Speaker 1: This is Bloomberg Crypto Daily Bloomberg I heard podcast, and
Speaker 1: I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News.
Speaker 1: It's Monday, December. Now I'm Philip log Across there in
Speaker 1: today for Stacy Marie Ishmael. Well, it's been an extremely
Speaker 1: messy month or so in crypto since slam bankmn Fred's
Speaker 1: exchange ft X collapsed. But today we're going to talk
Speaker 1: about something entirely different. We're going to talk about an
Speaker 1: n f T vending machine. You heard me right, an
Speaker 1: n f T vending machine For your listeners who are
Speaker 1: new to crypto. N f T stands for non fungible tokens,
Speaker 1: which are assets that, like bitcoin, won a block chain
Speaker 1: and cannot be copied, changed, or replaced. They were all
Speaker 1: the rage last year, but this year prices have come
Speaker 1: falling down along with the rest of crypto. But what
Speaker 1: if you could buy an n f T from a
Speaker 1: vending machine. Earlier this year, a machine just like that
Speaker 1: popped up in central London. The company behind this vending machine,
Speaker 1: called my n f T, said the goal was to
Speaker 1: eliminate any barriers to entry when it comes to buying
Speaker 1: n f T s Hugo McDonald, the CEO and co
Speaker 1: founder of my n f T, joins us today for us. Yeah,
Speaker 1: the vending machine initiative was really about trying to just
Speaker 1: show people that this isn't a very scary technology that
Speaker 1: is inaccessible. Along with Bloomberg reporter tanseel act are and
Speaker 1: people couldn't choose what the piece of art would be, right,
Speaker 1: So it was like a lucky dip. So it's literally
Speaker 1: like you just put in a tenner, you know, pay
Speaker 1: a tenna, and you get what you get. You Welcome
Speaker 1: to the show. Thanks for having me and tas Welcome
Speaker 1: to the show. Thanks Phil. Good to be on the
Speaker 1: show with you and h you go. I am excited, Hugh.
Speaker 1: Can you briefly tell us a little bit what you
Speaker 1: do and what your background is and how did you
Speaker 1: get into crypt Sure, so I've been in crypto for
Speaker 1: almost a decade now, started with bitcoin. But yeah, at
Speaker 1: the beginnings for me was I was I was working
Speaker 1: in banking. It was my first job. We had a
Speaker 1: CPD meeting and there was a young guy who stood
Speaker 1: up and was talking about bitcoin in the very early days.
Speaker 1: I think it was sort of eighty dollars at the
Speaker 1: time or something, and he pointed me towards the white
Speaker 1: paper and I read it, and from that point on
Speaker 1: I was basically a convert. I was supremely interested in
Speaker 1: the idea of a peer to peer currency, a trust
Speaker 1: less form of of of of exchange. And yeah, that
Speaker 1: was really where it began for me. And now yeah,
Speaker 1: so so in when n f T s were just
Speaker 1: sort of coming onto the horizon on ethereum that there
Speaker 1: had been some experimentations before on counterparty, on bitcoin and
Speaker 1: colored coins and these kinds of things, but I guess
Speaker 1: it really started moving on etherorum in seventeen with the
Speaker 1: advent of crypto punks, and then we had crypto kitties when,
Speaker 1: which was the first sort of hype cycle, if you
Speaker 1: will have, of n f T s. And it was
Speaker 1: at that time that myself and my two other co founders,
Speaker 1: Eduard and Guion, started really looking at the n f
Speaker 1: T technology side of this whole crypto world. And that
Speaker 1: really excited us because in my view, I think one
Speaker 1: day every single non fungible asset in the world will
Speaker 1: have a token to represent its value, it's authenticity, it's
Speaker 1: trading capability, all of these things, and so we wanted
Speaker 1: to sort of be a part of that future or
Speaker 1: create something or system that would help make that a reality.
Speaker 1: And then, even more recently, after two or three years
Speaker 1: of playing a round in the space and learning all
Speaker 1: of the hurdles that everyone else is coming across, poor
Speaker 1: u X, clunky UI, steep learning curve, crazy gas fees,
Speaker 1: scalability issues. We've sort of took all of this learning
Speaker 1: and we've tried to solve all of these problems in
Speaker 1: a new product that we're releasing called my Left dot
Speaker 1: Com Exciting. And that brings us to this point in
Speaker 1: time in crypto. If I would say it's been quite
Speaker 1: a year, what would you say? I would definitely agree.
