Today I chat with Eric McHugh, President of SHOPX about crypto adoption, usability and onboarding eCommerce merchants into Web 3 with token gated checkouts.
Episode Links
- Eric McHugh: https://www.linkedin.com/in/ericdouglasmchugh
- SHOPX Whitepaper: https://shopx.docsend.com/view/fhyi8uxed3j59nfv
- https://twitter.com/ericmchugh0
Show Notes
Gerbz: I know you're having a good day. I'm having a good day. Bitcoin tapped $73K this morning. Ethereum broke into $4K zone. We're getting early bullish bull market vibes going here. And with that bullishness comes a lot of emotions, and comes a lot of questions. Right?
Everyone wants to know, should they sell? When do they stop buying? Where are we in the cycle? I've been recording a lot of content about this over the last couple of weeks and I'm going to be putting it out over the next couple of weeks. Some of it's going to be more short form though. It's not all going to be like a perfectly crafted long form podcast. So be sure to follow BitLift on Instagram, YouTube, TikTok, Twitter, all the good places. I'm going to be putting out a lot more shorts, so be sure to check those out.
Today I'm going to be sharing with you a conversation I recorded a couple of weeks ago with Eric McHugh. Eric is the president of SHOPX, and SHOPX is helping onboard a lot of Web2 companies, e-commerce companies, into Web3.
They're doing some cool stuff with NFT token gating and NFT checkout gating, as well as tokenized software licensing. So we talked like, real practical use stuff. You know we say like, we don't just stack crypto, we use it. So Eric's helping people use it, and he's helping onboard brands, and helping educate those brands about how to onboard their users.
And it's a tough thing to do. And we're going to start seeing a lot, lot, lot more of this stuff as obviously the bull market progresses, but as crypto adoption progresses and as the years go on. So I hope you enjoyed my conversation today with Eric, from SHOPX.
Payments and E-Commerce
Gerbz: Let's talk payments for a second. Did you ever get bit by, cause you're in the e-commerce space in all the ways, but it's not coming at it from a payments perspective. That's such a different lens. Like I, all I saw was payments. And after years of trying to get people to use crypto for payments, I essentially gave up on it.
Like, people don't want to spend their crypto. Like I finally, I'm like, okay. Like, wave the frickin' towel. Like it's not, this isn't, I thought for so many years this was the thing that people would want. And it is the thing that merchants want, there's so many benefits for merchants to accept crypto. But there's none for like, users to spend crypto.
And I'm just curious if you have any experience from the payment side.
Eric: Not so much. Because from a personal standpoint, I've always liked to see that brands would accept crypto. But in the numbers like, well, I'm obviously going to keep my Bitcoin. You can have my dirty fiat. So I'm just like, that didn't logically make sense. But what SHOPX does, so I've personally tried to get brands onboarded into crypto payments.
Just like, yo, you need to check out Bitcoin. You need to look at this. But that was also, it wasn't like...because I'm working, like, business-ey with them, it's just like, I want you in the crypto ecosystem. Accept Bitcoin would be fantastic. But, what SHOPX does is we try to avoid that whole mess, just because it's harder to onboard a company into crypto payments.
So what we do is we tokengate the checkout process. So whatever payments they have, whatever email campaigns they have set up already, those just go normally. So we tried to remove all road blocks, as many road blocks as possible. Hey, just download the app, set up token gating, and nothing changes on the back end for you.
Gerbz: And so token gating is this idea of within your wallet, you're holding some sort of a pass that gives you, grant you access to view some sort of content. In your case, you're talking about this pass enables me to see a certain checkout page. And it's like this idea, like if I'm not holding a particular NFT in my wallet, I can't see the content or consume the content or, that's this idea behind kind of gating.
And I've played with it with POAPs and stuff. Why, what's the difference between like SHOPX and doing some sort of like POAP token gating? Or is there something like, what makes SHOPX the way to token gate for commerce versus, token gating, like...there's lots of token gating stuff out there.
Eric: Yes, I think SHOPX is the simplest platform to use. So I look at as from a B2B2C company.
So from the brand side, we're live in the Shopify WooCommerce app store. So if you're a brand, you have no experience within the token getting space or in crypto in general, to create your first NFT collection all you have to do is download the SHOPX app from the Shopify app store, get the right amount of tokenized software licenses.
