Blockchain, Cryptocurrencies, and Startups: Bill Tai’s Vision for the Future
I have a few people I admire and want to meet, and one of them is Bill Tai, whom I interviewed this time. He is the angel investor behind Zoom, Canva, and Treasure Data. The first time I saw him was on stage at the NFT NYC conference in New York in 2021. I was deeply impressed by how, at the Milken Institute — often referred to as the “Davos of the financial world” — he invited Nadya Tolokonnikova, the lead of the Russian punk band Pussy Riot, and introduced her example of using NFTs to raise funds while fighting for political and human rights issues. Tolokonnikova had been fighting against oppression in Russia, spreading a message of freedom and the right to expression through NFTs. I was struck by Bill Tai’s approach of bringing a punk band leader to a prestigious financial conference, as well as his keen eye for the future. What kind of worldview does Bill Tai have? The way he lives embodies a “punk and hacker spirit.” During the interview, a thought crossed my mind — could Satoshi Nakamoto, the creator of Bitcoin, have been influenced by Bill Tai?
When Bill Tai arrived at our meeting spot, the first thing that caught my eye was his signature cowboy hat. At the same time, I noticed his DIY-style smartwatch. I asked, “What is that?” and he told me to search for Clockstar. When I searched, I found the website for CircuitMess, the U.S. equivalent of Japan’s Gakken. They offer monthly kits that let you build not only smartwatches but also Game Boy like device and remote-controlled cars.
While browsing the site excitedly, Bill Tai shared a childhood story about how he first encountered electrical engineering. For his 9th birthday, he received the “100 in 1 Electronics Project Kit,” sold by RadioShack, an American electronics retailer. The kit included springs with numbers, and for example, it instructed you to connect spring 3 to spring 8 and then spring 9 to spring 13. By bending the springs and attaching wires, you could easily build a transistor radio. As a child, he learned many fascinating things from this kit.
At the age of 13, Bill Tai read an article titled “Secrets of the Little Blue Box”, which sparked his interest in network technology. The “blue box” is a famous device that Steve Jobs and Steve Wozniak sold before founding Apple. At that time, the U.S. telephone system was controlled by a series of computer switches that communicated using a 2600 hertz frequency. In the 1970s, some kids discovered that after making a toll-free 1–800 call from a payphone and having the other party hang up, they could play a 2600 hertz tone into the receiver and manipulate the system to make free long-distance calls. This was a highly noteworthy hack during a time when long-distance calls cost $3 per minute.
Additionally, computer scientist John T. Draper, also known as “Captain Crunch,” discovered that a toy whistle included in the American cereal “Captain Crunch” coincidentally produced a 2600 hertz tone, allowing free calls to be made with the whistle. This episode symbolizes the hacking culture and technological curiosity of that era. Bill Tai became fascinated with this story, disassembled his RadioShack kit, and built a 2600 hertz frequency synthesizer, experimenting with various pay-phones. This was the beginning of his deep dive into electronics.
Later, he became an electrical engineer and learned to design computer chips. In the 1980s, he built his own PCs, combining Intel microprocessors, graphics cards, DRAM, and disk drive controllers to create functional machines. His business expanded from chip design to networking, and in the 1990s, he founded iAsiaWorks, an Internet Service Provider (ISP). This company grew into a data center business and went public in 2000. Bill Tai’s success story is well-known in Silicon Valley.
For me, his success as an investor is also interesting, but I am particularly drawn to his appearance at the NFT conference and his interest in blockchain technology. When I mentioned this to him, he told me that he views blockchain and cryptocurrency as an extension of IC chips, networks, interfaces, and data science. His connection to blockchain and digital assets began with “Second Life”.
Second Life, launched in 2003, is an online virtual world where users create avatars and freely explore, interact, and engage in economic activities. The platform features an economy based on a virtual currency called Linden dollars, and users can create content that shapes the virtual society.
