WBD569 Audio Transcription
Science, Health and Bitcoin with Sam Abbassi
Release date: Wednesday 19th October
Note: the following is a transcription of my interview with Sam Abbassi. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
Sam Abbassi is the founder and CEO of Hoseki. In this interview, we discuss the growing demand for proof of reserves. Whilst the use case for businesses is clear, there is also an increasing retail need: it enables individuals to use Bitcoin as collateral, but also validates financial credentials. It is another means for assimilating Bitcoin into the fiat-dominated world.
“That’s the one thing Bitcoin does really well is that it has these property rights that allow you to enforce the fact that you do own Bitcoin. And so that’s what I’m most focused on: building a great wrapper and experience around that.”
— Sam Abbassi
Interview Transcription
Peter McCormack: Hi, Sam.
Sam Abbassi: Hey, Peter.
Peter McCormack: Welcome to What Bitcoin Did.
Sam Abbassi: Thank you.
Peter McCormack: Good to see you again, man. Last time I saw you was three weeks ago, two weeks ago?
Sam Abbassi: Post-win, post-celebration.
Peter McCormack: Well, that doesn't narrow it down for us.
Sam Abbassi: Yeah, right!
Peter McCormack: You were in London and we had a call and I was like, "Dude, do you want to come down to Bedford and watch some football?", and you did, and look at you. You're now repping your gear!
Sam Abbassi: I'm all merched out.
Peter McCormack: What is non-league British football like for you, man?
Sam Abbassi: So, part of me expected some Green Street Hooligan stuff. It wasn't quite that, but it was pretty close. I mean, fans and players getting at it was amazing, and the refs as well!
Peter McCormack: Yeah, I don't know who, or for whatever reason someone would want to referee at that level, because they go out for 90 minutes and everyone shouts and swears at them continually.
Sam Abbassi: Well, it's one of those thankless jobs; you do well and no one actually cares, but if you mess up, everyone suddenly cares.
Peter McCormack: Yeah, but sometimes even when they're right, they'll call a foul and the opposition team will be yelling at them, even though they're right. So, it is a thankless task and we're lucky to have the people coming in.
Sam Abbassi: Well, and those linesmen too. The linesmen looked like they were pushing 60 or something, but they were there for the love of the game, you could tell.
Peter McCormack: Well, that's the difficulty, is finding enough people who want to do it, especially at these lower levels. But it was good to see you down there, it was good to have you down to a game. It was a good win and I'm Bedford pilling people gradually.
Sam Abbassi: Yeah, I am too, just by proxy. It's almost like, I don't know, it's a whole world of pilling people to non-league soccer.
Peter McCormack: Yeah, we need to get Danny to a few more games, he's not been to enough. Anyway, look, it's been great to meet you. I've got to know you quite well, well not quite well, but a little bit very quickly, and we had a good conversation. You told me all about your company, you're going to help us with something for the football team, which we will get into, but it's been great to get to know you and the product you're making. As soon as you told me about it, I was like, "Well, you've got to come on the show", and then you started telling me about your back story and I was like, "Then you've definitely got to come on the show"!
So, look, there's a whole bunch I want to get into. I want to talk about Hoseki, I want to explain why the connection is, what you're going to help me with, but can we do your Bitcoin backstory, because as you said, this is your second podcast and your first in-person one, so a lot of people listening might not know who you are. So, if it's Saylor, we don't have to do that; if it's Max Keiser, we don't have to do it, everybody knows these people. But when it's somebody who hasn't been on before, I just want to add context, so give people your Bitcoin story.
Sam Abbassi: Yeah, sure, I guess when I first heard about it? Well, like a lot of people, I heard about it, didn't really think it was anything. I wasn't into investing at the time; this was 2014. An investment banking friend of mine told me about Bitcoin, but when I was in college, I studied economics, but I was really interested in geopolitics and what the world looks like. So, investing in an asset wasn't top of mind. My family comes from real estate, so we don't have these really complex, high-finance things that we know about or are taught and go into; it's more about just property management and real estate, so I disregarded it.
But 2017 came around, I'd just left a PhD programme in neuroscience and I wanted to continue that research element, because I love doing research. But I'm quite impatient, and neuroscience and basic science medical research really is designed to get drugs into the hands of patients, and that's like a ten-year thing, so I wasn't very patient. And then I saw this crypto scene, it was 2017. I didn't have money to invest, I had a certain set of skills, I knew how to programme, and all of a sudden this world opened up to me. That was in Miami, so this was before the whole crypto wave.
Miami is where I was raised, it's where I'm from. So, I got thrown into that. This is, again, 2017 boom, crypto crazy cycle, so I worked in that space for a bit, understood what this technology is, orange pilled myself throughout that process, spent a lot of time at Ethereum conferences, a lot of time then at Bitcoin conferences, and then I could clearly differentiate these two communities and what they're about.
Peter McCormack: Yeah!
Sam Abbassi: That was very apparent pretty quickly.
Peter McCormack: What stood out; what was the clear difference?
Sam Abbassi: Maybe it's not so colourful literally in the Bitcoin space, which I appreciated. I went to Building on Bitcoin in 2018 in Lisbon and I met Giacomo, I met the Blockstream team, I met a lot of these cypherpunk people, Sergej from Bitrefill, and that message resonated a lot clearer with me. The Ethereum scene was more of a party scene, more of a trust-fund kid, psychedelic-infused party, which again is fine, it definitely has its place; I enjoyed that to a certain extent. But the Bitcoin scene was a lot more serious.
Peter McCormack: Yeah, the way I used to explain it was, as a bitcoiner, I feel like I'm at Vegas in a meeting in a glass meeting room seeing all of the crypto scene out partying outside!
Sam Abbassi: Yeah, and you want to go party sometimes, it really is attractive. But I think different personalities gear you towards different groups of people, and ultimately I identified with the bitcoiners a lot -- it was a lot stronger. So, yeah, I stayed in that space up until 2019, left to work at Fidelity on Bitcoin research and development. So, like a lot of companies, they have their own corporate incubator. I worked on open-source self-custody solutions, looking at Spectre for example. So, Stepan was incredibly helpful with us; he came and did some workshops. And then I worked on proof of reserves there as well, a bit of Lightning work, but mainly it was open-source custody and proof of reserves.
Peter McCormack: Which led you therefore to Hoseki?
Sam Abbassi: Yeah. When you look back, you realise the stars are always aligned, but yeah, and now I'm here building a proof-of-reserves platform.
Peter McCormack: So, I will get into that, but you hadn't talked to me about your PhD in neuroscience.
Sam Abbassi: Well, I didn't get the PhD, I left.
Peter McCormack: Yeah, but you started on it, and the thing that stood out to me there is you said, "It's about getting drugs into the hands of patients". Is there any part of that that you saw that you felt was unethical, and the reason I bring up the question is that we don't have advertising for drugs in the UK. I think maybe you can do something like Nurofen, I think maybe I've seen Nurofen advertising. But when I come to the US, I've talked about this a lot, you put on the TV, the adverts come on, and there's a lot of adverts for drugs.
