Untold Stories: Unfiltered Behind-The-Curtain Look At Binance

Binance’s CZ sits down with Charlie to talk about his life, leaving China, Binance’s inner workings and his vision for the future evolution of crypto exchanges, including:

  • The founding of Binance and the rationale behind it

  • How crypto-to-crypto trading changed the space

  • How Biance fundamentally changed how exchanges operate

  • Why CZ’s family had to flee China and how that changed his worldview

  • How decentralization helped Binance succeed

  • The politics of wearing flip flops

  • Why taking care of exchange users over shareholders makes sense in crypto

  • Binance Coin’s bright future

Untold Stories Ep 15 Blog Graphic.png

Charlie
Hey, everyone. This is Charlie Shrem and you're listening to Untold Stories.

This is a show where we dive deep into the lives and personal histories of some of Crypto's most influential leaders, and find out how the crypto movement truly came to be. Let's dive in.

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A really special guest today, Mr. Changpeng Zhao. You all know him as "CZ of Binance," but before 2017, no one really knew who CZ was and this was pretty recently. It's very interesting because when 2017 came and Binance was launched, I was saying to myself, "This name sounds so familiar. Who is this guy?"

I had looked back in my emails from 2014 and, CZ, welcome to the show. We actually spoke in 2014 for like a few emails back and forth.

CZ
Yes, well thanks for having me here. Yes, I remember that conversation as well.

Charlie
I was looking for an API key for a project that I was working with and you were at BlockChain.info.

CZ
Yeah.

Charlie
And at the time, I only really remember very few employees working at BlockChain. It was Ben and then my friend Mangerick who was the head of customer support up at Instant, but he ended up being the head of customer support at Blockchain. I had asked Roger for some things, for some help, and he introduced me to you, and I was like alright who is this guy, and I remember you had an interesting quote. I Tweeted it yesterday, but the quote was ... because I had asked you, I remember BlockGene.info was a wallet that didn't allow people to ... it was a completely user side wallet that... was what I used since the beginning. It allowed me to actually hold my own keys, which back then that was kind of the norm. But nowadays you have this custodial solution. You don't really have ... there's such a disconnect now, most people don't really understand the difference.

And I didn't understand the difference because I had asked you I said, "Is there a way for the API to block my wallet or not let my coins go out?" And you told me, "We can't and don't want to have a way to restrict them from using their bitcoins, we can't limit, freeze, block, approve, or otherwise interfere with the transactions. That's the bitcoin way."

And that really struck me when I had read that recently because those two lines can really simply explain cryptocurrency perfectly.

CZ
Right, yes. Back then blockchain.info was started by Ben Reeves and I was the third person in there, and it was a small team. None custodians wanted a solution. Everything happens on the client side inside the browser. So yeah, those were the early days.

Charlie
It really was. And you went from there to, I believe, you worked for OKCoin for a little bit. And then you had the idea for Binance and then I don't know, like six months later you were the top exchange. Where did you get the vision from and why?

CZ
Sure, I'll explain a little bit of the history then. I learned about crypto... of bitcoin in 2013 and then joined blockchain.info end of 2013-ish. I just really liked the idea. Even back then, there were discussions about running a pure Crypto to Crypto exchange even at blockchain.info. But because blockchain.info, the teams more heavier towards the wallet space, so we didn't really do that.

My experience always came from the sort of trading... more the programmer background. I was always a developer, mostly on the trading side. So then-

Charlie
Can I ask you, really quickly, I'm... there weren't very many Crypto to Crypto exchanges. In fact, I remember when you launched, and even in those years there weren't very many of them. Everything was Fiat... Crypto-Crypto Fiat. There wasn't much of a need for Crypto to Crypto. Why did you think that that was needed?

CZ
So, even back in 2013, there was this concept of, "You have Fiat to Crypto exchanges in every country because the Fiat in every country is different." But once you get into Crypto then you can have Crypto to Crypto trading. Even back in 2013, there were many, what we'd call, "Out Coins," or for the lack of a better word, "Copycoins," right? There was a bunch of them. And there was thousands of them already because people just clone Bitcoin, or clone Litecoin, and then make a new coin.

But then nobody was doing that back then. The [inaudible 00:06:28] was too small. The Out Coin market is too small, even Bitcoin market was quite small. In 2015, I left OKCoin. With looking at that idea again, the market's still pretty small. I think Poloniex had just started. Bittrex may or may not have started yet.

Charlie
Poloniex was original... Like when Poloniex?

CZ
Yes, yes. And then 2017, we thought that market was ready. Poloniex was really big, Bittrex were catching up to them. And then... but Bittrex was... both of them are in the top 10, and Poloniex usually top 1. By the time we started, Bittrex was #1 consistently, every day. Very large trading vault, it was very active. So we thought that direction was correct.

To be honest, even then the user experience, the customer support levels, the device support like mobile apps, all of those things were quite weak. I think even today we're still quite weak. There's still a lot more to improve. But back then, we saw an opportunity and we took it.

Charlie
It wasn't just that that was quite weak. I think the overall expectation of professionalism from these sites, Poloniex being the #1, wasn't that high. The people that were trading on Poloniex... and I guess the users that Poloniex catered to, it was mostly for fun, and speculation, and "hump and dump," and stuff like that. I mean, you had a troll box on the front page. What does that tell you about the professional... I miss the troll box, by the way. I would open it up and just sit there and... you know the best thing about troll box was? No one knew who you are, so you could just troll people without saying your name.

