 Hi, my name is Natasha Tiku. I'm a senior writer with The Verge and I'm here with Tony Gallipi, the co-founder and executive chairman of BitPay. Hi, Natasha. Hi, nice to meet you. So this is Bitcoin's biggest presence at CES ever, right? Bitcoin also happens to be in the news a lot right now. It started a few days ago with a drop in stock price and then recently the second largest exchange was hacked and $5.1 million is in the ether somewhere. So it's kind of a strange time to have this more professionalized presence and then yet like the headlines are different. So how do you feel about that going into it? Well, Bitcoin is a new industry and there's certainly lots of challenges. And we've had to really reinvent a lot of our inner workings and accountings to be able to function and survive in this new digital currency age. Because when you work with digital currencies, when they move, they move and you can't get them back and you can't really trace them. So you really have to be very careful about everything you do from a security perspective, everything that you build, every server that your code is written on or deployed on. You need to understand who has access to that and who potentially could get into your system. So we've been coming to CES for four years. This is our fourth year here. In the first couple of years there were two or three Bitcoin companies and then this year we have 10. So there's a tremendous growth from last year to this year in terms of the types of Bitcoin companies that are growing up to the point where they have a marketing budget and they've gotten some venture funding and they can get out. So there's a great variety here. We've got two exchanges, two wallets, a couple of merchants, an ATM, of course Bitpay, the leader in merchant service. So the other big difference is the amount of investment that these kinds of companies are getting. Bitpay in particular has funding from a number of high profile individuals, Ashton Kutcher, Matt Mullenweg, Founders Fund, which is Peter Thiel's venture capital fund. Can you talk a little bit about how the infusion of venture capital has affected the industry? Yeah. So when you compare, let's say, 2013 to 2014, in 2013 there was I think about 80 or 90 million dollars of venture capital invested in Bitcoin companies. In 2014 it was almost 400 million dollars. So about a four times growth in one year. And it kind of mimics the early days of the internet around 1994, 1995 when companies like Amazon and eBay and Dell were really getting started and were starting to build their teams and build their products. So we're kind of at that stage in Bitcoin's life cycle now. But venture capital does a couple of things. It allows us to hire really good engineers. We have to develop software because we're a software company. And just talent is extremely limited. Every software company from top to bottom is short on developers. So you need to be able to recruit and find and retain the best talent you can. We also have sales, marketing, compliance, finance, all the things that you need to run a business, especially a business that handles money. So all that takes time and resources. So surely if this is a showcase it couldn't have felt, I mean from the people I've talked to it seems like this is just a hiccup, like you said. It's a new market. It's a new long term trajectory. But surely it can't feel good to have a showcase right before a bunch of little $5.1 million hiccups right before you go in. Yeah. Yeah, I mean look, Bitcoin is a young industry. There is going to be these hiccups. And the best thing we can do as a company is to try to build our service to absorb as many of these speed bumps as we can. And certainly we want to insulate our customers and insulate our merchants from any drama of the day that happens in Bitcoin. So we try to do that as best we can. We try to make sure that our systems are as good as they possibly can be. In the events that happened this week, our service was just fine. There were no interruptions to our service. Some of our merchants were getting questions from reporters. And we said, yeah, we insulate you guys from that. There's really nothing to worry about. Because we've seen these incidents take place, the entire industry learns from every mistake. So whatever the root cause of this incident was this week, we're all going to understand the root cause, and we're all going to improve our platform to make sure that doesn't happen again. So over time, you're going to start to eliminate a lot of the probable causes and possible causes of errors that can be made. If you look back three years ago, it seems like every week something was going wrong. We're not making any of those same mistakes again. Right. Well, sort of. Yeah. But they're different. So I think we don't know the details of what happened this week. But apparently it was only 1% of the funds that they had. Now it was customers' money. So we know they have reached out to a few people, and it seems that their intention is to go ahead and make those customers whole. They're a venture-backed company. They have enough in reserves to absorb this. It's not like Mt. Gox, where 90% of their inventory was wiped out. So people have learned, well, we're only going to put 1% at risk. And they may have even had insurance on this. We don't know. So there's lots of opportunities, or lots of details still to come out. But if you compare just the event of this one compared to Mt. Gox, it's several automatic magnitudes less in severity and in size. Right. And I think that would probably be the