Brock Pierce on Crypto, Blockchain Gaming, Rebooting Mt. Gox, and More
Brock Pierce is seemingly everywhere in the cryptocurrency and blockchain space.
One can trace Pierce’s fingerprints on a dizzying amount of industry-shaping events. Today, Pierce is still behind the steering wheel of some of the space’s largest happenings and projects. Pierce is currently the Chairman of the Bitcoin Foundation, a co-founder of Block.one, EOS Alliance, Tether, Mastercoin, and Blockchain Capital, and advises companies like BitGo, DNA, and Patrick Byrne’s tZERO.
2019 is already shaping up to be a big year for the billionaire master storyteller, with his plans to relaunch the infamous Mt. Gox, a cryptocurrency exchange hacked for about 740,000 bitcoins (~$2.664 billion) in 2014.
Pierce’s reputation is built on years of entrepreneurship and venture capital, cryptocurrency and blockchain evangelism, being what Rolling Stone calls “[the cryptocurrency] world’s first cult leader”, being a blockchain billionaire, and amusingly enough, a child actor in Disney’s 1992 classic The Mighty Ducks.
Although Pierce may have retired from the acting world at seventeen, he still holds a flair for storytelling and showmanship, placing much of his focus on nurturing and growing a young, but flourishing cryptocurrency sector.
We got the chance to interview Brock Pierce regarding his thoughts on the growth of the space, cryptocurrency entrepreneurship, Bitcoin, gaming and blockchain, Puerto Rico, Seasteading, and the McAfee Campaign.
How does entrepreneurship in the blockchain & cryptocurrency space differ from the more traditional startup world?
I guess one of the main things you realize when you work as an entrepreneur is that it’s long days, long hours. When you start working as an Internet entrepreneur, the world is moving at a million miles an hour and is changing rapidly.
Crypto is just a further acceleration of that. It’s like a billion miles an hour. It’s more difficult than any other space that I’m aware of just because of the speed of change. This industry is moving so rapidly. What would be more realistic? The Internet took 40/50 years to get to where it is today. We’re moving probably about three times faster. We’re basically the speed of the Internet times Pi.
The evolution has been crazy to watch. Especially during the ICOMania in 2017-2018, which added another element of acceleration. So many random companies were popping out of the ether and raising millions to build projects of either world-shattering or completely dubious value.
A good thing is that the ICO market has had a nice correction. We needed to slow down a little bit. We were getting in front of our skis, as they would say.
It’s been interesting to see how so many cryptocurrency and blockchain entrepreneurs have become very public figureheads for their projects.
The figurehead is normally the storyteller. In a band, you’ve got the lead singer, I prefer to use the term conductor. The figurehead is normally the conductor and the storyteller. It’s often lost in most Silicon Valley startups, the importance of storytelling when most people are thinking about they assemble their team and the critical functions that the team needs to be successful. Storytelling is normally not on the list.
It’s almost a lost art, but when you start looking at projects that are successful versus those that aren’t, you’ll find that there’s a common thread and that common thread normally involves a good storyteller.
What’s a day in the life of Brock Pierce look like?
These days, I get up by 6:00 AM, meditate, journal, Yoga. I’m trying to get all that stuff done by 7:00 or 8:00 in the morning, all of my morning rituals. Then I work long hours and rinse, repeat.
Often, I’m on a plane. If you take just the last month, I was in Puerto Rico. Then I was in Vegas for one night, LA for one night, New York for one night, LA for one night. West Palm Beach for one night, Miami for one night. London for one night, Versailles for one night. Normandy for one night, Paris for one night, DC for two nights. New York for one night, LA for two nights, Tokyo for three nights. This is often how I roll.
How do you keep your brain narrowed and focused on producing at a high level every single day, especially with all the travel?
It’s all training. I’ve been doing this a long time.
Do you think there’s going to be a make or break type moment for cryptocurrency in 2019/2020, and if so, what would you hypothesize it would be?
Well, I don’t see a break happening. I only see a make.
We’re in a bear market, but we’ve been in bear markets before. This is kind of like a regular cycle. Remember the price of cryptocurrency is the primary barometer of sentiment. It has very little to do with fundamentals. The fundamentals of the ecosystem have been consistent and up and to the right. Number of users, number of entrepreneurs, amount of capital coming in, all of it. Transaction volume, pretty much everything has consistently been up and to the right, sometimes accelerating faster than at other times.
