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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 1: I'm Joe and I'm Tracy at Tracy, I have a question, Um,

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Speaker 1: have you ever had negative encounters? Sorry, have you ever

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Speaker 1: had negative encounters on Twitter with people with laser eyes

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Speaker 1: in their in their profile? Because I'm just curious. Have

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Speaker 1: you ever had that? Have you ever experienced it? This

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Speaker 1: reminds me of that scene from Mean Girls where they

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Speaker 1: say have you been personally victimized by Regina George? And

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Speaker 1: everyone raises their hand. Yes, yes, Joe, I have been

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Speaker 1: personally victimized by laser eyes on Twitter and toxic bitcoin

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Speaker 1: maximalists actually got really bad. Last year. I was tweeting

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Speaker 1: a lot about bitcoin, and I actually stopped tweeting a

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Speaker 1: lot about bitcoin because of this, which I think is

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Speaker 1: to horrible. But last year I tweeted a chart of

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Speaker 1: bitcoin falling immediately after the CPI data was released, and

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Speaker 1: it came in hotter than expected, and people went absolutely nuts.

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Speaker 1: And I mean I could go through some of the

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Speaker 1: insults because I saved them for posterity, but they would

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Speaker 1: not be suitable for you know, the classy program that

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Speaker 1: is all lots well, as you point out, lots of

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Speaker 1: people have experienced this. There is certainly, at a very

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Speaker 1: minimum a there's a lot of people in like the

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Speaker 1: broader crypto space who really resent the media and how

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Speaker 1: it's portrayed and all this stuff. But there is certainly

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Speaker 1: also a subfaction, most notably the bitcoin maxis, the maximalist,

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Speaker 1: the laser eyes, people who only eat steak, people like that.

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Speaker 1: We've written about them. But you know, to your point,

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Speaker 1: like the inflation narrative, it's kind of totally blown up,

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Speaker 1: like you were right, Uh, well, and we have so,

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Speaker 1: I mean, we we can just talk about how terrible

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Speaker 1: Bitcoin maxi's are for an hour. I would love that.

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Speaker 1: But I think this gets to a really important point

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Speaker 1: about bitcoin, which is like, is it a cultural movement

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Speaker 1: about creating a new type of currency that is outside

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Speaker 1: the power or authority of you know, traditional figures like

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Speaker 1: governments and central banks, or is it about the underlying

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Speaker 1: technology actually enabling you to do something different? And I

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Speaker 1: think at the moment you really see crypto split between

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Speaker 1: those two camps. Yeah, is it a technology, is it

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Speaker 1: a money? Is it a culture? I think, you know,

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Speaker 1: it's hard to separate. There is a bitcoin culture, and

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Speaker 1: maybe that's the reason this thing that's sort of just

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Speaker 1: made up is worth so much. But anyway, we all

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Speaker 1: know what we all know the sort of like these questions,

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Speaker 1: the bitcoin maxi is what it's like to talk about

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Speaker 1: them on Twitter, all that stuff that Big said. Today,

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Speaker 1: we're going to be speaking with a long time bitcoin

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Speaker 1: er who has now earned the ire of many of

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Speaker 1: the same laser eyed plubs that you have. Hey, Hey,

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Speaker 1: welcome to the club. Is all is all I can say.

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Speaker 1: All right, let's just kick it off. We're gonna be

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Speaker 1: speaking with Nick Carter. He's a general partner and Castle

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Speaker 1: Island Ventures. Uh and uh, Nick, thank you so much

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Speaker 1: for coming on odd lots, Hello, Joe and Tracy. I'm

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Speaker 1: honored to be here. This is my favorite podcast. Um,

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Speaker 1: I wish it was under more auspicious circumstances. So, Gavin Anderson,

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Speaker 1: Mike Hearn, and now Nick Carter, why did you rage

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Speaker 1: quit bitcoin? I didn't quit, To be clear, I don't

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Speaker 1: think I deserved that comparison because I didn't try and

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Speaker 1: change bitcoin in anyway. But yeah, well let's back up,

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Speaker 1: because you are I think one of the most prominent

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Speaker 1: bitcoin investors bitcoin advocates. I think at one point you

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Speaker 1: yourself may have had laser eyes on your Twitter profile,

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Speaker 1: longtime investor in bitcoin related companies, and now a bunch

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Speaker 1: of them hate you. So what do you back up? Like?

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Speaker 1: What do you do? And why are they mad at you? Yeah? Sure, so?

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Speaker 1: I mean so I you know, for context, I co

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Speaker 1: founded a venture firm that invests in all across the

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Speaker 1: crypto industry. This is actually becomes part of the story later.

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Speaker 1: You know, I identify as a bitcoin er. I think

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Speaker 1: bick when it is important and good, and my work

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Speaker 1: over the last five years is focused on really advocating

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Speaker 1: for bitcoin and you know, putting my resources to work

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Speaker 1: whatever they were in support of bitcoin specifically. And then

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Speaker 1: my fund. There is maybe a bit of a contradiction

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Speaker 1: there in the eyes of some because my fund, which

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Speaker 1: I started with Matt Walsh in invests all across all

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Speaker 1: across the crypto industry, primarily sort of crypto financial infrastructure

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Speaker 1: we call it, which is pretty you know, boring stuff

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Speaker 1: for the most part, basically making this sort of underlying

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Speaker 1: plumbing work better and connecting crypto to sort the FIAT

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Speaker 1: system and so on. And then that tension finally sort

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Speaker 1: of broke. Uh. The last couple of weeks when the bitcoiners,

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Speaker 1: I guess realized I don't know, had they never looked

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Speaker 1: at my funds website or what, but they kind of

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Speaker 1: realized that I don't exclusively invest in bitcoin stuff, and

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Speaker 1: kind of a pylon began, and then I took the

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Speaker 1: opportunity to clarify. You know, I'm personally a bitcoiner, but

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Speaker 1: I'm not like one of the orthodox hardliners. I don't

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Speaker 1: think it's immoral to, you know, invest in other blockchains.

