Original Title: Tokened EP.5: Conversation with Arthur Hayes

Compiled & Translated by: LenaXin, ChainCatcher

Guest: Arthur Hayes, Co-founder of BitMEX

ChainCatcher Editor's Summary

This article is compiled from a deep conversation on the Tokened Podcast with cryptocurrency billionaire and BitMEX co-founder Arthur Hayes, who shares his unique views on wealth, risk, and the freedom that travel brings. From navigating market volatility to exploring the world, Hayes shares core insights from his journey. These experiences are applicable not only in the cryptocurrency field but also reflect a philosophy of life.

ChainCatcher has compiled and translated this content.

(1) Hayes' Entry into the Industry: Transitioning from Traditional Finance to the Crypto World

Tokened: What initially drew you to the Bitcoin space, and how did you get involved?

Arthur Hayes: I worked as an ETF market maker at Deutsche Bank and Citibank in Hong Kong. After being laid off by Citibank in 2013, I decided to leave the traditional finance industry.

During my unemployment, I read articles about Bitcoin on Zero Hedge and began researching it. Satoshi Nakamoto's white paper captivated me, especially as it aligned with my interest in gold investment.

By the spring and summer of 2013, I fully embraced the idea of Bitcoin. As a trader, I started studying how the cryptocurrency market operates, including how to go long, short, and trade derivatives. I gained practical experience through arbitrage trading between Icybit and Mt. Gox.

This experience led me to decide to create a derivatives exchange. From late 2013 to 2014, I co-founded the company with my partners Ben Delo and Sam Reid. Twelve years later, I am still deeply involved in this field.

(2) Hayes' Perspective on Current Trends in the Cryptocurrency Space

Tokened: How do you view the current trends in the cryptocurrency space? Is there excessive hype? Is cryptocurrency a means of payment? Is it about building on the underlying chain? Or is it about asset tokenization? Which areas do you think are at risk of a bubble?

Arthur Hayes: I believe the core trend is the continuous devaluation of fiat currencies. Take Japan as an example; its debt-to-GDP ratio has reached an all-time high, representing a classic case of massive money printing. Inflation concerns are becoming increasingly prominent, with people struggling to afford housing and food, and wage growth lagging far behind the rate of money supply expansion. This constitutes the most fundamental economic trend.

In this context, Bitcoin always has intrinsic value. Unless it can be proven that countries will stop excessive money printing, holding Bitcoin remains a rational choice. Despite price volatility, Bitcoin has maintained the best asset performance record in human history since the creation of the genesis block in 2009. Its fundamental driving force is the ongoing devaluation of currencies worldwide.

Tokened: But I think if you look at any media outlet now, you'll find it overly focused on trading rather than the real world.

Arthur Hayes: There has always been a demand for trading. People are acutely aware that the dollars, yen, and euros they hold are continuously losing value, yet they still need to make a living and fulfill family responsibilities. This is the fundamental reason why Bitcoin always has intrinsic value.

(3) Hayes' Travel Philosophy: Exploring the World and Enhancing Communication

Tokened: You mentioned that many wealthy individuals now reside in Singapore, but can it truly be called a home?

Arthur Hayes: I am passionate about skiing and spend a lot of time in Hokkaido and Japanese ski resorts. I also love outdoor activities like surfing and kitesurfing, always pursuing a lifestyle that coexists with nature.

Tokened: Does travel change the way you view freedom, power, and money?

Arthur Hayes: The ability to travel globally within 24 hours has become an important privilege for modern people. The travel restrictions during the pandemic made us realize that some people are content to stay put while others yearn to move, depending on their geographical environment and personal preferences.

The global trend is evident; travel demand continues to grow, and airline miles and fuel consumption are increasing year by year. Humanity has an enduring desire to explore the world and enhance communication, which is the eternal value of travel.

Tokened: What is your daily life like now? Can you describe a typical daily routine?

Arthur Hayes: During the ski season, I usually go to bed around 7-8 PM and wake up at 4 AM. I start with stretching exercises and prepare food for the day since I need to hike for eight hours on the slopes every day.

(4) Industry Changes: From Talent Shortages to Attention Wars

Tokened: Do you think starting a business was easier back then than it is now, or more challenging?

Arthur Hayes: Challenges always exist, but they take different forms. The core issue BitMEX faced was talent recruitment. At that time, many qualified individuals were unwilling to enter the field, forcing us to hire some candidates who might not be considered today at high salaries.

Now the situation has fundamentally changed; cryptocurrency has become a standard career path. For example, at Maelstrom, we can attract excellent graduates from top universities who are not only well-trained but also enter the crypto ecosystem with the right mindset and career planning. This evolution in the talent environment is a reflection of the industry's maturity.

Tokened: Have you noticed changes in the funding needs of startups?

