dollars. And they're doing it at the very top of the funnel. And so for us, if we were able to convince those first people of the true value of Bitcoin, the top of the funnel would open up much, much larger and demand would be through the roof. And that is one of the educational challenges that we have about what is the value of a Bitcoin. It's definitely not spot price, but it exists between these two poles of these very real use cases of people and that fold actually caters to.
Kevin Rooke - 00:36:11:
Okay, I hear your strategy then on giving out rewards as you're essentially just taking a portion of whatever you're earning, passing it on in Bitcoin. And I guess that's a more conservative strategy than you might see in fiat markets where you hear things about maybe five or six years ago Uber raises $100 million and they just blast, like, right away, half of it's out the door for marketing. Do you think that Bitcoin companies across the board are going to have to take a more conservative approach and do this kind of like, if you're giving out rewards, you're giving out like a cut of your own earnings rather than, like, raise a ton of money, blast it out in Bitcoin and hope for the best?
Will Reeves - 00:36:58:
Well, the answer is yes. Part of it relates to the bull and bear market cycles and how that affects Bitcoin companies specifically, especially hard. Number one, bear cycles, Bitcoin companies cannot rely on the same inflows of capital that fiat companies can or altcoin defi companies can. The available capital, even just from venture capital, is just not there. So, what are you going to do in a bear market when your marketing expenses and all this are totally disproportionate to the revenues coming in? That's an extremely tough position to find yourself in. You can't print more Bitcoin. And so this is where you get the altcoin and defi world of some of these companies that have recently kind of totally collapsed. They were able to subsidize in very similar ways to that Uber example you gave. Instead of VC money subsidizing, they were able to subsidize it through dumping on their own coin, dumping on retail, and then that's how they could offer 5-10% back on every purchase. And we're here sitting in a bull market being like, we need to be, we understand the economics of running a card program. They're running the same card program we are, and they're offering 5% to 10% back. We know things are shady. We know things are shady. And so for a Bitcoin company, you have to operate in that. You have to make sure you have the highest value proposition. You have to compete. It's not like Bitcoin or Bitcoiners, certainly everyone, they're all looking into their self-interest. Where can they stack the most sats? Fold has to offer a really powerful value proposition even in a world where venture capital can subsidize insane offerings and defi and altcoins subsidize insane offerings. This is why Fold has to be really good at what it does, because we're operating at a disadvantage to both of those camps in some respects. So, it's really about balancing that, refining your value proposition, creating an experience that's really differentiated, but it's also knowing that you kind of operate at a disadvantage, but from the same point, like you’re operating, there's things that are in the favor of a Bitcoin company that those others do not have. You have more dedicated user bases. You have a marketing team which is Bitcoin itself, that is furthering your adoption. And those things are priceless. And ultimately, for us, the ROI is very clear.
Kevin Rooke - 00:39:29:
I hope you're enjoying the show so far. Just a quick message from our sponsor Voltage. Voltage empowers engineers to integrate Bitcoin and Lightning Network payments into their business stack with an enterprise-grade experience. The team at Voltage is building the complete tool set so that you can do more than simply spin up nodes, but also understand and interpret your node’s data. Their new product, Surge, gives engineers the capability to quickly solve problems and optimize operations. With node insights and visibility through time series data, you get dynamic and complex insights never available before. You can get complete control with insanely fast onboarding, advanced client side encryption, and zero management infrastructure, making backups, networking, and upgrades simple. Get a free seven-day trial today at Voltage.cloud. Now, you mentioned Bitcoin venture capital as not being as large of an ecosystem as crypto venture capital or fiat venture capital. Do you think this is a permanent thing that Bitcoin’s fairness and Bitcoin’s like neutrality makes it unappealing to venture capital investors who may be on a different cycle, expecting returns on a timeline? Or do you think this is just a fact that because the Lightning Network is a very small ecosystem, because Bitcoin is still very volatile, venture capital investors haven't taken the time to devote to Bitcoin and that that may change in the future.
