Stephen: This is your host, Stephen Sargeant. This is a world class episode with William Quigley. He's the co-founder of Tether, early Investor in things like PayPal and Ethereum, and he is also the co-founder of WAX the blockchain. For everything tokenized, whether it's in-game skins, all the way to NFTs. We talk the whole gambit.

We go back and talk about what VC was investing like in the 1990s and how there might be a move towards hardware versus software in 2025. We talk about the early days of crypto and tether. We talk about how. You know, the hype cycle in the NFTs and what went wrong and how speculation has led much of the crypto and blockchain industry and what we can do to bring the industry back to utility.

We talk in meme coins and Solana. We talk about transactions, millions of transaction volumes. For some of the biggest blockchains in the world and we touch on regulation. Although he doesn't like the word regulation, we talk about transparency and responsibility in the crypto space. This is one of our favorite episodes.

This is the second time Williams' been on the show, and it seems like every episode the conversation with him gets better and better, and he is the builder in this industry. Since the early days, this is a must listen to podcast. Let us know how we did and enjoy the show.  

Welcome to Around the Coin. I'm your host, Stephen Sargeant. This podcast is extra special because we have a featured guest, one of the most downloaded guests we have. William Quigley, co-founder of Tether and the Wax blockchain. William, for those of us that haven't listened to the first episode, which everyone should definitely run to, and you know, getting that was three and a half years ago.

A lot has changed in blockchain, Ethereum, crypto, stable coins, NFTs we're gonna go down the gambit, but give us a little bit of refresher of who you are and what you're working on now.

William: Okay, well, I guess briefly I was a venture capitalist for many years. I started with two other co-founders, the first consumer internet focused VC fund in the mid nineties. And a lot of what I. Thought about where blockchain would go, came from that early experience in focusing on the internet where there was a, you know, a layer of infrastructure, then a layer of applications, and then a layer of reporting and analysis type companies and then payments and so on.

So, I had prior to that I was working at thew Walt Disney Company in the late eighties and early nineties. And and then I got involved in a lot of the video gaming world. It was really the kind of the gateway to me getting involved in crypto. In the late nineties, the idea of trading video game virtual items became a thing with really I think the first game was Ultima Online or first game in the us.

It was already being done for a while in the in Korea. And so my partner. Started the very first marketplace that allowed people to buy and sell video game virtual items. And he used a company I had just invested in as a startup called PayPal because prior to that, there was no real way to pay online in order to buy and sell stuff.

People were very nervous about doing things like credit cards. And if you go way back to the early days of eBay, people would mail checks, which is insane, right? And so, a lot of people probably don't know this, but the many of the early adopters and users of, of crypto, initially Bitcoin came from my industry.

The video game item trading industry. Because video game items became a money substitute for many people around the world who didn't have access to banking. And in the it's a little less talked about now, but probably for the first 10 years of crypto, I would constantly hear people say, well, why would I need to use crypto?

I have a credit card, I have Venmo, I have PayPal, or whatever. And my answer was, generally, you shouldn't use crypto. You don't need it because you're one of those privileged few and some western countries where banking access is easy, but for billions of people. Banking is terribly difficult. And even if you get a bank account a lot of times in those countries, your assets are seized or the currencies devalued.

So, for people who are from the US I think that was one of the reasons why they had a very difficult time understanding why this was useful. And but I had seen it because we, we allowed people in a hundred countries to buy and sell video game virtual items, and I noticed how hard it was for many of those people to get access to reliable payments.

And so, we've done a lot. My partner and I have done a lot in the crypto space. We started like everybody else with mining and then eventually, I'm still annoyed that I didn't think of the idea of, of using asics and instead of standard computers to to, to do mining. But then we got.

Stephen: Did you see those in the early days? Did you see like early asics and just kind of like thought of it like, oh, or do you look back now and say, oh, what a competitive advantage those would've been if I had just adopted them earlier than I did.

William: yeah, it, I'll tell you, I was venture capitalists have a lot of scar tissue, right? And in some ways it's a curse. And for me, the cursed was that I had invested in like, I think four semiconductor companies. And I didn't like investing in semiconductor companies. These were communication chip companies extremely complex and frankly not great investments.

And, and if, when I'm giving lectures to young venture capitalists, I explain the difference between investing in an app and investing in a semiconductor. But suffice to say, you have to spend a lot of money upfront and wait years before you even know if the thing will work. I. And so you, with, with a lot of software based companies, we spend very little, we kind of see if it works, and if it does and you start scaling, then you pile money in.

But that money now has a lot less risk attached because, you know you're requiring users at a certain price and all that. By the way, this is why the VC industry really abandoned what you might call hard tech for almost 20 years. VCs didn't want to touch it and, and for good reason. It was way easier to back two random guys and an app and make a billion dollars.

But we've milked that now for 20 plus years and we need a whole new generation of hardware. And that is becoming, I think an area now where VCs have returned. But, but they're gonna see, the young VCs are gonna see how hard that really is, right? You know, famously people talk about how, you know, Elon Musk had no competition when it came to SpaceX because that was beyond like, traditional hardware.

That was like science, right? Nobody really wanted to touch it. But if you have no competition and you're aiming at a very large market, the value is, if it works, you have an incredibly valuable business. If you're in a traditional kind of easy to build software based type of business, it's nice because you don't have to put a lot of capital up front to go after it.

But the downside is you have massive competition very quickly. If it looks like what you're doing works.

Stephen: Is there any hardware that you're, you can think of off the top of your head? Obviously AI has, you know, helped from the software side. You have one, two people, teams able to build million tens of million dollar business rather easily without having to hire, you know, expensive CTOs or developers using ai.

Is there any hardware angles that you see where people are like starting to move towards, or any kind of industry that you're like, oh, these hardwares are like very interesting to

William: Yeah, I mean, like I said, the very, the first one semiconductors, semiconductors were like redlined by VCs for so many years because it was so hard to make money in that space. But probably aided by the boom in ai and obviously Nvidia becoming the most valuable company, you know, for a time being a, a semiconductor company that blew VCs away multi-trillion dollar valuation for that.