Those adverts for me stand out in two ways: they're for conditions I've never heard of, with drugs I've never heard of; and then at the end, this dude speaks really quickly telling you all the risks that basically, your leg might fall off, or some shit. And it felt to me, I couldn't help but think, "Are they inventing conditions; or are they trying to treat conditions that don't really need treating? Does the medical industry fail because of capitalism? Does it fail the human?"
Sam Abbassi: Yeah, I mean what you described is disgusting, it definitely is the environment here. I think we live in a hyper-capitalistic environment, everything is commercialised. You are a consumer, first and foremost, that's entirely what you've been designed to be since you were born in this very short blip of history. I didn't see so much of that in my research, because my research was more about, we were looking at pulmonary complications post-traumatic brain injury.
So, what that means is, you have a motorcycle accident, you end up in the ER, but you actually die from lung issues, not from the brain bleed. Your brain starts to bleed and these things called inflammasomes develop. So when you hit your wrist, you hit your knee, it inflames because it's designed to protect that protective tissue around the site of injury. But after a point in time, it becomes destructive, it starts to eat that tissue. So, that's why you ice it, that's why you take Ancet, that's why you want to reduce that inflammation; that's the first thing you do.
But the same thing happens in your brain. So, you're an elderly patient, you fall, you have now inflammation in your brain, but those proteins end up travelling into your lungs. And within that 24-hour period in the hospital, you usually end up dying from breathing complications, not from the brain bleed.
Peter McCormack: Oh, shit, I didn't even know any of this. So, how do they prevent that?
Sam Abbassi: Well, that's the research we were doing, trying to figure out, trying to develop drugs in order to prevent that.
Peter McCormack: Right, okay. But that seems like ethical drug development, that seems important work?
Sam Abbassi: Yeah. Then it kind of gets into, how do you define which one's ethical and which one's unethical. But ultimately it was interesting too because, and maybe this applies to research more broadly, but I think the people that I was doing the research with, they knew the conclusion before they had done all of the research, ahead of time. So again, they weren't leading the witness or anything necessarily, and that was probably more of a pure example of what maybe that sort of backwards research would look like, but still that existed. It's like, "We know the conclusion, now let's find supporting evidence to support that conclusion", and that seemed a bit backwards.
Peter McCormack: To get it through the FDA, is it?
Sam Abbassi: Well, just to support the claim, in this case.
Peter McCormack: Right, okay.
Sam Abbassi: So, we assume that these patients are dying from pulmonary complications, we know there's inflammatory activity in the brain, we also happen to have a drug company that can develop it for us, let's go and find the supporting research in order to make that happen. So again, it probably isn't the most egregious example in the history of drug developmental research, but if that existed at that level, then it must exist at a much more egregious level in other places.
Peter McCormack: Well, when you do the research and you look up the stats, I'm sure Danny can find it, but the number of kids in the US who are on ADHD medication, or the number of kids who are on anxiety medication, the number of people who are using Adderall, the opioid deaths. It's always felt to me that -- I believe in capitalism itself, but it feels to me that the US version of capitalism, when it hits the health system, it doesn't seem to benefit many people, apart from the drug companies and perhaps some of the doctors, or the people within the system. But it doesn't benefit the customer. I feel like the customer is constantly getting fucked here, and that's the thing that stands out to me.
Sam Abbassi: Yeah, I mean it's a corporate system, they call it corporatocracy or corporate socialism. I mean, corporations are people in this country; I think that's the essence of it.
Peter McCormack: But we have private medical in the UK. I have private medical care, I use a private doctor, I use the private system, but it still feels different. It doesn't feel like people are trying to -- when I go and see my private doctor, he isn't trying to get me to take drugs, he isn't trying to force drugs on me. I remember my last session with him, it was all about lifestyle, where I had all my blood tests done, my cholesterol was up, there were a couple of other things there. Some people listening will be like, "Just eat steak". We went through it and he was like, "I want you to make all these lifestyle changes and come back and see me in a month".
So, something goes wrong here in the US, something different happens.
Sam Abbassi: Yeah, and it seems like they've been co-opted. I mean, these doctors get paid to speak at these conferences. It all does seem pay for play, and even if they don't realise it, it seems like it's seeped into their education at a core level as well. But in the UK, the NHS seems like it's weaker and weaker, or is getting weaker and weaker every day, right?
Peter McCormack: Yeah, I have a thesis on that. My thesis on that is the NHS is a wonderful institution, the idea behind it is brilliant, and I'll stand by that whatever accusation comes at me, because you will find very few people in the UK, if you asked them, "Would you like to get rid of the NHS?" who would say yes. Whoever you are, wherever you are, whatever situation you're in, if you've broken your leg, if you've been run over, if you've been stabbed, if you had a heart attack or a stroke, you will get seen.
Now, emergency care is being stretched, but it's still available. The waiting lists on certain conditions are significant. So, if you have money, you should probably take up private healthcare, because if you get cancer, there are certain waiting lists and there are risks to you. But everyone will get seen and nobody's going to have their entire financial situation completely destroyed because they break a leg or they get run over or they have a heart attack, and they don't have insurance. That is a great system to have, I think, in society. I think that reflects a civil, developed society.
But my thesis on why it's being stretched so much is because, when the NHS was developed, the kinds of things you were getting treated for, we didn't have these unbelievable scanners and MRI systems, it was very basic care. Now we've had all the technological advancements in medical care, we've had all the developments in drugs and the drugs are expensive. We're better at keeping people alive and fixing people, but that comes at a cost, and so that's an increasing burden on the NHS.
But I think most people you talk to in the UK, there are some very basic, easy changes you can make. I think people should be aware of the benefits of having some private cover if you can afford it. My private healthcare, this will probably amaze you. So, I have private healthcare. It costs me, for me and my children, for the most expensive care possible, two kids, full cancer cover, immediately seen if it's discovered that you have cancer, it costs me £180 a month, which is about $180 now!
Sam Abbassi: That's insane!
Peter McCormack: Yeah, so when I did my back in and I had to have a microdiscectomy, from diagnosis to operation was three days. Now, on the NHS, I don't know what it would be; weeks, months, Danny?
Danny Knowles: I mean, I've no idea.
Peter McCormack: And when my son had his shin issues, he was dealt with with the doctor straightaway in London. Now, some people cannot afford £180 a month, or £150, whatever it would cost them. I mean, the average disposable income in the UK, can you look that one up, Danny, because I looked yesterday and I can't remember whether it was a week or a month, but I'm sure it was about £176 a month. But I know plenty of people who can afford it and who don't have it, and they don't realise the benefit. One, they're going to have the benefit of having immediate care, but they're also going to take some strain off the NHS.
But there are certain things the NHS could do better. They could charge for appointments, just charge for appointments, because they have a real issue with people having appointments and not turning up; there are little things like they could do that. I think there could be a good mix, I think certain bits should be privatised, which is heresy to some people. But look, healthcare is a complicated subject.