Will Reeves - 00:41:05:
Yeah, the history of Bitcoin venture capital, Fold started in the basement of Boost VC, which is a Draper VC. And Bitrefill was there, Casa was there, a bunch of wallets were there. In the early days was a lot of people who got rich off Bitcoin, Roger Ver, Draper, and they were essentially funding a ton of the Bitcoin space at that time, but it was still extremely small and you kind of take a couple of cycles in between there and not only did some of them leave or start to do their own thing, but new entrants weren't coming in. It was only really until 2017 happened with the breakout of Coinbase, did you see VCs start to again look in a very big way into this space and specifically into Bitcoin companies because at that point Bitcoin had such a massive rally, such intense retail interest, that the opportunity got back on the radar of VCs. And so what you started there was two things were happening. You had the emergence of VCs specifically looking at crypto writ large, but also a portion of that, who are smart enough to look at, hey, there's a lot of madness, a lot of noise there, but let's just focus on Bitcoin. It's something that we feel more comfortable with. It looks a lot more like our existing portfolio. We're not printing tokens and all this other stuff that they didn't understand or their VC structure couldn't actually even invest in. So you had a small portion start to look into Bitcoin specifically. Most of the other VCs went and piled in into the kind of altcoin Cambrian explosion that happened, creating some of the most successful on paper VC funds ever, which then created a whole effect, follow on effect of more and more money going into the altcoin defi space. But then you also had kind of the second round of these Bitcoin angels and Bitcoin seed investors start to pop up and they were able to write larger checks than that first group of like Roger Ver who would do 50k checks, 100k checks. This new seed group was able to do up to a million dollars or so. And they were very specifically focused on Bitcoin. And Lightning Network was one of the very critical things that added renewed energy into the Lightning Network space, because it provided a greenfield opportunity on top of Bitcoin, which had huge network effects, there seemed to be almost limitless applications of it. And so it really brought in a ton of new capital, but it provided the narrative and reasoning why these VCs can say, hey, I don't need to go look into some of these altcoins that I know are vaporware. And that is really just a play to dump on retail. Instead, I could invest in Lightning, which is extremely interesting because it's built on the Bitcoin that has the largest network effects in it. It is the only proven asset out in the market. This is an obvious play. And so Lightning was just one of the most powerful things to bring new capital into the space. And it's only now you see, this is the next cycle where you have large VC firms who are Bitcoin-only, or primarily Bitcoin and larger Bitcoin-only firms that started out as seed now are getting involved in series A's, series B’s. And while they are still small in number, they're actually now able to marshal far more capital than they were able to in the preceding cycles before them, and before that were before them. It was like ten to couple hundred k. Next cycle was a million or so. Now series A, Series B investors who are Bitcoin-only and were Bitcoin-only from the very start, are now writing checks that are 10 million, 20, 30, 40, $50 million. And that is just a huge acceleration in the amount of capital that's there. And it says two things. It says that the VC Bitcoin-only ecosystem is maturing and they have been able to find the flows of capital to get these large pools of capital to then deploy. But it's also that there are Bitcoin-only companies that are able to absorb that capital and are now maturing. There are now at a large enough state. So like Fold, series A came through, it was led by Craft Ventures. You had Zebedee just with the large raise, you had OpenNode with the raise, you had Strike with the raise, you have Unchained coming in with the raise. So, all these companies are now large enough, have proven out their use case enough, where they can actually absorb capital at that level. And it's at the same time where the VC community, Bitcoin-only community, has matured itself and found this new inflows of liquidity to then push into these projects. Whereas if either one of those were aligned or weren't aligned, then we'd have a problem. If there were a bunch of VCs who could write 10, 20, 50 million checks, but all the Bitcoin companies were tiny and not doing enough volume and if you dropped that much capital in them, it really wouldn't be used efficiently. But luckily these things are now in lockstep. The companies are growing, they are maturing, they have extremely qualified leadership teams, executive teams. This is not just the world of Lightning Network Conference in Berlin several years ago, where it was full, there Breez, Strike, Zebedee, all these like ragtag, like everyone just hanging out at the bar teams were the size of five people, ten people, maybe, max, just trying things out, sharing ideas. And it's just an entirely different space now, both from the actual companies that have matured and the VCs. And they've kind of come at the same pace, which has been amazing to see nice.
