Lars: 0:01

The following is a conversation with Jos L, bitcoin enthusiast and co-founder of Blockrise, who are creating the gold standard for crypto asset management. In this conversation, we'll explore innovating in the financial sector, the future of cryptocurrency as an asset class and the opportunities that lie ahead in this rapidly evolving space. So, whether you are a dedicated hodler or a Bitcoin skeptic, keep listening. I'm your host, lars Kramer, and this is Start to Scale, the podcast where we explore the scale-up journeys of remarkable founders.

Lars: 0:38

Well, jost is one of those remarkable founders because he's a passionate entrepreneur who started his journey early, registering his first business at the age of only 15. In 2013, he got involved in Bitcoin and became captivated by its transformative potential. And, while pursuing a bachelor's degree in aerospace engineering, his fascination with blockchain led him to found Blockrise, where he now serves as CEO. Today, blockrise is a trusted partner to prominent individuals, corporations and family offices who want to have complete control over their digital assets, and I think when Jos is not in the BlockRise office, you may find him on the golf court or in anything that flies, drives or sails. Jos, great to have you here. Thank you very much. Cool, you are an early Bitcoin adopter, so obviously I want to know what's the first thing you ever bought with Bitcoin.

Jos: 1:29

Oof. I actually I used to pay my domain services and web services for a long time with Bitcoin, especially around 2015, 2016. Okay, and that kind of hurts afterwards.

Lars: 1:41

So in hindsight, yeah, yeah, always in hindsight, okay.

Jos: 1:45

At least it was a very usable tool for me.

Lars: 1:46

Perfect so you didn't buy a pizza, but you bought web services for the first exactly, and there we go.

Jos: 1:51

Very expensive domain names, very expensive domain names, cool.

Lars: 1:55

Um well, great, great to have you here. You found a block rise in 2017. You have great office here at the black in rotterdam, yet you've been under the radar for us. So I can't wait to dive into your story and learn all about you. But always we start with four statements that you can answer with true or false. You ready?

Jos: 2:14

So ready.

Lars: 2:16

Bitcoin is a speculative asset.

Jos: 2:19

False.

Lars: 2:21

Not your keys, not your coins. True, by 2030, the financial sector will have fully embraced crypto.

Jos: 2:31

False.

Lars: 2:33

And the final one I can sleep just as comfortably in the back of a car as in a five-star hotel, 100% true, True there we go. Cool, let's go back to the beginning. You came across Bitcoin in in 2013. How did that change your perspective on technology and finance and and kind of what made you decide to dive deeper into blockchain?

Jos: 2:54

so I actually I got him uh, introduced to bitcoin through dumpert, which is a, a dutch video website basically, and it was just the bitcoinorg introduction video of, I think, two minutes and I it really striked me from a um, like technological uh perspective, like a peer-to-peer network torrenting was very popular at the time. It seemed kind of similar to that and that got me involved in first. So the whole financial aspect of it kind of, yeah, laid low for the time being and I just sat on it. So that was my first introduction and focus, and only years later, you know, it became more of a trading asset. I think most people that get introduced in this, yeah, this new asset, look at it from a trading perspective and then, only much later, in 2017, I was like like, okay, this is going to be big, I need to get involved, but in a in a more reliable manner and that's what the block price came to in the end cool.

Lars: 3:52

So it triggered you because it was peer-to-peer. Uh, the technology triggered you and then later you um, dove into the financial aspect. So so maybe for people out there because we'll probably have listeners who are very adept at Bitcoin and some are not, but maybe to a layman, explain the technology behind, specifically, bitcoin as a crypto.

Jos: 4:10

Yeah, so Bitcoin, specifically, is a decentralized, peer-to-peer cash system. So it's basically a network of computers that communicate with each other and on this network you can do transactions, and it's completely decentralized. So, as it is peer-to-peer, there's no intervention possible. There's also no uh censoration possible and you know like you can use this, in my opinion, to the, the good ends and the and the and the bad ends, and it has had a lot of media attention towards this, but in the end, it gives this complete freedom and, uh, you know like you decide what you do with your assets.

Lars: 4:52

Uh, and that is what really, yeah, pulled me in yeah, and it's also what sets it apart from other uh, crypto, right, because people often confuse bitcoin with with crypto in a general sense, uh, and there's a big difference between those two. Yeah.

Jos: 5:05

I really see Bitcoin as a commodity, you know, comparable to gold or perhaps a digital gold, and there's still a lot of possibilities. It's relatively slow, which is one of the counter arguments a lot of people make, but this is Bitcoin compared to cryptocurrency assets like Ethereum, for example, which I see more as a platform or utility, which is, in nowadays world, more comparable to company stocks. Yeah, and companies behind it that have a certain function, yeah, and I mean, in the end, we, for now at least, very much focus on Bitcoin because it's a. It's a huge world on its own already, but of course, the technology is kind of similar behind it.

Lars: 5:47

Yeah. And then you said, well, in 2017, you started a business with it. What was the initial inspiration behind Blockrise? And I'm also curious how has that vision perhaps evolved since you started the company?