So now there is a huge push and, and you, you have companies, for instance, like Intel, which, you know, when I was younger, Intel was. Like, consider it sort of like a Google or an Amazon. It was like, it would hard, it was hard to imagine any future where Intel wasn't the dominant chip manufacturer and Intel.

You know, you Nvidia could buy Intel with like two weeks of cash flow now, right? So, it, it, it, with Intel's collapse, it's still around, but they don't have a lot more chances to try to reposition. I think. VCs got a little scared. It was like also in the nineties, a lot of office type software, office productivity software.

If Microsoft didn't want people investing in it, they would just release like a PowerPoint saying, this is a new area we'll be going after. And everybody's like, oh, I don't want to compete, you know, with, with Microsoft, well, that was how people felt about Intel. Now, Intel is you know, a, a shadow of what it was, and so, yeah you'll have a lot more semiconductor investing.

Other areas robotics. A tough area very expensive to build and, and still early. And of course the final product is very expensive. So, but, but there will be investment in that area. I would say all forms of materials, the material science area is underinvested and now a lot of people are seeing all of the things we need that we don't have.

And so I, I suspect that will be a an important area. If you look at something like virtual reality, the types of headsets that we use the the, the the glass or the viewing screens, that's another area where there's probably a lot. Of advancement. And and then of course an area that I think has not been fruitful, but everybody knows the problem would be in battery technology.

It's a, it's an area where there's been lots of money invested and not great returns. And because there's physical limits to what you can do. But again, anybody who, who thinks about virtual reality the thing that any company hawking a virtual reality headset tries to Photoshop out is the, is the weight belt of batteries that you have to carry.

Right? And so, wireless as well. Wireless covers a lot of different areas from the actual transmission capabilities. Antenna, kind, kind of capabilities to to what we call propagation modeling, which is figuring out how to optimize a layout of a wireless mesh network. And then of course, the the the rf baseband chip sets which have been dominated by a few very valuable companies, but the IP there has been very hard to, to crack because again, you're dealing with physics. And so, I would say these are like a handful of the areas in the hardware side that we'll get a lot more attention, obviously in space as well. I mean, Elon has kind of two angles there.

He is got the delivery vehicle, which is SpaceX, and then he has the kind of the application network, which is starlink. And the idea of a private company doing that for many, many years was like, no, because there were attempts in the nineties Lucian Motorola, they tried and they spent a lot of money, but I.

It was, it was too expensive basically to get a satellite in the air. And I think that was Elon's real innovation to to the satellite business, was getting the, the deliveries done cheaply.

Stephen: I love this. I have to interrupt. 'cause you mentioned in game is where you started, especially around the marketplace. Roblox is probably, you know, when people talk about metaverse, they all, many people don't talk about the Metaverse anymore. They refer more to like, you know, Roblox and the, the universe it's created.

Is there any major in, you know, game marketplaces now? It doesn't seem that anyone jumps out at me. My son's on Roblox, both of them. I don't see any, you know, big companies. Well-branded in this space has much changed in the last 25 years since you've, you know, rolled out your marketplace.

William: Surprisingly not a lot has changed. Very few gaming companies, we were always at war with the gaming companies. I. Because very few of them liked the idea of the players being able to trade their in-game items. They just didn't like it. And most of them had a view that they wanted to be the monopoly of all commerce within their game universe.

I, I always found it kind of amusing too, because a lot of these video game developers and companies are very capitalistic, you know, but man, do they love monopolies? So, the, the challenge has been, and, and you saw this in blockchain based video gaming which is, is still hasn't hit sort of the mass market consumer adoption phase because I think the challenge has been, what is the economic model for the video game publisher with virtual items other than just selling them to you and letting you use them? Is there a an additional model where these things could be freely moved around? And most video game companies have taken the view that any dollar captured by people outside of their game universe is a dollar they lose.

Stephen: Right, because if they wanted to trade, they don't want 'em to trade. They just want them to buy, Hey, you want a skin? Buy a new skin. Now, don't trade. For somebody that's already bought a skin, I'm assuming is their,

William: that's right. Right. And and then you get, I should mention, it's not just the the game publishers. There is this this these dogmatic views in, in video game players that the buying and selling of virtual items is is an awful thing. Now, you could more persuasively argue that point when the trading was with virtual items.

I. And to your audience. Some are probably gamers, some aren't. Virtual items were in-game items that provided some form of utility for the player. And so often video game players said, oh this guy didn't earn, you know, this, this virtual item because he just bought it from someone else. So that's not fair.

But let's face it if any, if anyone is involved in sports, you know that with money you can buy a good team, right? But, but let's say that's a legitimate argument. The argument really falls apart when you get into skins and, and a skin for your audience is a in-game. That has no utility. It's strictly for cosmetic value.

And so it doesn't boost your ability in the game. It's just an avatar cover, if you will, in that case not allowing people to buy and sell is harder to understand and, but, but I have come away with a view. The reason video game companies suppress that and don't allow it is because they can, they control the universe.

So my view is, let's take the most like, controlling company I know, which is, which is apple. Apple lets you sell your phone to people and I or your, your laptop, but I would say they do it because they can't stop you. If they could stop you, they probably would. If Nike could stop you from trading your sneakers, they probably would.

They would want to capture some of that. So, video game companies just happen to be in a position where they can prevent people from, from trading assets. And so they do. And you know, the challenge for blockchain video gaming is to contribute something to the gaming experience that you can't do without a blockchain.

Now, one thing is allowing people to freely trade, but as we just. Talked about traditional video game companies could do that too. They just have decided they didn't want to. The, I do think there's a subset of players who would like to do it, but an age old problem with, with blockchain is is the fact that it's inconvenient.

And by that I mean it's, it's difficult. The the user interface is not great and probably until that is overcome, blockchain based video gaming will not hit mass market adoption.

