Vinny Lingham is a serial entrepreneur, and one of the most recognized and influential blockchain and cryptocurrency experts in the world. He is the Co-Founder and CEO of Civic Technologies, which is a blockchain-based identity management company. Vinny is one of the Sharks on “Shark Tank South Africa,” and he is a general partner of the investment firm Multicoin Capital, one of the world’s largest crypto funds investing in cryptocurrencies, tokens, and blockchain companies reshaping trillion-dollar markets.
Vinny is often affectionately referred to as the Oracle of Bitcoin when featured by major media outlets like Forbes, Fortune, CNBC, Business Insider, Coin Desk, and many more. His vision for the best usage of the blockchain is to create security, privacy, and identity verification and protection.
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Vinny Lingham: Get On The Blockchain And Into Crypto Or Be Left Behind
Joining us is Vinny Lingham, a serial entrepreneur and one of the most recognized and influential blockchain and cryptocurrency experts in the world. He is the Cofounder and CEO of Civic Technologies, which is a blockchain-based identity management company. He’s one of the Sharks on Shark Tank South Africa. He is a General Partner of Multicoin Capital, which is an investment firm, one of the world’s largest crypto funds investing in cryptocurrencies, tokens and blockchain companies reshaping trillion dollar markets. Vinny is often affectionately referred to as the Oracle of Bitcoin when featured by major media outlets like Forbes, Fortune, CNBC, Business Insider, CoinDesk and many more. His vision for the best usage of the blockchain is to create security, privacy, identity verification and protection. Please join me with Vinny Lingham.
Vinny Lingham, thank you for joining me on the show. How are you doing?
Chris, I’m doing well. How about you?
I’m doing good. It’s good to see and talk to you. As always, I’m excited to get into it. We are living in a time where your world is exploding. It’s more in the news now and more impactful than ever. You are the CEO of Civic, a company that is a blockchain-based digital identity provider. Shark Tank is a big show here in the United States. They had spinoffs all over the world. That’s awesome that you are one of the South African sharks. I’m excited to talk to you about all things business but as it relates to the blockchain. Let’s start with your company. You got into blockchain a long time ago. Tell us how you got into it, how and why you started Civic.
Civic was founded in late 2015. The vision was to build a decentralized identity lab for what would be the next wave of the internet. I call it the Blockchain Web 3.0 Stack. We’ve been working on that ever since. We were the first blockchain-based identity company to be born. We’ve had a lot of interesting successes and failures trying to pioneer what happens in digital identity. It’s been years since we started the company. We finally are at the point where the market’s catching up to what we sold years ago. We were a bit too early to be fair, when we started and now it’s getting to a point where there’s a need for digital identity KYC, AML in the crypto space.
Tell the people who don’t know what that means, what a digital identity provider does and what your vision of the company was.The blockchain world is basically allowing us to effectively get rid of pen, paper, and pencil. Click To Tweet
Our vision was that you could keep your personal identity information digitized on your device. Instead of having a physical passport, physical driver’s license, in the real world, we need those things when we walk into a bank to open up an account but if you’re in the online decentralized financial world where blockchain and cryptocurrencies play, you don’t speak to anyone. You don’t see anyone. You’ve got to provide information and verify your identity. That’s a little more difficult to do because there isn’t a physical infrastructure. We take your information. We digitize it. We will help you to store it on your device. We authenticate the face on the driver’s license and the passport with your face on your phone using some advanced cameras. The cameras have gotten a lot better over the years. To a very high degree of certainty, we can guarantee and validate the identity of people who are participating in the blockchain crypto ecosystem. That’s what we do. It’s the same way your bank verifies your identity when you walk into the branch. We do it digitally.
How does the digital identity that you have on your device then get used in your transactions? Where do you need this kind of service that Civic provides?
We’re focusing very much on places. A good example is the NFT space. Creators need to verify the identity to sell products in the digital NFT auctions. We help NFT companies with that so they can verify who you are. Any income from the platform, they need to know who you are to issue a 1099 or whatever it is. We help with the ID verification process for that. We’re helping companies that need to identify who their customers are. We do it using Identity.com, which is a blockchain-based smart contracting platform, which we help to establish. It’s a nonprofit organization but it’s a marketplace in exchange for people to use to do ID verification in the crypto world.