Jos: 6:01

Well, it has evolved. So in 2015-16, I started my aerospace engineering studies at the udelft and I didn't really like the lectures. I really liked the studies but, uh, it was hard to focus on on the lectures, especially when I found my bitcoin stash and I started my trading phase so you were with your laptop in the in in the lectures, yeah, and actually our current product manager saw that started talking to me and I know him.

Jos: 6:25

Yeah, and actually our current product manager saw that started talking to me and I know him from aerospace and he's now a product manager at Blockrise, which is funny. But anyway, that trading aspect got me in first, and then other people first family and friends and in the end, also external clients wanted to be involved. So that was the first two years until Blockrise was founded in 2017. And basically it was founded just to manage those people, to offer them what I was doing in a more secure manner. Still a little bit on the trading focus. However, I found, or we found, that the storage of these assets, especially Bitcoin, was very complicated. To assure this in a way that you know it will be completely independent of me, because that was always my, uh, my biggest challenge, and I mean, yeah, that that was a challenge on its own.

Jos: 7:14

So we almost had two years to to solve the custody part and so the safeguarding of of of assets yeah and then we only got started and the regulations came and trading, you know, and bank accounts and all the other challenges that we had to face.

Lars: 7:31

Um, so yeah, we went through a transformation of being a just a trading platform to now being a bitcoin asset manager yeah, for like a private bank for bitcoin yeah, and you've evolved based on the need of your clients and I think you've onboarded some prominent customers, family offices, asset managers Maybe there's asset owners or family offices listening now, and why would they want exposure to Bitcoin at all? And then, secondly, what's difficult or hard about it and I think you leaned into it with the custody but why would it be an interesting asset for them?

Jos: 8:05

So usually I came to the conclusion, as part of my transformation here as well, is that pitching Bitcoin itself is quite complicated.

Jos: 8:13

In the end, they need to realize themselves that this is an asset class that they want to put on their balance sheet. So usually I pitch for a 1% Bitcoin allocation of their total balance sheet either net worth or balance sheet, depending on the entity and from that perspective they start, you know, doing their own research on how does it work, what is the potential, etc. And then we can surface them to which extent they would like this exposure. And the main challenge is, I think, like trading is not a problem. And the main challenge is, I think, like trading is not a problem, there's Coinbase and Kraken and all these other huge exchanges that you can buy large amounts of Bitcoin. That's not the issue. But then what?

Jos: 8:51

Where do you keep it? Where do you store this? What about the regulatory standards that you? Need to comply with Administration. You know it's very complicated for a lot of clients to define a good price to buy Bitcoin, so they're looking for a product or service that can help them allocate it in the correct manner. That is what we do with asset management. We define how much Bitcoin or how much Euro balance should be in their portfolio. We manage it. Those kind of things is what the main challenge is what we see now.

Lars: 9:22

Okay, and then finally, the custody. So normally if you buy on Coinbase, you would sit in coinbase and there's a risk. So then in your case the custody moves to. How does it work?

Jos: 9:31

so blockrise uh build their own um custody solution and we really wanted to rely on other custody providers, like that's really how we started um. However, nobody could, and still can't, provide the custody that we were looking for Because we are very stubborn, I would say where every client should have their own addresses, their own Bitcoin wallets, so they can verify their own Bitcoin assets or crypto assets with us independently of block rise right. So lending is technically not possible, which is a leading problem, I would say, in the crypto market. Uh, the the transparency that brought us to crypto now is fighting against us. In the uh most of the exchanges, there's no fire viability we've seen companies like ftx fall down.

Jos: 10:18

Yeah, um. So that core principle is what we do at block rise and that makes everything a lot more complicated administration wise, trading wise. Everything needs to happen on the blockchain. There's no shortcuts, you know, there's no mistakes. So integrity and everything is so important and that's what we managed to solve in the last seven years.

Lars: 10:39

Cool. But why are you doing that? Because you could also make a lot of money just on the trading.

Jos: 10:43

I mean, if we started the trading platform which was one of the pitches we had to ourselves, like the three of us that started the company yeah, we would have made a lot more money. But, as I said, I would like to be stop-borne and really truly believe in an infrastructure that is needed in this market to make it more developed and therefore we took no shortcuts, we will never take shortcuts and we build it at the pace and importance that we think we value.

Lars: 11:13

Yeah, and that also creates a really nice space. I think into your offering, into this space. And then perhaps, how does it work from a revenue model point of view? How do you make money in the end with this model and how would that grow over time?

Jos: 11:28

Yeah, very important, Because currently BlockRise is an asset manager, so BlockRise has a registration in the central bank and clients can just onboard.

Jos: 11:37

So that means that there's a business relationship between BlockRise and the client either personal or corporate, and then BlockRise is the service provider, so clients can buy Bitcoin with us or Ethereum. That's the two assets that we offer or they can have it managed by us. So those are the two only products that we offer. The business model there is based on asset management. It's a custody fee up to 1%, it's a management fee up to 1% and it's a performance fee if you use asset management up to 15% and it's a performance fee if you use asset management up to 15%.

