From PayPal to Tether: William Quigley’s Journey in Fintech & Blockchain Innovation

Summary

William Quigley, a long-time VC and entrepreneur, shares his journey from auditing failing financial institutions to becoming a venture capitalist and co-founding Tether and WAX. He discusses the challenges of investing in the early days of the internet and blockchain, and the creation of Tether as a stablecoin. Quigley also explains the roadmap for NFTs and the evolution of WAX as a platform for trading NFTs. The conversation covers various topics related to NFTs, blockchain, AI, and career advice. William Quigley discusses the limitations of Ethereum for consumer mass market transactions and the potential of NFTs beyond collectibles. He emphasizes the ability of NFTs to transfer something to someone at no cost and with certainty of authenticity. Quigley also explores the intersection of blockchain and AI, particularly in auditing smart contracts and enhancing trading strategies. He advises young people to gain foundational skills in an exceptional company before venturing into entrepreneurship and to observe untapped market opportunities.

Takeaways

• William Quigley has a background in auditing financial institutions and working at the Walt Disney Company before becoming a venture capitalist.
• He co-founded Tether, the world's first fiat-backed stablecoin, and WAX, a blockchain platform for trading NFTs.
• The early days of investing in the internet and blockchain were challenging, as there was limited interest and understanding in these technologies.
• Tether was created to provide stability in the volatile crypto market and enable easier trading between cryptocurrencies.
• WAX was developed to tokenize and trade non-fungible assets, such as video game virtual items and collectibles.
• The roadmap for NFTs includes expanding the use cases beyond profile pictures and collectibles, with potential applications in various industries. Ethereum is not designed for consumer mass market transactions, and NFTs have the potential to go beyond collectibles.
• NFTs enable the transfer of assets at no cost and with certainty of authenticity, revolutionizing the verification process.
• AI can be used to audit smart contracts and enhance trading strategies in the blockchain space.
• Young people should gain foundational skills in an exceptional company before pursuing entrepreneurship and should observe untapped market opportunities.

Chapters
00:00 Introduction and Background
03:44 Challenges of Investing in the Early Days of the Internet and Blockchain
14:12 The Creation of Tether
27:35 WAX: Tokenizing and Trading Non-Fungible Assets
32:18 The Roadmap for NFTs
39:14 The Intersection of Blockchain and AI: Auditing Smart Contracts
42:34 Enhancing Trading Strategies with AI in the Blockchain Space
46:42 Career Advice: Gaining Foundational Skills and Observing Market Opportunities

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Chapters

• 0:37 Introduction and Background
• 3:00 Challenges of Investing in the Early Days of the Internet and Blockchain
• 12:18 The Creation of Tether
• 27:05 WAX: Tokenising and NFTs
• 29:56 The Roadmap for NFTs
• 39:05 The Intersection of Blockchain and AI: Auditing Smart Contracts
• 45:13 Career Advice: Gaining Foundational Skills and Observing Market Opportunities

Transcript

Matt (00:02.0)
Hi, this is Matthew Cheung. founder of Work in Fintech and today we're delighted to be joined by William Quigley. He's a long time VC and entrepreneur. William was the first institutional investor in PayPal and has over 25 years of experience at tech -focused VCs. He co -founded Tether, the world's first fiat -backed stablecoin and the most traded cryptocurrency to date. And he also founded Wax, one of the most active blockchains globally. So William, thank

for joining us today. So I guess you've got a very interesting story that everyone would love to hear but can we go back to the very beginning like before you started getting into kind of being a VC and investing and so on what did you do before that and how did you start to get into investment?

William (00:33.807)
Thank you.

William (00:53.551)
So I guess I began my career working for a firm that's no longer around, but it was a company, a consulting firm, that audited financial institutions. It was called Arthur Anderson. And in the mid-'80s, in the United States, we had the financial crisis of the century, like the 10th one in my lifetime.

And my responsibility was to look at these failing financial institutions and try to figure out what their real financial condition was. It was called the savings and loan crisis. And at the time, it was a pretty big deal in the United States. Hundreds of banks were failing because they had made bad loans. It's a story that now is very familiar. But at the time, people were calling it the financial,

catastrophe of the century, but it turns out those happen about every seven years is what I figured out in my later life and So I learned a lot about finance a lot about asset securitization. It was the dawn of that securitizing home loans and credit card receivables Car car leases all that sort of the dawn of modern finance

And from there I went into the Walt Disney Company. And I was in Los Angeles, so you know, entertainment was a big industry. And I jumped around a lot as we were, we did back then, a lot of different divisions from Euro Disney to the Disney Store retail chain. And then I wound up being the CFO of Disney's merchandise licensing division, where, you know, they have all of their standard

Disney properties and they license them out to people from T -shirts to waffle irons to theatrical releases, all that. it was while I was at Disney that the internet became a thing. And it was in 1994 when something called Mosaic, which was one of the first

William (03:16.495)
popular browsers became released and I saw that. I got very excited about the possibilities for the internet, particularly in the consumer area where I was working. I talked to my bosses, but there was not a lot of interest in any big company in the internet at that time. mean, almost no interest at all.

