*Original interview from Around the Coin, aired on April 18, 2025!
Stephen: Hello everyone, I'm your host, Stephen Sargeant. Welcome to the special interview with William Quigley. William Quigley is the co-founder of Tether, an early investor in PayPal and Ethereum, and also one of the co-founders of the blockchain project WAX. He manages various cryptocurrency-related businesses, whether it's game skins or NFTs, all fall within his scope. Today, we will have a good chat about the various 'gambling' in this industry.
Today, we will review and discuss the state of venture capital in the 1990s and compare the development trends of hardware and software in 2025. We will talk about the early days of cryptocurrency and Tether, discuss the hype cycle of NFTs, analyze what went wrong, explore how speculation has dominated the development of most cryptocurrencies and the blockchain industry, and how we can push this industry back to its practical essence.
We will also discuss meme coins and Solana, covering millions of transactions. For some large blockchain projects in the world, we will also explore regulatory issues. Although William doesn't particularly like the word 'regulation,' we still need to talk about the importance of transparency and accountability in the cryptocurrency field. This episode is definitely one of the highlights of our program.
This is William's second time on our show, and I feel that the conversations get more and more exciting each time. He is a builder in this industry and has been deeply involved since its early stages. So this episode is definitely not to be missed. Come, let’s see how our conversation goes today and enjoy this episode!
Welcome to (Around the Coin). I am your host, Stephen Sargeant. This episode is particularly special because we have a heavyweight guest, one of our most downloaded guests—William Quigley, co-founder of Tether and WAX blockchain. If you haven't listened to the first episode, you should definitely find time to do so.
In the fields of blockchain, Ethereum, cryptocurrency, stablecoins, and NFTs, the changes have been rapid and ongoing, so let’s take our time to discuss them.
William: Alright, let me briefly share my experience. I've been in venture capital for many years. In the mid-90s, I co-founded the first venture capital fund focused on consumer internet with two other partners. Many of my ideas about the direction of blockchain development come from the experience I accumulated in early internet investments. You know, the internet has a complete architecture, starting with the infrastructure layer, then the application layer, followed by the reporting and analysis company layer, and finally the payment stage.
In the late 80s and early 90s, I worked at Walt Disney and then began to get involved in the video game field, which also became my gateway to cryptocurrency. By the end of the 90s, the idea of trading virtual items in video games began to rise; the first game was (Ultima Online), at least the first in the United States.
In fact, in South Korea, this kind of virtual item trading has been popular for some time. Later, my partner founded the first market that allowed people to buy and sell virtual items in video games. At that time, we used the payment service of a startup called PayPal that we had just invested in because before that, online payment methods were really too scarce, making buying and selling items very inconvenient.
Back then, people were very cautious about paying with credit cards. If you trace back to the early days of eBay, people even traded by mailing checks. Isn’t that a bit crazy? So, many people might not know that many early adopters and users of cryptocurrency came from the video game item trading industry.
Video game items became a substitute for currency at that time, and this trading method was very appealing to many people around the world who did not have bank accounts. Although this is less discussed now, during the first ten years of cryptocurrency's birth, I was often asked, 'Why should I use cryptocurrency? I have credit cards, Venmo, PayPal, or other payment methods; why do I have to use cryptocurrency?' My answer is that generally, you really don't need cryptocurrency. Because you are one of the lucky few who can enjoy convenient banking services; in some Western countries, banking is very easy. But for billions of people around the world, obtaining bank services is incredibly difficult. Even if you have a bank account in those countries, many times, assets can be confiscated or face currency devaluation.
So for Americans, it might be hard to understand the practicality of cryptocurrency. But I've been in this industry for many years and have deep insights. We enabled people from 100 countries to buy and sell virtual items in video games, and in the process, we found that many people find it too difficult to obtain reliable payment methods.
To solve this problem, my partners and I have made many attempts in the cryptocurrency field. Like many people, we started with mining. However, I have regretted not thinking of using Asics mining machines instead of regular computers for mining back then. But later, we did catch up with the rhythm.
Stephen: Did you notice these things early on? Did you see the early Asics mining machines and think, 'I wish I had used them earlier,' or did you realize in hindsight how much of a competitive advantage it would have been if adopted earlier?
