The Man Behind Bybit: An Exclusive Conversation with Ben Zhou

Of course. Um, it was, I think, the first five minutes when I heard the news. Where Bybit is today was completely out of everyone's imagination, even myself.

Thank you. Well, first of all, we are here in the Bybit gala event for our VIP guests. We're here in Bali. The weather is really nice. It's really good to sit down and see you guys again. And you are one of our most important partners, even globally speaking. So I think it's really good to... I think today we'll have a deep conversation, or whatever you want to ask, and we can bridge to the community.

I think, yeah, it's an interesting question. First of all, we never planned to take over BitMEX or anyone. Where Bybit is today was completely out of everyone's imagination, even myself. When we started the exchange, our first goal was to survive within the next six months, right? And then after that, so you always have a gradual goal, right? And after the six months, you want to gradually grow your market share, you set your target into countries. And I think for Bybit today, we are a much more mature organization. So we have our five-year, ten-year plan, you know, which is where we want to go within five years. And you can see our latest mission statement is we want to be the one financial platform. So we can see that crypto is becoming not just crypto, just Bitcoin, it's about everything else and the whole financial system that's changing and evolving with crypto. So when the organization is matured, you have longer-term goals. When you do a startup, you're kind of short-term, right?

And in the beginning, you also said it took a lot of money. Actually, I think to run a startup, money was not the issue. We had overall, I think, in total, $1 million from all the co-founders that we put in, and gradually I think we put up to maybe $1.5 million. And so there's a lot of capital, a lot of VCs out there. And actually, I don't think the determining factor for a successful startup is money. And if you are trying to compete and say I have a lot of money, typically it's not a good thing. A startup company typically looks at how resilient the team is and how fast you can move, how fast you can execute. And these are the things typically VCs look at when looking to invest and give you the money, right? So, and I think there's a lot of money out there. And so I think the right team and the right talent, the right grit, you know, making sure you don't give up so easily, is more important than the money.

That's why it's a typical mistake. Also, when we see, we now do a lot of investment and we collect like a deck from startup companies. We will give you a deck of the next two, five years plan. I'll guarantee you that the investor is not going to look at it. They'll mostly look at your three months, six months, how you're going to survive. I mean, at the early stage, right? So, I think that's the most important.

First of all, I don't say we're a casino. We're an exchange where, you know, multiple participants are trading. But to go back to your point, I wasn't really a trader in the beginning. I've always been a kind of exchange builder and operator, right? But you know, I do test the product oftentimes. What I'm good at, I think, is to look at the product from a client's perspective. For example, we just released this thing called Bybit Odds. It's an option product. Basically, you can bet five minutes price up and down of Bitcoin. But you know, I had a meeting with the team because too much information is overloading the client. When you are presenting an odds product, you just want two big buttons that say buy up and down, and then my capital, how much is my projected profit after five minutes, right? Remove all these other stuff. So this is what I'm good at. A lot of building a product exchange is really human intuition and understanding of, you know, perspectives. And again, I do make trade, and I think I'm not sure what was my worst trade. I can't really remember, but I haven't really traded for a while.

I think there's a few things. Number one is, it's the most critical mentality shift, is that you need to assume you will be hacked again at any given point, and is your system able to mitigate the risks so that if you're hacked, you don't lose not 1.5 billion, right? I think the biggest mistake, and again, Bybit was never hacked. It was our third party. We put all our Ethereum into one cold wallet for convenience reasons, for whatever reason. But there should be a risk mitigation process that, you know, you ask, you challenge yourself, what if I get hacked again? Is this wallet going to affect my main business or not, right? So that's the first mentality shift. Second is to, in a way, in the company, prioritize risk and security, and also challenge the existing protocols, because a lot of times we can give high priority to your security and risk team, but how do you know they are executing things they want to execute 100 out of 100? But sometimes it's not. So we're involving third parties to provide a third-party view, third-party audit. So Bybit now probably has the most thorough third-party... We work with a few third-party providers to look at our wallet infrastructure, risk, and even the operational manual. So when people, let's say, are approving transactions, is there a transaction log being recorded? And if there's a video call recorded, there has to be a record. If we are going to the cold wallet, there needs to be camera recordings of who does what, and everything is recorded. So I think those measurements are very critical, not to prevent, but to review your own behaviors. And we involve third parties, we have an internal audit to look at the historical data of each transaction and each role and each owner, are they doing the things they're supposed to be doing? And that's how you keep the organization tight, I think.