And that would of course bite a lot of big companies in the ass down the road. And as a result, I left and I decided I would become a venture capitalist. And back then, you know, there wasn't really any obvious roadmap for that. There wasn't a... There was no internet. You couldn't go and Google something. You you could talk to people.

When I was in the licensing division of Disney, we were buying companies and some of those companies were owned by venture capitalists. And so I asked people who were doing that job, like, what is your job? How did you get it? And so on. And I thought, that sounds like something I'd like to do. In the end, there was no way to really join a firm because, you

Back then, the roadmap was you were born into a very wealthy family and you had money and you invested it. Or you sold your company for billions of dollars, right? There really wasn't a career track. And so I teamed up with two other guys and we started our own firm. And that turned out to be an exceptionally good idea at the dawn of the

because VCs were shunning the internet. It was thought of as sort of a goofy thing, not for serious people, particularly consumer internet. And it's probably almost impossible for young people to understand this now, but prior to the internet, venture capitalists didn't want to touch anything regarding consumer stuff. They only wanted to do really deep technology.

William (05:37.123)
they had no experience in the consumer field. And I did, and I thought the internet was a great place for that. we created, my partners and I, a philosophy about how to invest in an emerging space. We didn't do it deliberately, but as we were working and investing, we made several hundred investments. As we did that, we...

we started to go, we really should be looking at different sectors, you know, and once we do an investment, we should see what does that company need that maybe could itself be a new company we could fund. That was one of the reasons we invested in PayPal was because it was very hard for people to pay for things online in the 1990s. It was almost impossible if you were an online merchant.

to get a credit card, right? You would take a check. So every time we would find a hardship that one of our companies was experiencing, we would try to think, are there other companies trying to do something and also having that same hardship? Maybe we should launch a company, because we were incubating, maybe we should launch a company to serve that need. And that was

roadmap I applied in the early days of blockchain as

Matt (07:11.216)
So you were there in the early days of FinTech 1 .0 and people making transactions on the web. And that's obviously evolved a lot from, like you said, the early days of the internet through to then the Bitcoin white paper came out and people looking at blockchain. So that was in, 2008, right after the financial crash. think it's a couple of months after Lehman's and Ben Stern's went down.

William (07:36.911)
Yeah, call it 2009, 2010, you know, was when really, people started to really take interest.

Matt (07:45.776)
And when did you take interest?

William (07:49.057)
About a year after my partner, I had a partner for much of my career and we had been involved in the video game virtual item trading business. My partner founded that, the came up with the concept in the nineties of trading video game virtual items for money. And he created the largest marketplace in the world for doing that. video game virtual items became a very big, well relative to crypto.

small, but for gaming at the time it was a pretty big deal. People like to pay for things with their virtual items, but how do you get them? And so he came up with this idea of creating a marketplace and kind of how we got involved was the problem was he didn't know how to get people to pay for it. And so he wound up using PayPal.

And it was the early days of PayPal, right? So this was a category PayPal knew nothing about. It was just a few guys. But it turned out to be a very, very attractive category and consistent. And so after he sold that business, I was on the board. He sold that business in 2009 and spent a year kind of figuring stuff out. What do you do next? He came across the Bitcoin white paper. He started to mine.

And it wasn't until 2011 that I took it seriously and I have talked to another podcast about how that happened. the brief version is all venture capitalists have scar tissue from prior investments. And when they've had a bad experience with an investment, they tend to not to want to do another similar thing. And I had a...

played around with two companies in the early days of the internet that were what we called magic internet money companies. Like one was called Beans, one was called Flues. And we were trying to figure out how we could use these micro payments to get around the great difficulty of doing small payments on the internet. even today, small payments sub five US.

William (10:09.059)
It's very hard to do. It's not affordable because the transaction cost is so high. And so I had told them this stuff doesn't work. I had been in Singapore helping a friend of mine set up her company. She was also launching a video game virtual item marketplace. And she mentioned Bitcoin to me. And I thought, OK, two smart people have mentioned this to me.

Maybe I'll think about it. And so when I got back to the US, I told my partner, I'll just give you a couple of hours. Make me your best case as to why this isn't just a redo of these 1990s failed payment companies. And that's when I learned about blockchain. And I should say learned about blockchain being married with a token because blockchains themselves

You know, well, in the 80s, when I was auditing banks, we used blockchains. I'm pretty sure blockchains have existed for many hundreds of years. And, but the notion, and I liked them, but the notion of a block chain being married with a token was where the magic happened because now you could decentralize the work involved in overseeing the block chain. And that was

And so I kind of got it and then decided, okay, I'm going to jump in like I did with the internet. I'm going to just going to jump in, know, quit everything. And I got off a bunch of boards and I just focused on blockchain. But now I had a roadmap from my time in the internet and in the internet space. When we started, we were learning it like everybody else. we just, my partners and I, first we did,

retail, online retail businesses. Then we were like, these businesses need customers. Then we did online advertising to drive them customers. And then we were like, well, now they have customers, how do customers pay? So then we got into the payment area. And so I told my partner, the way, if this works the way I think it's gonna work, we wanna have a roadmap. And so we came up with a four year roadmap for the types of deals we would do, mainly incubating.

