In Part 1, Steve Wand, AKA BitBuzz, discussed the beginnings of the crypto space with me, covering everything from Bitcoin and Crypto Art to Rare Pepes and CryptoKitties. If you haven’t yet, read or watch through Part 1 here. If you’re already caught up, feel free to watch or read through Part 2, as you prefer, below:
D: You attribute Waterloo to being the birthplace of this whole ecosystem. I just want to have that on the record for people to know. So much is in the United States, but a lot came from Canada.
S: A lot of companies are in Toronto, such as Polymath. They were heavily involved and kicked off and helped to facilitate the ICO boom. Now, I’m not saying that was a great thing, but it did get a lot of media attention; they got a lot of new eyes in the space, a lot of people leaving their day jobs to come over and work here because it was confirmed that this is a solid career to go into. And so when we go to conferences, whether it’s LA, abroad in the Caribbean, or if you’re in New York or Chicago, and people ask “Where are you from?” and you say “Toronto,” they reply,“What the hell’s with you, there’s like, fifteen of you guys here!” After a while, in some places, it’s like the Canadian crypto party. It was a whole bunch of guys going all over the place. There was a hotbed of talent- devs like Vitalik’s dad, Dimitri, had Block Geeks, which was like a Y Combinator and a launchpad for blockchain companies. So they were able to facilitate tons of that. Then we had Hut8, which was one of the biggest miners in all of Canada, and they were making a mint back in the day, it was booming. They had huge offices downtown Toronto, right in the banking district; they hired tons of blockchain companies to go in there with them. I had this crazy little weed startup incubator going on right beside the banking system, in Canada. They made their mark; all those people have gone on to do fantastic things and build the space to make the tools we use easier, to make our lives easier, to get in and out of crypto, and understand, and see the analytics behind it. So everyone I’ve known in the space for, say, a five to six-year period, at some point in time, investing isn’t enough, and they want to start making an impact and usually, they get involved and start building, you know, do a start-up, or they’re finding holes in the system, they want to fix them. So I just appreciate seeing that, because people do truly want the best for the space.
D: Absolutely, very well said, and I think it’s very difficult not to, once you’re in the space; you’ve invested in better, you’ve researched enough, it’s difficult not to want to be involved, because you see the future – and how important this is going to be in the future, the web3 space as a whole… So, I mean, it’s very encouraging, once you’re in, you’re in, and I do think that there’s a big push, as we’ve seen, of Canadians in the space, making a difference.
I do want to move into a more broad conversation, about regulation. We’re seeing things like the United States trying to go back and forth to the Senate… I know the bill didn’t go through, but there is a lot of conversation right now about it, especially in the realm of NFTs. How do you respond to the regulation conversation that’s currently taking place?
S: I guess being in Canada it’s a little bit different, and always has been. Back when FinCEN put regulations in, Canada followed suit, maybe three years later, very loosely, with nonspecific cut and dry verbiage in the tax forms. So Kansas has just been sitting back and waiting for things, whereas the States have been more aggressive and before they self-regulate, we’re going to dictate. Personally, I think you should see where the industry goes, not stifle innovation, as long as it’s not rampant with fraud. Right now, other than some wash trading that was going on back in the day on Rarible… I don’t think this industry has anything to worry about at this point. The traditional art space is another thing… It’s very threatening to the status quo, but it doesn’t mean that we’re not safe; if anything, we’re 50,000 times more transparent and more efficient.
So I guess I am in a lot of groups where there are some high-paid lawyers in the crypto space, working specifically in the United States and the Caribbean. I try to keep an ear to what’s happening globally because I’m not just going to be having to abide by Canadian law; I don’t know where I’m going to settle in the world in the coming years. I’m going to vie for the governments that are open and have a solid frame of mind. No archaic mustache Pete, who would understand ‘so just say no.’ I am going to look for the countries where I’m welcome, who are doing blockchain initiatives; who have hackathons for the younger generation coming through. I’ve just tried to position myself for five years; whether it be Switzerland, the Bahamas, or, right now, Florida, or somewhere like that. Those are the places that I’m looking at. The regulation does change drastically. Now, once you get to a certain point and it’s heavily invested in by lobbyist groups, banks, major VC firms, it’s not going anywhere at that point, no matter what the government wants.
