Welcome to the Innovation Conversation, a podcast
about innovators, both in business and real life.
Hosted by myself, Ricardo Rescual and Harry McCona.
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Hi, and welcome to another episode of The Innovation
Conversation. Today we are joined by Benjamin
Whitby. Benjamin, welcome to the podcast. Carter,
thank you so much for having me. It's a pleasure
having you here. Benjamin, would you like to
introduce yourself to the audience, please? Yeah,
I'd be delighted to. My name is Benjamin Whitby.
I am a technologist, quantum physicist, investment
banker. 20 years in capital markets and been
in the crypto space since rabbit hole 2013, four
times 2017. So did you ever buy a pizza with
the Bitcoin? No, I never ever got to kind of
do anything that kind of crazy. But yeah, the
rabbit hole moment for me was when I was still
working at HSBC and one of our staff put 50 Canadian
dollars into Robocoin ATM. which was the world's
first ATM in Bitcoin and I ended up having to
go and sort that out, walk the guy around the
car park, then read the white paper and just
had the most kind of amazing kind of revelation
how you just see forwards with technology and
you can see where things are going to go and
just saw that all of capital markets was going
to tokenize saw this in 2013 and then spent four
years in HSBC trying to get them to move the
needle before then kind of going full -time into
crypto in 2017 and now launched our latest protocol,
which is a cross -chain protocol. So yeah, it's
really exciting. So I guess what prompted you
to make a move from investment banking in a more
traditional role to the space? So I started my
career in early 2000s, late 1999, early 2000s.
And I ended up kind of working for one of the
biggest, Lloyds of London, so the biggest insurance
market in the world. We did all the Y2K challenges
there. And whilst I was there, having come out
of university, having access to the internet,
to then come into the working world and being
told No, you can't access the internet. No, you
can't have email. No, you have to use Lotus Notes.
I was like, this is like go back in time. And
yeah, obviously then we went through, um, web
1 .0 and email, the web kind of, and the internet
kind of propagated through all of our industry.
And I felt that the same kind of position I was
seeing same kind of position with Bitcoin in
2013 with this, it was like, Right, here we now
have something that is going to make the internet
able to operate with digitally scarce assets,
which is really important. So my generation,
we grew up kind of copying cassettes and CDs
and NPCs and things like that. And you got used
to being able to share digital assets around
with everybody. And so to have something that
is digitally scarce, See game changer and was
like this is gonna change capital markets forever
Which is really why I persisted with HSBC for
so long because I thought it's gonna be now they're
gonna see it. They're gonna see it It's gonna
happen. It's gonna happen But they chose either
not to see it or they were moving too slowly
and I just got quite bored and decided that it
was a there was an opportunity that was too big
to miss and Four had to kind of jump in with
both feet because you only really get one life
in terms of doing what you're doing and you have
to be doing something that you absolutely fundamentally
believe in. So I guess you can almost call yourself
an accidental entrepreneur, in the sense that
you had a very well established career in life
and then you moved to the crypto space. A wise
move by the way, but at the time I guess you
must have felt quite scary, you know? Yeah, it
was quite scary. I did it eight years at HSBC.
I had a great network. Before that I was with
PwC and Accenture and I thought actually people
would kind of understand where this was going
and would see through the noise and see to the
technology. And then obviously we had a couple
of good years and then a couple of really, really
tough years with like 2021 to 2024 really now
until when kind of all the the regulators in
the US are going to change. We had to endure
Operation Chokepoint and really it's being made
to feel like a criminal because you're building
technology that is going to change the world
and it just feels wrong at so many different
levels. But yeah, you do. You have to kind of
embrace and take what you know and then reach
for something new. You know when you when you
told your peers they're gonna move into the crypto
space and blockchain space How did they react
to that back in? Bitcoin hit 20k for the very
first time when I resigned and They were like
it's gonna be amazing. It's gonna go up forever.