William (12:32.747)
But if we saw a company that was doing a really good job of something we liked, we would invest as well. And then we started the venture capital fund just to target those companies. So we did like every conceivable aspect of what would be called crypto from building the blockchains to eventually once we did Mastercoin, which was the first attempt to put an intelligent layer on a blockchain, of Mastercoin came Ethereum.

And we were the second biggest buyers in the Ethereum crowd sale. then sometime in 2014, we came up with the concept of tokenizing a US dollar and creating what would became known as a stable coin. then NFTs, NFTs had always been in our mind because we were video game virtual item guys and we were trying to figure out a way to get video game virtual items on a blockchain.

But we needed a new consensus mechanism that was fast and cheap to do that. And that came about in 2017. Wallets, marketplaces. So I would say, by the way, the four -year plan took about 10 years to actually do in reality. And having that philosophy of this is a brand new open market, it's a brand...

new type of capability in the world, we need to think about our investment philosophy in an intelligent, comprehensive way. That wound up being very important.

Matt (14:12.538)
So with, because Tether is huge, and when you invested and participated and got involved in Tether, was it because you, was it going back to the payments idea again? Is that, was that where the, kind of the thesis when you were looking at it?

William (14:30.189)
Yeah, kind of, kind of. What happened was, so I believe the greatest businesses come from brilliant insight about something. And brilliant insight is the rarest element in the universe. Very few people have great insight. I think we had very good insight. And we were trading crypto, it was a

Obviously there weren't as many. Most of them were derivatives of Bitcoin blockchain. But the... Suffice to say it was really a pain in the ass to try to trade crypto and then periodically, if you wanted to reduce your exposure to volatility, to do

The only way to do that was to go through all these hoops to convert your crypto into fiat. And for people who've only been in the industry five, even maybe 10 years, you won't appreciate how freaking hard that was because there were only a few exchanges in the world, like three, that allowed you to deposit fiat. But those exchanges,

for strange reasons didn't allow you to trade much of anything but Bitcoin. So the fun stuff was on exchanges, which we called altcoin exchanges or alt exchanges. Those were exchanges that had all the weird new issued tokens, but they didn't have banking. So how do you get on those? Well, you would have to send your money to the regular exchange, which are only a few.

buy Bitcoin and then transfer your money out, the Bitcoin out to these alt exchanges. And then you're on the alt exchanges and you're messing around and then you get nervous because you think, you know, something's going to happen. Volatility is stepping up. You want to get out of that. Well, you have to sell all of your alt coins for Bitcoin, transfer your Bitcoin back to the original exchange that has fiat capability.

William (16:54.711)
sell your Bitcoin for fiat, get a wire to your bank because they wouldn't hold the fiat. And then by the time you got your fiat, seven days later, you wanted to be back in. So it was nonsense. And so our thinking was, is there a way to create some mechanism where we could get stability during periods of volatility without going through all those hoops?

And the idea came about, what if we were to tokenize some asset? And what asset would we want to tokenize? And we went through all the ideas. And then eventually it was like, our reference asset is really US dollars. So how can we do that? And there's many ways to create a, quote, stable coin.

and some of the bad ways we've now seen. We understood all the different ways to do it because there's a lot of academic research in this over the years, how central banks could do stuff like this. But we ultimately decided for very good reasons that a token would have to be backed one -to -one with a form of USD.

what it had to be like collateralizing other tokens or something we didn't think was a great idea. And then the challenge became, okay, so if people are going to give us fiat, we need to have a bank. And banks were very reluctant and they still are, right? It's still the bane of our existence as crypto people to maintain banking relationships.

And so we really struggled with finding a bank, you know, where we could... And as a former bank auditor, I was trying to tell the banks, we're going to be the best customer you've ever freaking had because there's a term in the US called core deposits. And core deposits are deposits upon which a bank can get maximum leverage. So it can loan out maybe 10 to one, right?

William (19:19.957)
And because that money is thought of as going to very stable in the bank and with fractional reserve banking, if you have a lot of stable money in the bank, you can loan out at a multiple. And so I explained that no one's going to want to redeem this. This money will be there for a long time, but they were just, it was too much for them, right? They just didn't understand. And then Silk Road and that kind of stuff, they were worried about crypto and all that.

The only other thing I would say about it was it's surprising to a lot of people how hard it was to explain to crypto people what Tether was. To crypto people, most of them couldn't understand it. And since I had done a lot of things in my life with new technologies, I appreciated why this was a struggle for

You know, they're like, well, it's a token, but it's backed by something. But the thing it's backed by isn't on a blockchain. Where is it? How do I know that thing is there? You know, all those questions and and and a lot of the crypto OGs were like, why would we need that? The last thing we want is a fiat synthetic. We are getting a wood of fiat. And that was nonsense, of course, just total nonsense.