Stephen: We did see a pickup a lot with NFT gaming, but I wanna talk to you about the early days. 'cause you, you know, you have been in crypto for so long. You've invested in Ethereum early on, incubated Tether, and became a co-founder. Now we're seeing a lot of people look back on some of these companies early on, which like, oh, they didn't do it properly.

They weren't following, you know, proper protocols, but without these early innovations, without them pushing the limits, we wouldn't have, you know, ETFs, we wouldn't have, you know, institutional adoption. How do you balance that? Like we had to kind of do things a little bit shady early on in order for us and our customers to keep their bank accounts at banks with, we still led the path to the innovation that we're seeing today.

William: Yeah, the crypto was, I suppose in some cases it still is what, what we would call a gray market. And a gray market is, is simply a market that an industry where the established rules of the real world haven't yet been created. And some. Some industries never leave the gray market. You know, the video game, virtual item trading was kind of like that.

But the, the benefit of a gray market is that all the W twos who work at big companies have no desire or ability to look at a new market when there aren't all these guardrails and instruction sets, you know, about how to operate in that industry. So they stay out of it. And that allows the entrepreneurs, the early stage companies to take a dominant position.

And obviously the internet being a great example, but mobile as well. Mobile adoption was mostly, and I'm talking about the app side, was all new companies. So, if you were waiting around in 20 10, 11, 12, 15, 17, even 20 for somebody to give you an instruction manual, you know, you were never gonna do it, which is why most large companies just didn't touch blockchain.

And then you had a sort of a, a rear guard action by the financial institutions of the world to denigrate blockchain and crypto. And their reasons for doing that was they saw it as a threat. But they, they they didn't want to go into it themselves. If they knew of an obvious way to make money and do it, I think they would've not talked mad shit about it.

They would've just done it. But they were, you know, w twos aren't terribly innovative, right? So they just sat there and said, Hmm, let's just try to put a lid on it. And that's what they did. It. It's what I would say is the difference between the rollout of, of the consumer internet, call it mid nineties onward versus crypto.

There are similarities, but the differences are striking as well. There was no established industry agitating for restrictions being put on the internet. It it, it was just kind of, seemed, kind of gimmicky and sort of a waste of time. When I left at Disney and, and started my venture capital fund, and it was the first one targeting consumer internet, most people just sort of like felt sorry for me.

They're like, wow, you're leaving behind a great career for this fad that. Has no value. Right? And that was fine because there was a whole bunch of us who said, great, just leave us alone. And then at a certain point, as industries started to crumble traditional industries because of the. Obvious value you could get from doing it on the web versus doing it in the analog world.

All the big businesses started saying, oh shit. But for the most part if you think about it, the largest companies in the world now are sort of internet-based businesses. The traditional industries never could adopt, be or, or adapt because it was too late for them. So you compare that to crypto.

What the financial services industry did effectively was they got the government to restrict usage to sue people. They, in, in the US we had this army of, of regulators who had no congressional mandate to do anything. Regarding crypto, but they took it upon themselves to try to, to kill it off.

And they demonized it. Like it's, it's not as common now, but for many, many years, if I read anything about Bitcoin or blockchain in the same paragraph, you would have the words money laundering terrorist financing, tax evasion. It, it, it always, right. They would have to put that in there. And it's for this reason that it really stifled, I think the adoption for, for a long, long time.

And of course with the, the Trump administration being procr, that's gonna start to change. But one of the things that I don't like about what happened was there was a learning curve. Any new, when any new innovation comes about, there's a learning curve. When startups jump into it. And as I mentioned, you know, they do it before the big companies the, the the people in those startups learn a lot and often the the established companies never catch up.

So there's a, a reward for being first or being early. Will kill you in the startup world is if something, a government agency or collection of of industries can suppress your innovation until they have enough time to learn. Right? And so, you know, you've got guys like Jamie Diamond at at JP Morgan who for years was saying, I'll fire anybody involved in blockchain and crypto.

It's bad. But if you looked at the patent filings, they were filing shit, tons of patents around blockchain. So, you know, he was saying one thing, but he was doing another. So it was a very a clear cut example of using the forces of his industry and the government to suppress the industry, the crypto industry, until they had enough time to catch up and figure out how to exploit it themselves.

Stephen: Right. And you mentioned up until 2020, we saw 2021 was kind of like a coming out party for NFTs Defi crypto itself. 2017 is really, I think when crypto and especially Bitcoin on the map, but you started, you know, and NFT marketplace, n and NFT, you know, blockchain, pretty much it wax right in the heart of, you know, 2021.

You, you look like a genius. But then within 12 to 14 months. You know, the craze of NFTs dies down. What were, you know, maybe before we even get into that, I think one of the points you made on the last podcast was the difference between tokenization and digitization, maybe this level set, and give us a brief explanation on the difference of two, because I think that, you know, trips up a lot of people, especially when they think of NFTs or even stable coins for that matter.

William: Right. And you could spend a lot of time on this, so, let's try to do it briefly first. Just you saying that is good. 'cause people can do their own research. But I would say maybe this is an exaggeration, but 95% of people in crypto don't understand the difference, let alone the mass market. The mass market is hopeless.

Most people understand the concept of digitizing something where you allow people to electronically send a record, a piece of music whatever, do a payment, right? You're updating all these digital files. Well, the. That works. But the problem is what all what you're really doing is you, you've got databases in different locations, different servers, and people are in the digital world sending an instruction to, if they meet the right requirements change this number from a one to a two, so your bank balance goes up or whatever.

It's generally centrally controlled, and it is a digital file can be changed as long as you have permission, right? And and, and it, it can be copied. You can take an emoji, you can copy it and send it, and there's no way to tell what the original version of that emoji was versus the endless copies that are out there.

And of course this has created all kinds of problems with things like music. So, once you start building on a blockchain and understanding how Merkel trees work and whatnot, the intricacies, you really start to see how tokenization differs so much from digitization. When you tokenize something, I like to think of it as you put this digital file in an envelope and that envelope, this, this software based envelope has a a set of properties and these properties are.