I think America, you can get the best treatment in the world, if you can afford it. You've probably got the best cancer treatments in the world, or some of the best, and a lot of people in the UK with cancer, especially kids, they fundraise to go to the US to get treatment; it's a big thing. It happened to a friend of mine. His son had, I can't remember what form of cancer, but he got treated in the US and he survived and he's alive today. But that was a treatment he couldn't get in the UK. But I feel like outside of that, the US also has one of the worst health systems in the world in terms of the customer.
Sam Abbassi: Yeah, so what I'm trying to figure out is if that's a trade-off of the system, like we may have some of the best cancer treatment facilities in the world. Is it at a trade-off of having this consumeristic culture? It might be, I think it seems like it is.
Peter McCormack: Well, America seems to have the best of everything, right, at a certain time?
Sam Abbassi: Yeah, the worst of a lot of stuff too.
Peter McCormack: The worst of a lot of stuff, but the way your capitalist system is set up for investment and winners and losers, and the culture of competition and being the best, you know, Silicon Valley for a long time. I mean, pretty much the majority of the best tech companies are US-based, search engines, whatever. You get the odd outlier, like Spotify, but generally speaking, the US has got the majority of them. And I think your system is set up to create winners and losers, and that's just the way it is; whereas, I think we're set up just to be kind of average!
Sam Abbassi: Yeah, and again you get that massive spectrum when you have a system like that. You have people that outperform at an exponential rate, and then you have a lot that are suffering at the same time. So again, I just think it's a matter of trade-off; it's not really good or bad, it's what the system can offer to who and when.
Peter McCormack: There was a long time where I wanted to come here and live in the US, because I like it. This is probably my 100th time here. I come eight times a year, I absolutely love it. The people are great, the food's great, get treated really nicely, made some great friends. But there were always two things that put me off coming to live here permanently. One was the health system, because it just freaked me out, because I didn't even understand it. Trying to get your head around that, it's complicated.
When you're used to having one number of phone, or one place to go to get treated and it not cost you anything, to come to the US system, where I've heard, like I have a friend whose daughter hurt herself surfing. They phoned the wrong ambulance company, and he got hit with a $2,000 bill or something, because he got the wrong one. Those kinds of things freak me out. The other thing that put me off was the exit tax, if you ever change your mind!
Sam Abbassi: Yeah, that's pretty extreme. I don't know exactly what the rate is. I think it's like 40% or 50%, something insane.
Peter McCormack: Something like that. Did you find that average?
Danny Knowles: Yeah, it was £175 a month disposable income.
Peter McCormack: Yeah. I've been making this film in the UK about inflation, so I had to look that up, because the cost of living's going up so much; it's like, how much breathing room do people have? The average disposable income in the UK is £175 a month, which isn't much breathing room.
Sam Abbassi: And your insurance is £180 or something?
Peter McCormack: Yeah, so there are a lot of people who just don't have that, but there are also people who can. I know plenty of people who don't have it who could afford it, and they should have it, because it benefits them, and that will take the pressure off the system.
Sam Abbassi: The thing I've heard is that it's incredibly good if you have a life-threatening condition. But if it's something simple like getting seen, it's a pain in the ass, it's almost impossible.
Peter McCormack: Yeah, like if you're stabbed, you'll be taken to hospital and you'll be treated immediately; if you have a heart attack, you will be treated immediately. But there are instances where they're like, "We can't get an ambulance to you, because there's pressures on the system". But that is true; life-threatening, immediate things.
If you have, like my microdiscectomy on my herniated disc, I couldn't sit down when I had that. I had to be stood up or laying down, because if I sat down, the pressure on my disc was causing shooting pains in the leg, the sciatica, which is un-fucking-bearable. I don't know what the wait time is; but with something like that or, Danny, you did your knee --
Danny Knowles: Yeah, but that was in Australia.
Peter McCormack: But if you were in the UK, if you went in and they said, "Yeah, your operation's in three months", you wouldn't be surprised, right?
Danny Knowles: Not at all, no, and it was similar in Australia, to be fair. And they have a private/public hybrid system, it's quite confusing, but it actually works quite well. So, it's like what you're suggesting. If you go to the GP, whatever, you have to pay like $100 or something, and then they rebate you a certain amount. And then, when you get to 30 or 31, if you earn over a certain amount, you have to get private health insurance, or they deduct you in your tax.
Peter McCormack: Oh, really? So, they expect you've got your shit together by 31?
Danny Knowles: Yeah.
Peter McCormack: How old are you now?
Danny Knowles: 31!
Peter McCormack: You've been hit with that?
Danny Knowles: Yeah. Well, so I got private healthcare for the first time last year or something.
Peter McCormack: How much is it?
Danny Knowles: I think it's about $400 a month for me and my wife.
Peter McCormack: Okay, what's that in pounds? That's not far off.
Danny Knowles: It's about £230, or something like that.
Peter McCormack: So, is it in some ways, where you have to take out that insurance, is that kind of like National Insurance in the UK, but you're paying it directly, rather than having it taken from your wage?
Danny Knowles: No, it's still like you go direct to BUPA, or whatever, and buy your --
Peter McCormack: Oh, okay. So, we have a tax in the UK, called National Insurance, which both employers and employees pay. And I think, what's NI? Is it 12%?
Danny Knowles: I've no idea, I'll have a look.
Peter McCormack: Yeah. So, I think as a company, for every employee you have, I think you pay 12% of their salary as national insurance.
Danny Knowles: 13.25%.
Peter McCormack: Oh, is that as an individual?
Danny Knowles: Yeah.
Peter McCormack: Right. But anyway, so it's another tax. That's meant to pay for the National Health Service. But what's actually happened is it just goes into the big pot, the big government pot of wastage.
Sam Abbassi: Is there any transparency on where those funds are used for?
Peter McCormack: Fuck knows! Possibly. I fucking doubt it.
Danny Knowles: But going back to what you were saying before, I agree that if you asked everyone in the UK, "Do you want to get rid of the NHS?", 99% would say no. But I think most would say it probably needs to change.
Peter McCormack: Yeah. There is a lot of bureaucratic waste. So, my mum worked in the NHS. She was a nurse, an incredible nurse, my mum, and she was a bit like me, she'd say what she thinks. And, she used to come home and just complain about all the middle management coming in with these fucking ideas and interfering. She'd just say it was bullshit. There is a lot of waste. And also, the other thing is, it's a political -- if you came in as a politician and said, "We need to privatise the NHS", you will not get voted into power. It's like an institution that we hold dear in the UK and we protect.
There was a time when the Conservatives wanted to privatise parts of it, and the accusation was like, "They're selling off the NHS to their corporate friends", which they probably were. But it's a very difficult thing to change in the UK.
Sam Abbassi: I think, didn't something like that happen in the 1990s with public schooling? Wasn't there one political party in the UK that advocated for, I think schools were all public then, and they ended up privatising it, going against public sentiment?
Peter McCormack: No, I don't think so. You might be talking about --
Danny Knowles: That will be with the grammar schools, presumably?
