BTC034: Bitcoin as Legal Tender & Near-Zero Exchange Fees w/ Jack Mallers

Preston Pysh (00:00:03):
Hey everyone, welcome to the Wednesday   release of the podcast where we’re talking 
about Bitcoin. Today’s guest is making some   of the biggest moves in the space, and that’s none 
other than Jack Mallers, who’s the CEO and founder   of Strike. Many are aware of El Salvador making 
their Bitcoin legal tender announcement and Jack   and his team were the ones really piecing this 
all together, and putting everything in place. Preston Pysh (00:00:25):
On this show, Jack and I get into the   finer aspects of why this is so important and how 
the technology works. We also talk about his new   announcement to provide Bitcoin exchange services 
at nearly no fee for people using his Strike   application.

We also talk a little bit about 
him leading the Indy 500 effort with the Bitcoin   car and much, much more. Without further delay, 
here’s my chat with the one and only Jack Mallers. Preston Pysh (00:01:11):
Jack, welcome back to the   show. I am thrilled to have you here. Jack Mallers (00:01:18):
Preston, I’m a huge fan. I   am really humbled to be back and am super excited. Preston Pysh (00:01:25):
I’ve got to start this off by   just telling you that I was watching this 
video of you doing an interview on Fox,   I think it was Fox Business. I don’t know the 
lady’s name, but she was there interviewing you,   and you were just given this bang-up response. 
I think it was some of the stuff you were doing   down in El Salvador. She totally steps in, 
interrupts you, you’re calmer than ever,   just let her do her thing. Then you come back in 
with an excellent counter-response or whatever. Preston Pysh (00:01:56):
When you’re doing these things   on these major news outlets… The segments 
are one minute, you can’t even say anything   meaningful in a minute, but you’re 
still banging out this amazing response.   But the best part for me was at the end, 
she says, “Well, thanks for coming on,   Jack Ballers.” I don’t even remember what was said 
in that entire interview, other than at the end,   she called you Jack Ballers.

I’m convinced 
it was a total Freudian slip. It was amazing.   I couldn’t stop laughing. I think I listened to 
it three times in a row because it was so funny. Jack Mallers (00:02:35):
Yeah, that was fun.   Her name is Liz. To her credit, and I don’t 
know if I’m going to get in trouble for saying   this, but I’ve done a few of those now, and 
they send you questions beforehand, and we get   on a few minutes before to do the prep and make 
sure my lighting and I’m an absolute wildcard,   I’m willing to admit that.

They usually have 
me come on early to make sure I’m not going   to join in a Speedo or something. I’ve got my 
hoodie, “Are you sure you want to wear that?”   “Yeah, I’m actually way more than 
sure. I’m going to wear this.” Jack Mallers (00:03:04):
We review the questions,   and she goes, “Hey, just a heads up, 
they actually don’t want me to ask any   of this. They really want me to press you 
on the IMF and the World Bank.” I told her,   said, “Okay, just be careful what 
you wish for.” She said, “Okay,   I don’t know what that means but we’re going 
live.” Then we went live. That is what happened. Jack Mallers (00:03:25):
I know afterward,   she actually enjoyed the response as well. 
She’s a very sweet lady. So, no harm, no foul.   But no, I’m a straight shooter, man. 
Everyone knows that. It is what it is. Preston Pysh (00:03:34):
It was great.

You provided such   a good response. We were roughing her up in the 
comments and everything because she interrupted   you. But I think it’s such a short amount of 
time. I think a lot of people don’t realize that   the corresponds are really trying to get as many 
questions in there as they can without letting   people go on this monologue or whatever. But, 
dude, at the end when she called you Jack Ballers- Jack Mallers (00:03:58):  I don’t know if she meant it as 
a compliment. But I’ll take it. Preston Pysh (00:04:02):
I took it as a compliment for you.   I was just like, that is amazing.

You couldn’t 
have got a better outcome there at the end.   The first question that I’ve got here for you is 
just really, you did this amazing interview with   Peter McCormick, you laid out the whole El 
Salvador thing. I don’t want to go back and   rehash that story. Instead, I would point 
people towards Peter’s discussion with you,   to really get the ins and outs of how just 
amazing this entire thing was that unfolded. Preston Pysh (00:04:33):
But for people on our show   that aren’t familiar with any of 
that, or maybe didn’t listen to Peter,   just give us a quick recap of what happened in El 
Salvador. It doesn’t have to be long but just give   us that and then I want to dig a lot deeper 
into some of the ideas that happened there. Jack Mallers (00:04:51):  My name is Jack and I’m the founder 
and CEO of a company called Strike.   What we do, from a very high level, is we aim to 
provide the best experience on top of the world’s   first open monetary network, it’s Bitcoin.

We 
can delve into why I think that that’s going to   grow into the biggest company in the world and 
why I’m very passionate about what we’re doing. Jack Mallers (00:05:11):
To make a tremendously   long story short, we launched 
a product in the United States   saw a great amount of success. One of the early 
ambitions when I first started the company   was attempting to reinvent cross border payments. 
I think they’re tremendously inefficient,   and I think they really showcase the 
inefficiencies in the legacy financial system,   and what a tremendous amount of intermediaries, 
cost of capital, balance sheet flow, all of these   things can do to a financial experience, and end 
up harming an entire country like El Salvador. Jack Mallers (00:05:41):
El Salvador,   over 20% of the country’s GDP is in remittance, 
they failed to establish their own nation state   currency, so they operate on the US dollar. 
They have a tremendous immigration problem,   and actually stems from the lack of financial 
stability and opportunity in the country.

Jack Mallers (00:05:59):
You either, for more or less,   I don’t want to oversimplify, 
but it’s pretty close,   you either result of violence and join a 
gang or you immigrate to the United States,   and remit money home. Yes, we want to launch 
in Europe, yes, we want to launch in all these   countries, but I figured it was a really great 
place to start, because on top of all of that,   there was this Bitcoin Beach Project, which 
had really cultivated a culture of caring   about financial inclusion and solving it with 
this world’s first open monetary network. Jack Mallers (00:06:27):
I figured, hey, if we can   launch a product there, reinvent cross border 
payments, remove the variable cost that really   prices out small remittance, and fix this from 
the ground up, we can actually literally improve   the GDP of a country and really re-instill basic 
human freedom, and bring a tremendous amount of   financial inclusivity to a country that has 70% 
of its citizens that don’t have a bank account.

Jack Mallers (00:06:53):
It was a pilot for us as a company.   But it was really just a mission for me as a 
human being. I went there just to launch an MVP,   launch a pilot. We were hoping to get a couple 
hundred users and learn from the data gathered   and try and get a better understanding of, hey, 
does this idea that I have carry any legs? Then   through being there, we started, we got a 
couple of users a day, it was 10 users a day,   100 users a day, 1,000 users a day, 20,000 users 
a day, and the thing took on a life of its own. Jack Mallers (00:07:24):
It really validated a lot of the assumptions that   the unbanked have a terrible financial 
experience, and really are preyed upon   by the existing financial system. They saw this 
as just a premium experience. By ways of that,   I got contacted by the president, who saw Strike 
as a glimmer of hope almost, in the country.

The   president then outlined to me… To be clear, I have 
no commercial relationship. It’s purely an advisor   and just spoke my mind. There’s no material 
benefit for me as an individual or Strike   as a company. But the president outlined these 
two problems that he viewed his country having,   but a lot of the world happening is the 
unintended spillover from the Federal Reserve   causes a lot of problems to the economic 
stability of his country, and the lack   of financial inclusion really prevents basic 
human freedom for the majority of his citizens. Jack Mallers (00:08:24):
He saw Bitcoin and this open monetary network,   and this established hard money monetary policy 
defended by a distributed network and what strike   was doing as hope, and a better future for the 
country, and expressed his interest in making   Bitcoin legal tender. I was more than willing 
to give my thoughts and opinions to the process   and went on stage in Miami. I’ll stop there 
before I run on longer, but that’s what happened. Preston Pysh (00:08:47):
Shortly, you went on stage at Miami,   you made the announcement that the president 
of El Salvador, you played the video, and   he made the big announcement that they’re going 
to make it legal tender.