CZ
Yes, the troll box... funnily, when Binance.com went live on the first day, we also had a troll box. But it was a disaster. Basically, people would just say, "Oh, [inaudible 00:08:31]."

Charlie
Why? What happened?

CZ
Well, people were swearing, there's profanity everywhere, and then the people were all trying to influence each other's trading activities by saying, "I'm going to down pour," "I'm going to pump this coin." It was a mess, so we took it off.

Charlie
But that... so that was the... I think by taking that off, it was symbolic because, eventually, you became #1. But the reason it's symbolic is, from that moment on... and this was very important, because not yet were the "big boys" or the rest of the world looking at us so crazy yet. Yes, they understood Bitcoin, and it was mostly Bitcoin, but they weren't really looking at our industry so hard. And when they did, they see troll box, Poloniex, kind of stupidity, kids. You know, children.

When Binance became, eventually, the exchange, the Crypto to Crypto exchange that gave a portal into this alt... and I don't use Altcoin in a negative way, I use it alternative to Bitcoin-

CZ
Yep.

Charlie
When other people, not in the Crypto space, look and they see the professionalism, that to them is saying, "Okay. Now maybe I could take this industry a little bit more seriously." So by not doing that... by not adding a troll box, and by focusing on user support, by focusing on a really good user experience, you started a fork in the way that we perceive and the way we use Altcoins. Would you agree with me?

CZ
Yes, I think I would agree. I think we did do a lot of things very differently. Well, not so differently from the surface, but if you looked underneath the surface, we did do a lot of things slightly differently. And I can go into a bit more detail into that. For example, many people didn't know that, even from day one we had our API, our API's about 10 times faster than any other API on the market. When the professional traders use API's, they measure this very carefully. And I've had multiple reports mentioned by our clients against multiple exchanges, we're far faster. We actually-

Charlie
Okay.

CZ
We’re actually faster than CME on the API.

Charlie
That's unbelievable. And, funny story, I know this is supposed to be your untold stories, but I'm going to tell you an untold story of mine. It's so interesting that you say that because... so for my listeners, the API is, basically, what allows two different companies, or two different pieces of software, to talk to each other.

For example, a very example is if you have your own trading software on your computer and you want it to connect to your Binance account, your software on your computer can say buy, sell, deposit, withdrawal, an API are the endpoints that allow your software... or any software to connect to your account on the exchange. And this is very important because it allows for all these different companies and the abilities to talk to each other. They are the translators, or interpreters, and the connectors of the software world. The single most important thing.

CZ
Back in 2013 and 2014, when I was running BitInstant, the API's of exchanges were shit. Mt. Gox API was shit. Every API was so bad. When I actually sent you that email about the API, I was so flabbergasted and so excited that you actually took this seriously. And I was asking you such dumb questions. I was like, "Can the API even rate limit?" You know? And you were like, "Well of course it can." You know? Back in BitInstant, not only did we have to build the API's for the exchanges, my developers... Imagine that, imagine you having to build the API for a company that you want work with. But I had to build API wrappers too. It was insane.

CZ
Sure, yes. So basically, we took API's very seriously, and we understood that the serious traders really need to use that API. That's one aspect for numb... our second aspect is, typically, back in those days, any exchange you use, you submit a sport ticket. You wait for months and this is-

Charlie
I'm still waiting for some sport tickets from some companies, by the way.

CZ
And this is a financial trading platform, right? So I thought that could be improved. So with that... and that's quite easy to improve but it's easy in a way, but difficult in another way. All you've got to have is the right mind set, so I told my team, "Look, we have to respond within 24 hours for the next three months. And after three months, I want our response to be within the hour. What do you guys need?" And the team says, "Oh, we need to hire a bunch of people." I said, "Go ahead. Go hire a bunch of people." That's all it took.

So now the customer support in the Crypto industry is much better. All the other exchanges have caught up. That's also very good for us.

Charlie
You had to raise the bar?

CZ
Yeah.

Charlie
For the-

CZ
Yeah. It's not so much "raising the bar," it's that the... even Poloniex and Bittrex, they had very small teams, right? They were all just a new... Everybody in Crypto is entrepreneur project right now. They were just very early days. So even today, we're still all early days and the teams... Today the exchange is a little bit bigger but we started two years with a very small team. So, I think it was just early days in the industry, the growth is natural.

Charlie
How big is the staff now at Binance?

CZ
We are at 500 right now if we count all the guys who are taking a salary, per se. Yeah.

Charlie
That is unbelievable. Is there one place were a majority of people are located or you really are very distributed?

CZ
We are very distributed right now. Our worse is like everybody is traveling in some capacity, so they move around quite a lot. I don't... it's harder to keep track of where people are.

Charlie
You know what you need? Uber has this "God Mode," where they can see all their cars. You need the ability to look at a map and see all your staff in real time, wherever they are.

CZ
I think my answer-

Charlie
An invasion of privacy right there.

CZ
So I think my answer to you is very similar to the previous email that I responded. We actually don't want to know, we don't want to know where they are.

Charlie
So, that goes into your mindset, right?

CZ
Yeah.

Charlie
And I want to ask you where you got that mindset because most people I talk to, I have guests, and they're from East Germany, they're from Ukraine, they're from Russia, they're from Cuba, they're from all these places that information was very tightly controlled. You grew up, from what I read, and your family... you actually had to leave China because of information with things that your family was saying or was perceived to be. So from a young age, you really understood the concept of having free information and privacy?