The foot is off the gas right now versus pedal to the metal. We’re still moving forward even though the price might be down.
We go through these cycles and it’s very necessary because what happens is when the price rockets, the mentality of the ecosystem is “when moon, when Lambo”? That is not what we are or how we want to be represented. Whether people realize it or not, we are building the technology framework that’s going to change the world and hopefully make it a much better place. The outcome will be determined by the quality of the people that do it.
Do we want “when moon, when Lambo” mentality being the designers of the new world or do we want it to be people of high integrity that are hunkered down and doing the work to build the necessary infrastructure to build a better future for all of us?
We need these corrections because they act as a cleansing or purging event and it gets everything out of the industry that is not in resonance with what we’re doing and what we’re building. I for one am very happy the market is down because the market is now becoming rational again and the people that are not operating with integrity are disappearing because they don’t see a quick buck anymore. What’s left are the true believers and the people that are here to change the world.
Let’s assume that we continue on this current trajectory. How do you see your average non-technical person interacting with cryptocurrency and blockchain solutions on a daily basis within the next few years?
Remember, this space has only been around 10 years and very few people were working in it 10 years ago. You can count them on two hands. It’s really only been the last six or seven years that you’ve had any critical mass of people working on things and that mass has obviously expanded exponentially over these last six, seven years.
We have a lot of really talented people all over the world focused and participating. The Internet, as it was being developed over the 60s, 70s, 80s, and 90s, wasn’t usable to consumers until 1995. In 1995, Netscape was created. The Internet was not usable to average people until you had an internet browser, until you had an email client until you had search engines and content and things to consume and things to buy. Until you are at a critical mass of infrastructure, until the bridges, the roads, and the tunnels had been built, it was not ready for mainstream.
Crypto has been in a very similar state. I think we’ve now had our Netscape moment and that was with EOS. I believe EOS is our Netscape. EOS is the first scalable blockchain that has low latency, meaning it’s fast, and no fees on to the consumer, meaning no friction. I think we’ve had our Netscape moment. You remember when Netscape launched, no one recognized its significance until you had the benefit of hindsight, meaning a few years later. I believe we’ve now had our consumer internet moment. This is the equivalent of when the Apple iPhone came out and the app store. We’re in the beginning stages.
The first apps in the app store are early, they’re not where it’s all going to end up. I’m also not saying that EOS is definitely the future. I’m entirely chain agnostic and there’s a lot of generation three protocols that are going to come out that are scalable and fast and things of that nature.
Ethereum will have an upgrade at some point. I’m just saying it was first and keep in mind there was Netscape, Internet Explorer, Safari, Chrome, Firefox, Brave, ETC. There will be a number of browsers, to use that analogy. I think we’ve had our consumer moment and so, I think that’s now. I think over the next year or two or three, we’re going to see meaningful consumer adoption because we now have systems that can scale and can deliver that now.
There’s still a handful of other things that need to be improved. User interfaces, but that’s getting better as more marketing people and designers come into the space. It’s not just great engineers anymore and great cryptographers.
Obviously, to get mass consumer adoption, you need things that are consumer usable and you also need applications that appeal to the masses. The three categories where I think we’re going to see the first killer apps emerge are going to either be in social, things that are going after Facebook and Instagram or it’ll be in messaging, things that are going after WhatsApp and Skype or it’s going to be in gaming.
I think those are the three areas where we’re going to see the first sort of killer apps emerge that deliver meaningful scale to blockchain. I think that we’re going to see our first app this year hit a million users.
This bear market has many projects laying off significant amounts of their staff, if not shutting down completely. Do you have any words of wisdom for any entrepreneurs in the blockchain and crypto space?
Have faith. You’re in the right space at the right time and most likely doing the right thing. A poem comes to mind. The poem by Rudyard Kipling and the poem is known as “If”:
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:
If you can meet with triumph and disaster and treat those two imposters just the same, it feels like an appropriate poem for everyone. For anyone that hasn’t read it, maybe that’s the best piece of advice I can give everyone today.
Having a very Zen-like or stoic resolve and ignore the explosions around you. Just keep focusing on what’s going on in front of you.
Exactly, be present, stay present.
The intersection of gaming and blockchain has been very interesting to follow. Why would now be the best time for game developers to start building as opposed to a few years ago?
You didn’t have the infrastructure a few years ago. What kind of game are you going to build on a blockchain a few years ago? The only thing that was done recently that had any success was Crypto Kitties, and Crypto Kitties couldn’t scale.
