That would be the ceo and founder of blockchain.com, peter smith, and peter excited to chat with you today, because you know youve operated in this space for a bit. Not a lot of people have been around or can say their companys been around in crypto for a decade, but that is what blockchain.com celebrated earlier this year, and i guess well start with with kind of how youve built the business to do multiple different things. I think a lot of people know you as the original kind of blockchain explorer and thats how you guys got your start, but added a lot more over the years since talk to me about how youve navigated that and what youve seen over those years in terms Of what customers are looking for yeah, so i think weve always kind of get our role to make it easier to use uh, bitcoin and then later you know all the cryptocurrencies that came after bitcoin, and you know that started early on by building data products that Made it easy for people to figure out what was going on like what is it? When did a transaction happen? How many transactions happened yesterday, a pretty simple product but really useful, and we went from there to building consumer products and in the last two and a half years, weve built a lot of institutional product, as institutions have moved into the market um, and so today its You know its a big business, it spans consumer and institutional, and you know asset management.

But really just has this very simple idea at the heart of it, which is you know? What do? Customers need to be involved in the cryptocurrency market? Uh and thats been a vision, thats kept us going for uh, like you said, 10 years now, which kind of makes me a grandpa at this point, a grandpa in crypto theres, not a lot of them. I dont know if 10 years really classifies as a grandpa, but well let that one oh well go with that. One, like five regular years, its like 50 years now great grandpa, really after this year, great grandpa, maybe but uh. When we look at you know what youve been able to do over that, you guys announced that you hit uh one and a half billion dollars in terms of revenue year to date, and as i said, you do do a lot of different things. So i mean i guess in terms of where youve seen the most growth in what youve now rolled out. What are you seeing there? Look, i think the consumer business has grown really rapidly this year. So you know uh thats been great. The thing about that business is, though, is its huge right. There are tens of millions of people all over the world using these products, and so you know, every additional million you add is is just small right, because youre growing off a really big baseline. So, in an aggregate basis, consumers definitely grown the most on a percentage basis, institutional, which has definitely been the fastest growing business that weve ever built, um and obviously coming off a lower baseline because its much younger than the consumer business.

But today it accounts for about 50 of all of our revenue as a group, and that business has just really grown incredibly quickly about 50 month over month, which is really you know quite uh phenomenal. If you think about it. Oh youve, added more and more things. A few weeks ago, you added margin trading, though not here in the us and thats one thats one aspect of what weve seen some companies being able to offer uh some things farther along outside of the u.s and what they can do here i mean how maybe Impacting our regulations in regards to growth and maybe the different routes there, that blockchain.com has had to go versus some other companies in crypto, and maybe some of the pitfalls that you might be pointing out as warning signs for some of those companies that arent, maybe following As strict a path when it comes to regulation, yeah, so look we hold licenses around the world, so were a onshore regulated company um, you know, sam was talking in your last interview. I caught the end of it about the volume in the offshore markets. In the long term, i think almost all of the legitimate volume in the crypto space will be onshore and were here to build a business thats here in 2030 and so from day one weve built onshore. This is takes longer. You know it takes longer for coinbase or us to roll out a new asset or a new feature than some other companies, and we have to be, you know, probably more limited in what products we roll out in some jurisdictions that have stricter rules for the cryptocurrency Markets, but i think in the long term its how you protect customers, its also how you uh work with the regulator and cooperate by being you know in good faith with them and so were very committed to that onshore path, um and uh.

You know it results in a lot, a lot of trade offs. You know we cant just go out and add shiba tomorrow or put 100x leverage on, but i think at the end of the day, it kind of depends on what youre here for. Are you here to extract as much value from the crypto market over the next? Three years are you here to build a business thats here in 2030 thats here in 2050, you know: are you on a five year vision or a 50 year vision, and for me personally, i wanted to be here for a 50 year vision. Yeah i mean i guess that is kind of a key piece of it right. We were talking earlier with robin hood here at the event about their kind of path forward and really tapping into some of those that clearly a lot of retail investors want to trade, and you mentioned sheba, i wonder kind of what you look like or what you Look at there in terms of the trade offs between some potential risks, uh, whether it be security, regulatory and also the upside, to kind of bring more people to the platform. Well, this is where long term short term comes in right. If you list something and it immediately skyrockets and then immediately, you know, within a year, falls back to earth, youre, probably actually not going to have attracted customers that trust you for a long term relationship with you, because theyre going to lose a lot of money in That process its the same reason that you know offshore platforms that offer a lot of leverage are very leveraged or perpetual driven, spend a ton of money on marketing its that theyre churning customers.

