Would You Buy an NFT From a Vending Machine?

n f T vending machine. You heard me right, an n f T vending machine For your listeners who are new to crypto. N f T stands for non fungible tokens, which are assets that, like bitcoin, won a block chain and cannot be copied, changed, or replaced. They were all the rage last year, but this year prices have come falling down along with the rest of crypto. But what if you could buy an n f T from a vending machine. Earlier this year, a machine just like that

popped up in central London. The company behind this vending machine, called my n f T, said the goal was to eliminate any barriers to entry when it comes to buying n f T s Hugo McDonald, the CEO and co founder of my n f T, joins us today for us. Yeah, the vending machine initiative was really about trying to just show people that this isn't a very scary technology that is inaccessible. Along with Bloomberg reporter tanseel act are and people couldn't choose what the piece of art would be, right,

So it was like a lucky dip. So it's literally like you just put in a tenner, you know, pay a tenna, and you get what you get. You Welcome to the show. Thanks for having me and tas Welcome to the show. Thanks Phil. Good to be on the show with you and h you go. I am excited, Hugh. Can you briefly tell us a little bit what you do and what your background is and how did you get into crypt Sure, so I've been in crypto for

almost a decade now, started with bitcoin. But yeah, at the beginnings for me was I was I was working in banking. It was my first job. We had a CPD meeting and there was a young guy who stood up and was talking about bitcoin in the very early days. I think it was sort of eighty dollars at the time or something, and he pointed me towards the white paper and I read it, and from that point on I was basically a convert. I was supremely interested in the idea of a peer to peer currency, a trust

less form of of of of exchange. And yeah, that

was really where it began for me. And now yeah, so so in when n f T s were just sort of coming onto the horizon on ethereum that there had been some experimentations before on counterparty, on bitcoin and colored coins and these kinds of things, but I guess it really started moving on etherorum in seventeen with the advent of crypto punks, and then we had crypto kitties when, which was the first sort of hype cycle, if you will have, of n f T s. And it was

at that time that myself and my two other co founders, Eduard and Guion, started really looking at the n f T technology side of this whole crypto world. And that really excited us because in my view, I think one day every single non fungible asset in the world will have a token to represent its value, it's authenticity, it's trading capability, all of these things, and so we wanted to sort of be a part of that future or create something or system that would help make that a reality.

And then, even more recently, after two or three years of playing a round in the space and learning all of the hurdles that everyone else is coming across, poor u X, clunky UI, steep learning curve, crazy gas fees, scalability issues. We've sort of took all of this learning and we've tried to solve all of these problems in a new product that we're releasing called my Left dot Com Exciting. And that brings us to this point in time in crypto. If I would say it's been quite

a year, what would you say? I would definitely agree. Two trillion dollar freefall rattles crypto to the core, and I think crypto has wiped out a lot of people in the past couple of months. You can take the lunar example, Bitcoin down sharply, the collapse of three Hours Capital, the bankruptcy of Celsius and Voyage, or the FOURD of ft X. So we did have genesis as well, saying that it's basically looking for a billion dollars or more.

Otherwise it could also be filing for bankruptcy, and some seem to think that the n f T hype is slowing down, Like if you look at the average trading volume, it's dropping. It's I guess it depends on who you're talking to. There's a lot of people who are probably licking their wounds, wondering what's going on. Um, I don't want to don't want to get involved in this space again if this was the first cycle that they were in.

But then there's a lot of people that have been here for a while and understand these these movements, And I think you have to look at it in the context of any sort of game changing, paradigm shifting technology that comes to the fall. How it works and booms and buston, natural bubble cycles are a part of it was a part of the dot com It was a part of the railroad in the US. It was it's a part of huge technology changes because of human behavior

and excitement and these kinds of things. So yeah, I mean, this year there's been a whole bunch of bankruptcy heast that have caused contagion and knock on effects. But I think that the thing that comes out of this is better for the industry, the uncertainty gets taken out of the industry and more certainty gets put back in. The people who really want to build value get found and the capital begins to flow into those rather than the

more speculative projects. And also it will pave the way for for for some form of I don't know, sensible regulatory framework perhaps, but you know, well we'll see. And so in the midst of this, I guess we can call it broadly chaos right now, in the midst of this chaos, you guys put up an n f tea machine in London. We did bad timing, right you go? Um, yeah,