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Speaker 1: And that kicked off this enormous sort of brew haha,

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Speaker 1: which you know, I don't. I think people must be

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Speaker 1: extremely bored because I don't see why it's such a

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Speaker 1: big deal. To be honest, I have a ton of questions,

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Speaker 1: but maybe maybe just to begin with, I would like

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Speaker 1: to get your thoughts on why this happened now, Because,

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Speaker 1: as you say, you've been investing in a variety of

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Speaker 1: crypto ventures for many years. Why do you think the

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Speaker 1: outpouring of anger the pylon happened this time around? Well, yeah,

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Speaker 1: it's a weird one because anyone that really knows me

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Speaker 1: knows that I have made you know, I've been promoting

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Speaker 1: my views on all kinds of topics, whether not just

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Speaker 1: bitcoin stuff for a while now, whether it's defy or

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Speaker 1: stable coins or anything like that, And so they know

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Speaker 1: that I'm a pluralist. I mean the company I co founded,

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Speaker 1: coin Metrics, you know that's been around since, runs notes

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Speaker 1: for dozens and dozens of blockchains. So if you need

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Speaker 1: the smallest thing about me, you know that I don't

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Speaker 1: just you know, consider it a sin to build on

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Speaker 1: other block chains or run other notes. I think, really

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Speaker 1: what happened is, you know, obviously by Quin is drawn

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Speaker 1: down from whatever sixty nine thousand two, I don't know

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Speaker 1: where it is today, exactly twenty thousand people want scapegoats.

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Speaker 1: A lot of the sort of core premises of the

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Speaker 1: bitcoin ideology have been undone. Frankly, I think there's been

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Speaker 1: a real collision with reality, like whether it's the stock

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Speaker 1: to flow model having thesis this folk these folk economic ideas.

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Speaker 1: For instance, bitcoin always you know, the cycle low is

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Speaker 1: always higher than the previous cycle high. You know a

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Speaker 1: lot of these concepts, you know, big quin becoming the

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Speaker 1: reserve currency within head right, the inflation hedge. I mean

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Speaker 1: that it's undelotiniable, that that hasn't really occurred. And so

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Speaker 1: a lot of these core premises and ideas were basically

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Speaker 1: falsified or you know, like significantly challenged by real world events.

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Speaker 1: You know, the like cycle was much smaller in magnitude

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Speaker 1: than than prior cycles were, and I think people are

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Speaker 1: just really upset and uh kind of on the hunt

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Speaker 1: for scapegoats. And then I was sort of the perfect one.

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Speaker 1: Previously people have this like perverse like um, you guys

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Speaker 1: know that movie like The wicker Man, where you know,

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Speaker 1: to ensure the good harvest you have to sort of

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Speaker 1: sacrifice someone. Basically you've been sacrificed on the altar of cry.

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Speaker 1: So if you look at the previous rage quits, like

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Speaker 1: high profile ones, I'm not saying, hi, rage quit, but

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Speaker 1: you know, my current are sort of historically at the

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Speaker 1: bottoms of previous cycles, and so I think people are

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Speaker 1: actually looking for that, looking for Thank you, Nick Carter

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Speaker 1: for your service. So you wrote this article or after

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Speaker 1: you know, you made the investment and it seemed interesting,

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Speaker 1: is uh sort of like related to signing into a

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Speaker 1: various services with your ethere and wall and we'll talk

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Speaker 1: about that, because I do think that's interesting stuff. People

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Speaker 1: freaked out at the investment and then you sort of

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Speaker 1: wrote this again, I know you're you're still a bitcoin

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Speaker 1: or you didn't divorce, but there's sort of like, you

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Speaker 1: know what, there really is this toxic element and you

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Speaker 1: point out it's like, you know, there's a lot of

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Speaker 1: bitcoin and Tracy brought this up at the beginning, is

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Speaker 1: that a culture is that technology. You're like, bitcoin is

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Speaker 1: not your like steak dinners that you like hang around with,

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Speaker 1: like your fellow laser eyes. But that Big said, like

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Speaker 1: I think of you as also to some extent an

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Speaker 1: advocate for bitcoin culture, and like you know, like you

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Speaker 1: rail against seed oils and do you think that's something

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Speaker 1: really bad happened in one and I think you're really

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Speaker 1: you know, lifting weight, uh not worshiping false meat Bitcoin

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Speaker 1: MAXI adjacent. Do you think like you contributed to this

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Speaker 1: idea that in addition to maybe being a money or

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Speaker 1: a technology, that there was also like this sort of

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Speaker 1: like hardline culture associated with owning the coins. Yeah, I

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Speaker 1: mean that culture undeniably exists, whether it's you know, kind

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Speaker 1: of a joke, like a lot of the stuff you

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Speaker 1: mentioned is like a little silly and you sort of

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Speaker 1: like lean into it, and also because it just sort

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Speaker 1: of perplexes outsiders and right, that's like kind of the

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Speaker 1: point is to you know, build up this edifice. It's

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Speaker 1: like sort of not clear if it's ironic or sincere. Right,

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Speaker 1: it means it's classic internet culture stuff. Why is that?

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Speaker 1: Why is that the point? Though? Because bitcoin, like it's

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Speaker 1: all about the network effect. Why would you want to

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Speaker 1: alienate good bothsiders? Sorry, yeah, I mean that's a good question.

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Speaker 1: I think it's easier to unite against like outside of voices,

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Speaker 1: whether it's like mainstream economists or the M s M. Right,

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Speaker 1: the dreaded m s M. It's sort of hard to

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Speaker 1: penetrate the culture, right if there's this veil of irony

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Speaker 1: coding everything, right, it's not clear if they're sincere. And

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Speaker 1: so then from the inside you can sort of like

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Speaker 1: mock these people when they sort of engage with your

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Speaker 1: ideas because it's like they're not part of the joke.

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Speaker 1: And I would say that's just like a classic defense tactic.

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Speaker 1: And so you sort of embrace, like, you know, deliberately

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Speaker 1: absurd ideas to maybe give like air covert to your

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Speaker 1: two maybe more serious ones. So what about the idea

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Speaker 1: that this sort of like hardline Max Shue culture has

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Speaker 1: at least in the past served Bitcoin well during periods

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Speaker 1: in which entities were trying to sort of change the code,

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Speaker 1: and of course I'm thinking most prominently about the block

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Speaker 1: size war in and where there was a a bid

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Speaker 1: by some largely more i would say, more corporate influence

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Speaker 1: to change the code, to expand bit coins throughput, to

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Speaker 1: reduce fees, and I think out of that there was

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Speaker 1: this sort of like hard line small block faction that

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Speaker 1: held off the change and seemed to be benefit or

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Speaker 1: a lot of people think that was the right direction,

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Speaker 1: but that this idea that this sort of culture is

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Speaker 1: beneficial and necessary, even if in the short term it

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Speaker 1: does repel people. Yeah, I I that's a great question.

