Intro Vocals [00:00:01] You’re watching The Blockchain Interviews hosted by Dan Weiskopf. Each episode features interviews with leading industry experts so that viewers can have a deeper understanding of today’s quickly evolving blockchain marketplace.
Dan Weiskopf [00:00:21] I’m so excited today to have Andrew Kiguel on the blockchain interview series. Andrew and I go back about four or five years. He’s now the CEO and Founder of Tokens.com. But wait, he was also the CEO and founder of Hut 8, and also the banker of Hut 8 when it was just coming together. The perspective that Andrew brings is very unique as a banker and operator. And you know, the great part about Andrew is sometimes we haven’t always agreed. And that makes for great, robust discussions. Andrew, thank you so much for being on the show and thank you for what you’ve done for the blockchain universe. It’s not always easy, but it’s very visionary.
Andrew Kiguel [00:01:14] Thanks, Dan. Appreciate being on, so…
Dan Weiskopf [00:01:18] So, so walk us through your background. You know, I gave a brief summary, right? When was your pivotal moment where you wanted to make the leap into, well, the blockchain as an operator? And when did you initially discover it as well?
Andrew Kiguel [00:01:37] Yeah, so I think I probably took a very different approach than most people in the blockchain crypto space. As you said, I was an investment banker for two decades, for 20 years, basically putting together packages for investors to look at—institutional, high net worth retail, family offices. And so I really made a career out of finding things that were hard for people to access, putting it into a public company and to help make a lot of people very wealthy over those two decades. Back in 2017, early 2017, there was a guy that you probably might know, Fred Pye introduced me to bitcoin because he came to me while I was a banker and he’s like Andrew Andrew! Bitcoin, bitcoin, we got to create a fund and do this, do that, and I was like, Fred, the crazy, no one’s going to buy this thing. And pretty much like everybody else who initially looks in here about bitcoin, you’re like, this is a Ponzi scheme, this is not real. But I’ll do a little bit of research. Two weeks later, I was like, This is revolutionary. It’s amazing. I need to figure out how to get this into the hands of public market investors. But the first thing I did is I tried to buy it, and I don’t, Dan do you own some of your own bitcoin? I’m assuming you should.
Dan Weiskopf [00:03:01] Yes. Now that process is intimidating for a lot of people, like if you’re a person that just likes hitting, buy or selling your existing portfolio, having to create a new account with firms that might be unfamiliar to you, at least today you have a Coinbase or Binance, which have gained, you know, strong reputations. But back in 2016, 2017, nobody had heard of these companies. I had my first bitcoin purchase was done with a company called Sapo. If you remember, Sapo are still around. Sapo is frog in Spanish, and I was so careful I actually flew to their Silicon Valley office to meet with them because I was like, I’m not sending you any money until I meet you guys and understand what’s going on. But I took that extra piece of due diligence, but the whole process was so complicated, I had to send money to Gibraltar. And then fast forward, I was like, There needs to be an easier way for the public market investor to get exposure to this area. That’s when myself and a couple of guys said, why don’t we create a bitcoin mining company that holds its bitcoin? We take that public, and by virtue of that company being public, people will get that exposure to bitcoin. Now remember, this was back in 2017, when Grayscale still was early days and had a long hold period and kind of a six month hold period on it. Nothing else had been regulated yet. So this was pretty novel to take a company public, to give people exposure to bitcoin, that was really a minor. That was really how I started getting excited about all this because when we started creating this, I think other people saw the value in it. And we talked about guys like Bill Tai, who everybody should know Bill, one of the most successful venture capital investors, you know, possibly in history. I mean, he was the first outside investor in Zoom early days and a whole bunch of other like huge names and a really brilliant and kind individual. We also had attracted the likes of Mike Novogratz and Mike Novogratz said, You know, I need to be involved in this company. And so we amassed this board of, you know, Bill Tai, Mike Novogratz, the CEO of Bitfury at the time and a few other notable people. I had done all the structuring and financial engineering as a co-founder of the business and also in the company had a $500 million valuation before we even launched, you know, a ton of money. And we were engaging in trying to find a CEO. And I don’t kow if people know this, we actually had another CEO in mind that we had all been interviewing, and he came in and he was like, I need this. I need that. I need you guys to pay for my—I need $100000 a year car allowance. And I was like, Guys, I’ll do this for next to free. Like, I’m happy to take the leap. Give me, I said pay me in bitcoin. I think I was the first CEO on the planet to get paid in bitcoin. But anyways, so that was my leap into crypto, was really because we were trying to fill a need for public market investors and my background really just lent itself to that.
