This opens up a lot of use cases, and so I'm always where do
I start. So I think one obvious one is bitcoin defive. So the
interesting thing is you'll pay gas fees in bitcoin, and so suddenly for the
stakers we'll have actually native bitcoin yields. All those gas fees will approve back
to other people. Then you of course have stable coins. I think that
there has been one thing to launch a stable coin on bitcoin for ten years.
This content is brought to you by Uphold, which is one of the
top crypto platforms out there, which allows you to easily buy, cell trade
Bitcoin and the top all coins in the market. Uphold lists two hundred and
sixty plus cryptocurrencies. They also allow you to trade precious metals such as gold,
silver, palladium, and platinum. I've been a user of uphol since
twenty eighteen, so I can voucher this platform. They have full transfer aperency
reports and they don't commingle or lend out your funds. They also have a
great product called Vault, which is an assisted self custody product. A vault
allows you to maintain custody of your funds and the keys are split, so
Uphold holds one and you hold two and if there's any issues, if you
lose one of your keys, Uphold will help restore these keys and you can
maintain access to your funds. It's twenty four to seven instant trading, it's
trustless, so this is a great feature that can give you peace of mind
where you don't have to worry about if you lose your private keys and much
more so. If you'd like to learn more about Uphold, please visit the
link in the description. Welcome to the Thinking Crypto podcast. I'm your host,
Tony Edward, and with me today's Wilhelm Schrow, who is the founder
and CEO of bot Nick's Labs. Willem. Great to have you on.
Great to meet you, Tony, great to be here, Nice to meet
you all. Yeah. Absolutely, Well, you guys are building some very
cool bitcoin scaling solutions, Layer twos and much more so. I have a
lot of questions for you as a bitcoin holder. I'm excited about the new
use cases and applications that can be built around bitcoin. But before we get
there, you know, tell us about yourself, where are you from and
what's your professional background. Absolutely absolutely, I got a lot of use cases
for you. Later in the podcast. So I'm WILLELM. I grew up
in Belgium, have a bit of a mathematics background, became thirteen national mathematics
competition there, ended up doing electrical engineering, researched in cryptography, so researched
in authenticated encryption. Actually part of the design how we're building a bit conlear
to, which is called the Spada chain, comes from my cryptography background.
Then lived the year and a half in Sauda Arabia, so hyperinflation happening in
Lebanon, so people get their bank accountsies fully fell down a rabbit hole.
Then went to Boston to Harvard and then moved to New York and around like
two years ago, I think we came up with the idea for botanics.
Basically realizing that you have Bitcoin, a trillion dollar market and almost new applications
on top of it, and then on etherium, so many different applications and
most of them are built on the EVM, and so realized that EVM is
a software layer. You can bring that to bitcoin as a second layer EVM
and that's when we started building. Went deep into the cryptography for the first
six months basically pure design, and then started building, went on Testina in
November and now getting close to getting close to Maynad. That's awesome. I'm
curious what was your first encounter with bitcoin? Did a friend tell you about
it? Did you read about it on a forum? And was it around
the time you were studying cryptography? No, exactly exactly. So actually,
one of my good friends that is still working in the space, I was
like twenty twelve or something to me about it. Unfortunately I didn't buy them
because I had to send cash in an envelope, and besides that, I
didn't have that much money as a poor college student. And then of course
I start in my cryptography classes, so I saw a bitcoin in my cryptography
classes. Oh wow. So I'm curious in your classes around cryptography, how
was bigcoin presented and it is? Is it very different from other forms of
cryptography. Yeah, that's a very good question. I think in general ninety
five percent of the classes of cryptography was not about cryptocurrency at all. Maybe
today it's a little bit a little bit more, but it's about all areas
of cryptography, symmetric, asymmetric acryption, et cetera. And then, yeah,
of course this was very novel then, so this was twenty thirteen.
