CZ, welcome to the All-In podcast.
Well, thanks for having me here.
It's really, really great to see you.
I want to go all the way back to the beginning because I think a lot of people don't really know your background the way that they probably should. The part of the background that I really care about is there's parts of your early journey in Canada, which is very similar to mine. You worked at McDonald's. I worked at Burger King.
But before that, your parents were able to immigrate from China right around Tiananmen Square, right? My father went to Canada to study in 1984. That's five years before Tiananmen Square. How did that come about? So your father stayed in Canada once he went there or no?
He could visit us twice a year basically, but most of the time he was in Canada. And he was a teacher in China. He was a professor in China and then he went to do an exchange program at the University of Toronto first.
And then a couple years later he moved to UBC, University of British Columbia in Vancouver. And then he was there. We were applying back then, it's actually very difficult to get a passport. It takes like three or four years to get a passport. We started applying in 1985-ish. It took like two, three years to get a passport and then after you get a passport...
Meaning a Chinese passport.
A Chinese passport. Yeah. So and then it takes like another few years to get a visa. Like that's just how long the process takes back then. And then yeah, so we got it shortly after in 1989.
When you look back, it almost seems fortuitous. Isn't there a version where post-Tiananmen they kind of just shut everything down and say, 'Okay, let's just reset' and then maybe they wouldn't have approved the visa or...
No, actually after that the visa got easier. The passports, like, that got harder. So they no longer issue new passports, like the reissue of new passports got harder. But we were lucky. So we got the passports like, you know, maybe a year before that and then we're waiting for the visa and then afterwards the visa got easier. So in some ways that actually kind of helped us to get the visa.
Wow. Yeah. In some really weird way. Did that event shape your perspective in any way, shape or form or not really? Were you too young or no? You were what, 12?
I was 12. So I think consciously, no, it didn't change me that much but subconsciously I think, you know, there were discussions about democracy versus... so there's some discussions. I was actually living on a university campus back then, the China Science and Technology University, one of the top four universities in China. So there were a lot of discussions among the university students which were older, like which were probably seven to nine years older than me. So there were some discussions but I was 12 so I wasn't really clued into it but I think subconsciously it may have some kind of a subconscious impact. I don't know.
And what was it like when you moved to Vancouver?
I moved to Vancouver. Yeah.
So you land in British Columbia.
In Vancouver. It's like a different...
It's very different. It's just a completely new country and then...
Did you know English at all or...
No, I studied English for like a couple years in school but, you know, I was not fluent at all. But yeah, Vancouver is great. Canada is, you know, nice greenery, open space. Everything's pretty... the living standard is high. Everything's pretty good. Everything is very clean. The fruits are bigger. So it's just a really nice environment. Yeah.
Did both your parents work when the family was reunited? What do they do?
So my father stayed, was like an assistant professor in the university. He gets like a thousand Canadian dollars per month of like, I don't know, what do you call it?
Like a stipend. Yeah. We get some like really low-cost housing with the faculty housing from UBC. So we lived on campus. I think on the third day of our arrival in Canada, my mom went to a factory, sewing factory to work like sewing clothes. She was a math and history teacher in China, but she doesn't speak that much English. So she couldn't get the same level of jobs and she basically can only work at a minimum wage factory. She did that for like seven, ten years. And yeah, so she just worked there.
My mom was a nurse in Sri Lanka and when we immigrated, when we got refugee status, my father was unemployed. And my mom became a housekeeper and that's what she did and then she became like a nurse's aid and then I think when I was like 14 is when I got my first job.
Yeah. Yeah. I got my first job at McDonald's at I think it's 14 or 15. I think it was 15.
14. Yeah. We're the same age so it probably would have been 14. I don't know what the... Do you remember what the minimum wage was in British Columbia that...
I do. The minimum wage was $6, but McDonald's...
Oh, that's incredible. In Ontario, it was 4.55.
So, but in McDonald's, they pay 4.50. That's below minimum wage because McDonald's somehow had like a special exemption because a lot of young kids work there. Yeah. So, I think it was on my 14th birthday that I applied for the job and then a week later I was flipping burgers there. And it was the first income I had.
You're not like this precocious technical wonder kid who's coding 24/7 and learning computer science or were you?
No, I wouldn't describe me as that. I think I'm a technical guy. I started computer science. I was interested in programming even in high school. But I wasn't a programming wizard. I wasn't like, you know, one of those really genius coders. Yeah. I think I'm a decent coder. I think I wrote some decent code in my career and then when I was like 28, 30-ish I moved away from coding. I was like doing more business development, sales and etc. So there was like maybe I would say eight years of my career.
So you're a normal immigrant kid learning to adapt in Canada. Yeah. Did you have a lot of friends?
Yeah, I had a lot of friends. I had a... my...
No, both. I actually had like both Asian and non-Asian friends. But I was actually in our school most of the Asians hang out with Asians but I was actually one of the exceptions that I had like Caucasian friends. I had all kind of different friends. Yeah. My teenager years in Canada was great. It was like some of the best years like I think those years really shaped me to be a happy person. I'm generally a happy person.
How did it feel when you weren't able to get into my alma mater University of Waterloo and so had to settle for McGill? How did that make you feel? Does it make you feel stupid?
So actually I was deciding, my sister went to Waterloo so I was deciding between Waterloo and McGill and maybe U of T. I knew I wasn't going to go to UBC. I wanted a different city. Yeah. And actually UBC gave me an offer but I just knew I don't want to go there. At the time my friend's mother who I really respect, she said well you might want to become a doctor because doctors have a good living, a good lifestyle. I took her advice. I studied biology and McGill is not much of a biology school.
So, I went to McGill. But then one semester later I said, 'No, no more biology. I'm going to move to computer science.'
