Inside WebX, the world's first Bitcoin accumulation company

0:00I'm Ashton Addison from the Crypto Coin Show. Today on Blockchain Interviews, we have Bill Daflin, investor in WebEx, the first Bitcoin accumulation company, BAC's here to talk about corporate Bitcoin strategies, digital asset treasuries, and much more about Bitcoin. Bill, welcome to the show and thanks for taking the time.

Awesome. Thank you for inviting me.

0:24Yeah,

excited to dive into Bitcoin corporate strategies which is becoming ever more important. We've seen a lot of these DATs or digital asset treasuries in the news, but now WebX is has become the first back which is Bitcoin accumulation company. I'm excited to dive into the differences and what that really means. I'd love to kick off our conversation with sort of a high

0:49level on what is WebEx, what's a back and then we can dive into the details.

Sure. You know, WebEx is a Hong Kong listed company by the ticker HK 8521. The ticker is very, you know, in Asian culture, I think very interesting. 852 is the Hong Kong area code.

one and so means it literally means Hong Kong number one. So we as an investor we found that to be very

1:17interesting. So you know these guys are culturally sensitive and how they picked the they picked the ticker to be a bit accumulation company to be the first Bitcoin accumulation company from Hong Kong. And then you know we ask a question you know what does it mean to be a Bitcoin accumulation company? Actually what they you know put it very simple words is a company that is

1:40actively accumulating bitcoin through its own business operations.

So through its revenue. So instead of just you know raising capital and buy bitcoin raising capital buy bitcoin the idea is that to raise capital and increase a certain type of business activity that can return bitcoin as revenue and the company do not sell that revenue and put it into treasury or

2:08most of it into treasury

and continue to raise additional funding to fund its main business operation which is real business that returns more Bitcoin.

So that's kind of a high level of how Yeah. how it works.

Yeah, I think that's really great because we're going back to, you know, before the crypto craze and when people were investing in projects

2:32just hoping for returns, people actually had sensible investment thesises back in traditional companies that it has revenue. We're investing in a share of the profits. And it seems like this is a great translation of that into Bitcoin where from what I understand digital asset treasury at least with Micro Strategy and these other companies that are popping up you're

2:55just raising capital just to use that capital just to buy Bitcoin and then sort of raise more to buy Bitcoin. But where's the where's the operations of like traditional business? Where's where's the revenue coming from? It's just sort of we'll just keep buying Bitcoin and as Bitcoin appreciates we'll raise more to buy more Bitcoin. And there's not really income generating

3:15stream of a traditional business and there are so millions of businesses that have revenue generation streams and they could be buying Bitcoin. So and at least there's a real business backing that as well. So, is that the main difference in that this is a traditional company that has income not related to crypto and we're using that to buy Bitcoin versus just raising capital to

3:38buy Bitcoin?

Yeah, it's a very good question. Maybe let's just go back in history a little bit, right? We know that the first one first DAT was the micro strategy and u obviously it's also the most successful one most success successful one right but how it became successful successful it was a real business it had a real business which is software

4:01company had revenue

and it decided to start accumulating a little bit of Bitcoin right at that time probably the Bitcoin per share was very very low and then it accumulated more Bitcoin and more Bitcoin and well the real business actual business still running. And there was a I mean the success has certain historical reason to it but also certain

4:24structural reasons right. One of the reasons that people started to buy into the story buying into the vision slowly you know step by step. So therefore building a cost basis that rose you know gradually and as a company continue to execute execute its vision right

and most recently we had a lot of these u I'll say the second type of DAT company so that was the original type

4:48the second type was that I raise a bunch of money and then I do a reverse merger into a spa into a shell

I kind of see a fundamental flow in fundamental flaw in this right it's more like It's almost like everybody put money together to buy a certain token and put that in a stock,

right? And the fundamental flaw is that everybody gets a share at the same

5:13time. If there is any mnav or multiple to the nav investors or traders on open market will adopt the share before the pipe investor gets their shares. So it has a tendency to go back to nav when everybody gets their shares and then when everybody gets their shares people are scared because goes back to nav and they may sell a little bit and it's below nav and then

5:36stays below below nav. So and then afterwards what's more story what additional story there is what's what additional story are you telling you know what's the vision and it seems to be a lack of that as well. So, it's actually not that not that exciting to, you know, to me. [clears throat]

and I think the third variant is the one that we're talking about with

6:01you know, 8521. Incredibly innovative. And to your question, it's actually not just to use a random existing business revenue to buy Bitcoin because that's not very efficient. Think about it. Maybe my business only has a profit margin of 20%. Even if the [clears throat] profit margin is 50%, then I'm wasting 50% of the capital. I'm not accumulating Bitcoin. But what if

6:29what if there's a company that what if there is a type of business operation where the efficiency of accumulating Bitcoin is at 100%. Which means every dollar I'm signing in, $1 of Bitcoin comes out.