People understand that cryptocurrency is on the blockchain. You’re talking about digital identity on the blockchain. For people who don’t know that much about the blockchain but want to know more about it, companies, businesses and industries are all getting on the blockchain. Is that where they belong? Is that where the future is? Tell us what the blockchain has to offer and why things are going there.
We’re very early on in the evolution of the cryptocurrency world. This is the early 2000s compared to the internet. What this new revolution is about is it’s about programmatically making sure that transactions can happen without a trusted third party in between. What is a smart contract? A smart contract is a digital contract with a set of rules that as long as everyone agrees with what the rules are, will automatically enforce those rules. Let’s say, for example, I wanted to buy a piece of property from you at a certain date and time. As long as I deposited the cryptocurrency in a certain wallet, the ownership would change from you to me on a certain day. You can write that into a smart contract.
People can buy and trade, whether it’s property, land or NFT, Non-Fungible Tokens. You can do these smart contracts. The blockchain world is allowing us to get rid of paper effectively, pencil, printed signature in contracts and make programmatic contracts that exist out there that are enforceable. There are lots of different use cases here. We can dive into some of them. Essentially, it’s an ecosystem built upon programmatic rules and not courts and adjudication by arbitration. This is the contract. If you transfer X currency to this wallet, these things will happen.Cryptocurrencies are basically uniting the world's populations into single global markets. Click To Tweet
There’s no chance for the transaction to be delayed. It’s instant. It’s between the two parties. There’s nobody in the middle. There’s no chance of people stealing the money or the money going to the wrong place. It’s a very safe unhackable transaction.
I wouldn’t say it’s unhackable yet. We were still testing on it. Some contracts have been hacked. Because it’s a little open-source and it’s becoming more tried and tested, the risks are much lower than in the real world. You have this defined decentralized finance. You have these massive platforms that run what they call AMMs, Automated Market Makers, which allows people to yield on a cryptocurrency borrower. If you have a Bitcoin, you don’t want to sell a Bitcoin but you want to borrow $20,000 against it. Bitcoin is worth $60,000 now, you should be able to borrow against it. The way the contracts work is I deposit a Bitcoin and then I withdraw some US dollars in a tokenized format, in USDC or USDT, whichever currency you want. If the Bitcoin price drops below a certain point, those coins will be sold to defray and protect the person lending the coins to you. This is all done in a very trusted way. You know what you’re putting down as the collateral. You know what you’re borrowing against. You don’t need to talk to anyone. You can go to a platform and effectively borrow against those points.
We are going to talk about crypto a little bit. You were known as the Oracle of Bitcoin for many years. Everybody had you on TV. You were predicting what was going to happen. You were the Oracle. You made a lot of people have a lot of money. Everybody always wants to hear what you have to say. When I’ve met with you and talk to you, you seem to be always right on the mark. You’re always advising caution and carefulness with your money. This is an amazing world that we’re living in. We were in a pandemic and yet the stock market went up. Cryptocurrency is more valuable than ever. Is it because people are realizing that they want to have more control? It’s the theme in society, in business and also in people’s personal lives. People want things to be decentralized. People want to have more control. Is that why there’s popularity here around this or is it just inevitable? This is the future and people are now finally realizing that.
What’s going on is that we’re moving to a world where it’s effectively global markets. It’s trustless. It sits outside the function of governments. Governments don’t know what to do. Cryptocurrencies are uniting the world’s populations. We’ve got seven billion people out there into single global markets. There’s a global market for Bitcoin where there are billions of people who want to own Bitcoin or at least hundreds of millions that do. These people can buy it from any country in the world. One Bitcoin in America is the same Bitcoin in China and everywhere. You’ve got these global units of account and stores of value like Bitcoin. You’ve also got Ethereum. You’ve got other cryptocurrencies like Filecoin, etc. Whether you want to look at them as public utilities or public assets, they have massive audiences.
