How Blockchain is Reshaping Finance with Amadeo Pellicce from Blockchain.comJun 25, 2021
Share this article:
HOST: Hey, everybody. Welcome back to the Unstoppable Podcast. I'm your host, Diana Chen, and I'm here today with our guest Amadeo Pellicce. He's the product manager at Blockchain.com. Before I bring him on, I just have a very exciting announcement to make. Unstoppable Domains is now integrated with Blockchain.com. So that means you can now send and receive crypto on Blockchain.com using your .crypto domain name, instead of that long string of letters and characters that make up your public key.
So super exciting stuff, and I'll bring Amadeo on to talk more about that. Welcome, Amadeo. Thank you so much for being here.
AMADEO PELLICCE: Thanks for having me, Diana.
HOST: Awesome. So before we dive into Blockchain.com, and our integration. I want to hear more about your backstory and how you got into crypto in the first place?
AMADEO PELLICCE: Sure. So I've been part of the crypto community since 2013. Originally, you know, got into Bitcoin, because my flat mate--my roommate actually had some problems receiving, you know, making international wire transfers. And that was just a great user experience for doing payments. I then started a kind of early on crypto exchange here in the UK, and worked in kind of Ethereum; Ethereum startups. And then most recently, joined Blockchain.com as a product manager.
The most exciting part of my job is just trying to make crypto more useful, whether it's an easier, whether it's to get your first crypto or to actually transfer it around. That's where I spend most of my time.
HOST: Gotcha. So 2013, that was like super early days. How did you go about learning more at the time? Like obviously your flat mate having that real life use case probably helped. But in terms of sources, there probably wasn't really crypto Twitter at the time. Where did you turn to learn more about the space?
AMADEO PELLICCE: It was actually a really small community back then. So the first encounter with other crypto people was in the London Bitcoin 2012 Conference, which brought in like early day, guys. And there was Bitcoin magazine back in the day Vitalik, actually was a part of Bitcoin magazine. So he actually was based in London, so I did get to be with him back when Ethereum was kind of, you know, very early days. And he was trying - - into Bitcoin. And yeah, really, like, from them at the time, I really wanted to just make it really easy for people to make payments and kind of use non-government money in a way. But I would have never dreamed that we'd be where we are today, just a mere eight years later. So yeah, super exciting journey.
HOST: Very cool. And for the listeners who maybe are brand new to this space. How would you explain in like a one-minute pitch? How would you explain crypto to them in a way that gets them excited to learn more?
AMADEO PELLICCE: Yes. So crypto is sound money. If you take a dollar in your pocket. The fact is that about two-thirds of those dollars have been printed in the last year by central governments, and crypto really gives people the opportunity to control their money and have money that can be used as sort of the kind of government systems to really access all sorts of applications. So it's a really exciting development, how we're able to separate money from state. That has never happened before.
HOST: For sure. And then what do you see as the major roadblocks or reasons why we haven't seen widespread adoption of crypto yet?
AMADEO PELLICCE: I think that it's phonologies is still really early. I think whenever crypto gets a lot of adoption, whether it's through price movements, or new application gets launched on any of the main chain, things clog up, right? It becomes really expensive to transact. The user experience is still lacking.
So I think it's a combination of new sort of technologies system clog use cases. And then those use cases actually getting adoption and getting sort of ingrained into the lives of people. So every new technological improvements brings in a new set of use cases, which then clogs up the main networks, which then brings in new technological improvements. So you know, but it's still really early days, and I'm super excited about the kind of further scaling of the technologies.
HOST: For sure. All right. So let's dive in and talk a little bit more about Blockchain.com. I think everybody has probably heard of Blockchain.com, but for anyone who might not be very familiar, can you just briefly explain what is Blockchain.com?
AMADEO PELLICCE: Sure. So Blockchaim.com is usually people's first encounter with crypto. We're the oldest crypto companies still in operation. We're best known for our Blockchain.com wallet, which has over 70 million users all over the world, and it allows folks to get their first crypto and use it.
In comparison to other players like Binance, or Coinbase, Blockchain.com allows us to store your crypto yourselves. So you hold the keys to your crypto. And we really believe, you know, we're powering in you a new money system for the internet through this kind of Web-3 stack.