Dan Weiskopf [00:06:12] Well, by the way, I’m glad you didn’t, and I don’t want to know who that person is. $100 thousand car allowance. I don’t even know what to say on that one. But that’s not the way you start a company, so good for you stepping in. Yeah. And talk to us a little bit about Tokens.com. That was your next venture.
Andrew Kiguel [00:06:33] Yeah. So as I started looking around at the industry and seeing what was next, and I know we were going to talk about sort proof of work and proof of stake. But I started thinking, why is everything being built—my first question was why are all new tokens being built on the staking platform? What are the advantages of it? Because in the early days, everything was built on proof of work or crypto mining. Now, I don’t know of anything that’s built on that crypto mining platform for the last two years. And staking, there are more staking tokens in the top 10 now than there are none. Whereas two years ago there were zero. So it just sort of started scratching my head and said what is this all about? And that led me down sort of a different pathway where I said, and people can debate me on this, but I said a lot of the exciting things happening in crypto are happening outside the bitcoin asset class is a way to put it. Even if you look at last year, there was $33 billion of venture capital invested into crypto. I don’t know if any of it went into anything having to do with bitcoin, and like $33 billion invested into crypto, Web3, I’d say less than five percent into anything related to Bitcoin. So I sort of saw that happening back in 2000 and I said, there’s an interesting play here. There’s another way here to create a business with the same philosophy as Hut 8, my prior business, which is let’s find a company that gives people exposure to things, Web3, things that are sort of evolving in the crypto space like DeFi, NFTs, Metaverse. And that was really the genesis of Tokens.com, which is really a compliment to Hut 8 in that Hut 8 provides people with great exposure to bitcoin. And I think it has the fourth or fifth largest holding of bitcoin of any public company, true to the philosophy that I put in there, but it doesn’t give you exposure to DeFi, Metaverse, and all these other great things going on. And so that’s why I created Tokens.com.
Dan Weiskopf [00:08:38] So I get a lot of questions about definitions from financial advisors. So let’s run through some definitions. Real basic, just zing them right through. Bitcoin miner. Why do we need them?
Andrew Kiguel [00:08:52] Right. So, I mean, that’s a loaded question, so you need a bitcoin miner. All blockchains, what makes blockchains and people heard the word decentralized. What essentially that means is that rather than having one focal point of authorization that it is spread out, much like the chart behind you all over the world where there’s miners who contribute to validating these blocks. And so crypto mining is an odd term, but really, it’s just a group of people that get paid to support the bitcoin network. And that’s why you need to have them.
Dan Weiskopf [00:09:28] Yeah, I wish personally we could evolve by calling them crypto processors or something different than miners. It just doesn’t necessarily make a lot of sense as a definition.
Andrew Kiguel [00:09:40] Right.
Dan Weiskopf [00:09:41] That’s what we are. Proof of work, proof of stake. Let’s zing through them here.
Andrew Kiguel [00:09:47] Yeah. So this, you know, every time I say this stuff, I get a lot of the bitcoin maximalists get very upset. But I think, someone said this to me last night, that Vitalik, the founder of a theorem with the key mind behind Ethereum, recently stated that proof of work is debt. Debt. I don’t want to quite go that far, but I don’t think he’s entirely wrong, and I’ll tell you why. So proof of work versus proof of stake. Let’s just take proof of work, a brilliant piece of technology that was developed back in 2008 and was really deployed for the first time into bitcoin. That’s 13-year-old technology. In today’s day and age, I don’t think anybody even keeps their phone for more than 12 months or their computer for more than two years, right? We’re dealing here with 13-year-old technology. And if you were to ask me whoever Satoshi was, who developed bitcoin, whether a group of people or an individual, I don’t think they ever looked 13 years down the road and said, this is going to be processing this quantity of transactions. This is going to be impacting every type of consumer technology on the planet. And I don’t think they anticipated the invention of the ASIC chip. To put this in perspective for listeners, bitcoin mining, or processing, was originally something that like kids did their basements off their computers. It used a minimal amount of electricity and you could do off your GPU. It was a hobbyist thing done, like I said, in the depths of like, I don’t want my parents to hear what I’m doing upstairs in their electricity bills are going to go up. The invention of the ASIC chip came several years after bitcoin mining had been being