CZ
Sure. I think on that part my personal experiences, or childhood experiences, actually do matter. They do, in fact, impact me. I lived in four different countries... lived, like for years, in four different countries. More than five or six years in each country. China, Canada, U.S, New York, and then Japan, Tokyo, and also in Hong Kong, and now in Singapore. Having that kind of... even when I was young, I calculated it, I never stayed in one city for more than five years.

When you're moving around the world like that, then you understand that the currency is localized to one country, and even language is localized to one country, but we live in the same world. So having that worldview and having more exposure to different diversity... Canada is an immigrant country, so you've got a lot of diversity there. In being able to interact with many different people, you understand that, #1, you don't have a strict mind set of "Okay, this is the only way of doing things." You kind of get used to the... so when I learn about Bitcoin, I got it right away. I was like, "This will be very useful for cross water payments, taking money from country to the next country, etc."

Given that sort of migrant experience, I was never really into centralized control. So, when I saw Bitcoin, it was like, "This is great." And even for Binance today, I'm more of the public figure. I take way too much credit for the success of Binance, but actually the team is fully decentralized, but the team should take a lot more credit. Interestingly, none of the team want to be too public, so I'm kind of forced to be the public guy.

Charlie
I understand that. And I know people that talk about the company, and they know that you do give a lot of credit to your team, you do tweet about them a lot, and you do give your team a lot of credit. I think what you've set is a standard that anyone who wants to work for Binance, at least. It's like working for Apple, or Facebook. Well, I don't like to use Facebook as an example, right? Not anymore.

Facebook's not the good example anymore. But seriously, your staff that you've built, I feel like they're proud, Right? They're proud to work for Binance? They're proud to be a part of this revolution because, at least from the messages that I see, and again I'm... and always tell me if I'm wrong, but from what I see, the message that you perceive... that you tell your staff is that, "You're not just working for this company," is that "you're in the army of this next level industrial revolution."

CZ
Yeah, so the message I typically tell my team is, "It's not about working for the company, or maximizing profits for Binance, or making Binance stronger, or whatever. It's just a mission that we want to carry. So, the mission is to increase the freedom of money." I think that anybody in Binance... most people who join Binance, I would say... for a large percentage of the team, that mission is a very big component of why they're here, why they do the things they do. And they work super hard for that mission. Yes, they do get paid, they do need to live, they do need to pay rent, they do need to buy food.

But I think having that agreement of that mission, and once they're in the team, they do see that we are, even the decisions I make, are not always optimizing for our shareholders and we actually don't have a lot of them now. We actually more optimize for the mission. I think having... when you're running a decentralized organization, when you don't see people everyday, they could slack off if they want to. But I think it's very rare occurring that none of the Binance staff slacks off.

Not only even the paid team members, we have a very important group of people who are volunteers, who don't get paid but they work more than full time for just volunteering, helping the community, helping Binance. Those guys who really have strong beliefs as well.

I think it's that belief, and that mission, that ties people together. We have to really execute it as well, we can't just say it. So a lot of-

Charlie
How?

CZ
So, a lot of decisions we do are really user driven. I'll give you an example, right?

Charlie
Tell me an untold story.

CZ
Sure, sure. Many people don't know this story. In September 2017, we launched for about two months, we raised $15 million US dollars two months ago, but we are not operationally... we are not as profitable as we are right now. I think we just kind of break even. We spent a bunch of money, and then the Chinese Ban news came out. And the Chinese government demanded all the ICU projects to return the investment of funds to the investors.

For Binance, ourselves, we don't have that problem because our coin already went 20x. And no one wants to get the original Bitcoin they pay.

Charlie
So the Chinese government's saying, "Give everyone their money back." And all the users are saying, "We don't want our money back."

CZ
Right. The Chinese government news caused many other projects to go [inaudible 00:21:00]. So we've helped full projects to do ICO's on the Binance platform back then. And all of those are underwater. Of course, all the investors are demanding to be made whole, and the project team doesn't have the money to make them whole. We did the calculations, and we came up with... the gap was $6 million US dollars in total.

We had a very quick team decision... meeting, it was about 5-10 minutes. And them we anonymously decided we'll take our own money, $6 million out of that $15 million that we just raised, and make those guys whole. This was for four projects that were not related to us. Well, we facilitated some of the ICU's, but they're independent projects from Binance.

Charlie
Why did you do that?

CZ
That's part of protecting the users, right? That's part of our ethos we used to say, "Look, we've returned the funds. We want to make them whole." So, we did that in China and when we announced it, we got such strong support. Most non-Chinese users don't know this, but the Chinese users all know this. And tied together with the Chinese government trying to shut down the other Chinese exchanges, guess where all the users went? They all came to us.

That story... for me that's the highest percentage of one time payment, in terms of percentage of funds we have. That's the highest amount that we have paid in one shot, much bigger than the hack we experienced two months ago. Even though the absolute amount's much bigger, the percentage wise, that's more than a third of our funds at the time. And we did it. There's a lot of those really hard decisions that we actually made, but when we made those decisions, we do follow our [inaudible 00:22:48].

We're not purely money driven, and I think that... when you have to make those kind of real actions, and then people understand you actually do mean your mission, they follow you.

Charlie
If you had raised $15 million dollars from investors, they would not have let you have done that.

CZ
Well, that's the other thing, so if we raised that-

Charlie
100%.