And the most important thing and the reason why Tether is now the most traded crypto on earth, over 30 trillion dollars annually in trading volume, is because there is no way to trade in an arbitrage transaction a crypto without one side of that trading pair being stable. Right? You must have stability in one side of a trading pair. Otherwise, how do you calculate a profit?

So when you're trading two cryptos for each other, if somebody asks you, have you made money? Well, you would have to answer that with, well, it depends what my reference asset is. Is it US dollars? Is it gold? Is it another crypto? So, you know, when you're calculating profits, it really helps to have something that's stable. And of course, that's why most trading on

William (21:44.959)
exchanges is arbitrage trading and that's why tether is so

Matt (21:52.75)
At what point did the banks start listening to you then? Because Teller is one of the biggest holders of short -term notes and deposits now.

William (21:59.555)
never really. the major banks still don't like each other. And now of course, and this is what's different, we could have a whole podcast on this, how was the internet and what it did and how it formed an industry, multi -trillion dollar industry, how is that different from blockchain? And from my eyes, having seen both, I'll give you one slice of it, which

Nobody took the internet seriously, but internet people. That's one back in the day. And the other is that internet companies as a result were not of interest to traditional companies. So who was buying up and aggregating crypto, I mean internet companies? It was other internet companies.

Internet companies became these behemoths as they like in the day. It was it was basically Yahoo did like a hundred acquisitions and the traditional companies run by W2s who didn't have a lot of vision. It was way too late when they realized, wait, the entire world and the consumer economy is shifting towards digital and

But by that time, you had massive internet companies that they could not topple. And now when you look at any internet related entity, you look at any industry sector within internet, whether it's travel, whether it's e -commerce, payments, gaming, all of those companies were natively internet companies.

And it didn't have to be that way, right? What you could have had was Walmart could have become the biggest internet retailer, right? And one of the airline companies, American Airlines, could have become the biggest travel broker. And payment companies, JP Morgan or Wells Fargo or Barclays could have become the biggest online payment. That's not what happened because they took too long. So I think

William (24:23.833)
Blockchain came around. The reason the banks were such dicks and the reason they just tried to interfere all the time was now business people, all those W -2s at those banks, those guys had learned the lesson of internet. And they're like, we're not going to be able to beat these guys at their own game. But what we can do is we can keep them small.

And we'll wait until we eventually figure this out. And I think that's in many ways what's going to happen. You've seen... Like, why is BlackRock the biggest ETF manager? Right? It should be a native crypto company. We've been wanting to do ETFs for freaking 10 years. But that's because people like BlackRock were making it very difficult.

working with regulators to make it very difficult for native blockchain companies to really get big and to address the markets that I knew existed. And so that's how those things have very, very different industry dynamics.

Matt (25:38.362)
would probably goes back to what you're saying about having brilliant insights. I think the people in the incumbent firms don't have the brilliant insights because they're probably a bit too comfortable and they're not thinking innovatively like the small scrappy startups are.

William (25:51.044)
Yes.

William (25:55.533)
It's true. if you have the ability, as banks do, working with regulators and government to block things, because the banks are hat in hand with the government, that gives them a very powerful weapon to suppress a new industry from evolving. if you look at AI, right?

There are a lot of big companies, tech companies, that have said, we don't want this to happen to us. And it was not lost on me that a lot of those big companies were going to the government in the US, in the EU, and saying, we need to put regulations around this. And I'm like, since when do companies do that? Well, those regulations, I guarantee you, will be written such that they will favor large scale companies.

and they will be very difficult for small scale companies. That's the nature. We call this regulatory capture. That's the nature of how big companies stay big.

Matt (27:04.172)
Absolutely. Let's move on from Tether and blockchain as a whole and actually look at some of the applications and how it's evolved, particularly NFTs. So you started a company, Wax, and had some of those big name firms like the likes of types of company like the old school firms like Walmart and so on get involved in NFTs when we had the big collectibles craze, what, three years ago whenever it was now.

What in your, when you talk about your roadmap, what do you see for the roadmap for NFTs? Because the profile pictures collectibles piece was some early use of it, but there's thousands of uses as we go forward in time. Can you talk through kind of how and why you start in WAX and actually what you see happening in the future for NFTs?

William (28:02.615)
Yeah, what I'd say is, we were doing, remember our background, my partner and me, were video game virtual item trading marketplaces. First it was video game virtual items and then was skins for your audience. A skin is a video game virtual item that is no in game utility. It's strictly for cosmetic value. That is very similar to think of an NFT. And the,

The idea came before Tether. When we were thinking of tokenizing things, we were thinking of tokenizing skins and virtual items. And one of the reasons was because the video game companies, a lot of them don't like it when their players trade their assets. And it's a violation of their terms of service and blah, blah. We dealt with that. We litigated over it in my marketplaces.