Lobbyists will turn against them and lobby for the reverse than they were four years prior. I think we’re coming to that point very soon. Ethereum has been deemed a non-security. So there are no regulatory issues there; Bitcoin has already passed the Howey test. I don’t believe those two coins have to worry about things we’ve seen like EOS and other ones who’ve gotten their hands slapped, and Telegram had to get their 4 billion back. So it’s not like they’re hands-off. The only distracting thing is that art in the traditional space has been rampant with fraud. So they’re assuming it’s carrying over. Now, if they understood the blockchain, they’d have to realize there’s no worry, it’s like a transparent ledger, that’s a dream come true. There’s nothing to worry about, you just curbed the biggest problem in the traditional space. Plus, you’ve made it cheaper, faster, to the world on the top of the dime, as long as you have the internet.
So once they realize, if they were smart, instead of going against it, and just trying to discount it, they should position themselves and learn more about it. So you’re one of the first in the space that can migrate people over there and then you have a long, long successful career in the space because it’s going to be decades before the masses fully understand that everyone’s come over. So if you add yourself as a traditional person, right now, instead of being discouraged, and angry, and upset that you’re irrelevant, you have probably five to ten years to not become that person. In those five to ten years, you can be a leader, bringing people into that space so you’re someone who’s at the forefront of it and that’s what people should be looking at, instead of being upset or discouraged about it.
D: I mean, the bigger the company or the bigger the organization – governments being at the top of that list, governments and banks – the more difficult it is to get that through. I’ve had the pleasure of working with some really large companies now in the space; and it’s the same conversations – what you brought up – it’s that they’re asking about KYC, they’re asking about AML, and I say, “Well you know what? You’re lucky; it’s on a public ledger, and they told you exactly what data they’re comfortable giving away by what’s on their profile. So, if they decided to get an ENS domain, they’re happy with you knowing their name, or they’re happy with you knowing what they’d like to be called; if it’s a profile on a website, they can choose to put their social media, or not, but they’re not obligated to, and that’s the information that you’ve been given on the blockchain; you’re welcome.
S: And I think we can see by the tools that we all use, if you look at the market share of Uniswap and Metamask, or any aggregators, they’re pretty much the tools that we have, and all of them are centralized. Yeah, we hope no one uses trust wallets. No one goes through KYC, like no one I know. I know some articles say they do, but with the people I talk to, no one’s doing those things. It’s because we all appreciate the tools that we’ve built around our privacy and that’s why we’re in this space to begin with, and why it flourishes. Like when Uniswap is doing the same amount as Coinbase and one of them is six months old, one of those is four years old and jumped through hoops, and now has a banking registered, like banking transfer place transmitter, that’s a no; it just goes to show we don’t want that we want Uniswap.
D: I love Uniswap! I’m a big, big fan of the platform. Probably the thing I’ve seen the most misinformation around, which I’ve been ranting about quite a bit lately, is a lot of confusion around proof of work vs. proof of stake, and people making big statements about how they’re 90% more environmentally sound- and that bothers me both in terms of verbiage and in terms of positioning because it’s not accurate. I do believe that there’s always going to be a place for proof of work, especially in terms of Bitcoin and doing massive transactions. So as somebody who’s made millions of transactions and could probably speak on this more than most people, how do you feel about proof of work? Do you feel that it’s necessary to keep? And, maybe a better question, how do you feel about proof of stake and the recent boom in chains like Palm, Matic, Wax… all of these projects that have become so popular recently?