And it's like well, that's just not gonna really
happen And then obviously we went through the
doldrums in the Bitcoin space. So I think About
six months after I had resigned and kind of come
out into the space we were down at three four
thousand dollars per Bitcoin Which now seems
like why didn't I buy so much more Bitcoin and
some more crypto? and the answer is you can never
have too much, but the reality of Kind of getting
engaged in this space is Significantly high -risk
right? So you've got all the benefit all the
challenges of traditional entrepreneurial activity,
layered on top with the fact that it's really
difficult to get a bank account. It's really
difficult to operate. It's really difficult to
launch a token. It's because it's all been structured
in such a way that there have been so many barriers
put in front until this point about progressing
this technology forwards, that it's only now
coming into this next wave of regulatory oversight
that I am truly excited for how this industry
is going to accelerate. You launch also your
own project now, which is Governor, if I got
the name correctly. Can you tell me a bit more
about it? Again, it's a journey of frustrations
and awareness and an observation of the gaps
that exist within the common technology space.
One of the challenges when I came out of HSBC
and kind of did this first DeFi project was that
actually we didn't have governance over our own
assets. As a team, we didn't have governance
over those. We had the ability to be sovereign,
self -sovereign, as in you know your private
key, I know my private key, we've got the ability
to sign and you know, as people in the investment
banking space know and will have experienced.
we all got these RSA tags that kind of generated
codes at a certain kind of frequency, and you
then kind of had to type in your unique code.
And so we were very used to kind of being able
to coordinate things, knowing that we were submitting
something that we could effectively sign without
being the full sole holder of those assets. And
in corporations, you need to have for a signature,
for a Overview, multiple signatures, multiple
sign -offs. And in the early days of crypto,
we never had that. So there were two kind of
real innovations that came through. One was the
innovation of the multi -sig technology. And
secondly, there was the innovation of MPC technology.
And MPC technology stands for multi -party computation.
And the combination of all these different technology
pieces into different layers We can now, in the
crypto space, put a structure and framework in
place that means that we can represent and reflect
the same processes that happen within corporate
structures today and investment banks through
social engagement, but do that on a technology
basis as well. And then once we've done that
with people, how can we then empower and give
AI agents the ability to go off and hold their
own keys? and be effectively self -sovereign.
So you can build a completely autonomous agent
as a smart contract on the blockchain, enable
that with a key infrastructure that allows them
to generate, create, control different addresses,
different assets on the blockchain. And that's
affected what Governor is. It's a framework that
enables self -sovereign control from all different
types of users and different kind of endpoints
including AIs and user agents that enables you
to control absolutely any asset on any blockchain.
Now that's really important. That's really important
because these blockchains when they exist, they
come into life and they become islands of liquidity.
So you have the assets that exist on Ethereum,
the assets that exist on Solana, on Solana. Those
two worlds do not talk to each other. Now, we're
getting to a point where I believe with the forthcoming
changes and regulations that enterprises will
be launching their own blockchains. We've already
seen this with Sony. We've seen this with a number
of different block... blockchain companies like
Coinbase and Kraken, where they've launched and
they're operating now, their own permissionless
blockchains. So these blockchains being called
DAP chains. And if we have the same types of
problems and challenges with those DAP chains
being islands of liquidity, then it makes it
very difficult to do composable transactions.
And it's It's almost as if you're a tourist and
you landed in a new country without a credit
card or a payment rail, the first thing that
you've got to do is you've got to go and take
your local home currency and do a conversion
into the currency of that national state. So
if you go to Ireland, you maybe need to change
from English pounds to Irish pounds. If you go
to France, you need to change from English pounds
to Euros. And that conversion to that kind of
new currency possession is the first thing that
you've got to do before you can do anything.
So before you can go and have coffee and a croissant
in France, you've got to have euros. Now, Governor
effectively makes it frictionless for anybody
to come and take their existing pounds and go
and purchase a coffee and a croissant in France,
in Paris, without having to do that dance of
currency exchange and movement, et cetera, et
cetera. And what's really, really important on
this is that all of these chains, we have Bitcoin.
