April 19, 2025 • 56 mins
James Scaur is a prolific New Zealand Bitcoin entrepreneur and developer now living in Sao Paulo, Brazil. James recently won the bitcoin++ hackathon in Florianopolis with the project NostrPIX, enabling payments to anyone in Brazil using sats.
James Scaur Website - https://scaur.nz/
NostrPix - https://nostrpix.carrd.co/
Fred Dagg - We Don't Know How Lucky We Are - https://www.youtube.com/watch?v=AYvMeT2GC14
Rise - https://www.riseworks.io/
SUPPORT ME: https://www.thetransformationofvalue.com/support
X: https://x.com/TTOVpodcast
Instagram: https://www.instagram.com/codyellingham
Nostr: https://njump.me/npub1uth29ygt090fe640skhc8l34d9s7xlwj4frxs2esezt7n6d64nwsqcmmmu
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Music by Simon James French: https://www.simonjamesfrench.com/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Actually, if you just make it really easy for people to like
use SAT's day-to-day, even if it's always, you know,
transacted in the field, you're getting people used to using
Bitcoin and you're just like normalizing the use of Bitcoin
as like an everyday means of exchange.
Hello, I am Cody Allingham, and this is the transformation of
(00:23):
Value, a place for thinkers and builders where we ask questions
about freedom, Bitcoin and creativity.
My guest today is James Scower, A prolific New Zealand Bitcoin
entrepreneur and developer now living in Sao Paulo, Brazil.
James recently won the Bitcoin Plus Plus Hackathon and
Florianopolis with the project Noster Picks, enabling payments
(00:44):
to anyone in Brazil using SAT's.James, welcome to the show.
Thank you. Yeah, that's a that's a hell of
an intro. How does it feel getting out of
New Zealand, man? Looking alive, great.
Like I, I, I missed AI. Yeah, I didn't like a lot of
things about like being in New Zealand over the, over the last
(01:07):
two years. It was, it was definitely
particularly difficult to see how how much New Zealand had
changed in, in, in between like 20/20/19 through the 2022.
So yeah, like, I'm quite happy to be out.
Well, you and me both. I mean, we both got out and I
(01:27):
mean, I was just back in New Zealand, you know, last month
and for four weeks. And it was really interesting.
I mean, you're from Christchurchoriginally, right?
And I felt Christchurch and the South Island had a little bit of
an edge on it compared to the rest of the country, but
certainly where I had sort of fallen in love with Wellington
and these places, you know, it just felt grey and tired.
(01:48):
And sometimes it reminded me a little bit of the 90s.
It's like we'd gone back in time.
So, you know, you're in Brazil now.
Tell me about the the the landscape there in terms of
innovation, what's happening like what's what's going on at a
high level? I mean, particularly for
Bitcoin, it's a really exciting place to be.
There's a lot of like grassrootscrypto adoption and also like,
(02:14):
you know, products and services start-ups feel like big
institutions who are getting involved with with Bitcoin.
Yeah, Day-to-day life is, I would say like, yeah, more and
more technologically advanced inNew Zealand.
Yeah, I have in just the few months I've been here, I've been
(02:35):
able to get like a Bitcoin collateralized credit card.
I've been able to switch all my bills now onto being like paid
with, paid with sets. Yeah, it's a it's, it's, it's
definitely one of the most exciting part parts of the
world, I would say. Right now at Auckland, at a high
level, Brazil's like what, 300 million people plus?
(02:59):
Two 220 I think. 220, sorry, 220million people and you know,
huge economy, you know, lots of agriculture, a lot of urban
stuff, a lot of manufacturing, all sorts of things going on.
It seems to me like it's kind ofin a sweet spot where there are
aspects that are developing, butit's also got quite established
urban centers. How do you see the play between
(03:19):
that like innovation versus up and coming country?
Like what? How does that all work together?
I would, I would just say like the most common like
misconception about developing countries is that they all are
like the, the development is just equally distributed.
Like yes, Brazil has has parts that are Brazil just has like
(03:40):
parts that are like super developed and parts that are
like really like undeveloped. It's not like an equal level of
development all, all, all aroundthe country.
And I think it's you see a similar thing in South Africa
and in Eastern Europe and a lot of a lot of different countries.
So yeah, Sao Paulo itself is a pretty good.
(04:05):
What do you say? Like microcosm of Brazil because
it has parts that are, I don't know, like, you know, lots of
people living on the on the street and very, very messy and
poor infrastructure, frequent power outs.
But then other parts that, you know, have a, a human
(04:25):
development index of like the population, like higher than,
you know, Geneva. So yeah, there's certainly parts
of some power that are that are very developed.
And then, yeah, other parts thatare like very like undeveloped.
Interesting in the same case. Well, I wonder like, so I just
(04:46):
had a conversation with someone else about another country and
the experience they had was a little bit negative, right?
This was a developing country and in Africa that they're based
in and basically they said corruptions everywhere.
It's not even about education really.
It's like there is, you know, the state is just basically
leading this corrupt thing That means everyone's life kind of
(05:09):
sucks. How would you describe at a high
level the political infrastructure or just the
landscape for success, and especially in contrast to New
Zealand or in comparison with New Zealand?
Yeah, there's there's definitely, yeah, more, more
corruption going on here than New Zealand.
(05:29):
And the, and in many ways, like the deck is stacked against
Brazilians to like Brazil's a very like not socially mobile
like population. It's it's very hard if you grow
up poor to, to become rich or, you know, vice versa.
Or I mean, it's probably easier to become poor if you start out
(05:50):
rich. But yeah.
But yeah, like a lot of a lot ofthings are played like Brazil
has a very large public sector to the point where the word for
public company in in Portuguese in place of publica refers to a
state owned enterprise and not apublicly traded company.
(06:12):
They have like a very large public sector.
A lot of people for years and years have been like telling
their kids like, you know, you got to go for these concourse or
public course, which are these like sort of high paying
government positions that you can almost never get fired from.
So Brazil certainly like has a very, a very, what would you say
(06:36):
like? Established kind of bureaucracy.
Yeah, yeah. A very, very established
bureaucracy and, and and, and a sort of generally anti a
general, a general economy that makes business hard.
It's it's, it's very hard for businesses here to know how much
(06:58):
tax they have to pay. It's very hard to hire
employees, very expensive to to hire people formally.
And it's rated it is one of the like most hard countries to do
business in, like globally, whereas New Zealand is like the
easiest country to do business globally.
(07:20):
Right. But what I kind of noticed out
of that is most, most, most Brazilians are negatively
affected by that. But the few who managed to
actually overcome the challengesthat that Brazil provides end up
becoming the type of people who could succeed anywhere.
(07:40):
You know, if, if, if you can make a business work in Brazil,
you can make it work anywhere. I've afford that for a long
time. Yeah, that's fascinating.
It sounds like it's a similar story with a few places like
that, Argentina, other other places where there's just so
much paperwork and legacy bureaucracy to get through.
It makes traditional businesses challenging.
(08:02):
But what does this mean for something like Bitcoin
entrepreneurship or digital businesses?
I mean, I think Brazilians just naturally understand Bitcoin in
a much well, Latin Americans generally.
But yeah, Brazilians understand Bitcoin a lot easier than people
(08:23):
from first world countries. The, the memory is still fairly
fresh from when a former president basically stole
everyone's like pension funds, like the Kiwi savers back in the
90s to, yeah, fund a couple extra months of operations.
(08:44):
And they've had neighbors who have, you know, gone through
hyperinflation or forced conversion of like U.S. dollars
into whatever local currency they have.
So Brazilians like know the Brazilians are generally like
open minded to new ways of usingmoney or the possibility that
(09:08):
there could be a better money than Fiat.
So yeah, like I would say that that is what drives a lot of
Bitcoin market dominance in Brazil and and increased like
Bitcoin adoption like in in day-to-day use here than than
compared to many first world countries.
And, and in order to adapt to the like global marketplace, I
(09:35):
feel like Brazilians adopt, adopt technology like faster
because it's, it's, it's, there's a lot of people here
and, and it's, and it's very hard to make a successful
business. So like the competition is
really intense and that that I think like provides like more
innovation. Interesting.
Well, there's something as well that stands out to me when you
(09:57):
look at even somewhere like Japan, which is the most clean
cut bureaucratic place, you knowall in your.
Works. Yeah.
Yeah. Well, it's, it's if you look at
what somewhere like Japan was like after World War Two, it was
actually quite a chaotic place. You know, this kind of, you had
(10:19):
these black markets, you had allsorts of corruption up until
like the 1980s, pretty much until they started to snub out
the yakuza. But, you know, all sorts of, you
know, dirty dealings. And there's still stuff like
that happening today. But I guess my point is the
period of economic growth after the war kind of went hand in
hand with this very frothy, messy market.
(10:40):
And it seems I'm not an expert in development studies, but it
seems like there was some kind of principles that gave that
rails and and sort of funneled it into a productive ends.
And I wonder whether Brazil, again, just given its makeup of
these those, you know, highly developed urban centers and then
maybe poorer, more rural areas, whether there's something
(11:02):
similar where even though it's maybe frothy and chaotic and
there is a big income gap and that's kind of a, you know,
maybe a bit corrupt. Is there actually a pathway
where that actually becomes a much more developed and rich
country potentially? Yeah, I, I think so.
I think Brazil has a lot of things going for it.
(11:22):
Has a lot of yeah, rare earth minerals.
Almost all power in Brazil is generated from like renewable
sources like hydroelectric dams,great like fertile, like farm
lands. Other like not rare earth
minerals as well. Like, you know, it's, it's also
(11:42):
good for like iron mining and things like that.
So yeah, Brazil has a lot of natural resources tap into it
also has, even though the population I think is like
dipping below replacement rate, it doesn't have like the same
kind of spinning top thing that you have with a lot of first
world countries where like youngpeople aren't having kids.
(12:03):
And then there's like a growing like older population, like
Brazil was, is, is much more is much more balanced and that that
sort of trend of young people like having less kids is only is
only started in recent years. So I think Brazil has a lot is
well positioned for like changing worlds.
(12:24):
I think that, yeah, Brazil has in many ways reached an
equilibrium. The middle class has like grown
a lot in the last the last two decades, I want to say.
And yeah, like just overall, like I, I see, yeah, I see, I
(12:48):
see a positive future for, for Brazil at the very least.
I don't think it can get worse. And I think a lot of other
places can get worse. And so, yeah, like relatively
speaking, I think Brazil could become, yeah, much more like
prosperous. Yeah.
And you mentioned hydropower andI know there's the E Taipu Dam,
(13:10):
I think between Brazil and Paraguay, and that's like the
third largest hydroelectric scheme in the world.
So, yeah, really interesting infrastructure there.
I just want to dwell a little bit on the entrepreneurship
stuff as well, just for a moment, James, because I know in
New Zealand, you've had a coupleof projects that you've worked
on over the years and a few of them have run up against
(13:33):
regulatory issues or otherwise been cancelled for some reason.
And I wonder maybe contrasting that with your experience and
kind of the, the can do attitudein Brazil like with some of your
projects? So I feel like in New Zealand
it's it's really easy to open a business, it's really easy to
figure out how much tax you haveto pay.
It's it's easy to, to get services.
(14:01):
You can, you can generally do a lot of things without much
bureaucracy for for your business.
But it is really, but what makesNew Zealand like particularly
difficult for running a businessin is really small market size,
(14:21):
like high cost of like goods sold.
Like if you're, if you're like importing things or building
things, you know, high, high costs to employ people.