Peter McCormack: Yeah. So, we've got three types of schools: we've got public schools, grammar schools and private schools. Grammar schools are essentially public schools, which tend to be a higher standard. They almost tend to reflect the private schools in terms of the standard, but I don't know too much of the background. So, we don't have any grammar schools in Bedford, where I'm from.
Danny Knowles: But I think, I don't know, this was before my time, but I'm pretty sure it used to be, the smart kids go to grammar school. And then a lot of those grammar schools became privatised.
Peter McCormack: I'm not sure, do you want to check that? Yeah, but basically, I think my niece and nephew both go to a grammar school, and you have to do a test; is it the 9-plus or the 12-plus? There's a certain test you have to do to get in.
Danny Knowles: The 11-plus.
Peter McCormack: 11-plus, so they separate the smartest kids to give them the opportunity to learn. Now some people, you know that some people will be like, "Well, this is not fair, you're making an elite group of people", but sometimes that's okay, because you want to get the best for these kids, you want to give them the best education, the best people to teach them. They still exist, but I don't know anything about privatising them; Danny might find something on that.
Sam Abbassi: Yeah, the NHS almost seems like a national myth, and I love national myths. That's at least how it comes across. It seems like it was something that was great, and people are clinging onto the idea that it was great, but it's no longer great anymore, and it's tough to shake that.
Peter McCormack: Yeah, I think you've nailed it there. I can see, as an outside who doesn't use it anymore, I see the issues with it. But I also still love the fact that people have the opportunity to use it. There's other things that have stretched it as well; a lot of people have figured out they could get paid more money by going through agencies, so a lot of agency staff now work for the NHS, whereas it would have all been direct employees before. But the NHS needs the staff and if they can't get direct access to nurses and doctors, they have to go through these agencies, where they pay a lot more money.
So, it is a complicated matter. I do like the idea of universal healthcare. I know that goes massively against what a number of people, maybe libertarians think, or certain bitcoiners think, because of the problems that causes, but I like the idea that anyone can get access to healthcare, especially the least fortunate. It's one of those things I should probably give Stephan Livera a call and say, "Talk to me about this", because he'll have a great explanation about how you can have a different system which still supports people who can't afford healthcare.
Sam Abbassi: I mean, some of this might be an issue of just nation states more broadly; there's just a lot of people in one place, and we're all being held accountable for each other, but we don't really have a common point of connection.
Peter McCormack: Yes.
Sam Abbassi: That's what I keep coming back to for almost any issue!
Peter McCormack: Expand on that.
Sam Abbassi: I think we're all too big. There've been nation states in the past, there've been empires in the past, but it seems like a consequence of our post-industrialised world. You can look at the US, for example. There's a lot of geography between us. I think we're as united as the Soviet Union was; keyword on Union. There isn't a whole lot of commonality between Florida and California, for example, almost different countries. Texas and Massachusetts, these almost look like different countries.
I think to a certain extent, people are tribal and they're very community-oriented, and when you have too many people in one place, it doesn't function as well, and we try and duck-tape things together to make it function, but it's kind of bursting, it's kind of leaking through all that.
Peter McCormack: What's the population in the US; is it 300 million?
Sam Abbassi: I think 360 million or 370 million.
Peter McCormack: 360 million, well that's a lot of people to try and centrally plan for. I've travelled a lot around the US and the commonality is the language, but culturally there are a lot of differences between somebody I've hung out with in Wyoming and somebody I've hung out with in Malibu. I mean, they're fundamentally different people with completely different outlooks on life.
Sam Abbassi: Well, New York and London have much more in common than New York and Oshkosh, or Des Moines, Iowa or something other place. Cities just have more in common than they do with their own kin and their own country.
Peter McCormack: Do you think this is why it's been fracturing?
Sam Abbassi: Yeah. I think it's a multigenerational thing; it's not like this is happening in the last five years, or the last decade, the last couple of decades. I think things ebb and flow, and we're naturally just going to move towards a more localised city state model. I think it's not a good thing or a bad thing, it just seems like it's naturally getting to that point, because these big countries are just breaking.
Peter McCormack: Yeah. Sometimes I also think that maybe comes down to your age as well, because I'm older than you, I think. I started to notice as I get older and I slow down, I want to spend more time locally in my community, helping out and doing things within my community, whereas I think when you're young, you want to get out and see the world and move around and meet people and go through exciting opportunities. When you get a bit older and a bit wiser, and you realise you can get most of what you need from your local community, everything you've been taught to believe you should want to get out of life doesn't really make you happy like you think it will.
I'm happiest on a Tuesday night going down to Allen Park and watching my daughter train football, and being amongst the community and watching all these kids play football; I think that's where I'm my happiest. But I used to think I'd be my happiest getting on a plane and flying to California and making a podcast, and then going down the beach. It was fun at the time, but I realise that it's not fulfilling.
Sam Abbassi: Yeah, it's seemingly attractive, but I think once you do it and once you do it enough, you realise it's actually, and I'm not speaking to your example specifically, but a lot of these things are actually quite empty. I think it's a natural human inclination to want to be around your community. We're animals, we're tribal; I think a lot of the stuff that we see in the general crypto space more broadly is because money is very tribal, so people become tribal about that too. But you need to have some sort of weight within a group of people that you may be accountable for, but you can also see a direct output from your input.
Maybe you're employing some people in your local community; that fulfils you, that gives you a good sense of, maybe you want to be a tribal leader, or some idea of a tribal leader in your own head. That is incredibly fulfilling. It's more fulfilling than going out to a club in Vegas or Miami for a couple of nights and ending up alone.
Peter McCormack: Yeah, I mean you've literally been within my community, you've seen it. That's where I'm happiest.
Sam Abbassi: Yeah, it's beautiful, honestly.
Peter McCormack: Building something for a small group of people that they can get behind and feel happy about… One of the things we've been talking about, we were talking about last night. Our Mayor in Bedford is a fucking moron, he's useless; Dave, the Mayor, honestly he's fucking useless. And I've been thinking about, maybe that's what I should be in, not trying to build this podcast and travelling; I should be there in my community doing the job that he can't do, and he's doing because nobody else wants it. Maybe that's what I should be doing.
If you want a legacy, what is it? Do you want your legacy to be as someone famous and successful and did all this shit, or do you want your legacy to be the change that you made for people. And I think maybe this is another thing coming back to the capitalism. Capitalism and advertising has taught us that the big shiny stuff is important. But actually, I think real inner peace and contentment comes from what you've done for other people.
Danny Knowles: Are you officially announcing you're running for Mayor of Bedford?
Peter McCormack: My official announcement. Dave, the Mayor, I'm coming for you, motherfucker! I want to do it. My issue, actually if I show you my Google, so I was googling last night, "Is it a full-time job and what's involved; what do you actually have to do?" and the amount of things I already found I think are absolutely ridiculous. But I think it's close to a full-time job.
Danny Knowles: Yeah, that doesn't surprise me.