So our licenses, or our tokens, function as tokenized software licenses. If you have the right amount, you gain access to our products and services. And directly within the Shopify backend, you can deploy your first NFT contract. We've simplified the process into two forms, so it's just form one, name of the NFT. Or I just call them passes just when dealing with Web2 people. Name of the NFT amount of NFTs, a picture, a description, click next, fill out another form for a landing page.
Click next, you deploy your contract. And since we're already integrated with the Shopify app store, or Shopify with their Shopify store, click add products. They could see all their products already there. And then from there they can decide which products I'm going to token gate for how long, how many redemptions they want to have.
So long story short, we're the simplest to use for their customers and we're one of the few apps where a) a brand can launch, they go from 0 to 1 meaning like, they have no crypto experience. They don't know what it is. They can just download the app and launch an NFT collection. Or we work retroactively with other pre minted collections too.
Gerbz: I'm thinking like from an e-commerce shop owner's perspective, why would they want their products to not be accessible? Like why, token gate a product?
Eric: Yeah, so honestly, the cool thing about Web3 in general is I think the space is so early that no one really knows what they're doing, so it's a giant experiment. So there are plenty of benefits for token gated product in Web3. The first is customer retention, and this is because of the ownership aspect, which is inherent, to Web3.
So, in e-commerce, the amount of money a company spends to acquire the first customer is often less than they make from the first customer's purchase. So the name of the game isn't acquiring the customer, it's getting the customer to come back. And they're much more likely to come back if they have that NFT pass.
The second reason is conversion rates. So the average conversion rate for an e-commerce store is roughly 1-2%, but because if they own that NFT access pass, they've already bought into the brand. So we see a conversion rate of around 80 percent. And you can play around on this as a brand too. So let's say you made 500 passes, you know about 400 products are going to be sold. You as a brand, you then know how much product to make. So you're not really blindly guessing.
And if you wanted to, you can create 200 products, you know 400 are going to sell, this creates hype, this creates FOMO, and then you can market it from there.
A cool real life use case for NFTs, and in general, I think this is one of our proudest moments, is the NFTs completely block checkout bots. So our first case studies were The Mag Park. It's a cool hat store in LA. So it's like a hometown dude. Like there's a basketball hoop in the store, kids come and play, like they're kind of like homies. It's that type of vibe.
So his issue was whatever they launched, like whenever you launch a new hat collection, checkout bots would come in, swoop up that inventory in less than a second, then flip the hats on the secondary market for ten times the profit. The customers don't get the product, the brand doesn't get the sale, no one's happy. So what he did is he launched a gold, silver, bronze style pass collection. He minted out his gold collection. It wasn't called gold, but he minted out his gold collection in less than 24 hours, 125 passes for 0.75 ETH.
And dude, my favorite thing about this was over 50 percent of the users were 100 percent brand new to crypto, but they wanted the e-commerce benefit to join. So okay, we're going to learn their system. We need to learn what cryptocurrency is. We need to acquire the NFT because we want the hat, we want the specific hat that came with the product.
They bought the pass. Now they get early access to products. They get discounts. There's a specific Discord channel for his Pink Mocha holders where they talk with the owner, they get to put their input in designs, and they get a bunch of different perks. So it's just a community.
Gerbz: Those users, they knew they were using, they knew they were using NFT? They knew they were getting into crypto or was that kind of obfuscated in some way?
Eric: So right now, I just refer to it as a pass. I'm just like, this is a loyalty pass. We described it as a Pink Mocha NFT pass. So they knew what they were getting into. And the biggest thing for them is like, okay, I want this pass. I want this ETH. How do I do it? Okay, I just got my Ethereum from Coinbase. How did I purchase the pass? Oh, it takes three to five business days for it to get your Ethereum off the exchange.
So then we learned as a company, we integrated Crossman. So now they can pay the credit card, but yeah. So we marketed as an NFT pass, but in his, he did a good job too, with educating the customers as well. Cause, so Mickey did a good job. Like, he's we're going to do this. He set it up properly. He found the interest. He created the Discord channels. He did everything properly. He had his learning materials in place. Once it was time for launch, his customers were easily able to acquire the pass, clean the product, and everything was good.