Arthur Hayes: I believe the core challenge for Web3 startups is always to gain user attention. While the cost of technology development has indeed decreased, the cost of breaking through the attention barrier continues to rise. Whether it's advertising or paying KOLs, acquiring traffic requires significant financial investment.

Tokened: When investing, do you also provide strategic advice to the companies you invest in?

Arthur Hayes: Yes, we act as advisors to large enterprises.

Tokened: If you could give advice to your early self as an entrepreneur, what do you think needs the most adjustment?

Arthur Hayes: Hire better talent.

(5) The Digital Nomad's Dilemma: Disconnecting, Einstein, and Antarctic Dreams

Tokened: A whole year completely off the internet, or a whole year without travel. Which would you choose?

Arthur Hayes: A whole year completely off the internet.

Tokened: If you could choose a historical figure as a travel companion, who would it be?

Arthur Hayes: Einstein.

Tokened: Not Satoshi Nakamoto?

Arthur Hayes: Satoshi should remain a mystery. Not meeting or revealing their identity is the ideal way to protect this legend.

Tokened: You travel often; is there a destination you have yet to visit but always long for?

Arthur Hayes: Antarctica.

Tokened: When you travel, do you often carry books or watch movies? Are there any works that particularly inspire you?

Arthur Hayes: My favorite sci-fi series is "The Three-Body Problem."

(6) Hayes' Advice for Entrepreneurs

Tokened: If you were to give any entrepreneur one piece of advice, what would be your main suggestion?

Arthur Hayes: Creating products that are truly worth paying for is key. Many entrepreneurs today focus on making products that appeal to venture capital rather than market needs. While they may secure funding, even if they are acquired or go public, the founding team may lose ownership, essentially just piling up free services with features that no one truly needs.

Web2 companies often require long-term accumulation to reach a $50 million valuation, while Web3 companies can achieve the same valuation in just a few hours after issuing tokens. This difference reflects a fundamental distinction in valuation logic between the two business models.

Tokened: Do you primarily invest in Web3, or a combination of Web2 and Web3?

Arthur Hayes: Maelstrom focuses on token investments rather than equity. We are familiar with the high liquidity characteristics of the crypto market, which typically allows us to recoup costs within two years.

In contrast, equity investments have a cycle of 7-10 years, which does not align with our liquidity needs. This is not a denial of equity value but a strategic choice based on capital efficiency.

I enjoy this flexibility. Cryptocurrency is a field I am familiar with, and we understand the successful models of token economics, so we stick to our lane. We only do what is within our capability and do not blindly cross over into other areas.

(7) Could Decentralized Media Be the Key Breakthrough?

Tokened: In the BlackFree project, what type of key project do you think is currently missing?

Arthur Hayes: I look forward to achieving decentralized social media. Current mainstream platforms like X, Instagram, and TikTok monopolize the value of community interaction, and breaking this centralized barrier is the key breakthrough.

Tokened: Are you referring to data and content?

Arthur Hayes: Your data and content can be banned by authorities at any time, whether it's Elon Musk or at the national level. This centralized control is fundamentally at odds with the core principles of the cryptocurrency movement, where we pursue data ownership and economic autonomy, aiming to eliminate the intermediary monopolies of governments and large financial institutions through disruptive technology. The current structure clearly conflicts with this vision.

Tokened: Why put your data on the blockchain?

Arthur Hayes: Founders should focus on underserved niche markets. There is no need to pursue star users; instead, build a dedicated social credit system for specific groups. By starting from the grassroots community, gradually establishing low-cost network effects, we can ultimately achieve ecological expansion. This is the effective path to breaking the monopoly of social media.

Tokened: Are you still active in the NFT space?

Arthur Hayes: I don't like CryptoPunks.

Tokened: Are we missing a key project? Perhaps one that is driven directly by oneself, developed personally, and specifically serves one's own follower group?

Arthur Hayes: While I do not have the commercial or technical capability to lead a social media revolution, I am convinced that a focused group of entrepreneurs needs to tackle this problem, and no one has truly broken through yet. The key is to promote the decentralization of social media and gain the support of the entire crypto community.

As for Musk? He clearly has different ambitions. His goal is to strengthen the centralization of the X platform, using data to train AI and integrate it into robotic systems. This has its own logic but is completely contrary to the idea of decentralization.

(8) What Lies Ahead for Cryptocurrency?

Tokened: How do you view the development prospects of cryptocurrency in the next 5-10 years? What are your expectations for its evolution?

Arthur Hayes: I expect prices to rise significantly, but more importantly, the user base. I hope to see a real application ecosystem with 2 billion active wallets. This means the current user base needs to grow a hundredfold.

Tokened: How can we clearly explain the value of joining Web3 to potential users?

Arthur Hayes: I suggest beginners start with a small allocation of Bitcoin, read Satoshi Nakamoto's white paper, and share it with friends. This process will naturally create polarized perceptions: either recognizing its revolutionary value or deeming it a scam. Based on this foundation, individuals can then explore the crypto space further according to their needs.

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