In addition to the US   dollar remaining as legal tender in El Salvador, 
that can be used, the citizens have the choice to   choose between which currency or hard money they 
want to choose to use, or a combination of both. Preston Pysh (00:09:11):
I think that’s probably   for me, Jack, the most important piece of 
all of this is the country using it for   the network, not necessarily the store of 
value. That’s just an added benefit. Explain   what that means to the person listening that 
Bitcoin the network being used in El Salvador? Jack Mallers (00:09:35):
Well, to be clear,   I’m under the impression that they’re using both, 
which I think is the most powerful statement   that Bitcoin can’t author itself 
because it’s not an established entity,   but that has been co-authored and Bitcoin has 
been used by.

What I mean by that is that you   have two problems if you’re El Salvador, but 
also if you’re the entire world, every country   is that the “unintended” spillover, and I use 
unintended with air quotes. The monetary expansion   of central banks causes significant issues to 
every country. It has this inflation problem. Jack Mallers (00:10:11):
How many stimulus checks, and my high   school friends are out buying vacations to Hawaii 
and expensive Manhattans at the bar with their   $1,200 stimulus checks. How many stimulus 
checks you think landed in El Salvador?   Zero. The president was very vocal about 
that is that monetary expansion and all   the money printing is really doing 
an extreme disservice to his country. Jack Mallers (00:10:35):
How do you solve for that? Well,   subscribing to a monetary policy that has a 
fixed supply, unknown issuance and defended by   a distributed network and can’t be co-opted 
by any central bank or central government.   The other problem that he has is financial 
inclusion, and that the banking system in   El Salvador is tremendously broken, there 
actually isn’t an established standard,   like the automated Clearinghouse like ACH to 
send money from one bank to another.

So, they   physically walk cash between banks, and 70% of 
the country doesn’t have a bank account anyways. Jack Mallers (00:11:08):
In my opinion, having access to   basic financial services is a sound basic human 
freedom. The president was very vocal about   while we have tremendous amount of 
unnecessary exposure to central banks,   especially in this macro environment, and we have 
a basic human freedom problem in the country.   Citizens are born, and by the time they get 
old enough to strive for a high quality of   life and have the ambition to live a high 
quality of life, they join a gang or they   leave the country. It’s a terrible place to live, 
and how do I fix that? What’s my solution there?   Ask the Federal Reserve to stop printing money 
or give us some of the stimulus? Not really   plausible, or reasonable, or achievable? Then how 
do I develop financial inclusion in the country? Jack Mallers (00:11:55):
What we discussed for a long time,   the government body and I is, El 
Salvador is also, and they know this,   a very under resourced country, compared to 
the United States.

We talked about is what   if you can plug into an open monetary network, 
a network where there is no gatekeeper, and a   network that comes with inherent network effects 
and economies of scale that are unprecedented. Jack Mallers (00:12:16):
Do you know how many people are   working on the ACH Network, or the Visa network? 
You know what’s crazy, not as many as it’s working   on the Bitcoin network now.

The network effects, 
economies of scale that come with when you plug   into the Bitcoin network, all the MIT professors 
that are working on cryptography now work for your   country. All the developers in London working 
on Bitcoin Core now work for your country.   The network effects that come inherent in an 
open system, where they can just plug in, allow   open interoperability within their whole country, 
remain interoperable with all of these innovative   services, all of these ambitious entrepreneurs, 
all of these established universities   and subscribe to a monetary policy that their 
reserves can be reliant on that won’t change,   where the issuance is known, supply is 
fixed, and all of a sudden, you’ve solved   two of humanity’s longest stated problems, 
but then specifically, the highest priority   problems of almost every country in the world 
right now, and that was the high level insight.

Jack Mallers (00:13:17):
Also, why it was Bitcoin only, by the way, and we   can get into why altcoins… This is a great example 
of why altcoins don’t make any sense, they never   have. But now we have a real time example of 
that, but that was, from the highest level,   the conversations is how to solve the spillover 
effect of monetary expansion from central banks,   and how to build basic financial inclusion 
for a country that’s relatively unbanked.

Jack Mallers (00:13:41):
That, in turn, instills basic human freedoms.   That, in turn, should, in theory, over a long 
enough timeframe, solve their immigration problem,   solve the violence problem, improve the security 
of the country, improve the stability of the   country, improve the quality of life. Then 
the last point I’ll make is the government   actually, they’re more free market fans than 
they are Bitcoin. They obviously are bitcoiners,   but their ultimate goal was designing a pure 
society, and they were very vocal about this   concept that, even in the United States, by the 
time you’re 18, you have six figures of debt   to get an education and a degree in something 
that you’re relatively unclear you even want.

Jack Mallers (00:14:18):
By the time you graduate,   you optimize your life around paying that back. 
Virtually all of my friends hate their life. The   kids I went to high school with, they hate their 
job. Why don’t you do something you like? Well,   how am I supposed to pay back $200,000 to 
Syracuse or whatever? By the time you pay   that back, and you’re like, 45, 50, 
55, 60, you subscribe to more debt   in the form of a mortgage, in the form of a 
car loan, in the form of health insurance. Jack Mallers (00:14:39):
You’re constantly in debt.   You’re constantly optimizing your 
life around paying debt back,   and you’re never allowed to pursue your passion. 
Your life is constantly optimized around   paying back your debtor instead of finding 
love, pursuing interest. They talked about if   you can fix the money, you can fix the world. 
There’s merit to that quote, and that mean,   and it would fix the monetary expansion in 
central banks, it would fix the financial   inclusion problem, and then over the long term, in 
theory, enable a truly pure free market society.   They’re very vocal about that.

It starts 
somewhere, which is here, where we are today. Preston Pysh (00:15:12):
You can never create equity   for yourself. At the end of the day, the model 
that you just described, a person can’t start   their own business unless they have some windfall 
from maybe a family member passing or something   to create equity for themselves. If you’re 
always creating equity for somebody else,   it’s really hard to get ahead and pay 
down debt outside of the pittance that   you’re constantly struggling to pay. It’s 
amazing how you just described that, Jack. Jack Mallers (00:15:42):
Sorry, not to cut you off,   but I just want to harp on this. I want to give 
the government body credit where credit’s due,   because I rarely now have the time, or I’m 
allowed to speak openly about this stuff. So,   I’m very excited to be here. Hopefully, I don’t 
rant too long. But I would sit down and I’m like,   “Wow, this is so cool.

We’re talking about Bitcoin 
with the government. I wonder where this goes.”   They would sit down and be like, “Aren’t you 
so disenthused and unimpressed with the lack   of art and creativity in the world today? Have 
you noticed that artistry is trending down?” Jack Mallers (00:16:12):
When I first sat down, I was like,   where am I? I’m in El Salvador talking about 
crazy concepts. But there was a long winded   way of saying if we can fix the money and 
bring relative stability to human life,   and reinsure high quality of life. We 
can retraject artistry, creativity,   re-instill human freedoms and build a society 
where people are comfortable being themselves   and lifestyle, pursuing passions, and not 
about paying back debts and being rich. Jack Mallers (00:16:39):
Anyway, I think they’re just getting started.   They were very intentional too on projecting 
this to the entire world. They saw themselves   as the brave first step, and almost took on the 
responsibility as an onus like, we have to do this   because the US can’t, and the EU can’t, and we are 
uniquely positioned to be the brave first warrior.