So yeah, like I just feel like the the market size and the
opportunities that you have in New Zealand, even though it's
easier to go after them, it's it's harder to yeah, it's harder
(14:47):
to like scale or it's hard to like tap into something that
that has a big market. There's a lot of businesses that
work in Brazil that I don't think what would work in New
Zealand. Like there are several merchant
services, bill payment services,Bitcoin banks and like credit
cards, they're they're like manyof many of these many that are
(15:09):
like Bitcoin only as well. Whereas in in New Zealand, I
think it's very hard to make even even a even a service that
is is out there to serve every single person into crypto in New
Zealand is still going to be a very small amount of people.
Yeah. Well, something I remember you
saying to me when we met last time was in New Zealand, In New
(15:31):
Zealand, there's there's these barriers to trying new things
and people are almost scared to,to put their feet in the water
or to be first. Whereas my understanding was in
Brazil, you know, that's maybe alittle bit more loose and so you
can try stuff out. So tell me a bit about about
that. Yeah, yeah, yeah.
I would say culturally it's, it's also more difficult in New
Zealand. And yeah, in New Zealand you
(15:54):
really notice it, I think when you go outside like tall poppy
syndrome, where like we really don't like to see someone like
standing out or, or even thinking that they might be
better than anyone else saying anything, You know, sort of the
being like just middle of the road, like mediocre, average or
like not exceptional or anythingis, is seen as like a, a good
(16:16):
thing or at the very least like it.
It should definitely not be looked down upon.
And that that comes with, yeah, the good side that we're very
egalitarian country and, and treat people fairly.
And you don't have, you know, a lot of homelessness or, or
poverty. But on on the negative side,
(16:37):
yeah, there's there's New Zealand's definitely not a
country that where people care about being exceptional or, or
like excellent at something. And so, yeah, and, and I think
Brazil too, like in New Zealand,we, we spend a lot of time like
waiting for other people can tell, tell us it's OK before we
(16:57):
can, before we can go ahead and,and build something or do
something. In Brazil, people just used to
take an initiative. If, if, if you, if you don't, if
you don't take initiative like you, you sort of just get like
left, left behind. So there is like a lot more, you
know, of a go getter attitude like let's just try it out.
(17:18):
Let's just, you know, First off the wall and see what sticks.
Yeah. I hope you won't mind me sharing
the story, James, but I rememberwe were having having a drink or
something in Wellington and you were saying, were you your early
days in Brazil and you were at aclub or something and you saw a
girl and your eyes met and you were doing the classic Kiwi
(17:39):
thing, which is just to sort of slink back and be a bit cool.
But straight away some other guycame up and had a chat with her
and no one saw saw them again. They sort of disappeared into
the night. And that really stood that I
remember that story because you're right, New Zealand, you
know, we wait, we wait for it tobe OK.
And I do think this is related to the, the nanny state.
And, you know, if you come in, it's like, well, what is the FMA
(18:01):
going to say? What is the regulator going to
say? You know, especially with
Bitcoin stuff, it's like, oh, what?
You know, what's the guidance from the IRD, which is.
Which is ironic given that like we probably have like the most
lenient and, and like relaxed, but like those, those agencies
are some of the most like lenient and relaxing in the
world. You know, you scrub your taxes
(18:22):
to IRD and you get like penalties or whatever.
Very often they just wave it or they will like work with you,
they'll talk with you, they'll try to help you through it.
If you're, if you're like, you know, you've made a sincere
mistake. You know, they're not just out
to, you know, like smash you allthe time.
And, and New Zealand just like has, I feel like so much of the
(18:44):
time in like other countries, when, when people like see a
grey area of the law, they decide, OK, well, I'm going to
go out there and test it or I'm just going to like assume if
it's not, if it's not illegal, then it's legal.
But, and yeah, in New Zealand wehave a lot of an approach of
just like, well, I, I don't see anyone else who's doing it.
So I I'm I'm not going to go anddo it either.
(19:05):
Man, I, I know exactly what I mean because I, I, to be honest,
I have a similar experience. Japan's a little bit like New
Zealand in that regard. And it's over regulated big
time. And that's like, man, I, I, my
gut feeling is I always assume when something looks like an
opportunity and no one's pouncedon it, it's because there's some
hidden claws, there's some bylaws that's affecting that.
(19:27):
Whereas I've actually learned a lot.
I got a lot of Chinese friends and I, if you work with Chinese
people, they love being in the on the edge, They love being in
the Gray zone. And there's edge there.
There's, there's like arbitrage,there's opportunity there.
And sure, you, as you say, you can work with people and you can
negotiate things if you end up doing something that's not quite
(19:47):
right, you know, ask for forgiveness instead of
permission, right? Yeah, yeah, absolutely.
Like that's how we've, we've had, you know, yeah, unsold
innovation and, and, and yeah, like quality of life
improvements, I think. The old school New Zealand is a
bit more like that though, right?
Like, yeah, yeah, back in the day, you know, everyone was just
(20:11):
doing it themselves and that didn't really care.
But it's maybe it's like since the 90s or maybe the 80s, things
have changed. I don't.
Know, but yeah, I think it's yeah, if you if you sort of grew
up in a more like rural area, you still have like some of the
like like old, old values. Yeah, I found it.
I was talking to someone not so long ago about how New Zealand's
(20:32):
like culture has changed over time.
And they were like, yeah, like they were just curious about
like how, how you would like describe New Zealand culture.
They, they thought they, they, what did they say?
They were, they were curious about our response to COVID.
Well, in, in whatever case, they, they saw us as being like
quite obedience or trusting or what we say kind of like
(20:56):
conformist or something like that.
And I, and I found that really surprising because I would have
said that New Zealand for the longest time, like Australia and
New Zealand, like the whole Anzac culture, Anzac spirit of,
of mateship is that like, like it's, it's anti authoritarian,
right? Like it's, it's, it's, it's
(21:17):
every, every, everyone is, is sort of is sort of mates is, are
equals. And, you know, someone who's,
you know, far away in a suit andsome tall rise building, you
know, shouldn't, shouldn't, shouldn't be able to like tell
you what to do. That that that used, I feel like
that used to be a very strong value in New Zealand.
(21:38):
And, and, and then it was just sort of yeah, like taken away.
Like, you know, there used to bea really strong like value on
like the the number 8 wire mentality and, and building
things with your hands and, and,and yeah, that's, that's sort of
gone away as well. Or you can just like, but you
know, this sort of idea of like the Kiwi bloke is like a guy
(21:59):
who's, you know, tough and like,you know, he if he if he goes
out and, you know, gets injured at a rugby match or, you know,
bashes his bashes his foot on onsome rock or whatever, you know,
he just sort of step up and liveand, and, and soldiers on.
And even that's like being kind of like, you know, demonized and
(22:19):
like pushed, pushed, pushed out of New Zealand culture.
So I don't really know what, where what type of culture we
have now, but it's like it's very far away from the, the the
the like Kiwiana idea of, I don't know, 50 years ago, where,
where a nation of if you just goand and and listen to we don't
(22:40):
know how lucky we are from 1998,Fred Dagg.
And you just compare that to NewZealand today.
It is it's insane the difference.
Oh man. Yeah, yeah, yeah.
Well, the number, the, it's in asense, the, the tool poppy
syndrome that you mentioned before that in the old days that
had a legitimate value as, you know, kind of critical of the
Privy Council or the, the Queen or whatever, you know, and, you
(23:04):
know, England and, and the powerstructures seemed far away and,
and New Zealand's government wasgenerally quite flat.
You could ring up the Prime Minister, you know, at his home,
the class and have a, you know, have a yarn, you know, these
kind of national myths. But that has changed.
And I don't know, I mean, again,you and me have both left and
many others have left. But moving on to what you're
(23:25):
working on now, because I was quite blown away when I saw the
news about your team at the hackathon and, and that, and I
think you had only just arrived in Brazil and you you jumped
into this hackathon and you guysended up winning.
So tell me about that story. Yeah, yeah, yeah, indeed.
I, I had only just arrived. I came, came here late last year
(23:48):
for another Bitcoin conference and then this one happened to be
hosted in in February. And yeah, it was, I had been
following Bitcoin Plus Plus for a while.
They're probably the, the, like,best educational resource out
there for like the technical education resource for
(24:11):
Bitcoiners right now. Yeah.
Organizers of, you know, conferences where people are
talking about, you know, emerging multi sig technology
and your taproot script script paths and what, you know, all
the like, really like nitty gritty stuff.
(24:31):
So yeah, once I once I found outthat there was there was one
being hosted in Brazil, I just immediately signed up and and
booked a booked a flight down. And then when I was there, I met
three others who I'd never met before.
And yeah, over the weekend we, we built this, this sort of
(24:52):
prototype app. And yeah, some some managed away
to take away the top prize. Yeah.
So Nosta Pix tell me about that though, because that interfaces
with the Brazilian payment system.
Yep. So so PIX is like a sort of
proto CBDC. It's a it's, it's got very high
(25:13):
like penetration across Brazil. You can it's, it's an interbank
like instant payment system withall transactions routed for the
central bank. It's kind of similar to what is
it India has, is it BB pay and. Universal, Yeah, yeah, yeah.
Universal payment system, Yeah. UPN is it?
Yeah, yeah, yeah, something likethat.
(25:35):
Yeah, yeah. It's a it's instant payment
system. People use it to receive money,
send them receive in between individuals.
You can buy online at a website,you can buy from card readers.
Almost almost every everything that like holds or accepts money
and Brazil was integrated with this PIC system.
(25:58):
And one of the problems with thePIC system is that you can't use
it unless you have like Brazilian documents.
You need to have a Brazilian ID number, you need a Brazilian tax
number, you need a bank account registered against those
details, because you know that that just the basic designer
(26:19):
picks requires a lot of information.
They want to have people's names, locations, you know, tax
numbers, all of that to like link, link together their
transactions and the metadata associated with them.
So if you are visiting Brazil, you have basically no way of
using this payment system that is preferred and and available
(26:42):
everywhere. Oh, that's what I was going to
compare it to Prompay, like the Thai QR system.
Yeah, that's, that's a similar system as well.
So yeah, we, we just decided, OK, well, let's, let's figure
out a way that we can, that we can make that happen.
Let's find a way that we can payPixies on a Bitcoiners behalf
and then like accept, accept Bitcoin and then immediately
(27:05):
upon receiving the Bitcoin, like, you know, execute the
payment. And yeah, we were able to to get
that to get that going. Yeah.
Can you tell me how that works though?
Because if it's this like KYC system, how do you get someone
who's not in that system to use it?
So for the prototype, we just used our personal details, so
the payments coming out from ourname.
(27:27):
And then for the, I think PIX like technically does allow you
to use it without a Brazilian tax ID, but just the like vast
majority of APIs and like systems related to it like
require a Brazilian entity, likean individual company.
(27:48):
So yeah, we just started off with our names, like our
personal, like KYC information, but part of like what we're
planning for the future is to let Brazilians sign up.
So we'll charge like a fee on each transaction.
Brazilians, if they add their own tax, like number, tax
(28:09):
details are in KYC information will get a discount on that fee.
And if they volunteer their, their tax ID for other people to
use to make payments on, to makepayments on behalf of of like
them, they, they can earn that fee.