CZ
Absolutely not. If we had a board with institutional investors, and #1 we'd had to of had a board meeting, which would take like a month to organize, and then they would all absolutely say, "No." But because we rai... we did an ICO, we don't have a board, we're kind of a pure crypto project. And it was just a couple team members... well, a few team members getting together, the meeting was less than ten minutes.

Charlie
That was almost half of all the money that you had back then-

CZ
Pretty much.

Charlie
And you decided to bail out... I'm still trying to wrap my head around this. Were you fearful for the team, itself, or were the team members of those four projects in China and you were somewhat fearful for them?

CZ
No, actually. None of the team invested in any of those projects themselves. So-

Charlie
I meant the team of those projects. Were any of them in China that you were worried that they'd get in trouble if they didn't return their money?

CZ
No, I think the teams are okay because most of the teams... even all four of those projects, they were actually able to return close to 75-80% of them funds to investors. That's already pretty good by any standard at that time.

Some of the projects just took the money and ran away. The four projects are still around, they returned 80% of it. But then there was a gap, so we just made up for the gap. It was not so much protecting the project teams, it was really just to... we didn't want our users to get hurt by some random news that just came out out of nowhere. So that was just to protect our users, really.

Charlie
How big was the company back then at that point?

CZ
At that point we were about 40 people. We were hiring very aggressively, but we were about 40.

Charlie
Tell me... so you talked earlier about motivation, and so motivation of... of people being motivated that they're part of this mission is definitely something that is important. I've had experience running a decentralized company, and I've ran companies that were based in one office, and I personally find that while it's great to talk about running a decentralized company, in practice it's extremely difficult. For people that are trying to do it, for the listeners that are doing it, what advice do you have to give? I mean, tell me, how is the management style done? Do you have layers? Do you have managers? Do people... do you have a hierarchy?

CZ
Right. So the decentralized organization is really, really tricky. It sounds really good when you talk about it, but when you actually run it, as you said, it's very, very tri-

Charlie
That's what I mean, yeah.

CZ
It's extremely tricky for a number of reasons. When we had 40 people back then, everyone was sitting in one small room. We had no blocked off offices, we had one meeting room everybody shared and you can just yell at the guy... and also just sitting there you know what's going on. Where as today, especially when I'm traveling, I don't know what's going on at all. And the way to solve that is you have many, many different chat groups, but then you get overwhelmed with chat groups, right? There's so many groups, so many groups-

Charlie
Yeah, I'm already overwhelmed with my chat groups right now.

CZ
Right, right. And even the chat groups don't work as well as in person communication, right? You don't get to see the guy. If you do those for an extended period of time, the team cooperation degrades. And there's more conflicts because there's more miscommunication. There's more room for misunderstandings, lack of communication. And then when you do want to fly everybody together to meet them periodically, it becomes very expensive. Actually much more expensive than renting offices. It's actually very tricky to do right. One of the things I fund is... the passion of the people helps, number one.

The personality types of the team members helps. If you have guys who are very strict, who are very self centered or arrogant, even if their technical skills are very strong, they usually breakdown any decentralized organization because-

Charlie
What qualities do you look for when you're interviewing to know if this person would be good fit in your decentralized organization?

CZ
Sure. So, internally we actually have three words. We look for people who are hardcore, who have a very strong inner calm person, who overcome difficulties to get shit done. The second word is we look for people who are humble. If you think you're a really hot shot, and if you think you are always right, if you think you're above everybody else, then that doesn't work in our organization. We want somebody who is more down to earth, even though we want you to be technically "strong," we want the attitude to be very humble. Most of the team doesn't brag the into the outside they're part of Binance, etc. The third word we use... we look for freedom seekers. So the guy have to want a lot of... have to seek freedom.

Charlie
Freedom seekers.

CZ
Yeah.

Charlie
I love that.

CZ
We found that the combination with those three qualities fit Binance best. We actually did the brainstorming session to come up with those three words because we tried to figure out why some people work for Binance, some people don't. And it came down to those three simple words, and that works quite well.

Charlie
Over the course of the company... when you launched you were a Crypto only company, you still vary... to most of an extent you are. And you had an opportunity to really, not only have your team, as we've talked about, be decentralized but your whole company to be completely decentralized. What we've noticed, and what has happened also, which is a very good thing, is that you started connecting with governments. I mean, it looks like you're best friends with the Prime Minister of Malta. And you pave the way for the licensing scheme over there, and for the summits, and the connections to the governments, and I assume that you talk to other governments. When other Crypto only companies have decided to say, "We are crypto only. We don't want to work with the government. We don't want to do any of that."

Even though you're freedom seeking, and even though you have a sour taste in your mouth, I feel like, from growing up, from family history. Why did you decide to be proactive and to work with various governments in moving this Crypto space forward?

CZ
Sure, sure. I think there's a couple aspects to it. The first aspect is, basically... personally, I'm not an extremist. I'm not pure Libertarian, I'm not pure decentralization-

Charlie
You don't like labels, 100%-

CZ
No. I think there's a balancing life. And being an extremist is just not my personality, it's not effective neither. The second point is, really, the effectiveness. What's the most effective way to get things done? To push things forward, to move things forward. Even though, I do very much like decentralization, I don't think we can go from the society we have today, and the technologies we have today, to purely decentralize everything running in thousands of laptops, over a thousand times, in one step.

So, I think there's small steps we have to take to get there. We want to increase the level of decentralization today, and we want to increase the freedom of money... I do believe that the currency we have today are way too restrictive, too limiting. I want to achieve that goal in the most effective way.