So we also have the Blockchain.com Exchange, which is a liquidity gateway. And we have our institution business, where we have a large lending desk and we service clients as well as. So kind of large traditional company, you could say, but very focused on helping people control their own money.
HOST: Gotcha. And so since you guys are a noncustodial wallet, do you see more I guess like crypto natives and people who've been in this space longer using it rather than newbies to the space who might be scared that they're going to lose their keys or something like that would prefer more of a custodial wallet?
AMADEO PELLICCE: I think we definitely have both cohorts. It's usually takes education for people to understand why they want to control their own money. And what we've been working really hard at is a good onboarding flowing, where we make it really easy for people to get their first crypto. But before they can take those cryptos into their private key wallet, we actually educate them about what it means to hold their own keys, helping them back up their keys. We have cloud backups that automatically backing things up on iCloud and Google Drive. We also have—we educate them about the seed phrase.
So it's a journey. I think most users start by just getting some crypto, because they heard about it from friends. And by the time they go to try to use it, we have to educate before we allow them to transfer to their private key, which used to be the default for absolutely, everyone. But we've now made it so that folks need to onboard first and really understand what responsibilities they have with this.
HOST: Yeah, definitely. And what have been some of the most successful ways that you found with educating users in the space?
AMADEO PELLICCE: So I think the biggest sort of education—so one particular sort of trend that has really improved the user experience for people has been the round stable coins. So beforehand, folks needed to onboard into wanting to get into Bitcoin or Ethereum, like what are the main chains. And they didn't really understand that what the units of these currencies were. I think things like stable coins have really helped educate people as to what they can do with cryptos, and therefore, made it a little bit more familiar. And it has served as a stepping stone for them to get into, you know, more crypto applications, whether it's DeFi or peer-to-peer payments. So that's been in the last, I'd say like three years.
The other thing is more around, just kind of explained to people that the censorship resistance aspect of crypto is just really powerful. So no one can take away your money, and it's yours to kind of use and control.
HOST: Very cool. Yeah. From personal experience, I think the education piece is the most important. I also think that it can be—it's probably harder than it sounds to educate the public, because there's such a big learning gap between what people are used to in Web-2, versus what people are used to on Web-3. And also, you know, thinking about engaging ways to educate the public instead of sort of just force feeding them the white papers and things like that, which I don't think is the best way to educate people. So there's definitely a lot to think about and a lot to sort of play around with in this space for sure.
So then looking ahead to the future, I guess, like how do you see the crypto market developing? I don't know, if you want to project out a year, or five years or 10 years. I know things are happening so fast; it's like 10 years seems like an eternity. But how do you see things progressing? And then how long do you foresee until everybody is using crypto?
AMADEO PELLICCE: So I think people will use crypto under the hood for most of their financial obligations without knowing it in the next five years. And it's probably going to take a little bit longer for them to actually understand that they're using it under the hood and understand why it's better.
And the reason why I stress under the hood is because a lot of the use cases that are getting traction in crypto are in the sort of, you know, gateway for connecting large institutions upfront. So even if a customer is sending money through their Venmo account from A to B, perhaps internationally. From their point of view, they're getting dollars to their friends, but the settlement network and the payments network might all be powered by crypto, because it's better, faster, cheaper. But that's slightly different from them, being able to engage with the crypto networks directly.
I think for that in a model where absolutely everyone is essentially like a note in the network. We need, you know, pretty deep technological breakthroughs in terms of scaling, which I'm super bullish on, but I think it's going to take a little bit longer than five years.
HOST: Yeah, for sure. That's really interesting take, like the under the hood example there. And so one thing I'm wondering too, is with running a company like blockchain.com. Do you get a lot of people? Or is there a lot of education that you need to do on the side of educating people about why crypto prices go up and down? I'm wondering like, do you get customers writing into you all the time, you know, asking about that, or like even asking for your predictions about which cryptocurrencies are going to go up in the future? Is that something that you guys get a lot of?
AMADEO PELLICCE: We definitely get a lot of inbound whenever there's a like large crypto market events. Like folks are a little bit confused why the price is kind of crashing or rising rapidly, or whether the network gets congested or not. The first sort of suspicion that they have is that we are making fees more expensive, or transactions slower, or all those things.