Of course, it's after the hack. No, before, I think the mindset is let's build a system to be super solid, and also you have ways of preventing each other, but the whole goal is to not let the hack happen. When you have that mentality, you tend to spend a lot of time on the very first layer. Okay, hacker cannot come in. So we build this super solid, yeah, we bulletproof window. So we focus only on the window and the door of the car to be bulletproof. But now the matter is, what if the bullet gets in? Then what does the chair do? What does the driver do? And then even if the driver gets hit, what's the second backup of the driver? Because the goal is to make sure the car is moving, right? So that's kind of the mentality shift.

Of course. It was, I think, the first five minutes when I heard the news. But again, we always had a very prudent accounting and finance system. So we were able to immediately calculate if we are able to cover the money or not, right? And that answer dictates what I will be doing next. If we can cover, then fine, I will just go on live and then announce to the world we're going to cover everything. Now, if we're not going to cover, then my job probably is to go find people that can loan me the money or potentially sell part of the company for an emergency bridge loan. But because we know, so then I wasn't worried after five minutes, basically.

Yes. Yeah, yeah. I lost the money. Fine. Okay. Yeah. Then you move on, you focus on what's next.

Actually, I think there are maybe two general perceptions we can challenge. I think a lot of people talk about, I'll just pick the most common ones, right? A lot of people talk about RWA, and I think currently RWA has been perceived as let's find some asset with real-world usage, whether it's from BlackRock or Franklin Templeton or HSBC. What's the reason people would make RWA out of it is because they want to have more distribution channels, more money. So at the end of the day, they are trading tokenization as today I have 100 users that can buy this thing, let's make a token out of it so 10,000 people can buy it. And I think that is the wrong way of using blockchain and using tokenization. I think it's so if then you just, you don't need tokenization. You're just distributing to other areas of the world, right? And that's essentially how people are looking at RWA. But I think what crypto people and where we are really good at is we created something called Bitcoin, Ethereum, and all these memecoins. Essentially, eventually when people have consensus, the value goes up. Is there real-world supporting things other than the GPU, whatever is burning electricity? There's nothing, right? So you can think about it as like thin air, but there's a whole industry created on top of it because there's different usage and derivative of it. And then you can become memecoin, you can have launchpad, you can have DeFi, you can have DEXs, so many things built on top of it. If you ask Warren Buffett, he thinks, he believes it's thin air, right? But now you have RWA, which actually has some value in the traditional sense, like Apple stock or whatever, or Franklin Templeton asset, then we should use our creativity and innovation to build on RWA. So there should be derivatives, RWA on top, a memecoin on top of RWA or something. And then so that there's a second reference point other than just air, right? I think that's one.

Another challenge is I think people, everyone talk about agentic payments, how crypto is going to really link to agentic payments, which I do, I completely agree, and that's the direction Bybit is moving towards. But I think we're pretty far from actual agents making payments, simply because law and regulation is not ready. When it comes to money, people need law. Because if I use my agent just to buy coffee, fine, he messes up, I don't care. But if I'm asking my agent to buy a car, and then the vendor realizes the agent bought the car, and then he sues me saying I'm not, I didn't, I'm not the one buying the car, or I'm as a buyer suing the vendor saying I'm not the buyer, it's the agent. What does the court of law do? What does the law or court do when it comes to agent? There's no definition. So because of that, I don't think bigger amounts can be transacted because no law, right?

Yeah. No, but I think the longer vision is not just agent get your credit card and buy coffee for it. That's so simple. It should be agent interacting with agent on payments. Then it becomes the same problem. You said if it's an autonomous car and autonomous two cars crash into each other, whose fault is it? Like if it's a human and a car, okay, you sue Tesla. Sure, Tesla will pay. Okay. But if it's Tesla, BYD, they crash into each other, and then like, do you look at the algorithm? Do you look at the car? Do you look at whoever? Maybe there's a guy there. I don't know. So yeah, definitely.