In a candid interview at the Bitcoin Asia Conference in Hong Kong, David Bailey, CEO of Bitcoin Inc., sat down with Bitcoin.com COO Jason Sheman to reflect on his company's tumultuous journey—from near bankruptcy to becoming the most influential media force in the Bitcoin ecosystem. The conversation covered painful lessons, the strategic decision to go all-in on Bitcoin, the evolution of the Bitcoin Conference, and controversial topics such as Layer 2 definitions and stablecoins on Bitcoin.
Burning $500 Million: The Painful Lesson That Saved the Company
Bailey, who started in Bitcoin at age 22 with zero professional experience, admitted he made “every mistake possible.” In 2017, his company made massive profits, but in 2018 they lost everything. “I burned about half a billion dollars betting on stuff I didn't even believe in,” he recalled. That loss forced a pivotal question: “If I'm going to go bankrupt, I should go bankrupt on something I actually believe in.” The only asset he had true conviction in was Bitcoin.
Aaron Van Wirdum, a Bitcoin journalist then working at the company, helped crystallize the strategy: “All other crypto is downstream from Bitcoin. If Bitcoin has a scaling problem, everything else has the same problem. Let's just go to the source of the river—Bitcoin.” In late 2018, Bitcoin Inc. liquidated all non-Bitcoin holdings and published a blog post titled “Make Bitcoin Fun Again,” announcing that the Bitcoin Conference would be Bitcoin-only. “People thought it was suicide,” Bailey laughed. But the first event—held in a garage with Lightning-enabled pinball machines—was a massive success, proving there was a hungry market for OG Bitcoin culture.
Redefining Layer 2: High Standards, Not Exclusion
Bailey addressed the recent controversy over Bitcoin Magazine's updated editorial policy on what qualifies as a Layer 2. “Terminology is losing meaning in Bitcoin. Everything calls itself a Layer 2, sidechain, or rollup without common definitions,” he said. The policy, crafted by technical editor Shinobi and editor-in-chief Mark Goodwin, sets a high bar: only solutions that inherit Bitcoin's security model without introducing new trust assumptions can be called true Layer 2s. “This isn't about excluding projects. It's about having precise conversations and giving builders a target to aim for,” Bailey explained. Sidechains and federated solutions are perfectly fine—they just shouldn't mislabel themselves.
Stablecoins: ‘I Hate Them, But Let the Market Decide’
On stablecoins built on Bitcoin, Bailey didn't mince words: “I hate stablecoins. The whole mission of Bitcoin is to implode fiat.” However, he acknowledged that Bitcoin is permissionless, and if stablecoins create real value, people should be free to build them. He then painted a dramatic scenario: “Stablecoins and Bitcoin are set for a massive collision.” As Bitcoin's market cap grows, its cycles will increasingly affect the real economy—a Bitcoin bull market will be a real-world boom, and a bear market a recession. The geopolitical dimension is critical: US dollar stablecoins are penetrating China and other regions, effectively weaponizing the dollar. Bailey sees Bitcoin as the ultimate countermeasure against this weaponization.
The Great Divide: Digital Gold vs. World Money
Bailey identified the biggest internal challenge as the community's split between those who want Bitcoin to ossify as digital gold and those who want it to evolve into global money. “People who got in around 2020 are afraid that changing Bitcoin could break their bags. They don't understand that Bitcoin is antifragile—the more it's tested, the stronger it gets.” He argued that Bitcoin would have “100% failed” if it had ossified in 2012, and urged the community to activate a new soft fork (e.g., OP_CAT or CTV) to restore developer morale and prove that good ideas can still be implemented. “We need to rely on our consensus system—miners and developers must step up and not back down from conflict.”
“Capitalism needs Bitcoin to be money for the world, not money for a few,” Bailey concluded. “That's the direction we should go.”