WEBVTT - Would You Buy an NFT From a Vending Machine?

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<v Speaker 1>This is Bloomberg Crypto Daily Bloomberg I heard podcast, and

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<v Speaker 1>I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News.

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<v Speaker 1>It's Monday, December. Now I'm Philip log Across there in

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<v Speaker 1>today for Stacy Marie Ishmael. Well, it's been an extremely

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<v Speaker 1>messy month or so in crypto since slam bankmn Fred's

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<v Speaker 1>exchange ft X collapsed. But today we're going to talk

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<v Speaker 1>about something entirely different. We're going to talk about an

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<v Speaker 1>n f T vending machine. You heard me right, an

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<v Speaker 1>n f T vending machine For your listeners who are

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<v Speaker 1>new to crypto. N f T stands for non fungible tokens,

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<v Speaker 1>which are assets that, like bitcoin, won a block chain

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<v Speaker 1>and cannot be copied, changed, or replaced. They were all

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<v Speaker 1>the rage last year, but this year prices have come

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<v Speaker 1>falling down along with the rest of crypto. But what

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<v Speaker 1>if you could buy an n f T from a

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<v Speaker 1>vending machine. Earlier this year, a machine just like that

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<v Speaker 1>popped up in central London. The company behind this vending machine,

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<v Speaker 1>called my n f T, said the goal was to

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<v Speaker 1>eliminate any barriers to entry when it comes to buying

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<v Speaker 1>n f T s Hugo McDonald, the CEO and co

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<v Speaker 1>founder of my n f T, joins us today for us. Yeah,

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<v Speaker 1>the vending machine initiative was really about trying to just

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<v Speaker 1>show people that this isn't a very scary technology that

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<v Speaker 1>is inaccessible. Along with Bloomberg reporter tanseel act are and

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<v Speaker 1>people couldn't choose what the piece of art would be, right,

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<v Speaker 1>So it was like a lucky dip. So it's literally

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<v Speaker 1>like you just put in a tenner, you know, pay

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<v Speaker 1>a tenna, and you get what you get. You Welcome

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<v Speaker 1>to the show. Thanks for having me and tas Welcome

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<v Speaker 1>to the show. Thanks Phil. Good to be on the

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<v Speaker 1>show with you and h you go. I am excited, Hugh.

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<v Speaker 1>Can you briefly tell us a little bit what you

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<v Speaker 1>do and what your background is and how did you

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<v Speaker 1>get into crypt Sure, so I've been in crypto for

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<v Speaker 1>almost a decade now, started with bitcoin. But yeah, at

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<v Speaker 1>the beginnings for me was I was I was working

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<v Speaker 1>in banking. It was my first job. We had a

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<v Speaker 1>CPD meeting and there was a young guy who stood

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<v Speaker 1>up and was talking about bitcoin in the very early days.

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<v Speaker 1>I think it was sort of eighty dollars at the

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<v Speaker 1>time or something, and he pointed me towards the white

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<v Speaker 1>paper and I read it, and from that point on

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<v Speaker 1>I was basically a convert. I was supremely interested in

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<v Speaker 1>the idea of a peer to peer currency, a trust

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<v Speaker 1>less form of of of of exchange. And yeah, that

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<v Speaker 1>was really where it began for me. And now yeah,

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<v Speaker 1>so so in when n f T s were just

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<v Speaker 1>sort of coming onto the horizon on ethereum that there

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<v Speaker 1>had been some experimentations before on counterparty, on bitcoin and

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<v Speaker 1>colored coins and these kinds of things, but I guess

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<v Speaker 1>it really started moving on etherorum in seventeen with the

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<v Speaker 1>advent of crypto punks, and then we had crypto kitties when,

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<v Speaker 1>which was the first sort of hype cycle, if you

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<v Speaker 1>will have, of n f T s. And it was

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<v Speaker 1>at that time that myself and my two other co founders,

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<v Speaker 1>Eduard and Guion, started really looking at the n f

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<v Speaker 1>T technology side of this whole crypto world. And that

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<v Speaker 1>really excited us because in my view, I think one

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<v Speaker 1>day every single non fungible asset in the world will

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<v Speaker 1>have a token to represent its value, it's authenticity, it's

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<v Speaker 1>trading capability, all of these things, and so we wanted

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<v Speaker 1>to sort of be a part of that future or

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<v Speaker 1>create something or system that would help make that a reality.