William: Let me tell you, venture capitalists have a lot of 'scars'; in a way, it's both experience and a 'curse'. For me, this 'curse' is that I have invested in four semiconductor companies. I actually don't like to invest in semiconductor companies; these communication chip companies are too complex, and frankly, the return on investment is not high.
If I were to teach young venture capitalists, I would definitely talk about the differences between investing in applications and investing in semiconductors. Investing in semiconductors requires you to put in a large sum of money upfront and wait years to see if it will succeed. In contrast, investing in software companies requires much less initial investment; you can test the waters first, and if successful, gradually scale up and add more investment.
Moreover, the risks of investing in software companies are relatively lower now because you know that users have to be willing to buy your product at a certain price, among other factors. By the way, this is also why the venture capital industry has been avoiding so-called 'hard tech' for nearly 20 years. After all, just supporting two people to develop an application might earn you a billion dollars, and that’s much easier than investing in hard tech.
But now, the dividends in the software field have already been mined for more than 20 years, and the market is in urgent need of a new generation of hardware technology. So I think the hardware field is becoming the new darling of venture capital. However, young venture capitalists will soon discover how difficult hardware investment can be. Take Elon Musk's SpaceX as an example; it has almost no competitors because it has transcended traditional hardware and is more like scientific research.
It's like doing scientific research, right? No one wants to easily get involved. But if you succeed in this area and have no competitors, targeting a vast market, the value can be immeasurable. If you are doing traditional, software-based, easily replicable business, that’s also good since you don’t have to invest much capital to compete. But the downsides are also obvious; once your business model looks viable, it will quickly attract a large number of competitors.
Stephen: Speaking of hardware, artificial intelligence is booming in the software field. With AI, a small team of one or two people can easily create a business worth tens of millions of dollars without spending big bucks on hiring a chief technology officer or professional developers. Have you noticed that some people are beginning to tackle this from a hardware perspective, or is there any industry that makes you feel, 'Oh, there's huge potential for hardware development'?
William: Of course. As I mentioned before, the semiconductor field is one of them. For years, the semiconductor industry has been neglected by venture capital because making money in this industry is too difficult. But possibly influenced by the booming development of artificial intelligence, Nvidia has become one of the most valuable companies in the world. At one point, Nvidia’s valuation as a semiconductor company was as high as several trillion dollars, which left venture capital firms astonished.
So now, the semiconductor field is facing a huge development opportunity. Many companies are starting to position themselves, such as Intel. You know, when I was young, Intel was an industry giant like Google or Amazon. It’s hard to imagine that in the future, Intel would lose its dominance as a chip manufacturer.
But now, Nvidia's cash flow could buy Intel in two weeks, right? Even though Intel is still around, it doesn’t have much opportunity to reposition itself. I think the venture capital industry is a bit scared now, just like in the 90s when many office software and productivity software were thriving.
If Microsoft doesn't want others to invest in a certain field, they will announce a new direction they want to pursue, just like when they launched PowerPoint. Everyone sees it and fears competing with Microsoft, and Intel is now facing a similar dilemma. Now, Intel is no longer as glorious as before, so investments in the semiconductor field will certainly increase.
There’s also the robotics sector, which is a potential direction, but it's still in its early stages, with high construction costs and final product prices. However, in the future, there will certainly be investments entering this field. Additionally, I believe that investment in materials science is far from enough; many people are realizing that we urgently need new materials, but there aren't any yet.
So I think materials science will become an important investment area. Look at the virtual reality field; the helmets, glasses, or screens we use will see a lot of innovations in the future. Of course, there's another field where the results aren't obvious yet, but everyone knows the problem lies in battery technology.
This field has seen a massive investment, but the returns have not been ideal because the laws of physics limit its development. However, anyone considering virtual reality, or any company selling virtual reality headsets, will try everything to reduce battery weight, right?
Wireless technology is similar; it covers a wide range, from actual transmission capacity to antenna technology, and then to what we call propagation modeling, which is how to optimize the layout of wireless mesh networks. Of course, the RF baseband chipset market has long been dominated by a few major companies, and their intellectual property is hard to overcome because it involves many physical issues. Therefore, I think these are several directions worth paying attention to in the hardware field, and the space sector is no exception. What I mean is, Elon Musk has two layouts in this field.