Peter McCormack: Which is a problem. So, it has to be in a post-What Bitcoin Did era.
Sam Abbassi: I think it depends on the person, I think you would probably make it a full-time job, and maybe the person in the current role isn't treating it as a full-time job.
Peter McCormack: Honestly, he's an idiot. Can I get sued for calling someone an idiot?
Danny Knowles: No.
Peter McCormack: Okay, well he's --
Sam Abbassi: Well, you're in a different county right now, so I think it's fine, right; international waters?
Peter McCormack: No, it doesn't work like that.
Danny Knowles: I think saying he's an idiot is fine.
Peter McCormack: I just don't want to get sued again.
Danny Knowles: We'll run it past the lawyers.
Peter McCormack: Run it past the lawyers! Rupert, are we okay with this?!
Sam Abbassi: But no, to go back to that, I think you're right. Affecting change in people's lives is really important. On your podcast, you do it at a massive scale. But I really love tactile, physical relationships, so there's only a handful of people whose lives you can directly affect in a truly life-changing way, and that might be more fulfilling; it depends on the person.
Peter McCormack: Well, in some ways, it goes back to the Bitcoin thing. Trying to explain Bitcoin to people, especially I have to do a lot in my local community now, because I have this club and we have a Bitcoin badge and we're the Bitcoin team, so I have to explain it to them; but the truth is, most of the people, the question they want to ask or they do ask is, "Is now a good time to buy?" Everyone's worried about buying it and it going down. They want to buy and want it to go up.
I've been increasingly trying to say to them, "The great thing about Bitcoin is the things it teaches you". And by the way, I'm always behind the curve on it a little bit more than other bitcoiners, but teaching you that appreciation of money, or what money is and how it works and how it doesn't work is super-fascinating. I mean, it's been great watching my brother orange pill himself; my brother is a bitcoiner now.
When he first came in, he was working with us, and he's traditionally on the left, and all the things he struggled to get his head round, he now gets it. And I've had to do the same. You have to learn about money, and we're in this period of time where everything's fucking breaking and people keep going, "Well, the bitcoiners were right, the bitcoiners predicted this, the bitcoiners said this". But also, there's this secondary thing where you slow down and you start to realise the important things in life.
Again, I'm behind the curve on everyone on this, but you should look after your health, you should eat good food, you should spend time in your community, you should go and see your local farmer. We should stop eating this bullshit food that's been put in front of us and told is okay. All those things that Bitcoin teaches you outside of the gains, I think that's in some ways more important, because it structures you towards a better life for you and your family, it gets you away from all the fake bullshit.
Sam Abbassi: You had a guest who said it beautifully, I forget his name. I think it's Bollinger?
Danny Knowles: Logan?
Peter McCormack: Logan Bollinger, yeah, Logan's great.
Sam Abbassi: I was just listening to it yesterday, and he said, "Bitcoin allows you to think about things other than money [or] it gives you the opportunity to think about things other than money", and I think that's right. You can't plan for generations on the current system, it's impossible. And also, just alongside the community aspect, that is a core part of being human, is wanting to plan and care for your family in this case, and it's impossible to do that today. You have to take a second job as a trader, you have to constantly think about your chance of beating inflation, which is getting harder and harder, day by day. In some countries, it's actually impossible.
So, yeah, I think Bitcoin gives us that opportunity. If I have a long-term perspective, I don't have to worry about things that I would have to worry about otherwise, and that is incredibly freeing, and maybe that's what freedom ultimately looks like.
Peter McCormack: Yeah, and actually you also have to think about, well for me, I've found really hard discarding things. Like an onion, shedding parts of my skin of my old life, and there's a lot to think about with that. Firstly, it's long-term commonly held beliefs. I'm somebody who's always loved the role of a journalist and journalism, and coming to the realisation that we have very few real journalists left doing proper objective work is mildly depressing.
I'm somebody who's absolutely supported democracy for years. We're in a time where it's very hard to support right now, especially in the UK, we've got this fucking idiot as our Prime Minister, we've got another idiot, who's just had his conference recently, Kier Starmer, who's come out with a whole bunch of new policies that Labour are going to put in place, and you realise the cycle's the same. That's a hard skin to shed, when you've believed in it for so long. There's so many of these things that -- it's just really difficult to go…
There's another reason it's difficult. When you start to shed these skins and you start talking to your friends about it, you sound like a nutter. Bitcoiners think I'm a statist; my friends think I'm a nutter, they think I'm an absolute crazy person!
Sam Abbassi: Yeah, but that's a good place to be. I have this quote that I try not to actually live by, but it seems like it inevitably happens, where it's, "Society honours its living conformists and its dead troublemakers", and I find that --
Peter McCormack: Who's that from?
Sam Abbassi: I don't remember. We can look it up maybe.
Peter McCormack: Say that again.
Sam Abbassi: "Society honours its living conformists and its dead troublemakers".
Peter McCormack: Yeah.
Sam Abbassi: And it's usually true. You can look at our history, for example, George Washington was kind of hated in his time; you can look at Gandhi, hated as well. Now, depending on the people and depending on who you're looking at, but yeah, it seems like people who have maybe contradictory, revolutionary ideas are hated by a large group of people, because the status quo's comfortable. You're presenting a radical change in how people fundamentally think about everything on a day-to-day basis, and that's very uncomfortable. It takes a certain type of people to think that way.
Peter McCormack: Do you have a favourite quote you would go to?
Danny Knowles: I don't have a favourite quote I would go to, but one of the things that I do think about all the time is when Mark Moss said, on the show, what was it, "Every new law, whether good or bad, means less freedom", and I think that's quite good.
Peter McCormack: We talked about that a lot, didn't we, because we didn't 100% agree with it?
Danny Knowles: No, but it's just something I think about a lot. I don't even know how you say this journalist's name, so I'm going to pull it up here.
Peter McCormack: Mignon McLaughlin.
Sam Abbassi: That's why I couldn't remember it, because I can't pronounce it!
Peter McCormack: "A successful marriage requires falling in love many times, always with the same person". I have a favourite quote. So, do you know Jiddu Krishnamurti?
Sam Abbassi: No.
Peter McCormack: He's this Indian Philosopher, and this one always stays with me, it never leaves me. He said, "It is no measure of health to be well adjusted to a profoundly sick society" and I've never actually looked up what he meant by that, maybe you can look it up. But what I read in that is that, if you're successful in the current society, but your success leads to a net negative impact on other people and the planet, have you really been successful?
Sam Abbassi: Then you have to evaluate what that output is though, right? That's tough.
Peter McCormack: Yeah. It just makes me think directionally, parts of capitalism have sent us in the wrong direction. I mean, it's clearly obvious.
Sam Abbassi: Well, for some people. Again, some people like this high-time-preference life.
Peter McCormack: Yeah, but it goes back to the point I was trying to say, it's like I've always wanted to earn and be successful. Now I'm at the point of thinking, being involved in my community has made me realise I want to be more involved in it, and that's more important than money, and it's taken a long time to get there. Anyway, this is meant to be about you, not me! Let's talk about Hoseki, because you've solved a problem for me, dude.