Was it a typical kind of college experience for you? Did you have great jobs in the summertime or were you just like an average normal university kid? How'd you pay for school by the way?
I worked every summer. I worked every summer and I also worked part-time during the school year. So...
So no debt. You were like I must graduate without debt.
Yeah. I didn't take any student debt. The first year I actually still took about $6,000 Canadian dollars from my dad. The second year I was still a bit short. My sister gave me $3,000. And then from that point on I never took money from anyone at all. I was self-sustainable. Wow. Yeah. So no student debt. Very lucky. And but I just worked every summer, every... yeah.
You know the best thing about Waterloo which was a savior for me...
And I had these incredible co-op jobs. I still graduated with about $30,000 of debt. But I was also a pretty prolific trader in equities. Okay. And my boss, this guy Mike Fischer, did this incredible kindness to me where I was working at a bank. And I was a derivatives trader. That was my day job. But I was trading equities and I had made him enough money. And he said, he called me Sherman. Didn't call me Chamath. He said, 'Sherman, how much debt do you have?' And I said, 'It's about 30.' I said, 'Fish, it's about 30,000. 32,000.' And he said, 'Go downstairs right now to the CIBC and pay your debt and I'll write you a check.' Wow. You should have. And he wrote me a $32,000 check. I should have said 300,000. But Canada is incredible because you can get this education and it doesn't saddle you with this debt that you can't overcome, which is not true in the United States for many people anymore.
Yeah. Even in McGill, there were people from the United States going to McGill, paying international student tuition and it was still cheaper than the US. I was like that's crazy.
Yeah. So yeah, we were lucky that the Canadian tuition was okay.
So you graduate from McGill in computer science.
Yeah. In computer... actually I didn't graduate from McGill. I went there for four years and on my third year I got an internship job and then extended and I didn't go back to McGill. So I didn't graduate from McGill and later on I found out I still need a bachelor's degree to apply for work visas in Japan. So I went to one of... this is like the dot-com height. So I went to an online education program called the American College of Computer Science and got a degree there.
Oh my god. Yeah. So you're technically a graduate from that school.
Okay. So which internship did you get where you started to work there?
So I got an internship in Tokyo. So from first year college I always worked on a programming job. So I worked at a company called Original Sim writing some simulation software and then third year I got into a company in Japan in Tokyo called Fusion Systems Japan and they were writing order execution systems for brokers of the Tokyo Stock.
Sorry that's a Japanese company with an office in Montreal or an office in Canada or no?
Yeah. It's actually an American, a bunch of American guys' company that's in Tokyo. So it's like a bunch of guys were...
And you're thinking this is an adventure. I'm going to go and live in Tokyo for a summer.
Yeah. Yeah. I mean I was a college student and living in Tokyo is like, you know, it's fun. It's a dream. Yeah. And the first time you go there is like it's...
And what kind of software did you write?
Mostly order execution software. So the same software like that moves orders and buy what drives Binance today.
Pretty much. So it's the same style like actually all the software I was involved with have no decision-making.
So when you first were exposed to this it was not like oh wow I love this, this makes sense or was it more okay I'm asked to write this code and I understand the concept so let me just do it. Were you attracted to the subject matter or you just did it because it was your job?
I first did it was because it was my job, right? I was so young I didn't know what all the different industries are and actually when I got to the company the company was giving me a project on working on digital imaging storage systems, like, you know, this basically iPhone photos app but for medical imaging for Nikon. But very soon the company's main product is the order execution system, right? So I was involved in that and then that became the thing over my career and I like it because it requires quite a lot of technical expertise. Everything is about efficiency, making it go as fast as possible, process as low latency as possible, right? That kind of appeals to me. I'm an efficiency kind of driven guy.
And just to double click on that when you look at high frequency trading organizations, the Susquehannas, the Jump, they go to such a degree to basically optimize for efficiency and low latency all the way down to it's their own circuit breakers, it's their own physical fiber infrastructure. They're willing to sort of pay the price to just shave off a handful of milliseconds on either end. Yeah. How does that manifest in the software? So when you're writing that kind of software, how do you actually optimize for those boundary conditions in code?
Yeah. Yeah. So well, there's quite a few levels, right? The first level you do is basically you write a software to be efficient and fast like no slowness. You want to remove all the database lookups. So you want to do everything in memory and then you want to reduce any sort of additional computation. You want to simplify the risk checks, especially pre-trade risk checks. And then the more advanced versions you move on to like the FPGA which is a network chip card that's on the network card, on what we call the ether card.
So that you don't have to go all the way up to memory and come all the way back down to the processor.
So back then when I was like still writing code like maybe 10 years ago that round trip is about 100 microseconds.
And then by avoiding that you reduce down to 20 microseconds, right? And then you move it to physical infrastructure, you want a collocation, right? You want to...
Why haven't these organizations like in the AI world for example with Grok, our big observation even 10 years ago when we were starting the business was this exact idea which is it's really inefficient for a GPU to sit and go all the way up to HBM to come back down so let's just take SRAM and just do everything here on chip, right? Manage it with software. That technical problem made a lot of sense and very fast for the decode phase of inference makes a ton of sense. Why when so much money is on the line for high frequency trading, why did they never try their own custom silicon? I understand FPGAs, but nobody really went to the point of actually saying here's a specific ASIC or did they and we just don't know about it.
I don't think it exists on very large scale. The algorithms change too often. So when you go to hardware like you want to design your own chip, it is very efficient, it's very fast but when you want to change it, it takes a long time, right? So when you want to reprogram it I think FPGA already offers kind of the best of both worlds. Even FPGA you want to reprogram it the programming cycle is much, is 10 times longer than software.
The company you worked at in Japan was it successful?
It's successful. That company got sold to a NASDAQ listed company just before 2000.
For like $52 million back then so that was decent money, yeah.