S: I would personally say that if you were to ask for the world’s knowledge, say you had to scan a public library of New York and store that somewhere, Bitcoin’s blockchain as a proof of work mechanism is the most secure in my mind. Ethereum’s proof of stake has been done before for years by several people. It is light-years better than any legacy product we’ve got but it isn’t better than Bitcoin. I mean, if I had every Beeple ever released, and I had the option of storing that on Ethereum or Bitcoin, I would choose Bitcoin’s blockchain. Proof of work is somewhat new, but it will scale properly over time, three to five years, not 18 months like people are hoping. You have to understand, if you’re building the world’s first Oracle, you don’t want it to be rushed, because a whole bunch of trolls are mocking you. Take a decade to build something that’s gonna last for two centuries. That makes sense to me and not doing that and rushing things is idiotic… The DOA was rushed, and look what happened.
Proof of stake, I think, has its place here; the arguments on energy were done by a group who pinpointed that because the data was available. If you did one day in the United States, it would probably dwarf what Bitcoin is doing, and now that you put every bank together, plus the military/industrial complex like the States do… If you drive by a building, if you drive by the New York skyline at night, there’s no one in 50,000 office buildings, yet the lights are on with the highest amount of lumens possible. I mean, that whole system is probably 1000 times more than what Bitcoin will ever be in its lifetime. So that argument is kind of idiotic in my mind, and with solar coming into play with other options available, other than, I guess, non-renewable energy, Bitcoin will become much more environmentally friendly as well. The global warming movement right now, I find, is also somewhat strange; you’ve got a government saying “pay us, and we’re taxing the shit out of you,” and you’re going to supposedly buy or bomb the planet to get back to normal. I don’t know how that’s going to work but with that, kind of coupled with that thing, I think it was put out either by a banking Consortium, who lobbied someone, or someone who was trying to drop the price and then buy it on the low. That’s usually what happens, it’s fun. Jamie Diamond did it for years.
D: Yeah, I’m not sure even how it came about, to be honest, because it just doesn’t make any sense. In this respect, how are they comparing two different systems and how much energy do they use? They’re two entirely different systems doing two different things.
S: They are, and it was a weird argument, because for a while there, when ETH got expensive, WAX was like, “Come to us we’re cheap,” and then now what are you marketing against? It’s just those protocols, and change won’t survive long term with a marketing play like that. Ethereum has never spent a dime on marketing, everyone just uses them because they’re the chain of choice and so they’re not expensive. Demand on the network dictates the price of the gas, so Ethereum didn’t say, “I don’t want to approve your transaction; today, I’m going to charge you $50 for gas.” You have 197,000 people waiting ahead of you to confirm a transaction. They don’t want to use WAX, they don’t want to use Tezos, they don’t want to use Solana, they want to use Ethereum and that’s why there are hundreds of thousands of people ahead of you waiting to confirm the transaction. So Ethereum isn’t expensive; it’s the most congested, widely used, most in-demand protocol for smart contracts on the planet, and that’s why the prices are the way they are. Let’s not call it expensive. If you want X to happen, then that’s the price to make that happen.
D: Right? It’s that you want to buy real estate on Madison Avenue, or in Yorkville versus, you want to buy in the middle of a field… That’s what it costs.
S: The homeowner, if it is too expensive, you either buy it or you don’t buy it, or you go buy a house somewhere else but you can afford it because that’s your priority.
D: Yeah, and I think what you’re saying is, there is a place for proof of stake but it’s not an alternative, it’s not a this or that; it’s that there are certain things that make sense to put on proof of stake, and there are certain things that make sense to put on proof of work.
Now I don’t want to take up too much time on this next topic of conversation, but it is one of my favourites. I would love to hear your thoughts as we’re moving forward, and again as Bitcoin becomes more environmentally friendly than it already is. It’s way more environmentally friendly than our current financial system, but especially in Canada, and other countries we see, getting a lot of the mining rigs from China; and other countries that are having issues with regulation. We do see a big push to opt for geothermal energy, solar energy, wind power, and a push to try to make sustainable sources of money, of power, of energy, etc.
