Blockchain Past, Present, and Future with H.E. Justin Sun

Jeremy: Welcome everyone to this new episode of The Money Movement. I'm really excited to be joined here today by Justin Sun, entrepreneur, investor, diplomat. We're going to talk more about a lot of different things. Welcome, Justin. It's really nice to see you.

Justin Sun: Yes, thank you. Thank you, Jeremy. Long time no see.

Jeremy: Long time no see. I understand you're dialing in from Geneva.

Justin: Yes.

Jeremy: With your new post, which I want to come back to, but I think it's fascinating. I'm always interested because I think certainly for myself, my own interest in crypto comes out of my original interest in political and economic systems and the relationship I think that this technology has to the future of how economies work. That's why I'm working on this. I know there has to be a long thread that connects all these things for you. Maybe I want to start maybe at the beginning of the thread, not when you're born, but maybe start earlier on. I believe you studied history in a Prominent University in China, but maybe set the stage a little for us, Justin, for what you were thinking about at that point in your life and the big themes that were capturing your attention.

Justin: Yes, definitely. I born in China. It's a very small province called Qinghai province. I think it's like US. Counterparties, I think, should be Alabama, those like Midwest states.

Jeremy: I was from the Midwest.

Justin: Very far from New York City, San Francisco. Then my dad and mom moved to Guangdong Province, which I think is like California in United States. Guangdong is very similar to California. It has the biggest GDP in China. Also, it has lots of the innovation tech zone there just like Silicon Valley, Shenzhen, like Guangzhou, it has Tencent, Huawei, all the very big tech companies. Then when I'm basically went to University, I went to Peking University, which is the best.

Jeremy: Like the Harvard of China.

Justin: Yes, exactly. Harvard in China. I happened to get a chance to- went to New York, Boston. After that, after I graduated, I applied for my master in US.

Jeremy: What were you studying at Peking University?

Justin: I think Literature and the History.

Jeremy: Literature and history. Okay. Any particular part of history, Chinese history, world history?

Justin: Oh, yes. I think it's more than Chinese history. That's from this part, I also study lots of US history as well, because as we know at that time, China and the US is the best allies. They fight Sino-Japanese War. Basically, lots of history heavily related to US policies. That's where I'm focused now. I think my master thesis and also my bachelors thesis is all talking about the ambassadorship of Hu Shih, which at that time is the Chinese Ambassador in United States. We talk a lots about Sino--

Jeremy: Is that during World War II?

Justin: Exactly, yes.

Jeremy: Most people don't know the history. Most Americans don't know the history of the deep strategic alliance between China and the US in fighting World War II. I happen to know a lot from Douglas about it, who also studied a lot of those things. Okay, that was your Thesis. All right. Very interesting.

Justin: That's why I know a lot about US policy, like 50 years ago, when Roosevelt and Truman is in charge.

Jeremy: Okay. Then you went to- I interrupted you. I'm sorry. You went on.

Justin: Applied for master degree in United States. I got admission from Columbia, Stanford and UPenn. I went to UPenn. I think the only reason is because at that time I still want to study literature and history. If I'm going to doing business, I think Stanford will be the best choice because it's in California, near Silicon Valley. At that time I still want to focus on Eastern Asia history because UPenn is the best. If you went to UPenn, you can check the museum there. They actually have lots of Asian, like Chinese art basically in UPenn Museum. They spend a lots of money try to collect Chinese collection, back to UPenn.

That's why I basically went to UPenn. Also, a year after I went to UPenn, I went to UPenn in 2011. Around 2012, I happened to just read New York Times and get to know Bitcoin, around 2012. That's how I know crypto, how I know Bitcoin. Because Bitcoin is so fascinating, it is basically cycle all my time. I have no time to prepare for thesis. No time prepare for the law school test. Basically, I think knowing Bitcoin changed my whole life. Before that, I'm very academic, try to study the Sino-American relationship in 1943 something like that. [chuckles]

Jeremy: Wow. Okay. That was a hard pivot.

Justin: Yes, exactly.

Jeremy: We all have stories like that. I think I had just taken a company public my last company Brightcove in 2012, and later in 2012, got introduced to crypto and Bitcoin. It was just like [mimics]. By early 2013, it was the same thing. I couldn't stop thinking about it, but it was interesting. I had a little bit of distance between my graduating from school and then, because I guess I'm a little older than you. It was interesting is that there were these connections to how is the world going to work? I had been studying how does the world work? How has it worked with political and the economic systems?