In my cryptography classes. Professor was a extremely skeptical person and so we called
it, yeah, some weird Internet experiment, but we looked at it from
a cryptographic perspective and it was like very legit, so very interesting to actually
see a lot of like primitives like shah and and other algorithms basically used in
real life. So that was actually cool to see. Oh wow, very
cool. And to your point, there's probably more classes and more dialogue around
bitcoin and crypto now that it's you know, has risen as a technology in
an asset class. So I don't know, have you ever messaged your professor
like, hey, I'm working on big point now. Yeah, actually I
haven't. I should probably do it at some point. The funny thing is,
I'm not sure you know, as the advanced encryption standard, probably the
most used encryption standard in the world, I was actually invented by my professor.
So that's that's quite cool. Not a lot of people know it,
but Belgium is somehow extremely big in the world of cryptography. Not that much
in the world of cryptocurrencies, but very big in the world of cryptography.
That's fascinating. So let's talk about both in x Labs. Why did you
decide to start this company and what's your core mission? Yeah, that's a
very good question. So two years ago I was in this world, and
then I entered the world through the bitcoin side, and of course I saw
hyperinflation, I saw people get their bank accountsy so I quickly saw the micro
picture, and I think bitcoin is a is a technology of sound money,
that is that can be absolutely massive for billions of people around the world.
And then you saw also another few things happening, like bitcoin has very slow
blocks, ten minute blocks, and it's very hard to build on, and
so most of the applications were built on other other change. And so I
really like bitcoin in the sense that it's a very clean code, it's a
very easy to understand code, it's very clean, it's very pure, it's
absolutely decentralized. And so I like bitcoin because it's the most pure, decentralized,
secure, best money ever made. And so I would like to see
more in the world and more applications actually being built on bitcoin. And then
once you think you start seeing you saw DeFi somewhere, of course, and
then you see these primitives of a financial system and so when you think about
decentralized ex changes, in my mind, they're a tenx better version of stock
exchanges. You can permissionly trade anywhere in the world twenty four to seven.
Today, someone I don't know in Egypt, for example, cannot buy all
the stocks on New York Stock Exchange. Why is that? And so you
can see that decentralized exchanges is a tenx better version. Outside of that,
I consider a lot of the tokens actually a better version of box. And
then of course you can take loans, and so you see these primitives of
a better financial system. And I wanted to build these primitives on top of
bitcoin. And what we're doing right now actually very funnily. In the company,
every two weeks we look at our mission when you think about one hundred
years from now, and you can actually see majority of the world with running
on bitcoin as money. But we're actually building as a second they EVM can
actually be the infrastructure that runs a financial system on bitcoin, with the decentralizedic
changes, with the loans, with the different tokens, and yeah, I
can see this world playing out. So what we're actually building can be,
can last, can last for one hundred years. That's amazing, and tell
us about the spider chains, and you mentioned they're using the EVM technology and
maybe if you can explain to maybe folks who are like new to crypto,
right, how does this on bitcoin and how is bitcoin leverage via the spider
chain. The spider chain is actually a novel layer to design, which is
quite unique compared to your different wallops that you typically see on the Ethereum.
So the spider chain is not a wallup. We actually believe Bitcoin is actually
not made to build wallups. You have the utxo model, while in Ethereum
you have a smart contract model and the account model, and so ethereum suits
itself way better to build wallups and so on Bitcoin, we actually wanted to
build a decentralized layer to where anyone can permissionally participate in. So you will
be able to participate in the Spider chain, run a full node, and
actually be part of the whole network. And so how it works is I'm
going to assume that the audience knows what multi six are. Multi six are
basically what runs in the whole of crypto. Even wallops are a smart contract
that as a multi sick where U encode fraud proving. But in essence,
we want to decentralize the multi six. And now I'm going to take a
small pause here and give the example of the lightning network for the people who
are more familiar with bitcoin. The lightning network is this decentralized network of two
out of two multi six. If you and I open a lightning channel,
that's a two out of two multi sick. And so in essence, you
can think about the lightning network as this overlaying network of two out of two
multi six, and so park the idea of the lightning network. But then
think again about that decentralized network of multi six. That's what the Spata chain
is. So you will create a series of multi six. For example,