used. And what an ASIC chip did, it’s a specialized chip that basically does what the GPU chip does, but times like a thousand, it’s just like incrementally better. What that did is it created what was really called an arms race in bitcoin mining, because it was who could amass more of these ASIC chips than the other to win more rewards as part of this processing? Because the way bitcoin mining works is, the more processing power you have, the more profitable, the more bitcoin you earn. Technology really jumped ahead, I think, of what anything that Satoshi had envisioned through the creation of the ASIC chip, which created this arms race of more processing power that just kept building up. And what you have today, in supporting the Bitcoin network, is a tremendous amount of electricity used. Now, I think that there’s a tremendous amount of value. Nobody calls up Wells Fargo and says you’re using too much electricity to protect my capital to run your operations. Yet when it comes to bitcoin, everybody’s like too much electricity, too much electricity. Nonetheless, it is a legitimate concern. Processing the bitcoin network uses up a ton of electricity. The other piece, with respect to proof of work, that again, people can debate, when it was created back in 2008, old technology, it does not have great scaling ability. And what I mean by that, and this is why they’ve created all Bitcoin gold and Bitcoin SV and bitcoin, all the forks. Generally speaking, bitcoin can process about 15, one, five transactions per second. Dan, you’re not going to revolutionize financial services delivery on 15 transactions per second. To put that in perspective for listeners, Visa and MasterCard do 20 to 30 thousand transactions per second. So leading this to stake, what I think occurred here is that a few years ago, people said proof of work, yes, proof of work works. But I know when I was running Hut 8, I constantly kept having to sell our bitcoin to pay for the electricity and to continue buying equipment. And I think people look and said there’s a few flies here. Number one, proof of work, I’m forced to sell the coin rewards that I get to finance all the expenses in fiat. So in other words, I’m creating all this value, earning and supporting the bitcoin network that I immediately need to sell to pay. You know, at Hut 8 I had like four or five million dollars a month in electricity costs. A month. Plus the equipment prices. I kept having to sell the bitcoin because that was our source of revenue, convert it to fiat to finance the operations. Number two, we’ve talked about the criticism of electricity use and the scaling. Proof of work— sorry, proof of stake was really created to solve those flaws and proof of work, and let’s just go through that. Instead of using electricity, you use ownership. Instead of having to buy depreciating equipment again, you own a whole bunch of these crypto miners, so you look at the income statements, you see the depreciation every quarter is massive. The equipment, the useful life is limited because the technology just keeps improving. Right? You know, you need to have that new technology or you’re just going to get priced out of the market and it won’t be profitable. In staking, if I want to stake ETH or Solana or DOT, I have to buy it. I never have a need to sell it, ETH or Solana or DOT while I’m staking it to finance the operations. It keeps the capital within that ecosystem of the token without me having the selling pressure on it that bitcoin currently has. And I just thought that was like a brilliant way to process it. We talked about Bitcoin 15 transactions per second. We talked about Visa MasterCard 20 to 30000. Staking can process up to 100000 transactions per second. OK. So let’s just think about this in terms of progression of being able to process transactions. It is not inconsequential to go from 15 to one hundred thousand. And back to my point, if you’re trying to revolutionize financial services delivery, the things happening in DeFi. If you’re trying to change the way provenance is calculated in art, music, gaming, you need staking. I say this all the time, the future of all these things, play to earn gaming, Metaverse, DeFi and NFTs relies on staking.
Dan Weiskopf [00:16:28] So let’s not get too far ahead of ourselves here. Bottom line, though, there are different use cases between bitcoin and the other cryptos you were mentioning, though.
Andrew Kiguel [00:16:38] Yeah, I think bitcoin is great as a storage of value. I think it’s got a future as a form of payment. But all things exciting happening in crypto are not happening on the bitcoin chain.
Dan Weiskopf [00:16:53] Next definition I want to cover. And yes, for longer a lot of miners. And so I know I don’t 100 percent agree with you, by the way. What is an exchange? Is it like a stock exchange? Explain to people what an exchange is because you brought up a great point.
Andrew Kiguel [00:17:11] So when you say, can you be more specific, what you mean by an exchange, you mean like a crypto exchange?
Dan Weiskopf [00:17:16] Crypto exchange, exactly, yes.