Are that you cannot make any edits to that thing once that thing is done, because it's been encrypted to maintain its state. And as a result of that, when you send this tokenized asset from one person to another, there's a beautiful thing that comes out of that, which is that the recipient knows with certainty instantly and at no cost that the thing they got.

Genuine. That's what makes tokenization different from digital. Digital is an electronic file that can be changed. And unless you put in specific rules behind that no one can know that it was ever changed. Whereas when you tokenize something, which the best way to think about it is you put it in a, in a wrapper, you put it in a, an an electronic envelope.

It can never be unsealed. It can never be modified. And, and that is what blockchain based items are. They're tokenized. And that is the contribution. It, it was very confusing to people and it still is early on when, for instance, I was trying to tout the value of a, of a tether or, or, or a Bitcoin. And people would say to me, smart people, they'd say, but, but William, great, you've, you've digitized the dollar.

Can, you know, congratulations. That's been done for 60 years. And by the way, a lot of crypto people would say this to me. And I'm like, no, no.

Stephen: NFTs. I think that whole right click can save. Army was like, well, I have a digital picture. Who cares? I can just right click and save it. And now that image is mine. So I'm sure NFTs were a lot harder to explain than probably even Bitcoin and Tether.

William: Because what you have to have, you have to explain that you can make a screenshot or a picture of the NFT, but, and that's fine, but it doesn't take away from the fact that if I send you an NFT, you know that that blockchain based NFT is the genuine article. And you can take a picture of it, just like you can take a picture of the Mona Lisa, right?

But that's not the Mona Lisa. Now in the physical world, we feel it, we touch it and we say, oh, this is genuine. Of course. The reality is you have no idea if that's, if it's genuine. I, I have not yet found a counter example to this, but I do believe that, for instance, an NFT, so a tokenized asset, I don't think there's anything else in the universe that has this trait to it.

The fact that I can send to you, I can be anonymous. You don't even have to validate who I am, which is often the way we, we validate. We, we get trust in the digital world, right? So when something comes from Amazon, we trust it because they've invested in their brand. Well, when I send you an NFT, not only do you not have to trust me, but you don't even have to know who I am.

All you have to know is that object. Is on this blockchain and it was hatched from this smart contract, the original smart contract that Burt, that NFT and therefore when you give it to me with no effort, no, no time spent and no cost. I know it's a genuine thing when you apply that to money, it's, it's extraordinary because money of course is one of the most counterfeited things on earth, right?

North Korea funds a lot of its budget by counterfeiting,

Stephen: US

William: euros and dollars. So the reason why I've said for instance, that all countries of any significant size will have tokenized their currency in 10 years is because it's one of those rare situations where there are no drawbacks. Like there are only positives.

All the problems we have with currency can be, can be ra basically removed once you tokenize it. I wish I wish I could have spoken to more members of the US Congress after the failed an awful attempt by Marcus Zuckerberg to explain why he was doing Libra. Remember they were gonna do this stablecoin and the members of Congress grilling him all took it as though he was inventing a new currency.

When in fact all he was doing is he was ensuring that the currency was perfected and and UNC copyable and it, it, in fact, it, it was like an improvement to, to the US dollar. But I remember watching him and being depressed about it because it was clear he knew nothing about this. He had been given some talking points.

I assume all he cared about at the time was the whole meta, you know, metaverse stuff, and he was grilled by Congress. It would've been much better if they had grilled somebody deeper in the organization who understood what they were actually trying to build. But as you remember, he voluntarily decided to walk away crazy enough, right?

Because now you have so many companies who have launched their own stable coins.

Stephen: and I think there was so much focus on like the basket of assets. You remember, that was what everyone was talking about, what's gonna be in the basket. There was no discussion around the technology, just like what's the underlying asset he's working with? And everyone making sure like is their asset going to be in that basket?

And how do they protect the value of their

William: Yeah. And, and even that, you know, the right answer was look, you for video game, virtual item trading, we, we settled transactions in dozens of currencies. So you picked the currency you wanted and that's what you would get. Now, there was a, a currency conversion cost to it, but you could do it. Yeah.

His, his answer should have been, look, a lot of people would like dollars, but some people would like yen or RMB or, or, or pound sterling or whatever. Euro you know. We'll give them what they want. That, but you're you're right. The basket thing made them feel like, oh, he's gonna try to like, manipulate the currency or something.

Like, dude, George Soros does, does that every day and no one seems to care. But

Stephen: now that you've explained the NFTs, that makes a lot of sense to our audience, but then. Why did the NFT market, like what were the reasons that you felt that contributed to the downward spiral of the NFT marketplace? Was it just too much speculation? Greed, you had a bunch of people that were able to spin up A-A-N-F-T and make a million dollars 'cause they sold 10,000 of them at a hundred dollars a pop.

What was your, you know, was there anything that you saw in the background that you're like, oh, it, it's definitely speculation, but there's some unique thing that was happening that maybe not many people have talked about.

William: Yeah. So what I would say is, you know, we came up with the idea, by the way, of tokenizing a game skins before we came up with the idea of tether. We came up with the idea in 2013, we're like, wow, what if we could do, but there was no the consensus mechanisms at the time. Everything was proof of work.

It just, the cost something that again, even crypto people didn't seem to understand was how you clear the queue when you get a lot of transactions on a chain. And when we, when we finally found a consensus mechanism, I still think it's the best one delegated proof of stake. In 2017, we then said, okay, we can do wax.

And so, probably not even well known. We were transacting hundreds of millions of dollars of, of NFTs, which were tokenized skins a month in, in 20 18, 20 19, 20 20. But nobody knew about it. Like you had to be a gaming person. And that's, you know, a separate thing. And then I think, I've always thought we probably kicked off the mania because we did a deal with the Tops trading card company who had done baseball cards.

I always wanted to do it with them. And by the way, very painful working with them because they could not understand blockchain. It was 18 months and I literally was just like, you'll do nothing. I'll just give you a, you know, a piece of the, the transaction value. Like, you, you have to do nothing. Just give us a stupid license.