He has SpaceX for transportation and Starlink for application networks. Many years ago, people thought private companies could not do this because, in the 90s, Lucian Motorola tried it, spent a lot of money, but ultimately gave up because the cost of sending satellites into space was too high. And I believe Elon Musk's true innovation in the satellite business lies in achieving satellite launches at a low cost.
Stephen: I really like this topic, but I have to interrupt you. You just mentioned that gaming was your entry point into this field, especially around the market. For example, Roblox, you know, in the past, everyone was excited when talking about the metaverse, but now, not many people mention the metaverse; instead, they talk more about Roblox and the virtual universe it has built.
That being said, do you think there are any major changes in the current gaming market? At least for now, nothing has really impressed me. My son is playing Roblox, and both kids are into it. But I’ve noticed there don’t seem to be any big companies in it. Since you launched your marketplace, what changes have occurred in the brand landscape of this field over the past 25 years?
William: Strangely enough, the changes haven't been very significant. There weren't many game companies to begin with, and we have always been 'outsmarting' them. Why do I say that? Because most game companies do not like players trading items in games; they just don’t want to see this situation. Many game companies feel they want to monopolize all commercial activities in the gaming world.
Honestly, I have always found this quite funny. Many video game developers and companies pride themselves on being 'capitalist', but when it comes to monopolies, they are quite happy. So the challenges are ever-present. Look, in the blockchain-based video game field, this situation is also very evident; these types of games have not yet been widely accepted by the mass market. Why? Because I feel the challenges have never disappeared. Just think about it, besides selling virtual items to players and letting them use them, what other economic model can video game publishers have? Is there an additional model that can allow these virtual items to circulate freely? But most video game companies believe that every dollar a player earns outside the game world is equivalent to a dollar lost for them.
Stephen: Indeed, if they want to control transactions, they wouldn't allow players to trade and only let players buy. For example, if you want to change a skin? Then you have to buy a new one; don’t even think about trading. I assume those who have already bought skins...
William: Exactly. And I have to say that it's not just game publishers who have this idea; there is also a more dogmatic view within the video game player community that thinks buying and selling virtual items is a terrible thing. If the trading objects are virtual items, they might think it makes sense.
Perhaps among my audience, some are gamers, and some are not. Virtual items are those things in games that can provide players with some practical use. Video game players often say, 'Oh, this guy didn't put in any effort and just relied on things bought from others; that's so unfair.'
But we must be realistic; if someone participates in sports and has money, they can buy a powerful team, right? That seems reasonable. But if you apply this logic to skins, it makes no sense at all. In the eyes of players, skins are just an element in the game, having no practical use, merely a change in appearance.
Therefore, skins do not enhance a player's ability in the game. In this case, not allowing players to buy and sell freely is a bit hard to understand. However, I do have an idea. The reason video game companies suppress and do not allow such trading behavior is that they can completely control the entire game world.
Take the most controlling company I know—Apple. Apple allows you to sell your phone or laptop to someone else, but I feel they do this because they can't stop it. If they could, they probably would have done it long ago. If Nike could stop you from buying and selling sneakers, they probably would do that too.
They just want a piece of the pie. Video game companies can block players from trading assets, so they do it. However, the challenge for blockchain video games is to bring in new elements to the gaming experience that can only be realized through blockchain.
Allowing players to trade freely is one of them, but as we just mentioned, traditional video game companies can actually do this too; they just choose not to. I do feel that a portion of players are willing to participate in such trading, but the blockchain has an old problem: it's very inconvenient to use.
How to say, it’s just that it’s difficult to operate, and the user interface isn’t very friendly. Perhaps only when this problem is solved will blockchain-based video games be accepted by the mass market.
Stephen: We do see that NFT games are continuously developing, but I’d like to talk to you about the early situation. You have been involved in the cryptocurrency field for a long time, invested in Ethereum early on, and helped incubate Tether, becoming a co-founder. Now many people look back at some early companies and say, 'Oh, they didn't do well back then.'