Speaker 1: Two trillion dollar freefall rattles crypto to the core, and
Speaker 1: I think crypto has wiped out a lot of people
Speaker 1: in the past couple of months. You can take the
Speaker 1: lunar example, Bitcoin down sharply, the collapse of three Hours Capital,
Speaker 1: the bankruptcy of Celsius and Voyage, or the FOURD of
Speaker 1: ft X. So we did have genesis as well, saying
Speaker 1: that it's basically looking for a billion dollars or more.
Speaker 1: Otherwise it could also be filing for bankruptcy, and some
Speaker 1: seem to think that the n f T hype is
Speaker 1: slowing down, Like if you look at the average trading volume,
Speaker 1: it's dropping. It's I guess it depends on who you're
Speaker 1: talking to. There's a lot of people who are probably
Speaker 1: licking their wounds, wondering what's going on. Um, I don't
Speaker 1: want to don't want to get involved in this space
Speaker 1: again if this was the first cycle that they were in.
Speaker 1: But then there's a lot of people that have been
Speaker 1: here for a while and understand these these movements, And
Speaker 1: I think you have to look at it in the
Speaker 1: context of any sort of game changing, paradigm shifting technology
Speaker 1: that comes to the fall. How it works and booms
Speaker 1: and buston, natural bubble cycles are a part of it
Speaker 1: was a part of the dot com It was a
Speaker 1: part of the railroad in the US. It was it's
Speaker 1: a part of huge technology changes because of human behavior
Speaker 1: and excitement and these kinds of things. So yeah, I mean,
Speaker 1: this year there's been a whole bunch of bankruptcy heast
Speaker 1: that have caused contagion and knock on effects. But I
Speaker 1: think that the thing that comes out of this is
Speaker 1: better for the industry, the uncertainty gets taken out of
Speaker 1: the industry and more certainty gets put back in. The
Speaker 1: people who really want to build value get found and
Speaker 1: the capital begins to flow into those rather than the
Speaker 1: more speculative projects. And also it will pave the way
Speaker 1: for for for some form of I don't know, sensible
Speaker 1: regulatory framework perhaps, but you know, well we'll see. And
Speaker 1: so in the midst of this, I guess we can
Speaker 1: call it broadly chaos right now, in the midst of
Speaker 1: this chaos, you guys put up an n f tea
Speaker 1: machine in London. We did bad timing, right you go? Um, yeah,
Speaker 1: I mean I don't really see. Timing is definitely a thing,
Speaker 1: but in the world of startups, I don't really You know,
Speaker 1: timing can be very valuable at times, but it's really
Speaker 1: just how long you can survive and how long you
Speaker 1: keep going. So I'm not a huge I don't see
Speaker 1: prove a whole whole amount of stocking in timing. But
Speaker 1: for us, yeah, the vending machine initiative was really about
Speaker 1: trying to just show people that this isn't a very
Speaker 1: scary technology that is inaccessible. There is ways you can
Speaker 1: make it more accessible and It was really just a
Speaker 1: way to try and sort of educate people on what
Speaker 1: n f T s were and show them that, you know,
Speaker 1: with your with your cards, you can you know, do
Speaker 1: ten pounds on contact less and get an n f
Speaker 1: T card, scan it, redeem it on on the mine
Speaker 1: ft site and then you're you're you're in the you're
Speaker 1: in the world of being able to transact with a
Speaker 1: non custody wallet into into the world of n f
Speaker 1: T s, and you know, we're also raising money for
Speaker 1: charity and you know, trying to just help sort of
Speaker 1: spread the word and have a bit of fun really
Speaker 1: and so yeah, I mean for us, it was it
Speaker 1: was actually really it was a great success. We was
Speaker 1: we sold one n f T every two minutes. The
Speaker 1: machine even went down because the vending machine payment services
Speaker 1: provider couldn't handle the volume. I did. I did speak
Speaker 1: to a few people on the ground who had purchased
Speaker 1: a couple of entities and they did say the platform
Speaker 1: was a little bit like there's some issues around actually downloading. Yeah.
Speaker 1: So yeah, it was in alpha essentially and the redemption process.