Andrew Kiguel [00:17:18] Yeah. So essentially a crypto exchange in my mind just mirrors what you might find it, you know, Raymond James or other retail forms in, you know, you would have your brokerage at, except it’s focused in on crypto products. They’re more technology, you know, you wouldn’t necessarily have a broker there, although I know there are some exchanges off of that. It’s self-guided in that you create an account, you have to go through all the know your client, anti-money laundering, regulatory issues to go in there and trade the crypto because you can’t do it on the Nasdaq right now. You can buy Tokens.com, and we own a whole bunch of these things. That’s the problem we’re trying to solve. But if you want to do it directly, you’d have to open an account on one of these crypto exchanges.
Dan Weiskopf [00:18:07] OK? What exactly is meant by decentralized applications, DApps, as an example?
Andrew Kiguel [00:18:14] Right. So this just goes back to, you know, Ethereum is really the godfather of this area, which is doing a complete conversion to staking, by the way. And Ethereum really looked at bitcoin and said bitcoin does a great job as a surge of value, payments, but you can’t program it. And Ethereum is this amazing programming language I always call it, it’s a little bit like iOS or Android in that you can build things on it, like apps. Very similarly to how you would program an app on Android system or iOS, DApps are applications or apps that are built on platforms like Ethereum that retail people can use to interact with. And primarily, you see that a lot in the decentralized finance, or DeFi, where I read a statistic like two hundred and fifty billion dollars have been deposited into these DeFi apps DApps. Which is people borrowing and lending and trading with each other. You know, I keep mine with some of the stuff where I loan out my bitcoins, through automated smart contract services to get paid a yield. And so what I’d say DApps are is that the level of interaction among consumers and retail to be leveraging blockchain technology.
Dan Weiskopf [00:19:36] NFTs. Definition.
Andrew Kiguel [00:19:40] Definition of an NFT is just a unique digital signature that can be attached to a digital good or physical good. It’s a form of identification.
Dan Weiskopf [00:19:51] And it falls on Ethereum, Solana. Those are the different cryptos, right?
Andrew Kiguel [00:19:58] Yeah, so basically Ethereum is still really the leader here. I believe it’s about 80 percent of anything done with, you know, DApps. DeFi NFT is still built, stored, and traded on the Ethereum platform, which is why Ethereum is so valuable. But yes, what NFT is really providing, you know, a lot of people talk, think about NFT zines like a fad and gimmicky thing. You know, you’re just trading JPEGs around. The future of NFTs is provenance, and provenance is a term that’s used in the art world, which is the authenticity and origins of a piece of art. In the real world, that’s nearly impossible to trace back for anything that’s older than 50 years. Like what was the trading price of this art 200 to 300 years ago? Who’s owned it? How do I know it’s authentic? NFT technology, which relies on the blockchain, solves this problem. It’s a public ledger where I can go back and look at any NFT, whatever it’s attached to and be like, This is who created it. This is the ownership history and the value history of what’s been paid for it, and I can see where it’s stored. So when you transact on it, I can see it move from the ledger, from this person’s wallet to mine.
Dan Weiskopf [00:21:20] OK, so the last two definitions, which do you want to go to first?Metaverse or Web 2.0 versus Web 3.0? Or combine them and mix them all up?
Andrew Kiguel [00:21:34] Right. Let me start with Web2 to Web3, because I think the Metaverse is a consequence of that. So, I’ve been in control for a long time. I find the definitions for Web3 to still be quite nebulous, so I’m just going to give you my sort of viewpoint on this.
Dan Weiskopf [00:21:53] Sure.