Gerbz: Interesting. Yeah. I'm part of, I play with the Starbucks the Starbucks NFT journey. I'm part of this thing.
And I thought it was, it's like their entry into crypto. When you sign up, you like connect a wallet. And then after that, there's sort of no talk of crypto or NFTs or wallets, you're like collecting stamps. They're not really on chain. Maybe they are on chain. Like I can't, I don't even really know. They sometimes tell me to try to buy an NFT, but then you can only pay with a credit card and I'm coming at it like from a crypto lens.
So I'm like just, and I can't like, it's very confusing. Obviously, we're transitioning where we're like in the midst of this transition, right? And so thinking about that user experience is, it's so hard. Like, how do you think, how do you deal with wallets, for example?
So, in that example, you just gave our users coming to this e-commerce store, like with a crypto wallet set up ready to spend, swap the ETH for this NFT, or is there some sort of like, give you your email and a key is generated like behind the scenes and then you can claim it later. Like, how's that? What's that flow like?
Eric: So I think wallets is actually the biggest barrier to entry for the normal person entering the Web3 space. Cause like, great, getting Ethereum or getting any cryptos, it's not even that hard dude. You just go to Coinbase, create your account, then you can take it off.
Gerbz: It's not hard for us.
Eric: Yeah, no, but like, it's not even like hard to set up but my worry is it creates a honeypot for just other people in the space because imagine a bunch of first time users creating a MetaMask just because they want a product.
They're like, okay, I want this hat. How do I claim this hat? Oh, I just created a MetaMask. Whatever. It's a password. Who cares about the password? But then, and then we both know those are private keys and you can never lose that. So it's on us to educate the brand on how to educate their customer in the sense, okay, here's what you have to do to properly set up your MetaMask. Please don't lose your keys, it's important.
So right now we work with MetaMask, Coinbase wallet, or TrustWallet. So if you have any of those three, and you own that NFT, you can gain access to the token gated product.
But long term, so this is where it's difficult. Because honestly I think we're both Web3 guys. I think, I believe in the power of self custody, I think everyone should use a Metamask or Trezor or whatever hardware. Just so they can take control. But that may not be viable for everyone in the space, like my mom, my grandma. They may not want a Trezor, they may just want to create an email account, set up a wallet on that end.
That's something we're still working on, but right now it's just those main three wallets
Gerbz: yeah, you should check out Coinbase Cloud has, I think they're like doing a beta right now Coinbase cloud is launching like their cloud wallet infrastructure system. It basically allows people to create a wallet with just an email address.
It kind of creates the private key in the background and the cloud allows people to kind of use the wallet without knowing that they're using a wallet. And if and when they sort of are finally, like going down that educational rabbit hole to the point where they're ready to take custody of their keys, they can do it. That's, where a lot of things are kind of heading right now I've seen.
And then I think like at first it's like Coinbase, it's like a shard. Coinbase holds a part, you hold a part, but like at some point you can even take full control. It's sort of just like they're, just we're all accepting the fact that like, day one people are not going to understand how to do this.
And let's be real. Like an NFT that gates a checkout page on some brand, like I don't need that on my Ledger. Like I just don't, I don't need that there. Like it's okay that it's not, you know, inscribed in metal and buried in my backyard. It's just it's kind of a, it's a ticket for a thing that's going to happen once.
And I might not even, I'm probably not going to even use it again. It's cool that I have it on the blockchain there that I, hold it in my wallet forever. I can see that I was part of this thing, but yeah, the self custody of that isn't quite as important.
Eric: Yeah, I agree. I mean, it's important. I think it's important in the sense we should always be able to self custody, but I don't think people really need to. It's, you know, like you said, it's like a $10 Starbucks pass. Do I need to? Do I need to multisig it? Not really. I could just take my phone and be like, here, scan, give me my discount, give me my coffee. We're good to go.
Gerbz: I think that's the goal of this that Coinbase cloud wallet, for example, is like, you just don't even know you're using crypto. And until you're like, oh shit, I wish I was custodying this thing. Oh, it turns out in the settings, there's an option to do that. Let's do it. I think that's kind of a cool way of thinking about it.
eNFTs
Gerbz: I heard you at one point you mentioned, or maybe I saw it on your site, something about eNFTs, which stands for an e-commerce NFT. What makes something in your mind like an eNFT versus a normal NFT? Is there some sort of EIP on this or is this just kind of like a lens that you're kind of a way of describing it?