Kevin Rooke - 00:47:27:
Yeah. Historically, VCs have been valuing businesses on future cash flows, right? They take the expected future cash flows discounted back to the present. They figure out what is this company actually worth, and then they decide whether or not to invest. When it comes to the Lightning Network, what we're starting to see is some small parts of the Lightning ecosystem. I'm specifically thinking about routing node operators and creators or Podcasting 2.0, for example. People are starting to denominate their earnings in sats, and they're thinking about not their cash flow, but their sats flow. And so my question then is for Fold, how do you think about the convergence of these two ideas? And at a point in the future where sats are the unit of account, especially if it's globally accepted as like Bitcoin as a store of value reserve currency, sats are the unit of account. How do you then think about valuing the Fold business and talking to VCs about what the business is actually worth? If you were to denominate Fold’s business in sats flow today, I bet the valuation that you would arrive at will be lower than the valuation in your expected cash flow or the expectations that VCs have for your business. But so it makes me think that if we get to a Bitcoin standard, everything converges to sats, what happens to the Bitcoin businesses that have raised or are planning to raise, thinking that they're going to get standard VC terms, denominating cash flow, when really they're fighting for scarce stats?
Will Reeves - 00:49:17:
Yeah, it's a great question. It's the same dynamic that we were just talking about in terms of Fold’s user base. We have a group of people who's very new to this. This is the first Bitcoin they've earned and their expected value or their idea value of a sat or Bitcoin in general is, I don't know, a couple of $1,000. It's interesting, I just want to get involved with it. But they discount dramatically the sats that they're earning through us versus the people who have already kind of gone through their educational cycle of Bitcoin and have a $100,000 price today on Bitcoin. And both of those are valuing Bitcoin very differently from each other. And this is a very similar thing that happens in the VC space as well. Currently, Fold’s going out to where to go out to raise, right now, depending on the VC, we'd be talking about our cash flow, or if we're talking to one of these other kind of maturing, more advanced VC organizations that are Bitcoin-only that we just spoke about, that are just now maturing, I'd be talking about stats flow because they understand the value of it. They understand the low time preference approach, but also they value the stats flow more than they necessarily do the cash flow. They've already gone through that exercise. And that's not an easy exercise because, number one, very ingrained behaviors, just as people have them. So do these organizations about how they value companies. It's definitely going to get to the point what we're all working for is, where Fold is looking at, our sats flow is ultimately more important than the cash flow. But we are living in a world right now that is both valuing us for the most part on our cash flow and our expenses and everything needs to be done in cash, all of that. So it's, it's going to be a longer term process, but it's really going to take, I think, one of the things that's going to do is just as retail investors had this experience of this idea of, there was that article that came out New York Times extremely early. There was a place called like the Crypto Castle and it was like, Meet the Bitcoin Billionaires. And it's just like a bunch of kids that were there. And that was one of the moments that people were like, holy shit, what the hell is going on with Bitcoin? Number go up, greed, things come in, then you start to get larger investors who are coming in and saying, I just need to get playing this game. And then you have another bull cycle. Those investors experienced that run up and we're like, holy shit, I kind of get it. And then you had that cycle happening again. That same thing is about to happen to Bitcoin companies because before, even two, three years ago, all of us were operating very small, relatively small businesses, small volumes. Still learning how to manage treasury, Bitcoin treasury versus fiat and how to handle overhead and all that we're about to hit when we hit the next bull cycle. That a lot of these matured Bitcoin companies have really nailed down their stats flow, but also their treasury of how they manage Bitcoin. And once we hit another bull cycle, the amount that those Bitcoin companies have saved in Bitcoin and have developed positive stats flow is now going to exponentially increase with that bull cycle. And you're going to see these companies go from needing to raise, to be able to operate on their own treasuries, on their own capital, that people are going to look around, VCs are going to look around and be like, why aren't they coming to us? Why are they able to just say no to our offers? Why are they able to have so much more leverage over these deals versus what they're used to of fiat-hungry businesses constantly having to go back to the well regardless of the cycle, even after you IPO, from seed to IPO, the standard is the business is hungry for fiat and has to continue to raise. And most of the time that's on the VC's terms, Bitcoin has the opportunity to flip that in some ways. And it's only now going to be really felt at the next bull cycle because these Bitcoin companies are now mature enough and large enough where those numbers are become very material and very meaningful versus before when it's happening on a much smaller scale.