Look at stock markets years ago. In many countries, the only people who can buy stocks in a certain country are the people who live in that country. The price for those stocks tends to be reasonable because supply and demand are limited to the local market. I’m from South Africa originally. I don’t have any American friends, other than those who would trade with the stock exchange. This is not a market that is linked to the markets that we’ve traded over yet. With cryptocurrencies, you’ve got the benefit of global markets. If somebody likes something in one country, they will arbitrage the price up. They’ll buy it. Whereas if there’s an underwriting stock in South Africa, no one knows about it. No one’s going to buy it. No one’s going to bother. It’s priced in Rand.
What you see in the cryptocurrency market is the unlocking of the potential for the human population on Earth to combine and allocate capital on a global scale, not on a local scale and a certain country where rules and regulations dictate that capital markets are constrained. This is unconstrained capitalism on a global scale. That’s what’s happening. This is why Bitcoin’s worth a trillion dollars. This is why multiple other cryptocurrencies are worth the tens of billions. You’ve got Ethereum which is $200 billion roughly. When you have a limited supply of some of these cryptocurrencies, which are extremely valuable in their own right but you have seven billion people, it’s very different from having a company in a market with twenty million people and only a small percentage of them will buy and trade that stock or whatnot. We’re seeing the power of what is Metcalfe’s Law. It’s the network effect of having seven billion humans participate in the global market.The higher you go in terms of wealth, the more you can take chances on speakers of assets like Bitcoin. Click To Tweet
The other interesting thing happening is Bitcoin is the dominant original in cryptocurrency but now China is coming out with their own government or country cryptocurrency. People are saying the United States needs to come up with a digital version of the dollar. Tell us a little bit about what countries are doing and why Bitcoin is still number one. Is it the original? What’s the reason behind Bitcoin’s success?
Bitcoin has the benefit of being the first. It isn’t the only but it is the first. It has a different use case that’s being focused on. The so-called store value use case. I don’t know what level of scale that gets to. It’s probably 10X for where we are. Will Bitcoin become the store of value for the whole world where you have $100 billion or $200 million store in Bitcoin? I don’t see that role but I do think it’s worth a lot more than where it’s priced at now. A couple hundred thousand dollars wouldn’t be outside the realm of imagination. Maybe $1 million but that’s going to be taking a long time to get there. What happens with China is it’s trying to lead the pack and saying they want their currency to become the global unit of account and challenge the dollar. They digitize it making it a global currency.
They’re trying to create this global market for the Chinese currency, which is a huge stretch to the US dollar. We understand the politics in the US versus the politics in China are very different. The chances of the US government launching a US dollar successfully and deploying it worldwide and beating China at this point where they are so ahead of the game, I’m skeptical. Maybe it could happen but the politics involved in getting a digital dollar out there is going to be hard. Facebook had to go through with their currency that they try to put up there with the congressional hearings, etc. I just don’t see America competing with China at this. China may win that race because they’ve got a big head start and then we’re like, “What’s left?”
We have the US dollar, which becomes a legacy currency. Maybe there’s a digital version that comes out several years after China gets a head start with their currency. I think the US should get a digital dollar out the door. I don’t think we can wait. We have to get it out now but I’m skeptical that the political situation will allow for that. China’s digital currency is a huge threat to the hegemony of the US dollar and that’s why people are going into Bitcoin as an alternative. Not everybody wants to see the Chinese currency win. China does. Bitcoin is where the economy plays. The downside is a lot of mining happens in China. If their currency took off, what happens to the Bitcoin mining operation in China? It’s a dire situation. You can’t kill Bitcoin but as Balaji Srinivasan says, he’s a thought leader in the crypto space. He thinks there’ll be a split at some point where you have two Bitcoins, a China Bitcoin and a non-China Bitcoin. That becomes another play. A lot of these things can play out.
All of the Bitcoin will be mined at some point. We’re almost 2/3 or 3/4 of the way there.
We’re 90% away there.
How many total Bitcoin are there?
There’s 21 million, supposed to be, but keep in mind, about four million is probably lost. There is about seventeen million Bitcoin left in circulation.
Why do people need to understand that Bitcoin is not going anywhere? Tell us how it’s not going to go anywhere. Why does that matter that there’s only 21 million Bitcoin available?