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<v Speaker 1>And then, even more recently, after two or three years

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<v Speaker 1>of playing a round in the space and learning all

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<v Speaker 1>of the hurdles that everyone else is coming across, poor

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<v Speaker 1>u X, clunky UI, steep learning curve, crazy gas fees,

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<v Speaker 1>scalability issues. We've sort of took all of this learning

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<v Speaker 1>and we've tried to solve all of these problems in

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<v Speaker 1>a new product that we're releasing called my Left dot

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<v Speaker 1>Com Exciting. And that brings us to this point in

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<v Speaker 1>time in crypto. If I would say it's been quite

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<v Speaker 1>a year, what would you say? I would definitely agree.

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<v Speaker 1>Two trillion dollar freefall rattles crypto to the core, and

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<v Speaker 1>I think crypto has wiped out a lot of people

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<v Speaker 1>in the past couple of months. You can take the

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<v Speaker 1>lunar example, Bitcoin down sharply, the collapse of three Hours Capital,

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<v Speaker 1>the bankruptcy of Celsius and Voyage, or the FOURD of

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<v Speaker 1>ft X. So we did have genesis as well, saying

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<v Speaker 1>that it's basically looking for a billion dollars or more.

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<v Speaker 1>Otherwise it could also be filing for bankruptcy, and some

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<v Speaker 1>seem to think that the n f T hype is

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<v Speaker 1>slowing down, Like if you look at the average trading volume,

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<v Speaker 1>it's dropping. It's I guess it depends on who you're

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<v Speaker 1>talking to. There's a lot of people who are probably

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<v Speaker 1>licking their wounds, wondering what's going on. Um, I don't

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<v Speaker 1>want to don't want to get involved in this space

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<v Speaker 1>again if this was the first cycle that they were in.

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<v Speaker 1>But then there's a lot of people that have been

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<v Speaker 1>here for a while and understand these these movements, And

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<v Speaker 1>I think you have to look at it in the

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<v Speaker 1>context of any sort of game changing, paradigm shifting technology

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<v Speaker 1>that comes to the fall. How it works and booms

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<v Speaker 1>and buston, natural bubble cycles are a part of it

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<v Speaker 1>was a part of the dot com It was a

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<v Speaker 1>part of the railroad in the US. It was it's

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<v Speaker 1>a part of huge technology changes because of human behavior

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<v Speaker 1>and excitement and these kinds of things. So yeah, I mean,

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<v Speaker 1>this year there's been a whole bunch of bankruptcy heast

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<v Speaker 1>that have caused contagion and knock on effects. But I

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<v Speaker 1>think that the thing that comes out of this is

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<v Speaker 1>better for the industry, the uncertainty gets taken out of

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<v Speaker 1>the industry and more certainty gets put back in. The

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<v Speaker 1>people who really want to build value get found and

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<v Speaker 1>the capital begins to flow into those rather than the

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<v Speaker 1>more speculative projects. And also it will pave the way

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<v Speaker 1>for for for some form of I don't know, sensible

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<v Speaker 1>regulatory framework perhaps, but you know, well we'll see. And

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<v Speaker 1>so in the midst of this, I guess we can

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<v Speaker 1>call it broadly chaos right now, in the midst of

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<v Speaker 1>this chaos, you guys put up an n f tea

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<v Speaker 1>machine in London. We did bad timing, right you go? Um, yeah,

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<v Speaker 1>I mean I don't really see. Timing is definitely a thing,

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<v Speaker 1>but in the world of startups, I don't really You know,

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<v Speaker 1>timing can be very valuable at times, but it's really

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<v Speaker 1>just how long you can survive and how long you

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<v Speaker 1>keep going. So I'm not a huge I don't see

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<v Speaker 1>prove a whole whole amount of stocking in timing. But

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<v Speaker 1>for us, yeah, the vending machine initiative was really about

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<v Speaker 1>trying to just show people that this isn't a very

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<v Speaker 1>scary technology that is inaccessible. There is ways you can

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<v Speaker 1>make it more accessible and It was really just a

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<v Speaker 1>way to try and sort of educate people on what

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<v Speaker 1>n f T s were and show them that, you know,

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<v Speaker 1>with your with your cards, you can you know, do