That's it. And it took 'em forever. But we thought that I told Tops, I think in about we should sell out. We had like 50,000 I. Or so, and we put 'em in packs, right? So if for people who remember the old baseball card packs, pack of five with a piece of bubblegum, so we put them in packs, but we also did something else because we were, we wanted consumer mass market.

The packs were $10 $25 and then there was rarities and all that. And that to me was, there was an, it was mostly an element of entertainment. You'd open this digital pack. Then we did we did garbage pail kids, which top zoned, and a lot of people were in nostalgia for garbage pail kids.

Stephen: Those are my two favorite things. Baseball cards and garbage fail kids. Like that's like bring me back down to 1989. Like that was my jam.

William: Yes. And, and people like millennials really loved it, and, but you're putting 10 bucks to $25. It wasn't a big deal. And so, it, I thought I said to 'em, you know, in 60 days we'll sell it out because, you know, I mean, like, look, the Ethereum crowd sale took 60 days, right? So whatever. And, and it, within 24 hours, we had sold out all of them.

And then they were like, oh, wow, this sounds great. By the way, I asked them the day before the drop, I said, can you, in your official Twitter account, just mention this? Absolutely not. And I was like, why? Well, because it might fail. We don't want to be embarrassed. You know, gimme an f'ing break. Right?

So, of course, right after it succeeds, there's like, now there's like 10. Fathers within tops of this project. Oh, this is everything. But now to get to your, your question. So suddenly a lot of people realized something that I knew because I was in the video game trading business, but they didn't, most people thought most blockchain like developer guys, especially in the, the gaming sector, they thought you needed to create a game.

You would pre-sell these NFTs and then hopefully people would buy them. And if then you would build the game from whatever you pre-sold. And I was like, guys, the trading people don't care about the game. They just wanna trade. It's just like, you know, being on eBay or any other trading hub, right? But I had that experience 'cause we were running video game item marketplaces. So, what happened is suddenly people thought of it as kind of a gold rush. Oh, we can just make these items. And then of course everybody tried to do it on Ethereum, and I was like, you guys, the reason we did wax was because Ethereum doesn't scale because of its the way it clears the queue is is based on like the Uber surge pricing model.

You just pay more. And so, you remember the a hundred dollars gas fees and all that. Well,

Stephen: that money even if you, you know, when you don't get the NFT. I think that was the part that caught people off guard, like, oh, I just spent $150 and I still didn't get the NFT. Is this how blockchain works?

William: That, that kind of sucked. But then obviously mad Rush in and I saw it, right. And just prices started skyrocketing and ridiculous actions like open sea raising money from frankly, clueless VCs at $10 billion valuation or whatever it was, right? And I'm like, guys, I've been running video game marketplaces for like 15 years.

You can make these, these marketplaces for like a hundred thousand dollars. And there's no barrier to entry, so you do not wanna be paying $10 billion for some random guy's thing. And but it was also clear that the, it was what I believe it was the first. Mass market, consumer mass market object blockchain related that the average Joe could figure out.

And you know, a typical blockchain conference at that time would have like three, 400 people attend, 500 whatever. If you got a thousand, I was amazing. And I started going to conferences with an NFT focus where there was 10,000 people.

Stephen: Right,

William: So, there was a mania and all of these, I dunno if you call 'em scammers, but these opportunists started saying, I'm gonna do this, I'm gonna do that.

I had been talking to a lot of of IP holders right, in the entertainment industry and whatnot, and there's been a long tradition in the gaming industry of paying a license and getting a likeness of something, right? And and we were getting these licenses for reasonable royalty rates, 10%, 15%, 20% of the transaction value.

And like overnight, all these scammers, after they saw what happened on Tops, went to these guys and were like, we'll give you 80%. Now. There's no reality where you can give the license or. 80% of the transaction value, and that's a sustainable business for you. And so, but you know, they raise money from VCs and they're like, whatever.

So WWE, you know, and all these other groups, NFL, whatever. And so in 2021, when I saw this, I was like, all right, obviously this is gonna when the, when the bull market ends for crypto, the speculative bubble of NFTs is going to end, and then it'll be over. And that's exactly what happened. And so in people's minds, NFTs are pretty pictures, right?

Or they're snippets of a video. But as we've talked about, an NFT is just a wrapper to take some digital file and enshrine it in a way that it can never be manipulated, edited, changed. That means that there's lots of things that will be turned into NFTs passports. Any coin of identification records, most of these things should be turned into NFTs.

But the, the NFT sort of focused kind of faded because everyone was like, oh, NFTs equal pretty pictures and no one wants those anymore. You know, whatever the prices of of like crypto punks and bored apes remember over a million dollars some of these idiots were paying. And now, I mean, I'm, I think most of these things have lost 99% of their value, which is why from the wax perspective, our view was, like baseball cards, you open up the pack, you got some fun out of the experience. It's like a scratcher, right? Like on a, on a, on a, on a the lottery that there's an entertainment value and you know, whatever, $10. Okay, whatever. But you're gonna spend hundreds of thousands of dollars. Like, then it, it gets out of the realm of entertainment into, I don't know what, gambling or

Stephen: not accessible. Like when, I think like a perfect example is like for me to go buy a baseball card. The convenience store used to have baseball cards. You buy 'em the 2 9 9 3 9 9 in a pack, you can't do that anymore. They don't sell them anymore. You have to go and get these like 50 card a hundred card packs, these specialty packs.

And I think you've approached the industry in the same way where you wanna make it accessible for people that wanna just go and invest in the NFT and have some fun where everyone else is like, Hey, we have these like premier packs. You have to buy $150,000 worth. It kind of loses that engagement after a certain time when the hype dies down.

Would that be a good analogy to, for the situation? Especially 'cause like wax feels like the place, the convenience store where you can just go and get it versus like having to drive all the way across town now just to get a simple pack of cards for your kids to see what

William: And this, you're right. This was exactly the reason when, when I first said, okay, we have to build our own chain. Now, that seems obvious to people. Oh, 'cause there's lots of chains. But people were like, well, why can't you just use Ethereum? And again, I said, well, because. It's, it's capped. I mean, you can do 10 transactions a second.

