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Anything out of the box, you just wanna go for it. Hey everybody, welcome to another one of Hashing It Out's personal episodes, and today we're actually gonna get personal with Stephen Pair from BitPay. How you doing Steven?

I'm plenty good. You know, it's pretty good. Monday here, we just lost an hour of sleep, but I'm okay with it. You know, I'm having a good start to the week. So if you could, either brief or long-winded, however you wanna tell stories, you can reintroduce yourself to our audience here at hashing it out.

Well, my name is Steven Pair and I'm the co-founder and CEO of BitPay. BitPay is a company that's been around since 2011, and processing crypto payments, starting with Bitcoin only. It was the only crypto in those days, but we now support about 14 or so different cryptocurrencies on the platform. And, yeah, been doing this, this for a little while now.

Absolutely a year in crypto is what they call in crypto and OG. Right. Or do you call yourself an OG or you can't now It's too, you know, that's not cool.

I guess so, there's probably, like at the first conference in 2010, actually, 2011, I think there was one in , New York, about 50 people showed up to that one. So I guess that qualifies.

Nice. Have you personally found that it's getting harder  to run a company in crypto that kind of aligns with some of those original tenants of crypto? Or is it just a welcome challenge of how we had to adapt, or, to cross that chasm into like, you know, mass adoption?

I don't, I don't think the challenge is any different than it was a decade ago or so, in that regard , you know, for me at least, it's just, really always been about, this new technology we have and, and, and how it can be applied to make things better for people.

Awesome. I think it was like right around last year or the year before we're in crypto, we started throwing around this phrase, custodial wallet, self custodies, third party custody. I, for one, think those terms are a little too technical for the everyday user, but we've now embraced them where we're going full tilt with them. How does BitPay allow users to maintain some of their custody of their funds that they use with the BitPay wallet?

Yeah, we've always, you know, our wallet, we've always taken a self custodial approach. And part of that was really just mitigating our risk as a company. You know, it was very unclear, a decade or so ago, whether, you know, a company like ours would be allowed to custody Bitcoin for somebody, and still be in compliance with regulations and whatnot. And so, for that reason we didn't build a custodial service. And part of it was just on principle. We felt like people should have possession of their own. So we've always been in that sort of self custodial camp. Also, in those days, Mount GOX and others that were getting hacked, money stolen out of these accounts, and just for our own not wanting to be a target and wanting it to take kind of step at a time with our company and what we were comfortable with doing. We elected not to take custody of people's Bitcoin, because we felt like it would make us a target. It's a big responsibility to take on that amount of large deposits from people and manage that well from a cybersecurity perspective.

And also as we see with what happened with the banks this weekend, just from an investment perspective and making sure those deposits are covered.

I heard the very last part that you said, referencing what happened just this past weekend with Silicon Valley Bank. I'm gonna try to patch us in with another question. My next question was gonna be - what was it that initially pushed you into like, okay, you've learned about Bitcoin, you, you, you fully understand it. What was it that pushed you to like, okay, well now I need to be the founder of the largest Bitcoin processing company on the, like, well, I don't think that's what you thought, well, you first started, but like, why was it, why did you see such a need for, okay, there needs to be bit Bitcoin, bitcoin payment processing that makes it easy for, for users, easy for the, you know, every day.

Yeah, so my co-founder and I, Tony, , he and I were, , so we went to college together. , I, you know, I'm a computer scientist, you know, studied computer science at Georgia Tech and was, , a big fan of something called Digi Cash back in the day. It was like early 1990s, and it was a cryptographic payment system, the first cryptographic payment system. And, , but it was centralized. And when did you cash when bankrupt, that payment system went, went away. , and, , you know, that I, I got really intrigued by that, that notion. And back in those days, there wasn't really a money for the internet. I mean, people were just starting to kind of use, actually, they weren't using credit cards yet on the internet. , so there wasn't really a money for the, , a payment system native to the internet.

And I just got fascinated by that topic and then started just studying money in general and central banking, the history of central banking and all that kinda stuff. And just, just became very, , you know, interested in the topic. And, , and you know, I had been sort of watching projects or seeking out projects that were trying to do something in the aftermath of, , Digi Cash going, , bankrupt. You know, I was just seeking out other projects that were kind of trying to do something like that. , and even with digit cash, it was, while I used cryptography, , to, to secure the payment system, it was still centralized. So they didn't really, digi cash didn't really solve that problem of centralization. , but when it went bankrupt, , I think a lot of people started thinking, well, how, how could you really build a payment system for the internet that what didn't require like one company to process all the payments?