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Speaker 1: I mean, I think if you go back to that

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Speaker 1: time and you know, really the block size war started

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Speaker 1: a long time ago, maybe even earlier than fourteen, was

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Speaker 1: probably the genesis. I would actually say a lot of

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Speaker 1: the people that were active participants then are not the

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Speaker 1: same participants now. I would say a lot of the

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Speaker 1: people that are the so called self you know, toxic

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Speaker 1: maxis or like self appointed defenders of the protocol like

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Speaker 1: those are actually newer bitcoiners. So like you have to

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Speaker 1: understand this churn, and I would say, what they're doing

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Speaker 1: is like, and I said this previously, they're doing kind

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Speaker 1: of like a sort of cargo cult like reenactment of

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Speaker 1: conflicts past. But you know, there's no real conflict right now.

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Speaker 1: Nobody's really aggressively trying to change Bitcoin in any sort

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Speaker 1: of hostile way. And so the block size war, like

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Speaker 1: I I still you know, come down on the same side.

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Speaker 1: I would support the small block idea. I think that's

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Speaker 1: basically an engineering discussion. And then there was also a

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Speaker 1: meta discussion about how should bitcoin be changed, what's the

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Speaker 1: most appropriate way to change bitcoin? And it's still clear

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Speaker 1: to me that the attempt to add bigger blocks to

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Speaker 1: bitcoin was pretty ham fisted and definitely very corporate and

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Speaker 1: totally out of step with sort of the actual values

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Speaker 1: of the bitcoin the way things had been done beforehand.

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Speaker 1: Whereas you know, if you know, and so like a

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Speaker 1: lot of people, it's almost like stolen valor a little bit, right,

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Speaker 1: It's like, um, it's like you know, someone taking to

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Speaker 1: the streets today and like assaulting random people and like

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Speaker 1: claiming lineage to you know, like their grandfather who fought

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Speaker 1: at Normandy or something like that. Right, it's like they're

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Speaker 1: reenacting the conflict from before, like you know, going through

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Speaker 1: the same emotions, but there's no real conflict today. I mean,

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Speaker 1: nobody's trying to change bitcoin anyway, so it's not clear

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Speaker 1: what they're defending bitcoin against. So you know, I think

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Speaker 1: there's been a bit of a subtle change there. Really

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Speaker 1: simple question, but what's the difference between or can you

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Speaker 1: just define toxic bitcoin maximalism, because I think one of

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Speaker 1: the things that's been going around about you now that

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Speaker 1: you know, um a lot of people are mad at you,

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Speaker 1: is this tweet from where you said something to the

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Speaker 1: effect of every bitcoin maximalist you've met had been friendly

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Speaker 1: and approachable, and now fast forward too and it seems

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Speaker 1: like you're saying, oh, no, you know, there's a lot

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Speaker 1: of toxicity in the community, so maybe you could just

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Speaker 1: give us a definition of what a talk sick bitcoin

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Speaker 1: maximalist is versus your run of the mill bitcoin MAXI yeah,

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Speaker 1: that I that tweet was true in to be clear, Um,

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Speaker 1: maybe I just hadn't met enough or I've only met

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Speaker 1: the right ones, but yeah, people were very nice to me.

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Speaker 1: I always still knew her to bitcoin back then, so yeah,

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Speaker 1: it's I think a lot of the issue here is

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Speaker 1: definitional because basically bitcoin maximalism emerged as like an epithet

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Speaker 1: that I think fatalic butterrant, actually coined in a kind

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Speaker 1: of pejorative sense, like saying bitcoin or bitcoinners were too

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Speaker 1: close minded and parochial and that's why he had to

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Speaker 1: make ethereum. And so a lot of the hatred for

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Speaker 1: the term came from that, I believe, and then some

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Speaker 1: people did embrace it though, and so then some bitcoinners

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Speaker 1: sort of call themselves maximalists, and the debate now is

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Speaker 1: really confused because nobody has their good definition for it,

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Speaker 1: even though there are people that call themselves this, and

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Speaker 1: there's a whole faction that does. And I think they're

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Speaker 1: skating on that you know, ambiguity a little bit to

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Speaker 1: try and avoid being pinned down in their beliefs. Um

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Speaker 1: So I think it's deliberate that they kind of refused

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Speaker 1: to define it. But I'll define in two ways, so

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Speaker 1: the soft form and hard form, so kind of like

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Speaker 1: reminiscent of the E M H. So soft form bitcoin maximalism.

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Speaker 1: And I wouldn't say this is toxic, but I think

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Speaker 1: this one's you know, pretty justifiable. Is like, look, bitcoin

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Speaker 1: is the only blockchain that's kind of worth building on.

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Speaker 1: Blockchain should probably only pertain to moving money around as

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Speaker 1: opposed to non monetary use cases. Other crypto assets are tokens.

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Speaker 1: They're sort of mostly waste of time, and there's definitely

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Speaker 1: a lot of scams out there. Stable coins are probably interesting.

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Speaker 1: This is sort of more adjacent, but maybe they should

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Speaker 1: reside on Bitcoin is apposed to other blockchains. And then,

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Speaker 1: like you're probably also pretty skeptical fractual reserve banking if

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Speaker 1: you subscribe to this ideology, and so it's kind of

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Speaker 1: like a more modern form of gold buggery, I would say.

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Speaker 1: And then you have the hard form, which I would

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Speaker 1: say is pretty venomous. Really, Bitcoin is absolutely the only asset,

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Speaker 1: certainly within the crypto sphere that is sort of moral

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Speaker 1: and good to own, and other assets are deeply sinful.

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Speaker 1: And you know, I'm using religious language because I consider

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Speaker 1: this to be a secular religion, Like it's a secular

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Speaker 1: religion to me. It's very obvious that it is. Now

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Speaker 1: they consider all coins is attacks on Bitcoin they've been

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Speaker 1: really zero some mindset, whether maybe that's true, maybe it

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Speaker 1: is zero some, but they consider all coins is like

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Speaker 1: actually a kind of a fiat like a retaliation of

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Speaker 1: the central bankers, um and uh. And they think that

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Speaker 1: launch conditions are absolutely paramount, so like the origin of

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Speaker 1: the blockchain is very important, and if there's an original

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Speaker 1: sin like you did an I O or pre mind,

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Speaker 1: that can never be undone. And then they think other

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Speaker 1: blockchains are literal scams, and they'll be explicit about this.

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Speaker 1: There's no other worthy place to build anything other than Bitcoin.

