[0:00:08] Hi guys, I'm Matt Schlicht from ZapChain, and I'm here with Greg Brockman, CTO of Stripe. Thank you for helping us with this Bitcoin course. I'm excited to help out. Yeah, Bitcoin's super complicated, or at least can be in the beginning, and so we're hoping to educate all these awesome people. There are definitely a lot of moving parts. Yeah, so tell us a little bit about Stripe.
[0:00:30] So Stripe makes it really easy for anyone to accept payments on the internet and for consumers to pay with whatever payment mechanism they want. And so that's ranging from credit cards to Bitcoin to Alipay. And really our goal is to make it easy to move value on the internet. So you're like Bitcoin but better. I think that we think of ourselves as a layer above kind of all of the payment instruments that exist out there and that for us that we really want something like Bitcoin to succeed and to help make the internet a more valuable place. Right.
[0:01:00] Bitcoin was started about five years ago, a little over five years. When did you first hear about it and how did that happen? So I first heard about it somewhere around 2010. I had some friends that had just stumbled upon this weird internet currency thing and were like, hey, we'll run a miner and kind of forgot about it for a long time. And so one of my friends actually lost their keys and were later looking back and had like 50 bitcoins or something crazy like that.
[0:01:29] And another one had 20 bitcoins that had accumulated over time and that he managed to get out during the great spike that went to about $30 and thought that that was really making it. He was like, we made it. I'm going to sell it now. Exactly. And then, of course, when it spiked to $1,000, that he sort of regretted that. And, of course, the question is, for all the people who got out at $1,000, if it reaches $10,000 or $100,000, how will they feel?
[0:01:54] But actually, for me, really the first kind of personal connection I had to Bitcoin was when I read the Satoshi paper. So he really lays out.
[0:02:03] This picture of how to build a technology for deciding things on the internet, which is kind of a crazy idea, right? In a lot of ways, the way the Bitcoin technology works is that you kind of have a bunch of different people out there in the world who mutually don't really trust each other. They don't know anything about each other. But as long as they all, as long as the majority of them vote in sort of the same way, and so you can kind of say, here's the rules of the network. Here's how the thing should evolve. And as long as...
[0:02:28] Most people are sort of in agreement that that's the right thing to do and that's what's going to happen. And that kind of that is an idea for how to make internet currency work or really any sort of distributed protocol on the internet. It was kind of an amazing idea. And then actually the specific mechanism of proof of work and things like that was also just an amazing innovation. And then also an implementation of these ideas that really works. And kind of getting all those elements together is something you very, very rarely see.
[0:02:57] What was the moment where you were like, this Bitcoin is really interesting? Was it when you read the white paper? So reading the white paper for me was...
[0:03:06] A realization that the technology is super interesting, right? And you can build almost anything you want on top of it, right? You could build anything that can be structured as like a series of messages that people just have to kind of agree on the order, right? Whether that's transactions, we all kind of agree these things happened, or whether that's even like instant messages, or if it's contracts, right? That you can build anything. And I think that that's really inspirational. And so in a lot of ways, I view...
[0:03:28] Bitcoin is sort of the first thing that we decided, OK, here's something that the internet needs sufficiently that it's worth having this be the first inroad that we have using this tech. And I think that since then, I've been watching Bitcoin a lot and sort of waiting for
[0:03:43] Right. So I think that probably a lot of people watching
[0:04:12] When they first heard about Bitcoin, they might have thought, oh, Bitcoin, this is something for, it's bad. It's because they probably read something in the media or heard something and they're like, Bitcoin is for drugs or weapons or something. But that's not actually at all what the...
[0:04:31] What's your take on Bitcoin?
[0:04:48] It's worth pointing out that for any technology, right, that technology is sort of very different from how people use technology. And that I think that for any given technology, it can be used in bad ways, right? You think about cars, like that they're amazing and they move us around. But at the same time, that...