And so we thought, wow, you know what though? It'd be nice if we could put it on a blockchain because then people could just do what they wanted and they... We wouldn't get all this interference in the big companies. And we thought that there's enough interest in the trading aspect of video game virtual items that maybe native blockchain based video games will become a thing, right? So in 2013 when we were kicking that around...

along with tokenizing consumer products, we ultimately decided trading non -fungible assets, know, unique assets, whether it be sneakers or postage stamps, collectibles, video game items, was going to be a bit too much at this stage of the blockchain development. And we also just came upon

the impediments of the technology. At that time, it was expensive and quite slow, right? Five, seven, 10 transactions per second. So we instead decided to do the dollar with a brand new chain, which we helped build called MasterCoin. But by 2017, a guy named Dan Larimer,

William (30:29.411)
has probably started more blockchains than anybody else in all of blockchain. He came up with this idea of a new consensus mechanism called the delegated proof of stake mechanism. I still think by far the best. Very fast, very reliable, highly secure, low cost. And so we use that, his concept, to create wax.

We initially, we tested wax on Ethereum and wax was basically the intent was to allow people to issue and trade NFTs. And even when we created a private copy, you our own copy of Ethereum, it was so limited. When we were on the public Ethereum, this is 2018 by the way,

years before the whole thing happened in 2021 when it blew up. And I said to people, look, it almost put us out of business. There was a couple of week period where the numbers don't seem as high now, but they were back then. We spent like $3 million just on gas fees. And that's because of the way Ethereum clears out its queue is it uses a surge pricing

And we had so much of our stuff in the queue, we had to pay a lot to get those transactions through. So we knew we have to launch our own chain. I had always wanted to trade baseball cards, so we teamed up with Tops. And by the way, it took those guys a year and a half to understand what we were doing. had no interest whatsoever.

Even the day before I had asked them, will you please tweet out that we're going to do this? And they said, no. And I'm like, why? And they're like, it's probably going to fail. We don't want to be embarrassed. my thinking, so we were the first ones to take branded content and put it in an NFT and sell it. And I thought if we sold it, you know, if it took

William (32:40.911)
As long as the Ethereum crowd sale, which was 60 days, I thought, you know, if it takes 60 days to sell out like 10 ,000 NFTs, that's pretty good. And they were sold in 24 hours. And that was sort of the shot heard around the world. Everybody was like, wait a minute. you don't even have, these things are just images you're trading. You're not actually having to create a game which is expensive and time consuming. And I'm like, no, people will trade virtual items. That was our insight from.

our days in video game, virtual game trading, they will trade them as a hobby in and of itself. And so then we did Mattel, Hot Wheels cars, did Hasbro with all of its different intellectual properties, NASCAR, William Shatner from Star Trek. We just started throwing stuff out there to see what people would do. And by early 2021, it just blew

Now, a lot of people were trying to do it on Ethereum and I was trying to explain to them, that is just a shitty idea. Like Ethereum is not designed for consumer mass market transactions. And it's shocking to me how long that took. It took till about 2022 or 2023 for people to go, I see. Right. And that's one of the things that's probably plagued Ethereum sense is

Ethereum has some very good aspects to it and the Ethereum virtual machine is terrific intelligent layer, but it's not designed for scale. And so where will NFTs go? I'm glad the whole collectible craze happened. People think, NFTs came and went, but that's not true. I'll just finish with this part.

An NFT is not a pretty picture or a snippet of a video clip, right? That's an application of an NFT. What you have to think about when it comes to NFTs as a builder is an NFT is something that gives you the ability to transfer something to somebody at no cost, with no effort, and

William (35:04.743)
no significant investment in time or money on the part of the receiver to figure out if it's authentic. There is actually nothing else in the universe like this. The idea that you can get something sent to you at the speed of light and you know with certainty at no cost, with no effort, that that thing that you've received is the genuine item that you wanted.

That to me is what makes NFT special. And that has nothing to do with pretty pictures. Over time, of course, all fiat will be tokenized, I believe. All fiat globally will be tokenized, maybe in the next 10 years. And many other important digital archived information from your passport,

to your membership cards, whatever it is. And it could be things like promissory notes, right? There's a lot of stuff in the legal realm where NFTs are valuable. But so many people in the world, so many people in the world are employed in the effort to verify the authenticity of documents. Governments have massive groups of people.

whose job it is to verify the authenticity of something. We have a technology now to no longer need that old way of doing it. And it's going to take time though. I've seen this again and again. Like, there's no reason now government shouldn't tokenize their currency. There's literally no downside to the tokenization of your fiat. But it'll take time. And the same will be for the way

large businesses, especially, tokenize their assets. But they eventually will, and we'll all be better for it because incidents of fraud and such will go down as a result.

Matt (37:17.168)
on a similar theme, suppose, extending things out into the future. You've obviously, there's been a, you had cloud computing the last, what, like 15 years, you've had, and because of the Moore's Law and similar laws, the compute and the power of compute has increased, which has led to this rapid rise in AI that's been around since World War II, but in the last couple of years, it's been our exponential growth where we've got past that tipping point.

Where do you see in a similar way where NFTs and, you know, CBDCs and blockchain will start to infiltrate everything that we're doing in the next, you know, 10 plus years. How do you see on chain and similar types of approaches impacting how AI is used? then later, you know, fast forwarding, I always believe in the kind of the other ready player one type of, you know, environment where you can step into a virtual world that is totally virtual.