And, and so yeah, I just got fascinated with that. And, , you know, to, , by the time Bitcoin came around, you know, say fast forward from early 1990s to now late 2010, you know, 22 thousands and 2009 when the blockchain launched, I heard about Bitcoin. I kind of dismissed it early on. , I think actually studying a lot about money and banking. You know, I kind of thought in those, with those early headlines around Bitcoin, it was like, run an algorithm and generate money. And I was like, well, what's the constraint on that ? And, you know, I just didn't think much of it at the time. , and so it wasn't until late 2010 that I really started studying. I read the Satoshi White paper, , and then I realized what mining was all about and, , securing the payment system. And, and that's when the light bulbs went off.

I was like, this could be really huge. And it, and it also coincided with, you know, with a a point in time where I was ready to get, , back into a small company, I, I'd had the most fun in my career working in a small company. And, and so, , even prior to starting BitPay, I've been, and unrelated to Bitcoin, I'd been trying to think of, you know, different things like different small, you know, companies that I could start, different products I could build, , you know, and just started, had been thinking in that direction already. , and then in the aftermath of oh eight, , I reconnected with Tony. We knew, we went to college together, knew each other from college. I reconnected with him around the aftermath of oh eight. He and I were both trading options and different things like that.

And yeah, just kinda reconnected actually. We can thank Facebook for that. And, , and so, , , you know, I I told him about, you know, Bitcoin and probably early 2011, and, , you know, he was kind of dismissive of it at first as well. , and I started trying to, I I was mining. I, you know, bought all the graphics cards in, in Atlanta and built up mining rigs, and that was a lot of fun. , but yeah, so one thing that led to another, he and I started talking about this, and I'm like, this, this is really, there's something here. I wanna figure out a company around this, a way that I can do something and, and get back into a small company. I didn't even necessarily need to start a company, but, , just wanted to get back into a small company.

And this was an, a technology that was really exciting to me. And, and so, , you know, I tried a couple different things and, and Tony and I started talking a little bit more about it. And, , you know, they're already, , quite a few exchanges. There's Mount GOs and others at that time. And we, we felt like we wanted to build something, a platform that enabled people to, you know, utilize the technology for what it, what it was built for, and derive, you know, real value out of it as opposed to, , the exchanges at the time, which are providing a valuable service. But they were catering to people that were investing and speculating on the future rather than, than actually creating that future. And, and so that, that was genesis of the idea. Tony actually, you know, wrote me an email, , you know, talking about, let's start a company called bpay. And, actually, I'm not sure he had thought of the name yet, but he wrote an email, long email about the concept, and, and, , I, I replied back. Sure. You know, let's do it. And that was the start of the company.

Man, it is wild out time flies. I I have a few bid pay wall since then. , have you, I have a question for you. You said that Tony was, , dismissive. Now we're, you know, fast forward, what, 12 years from 2011 or 13? Come on math. Do me right Math. 12 years. Yeah. So do you, , do you still find, even with like, you know, you all have had immense success at bid pay. Do you still find people are dismissive when you first introduce them to, to crypto, to Bitcoin?

Oh, yeah. Oh, of course. Yeah. And, you know, I don't, I, you know, back in the day I used to spend a lot of time, you know, explaining why this is a, you know, a, a big thing and, and, and an important thing. , but, , I do less and less of that. There's a lot of people out there that, that do that and do it well. , but yes, absolutely today, you know, it, it, it still, , still happens, you know, different, , friends in different circles or queens as I come across and, , you know, that, , don't really know a whole lot about, but actually are successful people. And, , I mean, some of 'em like absolutely hate Bitcoin. They're like, they, you know, they, they hate the concept of crypto and they think it should be made illegal and banned and and whatnot. It's crazy. But, , these are otherwise intelligent people. , but you know, they just don't, haven't really thought. I don't, I don't think, , enough about it. , you know, there's a lot of tons of misconceptions out there, even still today.