you can have ten thousand different people all participating in this decentralized network, and
so you will create one single multi sick. You will randomly choose one hundred
participants and they will secure multi sick one, and then you create a new
one. Again, you randomly choose one hundred participants out of the ten thousand,
and they will secure a multi six two. And then you carry the
new one mult six three, and then four and then five, and then
six, and after a while you have these decentralized overlay network of hundreds of
multi six of thousands of multi six, where you have ten thousand or one
hundred thousand full node operators where anyone can join in. And then what you
do is all those note operators will have to stake bitcoin, so you come
in together in a proof of staate consensus, and that's how you secure the
EVM. And so this whole thing runs on bitcoin. So also in the
EVM, the bitcoin is the native token on the EVM, so you'll pay
gas fees in bitcoin, and that's actually how the whole techtec works. Now,
as far as use cases and utility that this opens up, is it
the ability to create tokens? Is it payment? What are some of the
use cases? Yeah, this opens up a lot of use cases, and
so I'm always where do I start? So I think one obvious one is
bitcoin, DeFi. So the interesting thing is you'll pay gas fees in bitcoin,
and so suddenly for the stakers will have actually native bitcoin yields, all
those gas fees will grew back to other people. Then you of course have
stable coins. I think Better has been wanting to launch a stable coin on
Bitcoin for ten years, there's no real stable coin on Bitcoin yet, and
so suddenly you can have a stable coin on Bitcoin, a Bitcoin back stable
coin. So like a maker dow or like a liquidity model, you can
copy paste the same smart contract you have on the Etherium and you can deploy
it on Botanics and the whole thing runs on Bitcoin, so Bitcoin yield Bitcoin
back stable coins. You can take loans against your bitcoin. So many people
have been wanting to actually do something with their money in the real life,
but they don't want to sell their bitcoin. So now you can take a
loan against your bitcoin in a style lack on av for example, So you'll
have like Avis on Botanics and you can loan against your bitcoin and get stable
coins in in a return. Besides that, of course, you can have
different launch pats or mean corn launch pats. Another very interesting solution is once
you have bitcoin on EVM, you can use an EVM EVM bridge like layered
zero and bring the bitcoin on Botanics to Etherium and you have a decentralized version
of wrapped bitcoin on Ethereum. So this can spread Bitcoin in a decentralized fashion
throughout the whole crypto ecosystem. Besides that, I think purb t DEXes.
As a bitcoiner, I've been wanting to leverage my bitcoin two x five X.
I don't want to do it on a central exchange. I want to
use a purp text think like think like your Vertex protocol that you know from
arbitrum. Now you can natively do that on Bitcoin, and so all your
favorite applications that you've been using on any EVM are now possible on botanics.
And these are just a handful of use cases. The actual amount of applications
will be very, very big. A follow up question on the stable coin
item, are you working with any stable coin issues? Are you pitching Tether
to maybe come, you know, launch on this one of your spider chains?
Anything you can share there? Nothing we can share there. We do
have a few teams that have come out of Stealth already that are building bitcoin
back stable coins using the liquidy model, so you'll get bitcoin back stable coins
on day one on the botanics mean that now and I know you talked about
the Lightning network before. Is this compatible with the Lightning network or completely separate
from the Lightning network? Can it be integrated in anyway. Absolutely. Actually,
we did a hacket on a few months ago and the winning team build
a lightning network integration. So I think you go to your favorite bar or
something that gives you a lightning invoice, and you can pay that lightning invoice
with the bitcoin in your medo mask, on your phone or from anywhere,
and so you can pay lightning invoices from the botanic cdm Oh wow, very
cool. Now there are many bitcoin maxis out there who don't like anything around
bitcoin are being built on bitcoin and so forth. Do you see that changing
though that? You know, many bitcoin maxis are now maybe less aggressive and
they're like, you know what, we want all these cool things for bitcoin.
Because the adoption of bitcoin is growing, there's people in different walks of
life that want to use bitcoin for different reasons aside from just digital goal or
digital money. They want to be able to do cool things with their bitcoin.
What are your thoughts on the bitcoin maxis. No, absolutely, I
think that that's changing. You already saw it with ordinals. The moment you
can do something with your bitcoin, there's so much demand. I mean,
it's a trillion dollar market. There's a lot of demand for it. But
there's just no applications that you can actually use it for, and so I
think a lot of bitcoiners would want to lend against their bitcoin, but they
don't want to send it to like a block five or anything that's very centralized.