And the most effective was is not so much I'll make the most decentralized app that nobody uses, or nobody knows how to use. We've got to be very programmatic about it. The key is actually to making things that people will use, and that's one step more decentralized.

Charlie
Well there's a trade off-

CZ
Yeah.

Charlie
You know between privacy and security, and user experience. It's like a lever: as the user experience goes up, privacy and security goes down. And like you said, as decentralization privacy go up, user experience go down and no one's going to use it. So, where is the balance? Where is medium?

CZ
So, the balance is, in a very simple way, is to increase the decentralization, and freedom, and privacy, one step so that we'll still make a large number of people use it. If not a large number of people use it then the effectiveness of your work is not that high. So, that's kind of always my mentality.

We got very lucky with Binance.com when we set... well, even though Binance.com, itself, is a centralized exchange, we promoted the availability... we provide the liquidity for decentralized tokens, or coins. And we have a large number of users, so we provide a very valuable service. So, that's good.

Then I look at the next step is... well, in 2018, there was all these concerns about regulatory issues, etc. In the position we're in, we said, "Well, we have to help with that as well." Then I look around, I said, "What's the best way to help?" If I tried to talk to some of the bigger governments, I don't even know who to talk to because the government is so big in big countries. There's so many different departments, so many offices, so many different people, right?

Where as if I talk to, let's say, the government of Malta, very quickly you can identify the prime minister, the guy in charge of the Blockchain technology initiative in the government. And if I talk with the... if I went to Bermuda, I'd talk with the premier there directly.

So, it's not so much I choose them, it's that we kind of choose each other, right? I felt that by going to those smaller countries, I'll be most effective. And having a number of small countries accepting Crypto, and Blockchain technology, and accepting and welcoming businesses like ours helps industry. I just felt like that's the most effective thing to do. So, I went out there, and we had the means.

Those guys were... there were people introducing us to them, introducing them to us. We had the opportunity there, so we just took it. I flew around a lot in 2018 meeting head of states everywhere. So, there's a lot of guys I have not publicized because, either they're slightly negative, or they-

Charlie
Sure.

CZ
Or we haven't progressed far enough. I mean, we just do whatever we think the most effective things to push this industry forward.

Charlie
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What's your favorite experience meeting with a head of state? Were you ever just saying to yourself, "Here I am, in my shorts and flip flops, talking to a prime minister," or something like that?

CZ
Yeah, I think that the Bermuda show's definitely, has got to be the best experience. I mean, I got off at the airport, I got picked up by the premier's protocol, which is basically one BMW 7 Series. What's really interesting is the driver who got out... it's just one driver, that's the protocol. The driver got out, he was in shorts and really high socks. I was like, "That's kind of an interesting outfit."

And then I went to meet a couple other guys first, and the guy who was supposed to be my, I guess my handler, or my... the guy who was taking care of me, he's in a shirt, suit, and shorts, and high socks. I was like, "Wow, that's interesting."

And then he's like, "No. This is formal wear. This is Bermuda formal wear."

I was like, "I've got to get into those." So we went to a store, buy that. That got so viral because a lot of people still don't understand that that's the formal custom in Bermuda. But, it's great. It is a really fun experience.

Charlie
Do you still wear it?

CZ
I still have it. The Bermuda shorts are very strict, you can't have too many pockets in the shorts. And the socks have to be no further than two inches away from your knee, so it's got to be high socks. So no, I don't wear those high socks. I do wear those shorts all the time.

Charlie
You can't really walk in high socks in Singapore, or wherever you are in the world. It won't really make any sense.

CZ
Yeah, that would not make sense. But the custom is very comfortable because Bermuda is very hot. Yeah, it's very comfortable.

Charlie
When you travel around the world, do you wear flip flops or do you wear shoes?

CZ
I wear-

Charlie
And there's a reason I'm asking this.

CZ
Yes, of course. I'm in flip flops right now and when I travel-

Charlie
Okay.

CZ
I'm always in flip flops. It's very-

Charlie
So-

CZ
Yeah?

Charlie
You and I are the same in that we both wear flip flops religiously. In fact, I'm trying to actually launch my own flip flop line called, "Fancy Flops." So, if you want to launch it with me, we could talk about it later because I feel like... I'll tell you a funny story too, I was in Dubai and I was trying to get into a very fancy restaurant in flip flops, and you'd think out of all places in the world, in Dubai you can get in because everyone is wearing sandals, right?

I'm standing at the door with my wife and the guy won't let me into the restaurant wearing flip flops, and all of a sudden, another guy walks by me in sandals. And I said, "Well, how come he can go in?"

And he said, "You're not Emirate."

I was like, "oh." I couldn't get in because... but I wear flip flops everywhere. I'm going to a wedding next week, I'm going to be in a tuxedo and flip flops. And, you know, I met with Anderson Cooper and I'm wearing flip flops. The reason I do it, and tell me if you agree, the reason I do it is... well, 1. it's very comfortable and I like when my feet can breathe. But I think realistically, I do it, and tell me if you agree, we do it because we can.

It's like a constant reminder that we have to work really hard because if we don't work really hard, and I'm speaking for myself, if I don't work really hard every single day, then I'll have to go back and work for a real company where I'm going to have to wear shoes.