How do you see blockchain being applied in that type of world? And what can people do now to, I suppose, skate where the puck's going to be in 10 plus years to start positioning themselves that you've had a roadmap that you've copy pasted a couple of times now. What can people start to think about now that they can hope to do similar as time and technology goes forward?

William (38:44.335)
So on first, you know, NFTs and fiat, I think in 10 years, there'll be the G20, the largest 20 economies in the world will either have fiat tokenized as just a daily occurrence or will be well on their way to doing that. So I give that 10 years, maybe less. With AI, so

The real action in blockchain is around smart contracts. And smart contracts have very, very catastrophic repercussions when they don't do what they're supposed to do. So using AI to audit and constantly evaluate after updates have been done, whether or not there are any

vulnerabilities that need to be addressed. That's a great application for AI because it's tireless, right? And then in DeFi, what we saw, it's one of my favorite periods of time was 2020. I love that period because DeFi went from nascent to the dominant activity on

blockchain in 12 months I could wax on and on about how amazing it was business model creation is incredibly rare right like When a VC comes upon a new business model That's like finding the you know, the sunken Spanish galleon somewhere, you know, it's the rarest of events and and and the reason is because

Most companies, existing companies, can survive the introduction of new technologies or increased competition or even new regulatory regime. But very few companies can survive the introduction of a new business model. It's like an extinction event.

William (41:08.879)
in most industries when a new business model comes. it's like, know, aliens coming to earth with interstellar travel capabilities. There's just no way for us to really address it. And what I saw during that DeFi period in 2020 was a remarkable amount of business model innovation almost every week. And

What that led to was just incredible strain on building these elaborate smart contracts that were basically being layered on top of other smart contracts, right? And we were trying to build those. We were trying to use those. And I see AI in that area in particular being exceptionally useful, particularly as Wall Street and the global.

institutional capital goes to blockchain. They're going to be able to implement a lot of their regimes, their trading strategies, which are quite sophisticated, using bots powered with some form of AI. So within blockchain, I think that's going to be the most interesting application because at the end of the day, it comes down to making money. This is where people put the most investment and that will be AI helping

make more money in the trading realm. And as far as looking out beyond that and thinking, okay, how do I come up with a thesis, right, or a roadmap for how AI, let's say in general, is going to be used in the future? First, recognize it's impossible to really know everything,

I can tell you over the years as a venture capitalist, when I would lean in in a meeting with an entrepreneur was when that entrepreneur said something to the effect of, know, I've been working at this big company and we're selling a certain type of software or whatever it is. And I see this other market opportunity, but the company isn't interested in that.

William (43:31.787)
I'm trying to get them interested, but they're just not going to do anything. But I can tell from my vantage point that my customers would really like to have this other thing. And so I would say it's very hard to have insight about something if you're not steeped in it, you know, if you're not in it. And so if you're just reading magazines or whatever, watching YouTube's, it's probably going to be hard for you to come

with a thesis for where AI is going to evolve. I would recommend if that's an area of passion for someone, you need to get involved in that industry in some way. It could be as a user. You could be using AI for your trading strategies within blockchain, right? But as your brain is processing all the uses and the ways this benefits, you're going to start to realize that the things that appeal to you might appeal to others.

And that's the insight of, maybe if I built, I took what I've built or what I use and I package it in a way that it could be sold as a product, I could actually scale this into a real business. This is where generally things happen. If you listen to the stories of these amazing companies in Silicon Valley, so many of them are from people doing something themselves, using a tool themselves, and then realizing actually there's probably a wider market that would want to use this as well.

That would be my specific point on AI. It is going to infiltrate everything we do. And while it seems like big tech companies are going to own the whole thing, that has never been the case. They have the investment right now to actually power a lot of AI, but that's like a brute force thing.

Real innovation around a business model or an untapped market, it just doesn't happen from the W -2s working in a big company. It's usually from somebody on the outside who's maybe trying to dabble in that industry themselves. So that's my advice for people in that

Matt (45:47.994)
So to wrap up.

looking back, obviously you had your days at Disney dealing with merchandise, you had the days at Arthur Anderson where you're looking at banks books and the savings and loans crisis and so on and actually some of the things there you can see a bit of a pattern later on with what you do with wax and the collectibles and with tether and understanding you know payments and so on so this kind of compounding of knowledge and experience over the years and helping you to have your own perspective and roadmap and

at things. Going back to a lot of people listening to this show are young people either who are still studying or they just started their career. What advice would you give to yourself if you went back to when you were 18 and were to do things again? Would you do anything any different?