They want to see on chain permission ly, everything visible, everything open,
and so I can see a lot of that changing. And it's actually
also a paradox. If you are a big bitcoiner, you would want to
have the whole world run on bitcoin. Everything that you have today where you
use money for US dollars for and that those are like the good things and
the bad things. You're buying stocks, you're buying real estate. Ideally,
you want everything in the world to use bitcoin for it. Yeah, I
absolutely agree with you. Now tell us about security, because that's going to
be a big question for folks. Is this secure? Can you know,
going on the spider chain doing some DeFi things with bitcoin? Is it secure?
Very good question. I think security is probably our main priority. So
we want an extremely secure, extremely stable protocol. We actually just hired one
of the best security engineers in the world, so we're going through a lot
of different audits. Our team is very bitcoin, bitcoin focused and very comes
from actually the engineering team comes from the business well from the bitcoin world,
and so they are very security minded. We use in the beginning day one,
we'll actually already have decentralized block builders, so no one will be in
full control over the funds, and so this will be audited by a bunch
of different players stress tests that we've been in Intestine since November. One of
the reasons we spent longer on Destinet is basically we want to launch an absolutely
secure product. Now, are you working with bitcoin miners in any way,
given that you know they are on the forefront of mining bitcoin, and you
know there are some huge miners some of the United States down in Texas and
we were seeing possibly some bigger names coming in from Wall Street looking to mind
bitcoin. Are you working with any of those folks in a limited vereshion.
I think we've got contact with most of the miners. The interesting thing for
miners, of course, is botanics applications become very successful. They will generate
a lot of fees on the layer one, of course, which is very
good for the miners. Outside of that, a lot of miners have a
big bitcoin stack and we will be generating bitcoin yields because all the gas fees
on the Botanic CVM will basically create bitcoin yields. So that's also interesting not
only for the bitcoin miners, but for any any big bitcoin holders. Yeah,
that absolutely makes sense. And do you think I mean eventually right,
as you guys continue to grow, you can approach certain companies who are putting
bitcoin in a balance sheet, or other enterprises who are interacting with bitcoin in
different ways, maybe even bitcoin etf issuers, right, I don't know that
this could be another layer. Hey, we have bitcoin in the ETF,
but if you want to, you can earn yield off of it as well.
No, exactly, I think on the ETF side that will be hard
because the legal rules there are very difficult. I think they legally cannot do
anything with the bitcoin in the ETFs, which is good, that's what you
would want. But of course, yeah, if you have bitcoin in your
balance sheet as a company, why not get bitcoin yield on it? And
it's of course a trade out. There's let me let me clarify as well,
there's nothing more secure than bitcoin in a cold wallet on bitcoin the base
layer, but of course everything is is a trade off, and so you
can actually get bitcoin yield on the second layer. That's of course with yeah,
that's never going to be as secure as a cold wallet on the base
layer, but as a counter argument on the flip side, you then get
bitcoin yields. M yeah, I mean, And here's what why I was
thinking that because there's currently the ETHERMS body TF applications in play, and the
SEC said we don't want any staking in it now. Eventually I think there
will be staking. But you may imagine a bitcoin ETF that's issued with the
ability to earn yield maybe and boat in x and the spider chains are an
option, right that they can do that, but it's it's a specific ETF
that's dedicated to that. It's not you know, people who just want to
hold bitcoin in the ETF. It's a separate thing that could be possible later
down the line. No, absolutely, I definitely think that's possible. I
can see that coming. I think regulatory yeah, environment needs to catch up,
but I think that that could have a lot of demand. Absolutely.
Now, you guys have recently raised eleven point five million in funding. Tell
us about that and who participated? Yeah, absolutely, So this was actually
two separate rounds, So I think now. A year and a few months
ago we raised three million in like a first rolling round, and then over
the last few months we raised again. This one had a huge amount of
demand. I think we were like four x oversubscribed participants. There were poly
Chain of course, very well well known name Placeholder and Valor and EBCD awesome.