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Speaker 1: Anyone building another blockchains is sort of like being deeply misled,

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Speaker 1: either being tricked or they're being cynical. Then there's kind

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Speaker 1: of two competing views within this hard form camp. One

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Speaker 1: is that there's no innovation outside of Bitcoin whatsoever, and

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Speaker 1: that it's all kind of artifice and fraud. And then

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Speaker 1: the other view is that there is some innovation, but

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Speaker 1: it will inevitably collapse back in a bitcoin, and anything

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Speaker 1: good that's done anywhere else will collapse. And then there's

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Speaker 1: like all kinds of crazy, crazier stuff, which I'm sure

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Speaker 1: that both of you have encountered, which is like any

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Speaker 1: asset that is used in a monetary context at all

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Speaker 1: will collapse into bitcoin when hyperbit qualization occurs. That's you know,

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Speaker 1: sable coins are a waste of time because all fiats

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Speaker 1: are going to zero probably imminently. And then there's like

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Speaker 1: the lunatic fringe stuff like you know, stock to flow

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Speaker 1: dynamics being extremely important. You can even make models. These

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Speaker 1: people tend to think fractionals are banking is literally fraud

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Speaker 1: like literally fraudulent, and uh that you know, other adjacent

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Speaker 1: stuff like the hardness of the monetary medium that you're using,

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Speaker 1: like influences, like the very nature of society. It's off,

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Speaker 1: so like your time preference and the quality of art

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Speaker 1: and things and food and things like. Well, I was

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Speaker 1: gonna say because all coiners eat seed oils and bitcoiners

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Speaker 1: don't write. I mean to be clear, I think there

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Speaker 1: actually is a lot of scientific support from my anti

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Speaker 1: seed oil view, but we're not gonna so I actually

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Speaker 1: I would have a real question about soft form bitcoin maximalism.

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Speaker 1: And I think you're in a really good position because

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Speaker 1: to answer this, and you're because you're pregnantists, but also

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Speaker 1: because your investor in this space. But like, what is

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Speaker 1: the state of building on bitcoin? And I guess this

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Speaker 1: is something that uh, you know, the first time I

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Speaker 1: ever like checked out unit swap and was able to

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Speaker 1: like sign in with a wallet, meaning not just setting

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Speaker 1: up an account and not the not having I was like,

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Speaker 1: oh my god, this is like really cool. Like I

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Speaker 1: don't know if it's gonna go anywhere, but just like

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Speaker 1: the idea of like being able to click and you're

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Speaker 1: like you're in the app, it seemed like extremely cool

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Speaker 1: to me. And I know that your new controversial investment

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Speaker 1: is kind of related to that, But like, what is

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Speaker 1: the state of other stuff like building on bitcoin? Like

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Speaker 1: do you see it or people doing it? Doesn't work?

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Speaker 1: Could you theoretically build like a unit swap type environment

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Speaker 1: on just to be clear, the unit swap sign and

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Speaker 1: that's on ethereum right, yeah, yeah, I mean, um, I

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Speaker 1: guess there's two ideas here. One is like defy, like

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Speaker 1: the composable um infrastructure you would use to do sort

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Speaker 1: of swaps on defy. And then there's also the web

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Speaker 1: three like sign on with meta mask, so you definitely

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Speaker 1: couldn't really, I mean, you can do wallet based sign

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Speaker 1: on on Bitcoin with something like ellen off that is doable,

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Speaker 1: Like if you're custoding your keys, then you can It

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Speaker 1: doesn't matter what blockchain it is. You can definitely use

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Speaker 1: that as a log and but defy the more like

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Speaker 1: that's just a whole ecosystem that hasn't emerged on bitcoin,

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Speaker 1: and I think it'd be really challenging to rebuild all

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Speaker 1: of that kind of from scratch on bitcoin a because

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Speaker 1: like the underlying programming language is very very limited, and

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Speaker 1: then be just because the critical mass is on a

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Speaker 1: theorem and that that's kind of five six years of

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Speaker 1: development and understanding best practices and building out liquidity and

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Speaker 1: things like that. That's one of the things that you know,

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Speaker 1: I think it's very valid to be like a bitcoin

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Speaker 1: only person. I don't even like the term maximalist. I

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Speaker 1: totally hate it in fact um. But you know, we

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Speaker 1: invest in plenty of bitcoin only startups like founders that

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Speaker 1: are like, I only want to focus on bitcoin. I

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Speaker 1: think this is the biggest problem facing the world right now,

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Speaker 1: you know, fix the money, fix the world. And uh,

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Speaker 1: they're very sincere and we're completely fine with that, right

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Speaker 1: And they're building custodial tools for bitcoin, or they're building

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Speaker 1: exchanges or brokerage is you know, even like some stuff

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Speaker 1: you can refer to a smart contracts. Certainly, Lightning has

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Speaker 1: revitalized the developer community in bitcoin. To answer your question, Joe,

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Speaker 1: there's definitely a lot of enthusiasm there, but you know,

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Speaker 1: bitcoiners and so that's a valid perspective completely. But you know,

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Speaker 1: the hardliners, I would say, are totally They have to

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Speaker 1: find a way to dismiss what's happening on other block

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Speaker 1: chains and and dismiss the fact that Ethereum is charging,

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Speaker 1: you know, fifty times more in fees, is earning you know,

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Speaker 1: fifty times more in sort of blockchain revenue than Bitcoin is,

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Speaker 1: and the critical massive developers and applications and liquidity and tokens,

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Speaker 1: if you're into that, it really is elsewhere. And that's

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Speaker 1: just a reality the bitcoiners have to confront and and

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Speaker 1: many of them are. They have a hard time confronting that.

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Speaker 1: I think this is kind of the heart of a

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Speaker 1: lot of this disagreement. And Joe, I remember last year

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Speaker 1: you wrote a very very long and very good piece

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Speaker 1: about the sort of cultural split between Bitcoin and Defy

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Speaker 1: and this idea that a lot of Bitcoin supporters or

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Speaker 1: maxis really wanted to preserve the blockchain. They didn't want

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Speaker 1: to tinker with it, you know, don't change anything. It's

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Speaker 1: supposed to be as you know, immutable, timeless store of

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Speaker 1: value kind of idea verse is a lot of the

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Speaker 1: experimentation going on on DE five. So Nick, I'm curious

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Speaker 1: for your your view here, like why is it that

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Speaker 1: a lot of stuff seems to be built on other

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Speaker 1: types of chains versus Bitcoin, Like what is the hold

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Speaker 1: back for Bitcoin use cases? Because again, you know, you

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Speaker 1: can argue that there are some use cases and people

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Speaker 1: are doing some interesting stuff, but it definitely seems to

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Speaker 1: be less than what people are doing with other types

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Speaker 1: of technology. Yeah, I mean, there's just this attitude, and

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Speaker 1: I think comes down to design philosophy, right. You know,

401
00:22:34,760 --> 00:22:38,040
Speaker 1: from the bitcoin ors engineer mindset, you're very risk averse.