But without these early innovators challenging the limits, we wouldn't have ETFs or the entry of institutional funds. How do you balance that? Just like we had to do some less-than-glorious things early on to keep clients and ourselves with bank accounts, but it was these experiences that led us down the innovative path we are on today.
William: That's right; before cryptocurrency, and even in some cases now, it belongs to what we call the gray market. The gray market simply refers to an industry that has not yet established established rules in the real world. Some industries have stayed in the gray market for a long time; video games and virtual item trading are classic examples.
However, the gray market also has its advantages. Those W2 employees in big companies neither have the willingness nor the ability to pay attention to a brand new market because this market is blank in terms of operational rules and guidance. So they choose to stay out of it. This creates opportunities for entrepreneurs and early companies to dominate.
The internet is a good example, as is mobile technology, especially in terms of applications; most of those adopting mobile technology are new companies. So if you were waiting for someone to give you a user manual in the 2010s, 2011s, 2012s, 2015s, 2017s, or even 2020s, you would surely be out of luck. This is why most big companies are reluctant to venture into the blockchain field.
Later, financial institutions around the world began to vilify blockchain and cryptocurrency. They did this because they felt it was a threat but did not want to participate. If they really knew how to make money, they certainly wouldn't have said that nonsense and would have acted long ago.
But they also have no innovation, right? So they can only sit there thinking about how to suppress this. They really did that. This is the difference between the development of consumer internet and the development of cryptocurrency (especially after the mid-90s).
There are similarities between the two, but there are also obvious differences. At that time, there was no mature industry pushing for restrictions on the internet; it felt more like a gimmick, somewhat of a waste of time. When I left Disney to start the first venture capital fund focused on consumer internet, most people felt sorry for me.
They would say, 'Wow, you gave up a great future for this fleeting thing; it's not worth it!' But this is also quite good because this way, a whole group of people say, 'Okay, don’t mind us.' Later, traditional industries began to decline because people found that doing things online is more valuable than in the real world.
So all the big companies started to panic, saying, 'Oh no!' But if you think about it, the largest companies in the world are all internet companies now. Traditional industries will never catch up because it's already too late. So you can compare the development of cryptocurrency with this situation.
What the financial services industry does is to push the government to enact policies that restrict the use of cryptocurrency, even going as far as suing related individuals. In the United States, there is a large group of regulators who have not even been authorized by Congress to manage cryptocurrency matters, yet they take it upon themselves to try to stifle cryptocurrency in its cradle and demonize it.
Like now, although it's not as common anymore, for many, many years, whenever there was coverage about Bitcoin or blockchain, words like money laundering, terrorism financing, and tax evasion would definitely appear in the same text. It has always been like that. They must include this content, and because of that, I feel the application of blockchain has been suppressed for a long, long time.
Of course, the situation began to change somewhat after the Trump administration took office. But one thing I don’t like is that any new innovation will come with a learning curve. Startups always take the lead; they try new things earlier than big companies, and employees can learn a lot, while those old companies often find themselves forever lagging behind.
So the first-mover advantage is still very significant. In the world of startups, if government agencies or industry organizations can suppress your innovation until they have enough time to learn, you are done, right? Just like Jamie Diamond of JPMorgan, who has been saying for years, 'I want to fire anyone involved in blockchain and cryptocurrency business.'
This practice is quite unethical, but if you look at their patent applications, you will find that they have applied for a large number of blockchain patents. So what they say and what they actually do are two different things. This is a very clear example of using the power of industry and government to suppress the crypto industry until they have enough time to catch up.
Stephen: You're right. It wasn't until 2020 that we saw a bit of a 'highlight moment' for NFTs, DeFi, and cryptocurrency itself in 2021. 2017 was indeed the time when cryptocurrencies, especially Bitcoin, emerged, and you started to get involved in the NFT market and the blockchain field around 2021, right in time for the boom.
At that time, you looked like a genius. Who would have thought that in just 12 to 14 months, the popularity of NFTs would decline? Before we dive deeper into this topic, I remember you mentioned the difference between cryptocurrency and digitization on the podcast last time. I think many people are confused by these two concepts, especially when they think of NFTs or even stablecoins. Could you briefly explain the difference between the two for us?