What type of video games do you expect to see that are supported by blockchain? Would it be like your typical Fortnite and World of Warcraft on blockchain? Would it just be more of an NFT solution?
It definitely won’t be Fortnite or World of Warcraft. Those games take years to develop. Those things won’t happen on blockchain for some time. They’re going to be more simple games. Things like Crypto Kitties, things with NFTs. Gambling games, we already have a lot of adoption there. You’ve got the gambling side and we’re going to have more and more and more of that, but then you’re also going to have casual games, but I also think we’re going to see something where gambling games and casual games converge.
I like to call that category “reward-based gaming”. It looks like a video game and it doesn’t look like a gambling game, but you’re actually earning things of value. Things like trivia games. A lot of the same stuff that you see that’s popular on mobile today. They’re going to be simple because these are the things that you can turn around and crank out quickly.
We’ll see hundreds of simple games, most of which will fail, but we’ll end up with a few hopefully killer apps and by playing the game, you earn value. You’re collecting coins, think Farmville, stuff of that nature except for those coins have value like in games like World of Warcraft. The games need to be designed so that people want more of them and there has to be a reason why we would buy and sell them, the utility or whatever else.
It’s basically the industries I’ve worked in most of my life, which is gaming and specifically, marketplaces around gaming and game currencies.
I was the biggest market maker of game currencies in the world. I built a supply chain of 400,000 people in China to play games professionally to mine digital currency. I’ve done $20,000,000 worth of sales in that business.
That’s pretty much where my crypto roots are as well. I was selling Runescape items and gold for real dollars at like 12 or 13.
That was my business. I was doing that for RuneScape and every game.
Were you using Chinese bots?
I taught the Chinese how to do that. I’m the guy that taught the Chinese.
It’s funny to think about how many people that used to play World of Warcraft and RuneScape eventually got in cryptocurrency and general internet entrepreneurship. What were some of your favorite video games while you were growing up?
I was a pro gamer, so I played every game I could get my hands on as a kid. I was also a mall rat, so I loved hanging out in arcades back when they still existed. I’m dating myself now, but Mortal Kombat was probably my personal favorite in terms of arcade games. The one that I played in a lot of tournaments, but I love role-playing games more than probably anything else.
The Final Fantasies and everything else. I also played a lot of card games, things like Magic the Gathering. The first persistent games were coming online. I played a lot of Everquest, World of Warcraft, things of that nature.
So, you guys are looking to bring back MtGox from the so-called abyss. How are you guys planning to go about doing that? I’m very curious about the actual process of rescuing funds.
How do we plan about going and doing that? There’s a couple of priorities here. Number one is that there are 24,000 victims that have filed claims with Philadelphia Bankruptcy Lawyer for the bankruptcy trustee. There are 24,000 victims that made an early bet on Bitcoin back in the day and they’ve been deprived of the benefits of having taken that risk and their money’s been locked up in a bankruptcy process for five years now. Number one on the list of priorities is getting them that money and that bitcoin as quickly as possible
What does the actual task of recovering the funds look like?
MtGox lost 850,000 bitcoin. They found 200,000 of those, so there’s still 650,000 missing bitcoin. Now of the 200,000, the bankruptcy trustee sold about 50,000 of them for $630,000,000. The MtGox estate today has about $630,000,000 and about 150,000 bitcoin. That cash and that coin needs to be distributed to creditors, the victims, as soon as possible.
How about the bitcoin that’s not on the table, are there going to be any efforts to recover that or is that something that is beyond the immediate scope of the MtGox uprising?
I’d say that one more step down the road. The number two thing that needs to happen to get that money paid out is a simple rehabilitation plan, a CR plan, that needs to be approved by the bankruptcy trustee. That’s number two. Number three is that CoinLab filed a lawsuit against the MtGox estate for $70,000,000 back in 2014.
That lawsuit was a frivolous lawsuit in my opinion because they breached their contract and failed to perform. In addition to that, they embezzled $3,000,000 of Mt. Gox customer money. The firm that failed to perform was in breach of contract and embezzled $3,000,000. It’s suing MtGox for $70 million. Does that make any sense to you? It’s insane. The gall to do something like that is crazy.
Now, fast forward to today. Once CoinLab realized that it’s coming out of liquidation and going into civil rehabilitation and that the value of the bitcoin has gone up so much and that there are $630,000,000 there, they’ve amended their lawsuit and now they’re claiming they’re owed $16,000,000,000 ($16 billion). They want all of the money.