Jos: 12:11

That is the current model Over time we want to offer this whole suite of services as a white-labeled solution or a SaaS, and that's always the intention. However, we do not do that yet because the market is not ready yet and the license I don't see asset managers, especially smaller asset managers, acquiring a micar license, the new cryptocurrency european micar m-i-c-a-r yes, markets in crypto assets regulation there we go a european union-wide crypto asset regulation which comes into effect the 30th of december this year okay it's very complicated.

Jos: 12:41

Yesterday there was a fd article about it. Again, lots of existing parties will struggle, let alone asset managers or banks that want to do this. So we can offer our services, but to who is going to use our software?

Jos: 12:55

And in the end, we see this demand that it's quite early still, so they want us to be the asset manager, they want us to be their sort of crypto bank and in the future, we are ready to provide their sort of crypto bank and in the future, we are ready to provide it as a, as a white label or as a service to others.

Lars: 13:08

Okay, so that's your growth model. Then also, um, well, you talked about regulation, the me car, but um, you've obtained registration with day and bay, the netherlands bank, and I think your afm license is on its way. How do you navigate such a, I would say, rather conservative financial industry, and what has surprised you most in the process?

Jos: 13:30

um, yeah, so very early on, I would say I was a little bit against regulation. You know, it's like this. It's this new thing and it's this control which very, uh, contradicts, you know, the the main principles of of bitcoin. However, uh, over years, I I build up a lot of respect for the regulators and I've learned that they are a lot more understanding than I, um, than I had foreseen okay however it was, it was a challenge.

Jos: 13:55

You start with a letter, uh, you have an introduction meeting and you know it's we. We built everything from scratch, so our software, but also our uh, our registration with the dmb and now our micro license. It's just, there's a policy and you start writing and we really took a software based approach, so we didn't copy it from traditional financial institutions or something, so really from scratch, which made it very dynamic and in the end, I think, from the regulator and also parties involved. With the regulators, like, like financial supervision, whatever we build up a very good bond connection with them.

Jos: 14:29

We build up respect in the market you know, because of our approach and how we see things and really try to redefine and set that gold standard that we aim for. Yeah, from scratch.

Lars: 14:41

Cool and that's impressive because you're probably they're learning as they are dealing with your uh questions. Um, so do you get any help? Is there kind of who's doing that in the company?

Jos: 14:52

um, well, so my co-founder is cornelius jacobs, is a financial lawyer background and uh, with the dmb process very much involved. The two of us working day and night to to to get this registration. Um, right, we have a much larger team. We have more advisors. There's also more advising companies consultants available that were not there in 2017, and now they're popping up everywhere and there's some bigger players also getting involved, so there's a lot more knowledge to get from the market and the regulations start to come closer to existing regulations, like mifid, too you know it's.

Lars: 15:28

I think over time it will merge together in one type of supervision regulation, whereas now it's still considered really separate okay, and I think in our prep uh conversation you you also mentioned that some of the things that you're now creating, I mean they're so novel that you're, in a way, influencing European law. How does it make you feel, because you're you're pushing things forward?

Jos: 15:51

Yeah, so the amount of times that we have to take a whiteboard and start scratching, uh like starts uh, sketching things from scratch, is it's. It happens all the time. And so, for example, because of our custody structure, which we explained early on, um like reporting works differently, you know, identifying the counterparty, because for us the client, for example, is always the counterparty. It's never block rise, because block rise is just sort of intermediary yeah and in regulation wise, this just just doesn't work.

Jos: 16:22

And also with our new license uh parties that we work with, everything needs to be done again from scratch, because our structure just works different interesting.

Lars: 16:32

So normally they would have an intermediary that they can talk to and that they can build well uh legal uh structures around. But now, since you're doing it direct, it's a different situation yeah, it's, uh, it's.

Jos: 16:44

The client in the end has to sign for the transaction yeah and they sign for transactions to block rise, and then block rise forwards it again or whatever has to happen, where usually the client is on the, the service providers platform and it's only a database action. Okay, but it's quite a legal challenge and I'm confident we will solve it. But it just, and also, as you're growing, you know we need to make changes to an existing system.

Jos: 17:11

but we are kind of a small player compared to the other ones with a lot of effort, so we really rely on the support of our pitch and our idea, our vision on the support of our pitch and our idea, our vision on the market, which is also the very much the upside the moment that we start working with these huge enterprises that already exist for a long time, because they support our vision yeah that's just very very nice, cool, um.

Lars: 17:33

So we talked a little bit, a little bit about, uh well, obviously, trying to understand what you're doing. I think some people either go like I kind of know half what it is, but stay with us, stay with us, but let's switch to company building and also company scaling. I think you touched on a few things already, but if you think back over the past year since 2017, as a CEO, what has been your biggest challenge in building and scaling? Blockrise.

Jos: 18:00

Yeah, I always said that, for example, finding the team will be a challenge, but I think we're very fortunate with the team we have. We have a bunch of great guys all together. You met them last week.

Lars: 18:10

Yes.