And so, is that when you said, 'Hey, hold on. There's something here.' Or no, was it something else that happened?
No. So at that time I was too young. I was like 20-something.
So you're working at this place. You're just a coder.
In Japanese terms, right?
You're a salary man. So then walk us through what happens afterwards.
So that company got sold. They acquired, there was a lot of culture clashes between the parent company versus the original company. That's my first experience about, you know, how mergers may not work. Yeah. The two managements were just clashing and then the same partners went to do a different company called Building Two. But now this partners, I didn't get any money but the partners got quite a bit of money now so they rented a very fancy office. That company only lasted a year. It means that previous success doesn't guarantee future success.
So they spent a lot of money, had a very nice office but has zero revenue so that folded within a year and that's 2001. And early 2001 I was looking for new jobs and then Bloomberg was hiring and this is right before 9/11. I kind of got an offer before 9/11 and then 9/11 happened. I still haven't moved and then...
Where was this to New York or...
This was in... well I was still in Tokyo back then and then Bloomberg is in New York. The offer I was supposed...
The offer was in New York.
The offer was in New York. So after 9/11 I called Bloomberg say hey is the job still there? Do you still want me to go? And they said well do you still want to come? I was like yeah okay. So then I went. So I went to New York in November of 2001.
The streets were pretty quiet. Yeah. And but you know I was fine. New York was quiet for a few months but it became lively pretty quickly I think. So I didn't feel too many issues. So I then went to New York and worked at Bloomberg for four years.
Doing exactly again the same thing. You're kind of a salary guy. You're working at a big company, salary, bonus, maybe some options or some phantom equity or something like that.
Yeah. So, I joined as a senior developer. I was put into a team called Tradebook Futures. They just formed this team and they had a system that allowed people to trade futures on Bloomberg, but it wasn't... it was like spread out. So, they collected that into one team.
And still no inkling of like that entrepreneurial bug.
Not really. Back then I was like nah I worked...
What were you looking for? Stability? Like why Bloomberg being in New York? Like what was it?
I was just a young guy. I was like I think I was like 24, 25. So I was just a young guy trying to get a job, you know, experience different parts of the world and just find my way through. I knew I wasn't experienced enough to do entrepreneurship myself, right? So I was working a small company in Tokyo, the company only had like 200. Bloomberg at the time had about 3,000 people. So to me that was a big company. Yeah. And they had fancy offices, fish tanks and free food and everything. So I joined as a senior developer. I got some good bosses. I got promoted three times in two years and then I was leading a team of 60 initially and then kind of grew to about 80 people. And that's when I became sort of a manager. I no longer wrote code and I started...
The worst transition. Right. The worst. So that's kind of my Bloomberg experience. Yeah. So I had to stay there for four years.
And then you quit and moved to China.
I think it was around beginning of 2005. Again the same friends I had made in Japan, they were talking about starting a new company, a new fintech company and they were in Asia, right? So they're talking about Tokyo, Shanghai or Hong Kong. And they said Shanghai is most likely the most happening place for the future of fintech. We should have picked Hong Kong. Hong Kong had a lot more happening since then. So I went there in 2005. So it was like five foreigners from a Chinese perspective. Five Caucasians, four Caucasians plus a Japanese plus me. I'm the only one who speaks Chinese and my Chinese was kind of rusty back then too. So the six of us went there to do a new IT startup in Shanghai.
So all you guys just land there and what was the idea?
So we thought, you know, we have all this Wall Street experience, Wall Street trading technology experience.
So your other friends had they moved to New York or no they were still in Japan doing their own thing.
Two of the friends were in New York with me and then the other three were from Japan, right? They were there. So the six of us came together and we wanted to do... our idea was let's bring the Wall Street trading technology into China so we can service the brokers and exchanges in China. But then so we went, they rented a very fancy office again.
Wait okay so hold on just... so when you guys start this company this is now your first entrepreneurial... you're like okay let's do this.
Did you know to even ask the question like okay guys what's our equity split, what's the cap table, did you know any of these things or you're just like great let's go do it. I'm just assuming it's one-sixth we're equal like how did it all...
It wasn't one-sixth. It was like the top guy had like I don't know 39, 40% and the rest five of us split equally so I had about 11% or so. Okay. So, I knew that, but I didn't know like, you know, all the ins and outs about, you know, shareholder rights, what terms. I didn't know any of that.
Yeah. Preferred versus common, none of it.
You're like, great, I got 11%. I'm moving to Shanghai.
Yeah. So, I just have 11%. I had no idea what common stock is or versus preferred. So, just went and then but so I was a junior partner in this group. And then, once we landed in China, I start because I speak Chinese, right? So, I began talking to potential clients. I went to talk to brokers. I found out we are registered as a wholly foreigner owned, what we call a WFOE, wholly foreigner owned enterprise. Yeah. The Chinese brokers and financial institutions are not allowed to work with a WFOE.
So we found out after we started a company while we were in Shanghai and so the company pivoted towards doing any IT system for any company. We can be like...
Work for hire. We can be fixing...
Not even a body shop. We can be fixing printers or we can be writing like, you know, SAP implementations for you. We did all of that. So there's a whole spectrum of things and so we did that for a few years and we actually made a living.
Yeah, for a few years. And we made a living out of that. Yeah. We started, we had quite a number of automotive clients. The Shanghai General Motors, Shanghai Volkswagen, Shanghai First Automotive, they were all clients of ours. And like maybe three or four years in we started having offices in Hong Kong and then we were dealing with Morgan Stanley, Deutsche Bank, Credit Suisse.
So it grew so it was successful.
The company is still around. The company is still around. So I left in 2013 after eight years. But the company is still around.
So in the eight years you worked at that company all in Shanghai.