So like having a sort of peer-to-peer system where
payments are still coming out and, you know, being associated
(28:31):
with particular senders. But, you know, if, if you don't
have the ability to KYC, which which you don't if, if you're a
tourist in Brazil or if you, yeah, if you, like, care about
the privacy of your transaction,which is a very valid concern
considering that your full legalname is revealed on every
(28:51):
traditional transaction. Yeah, yeah.
That's yeah, so. So what I what I like about that
though. So for your prototype, you guys
just use your details, but are you saying that the PIX platform
has an API that you could just look into and that's how you
were able to do? It yeah, there there's, there's
various services that provide APIs.
(29:12):
I used, yeah, one that was actually specifically set up for
helping international businesseslike accept and received
pictures from their Brazilian users.
So I had that registered againstmy like New Zealand limited
company. But yeah, there's many, there's
many like, yeah, banking as a service APIs in Brazil.
(29:34):
It was pretty like open, open banking system can.
You tell me that that pics stuff.
Is that only for individual people or like could a company
have a? Yes, companies.
Companies can and do and do use them.
It's free for individuals, but it's also very low cost for
companies too. Because I was just going to say
(29:55):
instead of an individual necessarily offering up their
thing to others to use, I mean, maybe this is where there's a,
you know, the business could offer that service to them
potentially, right? Yeah, yeah.
I think it's better to try to keep individual details involved
just because you kind of walk into what like financial service
(30:17):
provider territory. If you're like a business, you
know, managing payments on like behalf of other people.
If you're instead just like sortof, you know, basically like a a
peer-to-peer platform and other people are like willingly taking
on like the responsibility of making payments for others.
Yeah, I think that that probablymakes a lot more sense.
That's fascinating though, because that sort of, I mean,
(30:39):
contrasting that with the New Zealand experience, so-called
open banking, which at the very best that's, you know, someone
asking you for a wind cave portal to put your password and
username in. And then it's like remembering
that to make payments. It's pretty like low tech.
It's against, it's against the bank's own terms and conditions.
(30:59):
Yet the banks themselves use these services to, to do like
loan applications, like, Oh yeah, yeah, connect to your
other bank account and we'll grab your statements for the,
for the loan application. So it's it's they're, they're OK
with breaking the other banks terms and conditions when
they're like getting applying you, you know, for a loan.
But yeah, no, no, we take no responsibility if you, if you
(31:21):
insert your your card details onPoly or wind cave, which is used
by Air New Zealand and Bunnings and.
Yeah. Well, what I like about what
you've described with Noster picks is that you can still
eventually, you know, the settlement still happening in
real, but you're able to make the payment of sets.
And that's like, that's pretty cool.
(31:43):
You know, that you can live on aBitcoin standard quite easily
and you're not having to do anything extra.
You know, it's not, I mean, ideally, you know, you go
completely off that network and just use lightning.
But if the merchant doesn't accept that, what you know, what
are you going to do? But this allows you to pay them
still. Yeah, yeah, yeah.
And I I think too like there's some people who like we
(32:04):
actually, I think part of the reason we won the hackathon is
that we we did really well on social media.
For some reason, we actually hadthe majority of our users were
not actually people like foreigners without like local
banking details, but they were actually Brazilians who were
trying out trying out the service.
And, and, and of course, when you sort of blow up on social
(32:27):
media, you end up getting like acouple of, you know, really like
angry people too, right. So we had like some people
reaching out saying like this iscompletely pointless because Pix
is a, you know, is a, is a, is aKYCD system that is, you know, a
massive invasion of privacy and you're just holding that Bitcoin
adoption by doing this. And so, and my answer to that
(32:49):
would be like, actually, if you just make it really easy for
people to like use SAT's day-to-day, even if it's always,
you know, transacted in the field, you're getting people
used to using Bitcoin and you'rejust like normalizing the use of
Bitcoin as like an everyday means of exchange.
So like it's, it's much easier to make the jump from like, oh,
(33:12):
like I'm, I'm paying you a Bitcoin, but you're getting
you're getting Brazilian high eyes or dollars or whatever it
is to like, oh, I pay you Bitcoin and you receive it
directly. Yeah.
Is that how you said by the way,that R is an H sound, isn't it?
How? With the currency, yeah.
Sorry. Yeah, in Portuguese, yeah.
No no no, I should know that because in jujitsu I do
(33:33):
presenting jujitsu and it's always like the the R sounds
become HS but with Sorry with what you just said though, so
I'm actually impressed. So this wasn't just for the
hackathon, you had some like random people using it.
Is that what you're saying? Like yeah, yeah, yeah, yeah,
yeah, yeah. While we were, yeah, we were
like live sharing it on social media.
I actually like live coded it like I was on like OPS studio
(33:55):
while I was coding out the application and yeah, yeah, we
did. And and we had like majority of
our team was non-technical as well.
So we just we just had we were just like spamming, spamming,
spamming, you know, getting getting people to to to try it
out. So yeah, yeah, we, we got a lot
(34:16):
of users. We got so much users that we
actually like lost money on the like, like the Bitcoin like
price swings that weekend and and yeah, like we we we ended up
like regularly having to, you know, re top up our account with
like another a hundred $200 justto just keep things ticking
(34:36):
over. Yeah.
Oh, that's cool, man. I mean, that's demonstrates
product market fit though. Like, fuck it, you're like,
you're not. That's literally a prototype in
the weekend, and you've got users like, that's pretty
awesome. Yeah, yeah, yeah.
Well, congratulations on that. And so you're saying there's
maybe potentially a more commercial version of this
coming out you guys are working on?
(34:57):
Yeah, yeah, yeah. We're working just sort of,
yeah, mostly based off where you're scrapping the front end
and we're and we're just making like a really good back end for
it that we can potentially like offer for like anyone to
integrate their app into. I think that's probably a better
idea than, you know, just like trying to make a yet another,
(35:18):
you know, like wallet or servicer app fully removing
custody as well. That that that's important.
We the Noster and our name comesfrom like Noster wallet
connects. There's like protocol for like
automatically like pulling payments from Lightning wallet.
So yeah, we, we want to do that.Yeah.
And also like automatic Fiat conversion 2, which I'm planning
(35:42):
to use Lightning pay for in New Zealand.
So yeah, like as a New Zealand business, you can you can accept
like Bitcoin as a payment from overseas, right from overseas
clients. You don't need to get a bunch of
information from them. And then you can turn that into
Brazilian hey eyes with, you know, something like
(36:04):
Transferwise and send to Brazilian bank accounts without
having Brazilian like tax documents.
So yeah, I think that's the way to do it is, is have lightning
pay like in New Zealand be be that back end from it's going to
be expensive to go from Bitcoin to New Zealand dollars to hay
eyes. But at the end of the day, like
(36:26):
if, if it's if it's useful and doesn't matter.
Yeah, well, there's a good flow with, again, people living only
in New Zealand wouldn't really get this, but there's a really
good flow to go from somewhere like Lightning Pay to Wise
because you're suddenly been able to use wires wherever you
want and you're kind of exiting out of of the New Zealand system
(36:48):
that way. So it's kind of an interesting
model. And I think yeah, again, what
you you said though, it's just so awesome that, you know, this
infrastructure was available foryou to just tap into and build
this stuff. And I do feel like New Zealand,
it's kind of this, this archaic system of the EFTPOS and these
like proprietary networks that kind of with pretty cutting edge
(37:11):
in the 90s, but that's just sortof stayed at that point.
And I don't know, it's sort of the way the mobile revolution
has happened in other parts of Asia.
And that it's like, man, New Zealand's nowhere near getting
to that point because we sort oflocked in at F postcards in 1990
or whatever, you know? Yeah.
Yeah. So, yeah, well done, man.
And I mean huge addressable market as well, just in Brazil,
(37:32):
like again, hundreds of millionsof people.
Yeah, and there are, there are certainly many like KYC services
allowing you to pay, pay this like picks in in Brazil.
But yeah, hopefully there's likea market for people who, yeah, I
don't know, care, care more about their privacy or or
foreigners incapable of getting Brazilian bank accounts.
(37:58):
Yeah, yeah. Fascinating.
So that's the the hackathon and then you're also working for a
payroll company leading some of the Bitcoin integration stuff.
So tell me about that. Yeah, yeah.
So yeah, I recently joined Ryze.They're a yeah, crypto payroll
company sort of originally like focused on stable coins like
(38:19):
USDC and USDT, like allowing people to allowing companies to
manage their payroll where they'll deposit funds on and
then like employees or contractors to take payouts and
cryptocurrency as well. And and and they support Fiat
too. So they've they've been around
(38:41):
for several years, I want to say2021, but I have recently begun
taking off it. I'm actually not exactly sure,
but I'm quite pretty sure the company like race race funding
like last November and and yeah,that that's that's what leads
me. I haven't having a chat with
(39:01):
with the team and, and coming onto to work in their Rams team,
which has has to do with everything related to moving
money on or off the platform. And so yeah, I'm, I'm
integrating Bitcoin as a depositand payout method.
Yeah, main net lightning, hopefully taproot assets.
(39:24):
Yeah. And it, it's, I'm really
enjoying it and it's really cool.
I mean, like, you know, I, I love making stuff that lets
people use Bitcoin in the real world and like getting paid
directly in Bitcoin, no intermediaries is, you know, one
of the best ways that you can, you can acquire it.
Oh. Man, that's brilliant.
(39:46):
Well done. Man, that's, that's awesome.
And also looking at the that real world side of things, you
know, I think this is something that I've been thinking more
about. I don't know what it is.
It feels like we've entered intoa bit more of a, a bit of a bull
run. You know, things have popped
off. There's maybe a, a focus on
holding Bitcoin. But if I go back to, you know,
(40:09):
when we first met at the Kiwi and you know, we were buying our
drinks and spending sets and using Lightning, it's like
there's something very enjoyableabout the payment side, which is
what it was all about originally, right?
So I don't know, tell me more about that.
As far as I'm concerned, if, if you, if you don't, if you don't
aren't forced to spend or or sell your sets, you haven't
(40:30):
bought enough. You're, you're that that means
that you have fear and reserve that you haven't converted to
Bitcoin, you know, like, yeah, yeah, you're, you're
underexposed. That that if you, if you truly
believe in Bitcoin enough to be like, oh, you know, of course
I'm going to spend dollars firstbefore I spend Bitcoin.
Yeah, well, well, clearly, clearly you don't think that way
(40:51):
because you you still have quitea few dollars, enough that you
never have to sell or spend. Yeah, it should feel a little
bit painful, but you should be doing it all the time because
it's the only place that you're keeping your money.
Yeah, yeah. No, I mean, it's, it's like
riding the wave, right? You, you know, you've got to
have it in Bitcoin, otherwise, yeah, you're just, you're just
(41:12):
staying flat with, you know, deflating.
Local. I've regretted a lot of times,
yeah, like not having bought Bitcoin or not having kept
Bitcoin. I have not regretted many times
where like I bought and then it's like gone down and I'm like
forced to sell a bit like that'sjust sort of life.
But like the missed opportunities are like always
(41:34):
like hurt more well. I also think, I mean text aside
because there is some, you know,regulatory stuff there, but in
terms of the the conceptual approach to it, I always think
about it as like first and last out.
And so, yeah, maybe it tips today and you have to spend some
Bitcoin. But if you think about that,
(41:55):
just having taken that from someof the Bitcoin that you brought
years ago that you're sort of, you know, you're not actually
losing if you know what I mean, it's sort of you're just taking
it from the the earlier period. Yeah.
Yeah, yeah, yeah, yeah, to, yeah, to a degree.