Preston Pysh (00:16:58):
The thing that you get with what   you’re describing is, if you’re playing a game 
of Monopoly, and you’re at the end of the game,   and there’s consolidation of the board into 
the hands of one player, that’s kind of where   we’re at globally, is you’re having this total 
consolidation of equity into the hands of the few.   We’re all aware of what the consequences of 
that are, because we’re living it right now. Preston Pysh (00:17:20):
But one of the things that   I really want to hit on with Bitcoin, the network. 
For people that are looking at Bitcoin, that maybe   aren’t intimately involved, but are curious, 
and they’re listening to this conversation,   they’re looking at the price action, and 
they’re saying that price action is so volatile,   how can somebody that doesn’t have a lot 
of disposable income down in El Salvador,   even remotely subscribe or want to use this 
form of money, when it’s all over the place? Preston Pysh (00:17:51):
They have this really fine   line of a variable cost versus their fixed 
costs and their daily lives that they can handle   and here’s this thing that’s got 60% or 
70% volatility.

How does Bitcoin work in   an environment like that? You see professors from 
Johns Hopkins, Hankey, or whatever his name is,   he’s out there making this argument and 
I’m just rolling my eyes, I’m like, dude,   you don’t get it, you’re totally missing the 
boat on how it’s being used down there. Explain   to people how this person with not a lot of 
disposable income is using the Bitcoin network. Jack Mallers (00:18:26):
I think it’s really important to   conceptually understand one of the 
mental models I deploy at Strike,   and one of the core thesis of the business 
is that there needs to be a divide of Bitcoin   between the asset and the network.

Literally, 
there is, cap will be lower B. Conceptually,   it’s really important to understand, Bitcoin, 
the asset, you have this 21 million hard cap,   you have this known issuance, you have this 
monetary policy that’s praised, rightfully so. Jack Mallers (00:18:52):
Bitcoin, the network, though, actually   achieves a tremendous amount, arguably even more, 
although it’s not competition, but it’s just as   fascinating. What I want everyone to do that’s 
listening is actually do away with the price   of Bitcoin, do away with the fixed supply, 
do away with the block times of 10 minutes,   what if they’re 20 minutes, what if they’re five 
minutes, let’s just ignore that for a second,   and just focus on the monetary network 
that enables the money to perform   financial services and achieve things like 
settlement and clearance and cash finality. Jack Mallers (00:19:25):
When you look at it,   and you look at additive properties, like 
the Lightning Network and layers on top,   it’s actually the most impressive monetary network 
in human history, and it’s not particularly close.   It’s a monetary network that’s cheaper. 
It’s faster.

It’s global. It’s the most   inclusive monetary network of all time. It 
works for all 8 billion people inherently   assuming a low latency internet connection. 
Oh, and by the way, it’s open. You cannot   compete with it, ever. You can’t get keep it. 
There’s no central party that can control. Jack Mallers (00:20:00):
That is the most impressive   monetary network of all time. What Strike was 
at the time, when I first created the MVP,   the very minimal product was, hey, can we 
use the network without succumbing to some   of the downsides and the risks of the asset? Can I 
literally not capital B, lowercase B divide them?   But quite literally, technologically divide 
them? Because growing up working on Bitcoin   and being really intimately familiar, I’m 27 now, 
I’ve been in Bitcoin for almost a decade.

A lot   of the problems in the past of using Bitcoin in 
payments is people trying to access this monetary   network and make use and benefit of the monetary 
network, but having to deal with the asset. Jack Mallers (00:20:44):
First and foremost, no one’s   incentivized to spend Bitcoin. Why? Because 
if you hold it, you grow in purchasing power,   it grows in value against the dollar over a long 
period of time. Second, in the United States,   it’s taxes property. It’s a very onerous 
tax consequence to spend it and realize   gains. Third, it’s an accounting nightmare. 
Four, you have to be technically savvy enough   to position yourself to actually use 
the monetary network and gain benefit. Jack Mallers (00:21:09):
It has this laundry list of reasons where   I’ll just use my visa card. The insight that we 
had at Strike was, what if we removed Bitcoin,   the asset, from the basic level experience? What 
if I made your Chase checking account or your Visa   Debit Card, or any form of cash collateral 
interoperable with this monitoring network,   so you get the benefits of global, instant 
cash finality, that’s cheaper, faster.   There’s no concept of MDR, there’s no concept of 
interchange as an acquirer.

Oh, and it’s open. Jack Mallers (00:21:40):
Our app would get better   every single day, whether I 
wrote a line of code or not   because the network is constantly improving 
at an exponential rate. What if I was able   to achieve that? That would be one of the more 
fascinating financial experiences, and ultimately,   over a long period of time, the best financial 
experience ever. That’s what Strike is. Jack Mallers (00:22:01):
What the president of El Salvador did, in   more or less words, is understand Strike, and then 
just ditched it to his country, which is great,   but it’s the concept that you can gain benefit 
from an open monetary network that’s cheaper,   faster, better, baseline inclusive, gives you 
the free market competition, and optionality that   every consumer would dream of, and enables 
a society of choice. That you choose how   private you want to be, choose the color of 
the app, choose what fee structure you want. Jack Mallers (00:22:31):
You have unlimited optionality,   you aren’t exposed to the volatility of the asset, 
you aren’t exposed to realizing any capital gains,   you aren’t exposed to having a custody 
and having to be technically savvy enough,   having to sacrifice on potential upside of 
your savings by having to spend it on coffee.   You get all the benefits of the best monetary 
network in human history, while retaining the   benefits of the asset or not having to be exposed 
to some of the downsides of using any payments.   Hopefully, that made sense.

But it’s a 
true division, and that is what Strike is,   and then I think El Salvador is trying to achieve 
the same thing, but just in a different context. Preston Pysh (00:23:08):
From a user standpoint, Jack, let’s just put   it into a user interface kind of description for 
somebody who’s listening to this. When you’re down   at Bitcoin Beach down in El Salvador, where 
this whole movement really had its roots, if   you and I were down there, and let’s say we wanted 
to transact with a person who was a vendor there   at the beach, and I had the Venmo app on my 
smartphone, and I tried to spend dollars or   send them dollars over Venmo, there’s a gatekeeper 
limitation for me to be able to do that, correct? Jack Mallers (00:23:41):
Mm-hmm (affirmative).

Preston Pysh (00:23:43):
But with Strike, using Bitcoin,   and the Lightning Network is the back end 
rails, that limitation is no longer there. Jack Mallers (00:23:52):
I bank at Chase. My Chase checking   account is my preferred cash collateral 
on Strike. Now, all that fanciness means   is everyone links their bank account to 
Venmo, link your bank account to Strike.   I have a US dollar balance on Strike 
that’s associated to my bank account.   I want up to a Pupusa lady in El 
Salvador, and I wanted cheese pupusa. Jack Mallers (00:24:16):
The lady showed me an open network   interoperable QR code, which was a Lightning 
Network invoice. It was a Bitcoin QR code   that any app that implemented the same 
payment standard could scan. There are   probably hundreds of 1000s of them out there. 
Probably 10s of 1000s known, probably 1000s work,   whatever, and there are a million. Strike allowed 
me to scan it, although I was holding dollars. Jack Mallers (00:24:42):
What would happen is I scan it,   and let’s say it was a $5 pupusa, I hit pay, 
Strike would debit $5 from my Chase account,   live converts it into Bitcoin and then 
executes the payment for me under the hood,   unbeknownst to me, and we achieve final 
clearance and settle with no concept of MDR,   interchange or anything, and the pupusa lady 
gets her $5 worth of Bitcoin that she requested.

Jack Mallers (00:25:07):
My US dollars that were sitting in Chicago,   here at Chase Bank were interoperable and used to 
execute and achieve a consumer merchant payment   in El Salvador. Now, the amazing thing is, 
there were like 10 different wallets that   were being used in this town, any of them could 
have scanned and paid it. Then oh, by the way,   Bitcoin is a bear instrument 
that’s natively digital.   It achieves physical settlement. No sense of 
credit on these monetary networks, it’s physical.