But what if it's better than 100%. it's 120%. Every dollar I'm sending in 100 $1.2 of Bitcoin comes out.

Then we have a very interesting thing where the traditional DAT is investor

6:56invest at an MNAP. So every time I invest, I'm buying Bitcoin at a higher price than on the market. And here every time I'm investing, the company's buying Bitcoin for me at a discount or accumulating Bitcoin at a discounted value through business operation, right?

Wow.

It's also kind of like a magic, but you know, I'll get to that in a little bit.

7:19To put it simple, if we think about what is Bitcoin, Bitcoin is really the first sovereign asset backed by computation power, right?

By mathematics, by computing power. And computing power represents the most vast form of productivity. And now we have you know we're in the age of AI and more and more computing powers are coming. That is really the level of country

7:45or company or even a civilization's strength is the amount of computing you can mass. So when we have a company that focus it main business on the operation or the development or the trading I mean on the management of computation power where the revenue is required by any supplier or any counterparty to be bitcoin which is backed by computation power. Therefore,

8:12for every dollar you are investing into the business, such as purchasing hush power for instance, you are returning more than one bitcoin.

Interesting. Yeah, that's those high margin companies are hard to come by when you have, you know, really high profit margins. At least in traditional brick and mortar, the margins are so low that, you know, it probably wouldn't

8:37make sense to accumulate Bitcoin. But if you have 100% or over 100% and you're getting you're putting in a dollar to get, you know, $1.2 of Bitcoin, that sounds like a secret formula that's patented for, you know, the KFC chicken or something. What And so is there something that WebEx can do getting this Bitcoin at a discount that other digital

9:00asset treasuries can't do?

Yes, kind of. Right. So I know there is this when the market was hot right it was going up like this

we have the concept of ATM which is a you know great acronym right yeah but the problem is that investor always end up not buying at at a premium

what if we have a concept where I'm saying quoting quote right reverse ATM

9:28I'm always buying at discount wouldn't that be better right so that is kind of the idea and then we become a new flying wheel Right. The flying wheels. I invest I get Bitcoin discount. I invest I get Bitcoin discount.

Sure.

And the secret sauce is really for instance for hush for hush power right for hush power to purchased hush power from the source

9:50

from where it is the cheapest the lowest cost right. So let's use a comparison for AI for instance right if we were to purchase AI computation power from a supplier who would have the cheapest computation power

would be and it would be like theoretically Nvidia right because

if Nvidia had its own servers it manufactures the chip and makes the

10:17servers would be the cheapest because it doesn't have to I mean it's it in itself is making 70% margin I which is under.

So somebody has to absorb that cost to build a data center, right? So the idea is to purchase hash power in a strategic partnership with one of the leading Bitcoin ASIC chip manufacturers that are also mining or has excess hash

10:42power on its own. So it has lowest cost basis.

Mhm. And for this very reason I think there was a recent announcement by the company which you know is now public that I can talk about a strategic partnership with one of the affiliates of what's minor or microbt obviously I was part of the discussion I was in the discussion now

11:10it's public we can talk about it that this strategic partnership I think is just going to deeper and bigger and a lot deeper between the two companies

in becoming you know a major cooperation partnership where microbt or what's minor the machine is called what's minor will continue and to support and provide hash rate contracts

11:40at discount I mean to provide hash rate contracts to the company and be able to deliver bitcoin I more than the dollar that's coming in.

Mhm. Okay. Very interesting. I'm going to look into that those partnerships further. And so are what is what you're saying the secret sauce instead of just buying Bitcoin OTC or from institutional desks or the crypto

12:06exchange is you're actually investing or building partnerships with the mining companies and then helping them take the Bitcoin off their hands through that way and in that way you're able to get it at a discount.

Yes. High level it is correct. We are also working with blockware on potential mining direct mining operations. But knowing that mining

12:36Does have more overhead a higher [clears throat] higher return but also more overhead and takes longer time to receive the bitcoins while you have to actually mine them.

Yeah.