William: Of course, we can talk about this topic for a long time, but let’s keep it brief for now. You mentioned that, and that's enough; if people are interested, they can research it further. But I want to say that it might be a bit of an exaggeration, but I think about 95% of people in the cryptocurrency industry do not understand the difference between the two, let alone the general market, which has little concept in this regard.
Most people can understand the concept of digitization, which allows people to send records, music, or other things electronically and make payments. Updating various digital files is fine. But the problem is that you actually have different databases in different places and different servers, and people are sending commands in the digital world.
This model is usually centralized control; it’s just a digital file that can be modified as long as you have permission, right? And it can be copied. You can copy an emoji and send it out, and you can't tell which is the original version and which is the endless copy.
Of course, this has also brought various issues to areas like music. So once you start building things on the blockchain, understanding how Merkle trees work and the complex relationships, you will truly understand how significant the difference is between cryptocurrency and digitization. When you cryptocurrency an item, I like to imagine it as putting this digital file in an envelope, and this software-based envelope has a series of attributes.
Once the packaging is complete, you can no longer edit it because it has been encrypted and fixed. Therefore, when you send this cryptocurrency asset from one person to another, the recipient can immediately confirm that what they received is real and does not require any additional cost to verify authenticity.
This is the difference between cryptocurrency and digitization. Digitization is just an electronic file that can be modified; unless you establish specific rules, no one knows if it has been modified. Cryptocurrency, on the other hand, is putting things into an 'electronic package' that cannot be unsealed or modified, which is characteristic of blockchain-based items—they are all cryptocurrency. This is the uniqueness of blockchain.
This concept is indeed easy to confuse, especially in the early days. For example, when I try to explain the value of Ethereum or Bitcoin to others, those smart people will say, 'But William, you have already digitized the dollar; this has been done for 60 years, what's so great about it?' Many people in the cryptocurrency circle will say the same to me. I would respond, 'No, no, it's different.'
Stephen: Speaking of NFTs, many people think it's just right-click saving; they might think, 'Okay, I have a digital photo; who cares? I right-click and save it, and now it's mine?' So I feel NFTs are harder to explain than Bitcoin and Tether.
William: That’s true. What you need to explain is that you can take a screenshot or a photo of an NFT, but that does not affect the authenticity of the NFT based on the blockchain. You can take a picture of the NFT just like you can take a picture of the Mona Lisa, right?
But that’s just a photo, not the real thing. In the real world, we rely on touch and sight to determine the authenticity of things, saying 'Oh, this is real.' But in reality, you have no way to know if it’s real. I haven’t found a counterexample, but I believe that cryptocurrency assets like NFTs are unique in the universe.
I can even send you a message anonymously without needing to verify who I am, which is often how we gain trust. In the digital world, we build trust through brands, right? So we trust Amazon because they invest in their brand. And when I send you an NFT, you not only don’t have to trust me, you don’t even need to know who I am.
You just need to know that this NFT was created on this blockchain by this smart contract, which is the original smart contract. So when you give it to me, it’s effortless, takes no time, and costs nothing. When you connect it with money, you will see its extraordinary nature because money is one of the most forged things on Earth, right?
North Korea relies on counterfeiting money to provide a lot of funding for its budget, along with US dollars and euros. That's why I said that all countries of a certain scale will achieve currency cryptocurrency within ten years, because cryptocurrency currency has almost no disadvantages and only advantages.
Once currency achieves cryptocurrency, it can basically solve all currency-related issues. I really wish I could talk to more members of the U.S. Congress. Remember when Mark Zuckerberg tried to explain why he wanted to create the Libra stablecoin and failed? When Congress questioned him, they treated him like he was inventing a new currency.
But in reality, he just wants to ensure the integrity and replicability of the currency, which is actually an improvement over the dollar. But I remember being particularly anxious when I watched him testify, as he clearly knew nothing about it, and someone just gave him some talking points.
I think he was full of thoughts about the metaverse at that time and ended up being harshly questioned by Congress. If they had asked someone more knowledgeable in the organization, the situation might have been much better because they know what they want to do. But you remember, in the end, he decided to leave himself; isn’t that crazy? Because now many companies are launching their own stablecoins.
*Friendly reminder: This article is for informational purposes only and does not constitute any investment advice!