Jack Mallers (00:25:37):
Then, the other key insight   into this is that Bitcoin is a physical bear 
instrument that’s natively digital. There’s no   sense of credit in this monetary network, is 
that you’re achieving physical cash finality.   The reason that that’s important is then it’s 
a bear instrument that could be exchanged back   into dollars. To complete the user story, which 
is Strike remittance, or Strike in commerce,   and what’s happening in El Salvador, is you can 
take cash collateral, so a checking account,   or a dollar balance or whatever, credit 
card points, something that a user likes   to store and hold value in, they can issue a 
payment, it gets live converted into Bitcoin,   uses this monetary network rails which achieves 
instant, virtually free cash finality globally.   Then as soon as it reaches its destination 
physically, as a bear instrument, you can   convert it back into dollars, euros, whatever 
cash collateral that the destination would like.

Jack Mallers (00:26:32):
You’re now just using a more novel monetary   network to escrow value, cheaper, faster, better, 
more global, inclusive and open. When you compare   it to the visa network, you compare it to the 
ACH network, you compare it to the Western Union   network, it’s better in every sense. It’s even 
better, and if I were to walk into a Dunkin Donuts   here in the United States, but it’s way better 
than what was in El Salvador, which is nothing. Preston Pysh (00:26:57):
Most people have smartphones   and devices to accept this. Jack Mallers (00:27:00):
Yes. Everyone has a Facebook   account, not only in El Salvador, in 
the world. Facebook on Android devices,   there are over 5 billion installs, they’ve 
almost got the entire planet on the thing.   Everyone has a smartphone, everyone has 
an internet connection, and now we have   a digital asset and an open digital monetary 
network, which is a whole other topic.

Preston Pysh (00:27:26):
I think the really key point   here is if the pupusa lady wanted to have 
the payment received in dollars, because   maybe she’s just barely profitable, 
and she has some type of fixed expense,   her electrical expenses in dollars, and she 
needs to make sure that she has that amount,   she can accept it in dollars, even though Bitcoin 
was used as the rails to basically get it there. Jack Mallers (00:27:50):
Correct, yeah. The Strike product today, you   can make any Bitcoin or Lightning or payment with 
dollars, you can receive any Bitcoin or Lightning   or payment as dollars. You have cash that’s 
natively interoperable with this monetary network.   Then if you combine the two, what you have is 
two parties that are separate from each other,   that can initiate a payment with dollars 
and then receive the payment as dollars   and use this bear instrument that’s able 
to achieve cash finality cheaper, faster,   better on this new novel, open monitoring 
network, just used under the hood to achieve   clearance.

You don’t need Visa anymore, you 
don’t need any monitoring network anymore. Jack Mallers (00:28:33):
It’s infinitely scalable, it’s open.   It’s just one of the more crazy advancements 
for money as a technology and human history.   I really don’t think people appreciate 
what we’re living through right now.   Hopefully, I’m alive for when the world does. 
But maybe I won’t be. It’s that big of a deal. Preston Pysh (00:28:53):
It seems like every week you got a   monster announcement. This week, you had another 
monster announcement. Tell us what you got. Jack Mallers (00:29:01):
I try my best. At Strike, we announced   the Bitcoin tab, which carries actual long tail 
vision, but in the immediate, we’re going to allow   people to buy bitcoin for no cost outside of the 
market spread. What that means is we get charged   a market spread to execute purchase at market, and 
we’re just passing that cost on to the consumer.   Right now, it’s below 30 basis points, so 0.3%. 
As volume grows and hits a threshold, which we   probably will exceed even with our beta whitelist, 
it’ll be below 10 basis points, so 0.1%.

Jack Mallers (00:29:39):
That’s explosive and amazing, relative to   existing services like Coinbase, which 
can exceed 4%, it really is the shot   heard around the world in retail purchasing of 
Bitcoin. Actually, this carries much more depth   than what my blog post and the media and 
stuff. But I think acquiring Bitcoin should   be free. I think it’s a race to the bottom. 
You can’t build a protective business selling   open source money. I expedited that race to 
zero rather quickly with purposeful intent. Preston Pysh (00:30:11):
Just so I understand Jack, it’s not exactly   zero, it’s 0.1%, which is 40X lower than any 
exchange is offering right now, is that correct? Jack Mallers (00:30:22):
Right. In a dream world,   our revenues are killing it in other facets 
of the business, and I’d love to subsidize   a truly free experience of buying Bitcoin.

But 
there is a cost to acquire Bitcoin at market,   and that is any asset in any market is you 
have to buffer in a market spread to ensure   that you’re covered on execution. The market 
spread that we get charged to execute your order,   we pass that cost on to the consumer, but 
right now, that’ll never exceed point 0.3%,   and probably by the end of July, that 
will never exceed 0.1%, hopefully. Preston Pysh (00:30:59):
Wow. People were accustomed to going to   all the major exchanges, they’re paying, like 
you said, the 4% fees at various locations. Now,   I just opened your app. I think a lot of 
people have been doing this with the Cash App,   where they’ll log on, and if they just want to 
smash buy for $100 order or $50 order or whatever,   it’s just you can immediately get your cash 
into the app from your bank account, and then   you can immediately put in an order.

Now, you’re 
offering this on strike, but you’re doing it for   40X lower fees than the major exchanges. Jack Mallers (00:31:36):
Yep. There’s a lot to unpack   here. You pause me if I’m ranting or I lose 
you. But there’s a lot to unpack. There’s a   few really important points. One, we’re 
not making any money or revenue at all,   very intentionally. Bitcoin, and selling 
open source money, it’s a race to the bottom,   that’s not a defensible business. You 
even saw that in the equities market. Now,   Robin Hood allows you commission free 
trade, you cannot defend against that. Jack Mallers (00:32:03):
When Coinbase went public,   that was the very big criticism is how are 
they going to defend their business model?   Coinbase, with $1.8 billion of revenue 
in Q1, 94% of that was fees to acquire   digital assets. Almost all of that was 
Bitcoin. How were they going to survive   knowing that this market is going to drive itself 
to zero? We already began to see that; Cash App,   Venmo Robin Hood, they started to come in, 
offer the same service for a little bit cheaper.

Jack Mallers (00:32:35):
Coinbase was at 2.9%,   Cash App and Venmo came in relative 2.2% to 2.5%.   Then you see the swan bitcoins come in or 
the river financials come in at below that,   with also different value propositions, 
but the pricing, it continued to go down. Jack Mallers (00:32:52):
Now, for me, it was a no brainer   for Strike to do this and offer it for zero 
outside of the market spread. Instead of go,   “Well, we’ll do it for 0.9%.” No, we’ll go 
straight to zero. Now, here’s why. It’s really   important. The biggest companies in the world 
are open network companies. Facebook, Twitter,   Google. What I mean by that is they operate 
on the internet, that’s their open network,   and their target audience is everyone on the 
planet. That’s what allows them to be as big as   they are. It’s one of the inherent properties 
that allows a company to be that big, Amazon.

Jack Mallers (00:33:26):
These companies have the target   customer to everyone in the planet. 
Now, someone like a Facebook,   their problem is they don’t have an inherent 
business model. So, their business model becomes   acting against the best interests of their user, 
their customers, their user. Zuckerberg appears   in front of Congress two times a quarter, he 
surfs with an American flag on the Fourth of   July. He’s the most hated man on the 
planet. He has to tarnish his brand. Jack Mallers (00:33:51):
Facebook has a terrible brand.   Jack Dorsey in Twitter, unfortunately, I think 
Jack Dorsey is a good guy, I’d like to believe   he’s a good guy, has a terrible brand, why? 
They have to compromise against their user,   infringe on their privacy, sell 
their data behind their back.   They are this open network business, which allows 
them to be as big as they are, but they’re capped,   and they tarnish their brand, tarnish 
their reputation, and have a huge problem   of achieving more than what they are because 
they don’t have an inherent business model.