I was mostly in Shanghai, but then I spent quite a bit of time helping to set up the Hong Kong office and then I was also doing quite a lot of work for some clients in Tokyo.
How big did that company get? I think even you got to about 200 people again and it's kind of stayed there for as far as I know even till now. And so as a junior partner you just take profits and you share it like...
Yeah. Yeah. So well actually we didn't take that much profits. I actually invested most of my savings back into that company and I actually didn't cash out a penny. But after a few years the company was stable enough to pay the partner salaries that all of our kids go to international school. So we get a six-figure salary.
At that point you had gotten married.
Yes. Yeah. So at that point I got married when I was in New York. So yeah. And then yeah. So I had two kids.
And you had met your ex-wife. How?
Yeah. I met her in Tokyo when I first went to Tokyo. So I met her in 1999-ish when I was first in Tokyo doing the internship. Okay. And then she visited me in New York and then, you know, we got married and then we had kids. Now we are separated or we're divorced. In Shanghai I had young kids and, you know, it was enough salary to put the kids into international school and that was good enough for me.
Wow. Yeah. So far again nothing here tells anybody that you're about to go and start Binance.
Nothing. No I didn't know. So then 2013, 2014, how old were you then at that point? You were...
So again, salary guy. Junior partner at this thing. It's going well. Your kids are in private school.
So then I came across Bitcoin, right? So well, one of my friends tells me, 'Look, CZ, you got to look at this thing called Bitcoin.' I look into it. I was like it took me about roughly six months to fully understand it. So that was from like roughly July 2013.
And that's because you read the white paper and you said I need to read it again and read it again or...
Yeah. Yeah, pretty much. And then because back then there was the Bitcoin Talk forum and then that's pretty much it.
But did you see my Bloomberg article in 2012? Is that... that had any influence?
Unfortunately, I don't... I read a bunch of stuff. I actually don't remember what I...
I'm just kidding. But I did write this thing and it's funny because I had a kind of a relationship with Mike Bloomberg. It was kind of not even mentor like he was just too senior but he knew me, he liked me, he would invite me to certain things.
Yeah, with Bloomberg. And then I got to know some of Mike's team. And in 2012 or so they said would you write an op-ed. Okay. And I was like yeah and I wrote it about Bitcoin and I said everybody should put 1% of their net worth into Bitcoin and I said it's basically schmuck insurance. And then they published it in the Bloomberg terminal or whatever and that's when I got red-pilled on Bitcoin where I was like man it's the most incredibly interesting technical product that I had read about and I think the thing that captivated me, I don't know if you felt this way, it was the only white paper that I read end to end where I thought this is one of the most elegantly written pieces of non-technical prose. Do you know what I'm trying to say? Like it's not something that is like dense and an archive that is just meant for PhDs. You could literally give it to your sister, to your brother, to somebody non-technical and they would understand it.
Yeah. Yeah. And it's only nine pages.
And exactly. You know what an enormous amount of intellectual skill it takes to do that.
Oh yeah. Oh yeah. Yeah. It's much harder to write it very short.
Much harder and elegantly and simply.
Yeah. Yeah. Anybody else try to rewrite that? I think it'd be 90 pages.
So the friend that showed it to you, was he a co-worker of yours or no? Just a random friend in Shanghai.
It's a friend. It's a... well, not a random. He's a friend. We don't have any working relationships. His name is Ron Cao. He runs I guess now Skyline Ventures. And back then he was at Lightspeed Ventures. He was a managing director of Lightspeed Ventures in China.
So we play, we have a poker house game, like, you know, small stakes. A bunch of struggling entrepreneurs versus like VCs. So the VCs have all the money and all...
So but, you know, it's a fun game. It's not a very serious game. So in one of the poker games Ron says CZ you should look at this thing called Bitcoin. I was like, 'Okay, Bitcoin.' Okay. So, and so we talked about it a little bit and then Bobby Lee, who was at the time working for Walmart, was just about to quit Walmart to join BTC China to become their CEO. And as part of that deal, Bobby said he will bring Ron in as an investor, Lightspeed into BTCC. So, that's in July 2013. I was like, okay. So, those two guys are pretty serious about this. So I had lunch with Bobby the next day and Bobby said put 10% of your net worth into Bitcoin. He said there's a small chance you will go to zero then you lose 10%. There's a much higher chance you will go 10x and you'll double your net worth. I was like okay sounds pretty serious. So that's when I started learning about, reading the white paper more carefully. Took me six months. So it was till the end of 2013 I started like I'm convinced now. I'm ready to go. But then Bitcoin went from $70 in mid 2013 to like $1,000 by end of 2013. So you already went more than like 15x.
How did that make you feel?
I was like, I'm too late. I was like, I wish I got in early.
Yeah. Because back then, right? Doesn't matter when you get into Bitcoin, you always feel late.
Right. Because everyone you talk to in the Bitcoin industry has bought before you. And did you talk to anybody while you were learning about it to say like you have a community in Shanghai?
There's a very small community in Shanghai and then I was basically talking to anybody in the world that's willing to talk with me. And then I had a couple friends in Taiwan, they used to... they worked for TSMC back then because and then they were trying to do a mining chip for Bitcoin. So two of those guys left TSMC try to do this startup. Startup never really took off but that was one group of guys I was talking to. There was another couple, they were mostly miners. There was another guy called... his nickname is Fish, Silver Fish in China. He's like a big miner. He runs the F2 pool even today.
So those guys were based in Hangzhou. You know, they came to Shanghai, I talked to them, etc. So there was a group of guys that you talked to. And then the biggest thing was in December 2013, December 13th-ish there was a Bitcoin conference in Las Vegas. I flew there to meet everyone. Everyone in the industry was there. There was a 200 people conference. Vitalik was there, Matt Roszak was there, Charlie Lee was there, a bunch of guys were there. And the same guys still today. And then at the time just before that it was the Silk Road arrest of Ross Ulbricht. So the media was like no this Bitcoin is only used by drug lords. And when you go to the conference it was like a bunch of kids, a bunch of geeks and they're very nice people, right? So you talk to Vitalik, you know, he's a very nice person.