And also, Speaking of tech specifically, like I feel like
(42:15):
the more that we actually use Bitcoin like day-to-day, the
like more of a precedent we're setting to like challenge the
idea that Bitcoin is only a speculative asset with 0 utility
that that is like purely bought with Fiat to sell for more Fiat
later, which is how most tax departments around the world
(42:36):
treat it. So, yeah, if you, if you can
start like using it day-to-day, you you that at least is
beginning to like prove something different than the
than the law considers it. That's really a fascinating
point because you know, if if wehave years and years of large
(42:59):
numbers of people using Bitcoin for their day-to-day expenses
when there is maybe a legal challenge to it from the state,
you know, and you get a good legal team together and just
say, hey guys, like man, this precedent's been set.
Why didn't you say anything earlier?
Actually, the interesting thing about New Zealand is that the,
the actual wording of the IR DS guidance on crypto assets, if I
understand it correctly, is thatyou have to pay tax on
(43:23):
cryptocurrency that you acquire for the purpose of disposal.
So like that you buy with Fiat to like sell for a higher price
later. And they, they have these sort
of assumptions in there that like, OK, by default, like if
you sell in the future, even if you bought it for a different
reason, like you're considered to have bought it for disposal
(43:43):
because you, you sold it just then or you know, things as
well. Like even if you receive the
payments in Bitcoin, you're considered to have received the
Fiat value and then like immediately bought Bitcoin.
Like I reckon, but but but the, the like ambiguity like exists
there to be like challenged and teased out in the future where
(44:05):
what happens if you're just buying Bitcoin because you want
to use it day-to-day and you don't care about the price?
It can can that be treated like a like stock that you acquire in
a company when you, when you're starting the company, you're
not, you're not trying to like make a profit or day trade or
whatever. You're just, you're just getting
equity in a company as you're, as you're helping build it.
Because right now, like we, we don't if someone buys a house
and sells it for a higher price later, we don't, we don't
(44:27):
consider that to be like, you know, capital gains tax or or
whatever, right? Like, no, it's just your, it's
your home. So yeah, I think a similar thing
could happen to Bitcoin in the future.
Yeah. Well, it's also interesting.
I mean, you mentioned the housing thing, which there are
emerging arguments and you've got the whole bright line test
and all that bullshit. But like, basically that's
(44:49):
that's a racket, man. Like, yeah, you sell a house,
five years is it? And you don't have to pay any
capital gains tax. Yeah, you sell some sets.
Yeah, I don't. I, yeah, I don't.
I don't see that. Yeah, change changing any
anytime soon? But yeah.
I mean, like at the end of the day, like, yeah, I feel like we
just need a bunch of people liketesting out that question that
(45:10):
like, you know, is everyone who's, you know, getting like
are you, are you declaring everytime you're receiving like, you
know, you're getting paid back by your mates Bitcoin after like
buying them food at a bar? Are you declaring that as like a
Bitcoin purchase? I would say like the vast
(45:31):
majority of people aren't and they shouldn't be either.
Like, you know, you don't declare cash that you're like
given either. You don't declare money that
you're getting in the garage sale, right.
And and it would be totally unreasonable to expect people
to, you know, track all those like minute things and then you
end up spending that money like somewhere else later.
(45:54):
Yeah. Like the, the system has no
problem with with that right now.
And I think I think like so manyof us are just like just wanting
to, to like hear the like approval from the government
first that like, yes, it's OK touse Bitcoin as like a meaning of
exchange. Like, yeah, the, the, the intent
of like the cryptocurrency, you know, tax laws is, is just that
(46:17):
they want to like get a, get a slice of the pie for the people
who are doing like massive, massive, you know, trading
movements, making tons of money,you know, gambling on alcoins,
right. If you've if you've just got
like a little lightning $5 payment and then you like, you
purchase a coffee. Yeah.
So, so you get like paid, you know, 5000 sets and, and, and
(46:41):
and that's, that's worth a $5 coffee.
And then you and then the price rises and you're only paying
4500 sets. You know, are you going to be
calculating the profit on that? Like no.
Yeah. Well, again, it comes back to
that culture thing because, you know, if you really zoom out,
what is the net benefit to the New Zealand, you know, project
(47:01):
to have some really good infrastructure and innovation
around Bitcoin payments? I would argue that the benefit
to the New Zealand government would actually be to have more
of these companies doing stuff like this and not try and
knuckle and dime payments. It's like, man, what?
And and I think that we actuallydo it to ourselves because as
you say, you know, it just hasn't really been super
(47:24):
clarified. And I don't know if it ever will
be Like, they're not ever going to be like, yeah.
No, I don't. I don't think it's going to be
clarified until you know. Until it's too late.
Someone's hand is false. But yeah, I think when the
challenge happens, it's going tobe pretty, you know, like the
people who are getting, you know, the however, it's like,
(47:45):
you know, tested out and law, I'm quite sure they're going to
be treated properly. You know, there's not going to
be these sort of like kangaroo courts, like what is what's the
name, like Julian Assange in, you know, United United States
or whatever, like in, in general, like New Zealand
authorities, FMA by ID whatever can be generally trusted to be,
(48:08):
you know, fairly like reasonable, right.
So I reckon like, you know, if, if they're, if they're trying to
like bring up like some, you know, dairy shop owner, you
know, out because, you know, he failed to declare, you know, the
Bitcoin payments for the last two years.
And, you know, you're just like unaware that like he was having
(48:30):
to, to declare it as anything other than, you know, New
Zealand dollars then yeah. I feel like I feel like that
they'll get treated more fairly in New Zealand than than most
countries. Yeah.
Oh, that's fascinating, man. Like I, I think, yeah, it's sort
of encouraging that again, it's,it's a little bit like the more
(48:52):
you use it, the more it's just established as practice.
It's just normal. And the New Zealand regulators
are way behind anyway, like the under resourced and look, these
guys are busy people dealing with all sorts of things.
So I think a bit of compassion there that it's, you know, you
don't need to be scared. And I think there are these
horror stories that people maybeimagine, but you're not really,
(49:14):
you're not doing anything wrong.You're just using a digital
currency to make a payment and it's it's innovative.
Yeah, it's it's just, it shouldn't be treated any
differently than you treat a, a credit card, a debit card, an
EFTPOS, a cash transaction, all of those perfectly legal that
don't require, you know, every time you tell you sell coffee
(49:35):
for Bitcoin. You don't have to get all these
KYC details that is considered normal.
You would be considered weird ifyou're being asked for your
passport every time that you want to buy a coffee.
So yeah, like I. Yeah, well, even just the
exchange rate slippage and stufflike that, you know, if you're,
if you're an overseas visitor and you're spending U.S. dollars
in New Zealand with your, you know, your credit card, like,
(49:58):
you know, are you keeping track of that stuff anyway?
I mean, it's a lot. It's interesting.
I've just seen opportunity and our friends at Lightning Pay are
really working on some awesome stuff here to be able to pay
bills, you know, work in this new ecosystem.
And hopefully, I think maybe with the open banking that's
starting to happen in New Zealand, you know, being able to
loop in to some of that stuff like what you've done with
(50:20):
Noster Perks could be really interesting as well.
I don't know if we'll see that anytime soon, but you know,
being able to actually take the Fiat aspects out of it as much
as we can so that, yeah, you canjust hold Bitcoin and pay your
bills with Bitcoin and New Zealand.
Yeah. I think, I think there's an
opportunity to with that like our Kahoot service outlining pay
(50:40):
is based off as well like that. That opens up the ability for
day-to-day individuals to like automate their bank transfers
and and interact with their banklike bank data automatically.
I think that opens up the opportunity to create a like
proper automated like peer-to-peer market in New
Zealand or Bitcoin. Akahoo is an interesting piece,
(51:04):
but the other one I was thinkingabout because Akahoo would allow
those classic bank transfers, right?
And I've used that method where I pay sets through lightning pay
and I can pay a bill, you know, settle the bill in New Zealand
dollars for something. But I think the real challenge
is when it comes to point of sale, you know, and I wonder
whether there's some sort of loop back where now that you can
(51:25):
get, I think there's you can getpeople's details.
And so I wonder whether, you know, there could be the thing
we like you go to tap to pay themerchants details are sort of
sent to you. And then that gets settled
somehow, you know, on, on on thelightning pay side or on the on
the on the Fiat side kind of instantly.
And so you you're sort of reducing the amount of Fiat that
(51:48):
you actually have to hold because at the moment, if you
still want to tap and pay with debit card, it's still Fiat to
Fiat. Whereas if you could hold it
that this like your, the reservoir is, is Bitcoin and at
the moment you got to pay, it takes it straight from your
Bitcoin stash into Fiat to settle that transaction.
Something like that could be really interesting, right?
Yeah. Or better like a credit card
(52:08):
that's like collateralized against your against your
bitcoins. You spend, spend in Fiat and
then see and settle at the end of the month.
Anyway, we're going down the rabbit hole but James, I'm keen
to just find out for the rest ofthis year what's what's on your
horizon. Yeah, well, I'm, my main focus
is, is my job at Rise where yeah, like I'm getting Bitcoin
(52:33):
to like their Bitcoin integration to like really high
standard teaching people about it because like most of the
people there are sort of from the more Ethereum sort of side
of things. So you're explaining, you know,
the differences between Bitcoin and Ethereum to them And yeah,
just making sure it's like a first class like supported asset
(52:54):
on their platform. Would love to integrate Taproot
assets when especially after USDT launches on on Taproot
assets. Yeah.
And I mean, I'm just sort of focused on getting established
back on like this side of the world, potentially looking at
(53:15):
acquiring Brazilian citizenship or Paraguayan residency.
And yeah, just like working as much as I can in my spare time
on, Yep, building, building likeopen source, like Bitcoin stuff,
anything that makes it easier toto like use Bitcoin or like
(53:35):
solves real world problems that I've, I've encountered.
I'm I'm keen to build. That's bloody awesome, man.
And Brazilian citizenship, you see a pathway for that?
Like is that is that? Yeah, yeah, I, I, I should be
able to know if I can apply in May.
That's why I'm going to get backthe reports, the results from a
(53:57):
Portuguese fluency test that I did.
And, yeah, if I can prove like that I've resided here in the
past and that I've paid taxes and that I don't have a criminal
record and that, yeah, I speak like good Portuguese, yeah, I
can apply for citizenship. It's probably going to take
forever, but then I could have. Yeah.
The New Zealand and the Brazilian passport, full access
(54:19):
to Marcosaur, plus, you know, the all the access that New
Zealand gives. It's.
Bloody brilliant, man. I can see, I mean that that's
pretty attractive. You know, if if Brazil wants
entrepreneurs and smart people to come like being able to get
it low. Yeah, and I mean, Paraguay is
also looking like a, a super compelling option.
Brazil has like some benefits for entrepreneurs.
(54:41):
Like if you can like figure out like a way of like making things
work, you can actually pay lowertax.
And you then you have New Zealand, there are like
incentives, especially for exporters here that so you will
like pay. You can pay like I have a friend
who's like paying like, you know, 5% tax instead of, you
know, 28%, right, New New Zealand, but in Paraguay, they
(55:05):
do 0% tax on your global income.And also no, no like import
duties. So you have like access to, you
know, America level prices for, you know, laptops or phones or
webcams or microphones, whateverthe equipment you want.
You also have very cheap power and a very business friendly
(55:27):
environment and and yeah, 0% taxon income that's not, not
sourced from within Paraguay. So a lot of Bitcoin is moving
there. I'm I'm very keen to check it
out. Yeah, that's fascinating, man.