Jos: 18:12

And it's really, really cool to have all these guys together and I do admire them in many ways. So that's not the main challenge. I think funding, like especially external funding, is one of the major challenges. We haven't. We haven't done it so far. We always relied on friends and family and, of course, my own and the team's investments, but it is this sort of seal of approval you know that an external party also understands and believes in what you're doing and we haven't.

Jos: 18:44

So, uh, that, of course, limited growth. That also limited, like the abilities that we, that we had so far.

Lars: 18:52

Yeah.

Jos: 18:53

Um, whereas we need to make a balance between we want to pioneer and innovate versus we want to sell our product.

Lars: 18:59

Yeah.

Jos: 18:59

And we always had this first priority of pioneering and innovating and building a super rigid product, because there is no room for mistakes but in the end, investors of course want to see the numbers as well. So making up this balance is quite a quite a challenge, uh, and you just need to find the right people that uh support it.

Lars: 19:16

Yeah because it's a complex space and and I think even many VCs would not fully grasp what you're doing. In a way, it was interesting. You mentioned the session last week, so you invited me to a meetup, which I think was remarkable because I had no idea what I signed up for. But in the room there were some really prominent asset owners and leaders in the space and I also realized, while some are really well educated in this bubble, there's also still a lot of people who really have no clue and are getting started. So I'm guessing you'd always find that potentially also with the investors right?

Jos: 19:51

some, yeah, completely understand what you're doing and some you still have to explain what a satoshi is exactly, well, literally, as of last week, yeah, and that that is the space, and this uh translates into everything that's more on the traditional side so of course investors, but also tax authority you know like uh, what is the vat that counts for our services?

Jos: 20:12

uh, the banks you know I would love to become a bank. It might become, uh real in in a couple years, uh, but until then we need to rely on banks. And this is so volatile, like working together and man, that really is a challenge on its own.

Lars: 20:29

We might have some people from the tax regulators listening, so what would you want to say to them?

Jos: 20:33

I mean open up the conversation. Like the letters take a long time to process, I know, but you're welcome anytime at our office and actually understand what we do. Yeah, we're so happy to like to collaborate yeah we've always mentioned this. We do this with the banks through, like the unions and, uh, with the supervisors. Well, right opening up the conversation is everything.

Lars: 20:52

Sit down together and and and get started yeah, yeah, because as soon as you mentioned crypto in your business somewhere, then all the banks close their doors.

Jos: 21:00

Right, exactly, and I think over the last seven years a lot has changed like the fact that I'm sitting here now, like the fact that we went under the radar for such a long time, is also because of that. But I really do feel like it's changing, especially this year. Introduction of bitcoin etfs in uh in america. Yeah, you know, these conversations are now possible. The fact that I can apply for startup incubators, which is seven years too late, but I can have this conversation now. And there is a genuine interest which is yeah, it's changing everything.

Lars: 21:29

Yeah, and the important thing is you've built traction so far, so that also sets you, I think, apart from others who want to compete in this space. Before we go to the break, how do you see BlockRrise positioning itself over the next five to 10 years? What's the outlook?

Jos: 21:45

I mean, if I can really dream big, then I would say Blockrise as a private bank you know Bitcoin at its core as a financial asset, but supporting all the financial infrastructures around it from payments you know that would need would be needed and, of course, offer this as a software to all the other parties existing.

Lars: 22:06

but personally, I would like to stay on the on the private banking side cool, and then you would need a lot of people, I think, also to support that mission. Are you hiring currently?

Jos: 22:14

we are hiring. Uh, we need to expand uh further also with the license. Uh, we need a lot more people. But we are self-funded, so we do it at our own pace. We first want to grow a little bit, and then we hire a little bit, and maybe we do need some external funding at some point.

Lars: 22:33

Okay, so next time we speak perhaps there'll be an update there.

Jos: 22:37

For sure.

Lars: 22:37

This has been amazing so far. Let's go to a quick break and then we'll be back.

Speaker 3: 22:47

You're listening to the podcast of up rotterdam. We help startups scale and grow their business by offering access to talent, access to international markets and access to capital. Curious how we can make the network work for you? Go to uprotterdamcom. This podcast was made possible by the city of Rotterdam.

Lars: 23:08

Welcome back. This is our conversation with Jos, and in the break I was thinking we're getting so technical really quick, jos. But I've obviously also been really interested in this space and, to be very honest, my first. So when you told the story about what you bought for your first Bitcoin, I lost my first wallet and to the day, I still regret that, Because it was also really, really, really in the early days. So somewhere in those 21 million coins there's one or two that belong to me. You, sure you?

Lars: 23:35

don't. Actually, it was actually more Now thinking back because it was really in the. I should forget about this.

Jos: 23:41

If you have any traces, please come by the office sometime and we might be able to. Yeah, support, okay.

Lars: 23:46

Okay, let's go okay, my wife's listening. It's like a holiday. Um, anyways it's. I think it's great to talk about this space. Um, I also realize that if you're now listening and you have no idea yet, uh, it's complicated. So what would be a resource to dive into? If you want to really educate yourself a little bit more in the space, what would be the good places to search? Are there any books, podcasts, videos?