Kevin Rooke - 00:53:44:
So do you think the world has over-indexed on VC investors where in a Bitcoin standard, we may not have as much need for VCs to kind of throw capital at projects and bootstrapping or kind of like other forms of gathering capital and getting product market fit might materialize and kind of replace venture capital to an extent?
Will Reeves - 00:54:13:
I think it changes it in a huge way. I think there's always need for the idea of the very core basic idea of venture capital, of hey, I have a hypothesis, I have an idea and let's go to market and test this out. You need start-up capital to do that. And depending on the business, sometimes it's a little, sometimes it's a lot depending on the capital requirements of that business, what it does is it eliminates waste. It eliminates the idea of hey, I can shepherd a company from seed stage continuously bloat it with capital that can kind of show returns from just insane amounts of unsustainable marketing and then ultimately just shepherd it through series A-B-C and then dump on retail and an IPO and get a return. That model gets gutted because number one, the value of a Bitcoin business building at the very beginning is going to require the value proposition to be sustainable. The incentives are aligned, it's growing, it's a lot less companies are going to be as big as these Ubers because a lot of them are artificially overvalued zombies that are created from the very beginning to get on the conveyor belt and dump on retail. It's part of the business model that's been created and what fiat Incentivizes. But with Bitcoin, it changes it up in a very big way. Number one, it puts power back in the entrepreneur’s hand that once they are creating a business that's positive stats flow, that's even beating potentially the returns that you could possibly get on Bitcoin or at least diversifying it across Bitcoin, that now that becomes the most valuable possible business that you could be involved in. And they have leverage over VCs and don't have to be necessarily as reliant, but it's going to be much harder. There's going to be a lot less businesses that are able to do that. Because number one, the barrier to entry of creating a business is extremely high already. You remove the element of just being able to have artificial growth and success metrics that's just really from artificially VC injections. You remove that and the emperor has no clothes. A little bit, it's like operating in a permanent bear market in some respects where you just have to be really real about the value you have and the model that you have. And so it doesn't remove it, it just provides an intense balance of power that will change how it works and where money flows.
Kevin Rooke - 00:56:47:
I see. Well said. I want to change the topic of conversation a little bit and focus on the Lightning Network. And to start off, I want to understand how important is the Lightning Network to Fold’s business today? What would you not be able to do if you didn't have the Lightning Network in place?
