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Block Kong Breakfast: Ben Delo, BitMEX

“As a schoolboy in Britain aged 16, I was asked to list my ambitions for the future.”

Ben Delo

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Block Kong Breakfast is a series of interviews with blockchain-related entrepreneurs and financiers in Hong Kong, brought to you by Charles d’Haussy.

You can’t make this up. This morning, I am on my way to the infamous “Trillion Business” co-working space in “Billion Plaza” tower to meet a billionaire and visit his first office. Lai Chi Kok is never short of surprises.

In 2018 Ben Delo was reported to be the United Kingdom’s first billionaire who made his fortune from bitcoin and its youngest self-made billionaire, according to the Sunday Times.

BitMEX was founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed, with financing from family and friends.

As per June 25 2020, the trio’s digital assets exchange reported $2.54 billion of 24 hours volume, $53 billion in thirty-day volume, and turnover of $1.14 trillion over the past 365 days. The choice of address for their first office now seems a premonition.

The Seychelles-registered cryptocurrency exchange and derivative trading platform has offices worldwide. It is equally world famous and often cited in the press.

Ben is offering me a historical tour of the Trillion Business co-working space where it all started. With its tired carpet and brown walls, the place isn’t delightful. I point out the only item in the room with color appears to be a Christmas wreath. In July.

Ben confirms it is indeed a Christmas wreath. “It hasn’t been removed in three years.”

We then stop by the conference room where all the chairs are broken. End of tour. It reminds me of Packard and Hewlett’s fabled garage in Silicon Valley.

The BitMEX co-founders eventually moved to a proper office when they made their first hire. Ben offers to show me, and we grab a taxi.

During the ride, Ben explains that BitMEX started to hire only after it became profitable. In the midst of the crypto boom of 2017, they signed for an office they could only fill at 30% capacity.

I am reassured about entering a normal office. It is spacious, there are no dusty holiday decorations, and the chairs appear to be in working order. BitMEX has since moved into its glitzy head office in Cheung Kong Centre but retains this office as a contingency site.

Ben shows me how the team was organized and how desks were shared at the time. “Trading engine folks seated there, our Korean and Japanese team here, Arthur and I sat across one another.”

In 2018, the company hired a secretary, releasing the co-founders from admin duties on top of company growth management. A true milestone for any young business.

BitMEX was early to the scene in 2014 but not among the first generation of crypto exchanges: that honor goes to Mt. Gox, which launched in 2010 in Japan, followed in 2011 by Bitstamp in Slovenia. Both suffered dramatic service disruptions and hacks. Mt. Gox became a byword of caution after being robbed of BTC850,000. (That’s over $7.6 trillion at today’s very rough, ever-changing exchange rate of $9,000 per bitcoin.)

Ben Delo

Delo says each generation of exchanges is built upon the mistakes of the past. BitMEX benefitted from seeing what worked or did not from the likes of Mt. Gox. By the time it launched, operations and security were tight, requiring multiple signatures and cold wallets (not connected to the Internet).

I ask how the team scaled its infrastructure during those days of heady growth.

“Bitmex was the first exchange to build its matching and margining engine in KDB+,” he says, referring to a programming language commonly used in high-frequency trading. This language specializes in storing, retrieving and analyzing large data sets at ultra-high throughput.

BitMEX is best known among digital-asset traders for its perpetual contracts and futures, and for the ability of traders to leverage these contracts up to 100 times. This degree of gearing is unheard of on a conventional trading floor but BitMEX pioneered turbo-charged futures trading in bitcoin, and massive leverage is now the industry norm.

To make this possible however requires more than just broadcasting the exchange’s leverage limits. Delo talks about security and APIs, and the need for strict, automated controls. The exchange’s core matching engine is constantly auditing user balances and account histories. According to the BitMEX website, it processes 100 audits every second – fast enough to intimidate a Big Four auditor.

This is all very cool, but the mandatory rule for Block Kong Breakfast is, eh bien, le petit dejeuner. So it’s back to Lai Chi Kok to line up outside “Hover City” restaurant.

Hover City is a classic Chinese establishment, a cavernous space filled with family-sized round tables offering different menus throughout the day. It specializes in Chiu Chow food, the sturdier cousin to Cantonese cuisine from inland Guangdong Province.

As happens in the course of these breakfast interviews, however, I find myself facing a menu in Chinese that I do not understand.

Ben comes to the rescue. “I have been to this place for so many years, that I translated and ranked the best choices.” Engineers will engineer.

Every Chiu Chow meal begins with “kung fu tea”, extra caffeinated and served as shots. It certainly drives the conversation.

While waiting for our BBQ pork, vegetables and other dim sum, I ask Delo about BitMEX grants. I learned that the company financially supports the MIT Digital Currency Initiative and offers grants to Bitcoin Core developers.

BitMEX the company gives, but Ben as an individual gives as well. Fortunes are made in the blockchain industry. Yet rare are thoughtful philanthropists in space.

In 2018, Delo gave £5 million to his former college at Oxford University. Joining hundreds of extremely wealthy people, Ben later signed The Giving Pledge, a program led by Bill Gates and Warren Buffet, announcing his intention to give away at least half of his wealth.

His pledge letter starts as follows:

“As a schoolboy in Britain aged 16, I was asked to list my ambitions for the future. I answered concisely: Computer programmer. Internet entrepreneur. Millionaire.”

Still a young man who has had the savvy and luck to more than fulfill those teenage ambitions, what’s next?

“My ambition now is to do the most good possible with my wealth,” he says. “To me, this means funding work to safeguard future generations and protect the long-term prospects of humanity.” His research into philanthropy led him to meet the founder of Effective Altruism, an organization that attempts to apply scientific analysis to the utility of donating a lot of money.

Right now a big focus is on combatting COVID-19. Delo has backed grants for diagnostic tools based on nanopore sequencing in the U.K., as well as research into approaches to mitigate or prevent other global biological risks.

On the tech front, Delo is backing the Center for Human-Compatible Artificial Intelligence, for designing safe and reliable machine intelligence systems.

And in the social sphere, he supports a Harvard Law School seminar series that is probing how to use evidence and reasoning to identify the most important, neglected, and tractable problems within legal reach.

Despite having transitioned from blockchain entrepreneur to billionaire philanthropist, Delo offers a view of himself as still living a fairly simple, even monkish life. His latest focus was co-authoring a mathematics paper exploring recursive patterns in prime numbers. It was published in The Fibonacci Quarterly (see image).

“Money has a utility function,” he says. “If you don’t have expensive taste, you don’t need it.”

Hover City Chiu Chow Restaurant

  • 1/F, Cheung Sha Wan Plaza, 833 Cheung Sha Wan Road, Lai Chi Kok
  • Dim sum set lunch for 2
  • Total: HK$434

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Block Kong Breakfast: Ben Delo, BitMEX