Absolutely. I, I found like the less friction that people have in, you know, the traditional system, , the more likely they are to be very apprehensive. And just some, like you said, dismissive, right? They're like, yeah, no, that's not, and I have no problems. I have no problems. So, , but anyways, , this one's gonna be an outside of the box question. Maybe you've heard it before me. You haven't. What's the most frivolous thing that you've bought with crypto that now would be worth thousands of dollars

And now would be worth thousands of? Well, , , I mean, I always joked in my house I'm sitting in right now, , it's a 20, 20 or 30 million house.

Well, yeah, I mean, but you know, you don't, I mean, you have to diversify. You can't, like, you know, as you, you know, I made an investment in, in Bitcoin and, and, , it obviously grew. And when that grows and it becomes a significant part of your, you know, savings, , you know, it'd be, it'd be kind of a little bit, , foolish not to diversify out of that. And, , even if you do think there's a great chance, it's gonna go to a million dollars one day, right? Mm-hmm. <affirmative>, , diversification. And it's still, , a wise thing to do even today. You know, it's like, , I don't think about it in those terms, but, but yeah, I, , you know, I joke and I don't consider, that's not really a frivolous purchase. , so, you know, I think a home is, is a good thing to home. Oh,

Yeah, I'm talking about a bag of chips. You got any thousand dollars basket chip? No.

You know, I just, I don't, I don't tend to be frivolous. I, I don't, I don't buy the fancy cars or whatever. And, , I, I'm just not, just not in that way, I guess , , yeah, I'm trying to think what's, what might be frivolous. I've purchased along the way. I mean, there, there are things that I've spent more money than I otherwise would have on, of course, but, , maybe vacations and things like that, that we spend more on nowadays. But, , yeah, nothing, , nothing that was just like off the, oof,

See, I have some stomach churners in 2017, I paid my cell phone bill and my rent and Bitcoin the whole year just outta spite, really? Yeah. Like I was telling my family like, hi, you should have gone on board. Look at me now. I told you this stuff is real. And looking back on it now, probably shouldn't have done that, but,

Well, So a lot of people talk about spend, so it's a, it's a really interesting topic because everybody talks about, well, you should be aler and you shouldn't be spending, and all this kind of stuff. And I always say, I always tell people, you're not a true hot unless you have nothing but Bitcoin to spend . And, and if you want to eat, if you wanna have lunch or dinner, you're gonna have to spend Bitcoin. Cuz it's all you have that's a true hot, right? , so at, at some point, you, you know, your hunger outweighs the need to hang on to, to Bitcoin and, and see it, see how far it will, will run. , so, , so spending on, on that, well, if all you had was Bitcoin, then the only option you had to pay for that, that bill was, , was to use Bitcoin.

but people talk about, well, why would anybody wanna spend anything when, , you know, when, if the price is gonna continue going up? And, and the answer to that is, well, you know, you have to live your life. , you need to have a place to live. You need to put food on the table. , you have to buy a car, transportation, vacations and all that kind of stuff. And, you know, you can't, you can't live in a house built out of Bitcoin. You can't, you can't take vacations to, you know, Bitcoin island, . It's like, you've got to, you've got to spend it, right? Mm-hmm. <affirmative>. , and in the case where you really wanted to hold onto the Bitcoin, you probably didn't have enough Bitcoin yet. So you probably should have had a little more Bitcoin, , in your savings than, , so that you would've felt good about spending some of it on, you know, when the price went up and, you know, pay that bill with, with Bitcoin.

So maybe you had a little too much Bitcoin that you wanted to get rid of, or what a lot of people do is they spend and replenish, , which to me is a little, it's a little silly. If, you know, you're gonna have a, , you know, you could look out three months and you say, I've got these bills and those bills, then why not go ahead and get Bitcoin now and, , then use it to pay for things, and you don't necessarily need to replenish. You're just using it to pay for things. , but even, but even that sort of spend and replenish idea is good in the sense that it, it forces you to go out and find places that will accept your Bitcoin, that you can use it to buy things, and it creates mm-hmm. <affirmative> more activity and more, , you know, it helps the Bitcoin economy, as it were. And, , , and if you, everybody was out there trying to spend their Bitcoin on things, even if they were spend and then replenish, , you know, it might be a little extra work for you to do that replenishment and do it that way. , but you're at least helping drive and, and, and, , , you know, create that Bitcoin economy. And that's a good thing, you know, it helps, , you know, if everybody was doing that, then you'd have a lot more places that accepted Bitcoin and, and, , , you know, it just just makes it easier to, to live your life in crypto.