Andrew Kiguel [00:21:53] Because when I hear Web3, three people saying, is this the next iteration of the internet in the sense it is. But I really just think of Web3 as anything crypto that doesn’t involve bitcoin for good or bad. Although there are obvious applications, but to be a little more technical, Web 1 was the creation of the internet, with sites and people randomly access some things. Web2 is considered more the organization of the Web, mobile, the creation of larger products on it, and the sharing of information and communication things like Facebook and YouTube. Web3, to me, has to do with ownership. That’s the distinguishing feature in that you’re aligning in Web3 content, which has been there before. You’re aligning money, which has kind of been there before people use the internet to access their bank account to move things around, but it’s still being done outside the internet, not within the internet. So Bitcoin, as the leader in this area now, all the other tokens are a way to keep money and value within the internet as opposed to having an outside processor. And the third piece of it is ownership. And so when you align all three of these things, I think, is what’s leading to this Web3 revolution and the Metaverse is a great example. For people who don’t know, Metaverses are these 3D video game type environments. They’ve been all over the news. You create an avatar and you access this through your computer at home, and this is evolving very quickly. Every major brand in the world is creating a metaverse strategy there. Every major corporation is creating a strategy. It’s inevitable it’s coming, it is not a fad. But this is what makes it really unique. In the past, you could go to Facebook or Instagram and you can upload your content and people can like it, but the advertising profits and the operation of that system would go to Facebook. You could go to things like Roblox or Minecraft or even Second Life, where the experience is created for you by the corporation, and the advertising revenues and everything done within it flow to them. The difference with Web3 is, is that you have this ownership piece that sort of slides in and the new Metaverses that are built on blockchain technology allow you to essentially buy a piece of the game and make a decision as to how you want to use that part of the game or that real estate to contribute to the community that’s there. It’s perfect alignment because you’re buying a piece of the land, you want to see that environment succeed, you want to create immersive experiences. That’s very different because if you can monetize within that game, you’re in a sense being a mini Facebook or Instagram or any other social platform because you’re part of contributing to that community. I read a really good example of this yesterday, but Las Vegas, so Las Vegas one hundred years ago, was desert. And then slowly, people start, you know, everyone knows a little bit about the history, the first casino and then it just builds. If you could go back and buy land in Vegas as you were kind of knowing, Hey, this is going to be where people go and meet for entertainment, you’d be like, That’s great. I’m going to buy the land now and I can create various forms of, you know, maybe a grocery store, maybe a nightclub, maybe a restaurant. You don’t know, the community contributes to that. The Metaverse is the same thing. People who are buying there are contributing to what this is going to look like. We are, in a sense, are like the Facebook and creating what the feeling and experience is going to be. That’s never been available before to the consumer.
Dan Weiskopf [00:25:47] Yeah, so I read, and I don’t know how accurate these numbers are. You know, the problem with random research pieces is you got to be skeptical about them. You know, what kind of numbers are you seeing? As far as value, revenues, I mean, put your bankers hat on for a minute, right? Are we talking about a $50 billion market, $100 billion dollar or a trillion market? Trillion-dollar market in the next couple of years or today?
Andrew Kiguel [00:26:22] So, hard to pinpoint what it is today, and this is an interesting question. When I think about Web3 and the Metaverse, I think of this as a multi-trillion dollar business. And the reason why is, this is going to impact every single type of consumer technology that is used today. So let’s just walk through that. Would you say social media is a trillion-dollar business in the world? Yeah, when you combine it together. This is the next iteration of social media. Would you say gaming is a trillion-dollar business? Probably close? This is the next iteration of gaming. How about computing, NVIDIA, the chips, the GPU chips, the graphics cards? Definitely a trillion-dollar business. Everyone has a personal computer, the graphics cards are going to have to adapt to what’s happening and the requirements of the Metaverse. The hardware. So let’s talk about brands. Online shopping, music, when you start thinking about the consequences of all this, think about, you know, let me give listeners an example of why this is so profound. There was a music concert held in Decentraland in October that attracted over 50000 unique visitors. OK, this was some of the top deejays in the world. There was a light show of various stages and there were obviously advertisers there. Think about yourself if, as a retailer or a brand, that you are able to go there and hold an event, we’re hosting a big fashion show in March of Decentraland. But as a retailer or brand, you can go in there and advertise your merchandise or your brand to hundreds of thousands of people, all at the same time, regardless of where they are geographically located, and you can do it in their own native language. That’s powerful. Think about the fashion show that we’re doing versus a real fashion show like London Fashion Week or New York Fashion Week, Miami Fashion Week. People will always be constrained to attend via geography, can’t jump on a plane, COVID or whatever else. And then there’s capacity limits. The capacity limits when you’re holding a fashion show aligned with these virtual worlds are far less. Geography doesn’t matter. You can have way more people in attendance. And really, what this comes down to is building your brand or selling your product. This is revolutionary for advertisers and retailers.
Dan Weiskopf [00:29:13] And, you know, speaking of the fashion show, I think you should explain a little bit more about what you’re talking about because it’s kind of cool. You can sit wherever you want, right? You know, we hear the Metaverse, whether it’s a concert or a fashion show, so you can get up and close.