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Speaker 1: You want to make sure that the program is truly

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Speaker 1: bug free. You want to apply the same standards of

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Speaker 1: like maybe nuclear engineering or the kind of software you

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Speaker 1: put into plane that really can't fail. You can't have this,

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Speaker 1: you know, because you're dealing with you know, people's money.

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Speaker 1: That's sort of like the Bitcoin mindset, and and that's

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Speaker 1: why bitcoin itself has this kind of soft fork ideology

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Speaker 1: where you want everybody to up into changes. You don't

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Speaker 1: want changes to be breaking back backwards compatibility with prior

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Speaker 1: you know, implementations. It's very deliberate and you know, necessarily slow.

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Speaker 1: As a consequence, Bitcoin programming language has this thing called

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Speaker 1: bitcoin script, which is very enough fourth i think, and

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Speaker 1: it's very limited. And actually most of the sort of

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Speaker 1: they're called op codes that would have allowed you to

416
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Speaker 1: do creative things were basically disabled early on because they

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Speaker 1: would have also introduced a lot of bugs. And so

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Speaker 1: that's sort of like the development mindset, whereas ethereum, you know,

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Speaker 1: which is really emblematic of sort of like the alternatives.

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Speaker 1: So that's certainly the smart contract focused ones. They took

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Speaker 1: a deliberately very different attitude, much more aggressive, much more

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Speaker 1: rapid iteration and change, making the bass layer much more

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Speaker 1: suitable to build up, you know, rich applications, and they

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Speaker 1: also paid dearly for that. I mean, it's much more complex. Overall,

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Speaker 1: they're still trying to move to proofastake. There have been many,

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Speaker 1: many hacks. I mean, you can just look down the

427
00:24:02,640 --> 00:24:05,280
Speaker 1: leaderboard of any of these defy exploits. There's dozens and

428
00:24:05,320 --> 00:24:08,119
Speaker 1: dozens that are above a hundred million. It's kind of

429
00:24:08,119 --> 00:24:12,320
Speaker 1: the way safety regulations are written in blood, defy programming

430
00:24:12,359 --> 00:24:15,879
Speaker 1: best practices are written in hacks. But you know a

431
00:24:15,920 --> 00:24:18,240
Speaker 1: lot of Etherians will argue that was a good trade off.

432
00:24:18,840 --> 00:24:22,160
Speaker 1: I think there's a synthesis possibility, you know. I think

433
00:24:22,160 --> 00:24:24,760
Speaker 1: Bitcoin maybe did have the right attitude. They focused on

434
00:24:24,840 --> 00:24:28,680
Speaker 1: monetary hardness above all else, and soundness of the protocol

435
00:24:28,680 --> 00:24:32,720
Speaker 1: and security and resistance to hot hacks and inflation bugs

436
00:24:32,800 --> 00:24:35,239
Speaker 1: and things like that, and then other protocols were kind

437
00:24:35,240 --> 00:24:38,840
Speaker 1: of free to experiment, innovate and uh, you know, create

438
00:24:38,880 --> 00:24:42,280
Speaker 1: a substrate that you could use to build interesting kind

439
00:24:42,280 --> 00:24:46,400
Speaker 1: of composable infrastructures. And you would never have been able

440
00:24:46,440 --> 00:24:49,439
Speaker 1: to build modern day defy on bitcoin. That's just the

441
00:24:49,480 --> 00:24:51,959
Speaker 1: reality of it. Um. I don't think it's the end

442
00:24:51,960 --> 00:24:53,879
Speaker 1: of the world. The bitcoin doesn't have that built in.

443
00:24:54,080 --> 00:24:56,680
Speaker 1: I don't think it necessarily needs that. But yeah, I

444
00:24:56,720 --> 00:25:00,640
Speaker 1: think ultimately this whole thing comes down to design philosophy. Yeah.

445
00:25:00,720 --> 00:25:02,240
Speaker 1: I was going to ask how much of a role

446
00:25:02,320 --> 00:25:06,840
Speaker 1: does decentralization play in this, because I've always seen it

447
00:25:06,840 --> 00:25:08,960
Speaker 1: when it comes to Bitcoin as sort of a strength

448
00:25:09,240 --> 00:25:11,520
Speaker 1: and a weakness. So on. On the one hand, if

449
00:25:11,560 --> 00:25:16,960
Speaker 1: you're trying to design a censorship resistant currency, you know,

450
00:25:17,080 --> 00:25:20,320
Speaker 1: something that can sit outside of traditional power structures and

451
00:25:20,720 --> 00:25:25,879
Speaker 1: be relatively safe, then decentralization makes a lot of sense.

452
00:25:26,000 --> 00:25:29,840
Speaker 1: But if you're trying to do something you know, more defy,

453
00:25:30,000 --> 00:25:33,000
Speaker 1: like or build something that people are actually going to use,

454
00:25:33,680 --> 00:25:36,119
Speaker 1: often it ends up being done on something that is

455
00:25:36,400 --> 00:25:39,760
Speaker 1: in some senses centralized, like ethereum, something that maybe has

456
00:25:40,240 --> 00:25:43,560
Speaker 1: a leader who can kind of galvanize a support base

457
00:25:43,640 --> 00:25:48,159
Speaker 1: and lead people in a particular direction. So how do

458
00:25:48,240 --> 00:25:52,280
Speaker 1: you view that aspect of it? Yeah, I mean I

459
00:25:52,280 --> 00:25:55,000
Speaker 1: would say it's it's pretty paramount. Maybe my views have

460
00:25:55,040 --> 00:25:56,840
Speaker 1: evolved a little bit. I would say it's maybe less

461
00:25:56,840 --> 00:26:00,359
Speaker 1: of a binary, you know, decentralized versus holy centralized. I

462
00:26:00,480 --> 00:26:05,199
Speaker 1: probably compare these systems along a number of variables, but

463
00:26:06,080 --> 00:26:08,200
Speaker 1: you know, running in a theorem, note, if you compare

464
00:26:08,240 --> 00:26:12,560
Speaker 1: it to other blockchains, it's actually much more doable because, like, ultimately,

465
00:26:12,600 --> 00:26:15,400
Speaker 1: I would say decentralization is really a function of how

466
00:26:15,440 --> 00:26:17,320
Speaker 1: easy it is to run a node and participate as