Eric: It's a way of describing it. And the reason we came up with this is because we've just, I think we just left the bear market. And we deal with pretty much mostly Web2 brands who don't have any experience within the crypto space. So a lot of our conversations went like this. It's like, okay, well, NFTs seem cool. Um, aren't like 95 percent of them scams? And you're just like, oh yeah. Do I care about do I care about a $500,000 monkey? Well no, they're cool, but not really. So then we just differentiate between an eNFT and a regular NFT.
An NFT they think of just like a hype based project where an eNFT is an NFT specifically with e-commerce utility. So for our eNFTs, we like to say that people don't buy the NFTs because they may or may not go up in value. They buy the NFTs because it comes with some e-commerce utility that the person wants. So it's just a lens framing thing. It's had pretty good effect though.
NFT Ticketing
Gerbz: Sure, sure. And have you thought much about ticketing? I mean, I'm sure you've thought about ticketing. This is kind of like, one of your sweet spots. Commerce and ticketing are kind of interrelated there for sure. I just saw the other day that Sports Illustrated announced that they're moving from Polygon's NFT ticketing system over to Avalanche's NFT ticketing system.
And just yeah, In general, I think that this is like the killer use case for NFTs. it just makes so much sense. what kind of thoughts do you have around NFT ticketing?
Eric: Oh, I 1000 percent agree. I think proof of attendance is one of the coolest things and I think obviously the rent seekers like Ticketmaster, like when you buy a $60 ticket online, it comes out to be $120. If NFTs have the ticket, it kind of solves this. It's easy to sell, it's easy to put it up on the open market where people can buy and sell.
And I think the coolest thing about ticketing is, let's say you just attend like a sports event. Like you go to a basketball game, there's proof of attendance. So you're insured that, you know, you went there. Let's say some major event happens, like Kobe passes MJ in points, you just have to be at that game.
The Lakers know who went there, they can say, great, here's the NFT to commemorate the experience. Oh, you, because you have that NFT, that can token gate this specific bobblehead for that experience, and then you can take it from there. So I think it's a great, I think it's a great use case.
The Problem: Bots
Gerbz: I agree. And, but I was also thinking like when you think bots, like what prevents bots from spinning up infinite numbers of wallets and then just buying NFT tickets with their wallets? I guess maybe there'd be some sort of identity attached to these wallets in some way, and then you'd be able to verify that it's a human.
How do you even, how do we prevent bots from just using wallets in the same way that they're using fake and stolen credit cards or just buying up all these, all this inventory. Such a problem.
Eric: No, it's a problem. It's like, it's a little known problem too, because if you're not in the space, you're not like someone specifically dealing with bots. You're just like, you don't even know what's going on in the background. I don't know, so for the Mag Park example, it was the pricing, bots aren't going to spend a thousand bucks for an NFT, so that blocked it that way.
But even for the smaller, because bots work on a straight volume thing, so if you add like a small fee, like five to ten dollars per transaction, you can't just mass buy with bots. But I think we'll figure that out. I think NFTs are a solution for that. Just because bots, like, they're gonna get smarter. They're gonna get smarter and smarter, too. They're just like, especially with AI, where you could...
Gerbz: And then AI, it's just going to be AI like with infinite accounts.
Eric: Yeah
Gerbz: Is it even a bot anymore when it's like one AI? Like, I don't even know. Yeah, it's a big problem. This is, it's funny because I was like shitting all over Worldcoin for a while, just cause I was hearing about it in the news and all the, it was scanning everyone's eyeballs.
And I'm like, that's literally the opposite of like why we're in crypto. But then I read the white paper and it's actually more about like proof of human and it's using like ZK technology to like, to shield private identity. And, it's, I was like, it's actually solving for a lot of the things that we're talking about are huge problems right now.
And so I was like, huh, once I actually read the white paper, or I don't know, I think it's a white paper. They have a page on their site where they break it down, what they're doing. It was actually pretty interesting. I wasn't, I'm not so mad at it.
Eric: No, I was in the same boat as you were. I'm just like, I'm not scanning the eyeball. Come on, dude. But okay. So it's actually, okay. So it's actually, do you think it's a good project or do you think it'll add value to humanity or do you....?