Bill Tai’s Story on Second Life and Linden Dollars:
Bill Tai: “Around 2003, years before the wave of cryptocurrency hit, I had a friendship with Second Life creator Philip Rosedale. When Second Life launched, user engagement was low. I suggested to Philip, ‘Let’s create an economy inside Second Life.’ I used Las Vegas as an analogy — how a desert with nothing became a thriving economy with poker chips. In Second Life, I proposed that if everyone passed around $1 poker chips according to a simple rule, the economy would start moving. A currency could be the basis for the creation of an economy. That currency was named the ”Linden dollar”. Users can use Linden dollars to buy land, items, or services within the virtual world. The ability to exchange Linden dollars for real-world currency also became a key feature, supporting the economic activity within Second Life.”
“My avatar in Second Life has the name AlanGreenspan Golem (named after the then-chair of the U.S. Federal Reserve) as a tribute to someone handling monetary policy in an economy. The name Linden comes from the street where SecondLife was created — inside Linden Labs on Linden Ave in San Francisco. “
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Linden dollars were one of the first virtual currencies to enable economic activity within a virtual space. It’s fascinating that the man who also invested in startups like Zoom, Canva, and Treasure Data was a catalyst behind this innovation as well. Bill Tai has remarkable foresight, not only in SaaS startups but also in virtual currencies and virtual worlds. This story illustrates how Linden dollars introduced new ways of exchanging value online, potentially influencing the development of cryptocurrency.
While listening, I couldn’t help but wonder whether Satoshi Nakamoto was influenced by Linden dollars when designing Bitcoin. Linden dollars are centrally managed, whereas Bitcoin aims for decentralization, but both represent groundbreaking efforts in virtual economies. It’s clear that Bill Tai was a pioneer in the virtual economy with Linden dollars.
Bill Tai’s Venture into Bitcoin:
Bill Tai: “In 2010, over Thanksgiving weekend, I started learning about Bitcoin. The idea of building a decentralized economy using Bitcoin began to take shape in my mind. At that time, Bitcoin was priced around $0.07 and even though there were no liquid markets I could see the potential for a peer to peer method of value exchange. I started to look at pioneers implementing the bitcoin algorithm in silicon and around 2011, met the team building Bitfury and funded their 28 nm ASIC.
By 2016, BitFury was the largest mining company in the world with data centers over time in Iceland, Finland, Norway, Azerbaijan, Kazakhstan, Republic of Georgia, Canada, and the U.S. with a footprint that grew to be around 800 Megawatts With Bitfury I also created an annual Blockchain Summit in 2016 held on Necker Island, owned by Richard Branson. Key figures in attendance included the former chairpersons of the CFTC , SEC, the head of the digital currency initiative at MIT Media Lab and other prominent people in the US Justice Department. Many went on to become key players in the new industry or to evolve into government roles such as the Barbados Ambassador to the UAE. We discussed the importance of blockchain as a technology for catalyzing social good and the development of robust real world economies with its ability to indelibly record assets in a decentralized database and to enable low cost frictionless transfer. To me, decentralized blockchains effectively are like a TCP/IP for assets.”
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In 2016, I began to learn about blockchain at SXSW, just as Bill Tai was already leading the industry with his team at Bitfury and engaging with industry stakeholders. Listening to him, it felt like my own interests in cryptocurrency and NFTs were unfolding within the world that Bill Tai helped create. Blockchain is being used in various places and is undoubtedly a foundational technology. However, in Japan, cryptocurrencies are still treated as “miscellaneous income” and are often viewed with skepticism due to their volatility. Some say NFTs are entering a winter phase. How does Bill Tai view the blockchain industry now?
Bill Tai on the Future of Blockchain:
Bill Tai: “I am deeply interested in leveraging blockchain technology not only for cryptocurrencies but also as a tool to manage digital assets like NFTs. Adoption of this technology will continue to grow over time, especially in areas like digital certificates. As market liquidity increases and ETFs are introduced, blockchain will play a crucial role in financial markets.
However, I worry that cryptocurrencies may lose broad support if they are only associated with the trading of non-essential speculative assets. Too much focus on short term trading and speculation on the price of digital assets, with inherent volatility have led to a negative perception of cryptocurrencies. Bitcoin and other currencies should be trustless systems, but because most of those assets to date have been handled through centralized exchanges which have become points of risk, trust in the overall ecosystem has been impacted negatively. These issues stem from existing legacy structures, not the technology itself. Speculation is necessary for markets, but it must be kept in check.