467
00:26:17,359 --> 00:26:20,200
Speaker 1: an equal peer on the network. There's a few blockchains

468
00:26:20,240 --> 00:26:22,800
Speaker 1: that it's you know, virtually impossible, and so they sort

469
00:26:22,800 --> 00:26:26,560
Speaker 1: of maxed out the node size in order to put

470
00:26:26,720 --> 00:26:29,200
Speaker 1: push a lot of data through the network per unit time,

471
00:26:29,840 --> 00:26:32,320
Speaker 1: and then you know, other blockchains tried to keep the

472
00:26:32,600 --> 00:26:35,240
Speaker 1: data overhead low and make it really easy to participate

473
00:26:35,359 --> 00:26:38,520
Speaker 1: with Bitcoin being emblematic at that, and so there's like

474
00:26:38,560 --> 00:26:43,120
Speaker 1: a whole whole spectrum. I think maybe you know, bitcoinners,

475
00:26:43,200 --> 00:26:46,760
Speaker 1: some bitcoiners would say, you know, bitcoin made the right decision.

476
00:26:46,920 --> 00:26:49,400
Speaker 1: The idea is for anybody on Earth to be able

477
00:26:49,440 --> 00:26:52,040
Speaker 1: to run a node, maybe even on their smartphone, maybe

478
00:26:52,080 --> 00:26:56,119
Speaker 1: even with weak Internet connection. You know, clearly there's market

479
00:26:56,160 --> 00:26:59,600
Speaker 1: demand for an alternative model where that you're pushing you're

480
00:26:59,600 --> 00:27:03,639
Speaker 1: doing more computation per unit time. Fees are lower because

481
00:27:03,960 --> 00:27:07,280
Speaker 1: you're pushing more data through the system and so there's

482
00:27:07,320 --> 00:27:11,080
Speaker 1: more capacity. But you know, I would say, like you know,

483
00:27:11,160 --> 00:27:13,719
Speaker 1: just looking at a theorem, if you compare it to

484
00:27:13,760 --> 00:27:18,160
Speaker 1: the Bitcoin design philosophy, Bitcoin embraces layered model with initially

485
00:27:18,200 --> 00:27:20,520
Speaker 1: side chains was a big part of the vision, and

486
00:27:20,560 --> 00:27:23,359
Speaker 1: then with Lightning as an L two network, I would

487
00:27:23,359 --> 00:27:25,639
Speaker 1: say Etherum culture is kind of downstream a Bitcoin culture

488
00:27:25,640 --> 00:27:28,120
Speaker 1: in many ways they embrace the layered model too. There's

489
00:27:28,160 --> 00:27:30,320
Speaker 1: many many different L two is being built on a theorem.

490
00:27:30,359 --> 00:27:34,000
Speaker 1: So they're also ended up being more pragmatic in understanding

491
00:27:34,000 --> 00:27:36,760
Speaker 1: that you can't have the notes be arbitually large, so

492
00:27:36,960 --> 00:27:38,879
Speaker 1: that you know, I would say they actually embraced the

493
00:27:38,880 --> 00:27:57,760
Speaker 1: same philosophy at the end of the day. So, you know,

494
00:27:57,840 --> 00:27:59,440
Speaker 1: one of the things that you mentioned in the beginning

495
00:27:59,640 --> 00:28:03,800
Speaker 1: is a lot of like sort of bitcoin stories or

496
00:28:03,920 --> 00:28:06,640
Speaker 1: bitcoin theses have sort of blown up. And the big

497
00:28:06,680 --> 00:28:10,920
Speaker 1: one in two is that we have the highest inflation

498
00:28:11,280 --> 00:28:15,040
Speaker 1: in the US in forty years, and bitcoin has not

499
00:28:15,200 --> 00:28:18,240
Speaker 1: proved to be particularly robust against that. It sort of

500
00:28:18,280 --> 00:28:22,520
Speaker 1: has been moving in line with the stock market. Another

501
00:28:23,119 --> 00:28:26,160
Speaker 1: thing that happened in two that I don't think it's

502
00:28:26,240 --> 00:28:30,399
Speaker 1: as much attention is that is, you know, and my

503
00:28:30,640 --> 00:28:33,600
Speaker 1: one of my interests personally in bitcoin is this idea

504
00:28:33,680 --> 00:28:36,200
Speaker 1: of like censorship resistant money, the idea that I could

505
00:28:36,240 --> 00:28:39,160
Speaker 1: send you or Tracy some money and no third party

506
00:28:39,600 --> 00:28:42,080
Speaker 1: could tell us no, which I think like in a

507
00:28:42,120 --> 00:28:44,440
Speaker 1: time where you know, cash is going away and more

508
00:28:44,440 --> 00:28:47,560
Speaker 1: and more commerce it's conduct online is potentially a very

509
00:28:47,600 --> 00:28:51,600
Speaker 1: powerful thing. But the other thing that happened in is

510
00:28:51,720 --> 00:28:55,160
Speaker 1: we had the Canadian Trucker protests where a bunch of

511
00:28:55,560 --> 00:28:59,560
Speaker 1: the participants and donors lost access or had money frozen,

512
00:28:59,680 --> 00:29:03,080
Speaker 1: lost access to their bank accounts. But it didn't seem like,

513
00:29:03,200 --> 00:29:04,880
Speaker 1: you know, it seemed like, oh, this is a great

514
00:29:05,000 --> 00:29:07,800
Speaker 1: moment for bitcoin and theory, except that I don't think

515
00:29:07,840 --> 00:29:11,200
Speaker 1: like bitcoin was that powerful or that My impression was,

516
00:29:11,360 --> 00:29:14,280
Speaker 1: you know, it's easy for authorities to track the bitcoin

517
00:29:14,360 --> 00:29:16,680
Speaker 1: that were being sent to is like very public. There

518
00:29:16,760 --> 00:29:19,080
Speaker 1: was no particularly great way from as far as I

519
00:29:19,120 --> 00:29:22,240
Speaker 1: could tell, to coordinate donations. I think a lot of

520
00:29:22,240 --> 00:29:24,080
Speaker 1: it just ended up like in the hands of someone

521
00:29:24,120 --> 00:29:27,040
Speaker 1: and hopefully did they got it to the right people,

522
00:29:27,320 --> 00:29:29,880
Speaker 1: like it seemed like that was a failure too, And hey,

523
00:29:29,920 --> 00:29:34,680
Speaker 1: I'm curious, like if you agree and be if like, Okay,

524
00:29:34,720 --> 00:29:37,960
Speaker 1: it's not a great inflation hedge and right now it's