Gerbz: I think it's a shit investment. I think it's a shit investment. I think it's a desperately needed technology, but yeah, as far as the token goes, it's like they're literal, their vision is to issue universal basic income for the value that AI generates in the world. So like AI is going to steal everyone's jobs and it's going to create all this value.
So then let's have the value that it creates converted into a universal basic income to pay the people that it's displacing. That's the vision for Worldcoin. I was like, whoa, that's that's not what I expected.
AI
Eric: Yeah, I thought was some Terminator type stuff, but yeah, no, I, think AI is an interesting, I don't think, I don't think it'll take everyone's jobs. I think it'll, I think it'll take a bunch of jobs. And I think, 'cause for me, AI, blockchain, they're, I think every, all technology, they're all just neutral.
And however you want to use it, you can. So I think AI, it's just people are gonna better be able to leverage a creative mindset. Like, pull what's in their head into real life and see if it works. And they're like, for example, if I had an idea to start a company like right now on just some random topic, I don't need to hire a copywriter. I don't need to have a graphic designer for logo. I was like, hey, write me 20, write this copy, write this logo, create a website. And then I can, and then I can build from there. So I think it unleashes human creativity.
Gerbz: I just, for me, ChatGPT for example, using it for everyday uses I've found it to be just so generic that I couldn't possibly, I couldn't possibly publish something that it wrote for me. Or when I have it, write an email for me, I'm like, ugh, that's, it's cringe, you know?
So, I don't, it's not replacing these things. It is gonna make these things easier, summarizing things is a lot easier, but then we gotta put our touch and our unique kind of angle on these things.
So yeah, get back. Let's get back to crypto commerce a little bit.
Getting Brands to Accept Crypto
Eric: Do you have any tips on how, cause you were getting brands into the payment structure. Do you have anything that worked really well for you to get a brand accepting cryptocurrency?
Gerbz: I wasn't doing it from the brand side. I had an e-commerce shop and I accepted crypto as payment. I actually, I built the business specifically to sell stuff for crypto and accept crypto as payments. So I've done over 10,000 transactions with paying customers that just paid me in crypto since 2013.
And so I didn't have, I wasn't onboarding brands to that, but what I did experience, so 2013 was the first kind of cycle that I went through. 2014, kind of bear market. During the boom, all of these brands were onboarding into crypto payments like Microsoft , hey, we accept Bitcoin as payment. Cause it was like Bitcoin, Litecoin, and Dogecoin were like the only cryptos at that time, right?
So like they all saw it as like a new, like a PR, they saw it as a press release. Hey, we can, we accept Bitcoin now. How cool are we? And we're, on the cutting edge.
And then, what quickly happened is, anybody who even tried to use it, they had all of these same problems that you're experiencing now, right? Setting up a wallet is a pain, paying the fees, who wants to do that? Dealing with customer support who doesn't understand anything about blockchain? Forget about it.
How do refunds work? I, who, no one in the company even knows! And then all of those companies, one by one they lopped off their Bitcoin support and they lopped off their crypto payments support because their customer support teams didn't even, couldn't even handle it. So that's, that was the experience that I kind of went through on, and, just from a third party, just seeing brands kind of go through that hype cycle, and they were stoked about the tech and they were stoked about the opportunity. They're stoked about not paying credit card processing fees. But the users, man, they couldn't do it. So at the end of the day, it wasn't worth it.
Eric: No, and I could see that, because in the end, if I were a Web2 brand and I started accepting crypto payment, I think that would create more, like, that would probably create more of a headache for me. Because, me personally, I would love to accept crypto, I prefer your Bitcoin over your fiat. But my customer support, they're gonna be like, what is this?
I think the e-commerce incentives, I think this helps with this problem. Did you accept crypto and fiat, or just crypto?
Gerbz: In the beginning I accepted only crypto because that was like, the whole point. And then the very first customer was like, yo, I want to give you money, but I'm not paying you with Bitcoin. So what do I do? So, damn it. And then very quickly we started accepting both. And then very quickly, fiat became the more dominant payment method.
And so, and then I'd, offer discounts for people to pay in crypto. And I was able to convert people now and then, into crypto for that reason. But yeah, man, people don't, they don't want to jump through the hoops.