Were you still working at that company while you were doing all of this moonlighting?
Yes. So this is what... this is kind of the...
You tell your partners, hey guys, I'm just going to go to Vegas for a couple days. I'll be back.
Pretty much. Yeah. Yeah. And then when I got back, I told the partners, we should do a Bitcoin payment system because BitPay was kind of the big player back then. BitPay just raised $4 million US in 2013. So they was kind of the large player actually in the employee.
Can I tell you a very funny bit? I have two BitPay stories.
I was very focused on trying to prove the transactional capability of Bitcoin. Yeah. I went to my local car dealership and I bought a car with Bitcoin using BitPay in 2012 or 13. Wow. That Range Rover is probably $90 million. And then even more stupidly, there was a real estate development in Lake Tahoe. Yeah. Called Martis Camp. Beautiful. And I had owned a couple of lots and I said, you know, it would be great if I actually could prove that you could buy real estate with Bitcoin. And I called the guys at BitPay and they were like, yeah, we can facilitate this transaction. No problem. I bought a piece of land. And then again, I thought this is an interesting story. And the Wall Street Journal wrote about it. And now that piece of land is a billion dollars.
But you cannot calculate this way, right? So...
It's easy. I calculate it this way every day.
You can't calculate it that way because...
The stupidest purchase ever.
No. No. No, no, no. That's the bucket of money mentality, right? So even if you didn't use Bitcoin, you would have used some money to some...
Buy the land. You could have used that money to buy Bitcoin.
Yeah. Right. So, yeah. Yeah.
So, you're like, 'Hey, we should do a version of BitPay.'
And your partners are like, 'What are you talking about?'
Exactly. And now, at this point, you still hadn't bought any Bitcoin.
No. At this point, like I had like maybe one Bitcoin.
Yeah. And one Bitcoin is like only a thousand bucks back then. Yeah. So, yeah.
And then so I tell my partner look I think this is the biggest thing in my life, right? So when I think there's three fundamental... back then I realized there was like two fundamental technologies in my life. The internet, I was too young to do too much with it and there was this Bitcoin thing and I wasn't... I was 35, 36, I wasn't going to miss it. The next thing that's going to come along is going to be 15 years later.
You feel old when you go to Vegas and you see all these young 22-year-old kids and you're like I missed it. Did you think that at any point or...
No, 35, 36 is still okay. Okay. So, it's still doable. You don't feel super old. Today I feel that. But I thought the next thing that will come will be 10, 15 years later and that's AI, right? So, today I say like there's three fundamental technologies in my life. But back then that's the thing, right? So for me it was very clear I got to do something in this industry, right? So and so I told my partners look I'm going to quit and I'm going to work in the Bitcoin industry. That's what it's called back then. And then I also need to buy Bitcoin and I don't have much money so I just said look I'm going to sell my apartment in Shanghai and then buy Bitcoin but selling the apartment takes time. So it took me like a solid few months to sell it and it was only...
You sold it, where did you... just got a rental apartment?
I sold it at... at the time actually my family also moved to Tokyo. So my family moved to Tokyo. We lived in a rental apartment. So in Tokyo. And then I was traveling in Shanghai. So that's kind of the time I started separating from the family as well. So I was spending a lot of time traveling, right? And so I sold the apartment for roughly $900,000, like just under a million bucks. And then started buying and I got paid in tranches because, you know, you get a first down payment, you got paid in tranches and every tranche I get, I just buy. The first tranche at $800 and then Bitcoin is dropping $600, $400. Kind of averaged to about $600.
Incredible. Yeah. Incredible. So now you have your Bitcoin position, but you still don't have a job.
Yeah. Well, I was looking for a job at the same time.
But you were looking for a job in the Bitcoin industry or you were just looking for any job?
In the Bitcoin industry. That was very specific. It didn't take me that long to get a job. The gap was from the time I said I'm going to quit until I finalized the job was probably about two to three weeks.
Oh wow. Yeah. And so who hired you?
I first discussed with BTCC, Bobby, he wanted to hire me and then but then Blockchain.info came along. I bumped into Roger Ver and then at the time Blockchain.info was... I was the third person to join the Blockchain.info team. There was Ben Reeves who's a founder and there was Nicholas Cary who was just the CEO, hired the CEO. And I was like the third guy in so I was like VP of Engineering because Ben... we want to reserve the CTO title for Ben. So yeah, I joined Blockchain.info. I flew to York in London, like three hours north of London. I spent some time there, you know, figuring out what to do. Yeah.
That didn't go very well. We expanded the team to 18 people and then Peter Smith joined as a CFO wanting to raise money for Blockchain.info. Coinbase just finished raising a round at raising $30 million. And that was a big one in the industry back then. Peter Smith somehow maneuvered himself into the CEO position pushing Nicholas Cary to the product manager kind of role. But the culture kind of changed a little bit. So I left. A bunch of the developers I hired left. And then Ben Reeves sold quite a lot of his position also left in a few months later. So that was... I think I was only there for like six, seven months. So that didn't work out too well. But I learned a lot from that experience.
Yeah. You learn what not to do.
No, they all know like Blockchain.info when I joined, Ben Reeves said look we have no company, we have no office, everyone works remotely, we just pay everybody in Bitcoin. And so that's something I learned from that company and I still... that's still very heavily used in Binance today. So I learned a lot. I also learned that that company, the whole marketing, they at the time Blockchain.info was the largest user platform in the industry, right? So they had about two million wallets, more than Coinbase at the time. And the entire marketing was one thread on BitcoinTalk.org. One thread. The thread is 150 pages. Ben Reeves just replies to that thread and that's how you grew to a two million user platform. I was like okay so you can do quite a lot of guerrilla marketing to be successful. Wow. So I learned a lot. But the culture changed a little bit. It wasn't fit for me and then I left and then that was when...
