The Story Behind The Tangle Revealed: Arthur Hayes, BitMEX CEO & Founder|ABS 2019

The Story Behind The Tangle Revealed: Arthur Hayes, BitMEX CEO & Founder|ABS 2019


[Music] [Applause] [Music] hi everyone this is Arthur Hays I’m the co-founder and CEO of bit Mex and welcome to the age of blockchain summit of 2019 hi guys this is Joyce a from global coin Research I’m here with glob temple live Asia blocking summit with Arthur Hayes we were excited to have him here we just came out of a great debate with Arthur and Nora reading and there was a lot to talk about there and my takeaway was that Nouriel was seriously just on a lot of start excuse my playing on TV but he was really just highlighting the fact that there’s so much to coins in this space and that a lot of retail folks are getting hurt and that was his main premise that I heard kind of over and over again is that what what did you think of it yeah it was a broken record he kept talking about the coin he seemed very knowledgeable about all of the different coins that exist in this industry for somebody who thinks they’re all going to zero so something kind of tells you that he might be back older very secretive least very secretive I think that’s a lot of good folks who are in the space who really on I really I’m very too contaminated by this because of the fact that he’s been using it at least 10 times in the debate but at the same time I think you know because where it is such an early industry and such a nascent space and because the space is so decentralized you just naturally attract a lot of bad actors well I don’t think it’s even that bad right if you think about the regular startup company right 95 92 95 percent of all new businesses fail within the first five years so why do you think that just because you put a white people around the internet and you have a blockchain or some sort of cryptographic element to your startup that you’re no different than the average so the fact that most of these things are worthless this is with the trend of all new businesses and technologies I agree and so generally we agree that there are a lot of poor quality folks and companies or in the space but as long as we drive them out and actually join the good actors we should be fine and the price and the markets and the free market will allow the the driftwood to drift away right what I always thought was interesting is that the volatility you see in leasing markets such as in China when there’s a share market that you are very well aware given that background that we both share and you know still even now the government has to intervene whenever the volatility get so serious and people start losing money but the same time that’s just the mad flip the nature of retail markets right well I think most governments these days have basically made a determination that the stock markets shall never go down and so whether it’s China the United States and Europe whenever the stock market or the equity markets broadly start to fall they start to print money and they start to do all sorts of actions to inflate their markets right because they want to think it’s a so I think it’s a social good that because you invested in equity it has to go up and that has destroyed price discovery and allow companies to exist and business models to exist it should not exist and get the good thing about crypto is because it’s a free market bad ideas become zero very quickly that’s really interesting I mean I think there are a lot of counterintuitive examples such as Tron but I won’t stay away from that for now but the same time I think you know because it’s a free market there are a lot of opportunities for folks who really want privacy for example actually to gain that advantage and have access and avoid capital controls for example in China and we’re seeing obviously a lot of volume going up because of you know the recent crackdown in Hong Kong and the protests driving that oh boy that’s partially threatened I wouldn’t say it’s all of them but what do you think about that I mean I think that’s right now it’s all it’s money printing global center banks pause between 2009 17 in 2019 yeah balance sheets sort of flatlined and now you have the Fed ECB PBOC BOJ all talking about restarting some form of quantitative easing right and obviously that’s going to lead to all sorts of risky assets going up in price Bitcoin being one of those and cryptocurrencies so as you know investors globally look around and they see low to negative yields on very safe government you know bonds they start to reach out on the risk curve and if they can’t afford a property or maybe the domestic equity markets are too expensive on a p/e ratio crypto starts to look attractive if it’s down 80 to 90 percent over a two year period so you know money printing lifts all assets whether it’s crypto stocks and bonds or real estate and money will flow to this section of the market if central banks continue to print it that’s a very fair point and I think a lot of folks don’t actually look at the macro environment and generally how the the institutions that we and the kind of the government government and economies are we’re in now is kind of in dire situations and people are really looking forward to this this crisis I would have coming out is the end of the day as I said on stage all we’re trying