Well, look, good luck with all of that stuff and thanks for
sharing your story. Really impressive QB boy from
Christchurch making it happen onthe other side of the world and
(55:48):
what is possibly one of the the most exciting regions of the
world for Bitcoin, which is Latin America.
And really seems like there could be a lot of opportunity
there in the future. So I wish you all the best luck
with that. Thank you.
Yeah, cool. All right, man.
Thank you very much. Goodbye.
Actually, if you just make it really easy for people to like
use SAT's day-to-day, even if it's always, you know,
transacted in the field, you're getting people used to using
Bitcoin and you're just like normalizing the use of Bitcoin
as like an everyday means of exchange.
Hello, I am Cody Allingham, and this is the transformation of
(00:23):
Value, a place for thinkers and builders where we ask questions
about freedom, Bitcoin and creativity.
My guest today is James Scower, A prolific New Zealand Bitcoin
entrepreneur and developer now living in Sao Paulo, Brazil.
James recently won the Bitcoin Plus Plus Hackathon and
Florianopolis with the project Noster Picks, enabling payments
(00:44):
to anyone in Brazil using SAT's.James, welcome to the show.
Thank you. Yeah, that's a that's a hell of
an intro. How does it feel getting out of
New Zealand, man? Looking alive, great.
Like I, I, I missed AI. Yeah, I didn't like a lot of
things about like being in New Zealand over the, over the last
(01:07):
two years. It was, it was definitely
particularly difficult to see how how much New Zealand had
changed in, in, in between like 20/20/19 through the 2022.
So yeah, like, I'm quite happy to be out.
Well, you and me both. I mean, we both got out and I
(01:27):
mean, I was just back in New Zealand, you know, last month
and for four weeks. And it was really interesting.
I mean, you're from Christchurchoriginally, right?
And I felt Christchurch and the South Island had a little bit of
an edge on it compared to the rest of the country, but
certainly where I had sort of fallen in love with Wellington
and these places, you know, it just felt grey and tired.
(01:48):
And sometimes it reminded me a little bit of the 90s.
It's like we'd gone back in time.
So, you know, you're in Brazil now.
Tell me about the the the landscape there in terms of
innovation, what's happening like what's what's going on at a
high level? I mean, particularly for
Bitcoin, it's a really exciting place to be.
There's a lot of like grassrootscrypto adoption and also like,
(02:14):
you know, products and services start-ups feel like big
institutions who are getting involved with with Bitcoin.
Yeah, Day-to-day life is, I would say like, yeah, more and
more technologically advanced inNew Zealand.
Yeah, I have in just the few months I've been here, I've been
(02:35):
able to get like a Bitcoin collateralized credit card.
I've been able to switch all my bills now onto being like paid
with, paid with sets. Yeah, it's a it's, it's, it's
definitely one of the most exciting part parts of the
world, I would say. Right now at Auckland, at a high
level, Brazil's like what, 300 million people plus?
(02:59):
Two 220 I think. 220, sorry, 220million people and you know,
huge economy, you know, lots of agriculture, a lot of urban
stuff, a lot of manufacturing, all sorts of things going on.
It seems to me like it's kind ofin a sweet spot where there are
aspects that are developing, butit's also got quite established
urban centers. How do you see the play between
(03:19):
that like innovation versus up and coming country?
Like what? How does that all work together?
I would, I would just say like the most common like
misconception about developing countries is that they all are
like the, the development is just equally distributed.
Like yes, Brazil has has parts that are Brazil just has like
(03:40):
parts that are like super developed and parts that are
like really like undeveloped. It's not like an equal level of
development all, all, all aroundthe country.
And I think it's you see a similar thing in South Africa
and in Eastern Europe and a lot of a lot of different countries.
So yeah, Sao Paulo itself is a pretty good.
(04:05):
What do you say? Like microcosm of Brazil because
it has parts that are, I don't know, like, you know, lots of
people living on the on the street and very, very messy and
poor infrastructure, frequent power outs.
But then other parts that, you know, have a, a human
(04:25):
development index of like the population, like higher than,
you know, Geneva. So yeah, there's certainly parts
of some power that are that are very developed.
And then, yeah, other parts thatare like very like undeveloped.
Interesting in the same case. Well, I wonder like, so I just
(04:46):
had a conversation with someone else about another country and
the experience they had was a little bit negative, right?
This was a developing country and in Africa that they're based
in and basically they said corruptions everywhere.
It's not even about education really.
It's like there is, you know, the state is just basically
leading this corrupt thing That means everyone's life kind of
(05:09):
sucks. How would you describe at a high
level the political infrastructure or just the
landscape for success, and especially in contrast to New
Zealand or in comparison with New Zealand?
Yeah, there's there's definitely, yeah, more, more
corruption going on here than New Zealand.
(05:29):
And the, and in many ways, like the deck is stacked against
Brazilians to like Brazil's a very like not socially mobile
like population. It's it's very hard if you grow
up poor to, to become rich or, you know, vice versa.
Or I mean, it's probably easier to become poor if you start out
(05:50):
rich. But yeah.
But yeah, like a lot of a lot ofthings are played like Brazil
has a very large public sector to the point where the word for
public company in in Portuguese in place of publica refers to a
state owned enterprise and not apublicly traded company.
(06:12):
They have like a very large public sector.
A lot of people for years and years have been like telling
their kids like, you know, you got to go for these concourse or
public course, which are these like sort of high paying
government positions that you can almost never get fired from.
So Brazil certainly like has a very, a very, what would you say
(06:36):
like? Established kind of bureaucracy.
Yeah, yeah. A very, very established
bureaucracy and, and and, and a sort of generally anti a
general, a general economy that makes business hard.
It's it's, it's very hard for businesses here to know how much
(06:58):
tax they have to pay. It's very hard to hire
employees, very expensive to to hire people formally.
And it's rated it is one of the like most hard countries to do
business in, like globally, whereas New Zealand is like the
easiest country to do business globally.
(07:20):
Right. But what I kind of noticed out
of that is most, most, most Brazilians are negatively
affected by that. But the few who managed to
actually overcome the challengesthat that Brazil provides end up
becoming the type of people who could succeed anywhere.
(07:40):
You know, if, if, if you can make a business work in Brazil,
you can make it work anywhere. I've afford that for a long
time. Yeah, that's fascinating.
It sounds like it's a similar story with a few places like
that, Argentina, other other places where there's just so
much paperwork and legacy bureaucracy to get through.
It makes traditional businesses challenging.
(08:02):
But what does this mean for something like Bitcoin
entrepreneurship or digital businesses?
I mean, I think Brazilians just naturally understand Bitcoin in
a much well, Latin Americans generally.
But yeah, Brazilians understand Bitcoin a lot easier than people
(08:23):
from first world countries. The, the memory is still fairly
fresh from when a former president basically stole
everyone's like pension funds, like the Kiwi savers back in the
90s to, yeah, fund a couple extra months of operations.
(08:44):
And they've had neighbors who have, you know, gone through
hyperinflation or forced conversion of like U.S. dollars
into whatever local currency they have.
So Brazilians like know the Brazilians are generally like
open minded to new ways of usingmoney or the possibility that
(09:08):
there could be a better money than Fiat.
So yeah, like I would say that that is what drives a lot of
Bitcoin market dominance in Brazil and and increased like
Bitcoin adoption like in in day-to-day use here than than
compared to many first world countries.
And, and in order to adapt to the like global marketplace, I
(09:35):
feel like Brazilians adopt, adopt technology like faster
because it's, it's, it's, there's a lot of people here
and, and it's, and it's very hard to make a successful
business. So like the competition is
really intense and that that I think like provides like more
innovation. Interesting.
Well, there's something as well that stands out to me when you
(09:57):
look at even somewhere like Japan, which is the most clean
cut bureaucratic place, you knowall in your.
Works. Yeah.
Yeah. Well, it's, it's if you look at
what somewhere like Japan was like after World War Two, it was
actually quite a chaotic place. You know, this kind of, you had
(10:19):
these black markets, you had allsorts of corruption up until
like the 1980s, pretty much until they started to snub out
the yakuza. But, you know, all sorts of, you
know, dirty dealings. And there's still stuff like
that happening today. But I guess my point is the
period of economic growth after the war kind of went hand in
hand with this very frothy, messy market.
(10:40):
And it seems I'm not an expert in development studies, but it
seems like there was some kind of principles that gave that
rails and and sort of funneled it into a productive ends.
And I wonder whether Brazil, again, just given its makeup of
these those, you know, highly developed urban centers and then
maybe poorer, more rural areas, whether there's something
(11:02):
similar where even though it's maybe frothy and chaotic and
there is a big income gap and that's kind of a, you know,
maybe a bit corrupt. Is there actually a pathway
where that actually becomes a much more developed and rich
country potentially? Yeah, I, I think so.
I think Brazil has a lot of things going for it.
(11:22):
Has a lot of yeah, rare earth minerals.
Almost all power in Brazil is generated from like renewable
sources like hydroelectric dams,great like fertile, like farm
lands. Other like not rare earth
minerals as well. Like, you know, it's, it's also
(11:42):
good for like iron mining and things like that.
So yeah, Brazil has a lot of natural resources tap into it
also has, even though the population I think is like
dipping below replacement rate, it doesn't have like the same
kind of spinning top thing that you have with a lot of first
world countries where like youngpeople aren't having kids.
(12:03):
And then there's like a growing like older population, like
Brazil was, is, is much more is much more balanced and that that
sort of trend of young people like having less kids is only is
only started in recent years. So I think Brazil has a lot is
well positioned for like changing worlds.
(12:24):
I think that, yeah, Brazil has in many ways reached an
equilibrium. The middle class has like grown
a lot in the last the last two decades, I want to say.
And yeah, like just overall, like I, I see, yeah, I see, I
(12:48):
see a positive future for, for Brazil at the very least.
I don't think it can get worse. And I think a lot of other
places can get worse. And so, yeah, like relatively
speaking, I think Brazil could become, yeah, much more like
prosperous. Yeah.
And you mentioned hydropower andI know there's the E Taipu Dam,
(13:10):
I think between Brazil and Paraguay, and that's like the
third largest hydroelectric scheme in the world.
So, yeah, really interesting infrastructure there.
I just want to dwell a little bit on the entrepreneurship
stuff as well, just for a moment, James, because I know in
New Zealand, you've had a coupleof projects that you've worked
on over the years and a few of them have run up against
(13:33):
regulatory issues or otherwise been cancelled for some reason.
And I wonder maybe contrasting that with your experience and
kind of the, the can do attitudein Brazil like with some of your
projects? So I feel like in New Zealand
it's it's really easy to open a business, it's really easy to
figure out how much tax you haveto pay.
It's it's easy to, to get services.
(14:01):
You can, you can generally do a lot of things without much
bureaucracy for for your business.
But it is really, but what makesNew Zealand like particularly
difficult for running a businessin is really small market size,
(14:21):
like high cost of like goods sold.
Like if you're, if you're like importing things or building
things, you know, high, high costs to employ people.
So yeah, like I just feel like the the market size and the
opportunities that you have in New Zealand, even though it's
easier to go after them, it's it's harder to yeah, it's harder
(14:47):
to like scale or it's hard to like tap into something that
that has a big market. There's a lot of businesses that
work in Brazil that I don't think what would work in New
Zealand. Like there are several merchant
services, bill payment services,Bitcoin banks and like credit
cards, they're they're like manyof many of these many that are
(15:09):
like Bitcoin only as well. Whereas in in New Zealand, I
think it's very hard to make even even a even a service that
is is out there to serve every single person into crypto in New
Zealand is still going to be a very small amount of people.