Eric: Between crypto payments and fiat payments Like what was the percentage of who paid on fiat?
Gerbz: Once we were at scale it was five, it was 5%, 95%. 5% crypto. In the early days it was like, in the very beginning it was a hundred. Then it was sort of like, 80-20. At the very end when, it was a big company it was 5%.
Eric: That makes sense, like the top 5 percent are actually doing stuff. But on the plus side, because you can't measure the people you brought in, because I guarantee you, you brought in people into the space because they wanted your product, so they had to figure out crypto, so they had to pay with it.
And they probably brought people into that, they brought more people into the space from there, and the people they brought in, brought in more people...
Gerbz: Yeah.
Eric: For that, thank you for that.
Gerbz: And you know, the benefit, I mean, there's also the customers. Like, one guy, we did a big custom order together. I think it was like $6,000 worth of product or whatever. And it was, he paid me 15 Bitcoin for it at that time. Yeah. Because that's what it was worth. And I mean, that's again, huge benefits as the merchant accepting crypto.
But he wrote me an email like six years later and I was like, fuck you.
Adoption Talk
Eric: I'm sure it was a guy, but somebody serious in a way. But like we, so like right now, if I wanted to buy something, I would use fiat just cause it makes more sense. I would rather keep the crypto and fiat's convenient, but we can always go back to the remittance issue where it's like, let's say you're selling something over borders.
I think Bitcoin, obviously Bitcoin, cryptocurrency, I think they're far superior. I think if we're trying to get people to accept crypto, that could be, I think that might be a way about it. But then you deal with the whole legal nonsense about just dealing internationally with crypto, which I'm sure opens a whole rabbit hole.
Gerbz: I mean, from what I understand, like internationally, like, Tether on Tron is like the most used.
Eric: No way.
Gerbz: Yeah. That's, the one. Tether on Tron, like in Argentina, in Asia, everywhere. That's, what people use.
Eric: That's funny. I mean Justin, he's big in Asia. Dude, he crushes marketing. Depending on whatever your opinions are on him personally, like he did his thing. Oh, maybe for accepting crypto payments, it's probably like Web3 where it has to be done in the background. People don't know what's happening.
Maybe that feature is being built out and that's how we get people to accept crypto payments.
Gerbz: I think Circle was working on something like that. Companies could open Circle accounts and operate their banking in USDC. They were enabling lots of fiat to USDC, one click conversion. They were building into payment gateways to allow people to pay in credit card and then the merchant to receive it as USDC in their Circle account.
But they shut that down. I'm guessing regulatory, but...
Eric: Usually it is.
Gerbz: And, there, it was like while they were on deck, like working towards IPOing. So I think it had to be regulatory.
Eric: Yeah, that we're not about. But I think that problem at longterm that solves itself. And then I think that's because of the game theory of cryptocurrency and Bitcoin. Well, let's say hypothetically, and obviously not legal or financial device, but let's say Circle did shut down for regulatory issues, that may be, that'd be a US thing.
Whereas a more forward thinking country, they're like, okay, well, that's dumb. They may create laws around that to attract a company like circle, and then they'll build there, then other companies will see that because that's, or other countries will see that because, okay, that just attracted talent. It attracted capital in my country, it's attracting the builders in other countries. Okay, well, that's working for them..
Gerbz: I mean, the thing is, we just, we put these quick time frames on things because we see the vision and then, you know, it takes 10 years for the ETF to launch. And that's like, that was step one. Like we knew that we needed this like 10 years ago. So it just takes a lot longer.
And it should accelerate as we kind of work through these regulatory hurdles, but I think regulatory stuff is the only thing holding back crypto. Like, development is there, like hype is there, everything is moving. We see the use cases, but like people are afraid of breaking the law and they should be afraid of breaking the law. So how do we get over that? Is just, it's time a lot of time.
Eric: Time and game theory, because right now, if you look at the people making the laws, I think we can both agree that they're pretty bland, they're just old, they don't know what they're talking about. But as the younger generation gets older, as more, again, as more and more politicians, as more regulators, they get skin in the game, that's the important part, I think it eventually tips in our favor.