to do is give people a choice and it’s up to them if they want to buy a ship coin they want to buy Bitcoin if they want to buy a stock or a property or whatever but at the end of the day we’re not saying you have to purchase any of these assets it’s a choice and you can see the relevant merits and demerits of any of these technologies and make your own choice if you want enter this industry right so if it max right now is a centralized exchange is their thoughts about actually offering it for centralized offering as well because as we spoke on the panel or at least in the debate there was a lot of emphasis on privacy I holding your own tokens right right so I mean that’s sort of separate from treated trading derivatives now we’re a centralized trading platform obviously we need to be very fast we have leverage the alter intricacies that putting this straight on to a blockchain does not make sense at this time right now if you are so tell been on decentralisation and you’re only going to exchange your assets and maybe some sort of financial training there are very illiquid decentralize exchanges I still don’t think that that is desired by traders right now now you know if you want a hold bitcoin for its purposes as potential digital money that’s different from your ability to treat it now a trader I don’t think really cares about the centralization or centralization they want a fast cheap way to exchange risk on the market and so we think that a centralized solution because that’s the best opportunity for our customers right that makes sense is there thoughts of actually offering non-custodial trading for centralized exchanges we’ve heard that made specifically because we offer margin trading without margin trading but because we take margin and we have to make sure that if you if we say you want you bet 100 Bitcoin that’s your profit we need to make sure that we can pay that out to you so as soon as we start allowing people to tree it on credit or we don’t hold the Bitcoin in our control then we could run be fractional and at some point not be able to pay out our customers and that would be very detrimental to our business so we’re very conservative in that fact that we don’t allow clients to you know hey I mean I’m good for it now that doesn’t work either have the Bitcoin in here come from margin or you don’t and if you don’t then you get liquidated yeah that makes sense and we also touched on vibra and the debate as well and you actually recently written a very extensive post in your newsletter describing your thoughts on Libre and be sure to give us a quick summary of what sure so I think Libra well Libra essentially is a basket of fiat currencies that is represented in digital form by a token that rides on a permissioned blockchain which has some sort of nose now because Facebook has two billion active users they actually control the customer whereas previously commercial banks controlled the customer they had all the information about you because they were originating loans your mortgage all these sort of things but now social media companies because of the wealth of data we share about ourselves to these companies they know more about us than a financial institution and we spend more of our time staring at their app than at a physical bank branch so what I think is that because Facebook and some of these big tech companies have billions of active users why shouldn’t they sell financial products because they can originate a loan cheaper than a bank they have so much free cash flow that they can actually lend off of their own balance sheet without having to borrow money so they don’t need any sort of baking license all the bank is relegated to is a dumb node that holds fiat currency in electronic format a central bank which is what a commercial bank should be relegate it to so in my view if labor you know watches and Facebook rolls us out to Instagram whatsapp and some of their other social media properties it has a potential to completely disintermediate commercial banks entirely and destroy their revenue generating possibility so PayPal should be wearing for example well people is just yeah I mean people’s anyways I mean I’m more talking about commercial banks like you know why should I go to a Citibank to get a personal loan or if I’m on Instagram and I want to buy that sexy that sexy bag Facebook can loan me the money directly at the point-of-sale and compete a credit score based on my engagement in all of their social media properties that’s where I think we’re moving to with Libra and because it’s programmable fiat money it’s possible right all right so it’s a really great FinTech play and a really great user experience potential folks who are you know who wanted by and I could access to two to two payments a lot more quickly and more in tune up doing intuitively for the same time it doesn’t sound like it’s a cryptocurrency absolutely on it’s something not a cryptocurrency exceptionally centralized permissioned and possibly will be censored because you can believe that if a government wants to stop and protect a potential transaction and Libre all they have to do is call a Facebook and they’ll or not Facebook with the foundation and the foundation will comply with that the thought I spoke to Facebook was that they were going to slowly move away from the Association well