Jack Mallers (00:34:19):
Strike actually, is also an open network company.   We plan on servicing all 8 billion people on the 
planet. Our open network is Bitcoin. But we’re a   financial services firm. We know how we’re going 
to make money. It is in the best interest of our   users, if the biggest retailers in the world 
start processing and achieving finality as an   acquirer on the Lightning Network, and they’re 
paying 10 basis points instead of 2.9 with visa.   We’re making money, they’re making money. 
The consumer now has the optionality of a   free market and scanning an open network 
interoperable QR code. Everyone wins. Jack Mallers (00:34:57):
We don’t have to compromise against our user.   In turn, I say all this to say, Strike has a 
very unique opportunity to be the biggest company   in the world. It’s in our DNA. We’re an open 
network business that has a known business model,   and can act in the best interest of our user. 
It also allows us to do amazing things.

I   think Strike will end up being one of the 
most powerful consumer brands of all time,   akin to an Apple, akin to a Nike, because 
of these inherent DNA properties. It’s what   Bitcoin enables and allows us to do, it’s 
because of Bitcoin. It’s because of my team,   it’s because of our investors, it’s because of our 
partners. But ultimately, it’s because of Bitcoin. Jack Mallers (00:35:32):
Now, long rant, I say all   that to say, Coinbase whiffed on this big 
time. Twitter, for example, you’re seeing   that they’re trying to solve this in real 
time.

If Jack Dorsey is listening to this,   I hope I’m not revealing… I’ve never talked to 
him about this or anything, just to be clear.   But Twitter’s now migrating away from the 
platform for the world to converse as people   and they’re now treating their users as 
creators and having Twitter spaces and now   having a tip jar for creators marketplace and 
trying to backdoor their way into finance and   realign themselves with their users and fix 
this inherent problem, that they’re an open   network company that compromises against the best 
interests of the people that use their service. Jack Mallers (00:36:12):
Facebook in the same thing with   trying to get into FinTech and issue their own… 
These companies are trying to backdoor and patch   this together. Now, Coinbase messed this up. 
Brian Armstrong whiffed. When I call him out.   obviously, he took the company public, he 
achieved great things. He built a lot of wealth,   and so kudos to him.

But I’m saying 
this because I’m very confident. I’m   not saying this to get a headline, or 
I’m not over marketing, he whiffed. Jack Mallers (00:36:40):
What he somehow did is he missed this,   he missed this. It showed a very fundamental 
misunderstanding of why Bitcoin is important,   misunderstanding of Bitcoin, the monetary network, 
and why it’s going to change the world. Instead,   he recreated an equity brokerage, but for 
Bitcoin, and he saw the innovation as creating   a casino of a bunch of coins in the same way 
that the NASDAQ listed a bunch of equities. Jack Mallers (00:37:05):
Now, all of a sudden,   Coinbase is a terrible brand. They act 
against the best interest of their users,   they act against the best interest of 
Bitcoin Core of the Bitcoin community,   and the very people that helped build his 
wealth in the first place.

He’s found himself   in the same problem that Jack Dorsey has, 
that Mark Zuckerberg has, and it’s a shame. Jack Mallers (00:37:25):
What I’m doing very flagrantly,   and taking the time to explain all this is I’m 
offering it for free. Why am I offering it… “Jack,   why don’t you charge 10 basis points?” No, because 
I want to make a point that I’m doing this the   right way. I’m acting in the best interest of 
my users, I’m taking advantage so that I can   build the best brand in the world. I’m taking 
advantage that my users can be my friends. Jack Mallers (00:37:45):
It’s a huge strategic point   on what Strike is about and how I seen 
the long term viability of my company,   and how I see the best financial experience on 
the planet evolving, is that you have to align   your best interest with your users. Bitcoin 
allows that theory unique opportunity while   allowing us to still retain a target audience 
of all 8 billion people on the planet.

Jack Mallers (00:38:07):
I’m trying to margin call Coinbase and all   of the light that built the core fundamentals 
and basis of their business the wrong way.   I want a margin call and say, okay, I’m expediting 
this market to zero. You thought you were going   to have five years for the race to the bottom to 
complete, and you’d come up with a business model?   No, you got five days. I found a flaw. It’s 
like The Big Short, I’m calling your bluff.   Let’s go, check up, come play in my 
court. I think it’s too late. End rant. Preston Pysh (00:38:35):
At this point, I think you would   agree with this, but I’m curious 
to hear your thoughts, when you’re   offering all these shit coins, altcoins on 
their exchanges, that becomes a liability.   When you’re trying to go up against 
another entity yourself, who’s offering   the purchase of Bitcoin at 10 basis points, all of 
that infrastructure, all that technical expertise,   all the forks, all that stuff becomes a burden 
and a frictional drag on their exchange, correct? Jack Mallers (00:39:11):
It’s a huge problem.

It’s a burden, it’s a drag on   the exchange, it’s a drag on the engineering team. 
It’s a huge liability. But you have to understand,   from a high level he’s made a mistake. I’m sorry, 
Brian, although not really. But for whoever’s made   the mistake. It’s a fundamental misunderstanding 
of why Bitcoin is important. It’s a fundamental   misunderstanding of how Bitcoin scales, of why the 
monitoring network is so valuable, and how what   happened in equities market and it’s a race to 
the bottom, misunderstood all of that completely.

Jack Mallers (00:39:41):
What he’s trying to do is   he’s trying to recreate the equities market and 
recreate the regulatory moat that exists within it   and that it’s really hard to compete with a lot of 
the existing exchanges, because of the licensing   because of the backdoor deals, because the 
insider trading with Stevie Cohen and all these   guys are protective over what they’ve created 
over the last 30 years, he’s trying to do the   same thing. You see headlines he’s meeting with 
the whatever institution. Coinbase is spending   hundreds of millions of dollars on lawyers and 
who knows what they’re doing behind closed doors. Jack Mallers (00:40:06):
He’s trying to say,   everyone may be able to buy and sell 
Bitcoin on Cash App, but no one’s   listing Algorand coin or left sock coin that uses 
the blockchain of putting on my left sock in the   morning more efficient, somehow. No one can do 
that, because I didn’t talk to this regulator.   He’s trying to recreate that environment and 
he just left, he totally missed the point.

Jack Mallers (00:40:25):
What he’s also ended up doing is created a   leverage long position on a world in which there’s 
a coin for everything. If that concept fails,   and it turns out all coins are just an arbitrage 
on the trend, and they have a lifespan that isn’t   much longer than today, then he’s lost. What am I 
doing? The opposite.

I’m building a long position   proxied on Bitcoin being the core nucleus of 
the best financial experience in the world. Jack Mallers (00:40:54):
Your revenues, and your   profits and your innovation comes 
in on acquire being able to achieve   financial clearance for 10 basis 
points and not 300, with Visa.   I know it’s a race to the bottom to buy an acquire 
open source money. Why not charge zero now?   I know all this stuff, I’m playing 4D chess 
with this guy, and he’s playing Bingo. Preston Pysh (00:41:14):
Dude, let’s get into this. Okay,   a person who would be hearing this, 
who is a person who owns altcoins,   is looking at it and saying the whole DeFi thing, 
you’re missing the boat there, Jack. This is just   for a new money that you’re optimizing for.

But 
there’s going to be this whole other thing with   all these digital tokens. You hear this argument 
all the time. What do you say to that person? Jack Mallers (00:41:40):
You take us in a lot of directions.   Let’s go to El Salvador, why didn’t El Salvador 
implement DeFi? I’ll tell you exactly why.   One, let’s revisit the monetary expansion problem 
that they tried to solve with central banks   and the inherent rapid inflation that they 
experience and decreasing in purchasing power   that’s outside of their control.

It’s a huge 
problem. How do they fix that? They subscribe   to a hard money monetary policy distributed and 
defended by an open network, that’s Bitcoin. Jack Mallers (00:42:08):
Now, what if they also added Ethereum? What   if they also added Algorand coin? What if they 
also added left stock coin? What if I go to bed   and realize, man, a cold pillow is better than a 
warm pillow and tomorrow invent cold pillow coin,   that is unintended spillover levels of inflation, 
which we have today, that does not solve the   problem of subscribing to a hard money monetary 
policy. Anyone in the world can create a coin and   imply inflation to your balance sheet, assuming 
that there’s a world where they’re all valuable,   which is what Coinbase is thinking and what 
altcoiners think. That is a flawed mental model. Jack Mallers (00:42:49):
Now, the other,   we need an open monetary network where there’s 
one universal open standard that anyone can   subscribe to. By plugging into it, and 
complying with the specification that   lives on GitHub, you are natively 
interoperable with everyone in the world,   and you get all the properties of cash finality, 
of instant clearance, of open network effects   and economies of scale out of the gate.