CZ
Right. I definitely agree with both of those things. And I also, I have so many... I couldn't tell you how many experiences I've had where I show up in flip flops to a restaurant that said, "No. You can't go in." And I just turn around and walk away. I have so many of those experiences. I think... I totally agree. For me, the direct feel is comfort, right? So your feet can breathe. But then there's an underlying thing where we have that freedom, we do use that freedom, but also we do remind ourselves that we're still down to earth.

Charlie
Do you wear good quality ones because if you're walking on these shoes all day, you have to make sure that the quality's good. I wear OluKai's because they have the arch for the middle part of the foot.

CZ
Okay.

Charlie
It's a really good... and I also wear this other brand called, "Hari Mari." And I'm giving them like free sh... they're not my sponsors, I just love their flip flops. They're not cheap, they're like $200's, but it's worth it because I wear them every single day.

CZ
Right. I think the pair I'm wearing is, Skecher's. It's very soft.

Charlie
Skecher's?

CZ
Yeah. It's a bit cheaper than the ones that I think you mentioned. I don't know. I'm usually not that picky but they're pretty comfortable.

Charlie
Alright, good. As long as they take care of your feet because your feet are the most important things... someone wise once told me, "Make sure you take care of your feet because without your feet you can't really do anything."

CZ
Yep.

Charlie
Okay. Not talking about flip flops anymore. I want to talk about BNB. When BNB originally launched, there was a utility for it, right? And there was a reason you had to launch and grow the company. A lot of projects launch a token, and you know, I think, better than 99% know, that they just forget about it.

They don't care about the token holders. They don't care. One would argue that Binance Chain, Binance Coin, the whole Binance ecosystem is probably one of the only projects of the top 10 that really is giving utility and giving value back to token holders. Why?

CZ
I think it's very simple, right? You issue a token, people invest, people buy it, mostly because they believe in you. So, you do want to return the value. And the best way... historically, I think even today, not historically, we still have the #1 priority for any organizations to maximize shareholder value. I don't believe that.

I believe in maximizing the community value, the people who use you. Well, shareholder value is okay, but we got to view token holders as shareholders, not just purity equity shareholders are shareholders. So-

Charlie
That's a big change in the thinking.

CZ
That's a huge change. Given that we are able to raise money using tokens now, using Crypto tokens. The users are your investors. Before, we had…as your investors, and they're not your users. And your users are paying for a service in one way or another, either directly or by selling the data to advertisers, and then you monetize for the VC's.

That motto is kind of old and should be going away. The new motto is, "Your users are your investors." And also, they are paying you directly in Crypto for whatever service you render to them. There's a very simple, direct micropayment type of model. So, every transaction should be low cost.

As long as you have a large number of transactions going on, the whole ecosystem works. If you have that kind of mindset... there's a very big difference in the two different type of mindsets. The traditional way is, "Okay. We want to maximize shareholder value, so we issue a token... we want to sell all the tokens to the other people, the retail guys, or the users." We sell all of them, we take BTC back and we sell them into US dollars and then we give that to our BTC investors. That's called "the maximizing shareholder value."

That motto, I think, will be out very soon. The new motto is, "Okay. We don't really have a lot of BC investors and we focus on increasing the value of the coin." And the best way to do that is increasing utility, so more ways to use it. So, Bitcoin-

CZ
Bitcoin does this really well in a decentralized way. And we try to copy that, right? So, from airline tickets, to coffee, paying for trading fees, working apartments, loans, we are building an ecosystem around BNB.

It is my belief that, in the historic way, you can build a company IPO and monetize on the equity part of it. But, in the new way, the company equity... even though, in the early days the company equity maybe the higher value of... because it's very hard to build an ecosystem, but if you do build the ecosystem, let's say you have hotels accepting your coin and you have travel agencies accepting your coin, you have new project coming up thus raising BNB... that ecosystem can be a hundred times, or a thousand times bigger, than Binance.com.

And then the BNB value will be high, if that ecosystem is large, and that's bigger than the equity of the company so it's not just about one company. I think there's a new, very different type of thinking that goes on for this new type of Blockchain abled businesses. I think a lot of people doesn't quite understand that fully yet.

Luckily, we see this a lot. Number one, we did the Binance thing ourselves. Number two, we see a lot of different projects going on around us through Launchpad or other things. So, we have a different mentality.

Charlie
Every question that I've asked you, you've had a really good answer where you've basically said, like you just did, people don't really understand it. We were the first, and we did it, and now a lot of people are doing it, and it's grown, you're trailblazing.

You are literally... it's like you're walking through a forest, and there's no path, and you're walking through a jungle, and you have a knife, or a sheath, or whatever, and you're chopping down the trees, and you're creating a path. That's literally the best analogy I can think of.

If you imagine, now somebody's going to make a meme, by the way, of you in a jungle with a big knife going through... but, you know, for a second, you're walking through this jungle, from an outside perspective, it looks like you already know the path. It looks like you already know what direction to go, and which trees to chop down, and which plants to chop down, and which to... it looks like, from your answers, it looks like you're already... it's like, "Oh. This is so simple that how could we not do this?"

A paradigm shift, and going from equity value to token value. Yeah, it sounds great now because you proved the theory, Dude. You proved it. But before you did, people would call you crazy. How do you know these things? Are you just really good at winging it and saying like, "Oh. If I fail then who cares?"

Do you not care about failure that much that you can just say, "I'm going to try, and if it doesn't work out, who cares?" Have you made any mistakes in that?

CZ
Oh, yeah. So, number one, I think the chopping through a forest is kind of a good analogy. And-

Charlie
Don't steal my analogy.