But the return is better. So I think WebEx at least at least what I understand is strategy will be multiffold not just hash rate purchase will be hash rate purchase as a

13:01direct and swift way to acquire bitcoin discount potentially well we can only speculate m direct mining as well as AI or cloud services where the parties the counterparties is also a pace in Bitcoin for the service back.

It could be a brokerage of computation power, brokerage of AI

13:29computation power or the brokerage fee which is low cap or you know you don't have capex is back in bitcoin as well as maybe asset management of bitcoin. So the idea is that anything that requires does not require direct heavy operation or capital expenditure where the operation directly returns Bitcoin at close to 100% going in or

13:58more than 100% going in would be the kind of activities that I think the company should and would pursue.

It's really cool, Bill. And earlier on you mentioned when you were talking about micro strategy the mnav and nav. Could you explain that a little bit further in what does the nav number mean? And if somebody was for example a traditional stock investor they looked

14:25at micro strategy or another dat and they saw the nav number and then looking at webex you know what should they be looking for in having the best value and where to invest. Yeah, I think you got to look slightly differently between WebEx and the mature DAT or the DAT that is in done through the reverse merger, right? So if you look at the micro strategy, the NAV

14:50initially was probably not very good. You many multiples of Nav basically means net asset value here we say net asset which is only talking about Bitcoin. net value of Bitcoin assets on balance sheet, right? And compared to the market cap of the company obviously when Micros first started and it say accumulated the first bitcoin, first 10 bitcoin, first 100 bitcoin and the

15:17bitcoin value was much lower

than the market cap. Therefore, the multiple is much higher. Right? Over time, as I accumulated more and more, the asset value caught up to market cap and market cap like for the most part stayed ahead of the underlying asset value. And for most of the other re reverse merger dots either Bitcoin, Ethereum, whatever they were they

15:42generally done or they were generally done with 1x when the sponsor raises capital, right? So basically it's a 1x asset to the to the price of the shares for the private placement and the idea is that investors are hoping more people on open market will purchase the stock causing the stock to go higher than its net net asset value

which we have seen so far as a lot of

16:09fluctuation and eventually when in most cases in many of the cases when investor actually gets the shares the price is cut below. Now for so for WebEx is slightly different of a situation. Right now it's almost like it is the next I mean it's the Asia version of Micro Strategy. It just p it just purchased its first Bitcoin just to signal okay they're doing Bitcoin

16:36strategy the bot one and the next one will not come from purchase purchase the next one will come from operation through

Mhm. computation operation, right?

And so what's important to look is the I think for WebEx is first the business strategy. I think you're if you're buying a stock, you're investing in a you know venture, you investing a

16:58you know business plan in you know partnership. You're you're also investing in the prospect of accumulation, right? The secret sauce where they can accumulate. So and you and you should look at I think it's going to maybe come on website Bitcoin receivables

instead of Bitcoin already purchased because it takes a little bit of a little bit of time to turn to turn

17:24computation power into Bitcoin. So let's say the company signs I think the announcement was 30 million Hong Kong dollar right so roughly maybe four $4 million right let's say $4 million

and how many bitcoin come $4 million purchase $4 million purchase and we got to look at the contract how many coin actually will come from these $4 million of hash rate or computation

17:47power operation maybe it' be more than 10% 20 I don't know certain percentage more than what 4 million would otherwise purchase on the market and once that specific hash rate contract I mean there will be multiple contracts like each one of the contract is signed there will be account receivable and that receivable I think should show up on the

18:08website so investors the community can see okay the company has entered into another business contract with let's say 10 bitcoin receivable

and this is one with 50 bitcoin receivable this one with 100 bitcoin receivable here is an AI computation service provided the counterparty has agreed to pay you know in 20 bitcoin in 50 bitcoin

right so I think those are the things

18:35I'm very important to be able to see like a maybe a bar an aggregate bar like aggregate receivable 1,000 bitcoin bitcoin received 100 and the rate of receiving those bitcoin as x number of coin per day

right

that's interesting and the company could say Hey, I've got a running business now, right? I put in more money. I get same amount of Bitcoin or more out.

19:02

I'm also getting Bitcoin day after day. So, it's almost like a dollar cost averaging. I don't have to think about trading. I don't think about when to buy the dip, what to buy. I'm just accuring Bitcoin the whole time, right?

Yeah. I love that.

Just goes to the investor say, "Hey, let's raise the capital

and get more account receivables." raise

19:19the capital, get more account receivables, increase the speed that is coming in.