Yeah. Well, something I remember you
saying to me when we met last time was in New Zealand, In New
(15:31):
Zealand, there's there's these barriers to trying new things
and people are almost scared to,to put their feet in the water
or to be first. Whereas my understanding was in
Brazil, you know, that's maybe alittle bit more loose and so you
can try stuff out. So tell me a bit about about
that. Yeah, yeah, yeah.
I would say culturally it's, it's also more difficult in New
Zealand. And yeah, in New Zealand you
(15:54):
really notice it, I think when you go outside like tall poppy
syndrome, where like we really don't like to see someone like
standing out or, or even thinking that they might be
better than anyone else saying anything, You know, sort of the
being like just middle of the road, like mediocre, average or
like not exceptional or anythingis, is seen as like a, a good
(16:16):
thing or at the very least like it.
It should definitely not be looked down upon.
And that that comes with, yeah, the good side that we're very
egalitarian country and, and treat people fairly.
And you don't have, you know, a lot of homelessness or, or
poverty. But on on the negative side,
(16:37):
yeah, there's there's New Zealand's definitely not a
country that where people care about being exceptional or, or
like excellent at something. And so, yeah, and, and I think
Brazil too, like in New Zealand,we, we spend a lot of time like
waiting for other people can tell, tell us it's OK before we
(16:57):
can, before we can go ahead and,and build something or do
something. In Brazil, people just used to
take an initiative. If, if, if you, if you don't, if
you don't take initiative like you, you sort of just get like
left, left behind. So there is like a lot more, you
know, of a go getter attitude like let's just try it out.
(17:18):
Let's just, you know, First off the wall and see what sticks.
Yeah. I hope you won't mind me sharing
the story, James, but I rememberwe were having having a drink or
something in Wellington and you were saying, were you your early
days in Brazil and you were at aclub or something and you saw a
girl and your eyes met and you were doing the classic Kiwi
(17:39):
thing, which is just to sort of slink back and be a bit cool.
But straight away some other guycame up and had a chat with her
and no one saw saw them again. They sort of disappeared into
the night. And that really stood that I
remember that story because you're right, New Zealand, you
know, we wait, we wait for it tobe OK.
And I do think this is related to the, the nanny state.
And, you know, if you come in, it's like, well, what is the FMA
(18:01):
going to say? What is the regulator going to
say? You know, especially with
Bitcoin stuff, it's like, oh, what?
You know, what's the guidance from the IRD, which is.
Which is ironic given that like we probably have like the most
lenient and, and like relaxed, but like those, those agencies
are some of the most like lenient and relaxing in the
world. You know, you scrub your taxes
(18:22):
to IRD and you get like penalties or whatever.
Very often they just wave it or they will like work with you,
they'll talk with you, they'll try to help you through it.
If you're, if you're like, you know, you've made a sincere
mistake. You know, they're not just out
to, you know, like smash you allthe time.
And, and New Zealand just like has, I feel like so much of the
(18:44):
time in like other countries, when, when people like see a
grey area of the law, they decide, OK, well, I'm going to
go out there and test it or I'm just going to like assume if
it's not, if it's not illegal, then it's legal.
But, and yeah, in New Zealand wehave a lot of an approach of
just like, well, I, I don't see anyone else who's doing it.
So I I'm I'm not going to go anddo it either.
(19:05):
Man, I, I know exactly what I mean because I, I, to be honest,
I have a similar experience. Japan's a little bit like New
Zealand in that regard. And it's over regulated big
time. And that's like, man, I, I, my
gut feeling is I always assume when something looks like an
opportunity and no one's pouncedon it, it's because there's some
hidden claws, there's some bylaws that's affecting that.
(19:27):
Whereas I've actually learned a lot.
I got a lot of Chinese friends and I, if you work with Chinese
people, they love being in the on the edge, They love being in
the Gray zone. And there's edge there.
There's, there's like arbitrage,there's opportunity there.
And sure, you, as you say, you can work with people and you can
negotiate things if you end up doing something that's not quite
(19:47):
right, you know, ask for forgiveness instead of
permission, right? Yeah, yeah, absolutely.
Like that's how we've, we've had, you know, yeah, unsold
innovation and, and, and yeah, like quality of life
improvements, I think. The old school New Zealand is a
bit more like that though, right?
Like, yeah, yeah, back in the day, you know, everyone was just
(20:11):
doing it themselves and that didn't really care.
But it's maybe it's like since the 90s or maybe the 80s, things
have changed. I don't.
Know, but yeah, I think it's yeah, if you if you sort of grew
up in a more like rural area, you still have like some of the
like like old, old values. Yeah, I found it.
I was talking to someone not so long ago about how New Zealand's
(20:32):
like culture has changed over time.
And they were like, yeah, like they were just curious about
like how, how you would like describe New Zealand culture.
They, they thought they, they, what did they say?
They were, they were curious about our response to COVID.
Well, in, in whatever case, they, they saw us as being like
quite obedience or trusting or what we say kind of like
(20:56):
conformist or something like that.
And I, and I found that really surprising because I would have
said that New Zealand for the longest time, like Australia and
New Zealand, like the whole Anzac culture, Anzac spirit of,
of mateship is that like, like it's, it's anti authoritarian,
right? Like it's, it's, it's, it's
(21:17):
every, every, everyone is, is sort of is sort of mates is, are
equals. And, you know, someone who's,
you know, far away in a suit andsome tall rise building, you
know, shouldn't, shouldn't, shouldn't be able to like tell
you what to do. That that that used, I feel like
that used to be a very strong value in New Zealand.
(21:38):
And, and, and then it was just sort of yeah, like taken away.
Like, you know, there used to bea really strong like value on
like the the number 8 wire mentality and, and building
things with your hands and, and,and yeah, that's, that's sort of
gone away as well. Or you can just like, but you
know, this sort of idea of like the Kiwi bloke is like a guy
(21:59):
who's, you know, tough and like,you know, he if he if he goes
out and, you know, gets injured at a rugby match or, you know,
bashes his bashes his foot on onsome rock or whatever, you know,
he just sort of step up and liveand, and, and soldiers on.
And even that's like being kind of like, you know, demonized and
(22:19):
like pushed, pushed, pushed out of New Zealand culture.
So I don't really know what, where what type of culture we
have now, but it's like it's very far away from the, the the
the like Kiwiana idea of, I don't know, 50 years ago, where,
where a nation of if you just goand and and listen to we don't
(22:40):
know how lucky we are from 1998,Fred Dagg.
And you just compare that to NewZealand today.
It is it's insane the difference.
Oh man. Yeah, yeah, yeah.
Well, the number, the, it's in asense, the, the tool poppy
syndrome that you mentioned before that in the old days that
had a legitimate value as, you know, kind of critical of the
Privy Council or the, the Queen or whatever, you know, and, you
(23:04):
know, England and, and the powerstructures seemed far away and,
and New Zealand's government wasgenerally quite flat.
You could ring up the Prime Minister, you know, at his home,
the class and have a, you know, have a yarn, you know, these
kind of national myths. But that has changed.
And I don't know, I mean, again,you and me have both left and
many others have left. But moving on to what you're
(23:25):
working on now, because I was quite blown away when I saw the
news about your team at the hackathon and, and that, and I
think you had only just arrived in Brazil and you you jumped
into this hackathon and you guysended up winning.
So tell me about that story. Yeah, yeah, yeah, indeed.
I, I had only just arrived. I came, came here late last year
(23:48):
for another Bitcoin conference and then this one happened to be
hosted in in February. And yeah, it was, I had been
following Bitcoin Plus Plus for a while.
They're probably the, the, like,best educational resource out
there for like the technical education resource for
(24:11):
Bitcoiners right now. Yeah.
Organizers of, you know, conferences where people are
talking about, you know, emerging multi sig technology
and your taproot script script paths and what, you know, all
the like, really like nitty gritty stuff.
(24:31):
So yeah, once I once I found outthat there was there was one
being hosted in Brazil, I just immediately signed up and and
booked a booked a flight down. And then when I was there, I met
three others who I'd never met before.
And yeah, over the weekend we, we built this, this sort of
(24:52):
prototype app. And yeah, some some managed away
to take away the top prize. Yeah.
So Nosta Pix tell me about that though, because that interfaces
with the Brazilian payment system.
Yep. So so PIX is like a sort of
proto CBDC. It's a it's, it's got very high
(25:13):
like penetration across Brazil. You can it's, it's an interbank
like instant payment system withall transactions routed for the
central bank. It's kind of similar to what is
it India has, is it BB pay and. Universal, Yeah, yeah, yeah.
Universal payment system, Yeah. UPN is it?
Yeah, yeah, yeah, something likethat.
(25:35):
Yeah, yeah. It's a it's instant payment
system. People use it to receive money,
send them receive in between individuals.
You can buy online at a website,you can buy from card readers.
Almost almost every everything that like holds or accepts money
and Brazil was integrated with this PIC system.
(25:58):
And one of the problems with thePIC system is that you can't use
it unless you have like Brazilian documents.
You need to have a Brazilian ID number, you need a Brazilian tax
number, you need a bank account registered against those
details, because you know that that just the basic designer
(26:19):
picks requires a lot of information.
They want to have people's names, locations, you know, tax
numbers, all of that to like link, link together their
transactions and the metadata associated with them.
So if you are visiting Brazil, you have basically no way of
using this payment system that is preferred and and available
(26:42):
everywhere. Oh, that's what I was going to
compare it to Prompay, like the Thai QR system.
Yeah, that's, that's a similar system as well.
So yeah, we, we just decided, OK, well, let's, let's figure
out a way that we can, that we can make that happen.
Let's find a way that we can payPixies on a Bitcoiners behalf
and then like accept, accept Bitcoin and then immediately
(27:05):
upon receiving the Bitcoin, like, you know, execute the
payment. And yeah, we were able to to get
that to get that going. Yeah.
Can you tell me how that works though?
Because if it's this like KYC system, how do you get someone
who's not in that system to use it?
So for the prototype, we just used our personal details, so
the payments coming out from ourname.
(27:27):
And then for the, I think PIX like technically does allow you
to use it without a Brazilian tax ID, but just the like vast
majority of APIs and like systems related to it like
require a Brazilian entity, likean individual company.
(27:48):
So yeah, we just started off with our names, like our
personal, like KYC information, but part of like what we're
planning for the future is to let Brazilians sign up.
So we'll charge like a fee on each transaction.
Brazilians, if they add their own tax, like number, tax
(28:09):
details are in KYC information will get a discount on that fee.
And if they volunteer their, their tax ID for other people to
use to make payments on, to makepayments on behalf of of like
them, they, they can earn that fee.
So like having a sort of peer-to-peer system where
payments are still coming out and, you know, being associated
(28:31):
with particular senders. But, you know, if, if you don't
have the ability to KYC, which which you don't if, if you're a
tourist in Brazil or if you, yeah, if you, like, care about
the privacy of your transaction,which is a very valid concern
considering that your full legalname is revealed on every
(28:51):
traditional transaction. Yeah, yeah.
That's yeah, so. So what I what I like about that
though. So for your prototype, you guys
just use your details, but are you saying that the PIX platform
has an API that you could just look into and that's how you
were able to do? It yeah, there there's, there's
various services that provide APIs.