William (46:42.285)
don't know if I would do it different because, you know, everything's changed. So I'm pleased with what happened. And this question is, the question you're asking me is a question I try to address a lot because it is one of the most often asked questions, right? It's

I was asking this question when I was a teenager, when I was in my early 20s. I was asking, what should I focus on? All the good ideas are taken. Like, how do I compete with these big companies? Like, you know, I felt the same way. And so I would say this. Again, we could write a whole book about what to do, and it would just be from one person's perspective, but I've done a lot of thinking.

on this subject. And so one thing I would say is you're going to have to, there's going to be a fork in the road in your life at some point. Do you want to work with someone or work for a company where they give you responsibility and they allow you to manage some process or whatever? They've set the rules for what it is you're going to do in an industry that

sort of develop the rules of engagement in that industry for how things work, how the pricing is done, how the product is delivered, how often it's updated and so on, how it's distributed. Those are kind of like when you go into an industry, there's like these rules everybody abides by. And that's very comfortable and you can do perfectly well with that, right? Or...

you're going to take a different path. And the different path is, well, I kind of would like to be making the rules. I kind of would like to actually create the industry itself or take some new platform and mess around with it and see what I can do with it. So if that's where you want to go, even then one bedrock piece of advice I would give

William (49:04.047)
Get some foundational skills beforehand. So maybe spend five years, you could spend 10 years, but spend some amount of time in an exceptional company, learning how an exceptional company exploits its resources, manages its people, develops strategy. It's very useful.

I know even though when I was younger I dismissed a lot of what I learned at Disney, when I saw how my startups were operating at times, I would say, you guys, you don't need to do what you're doing. You don't need to reinvent everything. There's old ways that are still good ways. We want to reinvent new things around the product, but maybe not how you run a company, right? We've done a pretty good job of how you run a

That's why some of these companies are worth trillions of dollars. So learn how companies are run efficiently. That's a real weakness of lot of entrepreneurs who never work in a formal, structured environment. They don't know what an income statement is, what a balance sheet is, what a statement of cash flows is. They don't really understand how one sets about to establish metrics and then propagate those metrics within their team.

How do you hire? How do you develop staff? How do you rotate staff within your company? How do you fight attrition? Like, big companies are big for a reason. They've done a good job of that. So I think there's this idea that you have to all be Mark Zuckerbergs. And you have to drop out of college, know nothing, code, and just make it happen. And that's amazing if you do

but I think your odds of success are lower doing it that way. I would suggest get some skills. And it would be even better if while you're working in that industry getting those skills, you're observing what markets are not being addressed by my company that I could address, right? That's historically where a lot of Silicon Valley.

William (51:24.929)
Entrepreneurs got their funding they would go to guys like me and they would say that you know I'm at Intel and I think we should make a chip that does you know a Secure socket layer for ecommerce transactions But Intel thinks the markets too small. I think it's big often the reason why a Big company when you say if it's such a good idea. Why aren't the big companies looking at it? It's

The management of that big company thinks that's too small of a market. So your insight might be, you don't believe it's a small market. You think it could be much, much bigger than they do. That's a great insight, right? So those are the sorts of things I would say. Like I said, we could talk forever about how you should go about it, even in the way you select a company. Lots of...

People come to me, even freaking Harvard MBAs come to me and they say, I've got a startup I can work at or this big company. I don't know how to think about it. And I have a process for helping them think about it. I have a process for helping them think about what is the equity worth in a startup versus a big company, how to think about the value of those two things. And I kind of wish there was more educational stuff about those things, because so many people have those questions.

So that's all I can say about that subject with the brief amount of time we have.

Matt (52:55.073)
I think we need to have another session in the future because these are all topics where there are some resources out there that try to fill some of the gap but to hear someone talk so passionately about it and with the experience makes a huge amount of difference.

William (53:13.079)
It's an area of such importance to me. just briefly, the reason it is, one of the benefits of being old is you see, you you start to see, yeah, there's a change in seasons now. I see how this works. By the way, in business, there's cycles. And in crypto,

I think people have finally figured that out too, but I noticed those pretty early on. There are cycles. when there's cycles and other people don't know their cycles, you have a very good opportunity because when they're sad, you can be very happy because you can be doing stuff while they're sad and depressed, knowing that summer is going to come again. And so I see at a more macro level, I see the world changing

terms of employment structure, in terms of how we as educated people, how we go about having a career or a life purpose. I see it. It's very clear to me that this is changing dramatically from when I was younger. And I feel like the institutions people rely on, like educational institutions,

They are, they're not seeing it or they're not helping fast enough. The notion that you're gonna go work for a big company and you're gonna be secure for, you know, or you're gonna learn a core skill and that's, you know, the bad news is those days are gone. The good news is there were a lot of people who were bored doing kind of the same

And so if you're a little bit more flexible and creative, you can have a remarkable 20, 30, 40 years, whatever it is that you want to work. And what's near and dear to me, be paid handsomely for doing it. And I think we need, we need more discussions around this. mean, universities, think are just failing people. It's not just the high cost. It's the lack

William (55:29.963)
ability to actually succeed in this evolving world. Which was, when I was younger, that's what universities were supposed to do. They were supposed to give you a really good grounding for being able to have a career and now I don't think they do. So yeah, we need to reorient

Matt (55:47.866)
Well that's,

one of the reasons why I started working fintech was exactly what we're talking about here. Every year there's 300 ,000, ,000 people applying for 3000 internships at Goldman. It's like why play that game when you could go work in a fintech company or a crypto company and have a lot more experience there to then do all the things you've just been talking about. But I think, William, if you're up for it, let's do another show because I think

we could talk for another hour on this because it's I'm passionate about it as well but we can learn so much from your experience.