They’re basically saying that if MtGox had stayed in business and if MtGox had not canceled their contracts from which they were in breach, and have they not embezzled the money which they chose to do, had they actually performed and done something which they did not, they believed their company would be worth $16 billion today.
They believed that they would be bigger than Coinbase. The only thing that I’m surprised by is why they’re not saying they’d be Facebook or Google or both. The gall to make that statement is out of this world. They’re claiming that they’re owed all the money and creditors should get zero. They believe that 100% of the money should go to CoinLab. That needs to be addressed. They need to be stopped.
One way we’re stopping it is I bought the MtGox equity in 2014. It looks to me like I own 100% of MtGox. As the equity holder, it looks like I would be entitled to $700,000,000 or $800,000,000 of excess capital. I want all of that to go to the creditors.
We want the creditors to receive all that cash and coin as quickly as possible. Call it the good guys. On the other side of the house, you’ve got CoinLab that did nothing, stole money and breached contract and they’re saying they deserve everything. Let’s call them the villains.
It’s very Joseph Campbell-esque.
This is a Joseph Campbell story. This is why I’m getting involved. It’s because MtGox, you had the rise and the fall, and the story is not over. We have the power as an industry to write the end of this story. How do we as an industry want the story to end and I would say let’s write a Joseph Campbell ending.
The rise, the fall, like a phoenix rising from the ashes, the rise again. Let’s stop the villains. Let’s stop the bad guys from taking all the money and as an industry, this is our Lehman Brothers. This is our Bear Stearns. Let’s show that we’re different than the old financial system. Let’s show that we’re better than the old financial system. Let’s get creditors all their money back and demonstrate that we’re resilient as an industry and we’re still standing.
It’s a very hot topic, especially recently with this whole Quadriga exchange scandal.
That’s the other piece, let’s raise the bar. Let’s raise the bar and operate this exchange as a lighthouse, as a demonstration of best practices of how exchanges should operate today so that this story that has continually plagued our industry, even quadrangle, as recently as now, Cryptopia, but this has been going on.
This story is happening over and over and over again, and the technology is there. The tools are there, the skills are there to prevent this from happening going forward. For one, decentralization of the custodianship, noncustodial exchanges. We can do that with the crypto. This shouldn’t be happening anymore. Multisig, this most recent one. You didn’t even use multisig. What is going on here? It looks intentional.
It looks very suspicious because we should all know better at this point. It’s time as an industry that we stop tolerating exchanges that do not implement the current best practices. This needs to stop.
A lot of people that are storing their cryptocurrencies aren’t even aware of what types of measures are taken to protect their money. A single person, unfortunately, passing away with the keys to $190,000,000 or whatever the amount was, it’s bonkers and it’s definitely not winning any points from a mainstream audience.
Most people got their introduction to Bitcoin through the MtGox story. That’s how people learned about the industry. They think it’s used for drugs or it goes up and down a lot and it’s really risky and not safe and it’s always getting hacked.
That’s the perception of the average person because of the MtGox story and the stories like it that have continued to plague our industry. It’s time to bring that to an end.
Number one, creditors, the victims, the 24,000 creditors, getting them that cash and coin as quickly as possible.
Number two, stop CoinLab. Stop the villain.
Number three, establish a foundation on behalf of the creditors governed by the creditors to pursue the recovery efforts of going after the missing coins and pursuing any and all claims to get creditors what they deserve. You get the victims what they deserve.
Number four is to relaunch the exchange.
Remember when Bitfinex got hacked? Bitfinex was able to pay off their creditors through the proceeds of operating the exchange. If MtGox had been operating for the last five years, creditors might have already been made whole. Let’s not let another five years go by. Let’s get this thing up and running quickly.
It’s my belief that this story, the creditors are the most important piece, 24,000 creditors, but we’ve all been victims. Anyone that’s ever held a bitcoin is a victim of the MtGox hack because MtGox getting hacked has set back our industry by one or two years. Every time there’s another one of these hacks, it sets back, and it damages the public perception of the work that we’re doing. What’s good for Gox is good for the ecosystem in my opinion.
What would you say would be the biggest hurdles in building back that Gox brand beyond reimbursing the creditors?
Building a best in breed, best in class exchange that has solved for the custodianship of the coin so that you can’t have the money stolen again. Then getting people to trust it again. That’s obviously a long process. Clearly, people have been burned. We’ve all been burned, but there’s a bit of a redemption story here.