Bitcoin is today 60 % market dominance, 60 %
of all value in crypto exists within Bitcoin
ecosystem. And there is no way to utilize that
value. without going through some kind of wrapping
or exchange process at this moment in time, which
sounds fine until you realize that the local
governments that have existed in this space have
been writing regulations about income tax, capital
gains tax, transfer and exchange of assets. And
so they see at this point in time, if we go back
to the I've got pounds, I want euros to buy a
coffee and a croissant. They see that transaction
where you're taking your pounds and turning it
into euros to do that transaction to buy a coffee
and croissant. They see that transaction as a
transaction that unlocks capital gains requirement,
which means that you lose an awful lot of your
value when you're going between these different
chains as a retail user, as a corporate user,
or potentially as an AI user. you're incurring
all sorts of different risks and challenges.
And so what Governor does is it enables you to
avoid in so many different ways through collateralization
and generating loans against your assets, the
ability to unlock value without incurring capital
gains costs, income costs, et cetera, et cetera,
because of the way that you're using your assets.
And importantly, probably most importantly, a
way of making sure that you're staying self -sovereign.
Okay, so you enable people to make the payments
in whatever currency they wish to do so and by
converting, do you also convert to fiat or how
does it work? I'm not touching fiat at this moment
in time. In order to do fiat, you do need to
be kind of regulated entity, that's one of the
things. It's very clear, you need to make sure
that you're doing KRC. and we're just operating
within the DeFi space. So the positions really
are try forward look again and say, right, okay,
we're gonna come to a position where, and there
are two big risks. The first is that we create
an environment that makes it impossible for AI
agents to go off and do various different things.
Now, if you've got an action that you want to
go off and do, you don't want your AI agent to
get stuck blocked. You want to be able to empower
them to travel through the entire kind of block
sphere and different blockchains without kind
of having problems. So the ability to create
addresses on all of these different blockchains
in a programmatic fashion is really important.
The second thing to kind of watch and worry about
is the way that we have defaulted into use of
bridges today and bridges in this space have
proved to be very successful, proved to be very
popular and are being used by people that do
not understand the risks. I always pick on the
Arbitrum team and I love the Arbitrum team because
I think they've got one of the best DAO frameworks
out there at the moment but if I use the Arbitrum
bridge As an example, as it stands today, they
have got round about three and a half billion
dollars worth of ETH on their bridge. Now that
bridge is secured by a 9 of 12 multi -sig run
by the Security Council of the Arbitrant Foundation.
At some point, when ETH finally comes out of
the doldrums, that three billion worth of value,
say three X's in the next cycle, could become
close to $10 billion. And that means that every
single user that is holding and securing that
contract is effectively securing a billion dollars
worth of value. Now at some point the money,
monetary value of the assets that they are holding
eclipses the risk of going and attacking any
one of those nine people. And so Governor flips
that on its head and allows individual users
to create and control assets, not through a centralized
bridge that holds $10 billion worth of value,
but to enable 8 billion people to hold a dollar's
worth of value on their own bridge, as it were.
So it really flips it on its head and the attack
vector in terms of the cryptography attacking
A bridge with a small amount of assets in there
is exactly the same as attacking a bridge with
a large amount of assets in there apart from
the maths is the same, but the social element
is very different. So the social element is you
need to attack one person and you'll unlock maybe
$100 worth of assets. Whereas if you attack the
bridge holders, you attack one person and you
unlock $10 million worth of assets is a very
asymmetric risk that you're addressing there.
Um, so governor helps move towards much, much
lower reduced, uh, risk model than current exists.
How, how'd you come up with this idea? First
principles thinking. I mean, I studied physics
for, uh, my degree and I always liked to kind
of deconstruct things back into their first principles.
It's something that we're all kind of taught
to do as artists and kind of go. find truth and
then evidence that truth. And yeah, it's always
good to go back and challenge. Was it challenging,
you know, launching the idea, getting to the
point where it is now, or did you actually found
a lot of people in the community saying, you
know what, I believe in this, I'm going to support
this 100 %? It's actually been really challenging.