It's and if it gets any kind of congestion, the gas prices could go up a hundred fold. That's not a place for doing, if you have a $5 pack or a $10 pack and you're paying $25 for the gas fees, it doesn't make any sense. And it, it like a lot of things, it was very hard to get that message out until people started going in 2021.

That's like four years later, right after wax was launched. They're like, oh my God, Ethereum doesn't scale. Right. I do think Solana was very well timed and timing is very important. Solana launched and then of course had sam Bankman put $4 billion of speculative capital, you know, behind it to drive the price up.

But Solana launched as quote, the Ethereum killer, right? Well, all of the, the better consensus mechanisms new blockchains, even a tron for God's sake could, could scale much better than, than Ethereum could. But it wasn't in people's mindset yet, right? But that moment where they saw what happened, they went, oh shit, it doesn't work.

What's the next best thing? And, and, and that was a very good time for Solana because it was, you know, relatively new. Maybe a year old at that point, and it could say, oh, look, it, you know, we can do this too. Even though initially of course, damn, that, that Solano was such a strange thing to me because the website would go down or the, the chain would go down like every two weeks.

And, and I, and I remember thinking, wow, in the history of wax, right, which launched in 2018 in the entire history, now it's whatever, eight years. There has not been a day, an hour, a minute of downtime. Like, like, like five, nine, reliability plus, plus plus. There's never been a downtime. There's no reason for a blockchain to go down.

But the, the future of the NFT. It might be a rebrand or whatever, but basically people will use blockchain based systems to secure and tokenize all of these assets, what we now call RWA, real world assets. And but probably the people creating those won't call them NFTs because the term NFT is too closely aligned now with like bored apes, speculative madness.

And so, I don't expect a return to that, by the way. I don't expect like, oh, these NFTs are gonna, you know, bored apes are gonna be worth $10 million. Again, I just don't see that. I think that was a time and a place and real world assets now, which is what, you know, we were trying to usher in with wax.

It was based NFTs and, and video game virtual items and real world assets like tokenizing cash. Like, like tether. That has taken, I must say I've been right about a lot of things in crypto, but not that it has taken far longer than I thought it would. I thought the the mass adoption of real world asset tokenization, frankly would've happened around 2020.

Stephen: I feel like we had like security token offerings, which was like a little bit of like a glimpse of that, you know, in 20, I believe it was 20 18, 20 19, but we didn't see really that take off E either. And that was kind of a rebrand, I think from ICOs. But let me ask you, William, talk to me like, you know, hit home, you're an entrepreneur, you're building all of these things, consensus mechanisms that work.

Everything on wax seems right? But then you have like, dapper Labs comes in, open sea comes in, Solana comes in, and it just feels like they're just marketed that, you know what I mean? The, the, the, the, the beautiful girl in the shiny dress and you're like, Hey, we've been doing this technology for years. It works.

And you're a trusted person in the space. Your track record's phenomenal. What do you think about seeing all these other players like get a boost or, you know, hit these hype cycles and maybe although Wax had a, you know, wax with something, I remember very early in NFTs, especially around those two projects, do you feel like it's getting the recognition or maybe just shed some light on some things that you guys are doing, especially the millions of dollars worth of transactions that people may not even know about 'cause they're so focused on pump fund or Solana.

William: Yeah, I would say you might remember this 'cause you've been in space a while. We used to talk about this world called like, this word called utility, right? Like, does this thing have utility? And again, the wax guys, we came from video game, virtual item trading. So we were trying to create an entire complete system.

Think of it more as apple, like, an Apple system versus, versus like, Microsoft in this way. Almost all chains up until wax were, were built as general purpose chains. What, what that meant to me was like guys would build a blockchain but have no fricking clue what they were people were gonna use it for.

It's like, I don't know, we just try it out. So we were very sector focused. We're like, Hey, we need to get. Skins video game skins and, and other types of NFTs in-game items. This is what we want. We want to tokenize assets. We, we did, we tokenized hundreds of millions of dollars of things like sneakers and other collectibles, real world collectibles.

And then you would trade the tokenized version of that, and then in the wax wallet you could hit redeem and get it sent to you, the real world. So we were, we built wax to be essentially no cost or incredibly cheap to use, right? Like gas fees of insignificant amounts because our thinking was we want this open platform that anybody can trade.

Consumer oriented items now, and it, and Wax to this day is, I haven't looked in the last week or so, but it's it was. Number one for number of transactions for most of its life. Solana now has passed it, but because of mean coins, but to put this in perspective the Bitcoin blockchain, I don't have to look Ethereum, I don't have to look 'cause it's always the same.

It's about a million, a million to daily transactions. That's all it's ever been. That's just what it does. Wax would do daily transactions during the NFT phase hype of, of 25, 30 million transactions, like 25 times. And a slow day for wax would be 5 million transactions compared to, you know, a million on Ethereum or Bitcoin at a, whereas the the miners on an Ethereum during that time were being compensated $600 million a month.

To through, through gas and then tokens. Our people the the people running the chains were the block producers, we call them, were being compensated a million dollars for, for instance. So, so if you think about it from an economic standpoint, to run our chain was, was extremely capital efficient, right?

But let's now take, go away from utility, which is basically being able to do a lot at a, at a very attractive price. What the industry kind of evolved to was more token speculation. So for a lot of those companies you mentioned they took venture capital in and then they price boosted their token with the venture capital.

But you, you might remember in 20 20, 20 21. These ridiculous amounts of capital that blockchains were raising. And you know, the thing about blockchains is they're very capital efficient. So it's like, why are they raising hundreds of millions? Well, for most of them, that money was used to buy their token, to keep the price high, right?

And so I think that now if you look at the top 100 tokens, for instance, by market cap here's a funny one, like 10 of them are like bankrupt companies or whatever. I mean, I think FTX is token is still a top like 75 token. The company was literally all the guys were thrown in jail and the company declared bankruptcy.