Then seeing crypto as a technology that could change social structures, economic structures, other things really profoundly, I'm interested to hear you talk a little bit about, as you got into it, there's obviously a lot of interest in this from the perspective of investing and store of value and trading. I know you're very successful in those areas, but less from perspective and more from the perspective of what did you see when you saw what Bitcoin represented, especially as someone who had the experience of China and the US, and thinking about that as a technology of economic freedom, what did that mean to you?

Justin: Yes. Basically, when I first know about Bitcoin, I think the most fascinating things to me is Bitcoin, it's the money for the internet. I think before that Facebook go IPO in US, so grow very big company. I think everybody knows internet is a big thing, but still if you compare internet it's like what matter we are talking about today. Still, the biggest problem for internet is there's no currency on internet itself. I think that's basically the biggest, I think, important part of Bitcoin, when I first think about Bitcoin.

I think Bitcoin is a star of the internet for money era, because we have seen these past nine years, a lot of the role Bitcoin play has been basically replaced by other stable coin, one layer, two solution. I can give you some example when we first came to Bitcoin, Bitcoin play a lot of role. Basically, Bitcoin is like the cloud currency. Every coins needs to trade with Bitcoin.

Today basically, I think stablecoin has take this role. Also before that, bitcoin, everybody is thinking about Bitcoin can do remittance payment, these kind of things things, but these days, I think USDT on TRON, USDC on TRON has started to play this role. Also, we have seen Bitcoin is basically a very good platform for people to build out, and right now we finding out more and more people building on Ethereum, TRON, other like layer one solutions. Bitcoin, I think, is more and more becoming basically, a score of value. People use it just like using gold, which I think is good for bitcoin because eventually, all the roles need to be played by other better solution.

Bitcoin find out the biggest advantage of bitcoin is just storage of value so that's why I'm against some of the idea of turning bitcoin to a smart contract platform and doing all the things smart contract platform is doing for bitcoin because bitcoin has sacrificed this kind of complexity for securities. I think what bitcoin is doing right now is perfect. It still needs to continue to play this role for the storage. Basically, it's the value of storage for internet.

Jeremy: What's so interesting is that the role of any given technology like this. Some people say something like bitcoin is apolitical, meaning it doesn't express any politics, which I don't agree with. I think it's very political. I think the economic philosophy behind it is political. It's Austrian economic philosophy. It has a very specific statement about scarcity and the value of scarcity and the role that should play in terms of fiscal discipline. That's a philosophy. That's a political and economic philosophy for organization.

What's interesting is that there was a choice that got made, really, it was 2014, 2015 when there were a lot of early developers who were coming into this space. I would count Circle as one of those and there were thousands of others, and you were getting involved. Other people getting involved and saying, "We want to build other things on top of this. The idea is that this is a new infrastructure that can be used for all kinds of things."

When we started, we had actually thought, "Okay, bitcoin, it's the first mover. It's got the open-source developer traction." That's where the action is. That's where smart contracts will come. That's where issuing assets or tokens will come but there was a political battle. It was an ideological battle that was taking place to say, "No, bitcoin needs to do this." Not just one thing but basically do this one thing, and these other ideas, you shouldn't use a blockchain for them or at least, that was what some of the community was arguing.

That led to the development of these new blockchains that could do more. Now, I think if you just watch CNBC, you'd think everything is just like some kind of digital currency you're trading, but in reality, it's infrastructure, and it's infrastructure to build things on. There were all these ideas. Of course Vitalik was, I think, one of the most prominent creators in terms of of new ideas, but then there were 10 new blockchains and TRON was one of those that emerged. There were a lot of ideas people were looking at and saying, "Okay, that's a good idea. That's a good idea." I don't know how many forks of bitcoin there were. There were a lot.

This part of this is open source and people competing with ideas and competing for developers. Knowing that bitcoin has positioned itself as the store of value, what do you see as the range of applications that will get built on these other layer-ones or layer-twos? Maybe you could talk a little bit about what's built on TRON today just as an example of that.