OKCoin hired you into OKCoin. Yeah.
So he said look why are you working for this wallet company your experience is dealing with order execution exchanges. So he hired me there.
Yeah. So yeah, so in the process I think BTC China helped me again. So, you know, I was kind of looking for a job again, right? So I left and then was talking to me and Bobby Lee found out and Bobby Lee meant so OKCoin back then will offer me 5% equity and then BTC China came along and offered me 10% equity and then OKCoin matched it within three hours and then I was debating between Shanghai and Beijing and I decided to go to Beijing to join OKCoin back then. Hu at that time had 1% equity. So she hired me to be like the bigger sort of partner in the business.
So that's how I went to OKCoin for about eight months or so. That didn't last long either.
I think there were also culture differences at OKCoin. There were some stuff that I didn't agree with. Both in terms of like, you know, simple examples like how they run promotions, how they do fee discounts where you have to ask for it. Like they advertise a fee discount but you have to ask for it to get it. It doesn't apply to everybody even though they advertise as such. So small things like that. And then so yeah, so that was in early 2015 I said no I'm going to leave. So that's kind of a... so that lasted for a few months in 2015. Yeah. 2014 mostly. Yeah. So how do we get from there to Binance?
So 2015 I with a couple of my old colleagues said we're going to do a Bitcoin exchange in Tokyo in Japan because this is a year after Mt. Gox and all that.
After Mt. Gox and all that. Yeah.
Yeah. So there's a vacuum in Japan. So we got two developers that came to me on the same day I decided to leave OKCoin. They came to me said look somehow they also quit their respective jobs. I said okay well why don't the three of us do something. And so we said okay so I will be the CEO and then I'll be the big guy with more equity and then I'll be responsible for raising. And I was paying them a salary out of my own savings and I wasn't taking anything. So the two developers, we whipped up a demo very quickly. We downloaded an open source software for an exchange and then we tweaked the UI to be a little bit sexier and then we hooked up...
You just forked an open source project like this is our... this is Binance.
No, we didn't say it was Binance. Yeah, this is before... this is before Binance.
And we didn't say... I was very transparent. I was like this we whipped up this demo in two days or in a few days. And this is a demo that we can show you. But this is not our ultimate product. It's just a proof of concept. Yeah. So it's like yeah so and then but then we had a script that took Bitfinex market data. Bitfinex was like the large exchange back then and we just kind of copy their order book and the order book was flashing, there's trades going on. So it was a very lively demo and when the investors saw that it was like wow this is good technology. But it's not just a demo. When they ask me questions I can answer in very deep ways, right? When they ask me like, you know, how do you structure this to be a fast exchange we... I can talk about in-memory matching, optimizing database, all the stuff you've learned. Yeah. So I can go really deep when they ask questions, right? So my knowledge is there.
Right. So they were like, 'Okay, this technology is cool, but you won't be successful running a crypto bitcoin exchange in Japan. You don't speak Japanese, right?' I was like, 'Okay, they have a point.' So they said, 'Why don't you sell this technology to other exchanges because most of the Japanese exchanges don't have very good technology.' I was like, 'Okay.' So then I went to talk to a few of the exchanges. Like literally two weeks later, we signed a contract with one of the exchanges and then they paid $360,000 for the system. So they made a down payment of $180,000. That was enough for me not to pay salaries anymore. So I was happy with that. So we pivoted from wanting to run our own Bitcoin exchange to an exchange systems provider.
Yeah. You're selling software.
We're selling software. And then in July 2015, a bunch of Chinese companies came to us saying they want systems for...
Can I just say by the way, sorry to interrupt you, but it's really incredible because there are so many founder stories when somebody says, 'I've started a company.' And then somebody says, 'Well, how much is it worth or how successful is it?' And you know, let's just say Binance is a $200 billion company...
Probably less than that, but...
It's in the neighborhood. A lot of people think that there is some incredible origin story that is like lightning in a bottle. But so often than not, the story is more yours, which is this. It's kind of like moving along, meandering, learning things, trying some other things, this non-obvious iteration, and then all of a sudden things kind of catalyze. But even then, you still don't get the right form because you're licensing it really. And people just misunderstand that this is actually more what entrepreneurship is. It's the resilience and the grit to just keep grinding.
For sure. For sure. I think most people idealize entrepreneurship that they just hate it and they...
It's like the Facebook story. You hack it together in college and oh it's now a million users.
Facebook, Microsoft, right? Exactly. And also Google, these three are like college, garage and they just...
Exactly. Even but the reality Binance or Tesla it's like a grind. It's a grind and it's a grind.
You have to like go so many different ways and it wasn't obvious from the beginning.
Right. So I think those three are the exceptions that kind of just hit it from day one.
But then that kind of shaped people's perception like 99.9% of other successful businesses are not like that.
Right. So if you look at now any other successful company. Yeah. So the same here.
So get us to the founding moment.
So you're licensing the software.
We licensed the software. That business went pretty well. So, we've had like 30 different exchange clients.
Over two years. In two years, we signed up...
Yeah. So, this is a multi-million dollar...
Yeah. So, and it's a SaaS business, right? What we call exchange as a service business. So, we charge a fixed monthly fee every month. And this platform business is paying us. It's very steady business. Every new client increases the revenue. So, every new client is like a step up.
Exactly. So it's a very actually a very good business model. But then in March 2017 the Chinese government shut down most of our clients. And then by May we're like...
