Is the Future of Money AI-Driven? | Bitcoin, Banxico, and Trump | Dimes y Billetes #490

There was a phrase at the beginning that defined Bitcoin, and it said, 'Bitcoin is an economic experiment to build a decentralized currency that works peer to peer and that is not issued by any government,' or something like that. I told him, 'What? A government is never going to regulate what is irrelevant. Either pivot in Mexico or open the same business somewhere else in the world, but there are no conditions in Mexico. Close the shop.' I believe that when you look at the history of all human progress, in the places where we have been able to take advantage of technologies best, it has always been where the people in power had the vision to say this has to change. Are we now facing a digital revolution where cash no longer exists? I don't know if artificial intelligence will drive it, or maybe it won't change this system. I don't think we're at least having an AI conversation at a structural level, like a country's economy: what happens if in 10 years the cost of labor in the United States becomes 10 cents? Why does Trump push it so much? I mean, what's his agenda behind it?

Moris, we've had this pending for a long time. We saw each other at the Fintech Festival a couple of months ago, and you told me, 'Hey, come to Monterrey,' and I said, 'Hey, and here we are.'

Well, perfect. First of all, thank you very much for having us again. Always, as I told you at the Fintech Festival, I believe you're one of the people in Mexico doing a lot to grow the country's financial education. I believe that's super important, and for me it's a great pleasure, I mean, an honor to share the story with you and your audience, but also with someone who is doing that work that I believe is so important, because we see many metrics of many things and there are many very exciting things happening in the country, but there's a lot to do. So I believe these platforms where we can communicate, where we can share, where we can help people understand these spaces, understand these opportunities, understand, have financial education, are super important. So thank you very much. I mean, you tell me where we start. There's a lot to cut into. What's behind Daniel Vogel? Where did you study? How did you come up with the idea for Bitso? I know you were abroad for a while. How did you come here? How did those first moments of Bitso start?