But these tokens stick around. Meme coins come, which by definition, you know, no utility. So the industry. Has shifted to pure speculation. And for instance, if you as a, as a as a, as a parlor trick, if you ever talk to somebody who invests a lot in blockchain, if you ask them like, what metrics are metrics important?

Most investors would say, absolutely. And then you say, okay, well how about transaction volume? Is that an important metric? Absolutely. Can you name the top five tokens? Top five transaction volume Blockchains. I'm telling you, almost no one can, 'cause no one really looks at it. It's so you either look at a chain as.

A utility oriented thing, or you look at it for speculation, the industry has really gone towards speculation. And by the way, I'm a capitalist, you know, so I understand that. But the, the negative side of that then is you're not compensating any builder to build in utility and real world capability. I

Stephen: then the only person that gets hurt is the customers that bought these. They're the only ones that pay the ultimate price, right?

William: Oh yeah. Well, and this is true for, yeah, but you'll hear teams that have built blockchains. They'll, you hear this a lot with Ethereum guys, they do this massive release with all these new capabilities, and it's sort of like a meme in itself. After they release it, the token drops in price. You're like, wait a minute, why did the token drop in price?

We, we just created all these capabilities because the reality is most people don't use those capabilities. The, the most action in the crypto industry is on the exchanges. It's not businesses or entrepreneurs individuals using the blockchains. Right? Just like take away meme, coin trading, the transactions are not interesting, right.

Stephen: like, we like shiny man. We don't like utility. We like, it's like, I think that reflects society though, right? Like we all know how to get in better shape, right? We eat well, we get eight hours of sleep. We exercise a little, but everyone's doing saunas and cold plunges and ozempic. Like nobody wants to do the easy thing.

We wanna do the thing that we can tell everyone that we're doing, and I think that reflects a lot in the crypto

William: You're

Stephen: do the shiny thing that looks more exciting than actually doing, you know, what, I guess is now considered the traditional boring thing, which is like Bitcoin and functionality like wax, blockchain.

I wanna, we have a few minutes left. I want to talk to you about regulations, especially around stable coins, your co-founder at, at the time of Tether. A like, like, did you know that the space was gonna be regulated like this? What do you think of the current regulations that might be stifling some of the innovation and turning the functionality to your point, turning the utility of you know, a stable coin and now having very similar, you know, regulations put upon it that traditional banks have with, you know, large reserves which kind of steal or stifle the innovation that the stable coins, especially those getting into the countries that you described earlier.

William: First I'd say, you know, the the word regulation is such a, like a. Vague word, right? It, it's just I, I try to always avoid it because I'm like, I don't know. There's a set of rules that different societies have imposed on businesses. I. Whenever I hear people say, oh, crypto's unregulated. I'm like, dude, that's, you're insane.

Like, like, there's thousands of regulations that crypto companies have to abide by. There may be some that banks abide by that crypto doesn't, or that stock issuing companies abide by that. Crypto doesn't, but that's because they're different beasts. So, the, the best form of regulation is transparency and accountability.

Right? So the Terra Luna had neither of those, right? And it was also based on a, for your audience. There's there's, there's three ways to collateralize a, a stable coin. And, and Terra Luna picked the worst way, right? And and it failed. It was, it was bound to. So, the Trump administration has been mostly I think, supportive of, of stable coins, though, funny enough, they're quite negative on the idea of of the the Federal Reserve are a central bank issuing a stable coin.

I'm not quite sure why. But that in the end all, as I mentioned, all fiat currencies, all central banks should ultimately issue their currency in stable coins. But if we, if we look at the current new sets of rules that are being imposed by not just the US but by other nations and then the voluntary compliance with things like KYC, know your customer and any money laundering, I think those are mostly quite good.

Tether is sort of, an outlier. It's the first stable coin it invented. That's the category. And it is it now publishes the, essentially a balance sheet that shows what's behind it. I believe all stable coins should have a proof of, of reserve, a proof of backing. This is something that the existing stable coin legislation in the US calls out, and I agree because it's very easy to do, it's easy for people to implement that.

And the likelihood is that I would say. Many, I don't know if at all, but many multinational co companies over the next 10 years will have their own stable coins because it makes so much sense. They're a good thing. The area where stable coins actually are the most valuable is also an area where most people never really delve into.

And that is the the enormous currency conversion costs that most of us have to have to pay. And we do it without really understanding what that cost is. Right. Because there's about a hundred trillion dollar global economy in, in the world annually and about. 1 trillion of that is sucked out by currency conversion costs which are basically profits captured by about 5,000 global financial institutions that have special relationships with our governments where they're allowed to be currency traders.

And so what's beautiful about tokenizing and, and let's assume all stable coins are tokenized, is that you never have to convert. I can send someone in Japan tokenized dollars and they can hold those tokenized dollars and then use those to buy something with anyone around the world, never having to bear the burden of the currency conversion.

And this is why I think lots of multinationals, anytime you do cross border settlement, you're, you're paying this currency, conversion costs.

Stephen: Even within their own organization, you mean? So it makes sense for these organizations to have a stable coin, so they're not, you know, just transferring funds is costing them these

William: Yeah, if you're, if you're earning most of your money in yen, but you're paying some workers in California in dollars, you're having to convert right now. Not everybody wants to have all of their currency tokenized. Right. Until we get to a point where that's, it's freely, you're freely able to spend and pay for anything.

But businesses for sure would love this. And I think it took. Even payment companies like PayPal, it took 'em 15 fricking years to finally go, oh, you know, by, you know, it took a long time for these businesses to go, wow, this stable coin thing makes sense. And the reality is, you know, tether is the most traded crypto on earth.

And I think stable coins are the real story of blockchain. Stable coins are going to become the the most traded, they're already the most traded asset, but they will remain and even grow in, in, in trading volume. That's the real, I think that's the biggest contribution blockchain has provided to the world is the invention of stable coins.

And they're not gonna go away. And once the US has a regulatory regime around stable coins, every other major company's gonna go. US is doing it. We're gonna copy.