Whereas in 10, 20 years, I think it'll be all sentenced. I think it'll solve itself. But right now like you're dealing with a massive pushback because again if something's disrupting where you're on top, they're like, no, we don't want that. So they're doing everything they can to keep us out. But luckily we're very persistent, like me you the whole crypto community.
I think we've proven we're very persistent. Very annoying in a good way and we'll push through eventually and then we'll be chilling. And then I think, and then I think at its core, because the main reason I got into Bitcoin, I get the feeling you're similar, is I think it fixes incentive structure at a base level.
The reason I got into gold is like, okay, the incentive right now is if I wanted to be rich without adding any value, how do I get rich? Well, I just plop myself right next to the money printer, I extract value from there, I give it to my friends, now there's three corrupt people, now our three corrupt people, we bring in three more.
Now there's six. Now as six corrupt people, we defeat the six good people because we're using corrupt methods. We have unlimited money. So the incentive for me to get rich, I view rich as being neutral to it. It's like, I think people can make lots of money in a good way. Like that's just increasing the size of the pie. It's like, so for me to get rich on our current system, I just put myself next to the money printer and just extract value that way.
But in a Bitcoin world, let's say I want your Bitcoin and it's like, well, how, do I get you're Bitcoin? Well, I can't take it. I can't steal it.
Gerbz: Gotta mine it.
Eric: Have to mine it or I have to produce something of value to you and then you voluntary give it to me.
So now my incentive is to produce as much value for as many people as possible if I want to get rich.
And then if we're circling back to AI, where now people just leverage what, like it's a tool for them to create companies, create ideas and It's a way for someone to have an idea and just create something physical out of it very quickly.
Now, with that level of creativity unlocked and incentives are to create value, I think we're in a better world. And I think an issue right now is our fiat based system, takes from us every second of every day and then funds really dumb stuff. This keeps everyone in a survival mindset.
Like everyone's poor. They're like, I can't afford a house. I can't afford groceries. I can't afford gas. And I get like, you can't create when you're in mindset of scarcity. But if you're in a mindset of abundance, which I think Bitcoin ultimately brings, that's when you get creative. That's when you really create.
And I think that when you, that's when you create to serve other people, cause you're like, you're already abundant. You're not trying to hoard for yourself. It's like, how do I create value for him? How do you create value for him? How do you create value for him? And then you try a bunch of stuff.
So people are doing that at scale. More people are doing it every single day. Like me, you, people starting businesses, people starting companies. I think we moved towards a brighter future in that way. Sorry about that. Like monologue, but I think that made sense.
Gerbz: No, that's the stuff I love man, and I totally agree with you. I used to always say there's only three ways to get more Bitcoin. You can trade time and electricity for it via mining, you can trade the money that you've already stored as value for it, as far as like just buying it. Exiting fiat into Bitcoin Or you can get people to give it to you. You can create value in some way and get people to give it to you in exchange for that.
Eric: Which is what you did. Which is what you did, so. Which is, I thought it was cool by the way.
Gerbz: That's what I came up with. Well, I'd already bought as much as I could, you know, which wasn't much, cause I was broke. So I bought as much as I could.
Mining, that's just not my wheelhouse.
Eric: Yeah, it's like, ah.
Gerbz: Still isn't. So I was like, all right, I got to build. And it sounds like that's what you're doing too. So I like that, man. And I think you're, on track to like, commerce. that's such a sweet spot. I think it's, I find it so interesting that commerce, but not from the payment angle, right? You've got a different approach to it. I like that.
Eric: We're a bridge. So we're like a Web2.5 company. So for a brand in Web2, once they're at Web3, we can do that.
So I look at commerce as like a $6.5 trillion dollar industry, and there's no real effective way for them to enter the Web3 space easily. The keyword is easy. It has to be simple for them.
So I think we've positioned ourselves as a place to go for a brand wanting to do that. They go to SHOPX, because during the bear market, we've established, we have, I think we have, first move advantage. For if a random brand wants to enter Web3 they want a token gate, they're more likely gonna go to SHOPX. And then if we offer like consulting we offer them a bias, we offer them use cases, then we can, and this goes into my ethos of like, so my why, I was still in a nice peaceful life and it's helpful for the ecosystem, now within my job I get to be the annoying person at Thanksgiving.