Justin: First of all, I completely agree with you. I think bitcoin itself and the cryptocurrency itself is very political, even it is pure a technology. I think that's the difference between AI and cryptocurrency. Basically, AI, other like Metaverse, this kind of the technology is pure technology without any political statement, but blockchain cryptocurrency is very political because it represents the economic freedom. It kind of represents Hayek, this kind of competing currency theory. Because cryptocurrency is highly related to finance, which definitely a very important part of the political power. Basically, I think it gets into very political basically. Even the technology itself is pure technology.

Jeremy: Sure.

Justin: Cryptography, is just about like Merkle trees. It is about all the technical [unintelligible 00:15:27].

Jeremy: What's interesting is that the parts of society if you go back 5000 years, the parts of society that had the best math were oftentimes the most powerful parts of society and therefore determined ways in which wealth and power and decisions and other things were made, the kings who had the best mathematicians. At one level, it is just technology, but it's really the most advanced application of the ability to do math in some ways. There's so much history to just math and cryptography. Anyway, that's a bit of a tangent, but coming back to your answer on what's being built.

Justin: I totally agree with you. I think most of the prominent technology in the world is a political statement. Basically, in Asia and China, we also have these debates. When China first defeated by Great Britain in first Opium War, there is a huge debate inside of the China whether we should adopt the British technology or we're going to basically adopt political system and the technology together. Because somebody is making statements, it's like we say today, technology is not only technology. If you really want to build the best technology in the world, you need to have the same political system so which breeds those technology in the first place. That's why I think basically bitcoin cryptocurrency comes along with open finance system. You can't have a super control over cryptocurrency or control system and then have a very proper crypto ecosystem.

Jeremy: With the evolution of the technology, obviously you undertook and worked to build TRON blockchain. Now, I think there are tons of projects now that you're involved with or that are built out around what you're doing. What's the state of the ecosystem today?

Justin: I think definitely one of the things we are right now focusing on is stablecoin. We collaborate also with USDC. I think we already see a lot of use case of stablecoin. People right now is using USDC, USDT, QSD, USDJ or on TRON blockchain as a way of payment settle between different exchanges, pay employees salaries. Basically, all the US dollar is doing, you can settle it on TRON network. We are settled right now $10 billion. Someday if we settle more, it's even about $20 billion, but the average is $12 billion which is already six times than Paypal is doing. That's one of our vision, is making TRON become the next generation of the global settlement layer for all the stablecoin or even fiat in the future. Before I joined crypto, I worked for Ripple for quite some time. When I first joined Ripple, this is kind of like XRP.

Jeremy: That was the idea. Right.

Justin: Exactly.

Jeremy: When we started Circle, we thought the real game would be if you could get a digital currency representation of a dollar or a euro and just do those on these public networks while you couldn't do it technically. I don't know if you remember, but the first version of Circle's products basically would take dollars or pounds, convert them into bitcoin instantly, and then you use bitcoin network sort of like converting into XRP. We were like, "Well, bitcoin is going to be the most liquid because it'll be the most liquid, you'll be able to do real-time FX. " Even that was still a problem. We needed tokens and smart contracts. We needed the building blocks for protocols. It's fascinating.

Justin: Exactly. I think that Ripple has the same concept. Just convert the money into XRP. It's in the XRP and convert back. They have the gateway system. Right now, I think the biggest- we have already seen numerous of the increase of the industry itself. I think probably next year, I'm hoping all the stablecoin settlement on TRON network can easily pass $100 billion, which make this the only solution for all the banks, cryptocurrency provider, and basically everybody in the world. It's instant transaction with almost zero transaction fees. I think this really benefits not only financial system, crypto industry, but also everybody in the world.

Jeremy: We very much share that vision. We've been very focused on making sure that USDC can work on blockchains that have tons of use and distribution and reach. It's been amazing to watch what you've been able to do with stablecoins on TRON, so we're excited to see that grow. I guess maybe looking forward a little bit, some of the bigger themes that everyone is talking about are things like games, other categories of applications. The big discussion is, what are the apps that are going to bring a billion users onto blockchains? A lot of people argue that games will be games and social. These kinds of apps, which are the kinds of apps that have driven consumer internet behavior.

It was like FarmVille that grew Facebook, originally. One of the big things that helped grow Facebook. I'm interested. You were very early actually in making a lot of big bets on games, content entertainment as big drivers of the adoption of blockchains. I think you've made a lot of bets in that space. I'm interested to hear your view on what you're seeing with blockchain gaming, social tokens. What are the things that are going to be really driving it? I know Animoca, YGG, and all these phenomenon in Asia are- I don't think people realize in the West, how big these phenomenon are right now.