I was born in Mexico City, lived in Mexico City until I was 18 years old, and as a kid I was a guy who always really liked innovation, technology. I went from a world without internet in my house to a world that suddenly had internet, and I remember that, I mean, I remember very well that moment when suddenly everything changed, man. I mean, I really liked a band called Radiohead, and I remember grabbing the encyclopedia my parents had in the living room and grabbing the R volume and flipping through it, and well, here it says nothing about Radiohead. How do I learn about these guys? The only thing I had was, well, you know, when CDs had a little booklet, the little booklet, and well, Radiohead didn't, they didn't tell you much about them, right? And I remember suddenly the internet appeared, and it was incredible because you could connect with people who had the same interests as you or learn about things that the encyclopedia didn't have, and it was a whole revolution for me. And I was like, I mean, it was like the first time I realized that the world is built by people like you and me, and that each of us has the capacity to imagine things differently. Sometimes we see structures, processes, regulations, laws, if you want even a country's constitution, and obviously these are things that can be very important, very relevant, but at the end of the day we have to realize that all of that we see around us was built by someone like you or me. And so if we want to get our act together, we can change that, I mean, and it's up to us to change that, right? So I remember, for example, in high school they told us, 'Hey, you can't use Wikipedia.' That's right. That was the prohibition of the moment. You can't use Wikipedia. Hey, and why? Because who knows who writes Wikipedia, right? And what happened, this guy Jimmy Wales grabbed it and had an idea and said, 'Hey, why do you have to hire experts in the subject to write the little part of the volume that's going to talk about what a radiography is, man, and define what a radiography is.' And it's very cool, but it's very limited, right? And biased. And so why don't we make an open platform? And it was a disruption that nowadays is like, no, I mean, the new kids, with the, I mean, no, not the new kids, the young people, man, when I talk to them, I mean, the kids who are in high school right now, hey, where do you learn about something? Well, on Wikipedia, but when I was in high school, no, no, no, this is the man. I mean, if you want, read it, but never cite it to me, right? And so I always really liked that topic of disruption, and then I had the opportunity to go to the United States to study. I studied at Stanford, systems engineering and economics. Systems, yes. Computer systems engineering and economics. And in what year? This was 2005. 2005. Very interesting to be at Stanford in 2005 studying computer science, man, right? I mean, a lot was happening. Facebook had just launched, I mean, Facebook was only open to some universities at that time. Stanford was one of them. I remember I visited Stanford in, I think, March, maybe April of 2005, and everyone, I mean, all the students, I mean, I hadn't gotten in yet, it was like the weekend where the admitted students came so they could tell you about the university, and all the students talked to you about this new thing called Facebook that had just come out and that was really fun because you could see what your friends had done over the weekend and blah blah blah blah, but it wasn't open to the world. And also, for example, I experienced during Stanford the launch of the iPhone, which brought the internet to your personal device. I mean, from when we arrived, everyone had their cell phones and you'd send text messages, and then there were the Blackberries where you'd send BBMs, but the iPhone came out and the iPhone changed things and it was a watershed moment, right? And many of my friends in 2008, 2009 would leave the university and build either iPhone applications, I mean, the first applications, or games that were built on top of Facebook, right? And super fun, honestly, we got to see the birth of... After Stanford in 2009, I went to San Francisco and worked for 4 years at a tech startup, first as an engineer and then in product. And during those moments, for example, Uber launched, which was another huge disruption, right? I mean, I also remember when my parents put internet in the house, I was 7 or 8 years old, and the rules back then were, hey, never talk to strangers. No, like a 7-year-old kid, 'Don't talk to strangers. Don't put your dad's card on the internet because they're going to clone it, right? Hey, and never get in a car with a stranger, never put your personal data on the internet because who knows what crazy person is going to see it.' And then suddenly, a few years later, you're sitting in San Francisco and they tell you, 'Man, no, no, it's horrible when suddenly you leave the party at 2 in the morning and you're looking for a taxi or you want to get somewhere and there's this app and it knows where you are and you tap it and it comes for you and a guy you don't know comes and you get in his car and now it's a very normal Uber thing, but back then, when you didn't know many people who had done it, you'd say, I mean, I remember the first time I got in with my parents and my parents looked at me like crazy, 'And who is going to come for us?' Well, a guy, but and what, and who hires that guy or who is he and what is he, and now it's something very common, right? But it's been very, I mean, I got to see in my life in San Francisco, well, many disruptions with social networks, with Facebook, with the iPhone, with Uber, and I mean many others we can talk about, but it became a little part of my education, right? Seeing these models arrive and break with perhaps assumptions we had held for many years and wanting to introduce new ideas in new ways. And during my stay in San Francisco, a Venezuelan friend of mine, Mike, told me, 'Hey, have you heard of Bitcoin?' No, I have no idea. What? I had never heard the word. And I went home that day and searched in the browser 'Bitcoin' and I remember I said, 'I'm going to search the word so I don't forget it.' Right there on Wikipedia? No, I searched on Google and it wasn't Wikipedia, but there was a Bitcoin wiki. Ah, one of those that when there were wikis, I mean, there still are, but private wikis, right? Exactly. I mean, or more than private, like about a topic. About a topic. Exactly. No, so it was a wiki that someone made, I remember, bitcoin.it was the page, and I remember I just said, 'Well, I'm going to open this just to read about it tomorrow.' It must have been like 2 in the morning and I clicked and there was a phrase at the beginning that defined Bitcoin and it said, 'Bitcoin is an economic experiment to build a decentralized currency that works peer to peer and that is not issued by any government,' or something like that. And I said, 'What?' [sigh] And I spent the whole night, I mean, this was like late 2010. And I spent the whole night reading about this thing and at some point it was 6 in the morning and the sun started coming up and I said, 'Oh man, I haven't slept because I just started getting into it and what is this and the technical part and the philosophical part of what money is,' and there were many very scattered ideas and we hadn't yet created, I think, a very good narrative as a community back then, I won't even say industry because it was like a community, and so it was like trying to grab little pieces of things you read in different places, and then there was a forum called Bitcoin Talk, and I was reading and there were still messages from the friend Satoshi Nakamoto that are still there, you can still see them, you can still see them there. But it was like, what is this, man? What is this? And at first it was a curiosity and we started mining and you could still mine with your computer and then people started mining with GPUs, with graphics cards, and then it evolved to mining with things called FPGAs and then the hardware pieces built specifically to mine Bitcoin. But anyway, the thing is that at some point I was in the office and I've always really liked working at night, well, as I told you, that story where I stayed up all night, and the cleaning guy at the company was a Mexican, Julio, and we always talked about things like how Mexico was doing in the World Cup, the elections, whatever. And one day Julio asked me for 300, he asked me for a loan of 300 and I said, 'Hey, Julio, I've known you for many years. Yes, I'll lend it to you, but what's up?' He said, 'No, no, everything's fine. What happens is I have to send money, I have to send money to my daughter and my wife, you know? And the remittance costs me, they pay me in 3 days and my daughter needs some utensils, some school supplies, and so if I don't send more or less 200, 250, the remittance is very expensive for me. So, but lend it to me, they pay me in 2 days and I'll pay you back.' I lent him the money and I stayed thinking a lot and I said, 'How crazy that we live in a world where you press a button and with FaceTime or with WhatsApp or whatever you can talk basically at zero cost to anyone and you can send an email and you can be on social networks and you can do all these things, but sending money from a guy who has been struggling because Julio's story, which I knew, was a very hard story of having had to leave his wife, his daughter to seek better opportunities in the United States and go through a very difficult story personally, what's up? Why do we charge these people so much money?' And that's where the beginnings of the idea of Bitso started, right? Of saying, 'Hey, Bitcoin could solve this.'