Andrew Kiguel [00:29:28] That’s right. So, at Tokens.com, back a few months ago, we made some news by doing the largest Metaverse land purchase in history. And I think it’s still the largest land purchase in Decentraland, which is the leading Metaverse. And we purchased a massive estate in the fashion district. At first, when the news hit, I got a lot of like weird responses, a lot of people who were like, there was a very famous financier, a multi-billionaire who tweeted, he retweeted the sale and was like, basically said, This is the dumbest thing I’ve ever seen. This makes the tulip bubble look like Warren Buffett. I, of course, tweeted back that if he gave me his flip phone cell phone number, I’d fax in some information on the purchase. But let me explain to you the rationale, what people don’t understand, and this goes back to the Vegas analogy, we’re pre-purchasing land that we can determine how it’s used in an area that’s going to be hosting multi-millions of people in the near future. OK. Just like buying land in Vegas 80,100 years ago as the city is being developed in constructed. What we’re doing with that land now is, we’ve teamed up with Decentraland, so the actual organizers of the virtual world, to host what is going to be a massive fashion show starting March 24th, it’s a multi-day event. I think this is going to be the most widely viewed live fashion event in history. I think we’re going to attract half a million unique visitors to this, and let me explain why. We’re speaking to major brands from all over the world, the entry point to go see this is very low. Like the friction points you go to Decentraland.com, you can treat your guest avatar, you can go in and walk around and see what your fashion brands are doing. We’re going to be hosting after-parties. We’re going to have deejays. There’s going to be like the Runaways, celebrities, brands. The curiosity factor for people is going to be massive, that they’re just going to go there and be like, I want to see what the heck my favorite brand is going to be doing on a virtual fashion show. We’ve had virtual, or sory, real life models approaching us that want to walk the runway. We have brands, like, I can’t reveal the brands just yet, but I think if you were to list off some of the top 10 brands in the last 20 years, we’re in conversations with all of them. So the curiosity factor is going to be huge. It’s happening on our land. We are the virtual landlord. We’re participating in this. But let’s think about the revenue opportunities here. If you are any brand in the world, you need to find a way to have a presence at this show. It’s going to be history-making, nobody’s done something like this in the past, and you’re going to have all these eyeballs. And let’s think about some of the people that might be attending. My daughter, who is 10, is just starting to learn what brands are like, what is Chanel versus Gucci versus Balenciaga or Adidas or Nike or whatever else is out there? It’s all new to her. She’s not subscribing to Vogue, she doesn’t even watch television. Everything, and she consumes to form her perception of what things are comes from being online. Now her favorite pastime online is TikTok. If you think about the Metaverse as the next iteration of social media, and a better way for these brands to access really how they positioned their brands to the next generation, the Metaverse is the perfect way to do it.
Dan Weiskopf [00:33:21] And by the way, just, you would agree that the Metaverse is part of the blockchain, right? You need the blockchain.
Andrew Kiguel [00:33:28] You do and you don’t. So if you want to make it decentralized, this community-based building of a city or an environment, they need to be built on the blockchain. However, there are other Metaverses out there like Roblox for Second Life that have, I would say, they miss out this ownership, this Web3 part of it that exists. Metaverses have been around for a long time. In fact, it was Neil Stephenson in 1992 that coined the term in his book Snow Crash. And even if you think back to it, I don’t know if, when I was a kid I used to play, I think it was called Vice City or whatever, the game where you’re racing around a city that looked a lot like Miami. Those are all examples of Metaversees. The Metaverses built on blockchain, allow this sort of other piece to come in, which is the ownership, the self-contained economies, and the ability to contribute to the community in the build that haven’t been there before. But yes, it doesn’t have to be built on blockchain, but I do think the future will be on blockchain. It’ll be very interesting. I’m curious to see what Mark Zuckerberg and Meta do when they unroll their metaverse. I’m assuming at some point in the next 12 to 24 months. Because I don’t think people want to see them unroll something that says, here’s the experience completely done for you and you don’t get a chance to participate in the upside.
Dan Weiskopf [00:34:51] No, that’s counterproductive.
Andrew Kiguel [00:34:51] Messaging now that we’ve been hearing is that we are going to make it. Interoperable with the users so that you can buy land and so that you can contribute. And I think Mark Zuckerberg is a very brilliant individual, and he sees that the future of this is in sharing the platform with the users.
Dan Weiskopf [00:35:11] So there’s a limitation on the amount of real estate that is on the Metaverse. There is, what, four real metaverses right now, is that fair to say? Discoverland.
Andrew Kiguel [00:35:30] So there’s a time, so I would say, let’s be specific, blockchain based Metaverses?
Dan Weiskopf [00:35:38] Yeah.