Speaker 1: There were some hiccups on the database with our side
Speaker 1: of making it as as fluid as possible, but we
Speaker 1: resolved them as time was going on. And so the
Speaker 1: way that it worked, just for the very initiated is
Speaker 1: basically you basically you pay or is it does the
Speaker 1: ten pounds? Yeah, so yeah, you pay ten pounds, you
Speaker 1: get a card out of the vending machine, you scanned
Speaker 1: the card. That card takes you to mine FT where
Speaker 1: you sign up. Once you're signed up, you're given a
Speaker 1: non custodian wallet for you to be able to participate
Speaker 1: in the world of Web three and then you redeemed
Speaker 1: the n f T that you got from the card,
Speaker 1: and that's automatically sent to your to your wallet and
Speaker 1: then you can do what you like with it. And
Speaker 1: how many did you sell during the two days the
Speaker 1: machine was on side, Um, I think we did about
Speaker 1: four or something like that. And people couldn't choose what
Speaker 1: the piece of art would be, right, so it was
Speaker 1: like a lucky did. So it's literally like you just
Speaker 1: put in a tenner, what you know, pay a tenner
Speaker 1: and you get what you get. Yes, So we we
Speaker 1: got a whole bunch of artists together that from different
Speaker 1: networks because we're a multi chain marketplace that we really
Speaker 1: liked and we've gotten to donate their works into the
Speaker 1: into the vending machine, and so it was really a
Speaker 1: lucky differ in any ways as to what piece of
Speaker 1: art from what artist you were going to get. So
Speaker 1: will will those n f T s be tradeable valuable
Speaker 1: in the future. So they're all E. S C. Seventy
Speaker 1: one or type or standards that are similar to them,
Speaker 1: depending on the chain. So once they're in your wallet
Speaker 1: as as the owner of it, you can do what
Speaker 1: you like with it. So you could you could resell
Speaker 1: it if you wish to, You could hold onto it forever,
Speaker 1: you could collect other pieces from that artist. I mean
Speaker 1: totally up to you and this machine. Where does it
Speaker 1: live now? It's no longer where you put it up first,
Speaker 1: is it? It is no longer where we put it
Speaker 1: up first. It was only there for a couple of
Speaker 1: days um as part of the n f T London
Speaker 1: event and to help obviously drive awareness around the technology
Speaker 1: and raise some money for some good causes. However, because
Speaker 1: it was so popular, we've had a huge amount of
Speaker 1: partners and people come to us asking for it to
Speaker 1: be at their events or to have it at some
Speaker 1: of their campuses and institutions. Then after the break. More
Speaker 1: from Bloomberg reporter tnz ill actor and my n f
Speaker 1: T CEO and co founder Hugo McDonald on the future
Speaker 1: all of n f t s in society will be
Speaker 1: right back tells. I wanted to come to you for
Speaker 1: a second. You've reported on and off of this market.
Speaker 1: What are your observations from this year and and more specifically,
Speaker 1: the UK Parliament was looking into ant as well. Yes,
Speaker 1: so day two of the event where you were high
Speaker 1: where you had your vending machine showcasing, Parliament released an
Speaker 1: inquiry into n f T s which was interesting. So
Speaker 1: MPs are expected to consider whether n FT investors, especially
Speaker 1: vulnerable speculators, are put at risk by the market. So
Speaker 1: they're actually investigating the concept of n f t S
Speaker 1: right um. And that that was interesting because obviously this
Speaker 1: space I c O S, Bitcoin crypto in general is
Speaker 1: not very well regulated and a lot of people entered
Speaker 1: the arena without having any idea of where they're putting
Speaker 1: their money. Obviously, hug your vending machine is tempound of pop.
Speaker 1: But we've seen n f tes like people. For examples,
Speaker 1: he sold his energy for what sixty million? Yeah, and
Speaker 1: then you've seen you've got like Soto Bees, You've got
Speaker 1: like old school UM auction houses entering the arena. Then
Speaker 1: you've got like you know, you've got luxury brands as well,
Speaker 1: UM selling n f T s for millions. So yeah,
Speaker 1: it's a market that's not very well regulated, should we say,
Speaker 1: so it's um it's the new markets. Yeah, it's a
Speaker 1: good thing. You go that UK politicians want to educate
Speaker 1: themselves around n f T s. I think it's absolutely brilliant.
Speaker 1: I mean, innovation happens at three or four times the
Speaker 1: rate as regulation and government oversight, right, I mean it's
Speaker 1: it's it's different different paces of innovation. So and I
Speaker 1: think there's a huge amount of room and opportunity for
Speaker 1: for different countries that embrace this technology faster to be
Speaker 1: able to to get you know, one up on others.
Speaker 1: I saw really interesting report recently from the Law Commission
Speaker 1: in the UK regarding sort of intellectual property rights and
Speaker 1: digital assets and how n f t s for example,
Speaker 1: can represent entirely new kinds of property rights. And it
Speaker 1: was the first piece I've read that was sort of
Speaker 1: produced by a government body that I found to be
Speaker 1: really quite engaging and like they've done their homework it
Speaker 1: was really interesting and I think that the UK is
Speaker 1: well positioned to be able to to really build some
Speaker 1: kind of framework or rules based principles that will allow
Speaker 1: for for businesses they're innovating in the space to flourish
Speaker 1: before we close it off today. I want to circle
Speaker 1: back to this argument you made at the outset, and
Speaker 1: which is one that we've been hearing. You know, I
Speaker 1: fear a bit we here Bloomberry Crypto in the last
Speaker 1: couple of weeks. It's the idea of going through these
Speaker 1: booment bus cycles, peeling off the rotten layers, I guess,
Speaker 1: or useless later or less useful layers maybe is a
Speaker 1: better way to frame it and then to start building again.