It's been really challenging from the people
that we know, the angel community that we know,
that we've met in London and in various different
other parts of the world now. to nearly eight
years in the crypto space. It's been relatively
easy to get involved in that first year of funding.
In terms of the next stage of funding, actually
incredibly hard because we're faced with an environment
where we have these amazing crypto assets that
are still significantly undervalued compared
to what they will do in society. If you're talking
to a venture capital firm and they're sitting
on a various different size of portfolio, they're
maybe not necessarily at this point in the cycle
looking for that outsize risk. They might want
to just put, so they've got 10 million bucks
that they've got on their tickets to write tickets
for. They might just decide, actually, we're
just going to put this into Bitcoin for the next
12 months, ride it through 3, 4X. where we've
got to and then take profits out. And so it's
a very difficult time to convince people to kind
of walk away from a three, four X position until
they've had that liquidity moment. So I think
that the market will start to free up in 2025,
but maybe not towards the end of 2025. And the
challenge is that you would have come across
this Previously, good ideas don't wait, right?
If he waits and wait for the funding opportunities
to be right, somebody else will build your product.
That's a good point. I was just about to ask
you one thing, which is I talk with a lot of
entrepreneurs and there's always that element
of madness in whatever new thing they're trying
to build and develop. How do you manage that
yourself? How do you manage that fine line between
I'm doing something new and that's never been
done before and this is sheer madness to even
try and do this in the first place. How do you
balance that? target that you possibly can, whether
that's users, whether that's assets, whether
that's kind of position in terms of the goal
of launching a rocket that gets to Mars. You've
got to have that big end vision. And so for Governor,
the vision's pretty, pretty big. It's unlock
all trillion dollars worth of assets in the crypto
space, so that a single chain, the smallest chain
can use three trillion dollars worth of assets.
So you can launch your smart contract on the
smallest chain and utilize three trillion dollars
worth of liquidity without having to go and attract
liquidity because when all of these new different
chains launch they want two things. They want
eyeballs and users and developers coming into
that position. Now if you can take away the friction
of one of those things you're going to win and
Yeah, we did the numbers in terms of the burn
rate. We did the numbers in terms of the opportunity
cost and the opportunity that was on the table.
We need a tiny, tiny fraction of those assets.
Like 0 .30 is one of those assets. We've tremendously
successful. Tremendously successful. So it's
an opportunity that really kind of needs to be
played out. I think that Again, the layers of
experience, the layers of technology that I've
encountered through my career, it all points
to this direction. It really kind of has led
me up until this point. What do you think your
old pals at HSBC would say if they see you now?
I mean, I hope they're one, I hope they're engaged
in the crypto space. I hope they're lobbying
internally to do interesting projects, tokenizing
assets. I think they are. I think a lot of them.
moved on to various different other projects.
There's a lot of movement with the Santander
team. There's a lot of movement with the UBS
team. JP Morgan has got a really great team,
kind of making some really great strides, no
matter what Jamie would say. Yeah, the staff
get it. The senior management get it. There's
an asymmetric risk there as well, in terms of
the regulations that have been in place. by Gary
Gensler have been downside risk against going
against the SEC is too great considering the
business that they have on their books at this
moment in time. What has been frustrating for
me has been the attack on the space from the
regulators against the upstarts that are coming
through. That brings me to my next question,
which is how do you, let's say I'm a newcomer
in the crypto space, I don't get the blockchain,
all those things. How do you separate between
what's good and what's not so good? Because there's
been many cases where people look at it and say,
oh my God, this has been a complete scam. But
in reality, there's actually quite a lot of applications.
And we know for a fact that very powerful applications
are being created nowadays. So how do you, when
you look at things, how are you able to separate
between what's really good and what's an absolute
scam? It's really hard. It's really, it's really,
really, really. And the position comes at two
different levels as well, because You've not
only got the challenge of the project and how
much funding that they might have and the idea
But also you've got this new dynamic and the
funding is great, right? I mean since So I was
I was at PwC before HSBC and kind of was at PwC
just as kind of Sarbanes -Oxley was coming through
and kind of like all that kind of was coming
to the table and then obviously Lehman happened
and that was a really kind of groundbreaking
moment. But there were scams even in that position.