Justin: Exactly. I definitely agree with you. I believe social and games is the next basically driving force for all the blockchain applications. I can give you some examples. We recently launched a game called WIN NFT HORSE, which is probably one of the first play-to-earn games just like Axie. We get numerous attraction of the game. I think the biggest difference between the game by hands, the traditional game, there's a three biggest the difference.

The first of all, is the character in the games become valuable. Before that, any characters in the game, it doesn't count no matter how you play it. At the end of the day, you're going to give out the game. It's become like one of your collection or tradable. It's going to [unintelligible 00:23:26] forever, like sit there. Now with NFT technology, you can literally trade your character with others, trade all the equipment, everything. The game becomes super liquid. I think that's the biggest difference.

Then the second difference is the token itself also is very liquid. These days, all the games you play, the tokens you earn in the game, no matter it's diamond, like gold, or anything, you can trade it with others. Also, you can bet on the ecosystem of the games, which I think is definitely made the game itself very powerful than before. Then the third one, I think is decentralized game. The developer of the game is impossible to delete your content like basically ban your account. All that behavior is impossible anymore. That's why I think Google, Apple is freaking out because Google, Apple is always [unintelligible 00:24:32].

Jeremy: Korea, right? Last night, the Korean government too is saying, "We cannot have play-to-earn games in the app stores."

Justin: Because, first of all, they are advocates like the [unintelligible 00:24:43] app industry. I believe this kind of the play-to-earn concept will be very powerful. Lots of users will seek to play those games instead of you play games in App Store, they push all the games to you every day. I think those play-to-earn games will have loyal customer, will follow the lead. That's why I'm very confident on play-to-earn game because I think it's so powerful compared to traditional game. Play-to-earn game just needs to go through everything we go through in the past nine years.

First of all, App Store won't let you listing. You have to dispute on web because web is like the only free place. You have to abandon all the traditional channel for traffic distribution, to build a community from scratch, bootstrapping everything. That's why I think this is what play-to-earn games is to basically doing all those things together. I don't think Apple and Google will be happy about that because they will lose 30% of the cut of the game, which they're charging every day. Also, this kind of decentralized game, they can't even have good relation with Epic. Epic is traditional player, but they can't even get along with them. I don't think they can get along with.

Jeremy: It seems like there is a lot of government pressure in many parts of the world on the whole economic model of the app stores and the anti-competitive nature of the app stores. We all remember when Apple and Google banned any kind of crypto apps from the App Store. That was a problem when we first launched Circle, was we were trying to build a payment experience using crypto but using mobile inspired by WeChat Pay, but trying to use crypto rails. That's useless without a camera or these things. They were very, very reluctant to allow that new payment technology into their phones. Eventually, they did, and now it's common. I have to assume that blockchain gaming will be so important that they will not want to lose out or some other-- We'll see what happens, but it seems like that's going to be a collision.

Justin: I think it's just the same of the crypto story. I think at the end of the day if there was top 10 game companies all blockchain-based, then Apple, Google, we might consider Switch. Right now, I think still even Animoca I know those company grow are big, but still, I think in terms of the quality of the game and also the complexity of the game, still far away from League of Legends. Those kinds of games. I think still we need lots of developments in the gaming industry to embrace this trend. I think definitely next 5, 10 years, we will see a lot of pure blockchain-based games. It's going to be super successful.

Jeremy: Do you have a game studio? Do you have a developer team of building games?

Justin: Yes. That's how we build WIN NFT HORSE, which is extremely popular. We collaborate with finance like [unintelligible 00:28:24] distributor game. Right now we have DAU over I think 30K, which is already a big number in terms of the game. I think the proud things is we never spent any money on ads. Basically, my Twitter and [unintelligible 00:28:43] changed, so we got all the users.

Jeremy: Where do we find it?

Justin: Just go to winnfthorse.io so you can download the game and play. It's available like Mac, Windows, Android app. We can use it in Apple.

Jeremy: All right. Very interesting. We'll check that out. Another thing that has emerged, and this maybe ties back to some of the earlier part of our conversation is more and more people are setting up the equivalent of a corporation on on-chain. This is like Dows. They're creating these to organize investments. They're creating these to organize creating things, creating new software projects, other things. I'm interested in your perspective on what do you think is happening? Big picture. What do you think is happening with people building these new kinds of coordination mechanisms on the internet?