[0:05:02] They're very dangerous, and lots of people get hurt or killed through the use of that technology. And so I think that with Bitcoin, a lot of what we need to do is we need to figure out how do we get the technical benefits and also make sure that it's being used for good things. And that's something that I think we still are trying to figure out as a society. So Bitcoin itself, in a lot of ways, is just a digital form of money, right? That in the real world, I have my currency, and I can take my dollar bill out of my wallet, and I can hand it to you. And then on the internet, that
[0:05:31] Before Bitcoin, there was no equivalent, right? You could kind of have a website for your bank and you can click around and behind the scenes, like a courier would go from one bank to another with a briefcase strapped to their wrist. And the Bitcoin is a way that you can actually have the money exist in the internet and you can hold it on your computer. You can have someone else hold onto it and you can use sort of all of the technology that we've built to actually power it and secure it. So, and then the other thing with Bitcoin is that there's the difference between
[0:06:01] Kind of Bitcoin the currency and then Bitcoin the protocol. And I think most people that have heard of Bitcoin are probably thinking of it as a currency. Which again is not really what we're most excited about either probably. So how would you explain like what the difference is between the currency and the protocol? And what is the protocol?
[0:06:22] So first of all, currencies are commonly regarded as having three use cases. One is a store of value, so just a place where you can put your life savings. Two is a unit of account, which is basically just a measure of value. And three is a transport layer, how you actually move money around, how you move value around. And for the first two, I think that that's really what people talk about when they say Bitcoin is a currency, right? That this is a place where I can, you know,
[0:06:50] Hold on to my life savings. I'll have my Bitcoin account instead of my USD bank account or whatever it is. And I'll think of the world in terms of that gas is going to cost me 0.01 Bitcoins or whatever it is. And I think that instead, if you look at the third one, which is how do you actually move value around? If I have a TV.
[0:07:10] It's kind of hard for me to put this into the internet and move it around. If I have a dollar bill, I can't really put it into my computer and have it go anywhere. But with Bitcoin, suddenly there's a way that two parties who don't really, again, know much about each other, don't necessarily trust each other, are able to actually transact directly and to actually have some unit of value move. And so the protocol, in a lot of ways, is really focused on this third aspect of
[0:07:37] Behind the scenes, sort of independent of how you think about the world, right? You can still think, I've got a dollar, I want to send it to you. And behind the scenes, it gets translated to Bitcoin, gets moved, and then gets moved back to dollars, right? And you can have sort of anything you want happening on either end and in the middle that Bitcoin's being used as the transmission mechanism. In a lot of ways, it's like if you think about getting a web page on the internet, right? That all you know is that you type in some thing into your address bar, you go to Google, you click a button, and the web page appears.
[0:08:06] And sort of in your mind, you're thinking about mouse clicks and you're thinking about links on a page. But behind the scenes, what's going on is that your web browser is speaking HTTP, this protocol, on the back end in order to actually say, hey, web server over there, I want this content. And then the content gets returned. Right. So to that, do you think that Bitcoin is going to help us transfer things internationally?
[0:08:29] So I think that one of the really exciting things about Bitcoin is the way that it really opens up the internet, both in terms of if you think about
[0:08:37] The transmission of information on the internet is actually very, very easy. I don't have to think about how to send an email from the US to Canada. I don't have to think about how to hook up our local ISPs. Or if someone in Honduras wants to send something to Ireland, you can just send information. It all just works. And behind the scenes, there's this complex process of various peering relationships and this transmission of information. But to the end user, it all is seamless and integrated.
[0:09:04] And I think that that's the big power of Bitcoin. I think that Bitcoin can do this across national boundaries. It's, again, something that exists on the internet. It bootstraps off of all the technical infrastructure that we've built. We're all sort of on the same connected network. And so as long as we have some way of actually deciding on, OK, here's a sequence of transactions that happened, then it doesn't matter where you're physically located. But it's also really valuable, even within a single country, that payments were actually supposed to be
[0:09:30] Core fabric of the web. Back when Marc Andreessen was first building Netscape, one thing that they were going to put into HTML was a payment tag.
[0:09:44] Internet payments were just regarded as, oh, those can never work, right? You can never make the internet secure. And so it just never happened. If you look at HTTP, it actually has a bunch of status codes. People have probably seen the 404 status code not found. And there's actually another status code, 402, which means payment required. But no one uses it, right? It's there in the spec. It was intended to be used. But for whatever reason, we just kind of forgot to actually make payments happen. And I think that now is the time where all that stuff is really going to come to fruition.