Jos: 24:08

yeah, there's a, there's a, there's a whole bunch. So, on blockerscom, we have some education, but it would definitely deserve some more, uh, more love. Um, there is a bitcoin for millennials from, uh, bram konstein, which I really like. Uh, he's really upcoming now, um, and really explaining core subjects. Yeah, there's a bitcoin for beginners. There's, uh, the bitcoin standard.

Lars: 24:31

Like there's more literature based okay um, yeah, there's a lot of resources available cool, okay, so we're going to make sure that these resources are in the um, in the notes, in the episode notes, so people can click on them and educate themselves a little bit more about this space. Um, in intro I talked a little bit about you play golf and that you like to fly, drive and sail. What's your favorite mode of transport?

Jos: 24:56

uh, today motorbike for sure motorbike.

Lars: 24:59

You have your own yeah, I'm a d?

Jos: 25:01

uh Ducati monster at 1200. There you go, there you go.

Lars: 25:04

Um, I'm wearing my flip flops today because I'm also my motorbike, although it's a rental, I must say. We have a chopper at home and I got an empty oh seven, I think for the weekend. Um, it's a dangerous hobby, but uh yeah go fast.

Jos: 25:17

Yeah, go fast. Yeah, we need the adrenaline. Yeah, yeah, that's it, that's it?

Lars: 25:20

Do you use it to go to work or just on the weekend?

Jos: 25:22

Yeah, it's actually a company vehicle of my personal holding. So, yes, I use it to go to work. Love it, love it.

Lars: 25:27

Ducati Monster is a company vehicle.

Jos: 25:29

It's my third one actually.

Lars: 25:30

Really, what happened to the first?

Jos: 25:33

Bought the first in 2017.

Lars: 25:41

You, uh, I bought the motorbike and then I traded it in for 1200. That got stolen after one year and then I bought the new 1200. Oh yeah, they're fast, man. Yeah, the thing is, I can't drive them slow. So when we I had a I don't know what it was a couple years ago monster, but it was, it wouldn't go slow.

Jos: 25:52

I was going with my wife and she would do like 60 kilometers per hour felt uncomfortable you need to go faster, especially if you come from an empty uh zero seven, like right now, like you drive 60 in the second gear, which is like a lot of people cannot comprehend this, this gearing system and and the low torque it has. Yes, it's a, it's a character on itself, yeah I love it.

Lars: 26:11

I love it, ducati. That's what we say in dutch, though. Um, what put the uh? Google translate on that one? Um, okay, so before we go to listeners' questions, one thing I wanted to check with you. At last week's meetup, we had many people talking about Bitcoin and the future, et cetera, and you already mentioned that ETF. So what's your stance on Bitcoin ETFs and what role does that play for the space?

Jos: 26:35

So, as a very brief introduction, etf is an exchange-traded fund, I assume most people know, and the Bitcoin ETF was introduced 11 January this year in America.

Lars: 26:43

Yeah.

Jos: 26:44

Basically allowing traditional institutions or investors to have Bitcoin sort of on their portfolio.

Lars: 26:53

Right. Yeah, it's sort of right, Sort of.

Jos: 26:55

It's a fund containing one-on-one Bitcoin.

Lars: 26:58

Yeah.

Jos: 26:58

However. So I'm very happy with it from a market acceptance perspective, yeah, um, because it it really uh, opened up a lot of new conversations and it added this, this seal of approval. However, from a more infrastructure perspective, the clients that are using the bitcoin etf cannot verify their own funds. And they can with some parties. They can validate the total fund so that there is indeed the amount of Bitcoins purchased as they state, but the clients cannot verify themselves. Right, and that is exactly what we stand for, and it's my same.

Jos: 27:31

Issue with the exchanges is that it's either tradable or it's verifiable, and it's never the same, and that is, yeah, that is my main concern. Yeah, but for, not for the time being. I think it allows for easier adoption, you know, but we should, uh, as a, as a market, we should develop these etfs into a product where bitcoin uh etfs are, um, like redrawable into your own account yeah so you should be able to take it out of the etf uh into your own storage solution, whatever it may be, which is, I know, legally impossible under the etf construction.

Jos: 28:07

But who knows what the future holds?

Lars: 28:10

so is it comparable to when we hold physical gold, for instance, compared to holding, you know, some part of gold?

Jos: 28:16

through uh intermediary party yeah, it's like a paper gold, like you. Have the three solutions yeah paper gold like only uh through a platform, and then there's a gold that you store with someone else in a in a safe like a company that provides it, or you have the gold in your own hand yeah and because bitcoin is digital, it has a little bit more overlap, but it's possible it's feasible, we've proven it.

Jos: 28:37

Many parties have proven it. Um, so yeah, of course, ease of trading is something that is always considered, but there should be better solutions.

Lars: 28:44

Yeah, okay well and you're building those. Wow, what a what a coincidence. Um, we'll go to listeners questions. Uh, we do this every episode, so please follow the linkedin channel for the next guest and send us your questions and we might ask them here. The first question is from a gentleman very close to you, because I met him at Slushed in Enschede two weeks ago, I think. So I asked him what is the question I should ask? And Jasper, jasper who said what do you believe is the biggest barrier to institutional adoption of Bitcoin and how do you see the industry overcoming it.