CZ
Yeah, I won't. And also, we never... we don't have the ans... It's never like we knew the path before. It was really going through a jungle, we don't know where the path is, we kind of know the general direction, we want to get to the top of the hill somehow, so we're kind of walking upwards. But, sometimes we will get lost. We also make a lot of mistakes.

I think, for me personally, it's very much a trial and error So, I tell my team that we want to spend 2% of time on decisions, and 98% of the time in execution. And I also tell them as long as we don't make completely stupid decisions... for example, if we have a path that's going forward, that's the direction we want to go, but then we make a decision kind of in the wrong direction, we go sideways for a little bit. But as long as we can recognize it very quickly, and then make another decision to kind of curve back, that's okay.

So, we do a lot of those kind of things where, to the outside, they may or may not know a lot of the mistakes we made. We made so many mistakes. I can go on for days talking about the different mistakes we made. But, the key is not to make a big mistake. You can make many small mistakes, and you... so, basically, if you chop down a tree and sees there's no path afterwards, then you got to try a different way. So-

Charlie
You got to turn around and go back.

CZ
Yeah. A lot of stuff that even I'm talking about now, maybe I didn't fully understand them a year ago, even. Not to mention that when we started. When we started, we wanted to go the VC route first, and then some guy convinced me to do ICO thing. Yeah, it's all learning in the process.

Charlie
Who convinced you? Well, you don't have to name him specifically, but was he someone close to you? That's a big decision.

CZ
Yeah. So, I went to a hot pot dinner in Chengdu in China, and it was organized by [Chen De lo Khoa 00:48:10], he's now in the states. Oh, he's so-

Charlie
Oh, he's a great guy, yeah. I know him very well.

CZ
Yeah. So, he's fairly famous in China and he was into ICO's much earlier than I am, and he's a good friend. He organized the hot pot dinner with 500 people attending. [inaudible 00:48:29] was there, Zhang was there, a bunch of like... Bobby from cyrpto.com was there. 500 people in a big hot pot restaurant.

He paid two BC for it that night, and then everybody's talking about, "ICO's. ICO's." And I told him, "Well, I'm thinking about doing the Crypto to Crypto exchange." And he's like, "No. You got to do the ICO. You got to do an ICO." So, it was that night.

Charlie
Wow. Does he know this story?

CZ
Yeah, he knows this story. And I asked him to be my... what do we call the... the visor for ICO. He's supposed to get a portion of BNB for him being an advisor. He now donates all of that to Binance charity.

Charlie
Wow.

CZ
Which is a huge[inaudible 00:49:16] today. Yeah.

Charlie
What's the plan with Binance charity?

CZ
Back in 2014, I wrote... even when I was in Blockchain.info, I wrote the little article posted Git Hub. You can still find it on Git Hub, dated 2014. I think Blockchain is a very good tool for charity because it allows the transactions to be tracked transparently. Back in 2014, I kind of had this idea that if you marry the Blockchain technology with charity, now you can do 100% transparent charities. All the way down to the end beneficiary.

The requirement is that everybody in that process needs to use Crypto. Which is also very good for Crypto because now that's education and adoption, right? Well you're helping people, you're giving money away, and those guys should be incentivized to learn about Crypto. It will be a very positive experience for them. Their first experience with Crypto will be a very positive one, so instead of, I don't know, back a few years, people will say the…all this stuff.

At the time, I didn't have the means to push it. I didn't have the resources and I also didn't have the influence. So, when Binance took off and became the largest exchange, I suddenly realized that now we ways to push it. And I'm meeting with Presidents, Prime ministers, Head of States. I said, "Well, now we can push this." The goal is really to increase the charity, so we can make a 100% transparent charity.

The transparency solves two problems for charity. Number one is the corruption. You eliminate any possibility of corruption, potentially. Number two, more importantly, you encourage people to donate because there's more tangible results. You can see which school that your funds went to, which kid in Africa you help directly, you can see the kid's face. That tangibility makes people want to do charity more.

For the Blockchain, for ourselves, for our industry, and for myself, this is a very good way to increase adoptions. I think, in Africa so far, this year we have helped more than 20,000 kids. In a few year time, when these kids grow up, they will all know Blockchain, and they will have a positive connotation to it. This education, adoption, and when the industry gets bigger, hopefully Binance will also, and everybody else in the industry will also benefit. So, for me it's a no brainer, it's just that... luckily, now we have the resources to do it. And very luckily, I ran into one of my old friends, Helen Hi, Who is really, really good at this. She completely took this and made it really good.

It's just one of those things where you try it and it worked.

Charlie
What's the future for it? I mean, what are you... where do you... do you see decentralized charities becoming the next way all charities operate?

CZ
I definitely think so. I'm not sure if all charities have to go on the Blockchain, there are some very well run charities without the Blockchain, but I think with the Blockchain is so much easier. So, I do think it will get pretty big. We are now helping about 100 schools in Africa and we're launching a second program to help with female hygiene, basically, we call a "period poverty." We donate tampons for girls in Africa to improve their hygiene and health. So, that's expanding very quickly now.

Charlie
My email and chat inbox is maybe 2% of what yours is like on a daily basis. How do you manage it?

CZ
Honestly, I don't look at emails that much now. Everything is more chat based, so I do have almost every chat program available on the planet installed on my phone. There's a couple I use with internal teams, which I check at a very high priority, and then the external ones-

Charlie
Don't tell people because then they're going to find you on there.