I get to tell them how to set up a MetaMask, I get to tell them how to buy Bitcoin. And then from there, it's just a seed. Because once you get that little bit like, what like five ten dollars of Bitcoin, you see it go up. You're like, oh, this is cool It's going up.
Gerbz: It's so true. . I gotta ask, too. You launched a token last cycle. I'm curious, what'd you learn from that? Is it something that's still core to what you guys are working on? Or is it like, man, that was like experiment number 6,320 B.
Eric: It was an experiment when we did it and it's, core to what we're working on. So it's the first ever tokenized software license. So as a brand, when to gain access to our products and services, you have to acquire the right amount of tokens. And if you get the right amount of tokens, we scan your wallet. If you have it, you're good to go. If not...
Gerbz: So that's how you token gate access to SHOPX is through SHOPX token.
Eric: Correct. And I think this is one of the coolest new, you get our tokenized software licenses, you stake them, you get a badge depending on how many, like gold, silver, bronze, platinum. You get a token gate section of Discord, you get materials, you start tweeting about us. You start tweeting in brands pages. I then take that page. I take that tweet, go to LinkedIn, we use as a sales material, and as we get more more brands, you get more and more and more Ethereum. So everyone wins.
SHOPX wins because we get paid in Ethereum, so we're getting revenue. We're onboarding people in the space, so we're happy. Our community wins because they're getting paid in Ethereum for helping our ecosystem grow.
So they're happy. The crypto community wins as a whole, because I think right now, the two reasons what the mass adoption hasn't happened is the user interface. It's just not there yet. And then incentives. So we're offering major brands incentive to enter the space. And for our for crypto, like if I want my Bitcoin price to go up, how do you do that?
You get more people on Bitcoin. So SHOPX is offering an easy way to do that. So crypto community wins that as a whole for that way. And I think the world at whole, like the world, like everyone, whether they know or not. I think they win when one brand purchases one NFT, because again, crypto, I think we both agree.
It's good. It's good for humans. Crypto is such a powerful, cool concept that is so much good, all you have to do is plant the seed. You plant the seed, then it'll grow. It'll grow at it's own pace, and then with both of us, like it's spread with both of us, we're just like, oh this is cool, we're gonna tell everyone about it.
That just happens, it just happens more and more, and eventually it's done in the background. And then we figure out what's next.
Gerbz: We know the pace too. It's a four year pace.
Eric: Four year pace.
Gerbz: How how it goes.
Eric: Every four years. And we're about to, I think we're about to hit a good spot too. But...
Gerbz: We're coming up on it, that's for sure. I'm ready for it. It sounds like you are too. I'm sure if you're noticing more inbound. Brands are gonna want in on all the, frenzy that is coming for sure.
And it sounds like you were able to maintain enough runway to survive the cycle.
Eric: We did. So we position ourselves very well. So like in the bear market, you build and it's on the bear market. We use it for building just because it's easier. It's like, it's less noise. Gas is cheaper. There's less, like, customers saying this doesn't work. So we use that as a time to build.
And the bull market. I think it's a time for sales and marketing where it's like, we'll use marketing budget to get brands onboard. We'll have inbound, we'll have inbound people reaching out, and we'll have a sales team actively reaching out too, So, and then bear market comes back around you build some more with a profit you made from the bull market
Gerbz: Makes sense. Cool. All right. If anyone wants to, anyone has an e-commerce shop or some sort of e-commerce operation and they want to token gate some product drops, some launches what should they, how should they start?
Eric: So the best way to do this is to go to our site, SHOPX.co. If you want to check out the community, the best way to do this would be to check out our Twitter @SHOPXlabs. And if you're serious about learning more about the project, don't ask me, don't ask our Twitter account, don't check out YouTube, join our Discord community and ask our community members what they actually think of the project, cause they're a bunch of degens, they're honest, so if they like something, they'll say it, but if they don't like something, they're happy to say it. That's more authentic than me telling you about the project, so yeah, check out the community, see what they have to say.
And yeah, and honestly, if I'm up, I'm personally down to help out in any way possible. So just shoot me a DM. And if you want to hop on a call, if you're a Web2 brand, want to know what crypto is why it's important, I would love to chat with you and see what we can do.
Gerbz: Cool. All right, Eric, this is great, man. Thanks for sharing SHOPX.