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<v Speaker 1>ten pounds on contact less and get an n f

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<v Speaker 1>T card, scan it, redeem it on on the mine

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<v Speaker 1>ft site and then you're you're you're in the you're

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<v Speaker 1>in the world of being able to transact with a

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<v Speaker 1>non custody wallet into into the world of n f

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<v Speaker 1>T s, and you know, we're also raising money for

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<v Speaker 1>charity and you know, trying to just help sort of

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<v Speaker 1>spread the word and have a bit of fun really

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<v Speaker 1>and so yeah, I mean for us, it was it

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<v Speaker 1>was actually really it was a great success. We was

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<v Speaker 1>we sold one n f T every two minutes. The

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<v Speaker 1>machine even went down because the vending machine payment services

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<v Speaker 1>provider couldn't handle the volume. I did. I did speak

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<v Speaker 1>to a few people on the ground who had purchased

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<v Speaker 1>a couple of entities and they did say the platform

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<v Speaker 1>was a little bit like there's some issues around actually downloading. Yeah.

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<v Speaker 1>So yeah, it was in alpha essentially and the redemption process.

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<v Speaker 1>There were some hiccups on the database with our side

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<v Speaker 1>of making it as as fluid as possible, but we

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<v Speaker 1>resolved them as time was going on. And so the

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<v Speaker 1>way that it worked, just for the very initiated is

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<v Speaker 1>basically you basically you pay or is it does the

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<v Speaker 1>ten pounds? Yeah, so yeah, you pay ten pounds, you

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<v Speaker 1>get a card out of the vending machine, you scanned

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<v Speaker 1>the card. That card takes you to mine FT where

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<v Speaker 1>you sign up. Once you're signed up, you're given a

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<v Speaker 1>non custodian wallet for you to be able to participate

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<v Speaker 1>in the world of Web three and then you redeemed

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<v Speaker 1>the n f T that you got from the card,

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<v Speaker 1>and that's automatically sent to your to your wallet and

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<v Speaker 1>then you can do what you like with it. And

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<v Speaker 1>how many did you sell during the two days the

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<v Speaker 1>machine was on side, Um, I think we did about

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<v Speaker 1>four or something like that. And people couldn't choose what

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<v Speaker 1>the piece of art would be, right, so it was

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<v Speaker 1>like a lucky did. So it's literally like you just

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<v Speaker 1>put in a tenner, what you know, pay a tenner

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<v Speaker 1>and you get what you get. Yes, So we we

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<v Speaker 1>got a whole bunch of artists together that from different

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<v Speaker 1>networks because we're a multi chain marketplace that we really

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<v Speaker 1>liked and we've gotten to donate their works into the

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<v Speaker 1>into the vending machine, and so it was really a

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<v Speaker 1>lucky differ in any ways as to what piece of

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<v Speaker 1>art from what artist you were going to get. So

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<v Speaker 1>will will those n f T s be tradeable valuable

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<v Speaker 1>in the future. So they're all E. S C. Seventy

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<v Speaker 1>one or type or standards that are similar to them,

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<v Speaker 1>depending on the chain. So once they're in your wallet

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<v Speaker 1>as as the owner of it, you can do what

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<v Speaker 1>you like with it. So you could you could resell

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<v Speaker 1>it if you wish to, You could hold onto it forever,

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<v Speaker 1>you could collect other pieces from that artist. I mean

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<v Speaker 1>totally up to you and this machine. Where does it

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<v Speaker 1>live now? It's no longer where you put it up first,

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<v Speaker 1>is it? It is no longer where we put it

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<v Speaker 1>up first. It was only there for a couple of

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<v Speaker 1>days um as part of the n f T London

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<v Speaker 1>event and to help obviously drive awareness around the technology

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<v Speaker 1>and raise some money for some good causes. However, because

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<v Speaker 1>it was so popular, we've had a huge amount of

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<v Speaker 1>partners and people come to us asking for it to

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<v Speaker 1>be at their events or to have it at some

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<v Speaker 1>of their campuses and institutions. Then after the break. More

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<v Speaker 1>from Bloomberg reporter tnz ill actor and my n f

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<v Speaker 1>T CEO and co founder Hugo McDonald on the future

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<v Speaker 1>all of n f t s in society will be

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<v Speaker 1>right back tells. I wanted to come to you for

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<v Speaker 1>a second. You've reported on and off of this market.