This is a long conversation, but the short answer is it’s a limited supply asset. It’s at $50,000 right now. If you’re a millionaire and multimillionaire, I always tell people to buy one Bitcoin per $1 million or $2 million that you have. Put it away and hold it. Think of it as insurance because you never know. You could look back in a couple of years and go, “That was important that I bought that for geopolitical reasons.” If every millionaire in the world tries to own one Bitcoin, there isn’t enough to go around. There is seventeen million Bitcoin, there are probably 100 million-plus millionaires in the world. If you’re a millionaire and you don’t have one, you’re taking a chance that you probably shouldn’t take. Bitcoin is a good foil against any geopolitical unrest that could happen over time. You don’t have to go back up the fall and put millions of dollars into it but you should probably on this one.
If you’re not a millionaire, should you buy a Bitcoin? Sure. You can put a bet in but it’s expensive as an asset. It may not have the same return and risk profile that you need. The higher up you go in terms of wealth, the more you can take chances on speculative assets like Bitcoin, which is still a speculative asset. The less property you have, the more you should probably invest in making sure you have a good home, property and whatever else. Everyone’s different. Young kids coming out of school asked me, “What should I buy? Should I buy Bitcoin?”
They prefer cryptocurrencies. I’m like, “You don’t have kids. You don’t have overhead costs but you need whatever you want and think. Do your research and see what gives you the best upside where you can have a 10, 20, 50X turn and you don’t have much to lose. When you have more to lose, it’s a different calculus.” Everyone’s different. This is not financial advice. If you’re at some level of wealth, you should at least realize that there isn’t enough Bitcoin to go around. It shouldn’t become a global standard for wealth protection.
What is the use case for Bitcoin and cryptocurrencies going forward with companies, businesses and transactions? Is this something that eventually can be something that we want to do more than any other transaction that we do? What’s the benefit of doing it? What’s the benefit for a company to accept Bitcoin? We’ve seen Tesla do it. Mastercard and Visa accepting payments for people’s debts in cryptocurrency or at least Bitcoin. Why would they want to do that? Is this something that we’re going to prefer doing in the future?
The ease of commerce across borders like digital dollars moving around Bitcoin, getting rid of the foreign exchange controls of companies. The foreign exchange market is a big market. People are buying and selling foreign exchange all the time. They are taking a margin. They’re taking 1% or 2% on either side of the trade. It pushes up costs of people trying to do the transaction. It makes it seamless. It makes it fast. Even sending a wire takes forever. People lose wires all the time. It doesn’t happen in crypto in the same way if you get a decent cryptocurrency, etc. It’s going to allow faster, cheaper transactions to be settled globally. If you can get the compliance stuff right, it’s going to be better than the banking system. I see a lot of banks trying to get into crypto. They did defensively but the fact of the matter is if crypto is successful in years’ time, we’re not going to leave the banks.
We’ll have a new type of bank where the banks of this day won’t exist. They’ll be out of work. The staff will be fully automated. It’s all programmatic. If you’re a banker and you can’t write code, you’re probably going to be out of the job in years because it’s going to be fully automated systems that run on all these autonomous systems. It’s the same as AI. AI is eating the world in a big way. Artificial Intelligence, programmatic, automation, this is what’s happening.
The big banks will keep fighting back, try and do stuff to make them look like they’re great in crypto but they have brands that the crypto community doesn’t care about. No one in crypto cares about Bank of America and Wells Fargo. We laugh at these guys. We don’t see them ever coming into the crypto world to figure out how to re-engineer themselves. What’s going to happen is crypto is going to continue to grow and innovate. Eventually, they’ll be the Barnes & Nobles of the financial world or the Blockbusters. That’s what’s going to happen. It’s almost guaranteed to happen. The question is when.