Will Reeves - 00:57:08:
Yeah, our experience with the Lightning Network started when we looked at our initial use case of it was spend your Bitcoin and buy a cup of coffee at Starbucks. We saw that that model of on chain payments just it didn't deliver the user experience we wanted. We could do zero comp transactions. It just didn't feel that the whole setup was really right for handling that use case. That's not what Bitcoin was structurally created for. And once we read the Lightning white paper and all this that we started to say, hey, this is an opportunity where this use case does become important. And it's not just a cup of coffee, it's just instantaneous microtransactions of payments. And just instant payments in general that were there was like that seems to match with what we're trying to do. Let's be really early on it. So we experimented it very early on. We launched a couple of projects that were well known in the Lightning space at that time with a Lightning Pizza. We connected Domino's Pizza ordering system into a Lightning POS so that anybody can order a Domino's Pizza in the United States via Lightning. It was a massive hit, extremely fun. It led to the adoption of a ton of new Lightning wallets that were out there, like BlueWallet and all these, because people then had to have a Lightning wallet to then try this new feature out. And then we continue to look at how Lightning could work in all respects. But where Lightning was at that time was, to do anything with Lightning, you had to be your own infrastructure provider. You had to also build the user experience layer and the service layer, and you had to do the whole operational overhead of operating on Lightning, which is just the accounting, the fact that with this type of payment system, your CTO is also your CFO, they hold the keys to everything. They hold the keys. In the fiat world, some of these are things that have like firewalls, and so there's a lot more risk there. But you have to build the infrastructure to be able to provide the service layer. And then you realize on the service layer, here's the real use case and you have to change the infrastructure to do it. It was really a heavy process for a small organization that's operating with very limited resources. And you saw a bunch of companies do this. This is why everyone is trying to be like a wallet. I want to be a Lightning wallet because then you got to see the use cases happening and you got to decide where you want to be. And that couldn't be more different from what we're seeing today, where the space has matured in a lot of these early companies have either specialized in the infrastructure side or on the service provider side. And what that is going to allow you to do is you have people who are really good in creating really great Lightning infrastructure. So you're thinking of like Voltage. Breez is getting into it, Zebedee is getting into infrastructure. Then you have on the service layer, you have people who are offering Lightning services for real use cases, whether that's Strike or Fold or BlueWallet or Cash App. And for the first time, and this is why Lightning is going to really add a tipping point is because the infrastructure layer is now mature enough, where new builders can build on top of these things, not have to worry all the way down the entire stack. They get to choose where they want to be and really innovate at that level. And really it's only up until this year, 2023, I think is going to be the full expression of it. Where infrastructure is mature, it can handle scale. And you have identified general use cases of where Lightning is going to be really valuable. And so, like, where Fold sees it is on two sides, we see it both from our user experience side, which is operating a fintech and payments business. The companies that win are ones that handle fraud that can at the same time provide a wonderful, great user experience. And those things are always in competition with one another. The more you turn up your fraud controls, the more you create onerous process for your end users, the more you block good users from using the platform overall, and the more you optimize for great user experience, you're sacrificing a lot of fraud. And what happens on a payment business when you're operating at extremely thin margins? Any fraud ends up eating those margins away if you don't have that balance really right. Lightning creates this incredible best of both worlds where you can provide an incredible user experience of instantaneous payments as well as eliminate the majority of the fraud angles that are there. These two things together is a huge combination. It's the combination of them that's really valuable. So Fold thinks of how do we embed this into our user experience? Where you have instant access to money and Fold has protection against offering instant access to money. But in the fiat world, anytime you offer instant access to money, you're taking on massive amounts of fraud risk and you better be ready for breaches that are extremely expensive and have put major companies out of business in the past. So we look at it from that angle of it, is a clear way to create a superior user experience at the same time of solving a lot of the issues that come with providing a superior user experience. On our growth plans, like Fold has created a wonderful model that we've proven out that works in a value proposition, top of funnel ability to earn rewards and then let down the funnel is being able to buy Bitcoin and kind of manage your Bitcoin intake, whether that's DCA and roundups and saving in Bitcoin, we're ready to take that global. But how do you move globally in the fiat markets? There's a reason why Cash App only exists in the US. There's a reason why all of these financial companies are just balkanized in their area and that's because of the regulations that are present on fiat companies. Bitcoin creates a way in a model for Fold to move internationally and to connect markets much faster than ever before. And so we're able to now expand more aggressively, connecting our users together, providing more utility the more users we connect into the network. And so this would be things like peer to peer transfers and things like this that are completely not possible currently with fiat. At the same time of reducing the fraud aspect, which is very important. Those are two major ones on the user side, there's other business values that are extremely important too.
Kevin Rooke - 01:04:17:
Now, you've had many years now watching the Lightning Network develop and you've seen it kind of get to the point of adoptions at today. If you think back to your first kind of introduction to the Lightning white paper, has the pace of progress in the last few years met, exceeded, fallen short of your expectations?