We've also found cases where we're, you know, we're focused on the wallet business from a consumer perspective a lot. Sometimes we see other crypto users using other crypto platforms. Those platforms having issues, and then they think we're having issues as a result.
So we get all sorts of things that's kind of the gateway into other applications. But yeah, we always have to remind people that they control their own money, that this is an open network. That no one really controls these things, sometimes, and that's not easy to understand sometimes.
HOST: I can imagine for sure, and especially with what's happening today, I mean, I'm sure your community team or your customer support team is busy today. And for reference, we're recording this on May 19th. And I think everyone's been sort of like freaking out a little bit today, because all the prices are tanking.
So I know you're not a financial advisor, and none of this is financial advice. But just from your perspective, what are some reasons why there's so much volatility in crypto prices? What are maybe some things that cause crypto prices to go up or down? And then I guess also, what do you have to say to everybody who's freaking out today, or just the people in general who get so much fun from, you know, the little bit, like a tiniest dip in crypto prices?
AMADEO PELLICCE: Yes. So crypto prices are very volatile, and that's just sort of as a result of the rapid growth that it's had. I think it's important to like remember that assets like Bitcoin are the most—the best performing assets of all time, right. If you compare it against absolutely anything else, they've beaten every other financial instrument, and just in the last year, they have been up 350% even at these lower prices.
So my answer is always like zoom out, like look at your chart, and then just press the minus button and zoom out. It helps sort of put things into perspective. I think these corrections occur naturally, right. Sometimes the market gets really excited and whatever, you know, trigger can create a bit of a cascade and a bit of a rush towards people selling or buying. In this case I think like, people think that Elon Musk's tweet just started kind of this wave of sales and stuff.
But I think the fact is like unfinished markets or risky asset classes are also taking a bit of a hit based on some of the inflation fears and some of the interest rate policies by the Feds that they're considering. So and you know, as to where things will go, no one really can tell you, but I think it's—we're in early days in this technology. So I think most people that buy into it should really understand that they should really make longer term investments here and stay away from the FOMO and the kind of panic market participation.
HOST: For sure. I agree with that completely. And so another thing that I wanted to talk to you about is, I've seen maybe some articles that you've written or maybe some tweets that you've put out on this topic. Is how you see banking changing in the long run?
And so maybe a good place to start there would be to talk about how banking works today. At least that's something that I realized after I got into this space is, as I started learning more about Web-3, I realized more and more how little I knew about Web 2.0.0, and how things actually functioned behind the scenes.
So I think, like, when we talk about banking in the future, we need to first look at how does banking actually work today. But we'd love to hear your views on that.
AMADEO PELLICCE: Sure. So I think with, you know, if you think about banking from a consumer perspective, there's usually two main use cases. One is sort of storing people's money and trying to get people yield on their money. That's the main reason why folks leave their cash in their bank account.
And the other one is around payments, right? So they want to pay their bills, they want to pay their friends, they want to pay rent. So when it comes to things like, you know, storage of money and investments, crypto really revolutionizes this, because it allows folks to store their own money and then distribute their wealth across very efficient markets that are powered by the technology itself.
So some of these large banking players will still continue to exist, but they'll more be kind of aggregators of a lot of these other decentralized market places and just almost being the onramp in the UX/UI layer, and folks will be able to access a lot of these international kind of Web-3 solid applications from their—or reap the benefits from their traditional, you know, banking interface when they're using—when they're doing things like depositing or doing investments, because markets will naturally just become more efficient.
I think with things like payments, just kind of going back to what I was saying earlier, the current banking system is really fragmented when it comes the way that money moves around. Each bank essentially has an agreement with another bank to allow their end customers to send money to other customers in those systems. And you have these pools of banks that have kind of agreements with almost everyone. And so you know, they're kind of known as the large Correspondent Banks. And crypto really changes this in the sense that it really opens the playing field for more modern participants to be able pay each other at lower costs faster and with less thrust than the existing system.
So I think crypto is really—it's really, you know, it's not as much about decentralized finance. I think it's more about how finance will become really open, right, and accessible to everyone. We'll still call it finance. It won't be decentralized finance. But it will just be a lot more open and accessible, and markets will be a lot more efficient just because there are no artificial barriers. So I think a lot will change, but it will take some time.