CZ
Right, right. But, I'm getting pretty good at ignoring the number badge. And then the others, I just try to respond once in a while. The place where I'm most active is on Twitter, publicly. I find Twitter works the best for mass communication with engagement with our users.

Charlie
Your funds are SAFU.

CZ
Our funds are SAFU, yes.

Charlie
It's great how you took something like that, and you rolled with it. It seems like that's your personality. If something happens like a mistake, or a basic thing like how you pronounce a word or spell a word, you run with it. I mean, do you have other mistakes that you've made that you say, "You know what? I'm just going to run with it and I'm not going to try to correct it."

CZ
Yeah. Well, that's kind of my personality. I'm a very laid back personality. I'm not... I think I'm not super arrogant. One guy described it as "rolling with the punches." So, I think that kind of describes my personality quite well. And the "SAFU" thing, actually it was not my pronunciation. It was a guy made a YouTube video about "funds are safe," and then he used the Japanese pronunciation. I guess the guy thought I was Japanese because I go to Japan. I did live in Japan for quite a while. And the Japanese pronunciation is, "Funds are safu," and then it was repeating and repeating and repeating.

Then on the next... so, I really like that video, and on the next upgrade, we said, "This is a big upgrade from the safu," with a F-U. And then the company team really liked it. So, I think it's fine. I'm pretty a pretty... I have a pretty good appreciation and tolerance for jokes. I love them.

Charlie
So, was it a mistake? OR was it on purpose?

CZ
My one was not a mistake, that was on purpose. And I was promoting his video and the guy [inaudible 00:55:26]. So, it was like an inside joke for the core company team, who've seen that video. That video is quite viral, but not everybody saw it. The guys who saw it liked it right away and we promoted that video a number of times, and the video is still up there.

Charlie
What's your main focus on what you do everyday? I mean, are you acting as more of a chairman? Are you working on vision? Business development? Are you managing the team? I assume you have good manager's that manage day to day options. What motivates today? What are you working on today? Tomorrow? Next week?

CZ
Sure. I'm still more involved on the technical product side. The strategy, or the vision, for the technical product side. I think, basically, on the day to day operations, I don't get involved at all now. Today if there's a system problem, if the system's lagging, or stuff like that, they don't even wake me up. They just handle it.

They'll only wake me up if they want me to Tweet something, that's all. On the marketing side, on the investment side, on the listing side, in all of those groups, we have very strong teams. Even on the technical side. I kind of spend more time just sort of visualizing what kind of bigger products we want to do, or not do. So, like Binance Stacks, I spent a little bit of time on that, just sort of at the higher level direction level, not coding.

For example, they were debating, "Do we do multi-signature feature first or do we do privacy [inaudible 00:57:04] feature first." It's those kind of very high level discussions. And then, the rest of the time I spend just sort of cheering the team up, basically.

I actually don't do very much now. The team's pretty strong. The team's pretty self-sustained.

Charlie
One last question I wanted to ask you before we end, I... what happened to your original Twitter account? Because you talk about Twitter, but in that old email signature, you had a different Twitter account. And when I checked it, it said that it was suspended?

CZ
Yes. I believe it's because... So, I had my old Twitter account, which I kind of was trying to grow, and I though I had a very large following, which was about "16k" people. But, one day when I was trying to change phone numbers, I took the original phone number off, and the account got suspended. I couldn't get it back. I tried to email support... I just couldn't get it back.

And then, in August, 2017, after Binance launched, I was like, "I'm just going to have to start a new Twitter account." So, I started a new Twitter account. It was unfortunate, yeah.

Charlie
I wonder if we can call up Twitter and get that old account back, un-suspended.

CZ
I probably can, but I don't know how to migrate the current followers to there. Because now I have a much bigger following.

Charlie: No, you can't. But, I think, I'd love to see the tweets. I'd love to see what you said. I'm probably going to go and figure out a way to read them, I'm sure people would want to know what you said before Binance. It's probably very interesting to read, it's like reading things that people said before they became famous.

CZ
Right, right. I actually didn't tweet that much. I was tweeting a bit for Blockchain.info, I was tweeting a little bit for OKCoin, but I wasn't a very heavy Twitter user. And I've only became a heavy Twitter user recently. Even-

Charlie
You taught Donald Trump how to tweet, right?

CZ
No. If I taught him, he wouldn't tweet that.

Charlie
Dude, thank you so much for coming on the show. I really appreciate it. I hope to meet you soon. I don't need to tell my users where to find you because they already probably do. You're at Twitter, at czbinance.com, BNB, Binance Charity, so many projects that you're involved in.

Thank you so much for being a part of this ecosystem and coming on the show, I really appreciate it.

CZ
Yeah, thanks. Thank you, Charlie, for having me. And yeah, I'll see you soon.

Charlie
Hey everyone, thanks for listening.

I created "Untold Stories" to preserve the history of this Crypto Movement. And tell the stories of the people, and how this movement really came to be.

So, I really want to take the time and thank my first sponsor, Scott Offord, who is a Crypto-Mining broker. Scott helps people buy and sell their Crypto miners. Scott also created a free Bitcoin mining profitability calculator and an interactive ASIC hardware comparison chart that you can find at cryptomining.tools. That's www.cryptomining.tools. It's a free online tool for calculating profitability and Days to ROI that includes the impact of the "Bitcoin Block Reward" halving.The mining profit calculator let's you put in your estimated uptime to give you more realistic profit projections.

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