Speaker unverified: belief

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…Visa backending to a Solana on chain balance. Exactly. Okay, let’s see if it works. Please be accepted. Sweet. You're good for it. How does the onchain transaction work? Does that happen in real time? The stablecoins in the balance are then moved immediately to a smart contract and then at the end of the day, all the funds in that smart contract are then settled to the networks. So the balance has actually moved out of the wallet. So I've had $5.36 moved out of my wallet. But is there a real time, can you get race conditions here? These are the age old questions, like, can you overspend? You can double spend. Okay. Yeah, you can't overspend because it checks the balance in the wallet in real time, but you could have a double spend attack? If during the exact same moment two transactions are authorized at the exact same time on the same card from the same balance, then both would in theory be approved. So you're saying we need a blockchain built for payments. That's what I'm saying. And the account layer is something that we've had to build on the wallet side, which is actually the ability to freeze funds based on the first payment to prevent double spend. It's actually something that we've had to build out for some of our customers specifically for that reason. And you're doing this at the Privy level rather than the chain level and then you post that transaction to the chain? Exactly. That's cool. Again, you would see why you want this. So one mistake I think people make when thinking about crypto is they think about it as a discreet invention. Like, one day we had computers, but of course one day we had UNIVAC and then we had the Apple One, and then we had the Macintosh. And actually the computers got much better over time to the point of almost being different things. And I think similarly people think of blockchains happening at one point in time, but we tried for the payments use case, we tried raw Bitcoin, no lightning or anything back in the day in 2013, 2014. That was not a good payments blockchain, I'll tell you that. And despite the fact that the Bitcoin white paper really talked about payments as the core use case rather than many things that have really worked for Bitcoin. And so I'm curious, as you look at the last five to 10 years of blockchain advancements, just how would you guys describe them? We started building payments use cases on top of blockchains like two, three years ago. And it became very clear to us immediately that none of these things were optimized for this use case. And it was a bunch of micro decisions that probably made sense for different use cases that were being optimized for, but made it really hard for us to be successful. So one example is that on some blockchains, in order to make the address, make it possible for that address to accept USDC, you have to fund it and prime it so that it is available to accept that USDC and that might cost 30 cents. You can't send USDC to an address that does not have it? Yeah, that does not have GAS and has not been basically programmed to accept USDC. And what was the bottleneck? C and that might cost 30 cents. You can't send USDC to an address that does not have it? Yeah, that does not have GAS and has not been basically programmed to accept USDC. And what was the bottleneck? It was basically all of the transactions needed to be serially sent and confirmed through the blockchain. And what would end up happening is that there's a relatively high failure rate for these. So a decent number would fail. We'd have to capture them, chronicle them, and then resend them. And it's just because they're not picked up. No worse fate working on a blockchain than having to manually set the nons for the transaction. When you get to that place, it's a dark, dark time. And so we just realized time and time again that there's been blockchains that have been built for trading use cases and blockchains being built for storage use cases, but not many blockchains that were built for payments use cases, which have their own... It's hundreds of very small decisions that add up to a materially improved experience if you want to build payment infrastructure. Won't Solana people say Solana solves this? Like, it's the blockchain built for scalability. Solana is a great blockchain for a lot of use cases, but it's still not great for payments. Maybe a very geeky take on this. If you go through the history of very early Bitcoin,the reemergence of peer-to-peer computing from the late nineties early aughts where instead of these being volunteer networks like Tor or others, this is now we've built incentivization into P2P. So you have a means of incentivizing resource coordination globally through these networks. So that's step one. I think step two with Ethereum is we've gone from a single purpose chain, Bitcoin, to now actually a programmable chain. So this is akin to Von Neumann architecture, you move from fixed programs to you can now store the program separately from the compute and you can have the computer do anything. And so they are actually turning complete blockchains. And Ethereum is the world computer in that regard. And I think the phase we're in now is scalability. and you can have the computer do anything. And so they are actually turning complete blockchains. And Ethereum is the world computer in that regard. And I think the phase we're in now is scalability. Yeah, I think it's interesting where you see these, this isn't a blockchain specific thing, but you see these pockets where there are moments in time where a bunch of people build the same thing to solve the same problem because the problem becomes so acute that the world is like, “Oh, this is obviously a thing that someone needs to build a solution around to do it.” And if you zoom into the blockchain where we've seen this now twice, where a couple years ago everyone was building scalable blockchains. Sui and Aptos and Solana, and all of these kind of came out right around the same time period to solve the scalability problems of Ethereum and Bitcoin. And then now we're going through the same moment where everyone's realizing that those blockchains that were previously greater were really good, but not great for payments use cases. And we have Tempo and others coming out to solve the payments use cases and all of them seemingly coming out and going to market at the same time, which is a good thing for the blockchain ecosystem because one or many of these will solve these problems. And this was a part of the conversations that we had at Privy when talking to Stripe about M&A, which was like, what are conditions under which we think we can be successful here? And I think one of them was the need to be able to work with competitive endeavors, endeavors competitive to Stripe itself and no offense to Bridge as well. And I think the point was to say it's way too early in market development to try and verticalize the stack. Part of the core value prop of the stack is that actually it's layered and you can assemble it in the way that best fits your use case. I think it's like, if you're serious about all these layers of the stack, you can't bind them all together because, just like there's no way you're going to get that much. If Microsoft is serious about the office suite, they're going to have it run on Mac and Windows because you're just not going to get a meaningful market share of an office suite otherwise. And beyond that, Microsoft at this point has its own laptops, but they're not building their own chips or maybe they are, but the point is you can't verticalize the entire— They're also mostly not building their own laptops that are running Windows software. Ultimately we want these blockchains to solve payments use cases. Folks are only going to build payments use cases around infrastructure that they feel like is open and neutral. There's not a world where there's a JP Morgan chain and a Stripe chain and a Bank of America chain and there's a thousand unique company blockchains. That's not going to happen.…

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