I mean I don't really see. Timing is definitely a thing, but in the world of startups, I don't really You know, timing can be very valuable at times, but it's really just how long you can survive and how long you keep going. So I'm not a huge I don't see prove a whole whole amount of stocking in timing. But for us, yeah, the vending machine initiative was really about trying to just show people that this isn't a very

scary technology that is inaccessible. There is ways you can make it more accessible and It was really just a way to try and sort of educate people on what n f T s were and show them that, you know, with your with your cards, you can you know, do ten pounds on contact less and get an n f T card, scan it, redeem it on on the mine ft site and then you're you're you're in the you're in the world of being able to transact with a non custody wallet into into the world of n f

T s, and you know, we're also raising money for charity and you know, trying to just help sort of spread the word and have a bit of fun really and so yeah, I mean for us, it was it was actually really it was a great success. We was we sold one n f T every two minutes. The machine even went down because the vending machine payment services provider couldn't handle the volume. I did. I did speak to a few people on the ground who had purchased a couple of entities and they did say the platform

was a little bit like there's some issues around actually downloading. Yeah. So yeah, it was in alpha essentially and the redemption process. There were some hiccups on the database with our side of making it as as fluid as possible, but we resolved them as time was going on. And so the way that it worked, just for the very initiated is basically you basically you pay or is it does the ten pounds? Yeah, so yeah, you pay ten pounds, you get a card out of the vending machine, you scanned

the card. That card takes you to mine FT where you sign up. Once you're signed up, you're given a non custodian wallet for you to be able to participate in the world of Web three and then you redeemed the n f T that you got from the card, and that's automatically sent to your to your wallet and then you can do what you like with it. And how many did you sell during the two days the machine was on side, Um, I think we did about

four or something like that. And people couldn't choose what the piece of art would be, right, so it was like a lucky did. So it's literally like you just put in a tenner, what you know, pay a tenner

and you get what you get. Yes, So we we got a whole bunch of artists together that from different networks because we're a multi chain marketplace that we really liked and we've gotten to donate their works into the into the vending machine, and so it was really a lucky differ in any ways as to what piece of art from what artist you were going to get. So will will those n f T s be tradeable valuable in the future. So they're all E. S C. Seventy one or type or standards that are similar to them,

depending on the chain. So once they're in your wallet as as the owner of it, you can do what you like with it. So you could you could resell it if you wish to, You could hold onto it forever, you could collect other pieces from that artist. I mean totally up to you and this machine. Where does it live now? It's no longer where you put it up first, is it? It is no longer where we put it

up first. It was only there for a couple of days um as part of the n f T London event and to help obviously drive awareness around the technology and raise some money for some good causes. However, because it was so popular, we've had a huge amount of partners and people come to us asking for it to be at their events or to have it at some

of their campuses and institutions. Then after the break. More from Bloomberg reporter tnz ill actor and my n f T CEO and co founder Hugo McDonald on the future all of n f t s in society will be right back tells. I wanted to come to you for a second. You've reported on and off of this market. What are your observations from this year and and more specifically,

the UK Parliament was looking into ant as well. Yes, so day two of the event where you were high where you had your vending machine showcasing, Parliament released an inquiry into n f T s which was interesting. So MPs are expected to consider whether n FT investors, especially vulnerable speculators, are put at risk by the market. So they're actually investigating the concept of n f t S

right um. And that that was interesting because obviously this space I c O S, Bitcoin crypto in general is not very well regulated and a lot of people entered the arena without having any idea of where they're putting their money. Obviously, hug your vending machine is tempound of pop. But we've seen n f tes like people. For examples, he sold his energy for what sixty million? Yeah, and then you've seen you've got like Soto Bees, You've got

like old school UM auction houses entering the arena. Then you've got like you know, you've got luxury brands as well, UM selling n f T s for millions. So yeah, it's a market that's not very well regulated, should we say, so it's um it's the new markets. Yeah, it's a good thing. You go that UK politicians want to educate themselves around n f T s. I think it's absolutely brilliant.