525
00:29:38,000 --> 00:29:42,040
Speaker 1: not really cut out for censorship resistant payments or store

526
00:29:42,440 --> 00:29:47,080
Speaker 1: like what exactly is the case for it? M Yeah,

527
00:29:47,200 --> 00:29:50,720
Speaker 1: that was a sobering moment. I think the Trucker protests

528
00:29:50,720 --> 00:29:54,320
Speaker 1: for a lot of bitcoiners because it basically became clear

529
00:29:54,400 --> 00:29:58,840
Speaker 1: that there was no platform or application that existed that

530
00:29:58,880 --> 00:30:03,640
Speaker 1: could facilitate out funding with bitcoin, and it showed just

531
00:30:04,440 --> 00:30:07,160
Speaker 1: and the tools that were put together we're pretty new,

532
00:30:07,920 --> 00:30:11,800
Speaker 1: they were very analog, and so it's just evidenced kind

533
00:30:11,800 --> 00:30:15,720
Speaker 1: of a lack of I don't know, developer talent or

534
00:30:16,120 --> 00:30:20,240
Speaker 1: enthusiasm or interest for building these things, whereas it There

535
00:30:20,280 --> 00:30:25,000
Speaker 1: are good crowdfunding tools in quote unquote crypto generally, but

536
00:30:25,160 --> 00:30:28,520
Speaker 1: for the most part they don't concern bitcoin. So maybe

537
00:30:28,560 --> 00:30:31,320
Speaker 1: that's kind of a great example because it shows there's

538
00:30:31,360 --> 00:30:34,960
Speaker 1: just less in it for a developer building on bitcoin.

539
00:30:35,320 --> 00:30:37,959
Speaker 1: That's kind of part of the crowding out effect. I

540
00:30:37,960 --> 00:30:41,360
Speaker 1: think that this easy token landscape and here's where I'm

541
00:30:41,360 --> 00:30:43,640
Speaker 1: you know, very sympathetic to the views of bitcoin is right,

542
00:30:43,720 --> 00:30:46,880
Speaker 1: is is there's a landscape. You know, you look at

543
00:30:46,880 --> 00:30:48,840
Speaker 1: your opportunity costs and if you're gonna build something, you

544
00:30:48,880 --> 00:30:51,240
Speaker 1: might as well do it in a tokenized way and

545
00:30:51,320 --> 00:30:55,800
Speaker 1: get your early liquidity, you know, and you can get

546
00:30:55,840 --> 00:30:59,080
Speaker 1: your exit or you know, certainly get some liquidity without

547
00:30:59,120 --> 00:31:01,600
Speaker 1: bringing a company to I p O and you can

548
00:31:01,680 --> 00:31:03,920
Speaker 1: raise money more easily. Maybe you can raise money directly

549
00:31:03,960 --> 00:31:07,520
Speaker 1: from retail. Obviously there's like security you just put you

550
00:31:07,600 --> 00:31:10,080
Speaker 1: just put the money in a box and more money

551
00:31:10,160 --> 00:31:12,720
Speaker 1: comes out of the box with with with crypto, it

552
00:31:12,720 --> 00:31:16,360
Speaker 1: seems pretty great. But in all seriousness, and I'm you know,

553
00:31:16,400 --> 00:31:18,640
Speaker 1: I wanna shift focus a little bit to that you

554
00:31:18,680 --> 00:31:21,720
Speaker 1: do invest in you know, that's the why we're talking

555
00:31:22,040 --> 00:31:25,680
Speaker 1: non bitcoin crypto. But it seems to me like so

556
00:31:25,760 --> 00:31:28,200
Speaker 1: much of what gets built and what has gotten built

557
00:31:28,200 --> 00:31:34,680
Speaker 1: over the last uh this cycle is de facto. I mean,

558
00:31:34,760 --> 00:31:37,440
Speaker 1: there have been a lot of Ponzi schemes or things

559
00:31:37,480 --> 00:31:42,480
Speaker 1: that aren't Ponzi schemes, but the Ponzi economics where mainly

560
00:31:42,560 --> 00:31:45,160
Speaker 1: the only way they approuve value is by more people

561
00:31:45,160 --> 00:31:47,800
Speaker 1: buying in, and then at some point it goes down

562
00:31:47,840 --> 00:31:50,440
Speaker 1: when some people want to sell without actually like any

563
00:31:50,520 --> 00:31:54,040
Speaker 1: real consumer product. And you know, like you've also been

564
00:31:54,120 --> 00:31:58,000
Speaker 1: pretty critical of sort of like vcs in the broader

565
00:31:58,040 --> 00:32:01,160
Speaker 1: crypto space for having uh spent the last several years

566
00:32:01,360 --> 00:32:05,440
Speaker 1: back in Ponzi schemes. Yeah, it's a mess. It's a

567
00:32:05,480 --> 00:32:10,680
Speaker 1: total mess. I mean, you know that it seems like

568
00:32:11,200 --> 00:32:13,760
Speaker 1: a lot of the quote unquote financial innovation that's occurred

569
00:32:13,760 --> 00:32:17,800
Speaker 1: in the broader crypto space has been innovation and creating

570
00:32:18,120 --> 00:32:20,880
Speaker 1: veiled or Ponzi is basically there or things that are

571
00:32:20,880 --> 00:32:23,560
Speaker 1: Ponzi adjacent or have I mean, people talk on ironically

572
00:32:23,560 --> 00:32:26,840
Speaker 1: about Ponzi nomics, and if you look at if you

573
00:32:26,880 --> 00:32:29,520
Speaker 1: look at the field of token economics or quote unquote

574
00:32:29,520 --> 00:32:32,400
Speaker 1: mechanism design, people dress these things up in this whole

575
00:32:32,400 --> 00:32:34,719
Speaker 1: like advisory firms that will help you with your token omics.

576
00:32:35,280 --> 00:32:37,840
Speaker 1: It's just basically like if you look at the actual mechanics,

577
00:32:37,840 --> 00:32:40,160
Speaker 1: it's a lot of it is ponzi. It's like, how

578
00:32:40,200 --> 00:32:43,440
Speaker 1: do you juice returns? How do you tinker with the

579
00:32:43,480 --> 00:32:45,840
Speaker 1: system a little bit too, you know, make the token

580
00:32:45,880 --> 00:32:49,360
Speaker 1: price go up temporarily. Some of the biggest and and

581
00:32:49,840 --> 00:32:52,280
Speaker 1: you know, virtually all of the vcs in the industry

582
00:32:52,400 --> 00:32:55,520
Speaker 1: are investing this stuff. Some of them really do believe

583
00:32:55,560 --> 00:32:57,880
Speaker 1: in the projects, and that's kind of the curious thing

584
00:32:58,040 --> 00:33:01,440
Speaker 1: is you know, they'll like maybe they like convinced themselves.