Jos: 29:19

Well, actually, what we touched, based on earlier, education, I think education is.

Jos: 29:23

You know, in the end, institutions are a bunch of people combined uh in a, in a framework, a company, and if every one of them understood how bitcoin really works, I think the adoption would go a lot faster. But the, the willingness to understand it and and proper education being available is, I think, the main hurdle, and from that I mean, once there's enough demand, we wouldn't have to pitch, uh, our solution, uh, as we do today, you know, with all these complex uh questions, but it will be just a no-brainer uh. So I think that's that's a main hurdle, combined with, of course, the seal of approval being regulation.

Lars: 29:59

Yeah. And then there's people like Michael Saylor, the CEO of MicroStrategy, who obviously took a really big bet early on in his company, putting Bitcoin on his balance sheet, and I think in the beginning people thought he was a fool, but I think by now it's brought his company to the next level, right.

Jos: 30:19

So do you think he's an example for other well, either asset managers or sometimes corporations that want to move forward For sure, like the step to take 100% again, from a perspective of secure storage and in custody. I think that it could be improved, but it's a massive, massive step in the right direction. And he's a prime example for a lot of people, uh. So, yes, uh, very thankful for that. More of those go check him out um.

Lars: 30:49

Second question is from pascal von hecker. Uh, he has a question. Actually has a very long question about your uh offering and he touched on it a little bit. But, um, perhaps you can shine a little bit light on his question. He says given that your current offerings include self-custody options similar to other wallets, the broker service brokerage service where competition is intense and the asset management service, do you see strategic advantage in focusing more on asset management, especially considering that holding bitcoin ether can now be done with ETFs at much lower management fees?

Jos: 31:26

Yes, I think management fees will balance out over time, especially with growth. Same for custody fees. Custody fees are being a lot more competitive now than before the Bitcoin ETFs. One quick note is I heard the self-custody, so keep in mind that Blockrise is a custodial platform where we offer what we call semi-custody.

Lars: 31:48

Semi-custody.

Jos: 31:49

Yes, which I know is another technical term, but it basically means that we are able to provide all the custodial services. However, we cannot access your assets.

Lars: 31:59

Right. And, yeah, we can get very technical on this, but it allows for, like, better key management, yeah, around this, so the clients do not face the technical challenges yeah and that is really one of our usps, compared to self-custody wallets, where most of them are super technical right, yeah, or you just have a ledger, I mean, but that's a self-custody, yeah so, but then that means you're an asset owner and you would have, I don't know, 10, 20, 100 million on a couple of ledgers, laying around. Exactly that would be there.

Jos: 32:27

And you need, in my opinion, like those solutions are. It's not like or a ledger or a block price. I think they can work together very well. And therefore you're free to move assets between your own storage solution and our solution anytime. So that is a bit of the USB there Brokerage. It's hugely competitive. That's why Blockrise will not be a market maker. We just rely on all the exchanges and we make the super solid, super quick, very low risk.

Jos: 32:54

That's our main goal Very little exposure to no exposure. And then asset management yes, it's, I think, the field for the next year, two years, to be in. There's very few asset managers, there's very few uh strategies, especially bitcoin focused a lot is, you know, uh like decentralized finance focus, smart contract focused, uh very complex type of trading and just bitcoin. Bitcoin strategies are not very common. So that is, I think, the main space to be in and, yes, we will have to get more competitive over time. But, on the other hand, I am indeed on the golf course and there's people what is Bitcoin? So it's competitive, but it's also very much not competitive.

Lars: 33:36

Yeah, yeah, Space is big, it's a blue ocean area. I think for many of those, oh, space is big, it's a blue ocean area. I think for many of those, oh, this is interesting. Amara comes in with a question. She says Bitcoin mining has been criticized for its high energy consumption. How do you see the future of Bitcoin mining evolving in response to environmental concerns?

Jos: 33:55

This is indeed very interesting because under MICAR, there's a sustainability requirements to be met and every crypto company licensed on the micar needs to provide all the information on energy use and everything in regards of the crypto sda support. So this is something we're currently working on a lot as well, and all the crypto companies again in europe need to provide these reports.

Lars: 34:16

So but you never know how does it work, because you don't know where it's mined.

Jos: 34:20

Welcome to regulations, so you need to find a company that will audit whatever you say is true or what we do. In the Netherlands, we collaborate with multiple companies to provide one report that we all support.

Lars: 34:32

Right Sounds like a more efficient approach.

Jos: 34:40

Yes, exactly. So there's many different researches also, like water use, and there's all these research published. However, they all go every direction, so it's very hard to find a good direction of what is the actual energy use. My view is that, in my opinion, it's still a lot more efficient than any other field system that we see there's no intermediaries, not all the financial institutions, uh, working around it, all the ATMs, whatever.