Sam Abbassi: Yeah, hopefully.
Peter McCormack: Well, how long; when do we get it?
Sam Abbassi: A couple of weeks.
Peter McCormack: Sweet. So, we hold Bitcoin reserves, and I wanted to be transparent about those Bitcoin reserves on our website for our football club. And the only way I could do that is by providing the zPub.
Danny Knowles: What's a zPub?
Peter McCormack: Right, so… you're such a dick! I fucking hate this stuff! So, an xPub is the Extended Public Key, which you derive all your addresses from. The zPub is something which I went onto a link that Lopp provided me, which I got from my xPub, that converted my xPub into a zPub. I don't fucking know what a zPub is, Danny! What is it?
Danny Knowles: Do you want to go, Sam?!
Peter McCormack: Do you know what it is?
Danny Knowles: It's the thing that -- it's the key which will make all your extended public keys viewable, correct?
Sam Abbassi: Kind of. I'm not going to correct you guys in public.
Danny Knowles: Go on.
Peter McCormack: Yeah, do it.
Sam Abbassi: No, that's basically it. I mean, we focus on the xPubs and most people just use xPubs.
Peter McCormack: So, I finally got my head around xPubs, and then I was trying to provide the -- by the way, welcome to What Bitcoin Did, experts in Bitcoin! If you want tech expertise, please go to Stephan Livera's podcast, or any other podcast. I wanted to provide it, but people couldn't get the balance from it, and so I just found some article that said, "No, you have to do it from the zPub", and I found this tool that Lopp provided, that you can convert your xPub to your zPub. I don't know this stuff, but this stuff gets explained to me and I forget it.
Sam Abbassi: Well, it's low level, it's actually very low level.
Peter McCormack: No, it's high level.
Sam Abbassi: Well, it's low level in the sense that it's at the core of building blocks, which is why it's so complicated. No, the high level is actually pretty easy.
Peter McCormack: Well, I've got it up now, so people can scan it and they can confirm that we've got the amount of Bitcoin. You heard about this.
Sam Abbassi: Yeah, well xPub lookups generally, not many block explorers provide that, just because it's more difficult to have a functioning block in support of just xPub lookups purely.
Peter McCormack: Then we got introduced by a mutual friend.
Sam Abbassi: Yeah. Well, you were talking about proof of reserves, we talk about proof of assets, but we're using the terms interchangeably now, because if certain people understand one brand, it's tough to try and rearrange near that. It's better to go with the flow than try and reconstruct the whole wheel. So, our service allows you to do the whole thing without having to disclose what the xPub is. So, it's more providing you with more privacy, so you can be more private about your wallet details.
Peter McCormack: It's a proof of reserves?
Sam Abbassi: Yeah, exactly.
Peter McCormack: What is the problem with exposing the xPub?
Sam Abbassi: Well, you may not want that detail out in the world, especially for individuals and retail customers, if you have to prove you have Bitcoin to several different counterparties, you're not going to have to leak your wallet details to several different people.
Peter McCormack: So, can it leak other information by making that publicly available?
Sam Abbassi: Yeah, you can run analytics, you can look at where the transactions came from, where they're going in perpetuity. So, it can be quite dangerous, again depending on the person and the use case.
Peter McCormack: And is that the same with the zPub being public?
Sam Abbassi: Yeah.
Peter McCormack: So, I don't mind it with the football club, because all we do is hold the Bitcoin. We've not moved any, we're not spending any of it; it's a company. And when I read that, I was like, "I'm totally fine with this". But as an individual, I would definitely not want that public. And so, the way your tool does it is how?
Sam Abbassi: Basically, it's giving us the information and then us giving the checkmark to whoever the counterparties are. So, in that sense, you're not doxing to N, you're not doxing 100 or 1,000 people; it's to 1 and we provide that verification. So, it's private in the sense that you're not having to give that detail to 100 people, we will simply take on the burden of giving that verification as long as they trust us.
Peter McCormack: Right, okay. So the opportunity here is, okay, it's great for me because I can do a proof of reserves, but I don't think there's a huge amount of companies who are going to need to do that and make that a long-term, viable, commercial business for you. That's not where the real opportunity is, right?
Sam Abbassi: No, this is really showcasing what the product can do. There's a bunch of different applications. We sort of see it as this bottom stack of the Bitcoin standard sack of the future. Proof of ownership is the basic characteristic of any asset class, be it stocks, bonds or whatever else, which is why I love what we're building, because I can explain this to anyone, bitcoiner or not, and they'll understand it.
A function of building a Bitcoin company, and I think any company, is you're an evangelist of the thing and the technology, in this case Bitcoin. So, anyone running a Bitcoin company has to evangelise Bitcoin, but in my case I don't have to actually. It's just, "You have this asset, you need to prove you own it. You need some kind of framework around it".
Peter McCormack: What are the scenarios, where people will need to prove they own it?
Sam Abbassi: I mean, it's already happening now. Our go-to market was mortgages and that was my problem. You're self-custodying your assets, you need to prove to your broker that you have Bitcoin, but how do you do that? You could maybe take a screenshot of your Trezor UI, or whatever wallet you're using.
Peter McCormack: Which you could fake the fuck out of.
Sam Abbassi: You could fake it, it's also very primitive and crude. Also, we're on the bleeding edge of technology, but we're relegated to taking screenshots; it doesn't make any sense. Or, if they don't dismiss you outright, they ask you to send your funds to Coinbase, for example, and print out a statement. But again, you're self-custodying; that's antithetical to the reason why you're self-custodying in the first place.
Peter McCormack: Yeah, and Coinbase will then take that information and pass it over to other third parties, which you don't want to do as a bitcoiner, maybe.
Sam Abbassi: That's been our go-to market, but residency applications has been a big one, people trying to use this jurisdictionless asset to be global citizens; and even things in the judicial realm as well. We're helping one user prove he has funds in order to support his case for getting custody of his kids, for example. One of his assets is Bitcoin.
The idea isn't to have people extend you credit just because you happen to have Bitcoin at this point in time, at this stage of maturation of the asset; it's more of having your Bitcoin play as a financial datapoint. Right now, if you have any cold storage, it is a shiny rock. It's amazing, you should sit on it, but there isn't anything else you can do, short of selling it or moving it, and I don't think that should be the case.
Peter McCormack: And you're essentially building this out in preparation for the direction the financial world is heading in?
Sam Abbassi: Exactly.
Peter McCormack: It's an interesting thing, because you said -- I'm pretty sure if I got a mortgage in the UK and I had to prove my assets, at the moment no one would accept Bitcoin as an asset they would approve of, as a proof that I can afford something. But in the US, you are starting to see that transitional change; Bitcoin is starting to integrate. I mean my sponsor, Ledn, they have a mortgage product now which is Bitcoin-based as well.
Who was it, Bill Barhydt was talking about it as well. We're starting to see that the asset, from certain people in certain areas, is being respected. Haven't Goldman Sachs even got a product now for borrowing against Bitcoin?