How do you feel about the future of Bitcoin and NFTs? I would love to hear your thoughts on the lightning network? Because I know you did say that if you could choose to put some of your more expensive pieces on Bitcoin, you would. So I’d love to hear your thoughts on lightning.
S: I do hope it does excel with lightning available now, because the chain itself, layer one, can’t handle that. It will work on lightning; the community and the tools have to be there. I know Cryptograffiti, Crypto by Brekky and a couple of others would only ever mint an NFT on Bitcoin’s network; they wouldn’t do it on Ethereum or any other chains for that matter. So there are some NFTs that will never be on Ethereum and that’s maybe because they’re wrapped and someone goes another way to remove them. But if they were to, I would specifically sign up for a Bitcoin wallet, a Bitcoin exchange, like a platform where we could buy art, and I would wait in line and bid quite a bit to get their NFTs for sure. So there is demand there for people like myself now because everyone… you saw the wave of OpenSea and NFTs, Tezos and Hic et Nunc, and WAX. So everyone’s moving around scattering and then people find their way, pick which ones they like the best, and maybe which ones lose less funds for them. But for someone like myself, who’s deep into the space, just the scarcity and the storage and everything else would be Bitcoin; I would move my most valuable assets to their system for sure. I would sign up for sites, because of certain people that would be drawing me to them that I know I can’t buy on other platforms. Now, having said that, the argument is kind of funny to me, because if you’re telling people that Ethereum isn’t secure, is Bitcoin more secure?
If you’re then transferring these valuable NFT’s around on layer two, Ethereum’s technically, almost or just as secure as that layer two solution as a layer one. So that argument is very strange; I’m not too sure how their community will uptake this. But I do know that if you look at wrapped BTC, there are, you know, $8 billion or $9 billion of wrapped BTC on the Ethereum network. So there’s like 9 billion of Bitcoin, that the people see more value in holding as an ETH asset than they do in Bitcoin. So right there, there is a demand already, people are just using the workaround because there is nothing available directly on that chain. But I do hope it does excel, I think there’s room for lots of things and I want to see these old projects come back to life, and thrive and have easy access to buy and sell these things. I think they’ll see their day in the light again, and will supersede the assets we’re seeing on Ethereum.
D: Very well said, and I’m so looking forward to lightning. I’m trying to set up a node in my house; I want all that jazz. I want to be ready to go in because I agree with you. This is an NFT publication so we won’t go BTC Maxi on anybody but I think we both have been in that space for longer than any of the other spaces so it’s something we believe in. And also I have one last thing to say on that. Look at the issues people in the space have with a lot of these other chains and in the way that they’re positioning themselves. It’s an issue with the marketing and the PR; they’re misconstruing information, like saying that their chain is “90% more environmentally friendly…” Why are they saying that? Bitcoin and Ethereum don’t have a marketing budget. They’re not putting out press releases, so I think it’s just a different situation.
S: Look at Flow. Flow in my mind is the same as Tops Digital; you don’t own those, you can’t freely buy and sell them, move them around wallet to wallet. They’re locked in, connected to the US ecosystem, and things like that. There should be terms that we use… this is a distributed ledger, which is a public ledger of digital assets. Those are not NFT’s, NFT’s are misconstrued a lot as well. Unless it’s a 1/1, it’s not an NFT… it’s a digital collectible. And even then it’s a ‘tokenized digital collectible’ and other ones are ‘tokenized digital collectibles in a closed-loop system.’ And so that is like the Fortnite skin, and Top Shots cards are not too far off each other from what they truly are- and that needs to change if they’re saying they’re a blockchain company.
This is part 2 of 3 from an interview with Steve Wand, AKA Bitbuzz, conducted by WTF’s Editor in Chief, David Cash. For part 1 click here. Part 3 coming soon!
In the meantime follow Steve on socials and check out some of his current projects:
Not Fungible: https://notfungible.com/
Game Credits: https://gamecredits.org/