Jos: 35:07

It's a full digital system. It's peer-to-peer. Two people can interact and, yes, mining is energy intensive, but it also defines the scarcity of of Bitcoin yeah like if we would remove the whole mining factor, which is something that the Ethereum did, for example. Uh, we move uh away from the system that connects the digital system with the physical system and the mining we see as a physical input. Energy, electricity is a sort of physical input and that links these two uh worlds in my opinion.

Jos: 35:36

Uh, so there's, there's that and keep so, there's that. And keep in mind that there's super cool projects and a lot of it is happening already where there's renewable mining sorry, renewable energy for Bitcoin mining as well as excess energy, which is a big problem here in the Netherlands, where greenhouses produce a lot of excess energy and they cannot deliver this back into the grid, so they're forced to either pay very high fines, or they put down a Bitcoin miner and use the excess energy to do this mining activity, and they use Bitcoin as a sort of store of value.

Lars: 36:10

So the excess energy that they create then goes into mining, which then has value, and it's probably better than paying the net behavior. Exactly, and this is it.

Jos: 36:21

The incentive is there. There's a lot of technological advancements happening right now, so it's not really a concern. And if it's a concern now, then I'm very convinced it will be sorted in the near future.

Lars: 36:33

Yeah, and the interesting thing is that people that are pushing the narrative around the energy use obviously also drive a different agenda every now and then, so I mean if you look at any industry, uh, and then the energy you create, okay, but anyway.

Lars: 36:43

So the giving back is an interesting story, so we'll keep track on what's happening there. Uh, thanks, amara, for this question. Good question, okay, next. Okay, next one I cheated because I listened to and I think I mentioned this to you one of my favorite podcast hosts is Lex Fridman. If you've never listened to any of his podcast episodes, I would highly recommend go check him out. He interviewed Michael Saylor, the guy we just talked about from MicroStrategy, I think two years ago, and really deep dive with him for our long episode on Bitcoin why it's important, why this challenges everything we understand from economy. He also called economists, linear thinkers, outdated linear thinkers, and he compared it to engineers how they take a more system approach. Anyway, go check out the episode. So I asked JetGPT what question would Michael Saylor ask? And I said keep it a short one. So his question is do you think Bitcoin's deflationary nature is a strength or a weakness in terms of promoting a healthy, sustainable economy?

Jos: 37:49

Oh yeah, you get very technical there. I think the deflationary aspect is what makes Bitcoin as is, and that will be driving Bitcoin forward as it is. Yeah.

Lars: 38:05

So his story is also about how we are educated in our society, with 2% annual inflation rate, consumer price index-based, but he makes a point that we're actually looking at over 7% inflation rate over 100 years. So basically, we're being, in his words, being fooled by the world around us, and inflation is much higher than we think because we keep printing money in a way, and that's where Bitcoin obviously because there's a finite amount of bitcoins that can be mined predefined even that's predefined 21 million um, but also, the deflationary aspect is completely predefined and yeah, for people who don't know, maybe uh, it's set in code and it it cannot change it correct change and that is it.

Jos: 38:48

There is no monetary policy other than the predefined policy yeah um, and yeah, I mean, if we look at the last three years alone, I think we've seen a lot more inflation than 2% or 7%. And yeah, in general I try to be very neutral about this.

Lars: 39:03

Again.

Jos: 39:03

I pitch for 1%, and what I believe you know and what BlockRise offers should be a little bit separated to a certain extent. Like it's a volatile asset, it's a high risk asset yeah but yes, I, I agree and uh, therefore it just strengthens my page that bitcoin should be a asset. Right to consider you know, and it's not about 100 of your net worth or zero, but it should be a asset. And how comfortable you are there yes uh, deflationary aspect is one of the most uh yeah, powerful aspects in my life cool.

Lars: 39:37

Okay, anyway, go check out this episode if you're interested. Um final question uh, is from michelle terlac. Uh, you know her, I think she's with artist capital. Uh, she has an interesting question about your organization. She says how will you retain your culture when you grow?

Jos: 39:53

Oof. Yeah, that's definitely one of the challenging ones, I would say. I think, like what we do now is I'm currently reading the no Rules, Rules book.

Lars: 40:05

The no Rules Rules.

Jos: 40:06

Yeah, by the Netflix founder, which he writes a lot about the culture, sustainability. I think open communication, like, if you look at our team right now, like everybody carries a lot of responsibility and I really would like to keep it that way. You know, there's no like one ruler that defines everything Strategy-wise, visionary-wise, for sure, but especially on their specialization part.

Jos: 40:33

I will do it, and that is what we, what we aim for, and I really want to maintain that and hire the people that fit into this culture yeah um, and yeah, that's what we've been hiring for, and I hope that we can maintain the culture in in such a way, because it would be really freaking amazing, like it would be so cool, if we keep extending the theme with the, with the same uh vision as it is built on now, but now you sit on one floor.

Lars: 41:00

I've been in your office on the black great office. Everybody sees each other sits together. Uh, who knows, you might need to open up a shop or actually an office in another city. How would you deal with that?