William (56:21.677)
Yeah, this would be good.

William (56:26.797)
Yeah, yeah. Like I said, I talk a lot about this subject and we can go through examples even, where this is where you are, this is that fork you're looking at, what do you do? There's a lot of angst among the younger millennials in Gen Z about how miserable working is, which sucks to me because all of us need a purpose.

You know, and one of those purposes is applying ourselves to add to the collective good of society. That's GDP, right? You're contributing something. So it doesn't have to be miserable, but I think that misery is being amplified by the fact that they can see it's really not paying off anymore. And why is that? And what do we need to change for it to start to pay off? Because now you're actually

doing things that are more practical for where the world is going. the US in particular is going to be this enormous beneficiary of de -globalization. And I try to tell young people this all the time, it's going to be crazy how good it's going to be for the US and other European countries that are advanced and have an educated workforce.

It's not all bad news, you know? And so we need people ready for that and not thinking, the boomers got all the good times. You know, the boomers didn't get all the good times. There were better times in the future.

Matt (58:11.12)
In the meantime, until we talk again, what's the best way people can follow you?

William (58:17.775)
I am not so good about being followed, I have to say. I am very internally focused, I... So, I have a Twitter, you know, William E. Quigley. I have a Twitter, but I will be honest, I... Social media has, to me, was more of a distraction, you know? And only recently did I decide,

I see these issues though, I should be providing some commentary if a few people benefit from it, great. I've benefited greatly from parts of social media where I listen to people and I'm like, wow, that's really great. They've been there before. So I will be doing more, but now it's basically just Twitter. And then I have a lot, I do do a fair amount of podcasts, but in terms of my own like publishing content,

I've not put energy into it. I've been working on blockchain products. But more so now.

Matt (59:24.888)
Awesome. Well, we'll obviously share this to the world. There's a lot to be learned, I think, from this conversation. And I'll be very keen to do it again, if you'd allow me to.

William (59:35.875)
Yeah, and I want to thank you, by the way. You know, you're a smart guy. You're in the areas that the reason I'm doing this with you is because I know what you do, right? And FinTech and crypto, you know, it's not all like we said, pretty pictures, NFTs or scam meme coins. There's so much more to it. And there's so many people out there are like, I would just like to know I'm not being bullshitted. Can I talk to somebody who's not trying to sell me a masterclass? You know?

Like, I just want to talk to somebody who has a point of view. Maybe they're right or wrong, but it's not laden with a bunch of, you know, nefarious things to make money off them. So I do like that. And this is going to be a huge area of economic growth. So people who have an active interest in it and in the areas that you're focused, this is a perfect place to be getting a broad exposure.

to whether maybe this is where they should dedicate some time.

Matt (01:00:37.028)
Yeah, there's a world of abundance ahead of us without a doubt.

William (01:00:41.357)
Yeah, an AI is not going to put us all out of work. mean, if I could close with that, we all have heard of the ludites, the people who thought the little weaving looms was going to end all of the jobs. And while it's true, an innovation or a automation can put a specific job, can make it obsolete.

But we are adaptable creatures, right? And I have heard this my whole life. I have heard my whole life. Every time there's been some new application, people say all the jobs are gonna be lost. Really? Well, who? Because you can never think about the job that doesn't yet exist. You know, 20 years ago, who was thinking, well, we'll lose some jobs in this area, but they'll

Blockchain developers, blockchain video game developers, well no, because no one knew that was going to happen. So what people need to appreciate is every time there's a new technology platform, you multiply the jobs. Not initially. That's the part where people, yes, there's some concern. But humans wind up exploiting that new thing, right? And now there's even more jobs.

We younger people tend to be more optimistic, which is good. And hopefully that's who we're talking to. but, it's, it's a pure fallacy to think that AI is going to eliminate all the jobs. will eliminate some jobs. You know what I'll tell you? Those are the shitty jobs. That's the jobs. Technology tends to eliminate the shit we don't want to do ourselves. So it's yeah.

Matt (01:02:33.424)
Well, that's what technology is for, right? Yeah.

William (01:02:37.219)
Yeah, mean horse -drawn carriages, they went away, so the people driving those were like, wow, we lost our jobs. People would prefer to be in motorized transport, you know?

Matt (01:02:50.092)
So William Quigley, I'm sorry to cut this off, but I've got a call with investors actually I need to do. But I've really enjoyed this conversation and I would like to do it again and I'll check in with you. Yeah, thank you. And I've learned a lot out of this and I appreciate your time and thank you on behalf of all the people that are going to listen to this.

William (01:02:58.361)
Good.

William (01:03:03.011)
Yeah, me too. Great chatting with you.

Okay, yeah we'll pick one of those other subjects. Alrighty.

William (01:03:19.513)
You are welcome.