That 
solves your financial inclusion problem. Jack Mallers (00:43:17):
That, all of a sudden, “banks the unbanked”   out of nowhere, and you get the properties of 
this robust secure base layer that is Bitcoin,   and that has all the resources and engineers 
behind it. Now, if you also then introduce the   Ethereum network, also the Algorand network, 
also the cold pillow blockchain network,   now, you’ve recreated independent monetary 
networks that are not interoperable,   a financial service has to infinitely integrate 
and expose themselves to tremendous amounts of   risk that they cannot keep up with, and you have 
a broken financial system where there’s ACH,   there’s SEPA, there’s Visa, 
there’s PayPal, there’s Square.   You have a bunch of people in the world 
that will inevitably not have access to   what ends up being the more popular and dominant 
monetary networks, which is 70% of El Salvador. Preston Pysh (00:44:04):
What you’re getting at is simplicity   is vital for the network effect and enticing 
more participants into that network.

Jack Mallers (00:44:15):
Yeah. What I’m getting at is   Bitcoin the asset solves one of humanity’s 
long stated problems, which is hard money,   which is savings technology, which is a monetary 
policy that cannot be construed by a central   individual, party, government, bank, anyone. 
Then what I’m getting at is Bitcoin the network   solves instant physical bare instrument 
finality at virtually no cost that’s open,   global, ultimately inclusive to all and 
cannot be competed with because it’s an   open network that comes with economies of scale 
network effects that are just unprecedented. Jack Mallers (00:44:43):
Those are the two things that Bitcoin has   forever changed the world for. Centuries to come, 
my great, great, great, great, great grandkid   is going to benefit from. Altcoins act against 
the best interest. If altcoins are truly to exist   forever, then those things aren’t solved, and we 
actually are at ground zero.

Inherently, if you   have one brain cell, you understand that altcoins 
don’t make any sense, and they never have,   and they’re an arbitrage on the trend, because 
there are people that don’t understand that, but   want to be involved, and there’s an arbitrage 
opportunity there, and that I can create   pink wood flag coin and tell you 
why it’s important in a blog post,   because you don’t understand these 
concepts and you’re willing to buy it. Jack Mallers (00:45:23):
But the ability to create Pink Wood Flag coin was   much easier 10 years ago than it is today, it’ll 
be much harder 10 years from now than it is today,   and eventually won’t be possible because markets 
are efficient, and that arbitrage opportunity will   close.

But all we’re living in is an inefficient 
market where there’s an arbitrage opportunity   where there’s unprecedent interest because the 
Federal Reserve has perverted risk tolerance   against all assets. How much is a Dogecoin worth? 
I don’t know, I got to get rid of my dollars. Jack Mallers (00:45:49):
Do I understand what it does? No.   Am I willing to pay $100 for one? Maybe 10 years 
ago? Am I willing to pay $1 for one? Maybe today.   How about in 10 years from now? 
No, that gap is going to close,   and then you’re going to be left with Bitcoin, and 
the poor problems that it has solved for humanity,   which is arguably some of the longest dated ones. 
Sorry, I’m passionate, but that is my opinion. Preston Pysh (00:46:11):
I think everybody’s loving it. Jack Mallers (00:46:15):
I hope so. Preston Pysh (00:46:16):
Okay. This was the most popular question,   out of the 447 questions that hit the feed 
this morning.

People who heard about the El   Salvador announcement, it’s just natural. The 
next question is, who else is contacting you?   What other countries are pinging 
Strike to have a conversation based   on what they’re seeing in El Salvador, 
based on everything you just described? Jack Mallers (00:46:40):
Here’s my response to this one. Obviously,   tricky and sensitive question for, 
I assume… People can assume why. But   I want to be clear, again, I don’t have a 
commercial relationship with the country,   it’s very important that the country 
doesn’t favor me or Strike in any way.   Not only because there’s implied legal risk 
there. But more importantly, for the free market. Jack Mallers (00:47:03):
We, myself, the president and the world   should want El Salvador to support a free market 
environment where everyone’s invited to compete,   and there’s no favorite. I want to make that very, 
very clear that this is a free market, El Salvador   is allowed to use our API, just like anyone in 
the world is liking Strike.

With that being said,   other countries have reached out. Because it’s 
a really valuable problem set to solve. I’m not   going to mention any by name, and 
it’s also an open monetary network. Jack Mallers (00:47:37):
I would like to think that they reach out because   Strike offers one of the more competitive 
experiences on top of the world’s first open   monitoring network, and can do some of the most 
impressive financial services in human history. I   would like to think as a company, we’ve reached 
that level. So, we’re going to try and service   customers just like a pupusa lady, just like a 
president, just like Russell Okung in the NFL,   just like Saquon Barkley, just 
like a lot of musicians, just like   any alleged, like my step mom, just like anyone, 
and open and entertaining all conversations. Preston Pysh (00:48:14):
More than two countries? Jack Mallers (00:48:17):  A lot are interested.

Listen, 
if you’re a sitting president,   what problems are you trying to solve? Probably 
monetary expansion, the macro environment, your   position relative to the dollar, and the quality 
of life for the people living within your country. Preston Pysh (00:48:35):
Here’s my gotcha way around this. In El Salvador,   Strike is the number one app in the app store 
for the country. Are you number one in any other   country? If not, which countries do you see your 
app trending in a very aggressive kind of way? Jack Mallers (00:48:57):
We’re actually not actively   launched in any other countries. Actively 
beta testing, sure. Our roadmap to launch…   For everyone listening, I walk a dangerously 
fine line where I don’t want to be too public,   for obvious reasons.

But I also I love those that 
are supportive of Strike and everyone on Bitcoin,   Twitter and this whole community. I want to be 
very transparent and vocal about everything. Jack Mallers (00:49:22):
I can say we plan to aggressively scale   in the developing world, more and more. What we 
achieved in El Salvador, I think was no mistake,   it was very aligned with the company’s vision 
and intention of enabling economic freedom.   Then we also have very big plans in the developed 
world, and what we’ve done in the United States,   we have an aggressive roadmap here in the 
US, we still have our Visa card to launch,   we have a direct deposit product where, 
publish the blog post whenever I feel like it.   Then we’re going to do the same in Europe and the 
same in the UK. Say that. I’m not going to commit   to anything, especially nowadays, I have to be 
very careful, I have a general counsel now that- Preston Pysh (00:49:59):
It’s getting real.

Jack Mallers (00:50:01):
… always nervous when I   go on podcasts, that I get 
fired up. Got to be careful. Preston Pysh (00:50:06):
It’s getting very real Jack, very real.   Talk to us about the vision that you have for 
this direct deposit and how that plays into…   From a user’s perspective, walk us through 
what that experience would be like. Jack Mallers (00:50:20):
It’s super simple. You just   line up your direct deposit to Strike, just like 
you would to your traditional checking account   that you do today. We give you an account and 
a routing number. The unique feature set that   we believe to be important as you’re allowed 
to then decide what percentage of that direct   deposit gets auto converted and deposited 
into Bitcoin on the application. Again, we’re   optimizing for the best financial experience, not 
the best bitcoin wallet, not the best Lightning   wallet.