Right and they don't touch you because you're the software vendor.
With a software vendor. Exactly. We don't run any business. So with a software vendor, but then our businesses, we have no clients, right. So we lost our clients and so by May we were like okay we need to pivot. Well by April May we were like figure out how to pivot. By end of May we was like okay actually three guys who worked for me said they want to do a Poloniex copycat. Poloniex was the biggest exchange back then. And then I said let me invest. We have some extra cash. Three days later they want to do some on-chain chat trading software. Was like no we're not going to invest in that anymore. And then I said well why don't we do that? We have the exchange system already. We still need to customize it to do a crypto-to-crypto only trading.
My gosh.
So in May we said okay we're going to do a crypto, we're gonna do an exchange again. The team said fine, sure.
How big is the team at this point?
20 people. So and we had tech people. We don't have marketing because we are a B2B business right. We have two sales guys, two sales guys plus me. And then we said well now we can run our own, let's do our own crypto-to-crypto exchange. So and then so that was the end of May and then June 1st to June 10th there was a guy who was a BTC co-founder, Li He, he ran an ICO in China he raised 15 million US dollars in 10 days and then I looked at him I was like he only had one document and one website no product nothing he raised $15 million US if he can do that I might be able to do that too.
You need venture funding you're like if I get the $1 million. I can build out a team. I can invest in some marketing. I can be in the J curve and not feel the pressure.
Exactly. Yeah. So, originally we were going to go to the VC funding route, right? But then when I saw that, I was like, well, and everyone talking about ICOs back then. I went to a conference mid June 2017 and everyone was talking about ICO. Everyone's like, CZ, you got to do an ICO. You got to do an ICO. So, by mid June, June 14th was the date. And then I said, okay, called the team said we're going to do an ICO. Write a white paper and then by...
And so did you have a name at that point like in the Bitcoin community or in the crypto community either in China or in Japan or somewhere?
I had a little bit of a name even working at Blockchain.info quite a lot of people know me Blockchain.info was the most popular platform back then right. And OKCoin was also like I was a CTO I was quite active on social media I was also kind of managing their international markets non-English speaking or non-Chinese speaking markets because nobody else I was the best English speaker on that team even though my English is not that great but so I had a little bit of a name people know me in the community.
Because you needed a bit of a name or some kind of pedigree to actually do an ICO at this point.
Yeah. Yeah. Yeah. So, but this is an advantage of when you get involved early in the industry like you go to a few conferences like there's 200 people and you go to like by the second time you go there people know you right. By the third time people like oh you know you're the expert already right so I had a bit of a reputation so I thought that Li He, the guy who did the ICO in China, he's quite well known in China but he's not known internationally I have a little bit of both so I said well I can probably do an ICO and raise the same amount so we...
So who are the buyers of the Binance ICO?
To be honest, even to this day, I don't know.
Even to this day, you don't know, right? But are they Chinese? Are they Japanese? Are they people from all around the world that kind of knew you? Was it that your white paper was really good?
Okay. So, I think in terms of demographic, it's probably like 80 to 90% Chinese. And there were some international guys who bought it. And I think the data shows that there was about 20,000 people who bought in the ICO.
20,000 people. So, and this is like a brand new brand. Some people know me in the industry and that was it.
So, even though the exchanges were put out of business in China, the ICO was allowed.
No, the ICO wasn't banned back then.
Yeah. It was not not allowed. Exactly. So, let me just make one clarification. The exchange clients that we were serving were mostly fiat-to-crypto exchanges, not crypto exchanges. Crypto exchanges were not banned in March. Crypto exchanges were banned after we started.
So that was in September. We're talking about like June, July kind of 2017.
Wow. You're really threading a needle.
Yeah. Yeah. So we didn't know that ban was coming. We just thought like you know those...
How much of the company did you sell?
No, we didn't have equity. We just the coins. We launched the token.
You had to do no equity participation. There's no equity involved.
So we just we launched a new token BNB is still there today and then we said look we're going to sell 60% of it for $15 million roughly. Right. So because we're tokenizing bitcoins...
And what were the original tokenomics that you designed for the BNB token?
Well, we said a bunch of things but the main one that was going to be live very quickly was going to be if you hold BNB you receive 50% fee discounts when you trade on Binance eventually the platform that gets launched. That was the main thing. But we also said, look, it's going to have eventually its own chain, its own decentralized ecosystem. There's like three or four things.
So then you guys must have been ecstatic. You're like, wow, we raised 15 million bucks. We're now going to launch this exchange. But then September comes around and then exchanges themselves. So then what do you do?
Yeah. September comes around. September 4th, like seven different departments of Chinese government issued a memo together saying that number one crypto exchanges are no longer allowed in China. ICOs are no longer allowed. Mining is not allowed, crypto mining. We said, well, we're gonna move. Well, we said we have to move. By then it was clear that even while at the time China was one of the largest user base, they have like 30 something percent user base from China, but we still have like 70% from the rest of the world. We said, look, if we cut off that 30%, we can still survive. We can actually survive pretty well.
So we said, well, I just said, 'Look, let's move. Let's move. Let's move to Tokyo.'
I've been back in and out of Tokyo. I know it.
And by the way, at that point, do you speak Japanese as well?
I speak very little Japanese. What I call taxi Japanese. I can say like, 'No, thank you. Go left, go right.' In a restaurant, when I order, I say this, this, this, not the full menu names.
Sushi, I can name most of them.
Yeah. So, that's my Japanese level. But you know I know Japan, I know Tokyo. It's not like a new country for me, right? So I said like let's move to Tokyo. And we had like 30 people then, right? So...
Back then eight years ago I think very like maybe one or two of the people were married. And nobody had kids. So it was like a very easy move for the team.
Yeah. So it's everybody just packed up and moved.