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<v Speaker 1>What are your observations from this year and and more specifically,

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<v Speaker 1>the UK Parliament was looking into ant as well. Yes,

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<v Speaker 1>so day two of the event where you were high

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<v Speaker 1>where you had your vending machine showcasing, Parliament released an

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<v Speaker 1>inquiry into n f T s which was interesting. So

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<v Speaker 1>MPs are expected to consider whether n FT investors, especially

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<v Speaker 1>vulnerable speculators, are put at risk by the market. So

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<v Speaker 1>they're actually investigating the concept of n f t S

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<v Speaker 1>right um. And that that was interesting because obviously this

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<v Speaker 1>space I c O S, Bitcoin crypto in general is

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<v Speaker 1>not very well regulated and a lot of people entered

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<v Speaker 1>the arena without having any idea of where they're putting

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<v Speaker 1>their money. Obviously, hug your vending machine is tempound of pop.

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<v Speaker 1>But we've seen n f tes like people. For examples,

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<v Speaker 1>he sold his energy for what sixty million? Yeah, and

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<v Speaker 1>then you've seen you've got like Soto Bees, You've got

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<v Speaker 1>like old school UM auction houses entering the arena. Then

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<v Speaker 1>you've got like you know, you've got luxury brands as well,

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<v Speaker 1>UM selling n f T s for millions. So yeah,

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<v Speaker 1>it's a market that's not very well regulated, should we say,

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<v Speaker 1>so it's um it's the new markets. Yeah, it's a

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<v Speaker 1>good thing. You go that UK politicians want to educate

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<v Speaker 1>themselves around n f T s. I think it's absolutely brilliant.

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<v Speaker 1>I mean, innovation happens at three or four times the

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<v Speaker 1>rate as regulation and government oversight, right, I mean it's

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<v Speaker 1>it's it's different different paces of innovation. So and I

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<v Speaker 1>think there's a huge amount of room and opportunity for

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<v Speaker 1>for different countries that embrace this technology faster to be

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<v Speaker 1>able to to get you know, one up on others.

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<v Speaker 1>I saw really interesting report recently from the Law Commission

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<v Speaker 1>in the UK regarding sort of intellectual property rights and

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<v Speaker 1>digital assets and how n f t s for example,

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<v Speaker 1>can represent entirely new kinds of property rights. And it

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<v Speaker 1>was the first piece I've read that was sort of

0:12:11.760 --> 0:12:14.400
<v Speaker 1>produced by a government body that I found to be

0:12:14.640 --> 0:12:17.640
<v Speaker 1>really quite engaging and like they've done their homework it

0:12:17.720 --> 0:12:22.320
<v Speaker 1>was really interesting and I think that the UK is

0:12:22.320 --> 0:12:25.720
<v Speaker 1>well positioned to be able to to really build some

0:12:25.800 --> 0:12:29.960
<v Speaker 1>kind of framework or rules based principles that will allow

0:12:30.080 --> 0:12:34.480
<v Speaker 1>for for businesses they're innovating in the space to flourish

0:12:36.280 --> 0:12:38.520
<v Speaker 1>before we close it off today. I want to circle

0:12:38.559 --> 0:12:41.040
<v Speaker 1>back to this argument you made at the outset, and

0:12:41.080 --> 0:12:42.920
<v Speaker 1>which is one that we've been hearing. You know, I

0:12:42.920 --> 0:12:44.880
<v Speaker 1>fear a bit we here Bloomberry Crypto in the last

0:12:44.880 --> 0:12:48.400
<v Speaker 1>couple of weeks. It's the idea of going through these

0:12:48.400 --> 0:12:51.960
<v Speaker 1>booment bus cycles, peeling off the rotten layers, I guess,

0:12:52.120 --> 0:12:55.040
<v Speaker 1>or useless later or less useful layers maybe is a

0:12:55.080 --> 0:12:58.160
<v Speaker 1>better way to frame it and then to start building again.