difference between a good actor and a bad actor. So say you had, like, if somebody had their position in Bitcoin right now, would you say, hold, sell, buy? What's your recommendation? You know, Bitcoin's been up and down. If you look at it two years ago when we were at CES, it was $13. Last year we were here, it was around $700. It's $297. Yeah, $297 on my way in. Yeah, OK. So it's been volatile. It's kind of what you expect from an early-stage tech stock or a newly discovered commodity. If you look at the early history of oil when we first discovered petroleum, right, it was really volatile. Right. You know, if you were to be able to track the minute-by-minute valuation of Twitter when it was a startup, right, it would just be bouncing all over the place, kind of like Bitcoin. Right. Well, their stock is not doing so well right now. Yeah, but they're a more mature company now. So I think that when you look at the potential for Bitcoin, I think there's a tremendous opportunity to really start to gain market share and open new types of payments that weren't possible before. Right. Like doing peer-to-peer payments and tipping online, doing peer-to-peer payments of small amounts anywhere in the world. Right. You can't do that with anything today, but there's huge markets that are available. Well, you seem like the way you're describing it is tamped down from some of maybe the early panels I would go to on Bitcoin, where Charlie Schrem, for example, described it as cash with wings and change-the-world potential, which startups have a predilection to claim they can change the world. So how has that adjusted? There's a big difference between an alternative cryptocurrency and an entirely new system. Yeah. I mean, Bitcoin is a big deal. It's probably the biggest innovation we've seen since the invention of the internet. It's going to change a lot of things. It's going to take, I think, a lot longer than some people expect. Some people think it's going to change the world overnight. It's going to take a lot longer than that. How on earth? I mean, with all of these halls filled with basically companies that have some connection to the internet, would Bitcoin be even more impactful than that, than the invention of the internet? Well, it's interesting. We see a lot, and even at this show, people are talking about the internet of things. Right. Not my favorite phrase. Where machines and devices can now start to be connected. With Bitcoin now, each device can actually have its own wallet and its own payment to be able to make decisions and buy things. Credit cards don't really work for that. There's a t-shirt that one of the engineers at one of these companies has, and he wears it in the office, and it says, in the internet of things, nobody knows that you're a refrigerator. That's good. So, Bitcoin as a digital currency, it makes sense for digital devices to be able to communicate with each other. It's easy to transact anywhere in the world. I can send a nickel worth of Bitcoin from here to China instantly. That's not possible with any other technology. Okay. One last question. So, how did the connection between Silicon Valley and Bitcoin get started? Is there one, was it the fact that these well-known figures, like Matt Mullenweg from WordPress, or Ashton Kutcher, who's also an investor in your company, did they help make the connections? How did those- Yeah. So, some of the early companies that got some very early venture funding in 2012, maybe early 2013, were on the West Coast, it was Seattle and San Francisco. You typically had an investor that saw the potential for Bitcoin and saw a startup, which may have been two or three guys with a little project, and said, yeah, I want to give them a couple hundred thousand dollars to see if their project can take off. Then, in late 2012, you mentioned Matt Mullenweg, well, WordPress was a customer of BitPay. They were probably the first major household name that everybody would recognize that said, we're going to accept Bitcoin and we're going to do it worldwide, and they chose BitPay. So, WordPress was actually a customer of us and they were using it, and a lot of it was driven by Matt. He's like, well- Right. And he knows everybody. Yeah. He said, I have a service that really anybody in the world with internet access can come to WordPress and create a blog, but I have a problem in that I can't take a payment from two-thirds of the world, and I have to give my service away for free, and I have to really limit it just because PayPal and credit cards don't work with two-thirds of the world's population. So, he saw Bitcoin- Do those two-thirds of the world have access to Bitcoin? They're getting there, and actually, Bitcoin is growing in the developing world more rapidly. In what areas? South America, Asia, are growing very large for Bitcoin. So he said, look, even if maybe only a fraction of 1% of people have it, at least it's better than nothing, and he sees the potential. He said, yes, if somebody from Africa wants to upgrade their blog and buy more storage or more bandwidth and a better design pack, I'd like to be able to take their money, and I can do that with Bitcoin. So Matt was a customer of ours with WordPress, and then he invested, and we kind of pulled together an early syndicate of guys like Shaquille Kahn, who you know, and that was our early seed round, and that helped us really start to hire some more engineers and continue to build the product beyond the early service that my co-founder and I built. Okay. Well, thank you for talking to me. I really appreciate it. Take care.