[0:10:13] Satoshi was like, we need to fix this problem. Marc Andreessen, you screwed up. I think you couldn't have done it in 1995. Yeah, I mean, when the internet, I mean, and that was a while ago too. And even like years after that, when people started using credit cards to make purchases, like that was still like, I don't know if I want to put my credit card on the internet because some person will steal it.
[0:10:36] And the card networks actually have very different rules around in-person transactions versus online transactions. And a lot of it comes from this idea that the internet is a new and kind of scary place. Hopefully we can move past that at some point. Yeah, we're really excited to see how the internet can make value transmission better. And I think Bitcoin can really help with that. Yeah, I think so too. So Bitcoin is good for sending things back and forth.
[0:11:06] Does it have intrinsic value? Like, you know, you have the dollar and the US government is backing that. You have gold and that's actually valuable. Is Bitcoin valuable? So I'll push back a little bit on the premise, right? So if you think about dollars, like the gold standard's been dead for a long time now, right? So it used to be back in the day that literally every single US node was something you could go...
[0:11:29] And you could exchange it for gold, right? And the idea was that there was some backing value, right? And that what would it even mean to just have this dollar that, what is it worth? I mean, I don't know. It's just worth a dollar, right? And I think the thing that we've learned as just a society is that money is worth what people believe it's worth, right? That the thing that makes a dollar valuable is the fact that someone's willing to accept it.
[0:11:53] And so at some point, it feels like you're building a castle in the sky. But in reality, what you're doing is you have some network. And there are a bunch of people in this network. They're all kind of connected to each other. And they're moving value around.
[0:12:04] The more liquidity that you provide, the more usefulness there is of me getting this dollar, the more people are willing to accept it, the more valuable that dollar is. And so really what you end up with is kind of this iterative process of dollar moves a little bit and moves a little bit more and a little bit more and a little bit more. And the more that that happens, the more valuable it becomes, the more useful it is.
[0:12:24] And in a lot of ways, it's actually very reminiscent of PageRank, which is the algorithm that Google uses to surface web pages to you. In PageRank, a good website, a good hit, is one that a lot of other good websites point to. And so you just had a circular definition there. But it actually works for a very similar reason. Whenever you have a network and you have things flowing around, the valuable stuff, you can sift them out just by saying that
[0:12:51] It's the stuff where there's lots of high value happening. And with lots of iteration, you get to see where those nodes are. So in that way, I'd say that Bitcoin is something that has intrinsic value to the same extent that the US dollar does. Its value is whether people are willing to accept it. Right. I think that's an important point, because I think a lot of people argue about whether Bitcoin has value or not, and they kind of get stuck on specifically the price, which is mostly controlled by speculation.
[0:13:19] Whereas that's not actually where the true value is coming from. So you should tell us a little bit about Stellar. Sure. And pretend like we have no idea what it is at all. Yep.
[0:13:34] So back to what I was talking about a little bit earlier with this picture of Bitcoin as a protocol, right? The idea that you should be able to sit here and think in US dollars and to just say, kind of move money. And then behind the scenes, some translation happens. And then on the other end, someone else receives money. And whether they receive it in US dollars, whether they receive it in their own local currency, maybe euros, it shouldn't be a difficult thing, right? It should be that you as a consumer just have the ability to say,
[0:14:04] I hold this currency, this amount of value, and it can be represented in multiple ways. Just like if I have an image, my image can be represented as a JPEG or a GIF or all these things. I don't really care. I just care about my image. And that I should be able to specify, I want it to go there. I want my value to go there. I want it to appear in whatever form the person on the other end wants it to exist.
[0:14:24] And I think that this is something you can build on top of Bitcoin. And I think that I'd be very excited to see that happen. And the thing that Stellar is trying to do is to actually make a system like this happen. So it's really an encoding. In a lot of ways, it's the minimum encoding of a network that has the property of being able to send in arbitrary fiat currencies. Right. So Stellar is a digital currency.