in the document it’s eight states at Facebook and Magnus’s it is a node or possibly will be a node but it doesn’t have enough voting power to actually determine the course of what the foundation does and sort of make another oh maybe I don’t really at the end of the day if people are really worried about this over this you know corporate overloading their financial privacy that’s great for crypto because that means that they actually value their financial privacy and what we’re seeing out of the whole backlash against Libre and Facebook is that people are starting to recognize that they’ve been giving away their data for free to all these social media companies who’ve minted all these billionaires and now they want to take back control of their data and financial privacy is just an offshoot of that movement right for sure definitely I think in the Western Hemisphere people care of echo these thoughts about privacy a lot more than you know what you see in Asia for example where most of the Bitcoin trading for example is from circulation is from kind their social mobility from their local societies and governments that they couldn’t really move up in the hierarchy of society so I I always wonder you know are we gonna see how to store value and a medium exchanged narrative coming out of what’s the Western Hemisphere first and then kind of the retail folks here will start actually holding on to the Bitcoin it’s still thinking let’s say China for them there are a lot of large holders of Bitcoin and a lot of the large miners believe you know religiously in the properties of Bitcoin and why it’s useful to society based on their own personal experiences so I definitely think that in Asia a lot of people don’t trust the government even though there might be you know some sort of centralized one-party state in a lot of countries in this region the actual everyday people don’t trust them because they’ve been through several iterations of governments over the last 100 years and they buy gold and they buy property to store their wealth and they trying to hide as much as they can from the authorities so crypto if it actually is anonymous now bitcoin is not it’s you know definitely synonymous and given the right tools law enforcement can to find out who you are if they try hard enough right using crypto it might lead to Bitcoin actually implementing real anonymity into the protocol yeah for sure and and do you look favorably towards other tokens of the other the coin I mean it’s their trading vehicles I think if you want to talk about sort of you know hard digital money then bitcoin is the only game in town now obviously other coins and tokens offer other verticals right you have sort of the de protocol like smart contracts we’ve got sort of like a file management and have privacy all these different verticals and you know some of them be successful some of the won’t be successful I’m not really super technical into understanding it more of a markets person regular gotcha and my last question that I think look me you know if for folks who don’t know that much about agent you know you’ve been living age or for quite some time I live in New York City but I also why don’t all the time because so much is happening going on here what would you kind of advise folks to kind of look at and patience into here because you know obviously all that Tippy’s here look at look at this conference yeah I mean people need to understand that a lot of people hear about Bitcoin and all these things in Western english-language media so if you don’t speak any of the local languages you most likely have been reading a translated or republish article from a large media organization that’s based in the US or Western Europe so obviously they’re going to have a bias towards companies and movements in that region and they’re going to feature startups and other personalities in those regions and that sort of belies all the activity that’s happening in Asia because these Western media organizations don’t really cover what’s going on on the ground maybe you can read about it in the local press but this isn’t that what people are going to see on a international English language speaking level so there’s definitely things happening in Asia the largest exchanges are based here the largest miners are based here some of the largest projects have developers based in these countries so if you really care about crypto you know go to a meet-up in a different country get out of your comfort zone that’s great advice and I think folks should totally do that go to Hong Kong and go visit the Nexus office in Hong Kong center because it’s a pretty amazing one all right thank you so much thank you yep thanks guys this is block life ten twelve abs on my foot you [Music]

2 thoughts on “The Story Behind The Tangle Revealed: Arthur Hayes, BitMEX CEO & Founder|ABS 2019

  1. Three things that I admire most about Arthur Hayes of BitMEX are 1. he's always increasingly consistent with the growth of his space, 2. his unbiased knowledge is clearly superior and 3. he is relentlessly succeeding in his space. Thank you Joyce Yang – you are certainly permitted to repeatedly use the term "SHITcoin" whenever and wherever you moderate intellectual interviews such as this one in Asia with Mr. Arthur Hayes.

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