Will Reeves - 01:04:43:
It's been one of those curves where an initial extreme early progress where it's demonstrated a lot of great use cases being thrown at the board, gaming, remittance this and all of them showed incredible promise. But ultimately two things stopped is number one, it didn't work and there was a lot more that needed to be built to make it work well. And number two, there weren't that many people. The amount of people connected into Lightning infrastructure was small. Like for Fold to make the call, hey, we're going to spend time working on some of our investing more in our ability to do a Lightning project would represent 1% of the growth if instead if we chose to, hey, let's create a new fiat on-ramp. To be very clear, like, the ability to fund your Fold card with a debit card versus Lightning represents order of magnitude difference in the addressable market in terms of people that you can bring into the space. Everyone has a debit card. Nobody has Lightning, or very small people to do. That's not to say that Lightning isn’t important. You need to build that, but Folds whole and we had to be very clear about what Fold and how we operate, what our role is in the ecosystem. Our role is to bring more people in so that more demand is for Lightning services. And so our role is not to just create at the very beginning, Lightning-only infrastructure that nobody uses, because that's the problem that Folds on since we've been working in the Lightning space for so long. That's the status quo of where Lightning was. Now, and we learned this with Lightning Pizza. We created a really fun use case at the top, and these Lightning wallets were really young, a couple of thousand downloads to the Lightning Pizza launches. And those downloads 2x. And not only do they 2x, but usage of them, 4x, it increases the amount of payments going through everything. We saw that use cases bring people into the ecosystem. And then from there, that ecosystem is more valuable, creates more demand for more Lightning services. And so this is where Fold’s kind of had to make this call of, number one, are we serving the end user or are we going to build infrastructure? Well, we serve the end user and our job is to bring as many people into the Lightning ecosystem as possible. Let's do that via rewards. Now we have people with Bitcoin. Now the next step is where we're just at now is where all this infrastructure down the stack is now matured, that Fold can partner and build on top of to then bring all those users that we've brought into the space and bring them deeper, deeper into Lightning. Whether that's withdrawing their stats into a Lightning wallet, whether that's embedding a Lightning wallet within Fold, a noncustodial Lightning wallet that connects them with all Lightning wallet users, whether that is allowing users to earn yield for routing, to have Fold become an LSP that allows us to do that because we have a bunch of people with Bitcoin on our platform that are invested in the growth of this space. It's really been seeing knowing your place as an entrepreneur and what you're building, because you can't build everything. That's how you fail when you go too broad. But right now, is that real inflection point when all that has really begun to change in a big way that I think everyone's going to see start to be expressed across the space in 2023.
Kevin Rooke - 01:08:01:
Right. Now I want to touch on a Twitter thread you posted recently. You had a really interesting perspective that I think a lot of people in the Lightning space don't necessarily always appreciate. You had this thread and I'll just kind of like run through highlights here. You said that oftentimes we compare Bitcoin and Lightning Network to fiat payment networks, but the comparisons reference the state of fiat payments like a decade ago and not the cutting-edge innovations that are happening in fiat markets. And basically, you said that you highlighted a few different features that were coming online in fiat payment networks. How it was making payments instant, 24/7/365, cheap, and that these were not necessarily the things that were going to push Lightning adoption forward because all the other payment networks are also getting to that point. The point you made at the end was that we need to focus on the things that Bitcoin can do and be clear about that. And some of those things I'll just highlight, I think you listed four of them. One was property rights and being noncustodial, free speech. And that is, you know, Tor and sovereign computing, free trade, just private peer to peer payments and public works, which is proof of work mining and Lightning routing. Now, two parts to this question. One is, how did you come to make this realization that it's not important to be focused on the speed necessarily and the 24/7/365 because a lot of people in Lightning do focus on that. And then second, what is Fold planning to do? You may have touched on it in a previous question, but what are your plans in terms of focusing on those things that Bitcoin can do that nothing else can do in the property rights, the free speech, the, you know, the free trade, and the public works?