Absolutely. Yeah. It's, it's slow moving. I think there's two states now that even lets you pay your taxes in Bitcoin. Yeah. , oh, was it Oklahoma and Dakota? Idaho. Anyway, I know it's one of the northern states in the us but anyway, I don't think I would, but there's some people out there paying their taxes with Bitcoin, one or two . , what, so what, there's thousands of tokens, right? Like thousands of currencies, which is part of the hardest part of, you know, what I do podcasting. Everybody naturally in my personal life comes to me, you know, what should I do? What, how do I, and I've, I'm almost at a point where I'm like, don't talk to me about it. I don't wanna, I'm not giving any advice. You're just gonna have to read the papers. But out of the thousands of tokens and quote unquote currencies, , BitPay has kept kind of a lower nber of ones that they process, , which is a good thing, I think. Like, how come you're so stringent about what you do and don't process? And, , you know, yeah, that's a, that's basically the question. Why, why so stringent?

Well, I don't think we're gonna see thousands of coins take off as, you know, payment methods. And, , , we, we try to look at the coins that have high market cap, a lot of interest, you know, Ethere, , you know, , U S D C, some of the stable coins that we support, , light coin, Bitcoin cash, , just ones that are sort of in the top of the, the list there in terms of market cap. , because market cap is kind of a reflection of interest in adoption. And, , and then they, they need to also be good for actual payments. , so, but, but I don't think you're gonna see like a thousand different payment options. What you will see are, , you know, more and more options, more and more ability to convert from one token to another that'll become easier and easier in either a centralized exchange or a decentralized exchange. and what people will do is just, they'll just need to convert into whichever token is, is accepted for payment. And, , yeah, I think that's, that's basically it. We kind of look at it like, what do our merchants want? , what are they asking us for? There've been a few, we've added just because a high profile merchant wanted it. , not necessarily we had any conviction about it being, you know, being a great payment method or great, you know, having a huge amount of adoption. , but it's kind of what our, what do our customers want? , , and, and oftentimes our customers are, you know, when we're in a competitive situation trying to win a customer, they're looking at what we offer versus what another payment processor would offer. And so we also have to take that into consideration that our competitors might be offering, , some tokens that we don't, and, , and that might matter to some of our customers.

And, and so, , so yeah, that's, that's kind of how we think about those things. Nice. , you know, and I think, you know, I I, I'm definitely, , a proponent of Bitcoin specifically. I think, , yeah, I think the technology there is is solid. I think, , the, you know, it doesn't change very, you know, it's, it's pretty stable in how it works, and well understood how it works. And, , you know, and, and yet, you know, as bullish as I am on Bitcoin, , it doesn't mean that Bitcoin is, is not susceptible to competition, right? So mm-hmm.

In this Hashing It Out Personals episode, Dee talks to Stephen Pair, co-founder, president, and CEO of BitPay.com. Dee and Stephen discuss the history of Bitcoin from the early days to the Lightning Network, and to its role in modern economies. Stephen sheds light on his introduction to crypto and how he still manages to have fun in the industry. 

<p>Hashing It Out is a highly-technical bi-weekly show that brings you the pioneering developers driving the Cypherpunk movement. In each show we take a deep dive through privacy, sovereignty, and network state technology with some of web3's most influential innovators.</p><section class="footnotes-container">&nbsp;</section>

Hashing It Out is a highly-technical bi-weekly show that brings you the pioneering developers driving the Cypherpunk movement. In each show we take a deep dive through privacy, sovereignty, and network state technology with some of web3's most influential innovators.

Dr. Corey Petty

Jessie Santiago

Demetrick Ferguson

Hashing It Out

<p>In this Hashing It Out Personals episode, Dee talks to Stephen Pair, co-founder, president, and CEO of BitPay.com. Dee and Stephen discuss the history of Bitcoin from the early days to the Lightning Network, and to its role in modern economies. Stephen sheds light on his introduction to crypto and how he still manages to have fun in the industry.&nbsp;</p><section class="footnotes-container">&nbsp;</section>