[0:14:47] Right? Kind of like Bitcoin. So I'd say Stellar has a couple of components to it. And one thing about Stellar is that you think Bitcoin has moving parts, right? In reality, you think about Bitcoin sort of internally as this digital currency. And then there are all these exchanges around the edge. And Stellar is really an encoding of all of that. And as part of it, it also comes with a built-in digital currency that is like Bitcoin in the sense that you can trade it around trustlessly.
[0:15:12] But the main purpose of that, it isn't actually the focus of the network. And in fact, even in a world where Stellar is very, very successful, the Stellar currency itself may not be super valuable because the real value in the network is going to be in all of this fiat currency that's represented within it. And that really the purpose of the Stellar is it's kind of like the waters of the ocean. It's really just this connectivity between all these different currencies. Right. So with Bitcoin right now, I would, like if you were in...
[0:15:42] Australia or something and I was going to send you money. First, I would have to convert it from my local currency to Bitcoin and then send the Bitcoin to you and then you'd have to convert that to your local currency. Yep. And so the thought is that with Stellar, it would kind of just do that? Yep. So with Stellar, you would have a Stellar account that would contain your Australian dollars and that you would say, send this much USD to my friend and...
[0:16:05] It would just do all the conversions for you. It would find a path of value transfers and translations. And one of the really cool things is that I think Stellar is something that can help make Bitcoin even more valuable and successful. Again, it's all about increasing liquidity. It's about making it so that it's easier to move this stuff around. It's about making it so that we're taking all the things that we're doing and using all of the technology that we've built, all these ideas that we've built, to actually make it more smooth, have a better user experience, and make it more secure.
[0:16:34] Yeah, and I think it's awesome that Bitcoin is enabling us to even make things like that because it is kind of silly that, like, why do we have to think about converting, you know, the currencies to different types of currencies? Like, why can't I just send you something like that? When you think about it, it actually doesn't make any sense. So that's really cool. So what, like, what are you excited about with Bitcoin going forward? Like, what innovations do you think?
[0:17:00] What's coming next? So at a high level, the thing that I'm most excited about is just sort of continuing down this road of making it easy for anyone to transmit value on the internet. And I think that there are going to be a lot of pieces to the ecosystem we haven't yet seen. I think that one thing that we as a company are very interested in is starting to see lots of purchasing happening through Bitcoin. What does it look like once lots of merchants start accepting it? So we actually have a Bitcoin product that's currently in private beta.
[0:17:26] Which we are really excited to see what happens once suddenly thousands of merchants across the internet without any additional work can start accepting Bitcoin. What changes there? And I think that on the consumer side that it's so early that most mainstream consumers just don't even really know where to get Bitcoin if they wanted it. I think that that's something that a lot of people really have yet to see. And I think it's going to be a continued iterative process where it's all about
[0:17:56] You know, people want to pay with whatever merchants accept. Merchants want to accept whatever consumers want to pay with. And so if you can find a way to sort of get a few people doing it, and then they'll bring on sort of the other side. And I think the iteration from there is something that's going to be really exciting to see. And I think that the pace of this innovation and change is just going to keep accelerating. That's awesome. I can't wait for you guys to come out with Bitcoin support publicly. Because, like, and if you don't know this, you know...
[0:18:23] A lot of companies and websites use Stripe to power payments. And there's one way of getting a lot of people to accept Bitcoin is like, oh, you should integrate this new thing I made and this will enable you to accept Bitcoin. But because so many people already use Stripe, you'll just flip a switch at some point and then it's like, oh, now all these people that take credit cards, they also take Bitcoin. And I think also very importantly that...
[0:18:50] A lot of our customers are the most innovative companies on the web, right? That we've always viewed ourselves as building for the next wave of internet innovation. And so you have these fast-growing companies that are technology companies that want to be innovative. And I think that us enabling them to accept Bitcoin is going to be really transformative. Awesome. Well, thank you so much for kind of walking us through your insights on Bitcoin. I think it's super helpful for everyone watching. I learned a lot, especially about Stellar.
[0:19:19] I'm really excited for that. And I cannot wait for Stripe to have Bitcoin support. I'll go get to it. Because that's going to be awesome. All right. Bye, guys.