Will Reeves - 01:09:56:
Yeah. So part of it is to, like, roll back to where we were when Lightning was just started. You know, when we had all of this, we had these fork wars of, you know, BCH forking off and this whole debate of medium of exchange or store of value, what Bitcoin is and what Bitcoin isn't. But we knew a lot of what Bitcoin was already proving out to do in a very big way or what it could offer the world. And that experiment ran. And very clearly, Bitcoin's core properties clearly won out over the forks that have come out of it, showing that Bitcoin is not we're not here to make Bitcoin into a Visa payments network that is low cost like that did. But then we had Lightning come in saying, well, actually, we can make it like that. It can be Bitcoin and this. And a lot of the Lightning community and focus was to focus on what these new superpowers were that it gave to Bitcoin. And that's when we started to talk a lot about, hey, it's 24/7/365. Banks don't close in Lightning. It's instantaneous. It can be just as fast or faster than a Visa transaction. It can be cheaper than a Visa transaction. And all these things were like, great superpower add-on features to Bitcoin. And my point is not, it's okay that we're not 24/7/365 or it's okay that we're not instant. It's that that's not the state that we're chasing. We need to be very clear about what the end goal here is. And it's in service of amplifying Bitcoin's core value proposition. It's not an extending or competing against a feature set that fiat has. And so what that means is I highlighted some of these very real things that's coming out. Hey, guys, 24/7/365 settlement is coming. Penny fees or transaction is coming. These are not the value propositions that Bitcoin or Lightning Network is going to compete on. Lightning Network is going to compete because it amplifies Bitcoin's core value propositions and does things that fiat cannot. Number one, it is borderless from the absolute beginning and payments cannot be stopped. That alone is a huge value proposition and that's valuable. Whether that happens instantaneous or every ten minutes, that's valuable. If it costs $30 or it costs a cent, that's valuable. If it didn't work on weekends, that would be valuable. And that is something that the fiat network fundamentally cannot do. It cannot provide that. The other bit is of mining and proof of work. This is an unstoppable economic incentive that is there, that provides, number one, access to the system, but also a means of revenue. And essentially, I called it a public works. Some people got pissed about that because it's related to government programs. But the point was that all of this is a decentralized alternative to these things that have been tried in experiments in the past. And so when we think about building, it's important not to make Bitcoin more fiat or compete against fiat. It's important to amplify what fiat cannot do and what Bitcoin can only do. And so this is why it should really the outcome of this, because people are like, hey, now what? What does that mean? Yes, it's important. You have to offer instantaneous. Yes, you have to do this stuff. It's like yeah, you do. And user experience, it needs to compete that way. But what we need to do is be focused on what the end goal is and that will define where our road maps go. Because if we just end up creating a system that looks a lot like fiat, it's as fast as fiat, as cheap as fiat, and we've made a lot of sacrifices along the way, we're going to lose that battle. Where we win is the most seamless way to self custody your assets along this process. Fiat cannot do that. Where we win is the easiest way to send money wherever someone is in the world, that is where we win. We win when we allow businesses from day one to be global enterprises and not Balkanized in different regions. And that is an idea. But it's also something that has to be built. And the incentives right now are pretty much mostly aligned with how do we create the most easiest user experience, the best user experience, and oftentimes what that means, it means making sacrifices that will make Bitcoin and Bitcoin products look a lot more like fiat than it does true Bitcoin products. And so it's really a call to builders to understand that, hey, there's the easy way and there's ways that will give you the quick hit and then there's the long term way, which ultimately will lead to the ongoing success of this entire project that we're in. And that's really doing the work to amplify what Bitcoin is great at, not match what fiat is going to be great at too. And so it's a thing of it's tried to be a little bit provocative in that way, but it's also true. Like, this is the same thing when we talk about the four cores and we can learn a lot from that. It's like, yes, we created a system that could potentially match throughput of fiat products. That's not the goal, because along the way you sacrifice some of the very elementary parts that make Bitcoin special and you sacrifice the security layer, the decentralization layer, you sacrifice all of that and what that ultimately means, it's worth nothing, which is what we see in the value of Bitcoin Cash today. So let's make Bitcoin valuable on what Bitcoin is best at and that requires people to build. And so, luckily, we are seeing that. I think things like Fedimint, self-custodial wallets, truly peer to peer payment protocols. I think things like Nostr and Start9 and all of these things are moving that way, and those will get less fiat VC capital along the way, those will get less adoption along the way. So the best possible things that companies like Fold, Strike, Unchained, and these have kind of broken through in a little bit and gotten to the next level of growth, is that we should also be building this, and we should also be supporting the building of those elements. And so it's really a call to action and a reminder more than anything, because I think it's also an example and a good reflection that Lightning has succeeded in a lot of ways. We know that there is a path to instant, near free, 24/7 access to payments borderless. Like it's there, we did it. But now let's remember what the whole big project is as well.