Yeah, I think I think that's a great idea to add Bitcoin receivables onto the site and onto the balance sheet as you build more accumulation strategies and not just purchases. Yeah, there's going to be receivables in Bitcoin and you know, Bitcoin payables and

19:42Bitcoin everything sort of Bitcoin is infiltrating into the balance sheet. So, I think that's really exciting. And it's it's definitely tough probably for at least Michael Sailor to determine, you know, when should we hit buy, he just keeps buying. At least it seems like he's has been buying every Monday or what, you know, just sort of whether the price is up or down. But

20:06whenever you see a dip, at least with retail investors, they're like, "Oh, I'm waiting for the dip to buy." when they should probably just be more thinking about just having a business and that part of that just goes in regardless of the price. We're accumulating Bitcoin for the long term.

Yeah. I mean, if we think about Bitcoin, the initial idea was Bitcoin being a

20:26form of payment, right? Electronic

original white paper. Obviously, the speed of Bitcoin, how it's designed, would not work for retail payments.

Mhm.

But who said it wouldn't work for B2B payments?

Mhm.

Yeah.

Right. We don't we don't need that fast with it's large sum millions of dollars.

We can't wait for 10 20 minutes not a problem.

20:49

Yeah.

So I think perfectly fine for especially in the future there's going to be more and more computation for everything for AI for Bitcoin for everything. Everything is going to be powered by computation and the amount of computation you have and therefore and maybe computation can be securitized right computation project products computation forward contracts

21:15

trading of computation contracts

right operating of computation trading distributing etc marketplace for competition products and that these things are very interesting and these things I think should naturally be paid paid in Bitcoin since Bitcoin is literally backed by computation power that is the most pure form of computation that you know the value

21:40in the competition.

Yeah.

Yeah. That's really cool, Bill. And you know, a lot of these digital asset treasury companies, they're, you know, American listed. And then I've seen Meta Planet, for example, as Bitcoin in Japan. But with WebEx, you know, HK 8521, that's in Hong Kong. Is there an advantage to being in Hong Kong and being the first Bitcoin

22:09accumulation company? Do you see it as a good jurisdiction for future Bitcoin backs and dats?

I think each jurisdiction has its uniqueness, right?

Mhm.

Due to its regulatory or economic whatever situation US is the most liberal and the most straightforward. I raise capital. I buy a coin. That's it. I can raise every

22:37day at market. I buy every day. Whereas in certain countries it's not the case. Certain countries have capital controls such as China, India.

In Japan they came up with some you know option I forgot option or different ways to be able to issue shares not directly.

Mhm.

Whereas in Hong Kong you also have certain of

23:04restrictions. you also have certain advantage and disadvantages. But out of all of that, I think, you know, Hong Kong has probably the highest upside or the highest potential for a Bitcoin accumulation company or digital treasury strategy company.

Why? If we think about in the world, US is the largest economy. China is the

23:31second largest economy. Mhm.

But China has got twice or more than twice the US M2.

That means the government has printed double the amount of money.

Uhhuh.

And the Chinese Chinese saving rate is incredibly high where the US saving rate is perhaps low or if not negative.

Mhm.

And it means there is a huge amount of investable readily investable assets

23:58that are looking for pristine financial assets to invest in. But there are aren't that many good financial assets to investing. Look at Chinese Asares. It used to be historically Chinese house housing. But the housing market is not currently doing very well. And I personally don't think it's going to do very well in the going forwards going into the future because everybody

24:21already has five houses apartments in China and they're not making nearly enough babies to absorb new houses.

Population grows.

So what else do we invest in? And so we bet, right, we believe Chinese wealth has a has the strongest need to get Bitcoin beta exposure. Look at Bitcoin exposure.

But how do they get a big exposure when this is already proven? We don't

24:49need to really actually think about it. China was the largest Bitcoin mining country and had the most amount of Bitcoin even originated in China, right? But because of capital control over things redly saw the government Chinese government had to stop Bitcoin inside China

right for mining for trading and there's no way to get exposure to Bitcoin on any

25:10massive level that is legally compliant

inside China there's no R&B trading on Bitcoin there's no Bitcoin mining is legal there's no Bitcoin digital strategy there's no Bitcoin how to say ETFs right and also I think the Chinese government did a great favor to Bitcoin by bending it seven times in China.

Yeah.

Imagine if the Chinese government I

25:32think the Chinese leadership is incredibly visionary.

Mhm.

And they are probably in their heart pro Bitcoin

because if they didn't ban Bitcoin seven times, Bitcoin would still be 70% concentrated in China. That wouldn't be a decentralized asset and US would not adopt it. The world would not adopt it. People one of the key criticism before was that oh China control the 80% of the

25:57hash rate. What if they want to do 51% attack? So I think the Chinese leadership understood this and oh let's make this asset true to its nature. Make it a decentralized.