Yes, the most interesting thing is that you don't realize it. I mean, I was there, obviously when I tell the story now you say, 'Wow, yes, I mean, what you're saying that everything I experienced and apart from that, this was after the dot-com crash.' Yes. And like, I remember that people didn't really know if the technology was really going to come back. Like there was uncertainty, right? Obviously there were many people who kept building and who were very committed, but there were many things that hadn't materialized, right? I mean, YouTube was still YouTube without Google, I mean, it hadn't been acquired by Google yet, right? And I still remember uploading the first videos to YouTube among my friends and you didn't even know what you were doing, man. I mean, hey, wait, I don't want a video of me on the internet, right? I mean, we weren't influencers, right? No, no, none of this existed, right? None of this way of communicating existed. And like, you just didn't realize it. And one of the things that really catches my attention when I look back is that communication back then, or the availability of material back then, was quite limited compared to what it is today. So I think one of the things that has also happened is that now it seems like a lot of innovation can happen anywhere in the world. No, I still believe Silicon Valley is a very important innovation center, but... And it's that capital was there, right? I mean, capital was there, the innovators were there. I mean, I think there were three things that happened there that I think is something we have to learn to replicate in Mexico, but in Silicon Valley particularly you had, as you say, super important capital because it funds ideas and risk capital, I mean, willing to put money into... And then you had tech companies that had already grown and been successful, and so there was a lot of talent. Mm. The famous alumni, the PayPal Mafia, I mean, people who had already been there who say, 'I can do it too.' Man. Exactly. And then you have the universities, which are a very powerful center for generating new ideas. So I think that's an ecosystem where it's been very difficult to replicate in other places. Obviously there are places where it has been replicated at different scales, but I think it's a very powerful ecosystem that Silicon Valley has, and when you look a little at the impact of when you have a successful company, I mean, many people have analyzed, for example, the impact of MercadoLibre, right, in Argentina, and it's incredible because when you already have a successful company, well, you have all that alumni there. Of course. And then you have the capital that wasn't risk capital before, but that says, 'Hey, man, I was offered to invest in MercadoLibre and I didn't do it, and well, now maybe, well, look what it became, right?' So there's already a story, so yes, he's going to put a ticket into this other entrepreneur, right? And I think that's one of the things when I look at the entrepreneurship ecosystem in Mexico, I mean, we still need to create the big exits, right? Whether through IPOs, big acquisitions, etc. But in Mexico I think we saw an era of a lot of venture capital that came in and there's still much more than there was 10 years ago. I mean, it was an enormous growth and it fell, but I think it fell to a much higher level than where we were 10 years ago, and where there are companies and where there are many companies that have grown a lot and are starting to create that talent. But there's still, I think, those exits to create those stories, and there's still, I mean, and I still think the part is missing, we see a lot of innovation in universities, but we still see a lot of university students who want to follow the traditional paths, I mean, I want to go into consulting, I want to go into banking, I want to go, I mean, like, or I'm going to be an engineer working at Volkswagen or whatever, which isn't bad at all, but we still don't see that symbiosis between capital, experience, innovation, happening like I think it happens in a place like Silicon Valley.

There are a bunch. I'm going to tell you two very quickly, but I think one, and I'll tell it, I know much of your audience is also people who are starting businesses, starting new ventures, etc. And I think there was a moment in Bitso's history where we believed Bitcoin was going to do many, many things, and I think that has happened, it has been true, right? Bitcoin. Well, and the crypto industry has now been used for many, many things, but we didn't have many resources, I mean, neither human nor capital. And there was a moment where I remember that at the very beginning of Bitso we were trying to attack both individuals and businesses at the same time. I mean, that was, what year? 2010. Yes. This conversation must have been like 2015, right? I mean, the company was founded in 2014, but this conversation I'm telling you must have been 2015. And we had growth on both sides, I mean, we had companies that wanted to use us for international transfers, etc., and we also had clients who just wanted to buy Bitcoin, etc. But when we started to see, hey, let's see how we develop the product for these two, well, there were three paths. Well, let's do both, let's do only the individual one, or let's do only the business one, right? The corporate one. And we made a list, right? And so we made a list and we said, 'Well, this path, these are the pros and cons. This path, these are the pros and cons. And this path, these are the pros and cons.' And it was very hard because we wanted to do both, but we realized we couldn't do both and do both well, and we made a very difficult decision to say, 'We're not going to do this, we're not going to do the corporate part at the beginning, we're not going to do the Bitso Business part at the beginning because we don't have enough resources or capital to go after that opportunity.' And I think that was incredibly accurate. I mean, I think it was a moment where if we had tried to do both, we would have done a very mediocre job doing both, and saying, 'Hey, we're going to go not only for the retail part, only for the individual part.' I think that was the right one at that moment, and I tell you this story because apart from that, it's a recurring story in Bitso. I think there is, I think almost all companies, whether big or small, I think there's a power in being able to say, 'I'm going to focus on achieving the most important thing or where I'm going to have the most capacity or certainty or whatever you want, but I'm going to make a focused bet on a particular path. Instead of trying to do five things at once and doing all five, but doing them half mediocre.' I think we always see that in almost the history of any company, Bitso included, when we focus is when we really see important progress.