HOST: Yeah, for sure. I know something that Camila Russo from the DeFi always says is, she's looking forward to the day when we don't have to call it decentralized finance anymore, when it's just going to be called finance, and it will have the structure of decentralized finance. So hopefully, we'll get there one day.
And one interesting point you brought up is, like sort of how it's going to change how banking works internationally. And so I know you're based in the UK; I'm based in the US. And so I'd be curious to hear like your thoughts on how it's—how banking will change in the western countries versus in maybe third world countries? Like what it will look like in different areas of the world?
AMADEO PELLICCE: So we're really blessed in the countries that we live in to get access to relatively good financial services, whether it's, you know, deposit accounts or credit cards or payment systems; for the most part, they work.
I think that largest impact would be felt by third world country sort of financial stacks, where you know, there is no longer a barrier for a user in a country that doesn't have advanced financial systems to access financial systems somewhere else, right? Why can't a, you know, someone in the Dominican Republic where I'm from you know, get really good interest rates comparable to the rates that folks in the US or the UK get, right? Or why can't they access the stock market, right? Like, these are all very artificial barriers.
And the more that we can break them down, the more participants you bring into the market, the more liquid markets become, and ultimately the better, faster and cheaper they become for everyone. So it will have a huge impact for everyone, but I think it will be mostly felt by third world countries due to open access that DeFi brings.
HOST: For sure. Yeah. And I think we've already started to see some of that, right? Are there any examples you can think of right now where we've already started seeing that?
AMADEO PELLICCE: So I think a lot of the, you know, a lot of the sort of DeFi aggregators or DeFi, let's say applications, if you think of you know, wallets and gateways into the Defi world. If you think about it and kind of take a step back, they are already starting to look a little bit like banks, right? We have the entire stack from savings accounts to peer-to-peer money transfers, and loans, or even more advanced financial instruments.
So I think we are already seeing these sort of, let's call them Neobanks that don't take custody of people's money already getting a lot of traction. I think it's, you know, it seems like a lot of traditional banks are kind of peeking into crypto by offering their client simply to buy and sell it. But whether they step forward and actually start offering some of these decentralized finance power tools to their customers, I think we're yet to see it. And it they don't, I think they'll just be left behind.
HOST: Yeah, for sure. Another area that I know you're interested in and I'm interested in a lot as well, and I think this is maybe one of the reasons why you guys were excited to integrate with Unstoppable in this way, is this whole topic surrounding digital identity. And so another big aspect of moving from Web 2.0 to Web 3.0 is this concept to run digital identity and being able to have more control over your digital identity.
And so today, you know, if you're on social media, which just about anybody is, your data, your information, all the content you create, everything is owned by decentralized companies that you're using: Facebook, Twitter; whatever platforms you're on. Whereas in the future, all of that can change. So I'm just curious from your perspective, how do you envision a Web 3.0 world when it comes to digital identity?
AMADEO PELLICCE: Yeah. So identity is super central to Web 3.0. And just to kind of step back, you know, as you said, things like Facebook and Twitter, they hold all the data you know within their data centers. They control who gets in or out of their networks, who sees what posts. Really, the promise of Web 3.0 is to flip that on its head and allow folks to, you know, because the data will be democratized and decentralized, it will allow network participants to interact with each other without the need for a central middleman. And that's super exciting because it will open all sorts of new use cases that perhaps weren't really practical before. And the role of identity there is super central, right? Because everyone that interacts online needs to really know who the other person that they're interacting is. Whether that's to make a payment to them or receive money, or even to, you know, interact in social media.
So I think the identity—yeah, even though there's been maybe 30, 40 years of research and applications into kind of online identity systems; decentralized identity, it's still a really early space. But ultimately, in a Web 3.0 world, identity really means private key management, right? How do you manage your keys in a way where you don't lose them, where you can prove to other people that you have them, and that you can interact with third party the applications and people really easily. And that's one of the things we're really passionate at block chain, about you just allowing people to manage their keys at scale. Right now, it's about money, but you know, it will, you know, key management and it's really the gateway to the rest of the financial systems, social networks, communications, and to really touch everything.