Yeah. But the exposure, the need for exposure of the Chinese people or Chinese wealth is still there. And where can you get it? There's one back door that the leadership has designed, right?

26:18Which is Hong Kong. Hong Kong is a back door. It's imagine China is this highressured pan or you know cooking pot or you're cooking chicken inside there's a very little hole there and all the pressure wants to come out and there's this steam stream from the hole right if you put a coin coin fly

that's Hong Kong

yeah no it I've been there and it's very

26:47exciting and yeah I'm excited to see BAC's like WebEx started in Hong Kong and to see had the capital flow in from there and yeah, I think that's a really long-term play by China banning it seven times and ensuring the decentralization as it continues to grow into the mainstream and now there's a huge accumulation in the US. But it's it's there's we're still so early.

27:13There's, you know, in the 15 years of Bitcoin. We still have, you know, over 100 years until the mining rewards even stop and then from then on there'll be hundreds of more years. So, WebEx is one of the early early accumulators of Bitcoin. And yeah, I really love that back door to see the capital flow in there. So, I'm

27:39rooting for you guys. What is the best way, Bill, to follow along with WebEx, how you guys are different, and follow along with further Bitcoin accumulation and see those Bitcoin receivables as they come in.

Yeah, I what I learned is that a new website is coming up very very soon. By the domain name, I think it's webex 8521.com. So I think one best way is to

28:07follow that as well as to follow Twitter. I think that and Twitter and I think the marketing team is doing a great job of preparing those information to be live as well as public disclosures by the company right and our opinions on the on the public disclosures.

the public disclosures has you know have always to be accurate and correct.

28:31

but [clears throat] the strategy and intent can be further explained and analyzed and shared u by the community. And I think I forgot to mention and I mean not forgotten I think I want to share my thoughts on a little bit overall thoughts on this at kind of at the end is that like any business from a startup to Nvidia to any business you

28:57know listed not listed small or big the most important part is have a is to have a business plan is to have a vision where where you are where you want to be what are you building right even Nvidia is talking about Yeah.

Mhm.

And the bigger the company, the stronger they're conveying this vision. And that's that is the most important thing. And if you don't have a reason to

29:19be or real vision where you want to be, then you are just a trade. Maybe you go up today, go down tomorrow, and that's the that's the end of it. And but I think it's very important to set expectation, milestones, and the north star. So, so what would be the north star for WebEx, right? I think the first step is to become the largest Bitcoin holder

29:46

on the balance sheet in Hong Kong, which is not not difficult. It's the largest one has holds 3,000 to 4,000 bitcoins.

Mhm.

Right. In the 3,000 of bitcoins. If you hold anything more than 4,000, you're the largest. Mhm.

But I think the real northstar is I think potentially to be accepted to the Hong Kong connect program

or the southbound program

30:11so that mainland stock trader stock traders can trade the stock directly with R&B and their proceeds would return in R&B.

Mhm. So that is also okay with capital control because none of the capital is leaving China yet you get legal exposure to Bitcoin data

right and there are I think 300 million [clears throat]

30:40stock traders in China more almost the population of the United States everybody is trading stock in China and if you gave them a Bitcoin proxy imagine the volume and know potential am now we speak that could be right you have the flat gate that was opening but I don't think any company would qualify for Hong Kong connect if they didn't have a real business

31:09

the reason why we think that this company has a chance as a shot I'm not saying guarantee as a shot is because there was historically a company that had been going on balance she seat and also on Hong Kong connect it was made to right who was a cell phone manufacturer. They purchased Bitcoin. They were on Hong Kong Connect.

It was fine. So,

31:31but they had real business. They were making cell phones.

But a computation business, computation is main business for either hash rate, AI, you know, cloud services is a real business.

And this a business that the government is promoting right now. Mhm. Well, it's very exciting, Bill. I really appreciate your insights into Bitcoin accumulation companies and

32:00actually, you know, having operations outside of just buy raise money, buy Bitcoin, because there's more to that in generating value for the shareholders, especially if you're able to do it to get Bitcoin at a discount. The more the better. You know, the better to the discount. The bigger the discount, the better. I'm looking forward to following along with this.

32:21I'll leave the link to the new website when it comes out and the socials and anything else in the show notes below. Wishing you and WebEx all the best moving forward and would love to follow up in the near future.

Thank you.