We’ve seen this play out so many times in the past. You go back in history. You look out Blockbuster and Netflix. Barnes & Noble was like Amazon and even the Blackberry CEO, the comments that they made trying to defend their position. Even Ford, GM, all these companies, when they look at Tesla, can’t believe that Tesla is bigger than all of them, pretty much combined. They put the oxygen. They put their head in the ground. They refuse to believe that disruption happens and see how there’ll be disruption. If you’ve been around technology for long enough, you see this disruptive cycle happen over and over again. You see the so-called leaders of these industries, the CEO, the geniuses that run these companies think that they’re smarter and better than the engineers, programmers and technologists of the world. Eventually, they see themselves as the best. The real question is time. Will these big banks exist in many years’ time? Probably not in their current form. The brands might exist. They may serve the older market but the younger folks don’t want to deal with them.If crypto is successful in five or ten years, we're still not going to leave the banks of today. Click To Tweet
Companies that are small businesses and Fortune 500 companies, are they all going to have to start accepting payment through crypto? Are they all going to have to put everything on the blockchain? Is this something that everybody needs to do or else we’re all dinosaurs?
We’re going to have to make sure that the crypto market falls a certain gap like any good product-market fit. There are the smartest people in the world working in the space trying to figure this out. I have faith that we’ll figure it out. Some of the smartest people I’ve ever met are all in crypto. They’re all mathematicians, computer scientists and engineers. We’re trying to make sure the world is a better place. We’re trying to do it by removing a lot of the evils of society by making things not subject to opinion but code and make them programmatic. You’ve heard a lot about systemic racism and those things that popped up and that’s all because the systems now are engineered poorly. They are designed by people who quite frankly are biased, stupid or both. We have to get to a point where it’s lifting its code that’s making the decisions. It doesn’t matter what the color of your skin is, how old you or any of that stuff. The system works properly on code and it’s unbiased. That’s what we’re trying to get to in the crypto community.
What is the most common usage of the blockchain that you see companies doing that weren’t in the blockchain that are older companies, dinosaur companies that maybe are saving themselves by getting on the blockchain? What’s the number one way they can get on there, do something to make their company more successful and be part of the future?
Probably fire their CEOs and hire someone from the crypto space. Quite frankly, that’s probably the only way forward. It’s very difficult to reinvent an existing established business. A lot of these CEOs think that adding Bitcoin in some way to the roster is going to change the whole profile for their businesses. It’s not going to. You have to reimagine and rethink it. PayPal has done a pretty good job of bringing crypto into their platform. Most of the companies aren’t going to do that. I speak to a lot of banks, by the way. They always contact me, asking me for opinions, this and that. They then go away and they don’t do anything about us. It’s a total waste of time. They’re kicking the tires as usual. It’s because as they go up to the top, the CEO kicks it down and says, “We’re not doing this. We don’t want to disrupt the whole business.” This is Netflix and Blockbuster all over again.
Vinny, this is all amazing stuff. It’s always great to talk to you. It’s an exciting space that you’re in. I appreciate you coming on and trying to help everybody understand a little bit more about it, especially during this exciting time in your industry.
Thanks, Chris. It’s great to be here. I enjoyed the chat.
About Vinny Lingham
Along with Elon Musk, South African-born Vinny Lingham is currently South Africa’s other major technology entrepreneur export to the famous Silicon Valley in San Francisco, and is always found ranked online in the top-5 lists of the most influential FinTech/ Blockchain/ Crypto Sphere insiders on the planet. He is a shark on “Shark Tank South Africa” (made by the same producers as “Shark Tank” in the U.S.) and is a very well-known presence online and in news media. Vinny is well known for his rabidly engaged Twitter following and speaks candidly about contemporary issues facing the Bitcoin & Blockchain community.
His previous business Gyft, which sold electronic gift vouchers, shot to fame after it began accepting Bitcoins. After California-based First Data acquired Gyft in 2014, reportedly for over $50m, Vinny – a serial entrepreneur – has also become well known as the ‘Bitcoin Oracle’ for his accurate forecasts of movements in the cryptocurrency’s price. He is now known as one of the world’s top experts on Bitcoin and Blockchain.
After over a decade of experience in e-commerce, Vinny realized that no-one had a universal identity solution that balanced security and privacy with ease of use and ubiquity. Today, his company, Civic, is being built from the ground up to solve problems relating to identity theft, fraud, and ultimately, democracy.