HOST: Yeah. When you talk about private key management, what are you envisioning in terms of sort of like a decentralized way of managing your private keys?
AMADEO PELLICCE: So the way to think about it is, you know, when you use WhatsApp under the hood, you actually encrypt the messages that you send to your friends. And that's super powerful because it means that other people can't really read you messages. And the way that that works is within the phones, right? Within the apps that you download, there's a key that is held there which is used to sort of lock and unlock, so to speak, your messages. And the reason it's decentralized is because everyone holds their own keys in their own phones, right? They're not really stored in a central box somewhere for you. So that's super important.
And the other thing that's important is it has to be easy to not lose it, right? You don't have—if you add a new phone, if you lose your phone, if you, you know, add your computer, it should be super transportable and it should be really, really hard to lose. Things like backing it up to your personal cloud, charting it, so you share it with your friends, or even more advanced things like putting it behind a smart contract that has custom logic, that's all going to make it easier for people to not lose their keys. But that's you know, that's a really hard problem.
And the third one is sort of how do you make it so that people can't be locked out of these systems? So the censorship is really, really difficult to get right in that decentralized world. How do you ensure that, you know, everyone gets access to these networks without you know, locking out—while the same time, ensuring user safety without locking out, you know, people that you shouldn't be locking out due to false positive. So yeah, private key management at scale is an absolute requirement for Web 3.0 to be successful.
HOST: For sure. Yeah. I hadn't thought about it like that, but that's all very interesting stuff. And so then, if you were to envision a future for maybe five years or 10 years down the line where we are operating more so in a Web 3.0 world, what does that look like to you? Like, are we still simultaneously interacting with Web 3.0 apps and Web 2.0 apps like Facebook and Twitter? Will those still be around? Or will they sort—be completely obsolete and just, you know, destroyed by these Web 3.0 social media platforms?
And then also, like, are other things stored on our private keys as well? Like, that's part of our digital identity that's beyond just our social media identity, like maybe thinking about like our driver's license, our ID, our passport, birth certificate, like other forms of identification; will all of these be stored in a central place that's attached to our private key and that's like, sort of how we interact? Or as like, how do you think about that?
AMADEO PELLICCE: Yeah. So I think it will definitely—Web 2.0 will be around for a very long time. And I think the nice thing about Web 2.0 is that the way that these services know who you are, is by allowing you to authenticate against them, whether it's your e-mail and password or more sophisticated methods. You're really just sharing some data that you have with them every time you use those services.
So in a way, Web 3.0 can be, you know, sort of backwards compatible to Web 2.0 where we can build experiences that allow folks to manage their keys for the Web 3.0 world, but at the same time also manage their, you know, access to Web 2.0 applications in a similar way. So when it comes to like folks interacting with their day-to-day lives, we've spoken about money a lot, right? So managing assets, transferring assets can all be done in a better way through tools that Web 3.0 brings to the market.
But if you think about social interactions, whether it's connecting with your friend and you know, proving to them that you are you, or you know, getting a service through a government website where you have to prove that you're who you are. These systems that are opened by Web 3.0 make it really easy for you to not share absolutely everything with everyone for every type of request, but you can break down the information that you share with folks.
So a good example is, let's say that you wanted to get bar, right? And you had to prove to the bouncer that, you know, you're over 18 or 21 or whatever it's in the US. You can automatically take out your phone, tap and prove to that third party, only your date of birth, right? Without showing them your entire passport or your entire, you know, driver's license. So you know, these are great user benefits, right? And they've become really accessible through these technologies. If we can make it so that the user experience is better and the underlying technologies can scale, and it's really, really safe so that users can't really be locked out of their lives. In the same way that folks might feel, you know, if they lose access to their Google account or their Amazon account or the iTunes account, and all of their digital content is kind of lost. How do we ensure that that never happens in a Web 3.0 world? It's even more difficult. And so yeah, it's a really exciting space to work in, because just the tech challenges are immense.