Customers come in, they take risks on a lot of high risk assets and then or pairs and products, and then they get wiped out and so youre constantly having to acquire new customers to replace the ones that you just killed. Thats, not how our business works. Our business is predicated around the idea that we want to be your. You know trusted partner in the cryptocurrency space for the next 30, 40 50 years, and so were here to offer products that generate value for customers in the long term, even if thats at the expense of short term revenue or short term growth. At the end of the day, i think i think weve done, okay on growth in terms of revenue and uh, and you know top line numbers. You know: weve got 30 something million customers around the world and doing about one in every three bitcoin transactions. Today, when you look at maybe where things head uh next year, obviously 2021 has been a banner year for a lot of crypto investors, its been hard uh to lose money. If youve held anything basically this year, when you look ahead to next year and kind of the interest now shifting from maybe retail excitement over to institutionals, we were just talking earlier in the program about that and how important it is for some of the price action. I mean what do you see shaping up there as institutions look past, maybe just bitcoin into some of these other projects.

Yeah were already having institutions look past, even ethereum, so were seeing volume and flow thats outside ethereum and bitcoin in our institutional business today, which is really kind of interesting, and it happened a lot faster than we thought it would um that is going to impact prices. Uh, i think it right its very hard to have lost money in crypto over the last year. Some people have managed to do it, but its quite hard and so were going to get into a harder, more competitive environment. I think over the next year and thats actually going to be net good for the market, because its going to start separating the good from the bad right now everythings trading very correlated. So you have just excitement in the space and thats trading up. You know there might be slight divergences between this asset and thats it on any given day, but everything is generally trading up. I think next year youre going to start to see you know the market really kind of narrow in on what what projects are really delivering. What projects are really growing from an actual usage perspective, rather than just an investment perspective, whats just a momentum, machine and whats real value that has real technical value, and i think that thats, the evolution in the market youre going to see next year, is sort of A breakup in the correlation of this asset class and weve seen a bit of that bifurcation.

I guess this year too, amongst some correlations breaking down some days. Youll have bitcoin down a lot of these other projects that they have good things to talk about, still enjoy some gains, but when we look at, i guess some of the risks it sounds like you know, im not sure. If i completely agree on you being the granddad of crypto, but when we look into maybe you taking a more cautious approach than what some others might be, i mean when you look at the risks now, in 2022, a lot of people talking about some of those Potentially, you know bringing down uh, not just the bull market, but i guess raising new questions about if the crypto space, maybe particularly in the centralized lending space, could be repeating a lot of the same mistakes that banks made in past cycles when you shifted uh from A bull market to a pretty big collapse, i mean whats whats, raising your flags now when you look at some of the systemic risks or risks rather in crypto look, i i tell people all the time that you dont really know what a crypto company is made Of until they go through three cycles, preferably one you know down one up and one down its really easy to run to do well when the markets, you know pounding upward its hard when the markets pounded, upward and then pounds down thats the real moment. The real test and theres very few companies in crypto today that are at scale that have ever been through that before you know, coinbase has been through it.

You know krakens been through it, weve been through it, but outside of that, its very few that have – and so i think, were going to see that and thats going to be the moment where the water goes out. The tide goes out and we all see whos wearing shorts and who isnt – and i think the challenge with the lending markets in regards to that specifically, is that some of these companies have reached a size and lending book, thats really scale. It has enough scale to hurt the overall crypto market, but they havent been through that moment of truth from a do. Our risk management frameworks, work perspective and so thats. What i worry about the most is theres no way of knowing have they stress tested. Are they running sophisticated simulations? Are they monitoring alm appropriately? You know we just dont, know uh and so were gon na have to wait and find out. But if theres one thing that being a long time taught me its like this market goes up and this market goes down yeah well, i guess whats the solution to prevent against that i mean. Is it more transparency thats? Why? I think a lot of people still are leaning hard and to define what that offers over some of these central lending platforms. I mean, as you see it. Maybe the answer is what a lot of people have feared before more regulation. I mean what is the answer there to to prevent something like that? If regulation was the answer you wouldnt have seen, banks fail, you know in the gfc they were very regulated um.

I think at the end of the day, the free market corrects for this. The market rewards companies that are run well and the market punishes companies that are run poorly um g5 protocols struggle with the same risk like youve, seen d5 protocols blow out when the market moves very hard and most of the depot protocols are new as well. We dont know what you know. First order and second order impacts were going to have when the market retraces seriously on these on these some of these lending protocols in d5 either um. They are open and transparent, but a lot of them really lack the research and modeling that you would expect to see in a sophisticated credit product yeah and, as you said, a lot of them not not necessarily have gone through the same three up and down cycles. That youre looking to to see what some of these projects or companies can weather but uh peter smith, the founder of blockchain.com, arguably crypto, grandpa, well see if our viewers agree with that, but appreciate viewing uh joining us here on crypto goes mainstream thanks again.

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