Justin: I think super, I'm big believer of Dow and the spirit of Dow. That's also one of the I think biggest use case for blockchain, but having been adopted by lots of people is Governance, and decentralized ID system. If right, so everybody like voting on blockchain, we won't have this kind of dispute of election, which happens these days very frequently in United States. We won't have this kind of disputes anymore because like every transaction, every voting system is purely on check. It's fully transparent, everybody can check about that. I think that's the first thing.

Then the second thing is before I think it's adopted by like a US government, even maybe in presidential election, I think first we need to use this kind of the blockchain governance in your community, neighbor, like governance. A very small amount of people when they're trying to make decisions, they can use this kind of the Dow. That's why I think we see constitution Dow, which those like early Dow, has emerging. I think it's definitely one of the use case. We have seen getting star, but I think in the next 5, 10 years, I hope we can see space Dow. Basically some like more sovereignty nation, will and do like Dow structure. Eventually the goal, so we want like US, a presidential election they'll become like a Dow, so everybody can vote on blockchain.

Jeremy: On-chain governance.

Justin: Exactly, on-chain governance.

Jeremy: It may be an interesting connection to the recent big change that you made. You're getting into politics, but help the listeners understand how you got involved with Grenada, the role that you now have with the WTO and where you're trying to go with that?

Justin: Yes, sure, definitely. First of all, TRON is also one of the largest Dow like in the markets. TRON is fully decentralized, so I'm sure TRON will be fine without my day-to-day support, but I will still be a very active community members to support and push forward all the things happen in triangle system just like Vitalik did for Ethereum. For this new appointment, I think first of all, I'm a huge fan for Caribbean community because I think the overall Caribbean community have several advantages the rest of the world just don't have. First of all, I think Caribbean is very close to United States, which is important. You want to travel to United States easily from those states, and then those Caribbean states is English-based. Everybody speak English.

It has very legit and well established rule of law system, and also the Caribbean states is very safe. The infrastructure support is very good. So basically it has the I think regulatory flexibility compared to US and China, and also it has a better rule of law and the infrastructure system if you want to compare them to Africa, Southeast Asia and the Pacific ocean, and also it's very close to United States if you compared to New Zealand and Australia.

That's why I'm always a big fan of Caribbean states. I visit lots of states there, like Belize, Saint Kitts, Dominica, Bahamas, and I know lots of people moved to Bahamas like Tether, and Circle, both us. We visit Bermuda, and that's why I believe the next states Dow, is going to really happen in our industry will be some Caribbean countries. I'm 100% sure.

That's why I'm getting very close to Caribbean community. Before that I already meet lots of like prime minister and basically head of states in different countries. Then I think Grenada is one of the states has most of the willingness to step into crypto, and then they invite me to become their national representative of Grenada to WTO, because I think they really want someone to present them in WTO.

All the Caribbean countries states also have this recent, big problem because of the COVID right there. Most of the Caribbean states, the biggest national income is tourists. It's got very hard hit with COVID. That's definitely they want to find some place they can grow their economy, which I definitely believe cryptocurrency and digital economy will be their best bet. That's why I want to also allocate my more time of myself time in Grenada WTO issues and also persuade more and more Caribbean states to get into crypto and digital economy. That's why, recently I visited Panama, Grenada, Barbados Dominica, these four states and I intend to visit more in 2022.

Jeremy: What is the role in Geneva going to involve for you?

Justin: Oh, so first of all, right now I'm the ambassador of Grenada to WTO which our permanent mission is in Geneva. I will basically attending all the WTO conferences. I think the US Trade Representative is the US Ambassador to WTO. I will met with lots of my colleagues in WTO. I think I will promote digital economy and blockchain in WTO. Hopefully, next year we can work things out and have lots of people in WTO get involved in cryptocurrency things. WTO is like the UN economic version.

Jeremy: Yes. It seems like we will very likely see Crypto economic Systems, Cryptocurrency, all of these things become bigger and bigger topics for the WTO in the next 5 to 10 years. I think they'll be very big topics because it's rebuilding the economic of this structure of the world, right?

Justin: Exactly.

Jeremy: I don't think people quite see it yet, but it seems you're positioning yourself in the right place for these future conversations as well. Well, speaking of conversations, this has been a great conversation, Justin. I really appreciate you taking the time to join us today.

Justin: Thank you, Jeremy.

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