Could you tell us a bit about how things are going in Puerto Rico?
Things in Puerto Rico are moving along. More and more amazing people are showing up with intellectual capital, human capital, financial capital, spiritual capital, and good intentions. Little by little, we’re making progress. You now have a number of angel investors in Puerto Rico, which had never been the case previously. You have a number of mentors that have built successful startups in the past that are there to help each and inspire the next wave of entrepreneurs.
There had never been any startups in Puerto Rico that had raised even a million dollars historically. Two startups raised over a million bucks last year at the second app. I think we’ll have a number of more this year. There’s a whole startup ecosystem emerging, and this is Puerto Rican entrepreneurs.
Puerto Rican people are so talented. Puerto Ricans have more bachelor’s degrees per capita than anywhere else in the United States. They’re the most educated on average. They also have more artists per capita than anywhere in the United States. meaning they’re very creative.
Puerto Rican people have talent. It’s a place we should all be spending more time. Puerto Rico’s main export is humans, human capital, but most of it ends up in San Francisco or in New York because there’s not enough opportunity in Puerto Rico. This has been this sustained brain drain where the most talented Puerto Ricans are continually leaving because they don’t have the tools to do what they want back home. That’s starting to change and hopefully continues to.
Especially with the digital revolution where you can pretty much start a multimillion-dollar company just from your laptop, no matter where you are. What are your thoughts on Seasteading and a self-sustaining autonomous blockchain built economies?
I love playing around with new forms of governance. I spend a lot of my time thinking about nation building. I’m friends with Patri Friedman, Milton Friedman’s grandson who started Seasteading. Randy, who was the CEO of Seasteading up until maybe a couple of months ago, has been living in Puerto Rico with us. I’m a very big fan of the Seasteading process.
The concept itself is fascinating, especially with the beauty of the internet connecting everybody, even if you’re pretty much nowhere. I’m just curious about your thoughts on McAfee’s campaign to become president.
I introduced John McAfee to Bitcoin. I think that’s what he’d tell you. John’s an extraordinary guy, very interesting. He has lived one of the most extraordinary lives and has certainly been a big and very public advocate for crypto and the things that we’re doing. If you get the pleasure of hanging out with him, you will be thoroughly entertained.
You’re known to be fairly accessible for virtually anybody who’s very interested in the cryptocurrency industry. I always see you at conferences chatting up with the crowds an all sorts of other events.
I make a point of being accessible. I give talks at conferences and I hang out for a couple of hours afterward always. Over the course of my entire life, every major speaker gives a talk and they exit out of the back door. I’ve only seen a couple of people in my entire life that doesn’t do that.
It’s a very unique aspect of the cryptocurrency space as well because you have a lot of the people that are doing the innovating are also engaging in building the community up. It’s awesome to see.
That’s what separates us from the old world is we’re building communities. That’s what this is. The technology is not what differentiates one project from another. It’s open source, copy paste.
What separates one project from another is the quality of its community and the stewards that help support it. Those stewards putting their community first, not themselves. That’s what separates us from the old world because we’re building open source systems with open hearts and open minds
What’s the next piece of the puzzle for you in your projects and how can our readers help out with any of the things that we’ve talked about today?
If you’re a Gox creditor, come to Gox Rising and sign up so that you own some of the new exchange and be informed. If you are not a Gox creditor, keep doing what you’re doing. It takes teamwork to make the dream work. It takes all of us and all the work that we’re doing.
There are so many ways that each and every one of us can contribute in our own unique, special way. Let’s change the world and make it a better place.
Thank you for your time, Brock!
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ABOUT THE AUTHOR
ABOUT THE AUTHOR
Alex Moskov is the Founder and Editor-in-Chief of CoinCentral. Alex leans on his formal educational background (BSBA with a Major in Finance from the University of Florida) and his on-the-ground experiences with cryptocurrency starting in 2012. Alex works with cryptocurrency and blockchain-based companies on content strategy and business development. He privately consults entrepreneurs and venture capitalists on movements within the cryptocurrency industry.
His writing has been seen in The Hustle, VentureBeat, Yahoo Finance, Harvard Business Review, and Business Insider. His articles on CoinCentral have been cited on publications like Forbes, TechCrunch, Vice, The Guardian, Investopedia, The Motley Fool, Seeking Alpha, and more.
He also regrets not buying more Bitcoin back in 2012, just like you.
You can connect with Alex on Twitter.