Jos: 41:12

um, yeah, I mean, uh, it's, it's the typical scaling issues. Uh, I think uh the, the managing management team, or the managers, are very important to to keep the communication smooth and rolling and you know, uh very short uh check-ins on on on what's the company strategy, where are we moving, what are we seeing in the market, and make sure that there's alignment across the whole team. Yeah, I think that like, for example, the communication through protocols, like slack, it allows for super short uh communication. We're fully relying on notion, for example, for all internal communication so everybody can read what is going on. There's very uh there's a lot of transparency within the company and that should just keep driving the company forward.

Lars: 41:55

Cool yeah.

Jos: 41:56

Combined with good communication. Frequent check-ins, yeah, yeah.

Lars: 42:01

So Notion and Slack obviously are the basics. It reminds me of an episode we did earlier with Hans Scheffer, who's the founder of HelloPrint. He has a big office here in Rotterdam, but also has people in Valencia, and I think he shows that through culture and a shared culture you can actually make it work. So go check out that episode if you're interested in this topic. Those were the listeners' questions. Actually, I had more, but we're running out of time and I think these questions, although some were a bit technical, even gave us a bit more insight in what you're doing. Yeah, it's been.

Lars: 42:33

I think I can talk with you for hours, but we'll have to stop. So for me it was really interesting to dive into the story of what it is that you're doing, but also why it's important. And then, as you're growing the company and are now getting more out in the open, so we'll probably see much more from you. So thanks, Jos. Thanks for sharing your story. We'll see much more from you. So thanks, Jos, Thanks for sharing your story. All the links will be in the show notes, but we have one important part still to go, which is the song that you have selected. Could you explain which song that is and why?

Jos: 43:03

Yeah, so I selected the Curbside Prophet from Jason Mraz and it's just a little bit of an ironic song, I think. Waiting for my rocket ship to come, which is the album name as well uh, rockets, crypto, you know, um, but also being on the side of the street, uh, you know, and calling out your services, but nobody is really buying it, uh, or understanding what you're working on. So there's a lot of uh irony in the song. But and and whenever, like I'm I'm not depressed, or ever, uh, but it just and whenever, like I'm not depressed or ever, but it just automatically just hypes you up. It always gives such a good vibe that I always love listening to the song.

Lars: 43:40

Makes you feel that you're not alone. Somebody else's challenge as well. Cool, great choice. So we'll close out with that. Thank you for listening to the Start to Scale podcast. If you enjoyed this episode, don't forget to leave a rating or share it with somebody else. It's the best way to help us make more content until next time.

Speaker 4: 44:06

Keep it up. I'm just a curbside prophet with my hand in my pocket and I'm waiting for my rocket to go. I'm just a curbside prophet with my hand in my pocket and I'm waiting for my rocket to go. I'm just a curbside prophet with my hand in my pocket and I'm waiting for my rocket y'all. You see, it started way back in NYC when I stole my first rhyme from the MIC At a West End Avenue at 63. It's the beginning of a leap year. February 96, when a guitar picked her up in the mix, I committed to the licks like a nickel bag of tricks. So well, look at me now, look at me now. Look at me now, now, now, now. I'm just a curbside droppin' with my hand in my pocket and I'm waitin' for my rocket to come. I'm just a curbside droppin' with my hand in my pocket and I'm waitin' for my rocket to come. I'm just a curbside droppin' with my hand in my pocket and I'm waitin' for my rocket y'all. But then you never, never, never guess what I bet and bet and bet, and I have no regrets that. I bet my whole checking account, because it all amounts to nothing up in the end. Well, you can only count that on the road again, we'll soon be on my radio dial and I'll be paying close attention to the will and else and style Like a band of gypsies on the highway While, as I'm a one man wishing on the California skyline Drive up the coast, I brag and I boast Because I'm picking up a pace. I make a tide like Space Ghost, raising a toast to the highway patrol with the most but my cruise control's on coast Cause I'm touring around the nation on extended vacation. See, I got Elsa the dog who exceeds my limitation. I say I like your style. Crazy pound pup, you need a ride. Well, come, come on, girl, hop in the truck With the curbside traffic with my hand in my pocket and I'm waiting for my rocket to come up. I'm just a curbside traffic with my hand in my pocket and I'm waiting for my rocket. Y'all. I'm just a curbside traffic with my hand in my pocket and I'm waiting for my rocket to come on. I'm just a curbside floppy with my head in my pocket and I'm waiting for my rocket. Yo See, I'm a down-home brother Redneck undercover With my guitar here, I'm ready to play and I'm a sucker for Philly Got a natural ability Gear to freestyle. Look at my flexibility Dingers on the mic. My ghetto hat's cocks right.

Speaker 4: 46:29

All the ladies say Yo, that kid is crazy. We got the backstage betties Taking more than they can get. They say what's up with MRAB? Hey, hey, hey, hey, hey, something's different in my world today. Well, they changed my traffic signs To a bright yellow. Hey, hey, hey, hey, something's different in my world today. Well, they changed my traffic sign to a brighter yellow. I'm just a curbside prophet. Love A curbside brother, love A curbside brother. Love A curbside. Oh, come on, I'm just a curbside prophet and I'm waiting for it. I've hatter Waiting for a rocker, still waiting for a rocker To come down. Curbside, come down, brother, you're a curbside hatter.