(29:12):
I used, yeah, one that was actually specifically set up for
helping international businesseslike accept and received
pictures from their Brazilian users.
So I had that registered againstmy like New Zealand limited
company. But yeah, there's many, there's
many like, yeah, banking as a service APIs in Brazil.
(29:34):
It was pretty like open, open banking system can.
You tell me that that pics stuff.
Is that only for individual people or like could a company
have a? Yes, companies.
Companies can and do and do use them.
It's free for individuals, but it's also very low cost for
companies too. Because I was just going to say
(29:55):
instead of an individual necessarily offering up their
thing to others to use, I mean, maybe this is where there's a,
you know, the business could offer that service to them
potentially, right? Yeah, yeah.
I think it's better to try to keep individual details involved
just because you kind of walk into what like financial service
(30:17):
provider territory. If you're like a business, you
know, managing payments on like behalf of other people.
If you're instead just like sortof, you know, basically like a a
peer-to-peer platform and other people are like willingly taking
on like the responsibility of making payments for others.
Yeah, I think that that probablymakes a lot more sense.
That's fascinating though, because that sort of, I mean,
(30:39):
contrasting that with the New Zealand experience, so-called
open banking, which at the very best that's, you know, someone
asking you for a wind cave portal to put your password and
username in. And then it's like remembering
that to make payments. It's pretty like low tech.
It's against, it's against the bank's own terms and conditions.
(30:59):
Yet the banks themselves use these services to, to do like
loan applications, like, Oh yeah, yeah, connect to your
other bank account and we'll grab your statements for the,
for the loan application. So it's it's they're, they're OK
with breaking the other banks terms and conditions when
they're like getting applying you, you know, for a loan.
But yeah, no, no, we take no responsibility if you, if you
(31:21):
insert your your card details onPoly or wind cave, which is used
by Air New Zealand and Bunnings and.
Yeah. Well, what I like about what
you've described with Noster picks is that you can still
eventually, you know, the settlement still happening in
real, but you're able to make the payment of sets.
And that's like, that's pretty cool.
(31:43):
You know, that you can live on aBitcoin standard quite easily
and you're not having to do anything extra.
You know, it's not, I mean, ideally, you know, you go
completely off that network and just use lightning.
But if the merchant doesn't accept that, what you know, what
are you going to do? But this allows you to pay them
still. Yeah, yeah, yeah.
And I I think too like there's some people who like we
(32:04):
actually, I think part of the reason we won the hackathon is
that we we did really well on social media.
For some reason, we actually hadthe majority of our users were
not actually people like foreigners without like local
banking details, but they were actually Brazilians who were
trying out trying out the service.
And, and, and of course, when you sort of blow up on social
(32:27):
media, you end up getting like acouple of, you know, really like
angry people too, right. So we had like some people
reaching out saying like this iscompletely pointless because Pix
is a, you know, is a, is a, is aKYCD system that is, you know, a
massive invasion of privacy and you're just holding that Bitcoin
adoption by doing this. And so, and my answer to that
(32:49):
would be like, actually, if you just make it really easy for
people to like use SAT's day-to-day, even if it's always,
you know, transacted in the field, you're getting people
used to using Bitcoin and you'rejust like normalizing the use of
Bitcoin as like an everyday means of exchange.
So like it's, it's much easier to make the jump from like, oh,
(33:12):
like I'm, I'm paying you a Bitcoin, but you're getting
you're getting Brazilian high eyes or dollars or whatever it
is to like, oh, I pay you Bitcoin and you receive it
directly. Yeah.
Is that how you said by the way,that R is an H sound, isn't it?
How? With the currency, yeah.
Sorry. Yeah, in Portuguese, yeah.
No no no, I should know that because in jujitsu I do
(33:33):
presenting jujitsu and it's always like the the R sounds
become HS but with Sorry with what you just said though, so
I'm actually impressed. So this wasn't just for the
hackathon, you had some like random people using it.
Is that what you're saying? Like yeah, yeah, yeah, yeah,
yeah, yeah. While we were, yeah, we were
like live sharing it on social media.
I actually like live coded it like I was on like OPS studio
(33:55):
while I was coding out the application and yeah, yeah, we
did. And and we had like majority of
our team was non-technical as well.
So we just we just had we were just like spamming, spamming,
spamming, you know, getting getting people to to to try it
out. So yeah, yeah, we, we got a lot
(34:16):
of users. We got so much users that we
actually like lost money on the like, like the Bitcoin like
price swings that weekend and and yeah, like we we we ended up
like regularly having to, you know, re top up our account with
like another a hundred $200 justto just keep things ticking
(34:36):
over. Yeah.
Oh, that's cool, man. I mean, that's demonstrates
product market fit though. Like, fuck it, you're like,
you're not. That's literally a prototype in
the weekend, and you've got users like, that's pretty
awesome. Yeah, yeah, yeah.
Well, congratulations on that. And so you're saying there's
maybe potentially a more commercial version of this
coming out you guys are working on?
(34:57):
Yeah, yeah, yeah. We're working just sort of,
yeah, mostly based off where you're scrapping the front end
and we're and we're just making like a really good back end for
it that we can potentially like offer for like anyone to
integrate their app into. I think that's probably a better
idea than, you know, just like trying to make a yet another,
(35:18):
you know, like wallet or servicer app fully removing
custody as well. That that that's important.
We the Noster and our name comesfrom like Noster wallet
connects. There's like protocol for like
automatically like pulling payments from Lightning wallet.
So yeah, we, we want to do that.Yeah.
And also like automatic Fiat conversion 2, which I'm planning
(35:42):
to use Lightning pay for in New Zealand.
So yeah, like as a New Zealand business, you can you can accept
like Bitcoin as a payment from overseas, right from overseas
clients. You don't need to get a bunch of
information from them. And then you can turn that into
Brazilian hey eyes with, you know, something like
(36:04):
Transferwise and send to Brazilian bank accounts without
having Brazilian like tax documents.
So yeah, I think that's the way to do it is, is have lightning
pay like in New Zealand be be that back end from it's going to
be expensive to go from Bitcoin to New Zealand dollars to hay
eyes. But at the end of the day, like
(36:26):
if, if it's if it's useful and doesn't matter.
Yeah, well, there's a good flow with, again, people living only
in New Zealand wouldn't really get this, but there's a really
good flow to go from somewhere like Lightning Pay to Wise
because you're suddenly been able to use wires wherever you
want and you're kind of exiting out of of the New Zealand system
(36:48):
that way. So it's kind of an interesting
model. And I think yeah, again, what
you you said though, it's just so awesome that, you know, this
infrastructure was available foryou to just tap into and build
this stuff. And I do feel like New Zealand,
it's kind of this, this archaic system of the EFTPOS and these
like proprietary networks that kind of with pretty cutting edge
(37:11):
in the 90s, but that's just sortof stayed at that point.
And I don't know, it's sort of the way the mobile revolution
has happened in other parts of Asia.
And that it's like, man, New Zealand's nowhere near getting
to that point because we sort oflocked in at F postcards in 1990
or whatever, you know? Yeah.
Yeah. So, yeah, well done, man.
And I mean huge addressable market as well, just in Brazil,
(37:32):
like again, hundreds of millionsof people.
Yeah, and there are, there are certainly many like KYC services
allowing you to pay, pay this like picks in in Brazil.
But yeah, hopefully there's likea market for people who, yeah, I
don't know, care, care more about their privacy or or
foreigners incapable of getting Brazilian bank accounts.
(37:58):
Yeah, yeah. Fascinating.
So that's the the hackathon and then you're also working for a
payroll company leading some of the Bitcoin integration stuff.
So tell me about that. Yeah, yeah.
So yeah, I recently joined Ryze.They're a yeah, crypto payroll
company sort of originally like focused on stable coins like
(38:19):
USDC and USDT, like allowing people to allowing companies to
manage their payroll where they'll deposit funds on and
then like employees or contractors to take payouts and
cryptocurrency as well. And and and they support Fiat
too. So they've they've been around
(38:41):
for several years, I want to say2021, but I have recently begun
taking off it. I'm actually not exactly sure,
but I'm quite pretty sure the company like race race funding
like last November and and yeah,that that's that's what leads
me. I haven't having a chat with
(39:01):
with the team and, and coming onto to work in their Rams team,
which has has to do with everything related to moving
money on or off the platform. And so yeah, I'm, I'm
integrating Bitcoin as a depositand payout method.
Yeah, main net lightning, hopefully taproot assets.
(39:24):
Yeah. And it, it's, I'm really
enjoying it and it's really cool.
I mean, like, you know, I, I love making stuff that lets
people use Bitcoin in the real world and like getting paid
directly in Bitcoin, no intermediaries is, you know, one
of the best ways that you can, you can acquire it.
Oh. Man, that's brilliant.
(39:46):
Well done. Man, that's, that's awesome.
And also looking at the that real world side of things, you
know, I think this is something that I've been thinking more
about. I don't know what it is.
It feels like we've entered intoa bit more of a, a bit of a bull
run. You know, things have popped
off. There's maybe a, a focus on
holding Bitcoin. But if I go back to, you know,
(40:09):
when we first met at the Kiwi and you know, we were buying our
drinks and spending sets and using Lightning, it's like
there's something very enjoyableabout the payment side, which is
what it was all about originally, right?
So I don't know, tell me more about that.
As far as I'm concerned, if, if you, if you don't, if you don't
aren't forced to spend or or sell your sets, you haven't
(40:30):
bought enough. You're, you're that that means
that you have fear and reserve that you haven't converted to
Bitcoin, you know, like, yeah, yeah, you're, you're
underexposed. That that if you, if you truly
believe in Bitcoin enough to be like, oh, you know, of course
I'm going to spend dollars firstbefore I spend Bitcoin.
Yeah, well, well, clearly, clearly you don't think that way
(40:51):
because you you still have quitea few dollars, enough that you
never have to sell or spend. Yeah, it should feel a little
bit painful, but you should be doing it all the time because
it's the only place that you're keeping your money.
Yeah, yeah. No, I mean, it's, it's like
riding the wave, right? You, you know, you've got to
have it in Bitcoin, otherwise, yeah, you're just, you're just
(41:12):
staying flat with, you know, deflating.
Local. I've regretted a lot of times,
yeah, like not having bought Bitcoin or not having kept
Bitcoin. I have not regretted many times
where like I bought and then it's like gone down and I'm like
forced to sell a bit like that'sjust sort of life.
But like the missed opportunities are like always
(41:34):
like hurt more well. I also think, I mean text aside
because there is some, you know,regulatory stuff there, but in
terms of the the conceptual approach to it, I always think
about it as like first and last out.
And so, yeah, maybe it tips today and you have to spend some
Bitcoin. But if you think about that,
(41:55):
just having taken that from someof the Bitcoin that you brought
years ago that you're sort of, you know, you're not actually
losing if you know what I mean, it's sort of you're just taking
it from the the earlier period. Yeah.
Yeah, yeah, yeah, yeah, to, yeah, to a degree.
And also, Speaking of tech specifically, like I feel like
(42:15):
the more that we actually use Bitcoin like day-to-day, the
like more of a precedent we're setting to like challenge the
idea that Bitcoin is only a speculative asset with 0 utility
that that is like purely bought with Fiat to sell for more Fiat
later, which is how most tax departments around the world
(42:36):
treat it. So, yeah, if you, if you can
start like using it day-to-day, you you that at least is
beginning to like prove something different than the
than the law considers it. That's really a fascinating
point because you know, if if wehave years and years of large
(42:59):
numbers of people using Bitcoin for their day-to-day expenses
when there is maybe a legal challenge to it from the state,
you know, and you get a good legal team together and just
say, hey guys, like man, this precedent's been set.