And what do you guys have on the remainder of your road map for
twenty twenty four? Yeah, I think the next few months will be incredible
if I'm correct, I think we will see bitcoin DeFi for the first time
ever in a big fashion, like actual bitcoin DeFi, like how you're familiar
with it, like on Etherium DeFi. I think a lot of people have
tried to do it, but all the building blocks are there to actually have
this in a few months time. So I think we'll launch me in at
in a month and a half from now, and then yeah, this can
be go very big. I think we have like thirty to fifty depths that
are going to launch on top of us, out of which like around ten
to fifteen native depths that will launch their tokens on top of us. So
there're gonna be a lot of activity, a lot of things to do a
lot of things to gain for everyone. So yeah, I think definitely stay
very close over the next few months. That's exciting and I'm looking forward to
that really cool stuff that you guys are doing. Let's talk about the crypto
market at large. I would love to get your thoughts on the big cooins,
body taps. How you know, given that you've seen bitcoin since back
in twenty twelve, and how it's grown, it's become this mainstream asset now
and the ETFs had incredible inflows. I mean, I think I don't think
anyone was expecting this. What are your thoughts on how things performed? Yeah,
I think the first the general environment, I think I have been blown
away by the amount of demand from bitcoin ETFs, Like it's way higher than
I expected. There's a huge amount of demand for it. From an ideological
perspective, I'm not sure if I fully like that, because I rather have
all the bitcoin in people's own hands, not in the ETFs. However,
it also means we were able, as just normal people to front run the
institutions. So that's quite cool that we actually were able to do that.
It was like a meme for years and years and years and now actually they
are here now. Of course we had these first few months of course,
massive massive up. I think we are fully consolidating now. Always expected a
few months of consolidation, and that's I think where we are. I do
think those institutions and those ETF holders are very stable backs like those pension funds.
They don't quickly buy and then sell the next day. If they buy,
it's often for a very very longer term horizon, and so this can
be very very sticky capital. So the institutions sometimes have diamond hands, so
to speak. Yeah, and on that note, I would love to get
your thoughts on bigcoin becoming this reserve asset. We talked about the corporations putting
big one on your balance sheet. We're seeing that grow a lot of different
companies are doing it now around the globe, and you have the ETFs being
launched around the globe spot ETFs of course, and certain countries like El Salvador
are embracing it making it a legal tender. Do you see this trend continuing
and do you see eventually maybe central banks holding bitcoin as a reserve accident one
hundred percent? I think in secret that's probably already happening. I think there's
quite a few big papers. Actually at a Harvard paper I think three years
ago or three years ago that said exactly this, if you are a central
bank in the rest of the world, and you see the US dollar being
weaponized, you see the US dollar having very high inflations, basically the fat
losing a little bit of control, and gold is always hard to get.
Bitcoin is a perfect hatch. And so the paper basically did a lot of
different calculations, but basically said like, yeah, if you're a central bank
in the world, you might want to keep a few percent of your holdings
in bitcoin. And so Al Salvador is of course way ahead of the curve.
But I think the more successful Al Salvador does, all the rest of
the countries are really keeping a close eye, I believe. I think especially
in South America, people are looking what El Salvador is doing, and so
I can I think we're not too far away from that anymore. I think
in reality it might already be happening behind the closed doors, but I think
we'll soon see see it come out more publicly, and soon I think in
the next two years. Yeah, I agree, and I know Argentina's president
Malay met with Al Salvador's president, so I'm curious if that was an item
they discussed. So I'm really fascinated to see which country is going to be
next to follow the Salvador's move. I would love to get your thoughts on
US cryptoregulations as someone who's building in the United States as an entrepreneur. We're
still waiting on full clarity, you know. I know Big One in itself
is classified as not a security, so it has that clarity, but there's
other things like DeFi and Yield where the SEC still has some control and they
want to bring it on their umbrella. But it We're seeing some movement in
Congress and crypto is becoming this political thing now. Donald Trump supports bitcoin,
meeting with bitcoin minors. What are your thoughts on what's been happening. Yeah,
I think it's very much needed. I think over the last three to
four years, a lot of innovation has basically been pushed outside of the US,
and I've seen at firsthand, like multiple people investors and other founders told
me, you have to go outside of the US to launch this, and
so yeah, I was here, and so I didn't end up doing that.
So I guess I'm one of the exceptions that I'm still building building in
the US. But it's great to actually see that that one eighty and Congress
and political one eighty in terms of crypto regulations or like at least showing that
they want to change things went really fast. I was very, very surprised
by that. They did a very sun and one eighty and everything turned around.