Kevin Rooke - 01:17:14:
Right, that's really well said. I know we're running out of time. I want to jump into a quick session I do, at the end of every show called The Lightning Round. Got a few rapid fire questions for you. I hope you're enjoying the show so far. Just a quick message from our sponsor, Stakwork. Stakwork is a Lightning-powered platform for generating high-quality transcripts of all your audio or video content. They combine AI engines and hundreds of human workers all over the world who are paid over the Lightning Network to assemble these transcripts. And that's what lets Stakwork create better, faster, and less expensive transcripts. To see the results for yourself, you can check out my personal website where I host transcripts for all my podcast episodes. If you want to learn more about Stakwork, visit stakwork.com. That is stakwork.com. First one. Has there been any book that has meaningfully changed your view of the world?
Will Reeves - 01:18:14:
Just this year, I've read books that have changed meaning. The Immortal Game is a book about chess, but it's really about how an idea can be enforced by a decentralized network of people around the world. Why do we all follow the same rules of chess. And they weren't just created by one person. They were reinforced over hundreds of years to create this game that we all can sit together and wherever you are, you're going to play the same game relatively under the same rule. How the hell does that happen without essentially protocol like Bitcoin? Well, it speaks to how ideas can be enforced, become real, and I think that was amazing. Genghis Khan and the Making of the Modern World. Absolutely fantastic book. Salt. Read that one, and that is the history of salt and how that has changed basically everything about how history moves, and it gives an amazing way of understanding world history from that angle. So, I mean, those have been absolutely amazing. That's just been this year.
Kevin Rooke - 01:19:18:
I've got a few new ones from my bookshelf. If you could change one thing about the Lightning Network, what would you change?
Will Reeves - 01:19:38:
What I do want is the continued evolution of Lightning Network. Lightning Network is not just the payments protocol. I want it to continue to evolve and I want people to keep their minds open to what that possibility is. And what that means is we need more users. So I would say right now, I would change more people, have access, seamless access into Lightning and be able to be able to interact with it because that will show us the way of what we build.
Kevin Rooke - 01:20:01:
Fair enough. If you could only hold one asset for the next decade and it could not be Bitcoin, what asset would it be?
Will Reeves - 01:20:09:
My family, my team.
Kevin Rooke - 01:20:13:
Good choice. And then finally, who's one builder or person in the Lightning space they'd like to give a shout out to?
Will Reeves - 01:20:24:
Oh, man. I think Paul from Stakwork, I'd say is low key, one of the most impressive and interesting and expansive thinkers in the space. I think we will be hearing about things that he's been working on over the past few years more and more, and he will create models that inspire kind of what I think, the next phase of what Lightning really looks like and what a Lightning-powered world looks like. He's building that today, and I think that is something that has been incredible to watch. Also, he's a really good dude, so.
Kevin Rooke - 01:21:08:
Yeah, 100% agree. Thank you so much for taking the time. Where can listeners go to learn more about you and Fold?
Will Reeves - 01:21:15:
We're pretty active on Twitter, so check us out @fold_app or at Will Reeves @wlrvs. Otherwise FoldApp.com, check out the app, get a couple of spins every day and earn some sats. And I think it's probably the best way for your non-Bitcoiner friends and family who are curious and just are tired of you screaming at them every, you know, Christmas and Thanksgiving. It's probably the best thing to just leave them with that and let that do the work so that you can save your voice and enjoy Christmas.
Kevin Rooke - 01:21:48:
Perfect. Thank you for the great conversation today and I hope you can do it again soon.