Danny Knowles: I heard they announced something, yeah.
Peter McCormack: We know Silvergate are Bitcoin-friendly, but they have a product. We're starting to see that transition I think a bit more here, less so in the UK. I mean, you can barely find a bank account in the UK that will allow you to have Bitcoin. But are you starting to see that change, that some institutions are accepting that?
Sam Abbassi: Yeah, we are, and we're partnering with Ledn, as an example; love them over there. Yeah, we are, and it's also not as daunting as you might expect, because the incentives are aligned, at least in the mortgage use case. The broker wants you to get approved, so they're going to try and support you however they can in order to get you approved, because that's how they get paid.
Oftentimes, you'll be surprised, all they want is something that looks official, which in our case is literally just a bank-like-looking statement. So, someone connects their Trezor, connects their COLDCARD, connects whatever wallets they have, or exchange accounts, and then prints out a statement for the last three months that shows their beginning monthly balance, their ending monthly balance, and then all of the line items, which would be Coinbase, Kraken and then randomised account numbers for those wallets.
For example, they don't ever get your address or your xPub, they get some randomised account number, because they don't need or want that level of detail. All they want is some bank-like-looking statement with a letterhead, your name and address and your assets listed, which is what we provide now.
Peter McCormack: In dollar value?
Sam Abbassi: Well, both the Bitcoin and the dollar value. So, the next thing obviously is to add more currencies.
Peter McCormack: So, they're ticking a box.
Sam Abbassi: Yeah.
Peter McCormack: What other currencies?
Sam Abbassi: No, like pound, euro.
Peter McCormack: Oh, yeah, of course. Well, I'm going to need the pound then.
Sam Abbassi: Yeah, exactly.
Peter McCormack: And very soon, you can just do an instant conversion one-to-one, because we know that's how much a pound's going to be worth! That must have been a super-cheap holiday for you to come to the UK.
Sam Abbassi: Yeah, I was over there when it was happening and my family was losing their mind, but I was secretly smiling!
Peter McCormack: Yeah, I mean it's been crazy to see what's been happening in the UK. But all my American friends are going, "We're going to come to the UK, it's super-cheap at the moment". "Yeah, it's not super-cheap for me to come to you".
Sam Abbassi: Yeah, I don't know if it will last either.
Peter McCormack: I don't know. We're going to talk to a couple of people about that very soon. There's another thing I wanted to talk to you about. We've jumped around a little bit here. Well actually, let's finish off with Hoseki. Tell people where to check it out anyway; and is the product available commercially yet?
Sam Abbassi: In two weeks, it will be good.
Peter McCormack: Fully, commercially out there.
Sam Abbassi: I mean, now you can sign up on the waitlist, and then if you email me, I can grab you onto our alpha. So, you can do what I'm describing now today, but you'll be able to sign up and do it without a private alpha link in two weeks.
Peter McCormack: Wow! How long has it taken to get this far?
Sam Abbassi: Well, it's been about a year in total. There's a lot of infrastructure that has to get built out. It sounds simple when you describe it, but honestly it's -- for example, we didn't want to use third parties, so everything we had to build was inhouse, and that took a while and took a lot of thought, so it's been about a year.
Peter McCormack: I also like thing about your company is that you don't really just look like a Bitcoin company, you just look like a tech start-up, like a software business, like a SaaS, which I think is directionally where some of the Bitcoin companies are heading, which I think is a good thing. I think it reflects where Bitcoin is going to, where we are just becoming part of the mainstream financial system, which I think is pretty cool.
Sam Abbassi: Yeah, I love Bitcoin culture, I just don't know if that's applicable to the world as a whole. There's a lot of different things in the world, and you should probably try and combine that in your company. So, we try and look friendly; that's the branding.
Peter McCormack: What does the name mean?
Sam Abbassi: Hoseki?
Peter McCormack: Yeah.
Sam Abbassi: It's a nod to Nick Szabo's article, Shelling Out. It means "jewellery". People see Bitcoin as different things, I kind of see it as jewellery. So in the past, different civilisations would use, as you know, different things for money, and seashells were used at one point.
So, in Massachusetts, the Narragansett use wampum belts. These were belts that were created with seashells and that had a very slow velocity of money. It transferred hands when tribes would unify, when babies were born, when marriages would happen, and that's kind of how I see Bitcoin's block time. I see that ten-minute finality as actually being incredibly fucking important and it's not something trivial. And this idea that we can use Bitcoin for every transaction I think is a little bit short-sighted. So, I see it as this incredibly momentous thing every time a block is added, sort of like when these seashells would transfer hands.
But also, if you look at India, gold-jewellery-backed lending was up, I think, 207% last year versus regular lending, which is up like 8%. Different societies use jewellery as money oftentimes as well.
Peter McCormack: Have you been to India?
Sam Abbassi: No.
Peter McCormack: It's an amazing country.
Sam Abbassi: Really?
Peter McCormack: Yeah. It's up there with probably my three favourite places I've ever been. I absolutely loved it. And I was in Goa and I went up to the little local towns --
Sam Abbassi: Is that in the South?
Peter McCormack: Yes, I think it's the Southwest.
Sam Abbassi: Okay.
Peter McCormack: Will you check that for me, Danny? Yeah. It wasn't too long a flight from Mumbai, and a beautiful place, amazing people. Again, great food, and cows on the beach, which was really weird. Literally, the friendliest people you will ever meet. People just stop and talk to you, they just want to talk to you and find out who you are and what you're about. But you go into the town, and the number of jewellers was incredible, they're just everywhere, because this is the way people pass down their inheritance, right. It's the gold; they buy the gold, they hold the gold. They're pretty smart people, they know what they're doing with this shit. That's their Bitcoin.
Sam Abbassi: Exactly.
Peter McCormack: I'd recommend going there.
Danny Knowles: So do you think in the future, people will lend out against your Bitcoin at different rates, depending on where you're holding it?
Sam Abbassi: I think not just that, it's that you can actually get a better rate, because you can prove that you can pay it, because you have transparency over the ownership.
Danny Knowles: But do you think the lenders will give you a different rate, whether it's on Coinbase, or sorry, cold storage is what I mean, because they'll have a different trust model for each of those places?
Sam Abbassi: Possibly, I can see it going that route. I don't immediately think it will go that route, at least not yet, because it's still poorly understood by the lender, unless you have a sophisticated lender. So, if you have like a Ledn, for example, they know what they're doing; but for regular normie lenders, they don't understand the concepts of holding your own keys. That's just poorly understood at this point. So, maybe.
Danny Knowles: Interesting.
Peter McCormack: Is there anything I've not asked you about with Hoseki that you want to talk about?
Sam Abbassi: Yeah, we could have gone that route, but again, it depends on how much time you have.
Peter McCormack: I've got plenty of time, you tell me.
Sam Abbassi: Sure.
Peter McCormack: Are you supporting Lightning?
Sam Abbassi: No.