Andrew Kiguel [00:35:38] Blockchain based Metaverses there’s four key ones right now. So Decentraland, Sandbox, Somnium Space and Crypto Voxels. And I would say the lion’s share of attention goes to Decentraland and Sandbox.
Dan Weiskopf [00:35:50] Yeah, there might be many, many more. I get that, but they’re in very early stage developments, maybe wannabes, right? And so we’ll see how they actually develop. So it sounds a little bit like there might be a little bit of a push back here. Because conspicuous consumption is, and key demographics, right? Are those two things that are driving the Metaverse?
Andrew Kiguel [00:36:19] There’s a few things driving the Metaverse. Again, it’s a far more immersive experience than what you might find in traditional gaming and social media. It’s largely, I would say it varies. I would say, on the gaming side, you can actually now make a career from playing video games and earning token rewards that have resale value. On the art side, people who have NFTs that can display them there, and you can hold art shows, music shows, it’s a great new forum for artists and celebrities to display their work. I’ve heard a lot of musicians will go in and sort of like, you might find a busker on a street corner, but will go into the metaverse and just start performing or doing what they do as a tester for their audience. But you can also have massive events there, too. So I think it’s largely event-driven and economically driven.
Dan Weiskopf [00:37:18] And it’s funny because it’s interrelated with the gig economy you’re saying as well. Right?
Andrew Kiguel [00:37:24] Absolutely.
Dan Weiskopf [00:37:24] Because it’s a way of making money on your own. Wow.
Andrew Kiguel [00:37:29] Well, you can buy, anybody can buy real estate in these metaverses like we’ve done. We’re doing it at a much larger scale and holding larger events. But because there’s a finite amount of real estate within any given Metaverse, people also view it as a great storage of value. Again, if you could go to Vegas one hundred years ago and just buy a small plot of land downtown and just say, great, I’m just going to wait this out and do nothing with it because I know that as the city grows and more visitor traffic, will grow in value, there is that aspect to the Metaverse as well that you also see something like bitcoin. There are some interesting similarities and attributes between bitcoin and owning land in the Metaverse.
Dan Weiskopf [00:38:11] Yeah, it’s funny because we host this call on Twitter spaces every day at noon. And you know, we have a real range of folks on that call. Some of them are 25. Some are 50. Some are portfolio managers. Some are, you know, 60, 70 year olds. And the whole Metaverse thing is way beyond the scope. Everybody seems to be very concerned around inflation and store of value on these calls, right? Is the Metaverse, because of the limitation, kind of like old school hard asset, but it’s in digital form?
Andrew Kiguel [00:38:52] Yes. Although I think that the, to make very clear that, yes, you do have some of the same attributes as bitcoin with the being sort of hard money, you know, sound money. But there’s no limitation on how many different Metaverses will exist. I still believe that the future of Metaverses is going to be less as a form of as a storage of value, although I think it has some of those attributes, and this is going to be more the next generation of gaming, social media and interaction. These are the things that are eating into, you know, I was looking at some statistics about how many people watch TV. I actually said this on, I think it was in a conversation with CNBC, where I was like, You know, people are watching less and less TV because the question to me was, doesn’t this preclude people from going outside and interacting normally? And I said, Well, it’s too late for that. People are already addicted to social media and the internet. It’s a migration of gaming and social media users to the Metaverse. And it’s actually just cannibalizing people who watch TV because in my mind, nobody under the age of like 30 orders cable anymore. Now I grew up with cable, so I’m like, We have to have cable. I’m the only guy that watches cable TV in my house, my wife who’s a little bit younger than me, she’s like, What is this? Why do we pay for this? That’s the group that’s going to be migrating to the Metaverse. It is the people that we traditionally associate with watching TV.
Dan Weiskopf [00:40:20] Yeah, because they can go to the community and enjoy the people, right, and engage on the Metaverse, you know, so it’s more dynamic than watching, I don’t know, Miami Vice.
Andrew Kiguel [00:40:38] Right. I liked Miam Vice. Well, but here’s another thing, I’ve seen movie festivals in the Metaverse. One particularly related to Star Wars, where they were just doing with the back to back movies of Star Wars, where you can watch the movie and then sort of in the corner, also talk to people, sort of simulates the experience of going to a movie theater, which I thought was really interesting. So maybe in the future you could see virtual movie theaters where the new James Bond movie or whatever comes out, and you can buy a ticket for a couple of dollars and go and virtually watch it on your screen while sitting with people. Or maybe you actually have to like shush people around you for making noise.