I think I can build the best financial 
experience in the entire planet. I think at the   core nucleus of that is access to Bitcoin, at 
virtually no cost, or as cheap as I can afford,   and in a variety of ways. And rewards from a card, 
and buying it, and direct deposit conversion. Jack Mallers (00:51:07):
I think Bitcoin is the   best savings technology in the 
world. I think nonworking capital   that you get from your paycheck should be 
saved and preserved in an asset that acts   in your best interest, and that’s Bitcoin, 
and we want to make that experience great.   That launches pretty much whenever I have 
a second to publish another blog post. So   excited about it and that’s why the Bitcoin tab 
lays down this foundation that not only allows   you to buy bitcoin, but allows you to interact 
with the asset. We plan on a variety of ways. Preston Pysh (00:51:37):
From a priority standpoint,   and you’re just looking at 
all these things that you know   you just got to move out on. For you, Jack, 
what are some of the top priorities for you? Jack Mallers (00:51:49):
What’s really funny   is when I pitched the company in this whole 
idea, I closed the seed round, April 1st   2020.

It’s just over a year saying I had any 
funding, and I was allowed to hire one person.   Obviously, a lot of growth has been experienced, 
and it’s been fast, but I’ll never forget,   I told who’s now my COO, “Give me 18 months, and 
I’ll have achieved this vision, I promise. I know,   it sounds crazy, but I got the hardest working guy 
you’ve ever met, I’m a soldier, trust me on this.” Jack Mallers (00:52:22):
It hasn’t been 18 months yet.   Within that 18 months was achieving cross border 
payments over Lightning, achieving a Visa card   direct deposit, and everything you’re seeing 
today. I would like to complete that roadmap,   and that involves launching in Europe, that 
involves the direct deposit product here in   the united states, that involves our Visa card, 
that also involves exposing our API publicly. Jack Mallers (00:52:47):
I think that was a very   big turning point in Facebook’s lifespan 
is when they opened up the API and Mark   Zuckerberg realized that he couldn’t hire 
everyone on the planet to build everything   that deserved to be built on the world’s 
best social network. I feel the same way,   in allowing people to build tooling 
on top of the infrastructure we have.

Preston Pysh (00:53:04):
Is that already live? Jack Mallers (00:53:06):
It’s live with select partners   that will probably be announced relatively 
soon, but not open to the public just yet.   If I had to guess, in priority order, it 
would be something like direct deposit,   the Euro in Europe, the API, which comes 
with a slew of tools for the acquiring side. Preston Pysh (00:53:30):
If I’m a developer, just   walk us through on the API 
front, would it be similar to,   you go to a small website, and you can 
check out by using your Amazon account   to pay for something but yet, you could do 
this with Strike? Is that what that would be? Jack Mallers (00:53:46):
Yeah, exactly.

Well think of it   this way is that I think the core innovation at 
Strike is again, allowing cash collateral to be   interoperable with this open monetary network, 
this new novel innovation of monetary network.   What that then enables is the best financial 
experience in the planet. We’ve over invested   in that experience for the consumer. Made a 
particular statement to go global because I   think the fact that we are an open network 
company is one of the biggest upsides to the   business is that we can service all 8 billion 
people. So, we should be aggressive about it.

Jack Mallers (00:54:19):
But all that to say, what if you can get that tool   set and do whatever you want? People are obsessed 
with DCA for appropriate reasons. You can build   a tool that DCAs for you every second, you could 
build your own paywall tool, you could integrate   with Shopify, you could build it into your own 
website. Stripe with a P, not Strike, but Stripe,   with a P is $100 billion plus private company, 
they don’t have a consumer app. It’s just an API. Jack Mallers (00:54:46):
Think about if we expose that to the world,   what we would enable the world to do. The insight, 
it’s actually Mark Zuckerberg interview that I   find fascinating is he said, “Initially you’d 
think, keep everything in house. Hire all the   smartest people and try and build everything 
you can.” What he realizes is that’s never   achievable and actually acts against the best 
interest of innovation. What if you take the   opposite approach, is you’re never going to 
be able to hire everyone that has an idea.

Jack Mallers (00:55:13):
What if you just open up the API   and let the world build with you? That’s what 
I want, I want the world to be able to utilize   what we’ve done internally and build whatever 
they’d like. So, yeah, check out on our website,   paywall tools, auto DCA-ing, and probably 
1000s of ideas that I can ever come up with,   because I’m dumber than a lot of the world. Preston Pysh (00:55:35):  Jack, when I think about the approval process 
for you to get the app listed in El Salvador,   walk us a little bit through that process 
from a policy or just a regulatory standpoint,   like the timeframe that’s associated with 
it, so people have an appreciation for   the struggle that’s associated with just getting 
an app listed in a country like this. Then it’ll   help people understand how the process takes 
when you’re going into other countries as well.

Jack Mallers (00:56:05):
Yeah, are you being very polite in my ability   to excuse myself of not being watched all over the 
planet? Because I did sift through the questions   below your tweet, and I did see, when this country 
from probably all countries. No, the answer to   your question is, it’s obviously very difficult. 
One of the problems that has been birthed from the   division of the world generally, and the fact that 
we have borders, different countries, in different   jurisdictions, different regulatory bodies, but 
then also different financial infrastructure.   We have SEPA, we have ACH, is that there’s just 
different rule sets, there’s different compliance. Jack Mallers (00:56:40):
There’s AMLD5, there’s MSBMTLs,   and applying to them, working with different 
regulators, getting approvals, it’s a very   complex thing. Then on top of that, once you do 
is integrating with the local financial system,   and ensuring a great experience is only 
additive to the difficulty. Other processes   are complicated, especially a place like El 
Salvador, it’s extraordinarily unclear. In fact,   I didn’t even know really what I 
was doing if it was allowed, until   I met the government, and they were like, “Oh, 
this is awesome, dude.

This is sick.” Because I   went into the meeting, like, oh, man, am I going 
to go to jail, because it wasn’t really clear. Jack Mallers (00:57:23):
Anyways, it’s complicated,   relatively unknown. Obviously, what we’re 
doing is new and a first. But all that to say,   I’m obviously tremendously committed, and we’ll 
stop at quite literally nothing to get it all   done. Actively working on it and working 
through it. But not easy, to say the least. Preston Pysh (00:57:45):
Well, if we do have any foreign   representatives from regulatory bodies that are 
listening to this conversation and you want to   green light Jack in your country, hit him up. 
I thought of one more thing, the Indy race.   If this doesn’t just demonstrate to people 
how busy this guy is, he was the guy behind   the IndyCar, the Bitcoin IndyCar, and this 
was just something else that you just happened   to pop out during all this other stuff that’s 
going on.

Talk to us about the experience, what   was the most memorable part of it for you? And 
maybe something that surprised you about the whole   thing that maybe people would find interesting 
or a funny story or something like that? Jack Mallers (00:58:31):
Yeah. First and foremost,   speaking to how busy I am, and such, it 
also implies how busy we are as a company,   which implies my team. People, their takeaway 
should be how tremendous group of individuals   Strike it really is.

It’s comprised of the best of 
the best, and they care more than anyone. I think   that, that is the key ingredient to developing 
and delivering on change, is just caring enough   to actually do it, and these people care, more 
than anyone in the world. Shout out to them. Jack Mallers (00:58:58):
Oh, my God, it was an amazing experience. I think   what it says is, again, we’re building an amazing 
consumer brand. Whether you’re a president,   whether you’re an IndyCar driver, whether 
you’re an NFL player, whether you’re a barista,   whether you’re a pupusa salesman in El Salvador, 
you call Jack, you call Strike.

You don’t call   Brian Armstrong, he doesn’t understand open 
source development and the Lightning Network. Jack Mallers (00:59:21):
I think it was great,   and I filled all of these calls. The best parts 
of me was the message that Ed Carpenter and his   team wanted to deliver. They wanted to race for 
more than potato chips and Monster Energy Drink.   What does that mean from a high level? That means 
that they want it to plug into this open system,   and this cultural phenomenon. Although they 
aren’t technologists, although they aren’t   a financial services firm, although they 
aren’t an acquirer paying 3% to be said,   they race cars. But that doesn’t mean that 
they can’t plug in and be additive to an   open system and to a movement that 
means tremendous amount to humanity.