Speaker 1: And I just wanted to sort of zero in on
Speaker 1: the building part. What kind of building do you see
Speaker 1: now and what kind of building are you looking to
Speaker 1: do coming forward. It's probably a cliche these days in
Speaker 1: terms of none of the people who said but I
Speaker 1: do really think we are still in the very early
Speaker 1: stages of this industry, you know, early early Internet times, seventies,
Speaker 1: eighties even, and the starting of the space was building
Speaker 1: layer ones theoryum Bitcoin, poker, dot which is even a
Speaker 1: layer zero. It's connecting chains together these kinds of things,
Speaker 1: and there's been a lot of innovation there. There's still
Speaker 1: a lot more to go. I mean, the blockchain trilemma
Speaker 1: of scalability, decentralization and security is a really difficult problem
Speaker 1: to solve and to solve well to get something that
Speaker 1: is going to work for you know, the modern day
Speaker 1: world at scale and comparison to the likes of Visa
Speaker 1: and these kinds of things. And so there's been a
Speaker 1: lot of work building on that in the past few years.
Speaker 1: You know, the move of ethereums, proof of state for
Speaker 1: example being a being a part of that. For us,
Speaker 1: I think we're re really interested in in the future
Speaker 1: is this concept of multi chain. So I I personally
Speaker 1: think the world will evolve in this space where everybody
Speaker 1: will have their own block chains because the speed at
Speaker 1: which you can create layer ones, let's say, or block
Speaker 1: chains is getting easier and easy and easy. The barriers
Speaker 1: are getting lower, and so I think you'll have businesses
Speaker 1: with private block chains. I think you have big, really
Speaker 1: decentralized public block chains that might be a bit slower,
Speaker 1: and I think that what lend up happening is you'll
Speaker 1: need an Internet, a block chains, and you'll need all
Speaker 1: of these worlds to talk to each other and to
Speaker 1: be able to interact with one another. And we're really
Speaker 1: interested in that future because that's where I think the
Speaker 1: space is going. And so for us when it comes
Speaker 1: to n f t s, it's about trying to be
Speaker 1: you know, multi chain and about creating a world where
Speaker 1: people can move their n f t s between block
Speaker 1: chains seamlessly and permissionlessly, for example, or being able to
Speaker 1: do something on one block chain with this n f
Speaker 1: T and then it has an effect on another one
Speaker 1: because they're interconnected in some four And there's been a
Speaker 1: lot of innovation in the space around us at the moment,
Speaker 1: the first versions of bridges, which have probably been talked
Speaker 1: about there because there's there's been a lot of security
Speaker 1: problems with bridges, has been a lot of hacks in bridges,
Speaker 1: and bridges are a big target for hackers because there
Speaker 1: are honeypot essentially where lots of capital ends are aggregating
Speaker 1: because of how bridges work. And so I think there's
Speaker 1: gonna be a lot of innovation around that multi chain
Speaker 1: concept over the next few years, and I think, you know,
Speaker 1: there will be a lot more innovation with what you
Speaker 1: can do with an n f T. You know, at
Speaker 1: the moment there's a lot of artwork and imagery, but
Speaker 1: you know, at the end of the day, it's a
Speaker 1: it's a deed, it's a digital deed. It's a blank
Speaker 1: canvas in which you can program different kinds of value
Speaker 1: and different rules. And so I think a world where
Speaker 1: will start seeing new kinds of assets that exist in
Speaker 1: the traditional world being tokenized as n f T s.
Speaker 1: I think it's going to start happening, and that will
Speaker 1: bring more liquidity to these fairly a liquid markets, and
Speaker 1: I think that will be interesting, um, you know, by
Speaker 1: reducing friction, and we're interested in that as well. We'd
Speaker 1: like to start innovating on that side of things as well.
Speaker 1: So parting message, there's still a there there m hm
Speaker 1: hm definitely. I think I think there's still still a
Speaker 1: long way to go. And on that note, task Hugo,
Speaker 1: we're coming to the end of the show. Hugo. I
Speaker 1: want to thank you so much for coming on and
Speaker 1: thank you tas thanks, thank you very much, cheers, cheers.
Speaker 1: You can find more of Tansdale actors reporting on the
Speaker 1: Bloomberg Terminal and on Bloomberg dot com and for more,
Speaker 1: be sure to check out our twice weekly newsletter, Bloomberg Crypto.
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