Peter McCormack: Never?
Sam Abbassi: We're looking at it.
Peter McCormack: Well then, I guess when people have to prove their reserves, they're probably not going to need to prove their $200 of Lightning. It's probably not going to make that much of a difference.
Sam Abbassi: It depends who the counterparty is. But yeah, generally no.
Peter McCormack: And is it because it's just too complicated to do right now?
Sam Abbassi: It's quite complex. I mean, Lightning doesn't have a topology, so it's difficult to figure those things out. It doesn't naturally give you an ability to audit it the same way Bitcoin does.
Peter McCormack: Right, okay. All right, so what did you want to cover then, because I've got time?
Sam Abbassi: I guess the idea that we're sort of -- like bitcoiners are kind of Third World citizens, these digital Third World citizens, is what I've been focused on. I don't think we see it that way, but I definitely think we are.
Peter McCormack: Explain that.
Sam Abbassi: Well, this thing's new. Yeah, we've made a lot of progress in the last couple of years, but it's still very mechanical. There aren't great experiences around using it, especially in self-custody. We have our own political and civil strife and problems, and we've had mass migrations of people coming in and people leaving.
Peter McCormack: People have been exiled.
Sam Abbassi: Yeah, people have been exiled by mobs, and also by individuals. So, I really see us as Third World citizens. More importantly, we have the same financial problems as the Third World does, in the sense that we don't have a good way of representing our assets. So, there's a book that I've read, called The Mystery of Capital, and that describes why, in this author's opinion, the Global South, or Third World, whatever you want to call it, is incredibly poor as it relates to the West, so North America, Europe and Japan.
It's got nothing to do with IQ or market orientation or your culture, because if you go to some of these countries, if you go to Turkey and you go to a bazaar in Turkey, you're going to get hassled by entrepreneurial people your entire journey. They're incredibly industrious. But the problem is, they actually don't have a way to represent their assets. They don't have property rights built in. Bitcoin has that, that's the one thing Bitcoin does really well, is that it has these property rights that allow you to enforce the fact that you do own Bitcoin.
So, that's what I'm most focused on, is building a great wrapper and experience around that. Much like multisig companies, you can make a multisig custody regime without these companies, it just isn't a good experience at all.
Peter McCormack: No, I've look at it. There's zero chance I could do it; if I did, I would fuck it up; and most likely, I'd lose my Bitcoin.
Sam Abbassi: It's dangerous.
Peter McCormack: Yeah, it's dangerous, it is dangerous, whereas Casa, Unchained, have built great products for people to be able to not fuck it up.
Sam Abbassi: And luckily, for expression of ownership in Bitcoin, it's not dangerous because you're not moving funds, but it's still not easy, it's not well understood. I realised that when I was writing the paper on proof of reserves, and I just thought, "This is an incredibly under-utilised part of the system".
Peter McCormack: Well, you've literally seen me try to do this without knowing there's a product that exists, and you can go, "Hi, Pete, I can help you with this, we've got a product". I'm like, "Great!"
Sam Abbassi: Well, you did the best thing you could have done with the tools available. We're just now building better tooling in order to make it easier.
Peter McCormack: And commercially, how is this going to work for you guys?
Sam Abbassi: Well, we're building this tool for both retail and for companies as well . So, bigger companies would have a bigger need in terms of lending agreements, again with respect to who their counterparties are. We see this as like an integration platform into different services, so you need to quickly prove you have Bitcoin on Rocket mortgage; well, we're plugged in, you can quickly just do that with us. There's a load of commercial models that can be developed that this infrastructure exists. So, we're not tethered to one thing necessarily.
Peter McCormack: Did you meet Jeremy earlier?
Sam Abbassi: Yeah.
Peter McCormack: Jeremy is a bitcoiner, but he's really a DID maximalist. I can imagine him, during all of this interviewing thinking, "Can you use this for proof of identity?"
Sam Abbassi: Yeah, I mean you can. It's not something I've promoted thus far, just because the idea of an address being your identity I don't think is -- I mean, maybe it's a good outcome, I don't necessarily see it. I think we're layers away from identity, but we are building a stack of that.
Peter McCormack: Yeah, because we do have this problem at the moment where, when we have to provide identity, we're giving away data that can be used and exploited. Our privacy is destroyed continually. I mean, we're at the point where we just don't really have privacy anymore.
Sam Abbassi: Digitally, not at all.
Peter McCormack: Yeah.
Sam Abbassi: The thing I'm most excited about is applying this to a community banking model, which sort of goes back to my city-states idea. I fundamentally view every single person who holds their own keys as an institution. I mean, we call ourselves banks. Again, maybe I was scammed coming into Bitcoin when I was told that you can be your own bank, but I don't have any banking services. I am my own bank, the funds are there, but again I can't do anything, I can't do much with it.
Peter McCormack: I know Chris over at LVL was trying to do this, he was trying to break that mould, and I know other people have been trying to do it. Is there any link to Fedimint with this then, because you talk about community banking?
Sam Abbassi: Possibly. I think at a cultural level, their model is complicated to conduct proof of reserves, which is why they haven't done it thus far, but I know they're working on it, and if we can help we definitely will. But I think the one thing that differentiates this type of community banking versus the Wildcat banking in the US in the 1800s is the audibility factor. You can have different -- again, you effectively are a country by having a Trezor, is how I see it. I see this massive redistribution of wealth from nation states to individuals at this "city-state model".
Peter McCormack: So essentially, banking is just going to become a peer-to-peer model?
Sam Abbassi: Yeah, I mean it is peer-to-peer because Bitcoin's peer-to-peer. It will just be now accessible to many more people than it is today. And the fact that you can audit each thing is what differentiates it from things of the past, and that's a critical aspect of the protocol that again, just isn't really -- I think it's incredibly underutilised.
Peter McCormack: So, have you found when you've been building this company, that you have been discovering new ideas and new applications, by virtue of just building?
Sam Abbassi: Yeah, that and talking to people. It's really important to discuss your ideas. I think we get into this trap of, "I'm building something, I need to just focus and keep my head down, and realise my vision". But at the same time, everything is synergistic. You have ideas at the same rate and time other people have ideas, and you hear from other people, and that influences your ideas.
So, yeah, I've learned and things have pivoted slightly and gone on different tangents, and all of that's really helpful for a product. But yeah, it's kept its same core premise, but the way it manifests itself has changed over time.
Peter McCormack: Awesome, man. Well listen, if people want to find out more about what you're doing, where shall we send them?
Sam Abbassi: www.hoseki.app, or @hosekiapp on Twitter, or you can follow me, @samabbassi on Twitter.
Peter McCormack: Well, listen, I appreciate getting to know you, thank you for coming to see my team. I'm looking forward to getting proof of reserves up on our website as soon as possible, because we want to show that to people, and I'm excited for you to get this launched, so people can start using it. I think you've got a bright future, man, and it's just great to get to know you.
Sam Abbassi: Yeah, thanks so much.
Peter McCormack: All right, dude, take care.