I mean, innovation happens at three or four times the rate as regulation and government oversight, right, I mean it's it's it's different different paces of innovation. So and I think there's a huge amount of room and opportunity for for different countries that embrace this technology faster to be able to to get you know, one up on others.

I saw really interesting report recently from the Law Commission in the UK regarding sort of intellectual property rights and digital assets and how n f t s for example,

can represent entirely new kinds of property rights. And it was the first piece I've read that was sort of produced by a government body that I found to be really quite engaging and like they've done their homework it was really interesting and I think that the UK is well positioned to be able to to really build some kind of framework or rules based principles that will allow for for businesses they're innovating in the space to flourish

before we close it off today. I want to circle back to this argument you made at the outset, and which is one that we've been hearing. You know, I fear a bit we here Bloomberry Crypto in the last couple of weeks. It's the idea of going through these booment bus cycles, peeling off the rotten layers, I guess, or useless later or less useful layers maybe is a better way to frame it and then to start building again. And I just wanted to sort of zero in on

the building part. What kind of building do you see now and what kind of building are you looking to do coming forward. It's probably a cliche these days in terms of none of the people who said but I do really think we are still in the very early stages of this industry, you know, early early Internet times, seventies, eighties even, and the starting of the space was building layer ones theoryum Bitcoin, poker, dot which is even a

layer zero. It's connecting chains together these kinds of things, and there's been a lot of innovation there. There's still a lot more to go. I mean, the blockchain trilemma of scalability, decentralization and security is a really difficult problem to solve and to solve well to get something that is going to work for you know, the modern day world at scale and comparison to the likes of Visa and these kinds of things. And so there's been a lot of work building on that in the past few years.

You know, the move of ethereums, proof of state for example being a being a part of that. For us, I think we're re really interested in in the future is this concept of multi chain. So I I personally think the world will evolve in this space where everybody will have their own block chains because the speed at which you can create layer ones, let's say, or block chains is getting easier and easy and easy. The barriers are getting lower, and so I think you'll have businesses

with private block chains. I think you have big, really decentralized public block chains that might be a bit slower, and I think that what lend up happening is you'll need an Internet, a block chains, and you'll need all of these worlds to talk to each other and to be able to interact with one another. And we're really interested in that future because that's where I think the

space is going. And so for us when it comes to n f t s, it's about trying to be you know, multi chain and about creating a world where people can move their n f t s between block chains seamlessly and permissionlessly, for example, or being able to do something on one block chain with this n f T and then it has an effect on another one because they're interconnected in some four And there's been a lot of innovation in the space around us at the moment,

the first versions of bridges, which have probably been talked about there because there's there's been a lot of security problems with bridges, has been a lot of hacks in bridges, and bridges are a big target for hackers because there are honeypot essentially where lots of capital ends are aggregating

because of how bridges work. And so I think there's gonna be a lot of innovation around that multi chain concept over the next few years, and I think, you know, there will be a lot more innovation with what you can do with an n f T. You know, at the moment there's a lot of artwork and imagery, but you know, at the end of the day, it's a it's a deed, it's a digital deed. It's a blank canvas in which you can program different kinds of value

and different rules. And so I think a world where will start seeing new kinds of assets that exist in the traditional world being tokenized as n f T s. I think it's going to start happening, and that will bring more liquidity to these fairly a liquid markets, and I think that will be interesting, um, you know, by reducing friction, and we're interested in that as well. We'd like to start innovating on that side of things as well. So parting message, there's still a there there m hm

hm definitely. I think I think there's still still a long way to go. And on that note, task Hugo, we're coming to the end of the show. Hugo. I want to thank you so much for coming on and thank you tas thanks, thank you very much, cheers, cheers. You can find more of Tansdale actors reporting on the Bloomberg Terminal and on Bloomberg dot com and for more, be sure to check out our twice weekly newsletter, Bloomberg Crypto. This is Bloomberg Crypto, a daily podcast from Bloomberg and

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