Stephen: Yeah. And that's always the biggest heart is like if you're dealing with the US and you can't, you really use it in the way you want to. It's kind of hurting, you know, a lot of your global business. And to your point, that was the ethos of crypto. When I first got in, in 2016, everyone was talking about banking, the underbanked and the unbanked, and we never really seemed to fix that problem until like stable coins were widely used where we see like, you know, you can't just go into a Nigerian bank and ask for US dollars, you may never get it.

Versus like, Hey, if you're in the US you can get access to cash of, you know, all the different countries. But you know, there's places around the world where the US dollar is almost impossible to, to obtain, and that's hard to do business if you can't send funds in USD.

William: right. Yeah, you, we could, believe me, we could have a long conversation about

Stephen: William, I feel like we need to come back. You need to come back on maybe in a few months, and let's do a part two. We've run out of time today, but tell us anything that you're working on, whether it's wax, anything that you're seeing or excited about the industry. Ai tell us something. Leave the audience with a little bit of a, a teaser for our next conversation.

William: let me go two ways on that. So, yeah, so Wax is, is I still am, am excited and confident in video gaming, which is like the largest consumer activity in the world. There's like 3 trillion people who do video games. I am, I'm still very excited about what blockchain can do for video gaming.

But as I mentioned at the beginning, the the UI problem, the inconvenience problem, I think has stifled a lot of that. So, wax is still very focused on video gaming. It's the reason it's still top five or six sometime number two, chain daily in transaction volume, especially when you take away memes.

So that's, but it hasn't taken off. So, so we, we we're very focused in that area. And then 2025, as you know, hopefully everybody here knows this was supposed to be the post 2024 Bitcoin happening Bull Market. And so this has been the most important year in the last four years. And traditionally at the end of that bull market, which if past patterns persist, would end in November, 2025.

It's about an 18 month cycle from the beginning to the finish. So it started in April 24 to have ITing for Bitcoin and probably would end in, I. 2025, but we really haven't seen it happen yet. So this is worrisome. But we're in a new era. I think if Bitcoin doesn't hit 200,000, I would say by the end of April, and I'm not predicting it will, I'm just saying if it doesn't hit 200,000 by the end of April, and I know that would mean it would more than double, so probably unlikely.

But then we are definitively off this very consistent prior pattern we've been on, which means we're an unknown territory. And so, call it September, October, maybe. We'll we'll be talking then if Bitcoin hasn't done that and remember wherever Bitcoin goes, all the alts follow, then we will have had a.

Post Bitcoin happening cycle where we didn't get the bull run. I think that means 2026. If it doesn't happen, if it does, we're good. If 2026 who knows, wall Street may lose interest, right? A lot of people may lose interest. We might have a reshuffling. Maybe it goes back to utility and less mad speculation, I don't know.

But this year is, is so important because of this if, if, why would you hold Bitcoin if it doesn't rise much more than what you could get out of a traditional stock, but you have all of the volatility and the difficulty of using it. So, I'm still focused on us achieving this post Bitcoin habiting pattern, but I am, I am.

I. I'm aware that if it doesn't happen in a, in a good way, people who are sort of like, I want to come in when things are shaken up so that maybe I can take advantage of some new vector. The industry goes, that could be in 2026.

Stephen: I love it. And I think, you know, the only thing about utility, every utility token had very little utility. Everyone that pronounces themselves is utility token, had very little utility. I think you know, utilities in the people that know what you're building at

William: And, and let me just say, you're exactly right. I, when we did wax, this was the reason, because we did it the same way we did the marketplace. We built the blockchain, then we built the wallet. We were the first to allow you to use very simple things like OAuth for sign on, sign off, really easy to use, and we created the marketplace.

So we, we wanted the, it's like Apple coming and saying, we're gonna give you the phone, we're going to give you the apps, we're going to give you the payments to do it a com, a complete system if you just give people a chain and say, build something that never works. So, these kind of industry targeted chains that allow you to do a useful utility, maybe when mad speculation starts to fade, that becomes much of a, of a bigger focus, which I think would be much better for entrepreneurs because how the hell do you know if your token's gonna pop or not, or be manipulated by some exchange? You don't know. But what you can control is how well of a job you do in allowing people to do that utility that you think they might wanna do.

And so that's maybe that's where blockchain starts to head, which, which would frankly take away a lot of its criticism, because you're right, most utility tokens do, how many times did we see in the 2017 ICO or 2020 ICO bubble where people were like, we allow you to use our token as a payment mechanism.

Really? Like, that's your fucking innovation. Like, like, I can do that with anyone.

Stephen: Such a great point, William, where can people find you? Where, where do you express similar thoughts and what a powerful point to lead off about what could happen in 2025 and 2026? I think that gave a lot of people the something to think about. Well, where can people find you if they're just like, Hey, I need to reach out to him and keep, try, keep tabs on both even's thought leadership.

William: I will say mostly I, I talk on podcasts or, you know, CNBC or stuff. I, I mostly that I do have a Twitter account, which is at William e Quigley where I, I publish stuff. But I am not like you, I am not creating a lot of content. I, I probably could, but I've been busy building stuff and as you know, this is a full-time job. Content creation is a full-time job.

Stephen: Full time job and you know, I think I appreciate, I appreciate that you're working on the building. So content creators like me have interesting people to talk to. Otherwise we're just talking heads, talking to other content creators and nobody has anything of of utility..

William: I do often wanna say more stuff, but then I'm like, like we talk. It's it, what you do takes a lot of discipline, a lot of work, a lot of prep. Right. So, maybe, maybe if crypto doesn't go the way everybody's thinking it will, I'll have a little bit more time.

Stephen: William Quigley, the content creator 2026, look out for, look out for. William, thank you so much for joining us. I, we will have you back in a few months and we can talk more about some of the predictions you had earlier on. Talk a little bit about ai, get deeper into delegated proof of stake, because I think that's such an interesting concept.

And maybe even touch on like, is Ethereum losing its luster? I know you made that statement. So many more interesting things to talk about you. William, thanks for joining the Around the Coin podcast and we can't wait to have you on for the threepeat.

William: You're welcome. Thank you.