Jack Mallers (00:59:56):
It was an overwhelming sense of   emotion and purpose that I got to live through 
this team. I played the smallest role possible,   which was, sketch the design in the car and 
ensure everything was put together and we   can get it open source devs. It was one of the 
coolest things in the world, man. I can say,   I like to shout out… This is a 
great story for the listeners,   Saquon Barkley, shout out, Saquon, he’s 
become a tremendously close friend of mine. Jack Mallers (01:00:26):
He jetted in that morning to   make the national anthem, and it was me, him and 
Russell Okung. Russ is barking at the PNC Bank car   and literally is like, “How much Bitcoin do I have 
to give you to take that dirty financial firm off   your car? You guys are gross, you don’t understand 
what you’re representing.” They’re trying to shoo   us away. Security’s trying to get… This guy is 
6″8′, what, 300 something pounds, he’s a monster. Jack Mallers (01:00:55):
I got arguably the best running back   in the NFL to my right, a Super 
Bowl winning tackle to my left.   These guys collectively could bench a car, 
and they’re yelling at the PNC Bank car.   Saquon standing next week for the national 
anthem.

It’s the Bitcoin car next to the   PNC Bank car. You’ve got a hoodied up Bitcoin 
developer and an NFL running back for the New   York Giants standing next to some suited up nerdy 
banker and some dweeb wearing a PNC Bank suit. Jack Mallers (01:01:24):
Then, Saquon after that jetted   back to New York to make practice. 
If that doesn’t exemplify the true   phenomenon that Bitcoin is and it doesn’t matter 
who you are, Bitcoin reminds us that we’re much   more similar than we are different. Saquon, yeah. 
Saquon probably lives in a big house, probably   dates awesome girls and drives nice cars. 
He cares about Bitcoin, just like you and I. Jack Mallers (01:01:48):
That was so cool for me to   experience. It was amazing. So, shout out 
to Ed Carpenter.

On the tail end of it,   now we have seven figures to donate to open 
source development, and that’s probably the   most important takeaway. It was awesome 
and proud to play the small role I did. Preston Pysh (01:02:07):
Did Russell take the gas out of the PNC car? Jack Mallers (01:02:11):  Probably, or maybe they took the gas out 
themselves when they realized if they didn’t- Preston Pysh (01:02:16):
How pathetic they were. Jack Mallers (01:02:18):
… a big lineman was going to find   him after the race. No, Russ is obviously the man. 
What he’s done for Bitcoin alone is so impressive. Preston Pysh (01:02:28):
Yeah, I’m such a fan of him,   I got a chance to meet him down in 
Miami, and we had a chance to talk. Jack Mallers (01:02:33):
He’s the best, man. Preston Pysh (01:02:33):
He’s amazing. Such a nice guy,   just all around great person.

All right, the NCAA 
now, all the rules are changing, as far as them   being able to receive payments. I would imagine 
this younger, fresher crowd is excited about   Bitcoin, just like you and me. Did you notice 
how I slid that, I’m young like you as well,   even though I’m not even close. But I 
would think this is a big opportunity. Preston Pysh (01:03:03):
When you think about the presence   that so many of these influencers have and how 
many people they’re able to reach out and touch   because of their follower base, I just 
see this as a massive opportunity. Are   you working with any of them, in 
addition to people like Russell,   that we’ve already talked about. 
What’s going on in this space? Jack Mallers (01:03:21):
Man, you’re too smart for me,   putting me on the spot.

Yeah, we may be working 
with an athlete or two and involved in what’s   happening, because I think we should, because 
I think it embodies who we are as a company,   who I am as a man, and what’s happening with 
the NCAA. Finally, this is a long outdated   rule change. I’m happy to see it, and I want 
to be involved, and I want to be helpful.   Some folks have reached out, we’ve done some 
reaching out, and definitely will be involved   and want to continue to be involved 
and be helpful.

Leave it at that. Preston Pysh (01:03:59):
To be honest with you,   people that are listening to this, if you 
know these types of people in your life,   or maybe you have one friend that’s really going, 
this is huge. If they have a million followers   on Twitter, or Instagram or whatever, and they 
just even start talking about this in a small way,   it has just a massive impact to just 
get all this knowledge out there about   Bitcoin and about the community. I’m 
real excited about what that means. Jack Mallers (01:04:26):
Here’s the deal, this goes back to the Saquons,   to the Russell Okungs is that athletes operate 
as independent brands because they should.   They’re independent businesses. These guys treat 
them as such, these guys being the NFL, the NBA,   these organizations, they prey on the bodies 
of these individuals.

If Russ tears his ACL,   they’re never going to talk to him again. 
They price their contracts in dollars.   The hole spiel. Same for collegiate athletes, but 
even more so because they don’t operate in such a   lucrative market like the NFL. So, this is a huge 
opportunity for them to lean into the fact that   they are independent businesses and they do build 
these big brands and these big followings and they   get to monetize that, and Bitcoin should we be a 
huge part of that, persisting in storing wealth. Jack Mallers (01:05:12):
The average NFL career is just over three years,   I don’t care what you do, that’s not generational 
wealth, no matter if you’re Tom Brady,   or practice team player that’s on the punt 
team.

Then even more so as a collegiate athlete,   who knows what can happen? You can get injured, 
you can have a change of heart and passion. You   want to pursue interests, like being historian and 
being able to monetize yourself as an independent   business and persistent store that wealth 
in something like Bitcoin is a fundamental   human right, in my opinion, and I’m just really 
passionate to help them out in enabling that. Preston Pysh (01:05:44):
All right, Jack, a hand off for people to   learn more about you, Strike, whatever, just 
fire away where you want to point people. Jack Mallers (01:05:54):
I’m less concerned about   me. You could go to strike.me is our 
company website, download the app.   As I’ve hinted at, the current form of the 
application, I’m tremendously proud of,   but I think job not finished, as Kobe Bryant 
would say. We have a lot of work to do, and   I probably have half a dozen announcements over 
the next 60 days that are tremendously exciting. Jack Mallers (01:06:16):
Strike.me. We’re @ln_strike on Twitter.   Then my full name is all my handles.


wasn’t smart enough to come up with some   anonymous profile back in the day. I’m Jack 
Mallers on Twitter, I’m Jack Mallers everywhere.   I was not too long ago, I dropped out of college, 
really did not know what to do with myself, and   Bitcoin has allowed me to be passionate, ambitious 
and contribute, and play a small role in something   that I think will forever change the world. I’m so 
thankful for the community’s support in my work,   and all of the love and support I get and strike 
Gets, and just allowing me to be a part of this   thing.

I never take it for granted. I just 
want to let everyone know that I love them,   and I’m appreciative of this journey that we’re 
participating in together. Hit me up at any time. Preston Pysh (01:07:08):
I also want to highlight Jack,   Peter’s podcast, What Bitcoin Did, where he 
interviewed you and you guys got into a lot   of details about how the whole El Salvador 
thing went down. I’m going to have a link   to that in my show notes because I just 
thoroughly enjoyed that conversation,   and we’ll have links to the stuff 
that you highlighted as well. Preston Pysh (01:07:27):
I know you said that your   name is Jack Mallers on all the platforms, 
but as far as I’m concerned, Fox Business   has termed you Jack Ballers.

Jack Ballers, 
thanks for coming on the show. It was an honor   to have you here, and I really look forward 
to doing it again sometime in the future. Jack Mallers (01:07:43):
Thank you, brother. Good to see you as always. Preston Pysh (01:07:46):
Hey, thanks for everybody   listening to the show. If you enjoyed the 
conversation, be sure to subscribe to the   show on whatever podcast app you’re using. We 
really appreciate that, and if you have time,   leave us a review. Thanks for joining us this 
week, and we’ll catch you next Wednesday. Outro (01:08:01):
Thank you for listening   to TIP. To access our show notes, courses, 
or forums, go to theinvestorspodcast.com.   This show is for entertainment purposes 
only. Before making any decisions,   consult a professional. This show is 
copyrighted by The Investor’s Podcast Network.   Written permission must be granted 
before syndication or rebroadcasting.

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