0:12:58.400 --> 0:13:00.040
<v Speaker 1>And I just wanted to sort of zero in on

0:13:00.160 --> 0:13:03.319
<v Speaker 1>the building part. What kind of building do you see

0:13:03.360 --> 0:13:05.600
<v Speaker 1>now and what kind of building are you looking to

0:13:05.640 --> 0:13:09.400
<v Speaker 1>do coming forward. It's probably a cliche these days in

0:13:09.480 --> 0:13:10.679
<v Speaker 1>terms of none of the people who said but I

0:13:10.720 --> 0:13:12.200
<v Speaker 1>do really think we are still in the very early

0:13:12.200 --> 0:13:16.920
<v Speaker 1>stages of this industry, you know, early early Internet times, seventies,

0:13:16.920 --> 0:13:22.640
<v Speaker 1>eighties even, and the starting of the space was building

0:13:23.200 --> 0:13:27.679
<v Speaker 1>layer ones theoryum Bitcoin, poker, dot which is even a

0:13:27.760 --> 0:13:30.480
<v Speaker 1>layer zero. It's connecting chains together these kinds of things,

0:13:31.280 --> 0:13:33.720
<v Speaker 1>and there's been a lot of innovation there. There's still

0:13:33.720 --> 0:13:36.079
<v Speaker 1>a lot more to go. I mean, the blockchain trilemma

0:13:36.160 --> 0:13:39.960
<v Speaker 1>of scalability, decentralization and security is a really difficult problem

0:13:40.000 --> 0:13:42.840
<v Speaker 1>to solve and to solve well to get something that

0:13:43.040 --> 0:13:45.040
<v Speaker 1>is going to work for you know, the modern day

0:13:45.040 --> 0:13:48.760
<v Speaker 1>world at scale and comparison to the likes of Visa

0:13:48.800 --> 0:13:50.600
<v Speaker 1>and these kinds of things. And so there's been a

0:13:50.600 --> 0:13:53.200
<v Speaker 1>lot of work building on that in the past few years.

0:13:53.400 --> 0:13:55.280
<v Speaker 1>You know, the move of ethereums, proof of state for

0:13:55.280 --> 0:13:57.679
<v Speaker 1>example being a being a part of that. For us,

0:13:58.240 --> 0:14:00.720
<v Speaker 1>I think we're re really interested in in the future

0:14:00.800 --> 0:14:04.240
<v Speaker 1>is this concept of multi chain. So I I personally

0:14:04.280 --> 0:14:06.600
<v Speaker 1>think the world will evolve in this space where everybody

0:14:06.640 --> 0:14:10.079
<v Speaker 1>will have their own block chains because the speed at

0:14:10.120 --> 0:14:13.240
<v Speaker 1>which you can create layer ones, let's say, or block

0:14:13.280 --> 0:14:15.600
<v Speaker 1>chains is getting easier and easy and easy. The barriers

0:14:15.600 --> 0:14:18.880
<v Speaker 1>are getting lower, and so I think you'll have businesses

0:14:18.880 --> 0:14:21.560
<v Speaker 1>with private block chains. I think you have big, really

0:14:21.600 --> 0:14:24.040
<v Speaker 1>decentralized public block chains that might be a bit slower,

0:14:24.480 --> 0:14:26.680
<v Speaker 1>and I think that what lend up happening is you'll

0:14:26.680 --> 0:14:28.480
<v Speaker 1>need an Internet, a block chains, and you'll need all

0:14:28.520 --> 0:14:30.680
<v Speaker 1>of these worlds to talk to each other and to

0:14:30.720 --> 0:14:33.480
<v Speaker 1>be able to interact with one another. And we're really

0:14:33.480 --> 0:14:36.600
<v Speaker 1>interested in that future because that's where I think the

0:14:36.640 --> 0:14:42.520
<v Speaker 1>space is going. And so for us when it comes

0:14:42.520 --> 0:14:44.040
<v Speaker 1>to n f t s, it's about trying to be

0:14:44.520 --> 0:14:47.080
<v Speaker 1>you know, multi chain and about creating a world where

0:14:47.520 --> 0:14:49.400
<v Speaker 1>people can move their n f t s between block

0:14:49.480 --> 0:14:54.080
<v Speaker 1>chains seamlessly and permissionlessly, for example, or being able to

0:14:54.520 --> 0:14:56.160
<v Speaker 1>do something on one block chain with this n f

0:14:56.200 --> 0:14:57.800
<v Speaker 1>T and then it has an effect on another one