HOST: For sure. Yeah, this is definitely a time when I wish I was more of a technical person and could understand these different things, but I sort of just so like, I'm like, wouldn't it be so cool if, you know, I could have all of my identity documents, like in one place or any sort of asset I own that's unique, you know, like to be able to store that as a token on the blockchain would be so great. Like you can think about like your mortgage documents, your insurance documents, like anything like that, instead of having to--now, you know, if you ask me, oh, show me like your homeowner's insurance, I'm like, oh, now I have to like, go down this. I have to go search for it. It's going to probably take me half an hour of like digging through things. Like, nothing is in the same place. And so I do look forward to the day where when all of our assets and all of our digital identity, like whatever makes up our identity can be stored in one central, but decentralized location.
AMADEO PELLICCE: Yeah. It's going to be great. But think about…
HOST: All right. Amadeo, I really appreciate you… Yeah. Sorry, go ahead. Go ahead.
AMADEO PELLICCE: I know. I was just going to say, like, but think about how long it take you for some of these institutions to, you know, catch up to these trends. We're really looking at a long cycle here. So it's, you know, it's, amazing that we can even do all those things, but we really need to get the board out there of the benefits of this technology and really bring a lot of these sort of more traditional folks on board as well.
HOST: A 100%. I 100% agree. Well, thank you so much, Amadeo, for being here. Before you go, the last segment I always do on every podcast is called Explain Your Tweet. This is where I go through your Twitter, and I pull out some cryptic or interesting tweets and give you a chance to explain them.
So the first one I have for you here is from—this is from February 13th. You said, "The US banking system infrastructure is a joke compared to Europe's."
So we sort of already talked about banking and what the future of banking's going to look like. But we didn't really talk about the difference between the US banking infrastructure and Europe. So do you want to talk a little bit about that?
AMADEO PELLICCE: Sure. Yeah. So in the news back then it was really trendy that, you know, you had the Wall Street - - Reddit, you know, Reddit wars and kind of the market versus the people sort of you know, discussions and it was just really stark how in the US and in many countries you don't have real time settlement systems for basic things like, you know, stocks and even money, right? Like if you want to transfer money from to your friend in the US, in another bank account in another like banking institution. The amount of time that that really takes to get to the destination is actually like, it takes many, many hours at best and many, many days at worst.
Whereas, in a world where you can send e-mails in seconds all over the world, it really should be super easy to send money around or prove that the people trade at stocks. So Europe is a lot more advanced in that sense. I think you know, we, we get the benefit of being a little bit a little bit smaller in some ways, but yeah, you know, even Europe is not even compared to the efficiencies that that crypto will bring. So yeah, that was the context there.
HOST: Got it, got it. Yeah. That makes a 100% sense. And then this other tweet, this is from February 25th 2021. You said, "It's incredible how connected you feel to the creators and open source communities that you support. GitHub donations will be huge." What do you mean by that?
AMADEO PELLICCE: So in a world where people make their living online and people can—because these markets have become so big, people can afford to really specialize in what they're good at and what they love doing. You know, users and people can build their own communities of fan bases that support their work, whether it's sort of charitable work or whether it's maintenance of a particular software or a painter or a, you know, a guitar teacher. The fact that we're kind of democratizing finance will mean that you know, all these people will be able to make a living online.
So I think a good example that I was just really struck how good the user experience was, was GitHub donations, which is kind of like Patron for like software developers within GitHub, how easy they make it for an organization that already uses software made by some independent developer to—they kind of give them a heads up about you know, oh, you should really be supporting, you know, X, Y, and Z, because they built the software that you're using today. So if we can, you know, bring those principles to the wider internet that that's going to be amazing.
HOST: Yeah. I 100% agree. Well, thank you so much, Amedeo. Good job completing the Explain Your Tweet sections. It's really not as scary as most people think it's going to be. Before you go, last thing; tell people where they can find you if they want to connect with you personally. And then also where people can go to learn more about Blockchain.com, maybe download a wallet for themselves or get on the exchange?
AMADEO PELLICCE: Sure. So Blockchain.com that's the name of our website, and you can go from signing up to getting your first crypto in less than a minute. We've actually recorded it. And it's super, super easy. So please try us out. And you can try me on Twitter, on Pellicceama, that's P-E-L-L-I-C-C-E-A-M-A.
HOST: Perfect. We'll include that in the show notes as well. Thanks again for being here, Amadeo. Thank you, listeners, for tuning in as always. And we'll be back again soon with another episode of the Unstoppable Podcast.