Why didn't you say anything earlier?
Actually, the interesting thing about New Zealand is that the,
the actual wording of the IR DS guidance on crypto assets, if I
understand it correctly, is thatyou have to pay tax on
(43:23):
cryptocurrency that you acquire for the purpose of disposal.
So like that you buy with Fiat to like sell for a higher price
later. And they, they have these sort
of assumptions in there that like, OK, by default, like if
you sell in the future, even if you bought it for a different
reason, like you're considered to have bought it for disposal
(43:43):
because you, you sold it just then or you know, things as
well. Like even if you receive the
payments in Bitcoin, you're considered to have received the
Fiat value and then like immediately bought Bitcoin.
Like I reckon, but but but the, the like ambiguity like exists
there to be like challenged and teased out in the future where
(44:05):
what happens if you're just buying Bitcoin because you want
to use it day-to-day and you don't care about the price?
It can can that be treated like a like stock that you acquire in
a company when you, when you're starting the company, you're
not, you're not trying to like make a profit or day trade or
whatever. You're just, you're just getting
equity in a company as you're, as you're helping build it.
Because right now, like we, we don't if someone buys a house
and sells it for a higher price later, we don't, we don't
(44:27):
consider that to be like, you know, capital gains tax or or
whatever, right? Like, no, it's just your, it's
your home. So yeah, I think a similar thing
could happen to Bitcoin in the future.
Yeah. Well, it's also interesting.
I mean, you mentioned the housing thing, which there are
emerging arguments and you've got the whole bright line test
and all that bullshit. But like, basically that's
(44:49):
that's a racket, man. Like, yeah, you sell a house,
five years is it? And you don't have to pay any
capital gains tax. Yeah, you sell some sets.
Yeah, I don't. I, yeah, I don't.
I don't see that. Yeah, change changing any
anytime soon? But yeah.
I mean, like at the end of the day, like, yeah, I feel like we
just need a bunch of people liketesting out that question that
(45:10):
like, you know, is everyone who's, you know, getting like
are you, are you declaring everytime you're receiving like, you
know, you're getting paid back by your mates Bitcoin after like
buying them food at a bar? Are you declaring that as like a
Bitcoin purchase? I would say like the vast
(45:31):
majority of people aren't and they shouldn't be either.
Like, you know, you don't declare cash that you're like
given either. You don't declare money that
you're getting in the garage sale, right.
And and it would be totally unreasonable to expect people
to, you know, track all those like minute things and then you
end up spending that money like somewhere else later.
(45:54):
Yeah. Like the, the system has no
problem with with that right now.
And I think I think like so manyof us are just like just wanting
to, to like hear the like approval from the government
first that like, yes, it's OK touse Bitcoin as like a meaning of
exchange. Like, yeah, the, the, the intent
of like the cryptocurrency, you know, tax laws is, is just that
(46:17):
they want to like get a, get a slice of the pie for the people
who are doing like massive, massive, you know, trading
movements, making tons of money,you know, gambling on alcoins,
right. If you've if you've just got
like a little lightning $5 payment and then you like, you
purchase a coffee. Yeah.
So, so you get like paid, you know, 5000 sets and, and, and
(46:41):
and that's, that's worth a $5 coffee.
And then you and then the price rises and you're only paying
4500 sets. You know, are you going to be
calculating the profit on that? Like no.
Yeah. Well, again, it comes back to
that culture thing because, you know, if you really zoom out,
what is the net benefit to the New Zealand, you know, project
(47:01):
to have some really good infrastructure and innovation
around Bitcoin payments? I would argue that the benefit
to the New Zealand government would actually be to have more
of these companies doing stuff like this and not try and
knuckle and dime payments. It's like, man, what?
And and I think that we actuallydo it to ourselves because as
you say, you know, it just hasn't really been super
(47:24):
clarified. And I don't know if it ever will
be Like, they're not ever going to be like, yeah.
No, I don't. I don't think it's going to be
clarified until you know. Until it's too late.
Someone's hand is false. But yeah, I think when the
challenge happens, it's going tobe pretty, you know, like the
people who are getting, you know, the however, it's like,
(47:45):
you know, tested out and law, I'm quite sure they're going to
be treated properly. You know, there's not going to
be these sort of like kangaroo courts, like what is what's the
name, like Julian Assange in, you know, United United States
or whatever, like in, in general, like New Zealand
authorities, FMA by ID whatever can be generally trusted to be,
(48:08):
you know, fairly like reasonable, right.
So I reckon like, you know, if, if they're, if they're trying to
like bring up like some, you know, dairy shop owner, you
know, out because, you know, he failed to declare, you know, the
Bitcoin payments for the last two years.
And, you know, you're just like unaware that like he was having
(48:30):
to, to declare it as anything other than, you know, New
Zealand dollars then yeah. I feel like I feel like that
they'll get treated more fairly in New Zealand than than most
countries. Yeah.
Oh, that's fascinating, man. Like I, I think, yeah, it's sort
of encouraging that again, it's,it's a little bit like the more
(48:52):
you use it, the more it's just established as practice.
It's just normal. And the New Zealand regulators
are way behind anyway, like the under resourced and look, these
guys are busy people dealing with all sorts of things.
So I think a bit of compassion there that it's, you know, you
don't need to be scared. And I think there are these
horror stories that people maybeimagine, but you're not really,
(49:14):
you're not doing anything wrong.You're just using a digital
currency to make a payment and it's it's innovative.
Yeah, it's it's just, it shouldn't be treated any
differently than you treat a, a credit card, a debit card, an
EFTPOS, a cash transaction, all of those perfectly legal that
don't require, you know, every time you tell you sell coffee
(49:35):
for Bitcoin. You don't have to get all these
KYC details that is considered normal.
You would be considered weird ifyou're being asked for your
passport every time that you want to buy a coffee.
So yeah, like I. Yeah, well, even just the
exchange rate slippage and stufflike that, you know, if you're,
if you're an overseas visitor and you're spending U.S. dollars
in New Zealand with your, you know, your credit card, like,
(49:58):
you know, are you keeping track of that stuff anyway?
I mean, it's a lot. It's interesting.
I've just seen opportunity and our friends at Lightning Pay are
really working on some awesome stuff here to be able to pay
bills, you know, work in this new ecosystem.
And hopefully, I think maybe with the open banking that's
starting to happen in New Zealand, you know, being able to
loop in to some of that stuff like what you've done with
(50:20):
Noster Perks could be really interesting as well.
I don't know if we'll see that anytime soon, but you know,
being able to actually take the Fiat aspects out of it as much
as we can so that, yeah, you canjust hold Bitcoin and pay your
bills with Bitcoin and New Zealand.
Yeah. I think, I think there's an
opportunity to with that like our Kahoot service outlining pay
(50:40):
is based off as well like that. That opens up the ability for
day-to-day individuals to like automate their bank transfers
and and interact with their banklike bank data automatically.
I think that opens up the opportunity to create a like
proper automated like peer-to-peer market in New
Zealand or Bitcoin. Akahoo is an interesting piece,
(51:04):
but the other one I was thinkingabout because Akahoo would allow
those classic bank transfers, right?
And I've used that method where I pay sets through lightning pay
and I can pay a bill, you know, settle the bill in New Zealand
dollars for something. But I think the real challenge
is when it comes to point of sale, you know, and I wonder
whether there's some sort of loop back where now that you can
(51:25):
get, I think there's you can getpeople's details.
And so I wonder whether, you know, there could be the thing
we like you go to tap to pay themerchants details are sort of
sent to you. And then that gets settled
somehow, you know, on, on on thelightning pay side or on the on
the on the Fiat side kind of instantly.
And so you you're sort of reducing the amount of Fiat that
(51:48):
you actually have to hold because at the moment, if you
still want to tap and pay with debit card, it's still Fiat to
Fiat. Whereas if you could hold it
that this like your, the reservoir is, is Bitcoin and at
the moment you got to pay, it takes it straight from your
Bitcoin stash into Fiat to settle that transaction.
Something like that could be really interesting, right?
Yeah. Or better like a credit card
(52:08):
that's like collateralized against your against your
bitcoins. You spend, spend in Fiat and
then see and settle at the end of the month.
Anyway, we're going down the rabbit hole but James, I'm keen
to just find out for the rest ofthis year what's what's on your
horizon. Yeah, well, I'm, my main focus
is, is my job at Rise where yeah, like I'm getting Bitcoin
(52:33):
to like their Bitcoin integration to like really high
standard teaching people about it because like most of the
people there are sort of from the more Ethereum sort of side
of things. So you're explaining, you know,
the differences between Bitcoin and Ethereum to them And yeah,
just making sure it's like a first class like supported asset
(52:54):
on their platform. Would love to integrate Taproot
assets when especially after USDT launches on on Taproot
assets. Yeah.
And I mean, I'm just sort of focused on getting established
back on like this side of the world, potentially looking at
(53:15):
acquiring Brazilian citizenship or Paraguayan residency.
And yeah, just like working as much as I can in my spare time
on, Yep, building, building likeopen source, like Bitcoin stuff,
anything that makes it easier toto like use Bitcoin or like
(53:35):
solves real world problems that I've, I've encountered.
I'm I'm keen to build. That's bloody awesome, man.
And Brazilian citizenship, you see a pathway for that?
Like is that is that? Yeah, yeah, I, I, I should be
able to know if I can apply in May.
That's why I'm going to get backthe reports, the results from a
(53:57):
Portuguese fluency test that I did.
And, yeah, if I can prove like that I've resided here in the
past and that I've paid taxes and that I don't have a criminal
record and that, yeah, I speak like good Portuguese, yeah, I
can apply for citizenship. It's probably going to take
forever, but then I could have. Yeah.
The New Zealand and the Brazilian passport, full access
(54:19):
to Marcosaur, plus, you know, the all the access that New
Zealand gives. It's.
Bloody brilliant, man. I can see, I mean that that's
pretty attractive. You know, if if Brazil wants
entrepreneurs and smart people to come like being able to get
it low. Yeah, and I mean, Paraguay is
also looking like a, a super compelling option.
Brazil has like some benefits for entrepreneurs.
(54:41):
Like if you can like figure out like a way of like making things
work, you can actually pay lowertax.
And you then you have New Zealand, there are like
incentives, especially for exporters here that so you will
like pay. You can pay like I have a friend
who's like paying like, you know, 5% tax instead of, you
know, 28%, right, New New Zealand, but in Paraguay, they
(55:05):
do 0% tax on your global income.And also no, no like import
duties. So you have like access to, you
know, America level prices for, you know, laptops or phones or
webcams or microphones, whateverthe equipment you want.
You also have very cheap power and a very business friendly
(55:27):
environment and and yeah, 0% taxon income that's not, not
sourced from within Paraguay. So a lot of Bitcoin is moving
there. I'm I'm very keen to check it
out. Yeah, that's fascinating, man.
Well, look, good luck with all of that stuff and thanks for
sharing your story. Really impressive QB boy from
Christchurch making it happen onthe other side of the world and
(55:48):
what is possibly one of the the most exciting regions of the
world for Bitcoin, which is Latin America.
And really seems like there could be a lot of opportunity
there in the future. So I wish you all the best luck
with that. Thank you.
Yeah, cool. All right, man.
Thank you very much. Goodbye.
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