So I'm actually hoping that very soon that actually also results in easier and
more open regulation, because today it's yeah, it's very hard. I mean,
I mean in New York here, UNISWAP is getting soon, summer,
I Wallet is getting soon. They're coming. I feel like they're coming after
after everyone. Of course, I've limited the red man power. But yeah,
I think it's very good that we finally seem some change. M hmm,
yeah, I agree. And it came out of nowhere. I don't
think anybody was expecting it, but it's a good sign. Now, if
you had to leave the United States, because you know they're not figuring things
out in time, where would you go, if you don't mind me asking
that's a good question. Would probably either either go to one of of like
the more classical Bahamas or something. But in reality, I'll probably go to
Dubai because I lived in the least. Yeah, and Dubai has become very
very open, very funnily like when I lived in the Middle East, like
I know, like six years ago, crypto was not a thing there and
they moved it around like very very quickly, and now they're very friendly environment.
So that's probably, yeah, where I would go. Yeah, there's
a lot of folks in Dubai and it's one of the most crypto friendly jurisdictions,
and Japan, Singapore and some of these other places and more open as
well. Now I would love to get your thoughts on central bank digital currencies
because world governments are taking the blockchain tech right from Bitcoin and essentially building their
own blockchain or using other public blockchains and mintingat currencies on there. And it's
called CBDC, similar to stable coins. There's a lot of benefits, but
there's also a lot of potential problems with it and where our rights can be
trampled on. I'd love to get your thoughts on what's happening with that.
Yeah, cbdc's it's been a thing for a few year we all all know
that a lot of governments have been working on it. Now, this is
one lucky thing that we know that governments are very, very slow and inefficient,
and so I don't think anyone, especially like in the West, has
been able to actually ship something or actually get alignment on something. And that's
a good thing. I think that's one of the benefits of democracies, like
you need everyone to be aligned. And I think most of the people understand
that CBDCs or yeah, privacy nightmare. Like at this point already with technology,
governments have extremely extremely amount of control and once with CBDCs, it becomes
yeah, yeah, another ten x worse. And so I think as the
opposite, now you actually have tetter and stable coins that actually provide an alternative.
And so I think you might see a world where instead of CBDCs,
actually government and say like, yeah, why don't we use I don't know,
a tether or launch a stable coin without the whole CBDC over regulation part.
Yeah, yeah, I agree with you, and I'm hoping they go
that direction. At least here in the United States, it seems like they're
going that direction because there's been some bills put out by different congressmen anti CBDC.
You know, the FED can't issue a CBDC directly to consumers and the
people, but you know, maybe they're able to use us D T us
D C and some of the other paypals p y U, s D and
so forth. Those are the ones they are used by the public. But
you know, we'll have to wait and see. Yeah, maybe it's a
BITC coon BacT stable coin on the botanic CVM. Yeah yeah, so,
uh, you know, I know you're you're probably still working on things and
in conversations, but it would make sense for tether to do something and an
issue on the spider chain, all right, I got some wrap up questions.
Oh sorry, I said one hundred percent. I think that makes makes
a lot of sense. I think just a stable coin on bitcoin that you
can buy with your bitcoin is just massive. Absolutely. I got some wrap
up questions there for you. If you could create your own mataverse, what
would the theme be? I named accompany botanics because I like mathematics in nature.
And then we've got a Spia chain, so probably like something in nature,
a lot of mathematical fractals awesome, And some rapid fire questions versus favorite
food, Basta, favorite musician or band, Relligial, favorite movie The Matrix,
Surprised it or not? I think a lot of people like the Matrix
in crypto for sure. Favorite book The Bitcoin Standard mm hmm. And uh,
finally, when you're not working at boat and X, what are you
doing for fun? A lot of different sports, so I like generally sports,
outdoor sports, team sports. So here in in Valencidia, I played
a lot of beach volleyball, of course. Now I I go for a
lot of runs in the city. Nice. Well, I'm a pleasure chatting
with you. I'm excited for the main night launch and all the cool things
you guys are doing around bitcoin. Thank you so much for joining me.
Absolutely, it's great to meet you. Tuning h