Dan Weiskopf [00:41:22] Or maybe you can be James Bond in the movie.
Andrew Kiguel [00:41:25] That’s right.
Dan Weiskopf [00:41:26] And play that role, right? You know, I’m so excited about this as an opportunity in general. I struggle like a lot of folks trying to put my arms around it and in understanding the limitations. So anyway, your role at Tokens.com and how you’re going to capture it, you know, as a banker, how do you approach things from a cash flow standpoint when you’re buying land, as an example?
Andrew Kiguel [00:42:00] So you mean valuation?
Dan Weiskopf [00:42:02] Yes, that’s something that’s relevant in this world, in the real world, right?
Andrew Kiguel [00:42:07] For sure.
Dan Weiskopf [00:42:07] But relevant in the Metaverse world.
Andrew Kiguel [00:42:09] It is, and we apply the same metrics from the real world to the Metaverse. So we look at the cost, what has sold in the neighborhood for what prices in the last while? We look at the foot traffic or the visitor traffic in this case. We look at the potential uses, so contiguous plots of land are more valuable than a sole plot of land. We look at the locations, who our neighbors are. What else is near there? And so, you know, there’s three rules to buying real estate in the Metaverse. Location, location and location. Right?
Dan Weiskopf [00:42:45] Sounds familiar.
Andrew Kiguel [00:42:46] Sounds familiar. If we apply the same rules, and it’s the same thing, if you were going to go buy a house, it’s not a commodity. When you’re looking in a neighborhood to buy a house, you look at, the first thing you look at is what has been sold around it, what are the things that appeal to you in that neighborhood that you can use?How close is it to other things? We do the same analysis when we’re buying things in the Metaverse.
Dan Weiskopf [00:43:10] OK, so on all these interviews, I try and ask the wild card questions, right? And when I look out five years from now, what am I going to say, looking backwards, oh, that was so obvious. Why wasn’t I paying attention to that? In the context, not just the managers, but the blockchain overall?
Andrew Kiguel [00:43:36] Yeah, I think the first thing when we think about Metaverses is that there’s going to be many of them around. Just like there’s various social media platforms, there’s going to be various Metaverses and some will find niches and things like education. Some will be more event concert driven. Some might be like workplace safety. Like, imagine the ability to recreate the inside of an automotive factory or a power plant and be able to train your workers remotely. I think education is going to be a massive area there. And that the technology is going to continue to improve along with this. But, you know, this is going to be very pervasive in the future, and I think just the way we use social media today, it’s going to just blend in.
Dan Weiskopf [00:44:23] It’s funny you talk about education, and I’m thinking about my son, and he loves, like you were talking about, gaming and you love sports. Right? And watching him, he’s immersed and you know, does he love school? Not so much, right? But he’s got to do it right. Being more involved would improve its grades, I’m sure. Will, I hope you’re listening.
Andrew Kiguel [00:44:50] Absolutely. Think about, what about higher education? Imagine you could have the leading medical experts or doctors in the world training people in a three-dimensional world where you could actually perform virtual operations, and you could be accessing and training students from all over the world. It doesn’t matter where the geographic, they don’t have to be in the same location anymore. Think about the value of that.
Dan Weiskopf [00:45:18] Yeah, yeah, absolutely. OK, so besides the Metaverse here, what other industries should we be looking at as being impacted by blockchain? And I have to exclude the fintech industry as well.
Andrew Kiguel [00:45:33] Right, you know, I think it’s really going to impact everything. I had a conversation last night with somebody talking about, you know, Web3 and carbon credits. I really think my vision is this is just going to be seamless to the point where people don’t actually realize that everything is going to move to some form of blockchain. Because it’s that ability, the same technology that enables NFTs, is going to become so widely spread amongst the ownership of everything because it’s the authenticity, verifying the ownership history and the origin of something, is just going to be everywhere, but we’re not going to notice it. It’s just going to slowly slide in, and then I think people will look back and be like, Hey, I remember that smart guy Dan talking about this a few years ago. Like that?
Dan Weiskopf [00:46:19] Yeah, that’s smart guy Andrew, as well as stand up for it. Thank you so much for doing this interview. Always appreciate learning from you and engaging with you in the Metaverse.
Andrew Kiguel [00:46:35] Thank you very much. We’ll meet next time in the Metaverse.
Dan Weiskopf [00:46:38] Absolutely. See you, Andrew.
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