0:14:58.280 --> 0:15:01.200
<v Speaker 1>because they're interconnected in some four And there's been a

0:15:01.240 --> 0:15:02.880
<v Speaker 1>lot of innovation in the space around us at the moment,

0:15:02.880 --> 0:15:05.520
<v Speaker 1>the first versions of bridges, which have probably been talked

0:15:05.520 --> 0:15:07.960
<v Speaker 1>about there because there's there's been a lot of security

0:15:07.960 --> 0:15:09.960
<v Speaker 1>problems with bridges, has been a lot of hacks in bridges,

0:15:10.400 --> 0:15:13.200
<v Speaker 1>and bridges are a big target for hackers because there

0:15:13.200 --> 0:15:16.240
<v Speaker 1>are honeypot essentially where lots of capital ends are aggregating

0:15:16.280 --> 0:15:18.640
<v Speaker 1>because of how bridges work. And so I think there's

0:15:18.680 --> 0:15:20.800
<v Speaker 1>gonna be a lot of innovation around that multi chain

0:15:20.880 --> 0:15:25.520
<v Speaker 1>concept over the next few years, and I think, you know,

0:15:25.800 --> 0:15:27.840
<v Speaker 1>there will be a lot more innovation with what you

0:15:27.880 --> 0:15:29.440
<v Speaker 1>can do with an n f T. You know, at

0:15:29.440 --> 0:15:31.920
<v Speaker 1>the moment there's a lot of artwork and imagery, but

0:15:32.280 --> 0:15:34.080
<v Speaker 1>you know, at the end of the day, it's a

0:15:34.600 --> 0:15:36.560
<v Speaker 1>it's a deed, it's a digital deed. It's a blank

0:15:36.600 --> 0:15:39.440
<v Speaker 1>canvas in which you can program different kinds of value

0:15:39.920 --> 0:15:43.400
<v Speaker 1>and different rules. And so I think a world where

0:15:43.400 --> 0:15:46.840
<v Speaker 1>will start seeing new kinds of assets that exist in

0:15:46.880 --> 0:15:49.040
<v Speaker 1>the traditional world being tokenized as n f T s.

0:15:49.040 --> 0:15:50.920
<v Speaker 1>I think it's going to start happening, and that will

0:15:50.960 --> 0:15:54.520
<v Speaker 1>bring more liquidity to these fairly a liquid markets, and

0:15:54.560 --> 0:15:57.120
<v Speaker 1>I think that will be interesting, um, you know, by

0:15:57.120 --> 0:15:59.800
<v Speaker 1>reducing friction, and we're interested in that as well. We'd

0:15:59.840 --> 0:16:02.320
<v Speaker 1>like to start innovating on that side of things as well.

0:16:03.000 --> 0:16:07.000
<v Speaker 1>So parting message, there's still a there there m hm

0:16:07.280 --> 0:16:10.080
<v Speaker 1>hm definitely. I think I think there's still still a

0:16:10.120 --> 0:16:13.160
<v Speaker 1>long way to go. And on that note, task Hugo,

0:16:13.240 --> 0:16:15.440
<v Speaker 1>we're coming to the end of the show. Hugo. I

0:16:15.440 --> 0:16:16.880
<v Speaker 1>want to thank you so much for coming on and

0:16:16.920 --> 0:16:20.000
<v Speaker 1>thank you tas thanks, thank you very much, cheers, cheers.

0:16:21.800 --> 0:16:24.920
<v Speaker 1>You can find more of Tansdale actors reporting on the

0:16:24.920 --> 0:16:28.600
<v Speaker 1>Bloomberg Terminal and on Bloomberg dot com and for more,

0:16:28.720 --> 0:16:32.520
<v Speaker 1>be sure to check out our twice weekly newsletter, Bloomberg Crypto.

0:16:38.960 --> 0:16:42.120
<v Speaker 1>This is Bloomberg Crypto, a daily podcast from Bloomberg and

0:16:42.160 --> 0:16:45.120
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0:16:45.360 --> 0:16:48.440
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0:16:58.320 --> 0:17:02.000
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0:17:02.040 --> 0:17:05.840
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0:17:09.359 --> 0:17:13.680
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0:17:13.760 --> 0:17:18.480
<v Speaker 1>music by Leo Sidron. I'm Stacy Maria Shmaal. We'll be

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