I remember one girl cried, one product manager, she cried because her boyfriend is in China. So she cried but she moved with us and she's not married to her boyfriend. So anyway...
So yeah, so we moved to Tokyo when China did that and our platform continued to grow. Yeah.
So when you first launched Binance, was it an instant hit or did it take energy to find that product market fit? At first few zealous users that would tell everybody else like how did the virality start? How did the liquidity really get built?
So, Binance I would say the product was growing pretty well but the token price went down from ICO price it went down 30-40%. It took about 3 weeks to recover. So, when we launched the product because at that time crypto is still pretty hot. I think the product market fit was there. It wasn't a new idea. It's just a crypto-to-crypto exchange. So then the ICO was critical then, right? Because these people say, 'Well, I own this token now. I can trade at a fee discount.' So that's why I'm going to choose Binance.
Yeah. But was it also architected better? Was it materially faster or more reliable?
Yeah. Yeah. For sure it was. So back then when we launched you can even using your eyeballs, you can see that placing an order on Binance is so much faster than on competing platform.
And so the performance of the exchange system was visible. Back then 2017, who were the big platforms that you were competing with?
There was Poloniex, Bittrex were the biggest ones and then there's a few Chinese ones. There's Huobi, OKX, OKCoin back then. And then in the Western world, Coinbase was there. Gemini wasn't there back then. Gemini was later. So Bitstamp was there. Bitfinex was there. Now they're kind of really really small.
So you're now in your late 30s.
And this thing is working.
40s, sorry. 40s. How did you internalize the success? You're like, 'What is this?' Like, 'What's happening?' Like, 'Are you saying that to yourself or...'
Yeah, there were some really surreal moments where you were like, is this real? In a good way. Said like, 'How like what's our revenue?' She I forgot the number, but she said like a couple hundred bitcoins. Like, that's crazy. We can't be making like are you sure? She's like, 'Yeah, we're sure.' Like, 'No, this number can't be correct. We must be off by like a magnitude.' And we double check, double check, triple check like correct. I was like, that's crazy. And then there was also a period where three weeks in when the BNB price was recovering. So BNB ICOed at like about 10 cents. It dropped to like 6 cents. And then we announced He Yi joining and then for the next two three weeks every time you know you go to sleep, you wake up the token is up 20%. You go to a meeting come back the token up 20%. You go to the bathroom, come back, and token's up 20%.
I mean, it must have been very quick where you're like, wait a minute, I'm rich.
That came a little bit later. That came in early 2018, about six, seven, eight months in. Forbes put me on the cover.
Uh, that's when like, well, I said, well, how did they even know to find you at that time to put you on the cover?
I actually don't know, but Forbes was doing a crypto edition. So with all the crypto guys and then they already had a picture of Vitalik doing a fancy hand gesture which is really cool picture. So yeah so they invited us they contacted our PR department which maintains contact with them which is really team back then like team of four or five girls and He Yi says like well Forbes want to do a special feature with you and take some photos I think you should go. I was like, I don't want to go. But I said, we're a new brand. Forbes can still help us, you know, increase the brand awareness.
Yeah. Yeah. So, I said, okay, fine. I'll go. So, I went to do the photo shoot. That was like my first photo like to put makeup on me and then the first time put makeup.
CZ, what is money? Well, is it important? I mean, don't take this wrong way, but you got rich old.
So, did it matter at that point? What is money when you're in your 40s and you make it?
It still matter. But money is not everything. I think I was old enough that there's a couple things that happened to me. Number one is I was older as like 40-something. So I'm not like a young 20-year-old that just you know Lambos, big parties. Too old for that. So I have also my personality is quite stable. So I don't get too excited on things. Also the other thing not to brag but I went from like a barely financially free to like now cover Forbes and I was like wait a second like how rich am I? I don't even know. I don't like when I look at my wallet nothing changed like Forbes cover nothing changed for me. But then people say look now you might be a billionaire. I was like am I really a billionaire? Like it doesn't feel that way. I was like even like a month ago like not a month like at that time when we left China to go to Japan I booked economy classes for a redeye flight and he was like no maybe we should upgrade to a business class so we can lay down and sleep. Okay that makes sense. That's you know so like I have those kind of habits. So when you make money successively like you know from 1 million you become 10 million you might want to buy some fancy cars from 100 million you might want to buy a yacht or something to a billion then you have I didn't go through that stepwise process. I just went from like a relatively okay kind of thing to like you're on the cover of Forbes. So and so I didn't develop quite a lot of those habits.
What does it mean now? Now, I mean, depending on the day, you're a deca billionaire or a centi-billionaire. What does it all mean?
It doesn't mean very much to me. I think money is two things. Number one, you have to take care of yourself. You have to have food, shelter, you know...
Which is very minimal amount of money.
Very minimal. Like you don't need that much for that.
Yeah. People can confuse themselves and create all kinds of complexity, but it doesn't take much.
It doesn't take much. So that I for sure have. So I have a very I don't have a luxury life, but I have a very comfortable life, I think. And then the other...
Sorry, what does that mean?
If you look at my house, my house like the living room water leaks every month or so because the house is too old. But that's the house that's the right size for me right now. No, it's not. We'll just fix it whenever it leaks. So that still happens like that happened a month ago. So like people think I live in a very fancy house, you know, all this other craziness, you know, it kind of fits all my family members. But it's an old house that I bought third or fourth hand, but it's in the right location. It works for me. It's in the right location. It's functional. Things break once in a while. It's fine.
Would you say it's because you're practical or is it just because you're just not moved by...
If it functions, I'm okay. I don't care about the fanciness. I don't care about style. I don't care about colors. I don't care about glitting gold. And if it's functional, I'm okay. Right. So, if it solves the problem, I'm good.
Do you ever have bouts of insecurity?