I’m interested in the fundamental value of blockchain technology and the overall structure of currency systems. Historically, it has been rare for any fiat currency to last as a world standard for more than a couple hundred years. Rome’s currency and the British pound ultimately declined due to over-issuance by governments. Today’s cryptocurrency ecosystem is similar to the diverse currency systems of 19th-century America. Additionally, loyalty point systems like Starbucks’ prepaid cards and airline points are examples of alternative value exchange systems that look like currencies backed by goods and services and those ultimately could also be managed using blockchains in the future.
The introduction of cryptocurrency ETFs has made digital currencies more easily tradable and is establishing them as institutionally acceptable risk assets. Despite significant price fluctuations, cryptocurrencies will not disappear and will continue to influence the market. On the other hand, the U.S. government has a strong incentive to maintain its position as the dominant world reserve currency and continues to push for the regulation of cryptocurrencies. I am not opposed to such regulations; rather, I believe we should legalize this technology early on and explore ways to make it beneficial for society. While I am not interested in speculation, I believe in the potential of blockchain technology to positively impact society.”
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What I am focusing on is the large-scale systemic changes that blockchain and cryptocurrencies will bring about. This technology has the potential to fundamentally restructure existing currency systems and economic frameworks, and its influence is expected to increase. In particular, the introduction of decentralized organizations (DAOs) and transparent transaction systems will replace traditional centralized models, significantly improving trust and security. I am actively involved in projects like Dig DAO (a spin-off of the Japanese Digital Agency’s web3 research group) and am optimistic about the potential of decentralized systems. Bill Tai’s words resonate deeply with me as they are aligned with this vision of the future. His vision suggests how technology can transcend existing limitations and build a sustainable and fair economic model, which I am convinced is a realizable future.
Japan’s Potential:
Bill Tai: “In 2017, when the Japanese government temporarily legalized Bitcoin, I went to Japan and tried using Bitcoin for shopping at Bic Camera. Through this, I directly experienced how cryptocurrencies function in the real economy. Although the future of currency systems and the economy remains uncertain, I am confident that cryptocurrencies and blockchain technology will be at the center of this transformation. In particular, the approval of Bitcoin ETFs will accelerate the adoption of cryptocurrencies, encourage institutional investors to enter the market, and increase liquidity.
Bitcoin and other cryptocurrencies are currently viewed as risk assets, with prices fluctuating based on interest rate changes. However, the technology itself will not disappear. Governments and financial institutions recognize the importance of this technology, and I believe regulations will continue to strengthen. The U.S. government, for example, is monitoring the liquidity of cryptocurrencies through programs like ‘Operation Choke Point,’ but complete regulation has not yet been achieved. I am not opposed to such initiatives but believe that collaboration with governments to use this technology in beneficial ways for society is essential.
Moreover, Japan has great potential to develop business models that leverage digital IPs without relying on physical goods. For instance, globally popular digital assets like Hello Kitty could be managed on the blockchain as unique assets, leading to the creation of a new digital economy and the development of virtual economies like those seen in Second Life. The possibilities of cryptocurrencies and blockchain technology are limitless, and they will continue to impact society significantly. What I am particularly interested in is how this technology can be used not just as a speculative tool but as a socially beneficial one. By utilizing decentralized blockchain technology, I believe that asset management and transaction transparency and security can be greatly improved, opening up new possibilities.”
The question of how cryptocurrencies and blockchain technology will influence society in the future must be taken seriously as our own challenge. It is not enough to simply be affected by these changes; we must actively explore how to harness this technology to solve social issues. Blockchain is not just a financial tool; it has the potential to bring innovation across a wide range of fields, including healthcare, education, supply chain management, and digital identity. I am confident that this technology can build a more transparent and reliable societal foundation and address critical social challenges.
The rapid evolution of technology requires us to adapt quickly, finding ways to ride this wave and support its growth by building new business models. Visionary investors like Bill Tai are shaping the future by creating new frameworks in response to technological advances, transforming potential into reality. His insights offer essential guidance for navigating the emerging tech landscape, and I intend to keep learning from them. Science fiction is no longer confined to books; it’s unfolding all around us in real life.
This article is written for Forbes Japan. This is the English version.