So the best regulation is not going to stop the
scams. We can list. Lehman is a really good example
in terms of that was a giant scam. We can say
Bernie Madoff was a massive scam that the regulators
signed off for many, many, many, many years before
it kind of bubbled up and actually kind of the
emperors called out for wearing their clothes.
In terms of how do you determine if a crypto
project is a scam or not? It's really difficult.
It's really difficult. The position that's currently
in my car tries to put framework together that
means that you can move forwards with a little
bit more confidence. But for me, it fundamentally
comes down to Do you have a team that you can
identify? Are they real people? Because it gives
you a great deal more confidence than having
an undocked ghost team. Do you have technology
that's legitimate, that's been verified and tested
at some level at some stage? And then do you
have a market that's receptive to actually receiving
this product? Because if your market isn't there
or the market is being actively regulated against
you, then you're never going to have a market
to sell into. But I think now we're getting to
a stage where we are going to see more legitimate
projects coming through because a lot of the
projects that were launched in 2018, 2019, a
lot of those were exceptionally early projects
that ultimately ended up not returning value
to users and consumers. But now we're ending
up with a position where you can start to engage
in these projects as an end user in a way that
you couldn't necessarily easily get involved
with traditional early stage venture. So, you
know, the whole Sarbe Zoxy thing that happened
after Enron really kind of raised the stakes
in terms of the IPO game. and has meant that
it's really kept normal people out of that investment,
that early stage risk taking. So only accredited
investors have been able to access entrepreneurial
risk. That's meant that only VCs have entered.
Really, IPOs have been a last resort that have
been taken after a product has demonstrated to
reach product market fit and launched into the
into the market with users, et cetera. I always
remember going back to some of the kind of classic
books that I recommend that people read and one
of them. Which ones? Which ones do you recommend?
I mean, it's all the classics. So it's all kind
of, you know, stuff like The Lean Startup, The
Zero to One, Hard Things About Hard Things. And
it's in Hard Things About Hard Things where they
talk about this journey that they were going
through, the cloud -based company, where they
literally had days' worth of runway left and
had to do an IPO. And you think, it's just insane
to be able to say, look, we're going to go to
market and we're going to launch an IPO to raise
capital for a new venture. You tell people that
now and they're like, that's not what an IPO
is for. An IPO is for to provide exit liquidity
for the VCs. and all of the employees that have
worked there and put sweat equity in, et cetera,
et cetera, et cetera. And because of that, we've
got a very kind of channel position in terms
of the funding market. The funding market had
doubled down in terms of Silicon Valley and lots
of different activity being launched out of Silicon
Valley because they were the people that were
able to understand and assess the risks. cycled
that capital through from their exits into their
new fundraising activity. And it meant that it
was pulling teams into Silicon Valley. So I hope
that now we're entering this new kind of token
forward token market economy that teams around
the world will be able to put good ideas onto
the table, get funded. from people all around
the world and solve problems in a much more dynamic
way that can not just be software, but could
also be hardware as well, because, you know,
things are much harder than bits. So you see
the future as a bright thing? Yeah, definitely.
I mean, I think anybody that exists in the space
in terms of wanting to kind of engage in technology
has to be an optimist, first and foremost. Either
that or crazy. One of those two things, right?
Ben, if people want to reach out to you, how
can you do so? What's the best way? So I am on
Twitter mainly. My Twitter is Benjamin J Whitby
and I'm open for DMs. People can contact me last
week. The project name that we're running with
is Governor Down. It's GVNRDAO. And yeah, we're
really excited to kind of bring it to market
and make sure that we can do something that's
really impactful and not only help users and
individuals engage, but also teams, builders,
developers, and new blockchains. So we hope that
we are the first team that come to when they
launch new chain. So there won't be The podcast
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