585
00:33:01,440 --> 00:33:04,360
Speaker 1: Like if you look at the Terra discourse or on Tara,

586
00:33:04,480 --> 00:33:07,560
Speaker 1: a lot of the firm's backing Tara, like they actually,

587
00:33:08,440 --> 00:33:10,680
Speaker 1: you know, some of them got out and some of

588
00:33:10,680 --> 00:33:13,680
Speaker 1: them didn't. Some of them round trip the position because

589
00:33:13,680 --> 00:33:16,600
Speaker 1: they started to believe the research they were putting out

590
00:33:17,600 --> 00:33:20,000
Speaker 1: where they were kind of justifying the Terra mechanics and

591
00:33:20,080 --> 00:33:22,320
Speaker 1: thinking like, hey, maybe this can work. But yeah, like

592
00:33:22,720 --> 00:33:25,280
Speaker 1: you know, I don't know if I care to list them,

593
00:33:25,320 --> 00:33:29,320
Speaker 1: but most of the really hyped sort of consumer applications

594
00:33:29,840 --> 00:33:32,760
Speaker 1: in the crypto space, certainly the ones that involved tokens,

595
00:33:32,800 --> 00:33:36,400
Speaker 1: A lot of them have very specific Ponzi dynamics which

596
00:33:36,480 --> 00:33:40,280
Speaker 1: can be pinpointed um and they're kind of all unwinding. Now, well,

597
00:33:40,320 --> 00:33:43,080
Speaker 1: there was a certain game that was really popular in

598
00:33:43,120 --> 00:33:45,320
Speaker 1: the Philippines and the last year he is like, oh,

599
00:33:45,400 --> 00:33:48,160
Speaker 1: this is providing an economic lifeline, and we had the

600
00:33:48,160 --> 00:33:51,280
Speaker 1: founder I'm talking about actually on it was like you

601
00:33:51,320 --> 00:33:54,120
Speaker 1: had to like buy some and if tease and then

602
00:33:54,160 --> 00:33:56,080
Speaker 1: they fought, and then you got more and still like

603
00:33:56,120 --> 00:33:58,600
Speaker 1: the question was like, yeah, but is the game fund

604
00:33:58,640 --> 00:34:01,280
Speaker 1: to play? Is there anything point here other than just

605
00:34:01,320 --> 00:34:04,880
Speaker 1: like trying to win more tokens? And now the prices

606
00:34:04,960 --> 00:34:08,319
Speaker 1: crashed and it seems like usage is way down, and

607
00:34:08,640 --> 00:34:12,239
Speaker 1: you know, it still seems like basically there's not much

608
00:34:12,360 --> 00:34:15,720
Speaker 1: there as far as I can tell, beyond the idea

609
00:34:15,800 --> 00:34:18,719
Speaker 1: that like you'll play, you're making money, but the game

610
00:34:18,800 --> 00:34:23,960
Speaker 1: isn't that great. Yeah, it's remarkable, it's really astonishing, and

611
00:34:24,440 --> 00:34:27,640
Speaker 1: you know, I'm not wanting to pile on specific projects

612
00:34:27,880 --> 00:34:31,120
Speaker 1: aggressively or or vcs or anything like that, but actually

613
00:34:31,400 --> 00:34:35,360
Speaker 1: was I had some really negative consequences. I mean, it

614
00:34:35,440 --> 00:34:37,480
Speaker 1: was super hyped, and you know, some of the best

615
00:34:37,480 --> 00:34:41,560
Speaker 1: feasts or most reputable venture firms were investing in the

616
00:34:41,600 --> 00:34:45,200
Speaker 1: likes of Axie or Stepan or Tera things that ended

617
00:34:45,280 --> 00:34:49,799
Speaker 1: up having these like genuinely Ponzi like dynamics. Acxie was

618
00:34:49,840 --> 00:34:52,600
Speaker 1: particularly bad because if you looked at where the player

619
00:34:52,600 --> 00:34:55,879
Speaker 1: base was, it was in the Philippines, Cube of Venezuela,

620
00:34:56,480 --> 00:35:01,920
Speaker 1: places where you know, relatively poor population shan and um.

621
00:35:02,080 --> 00:35:04,319
Speaker 1: People had Internet connections and then they could, you know,

622
00:35:04,360 --> 00:35:06,400
Speaker 1: all of a sudden earned by playing this game. But

623
00:35:06,840 --> 00:35:08,680
Speaker 1: it's nobody played the game for the sake of the game.

624
00:35:08,719 --> 00:35:11,880
Speaker 1: They played the game to get the tokens, and of course,

625
00:35:12,160 --> 00:35:15,000
Speaker 1: you know, as the tokens sold off, the game stopped

626
00:35:15,040 --> 00:35:18,040
Speaker 1: being worth playing. There was some really perverse dynamics and

627
00:35:18,080 --> 00:35:21,719
Speaker 1: the Axis situation. I mean, you had sub theme that

628
00:35:21,800 --> 00:35:25,239
Speaker 1: developed where basically Westerners would buy the n f T

629
00:35:25,480 --> 00:35:27,359
Speaker 1: s that would you know, the characters that would make

630
00:35:27,360 --> 00:35:30,120
Speaker 1: you eligible to play the game, and then kind of

631
00:35:30,280 --> 00:35:33,480
Speaker 1: like lease them out to you know, local players and

632
00:35:33,600 --> 00:35:37,920
Speaker 1: say the Philippines. And this was euphemistically called the scholar program.

633
00:35:38,920 --> 00:35:40,719
Speaker 1: In my view, is kind of like a form of

634
00:35:40,760 --> 00:35:45,680
Speaker 1: digital sharecropping. Basically where the you know, the locals playing

635
00:35:45,680 --> 00:35:47,680
Speaker 1: the game earning a couple of bucks a day, didn't

636
00:35:47,680 --> 00:35:51,360
Speaker 1: even own the fruits of their labor. Basically, they were

637
00:35:51,400 --> 00:35:54,040
Speaker 1: literally toiling on behalf of like Westerners that had the

638
00:35:54,080 --> 00:35:57,400
Speaker 1: capitol to buy the assets to play the game. And

639
00:35:57,480 --> 00:36:00,440
Speaker 1: then the worst part is that, you know, all utimately

640
00:36:00,560 --> 00:36:03,839
Speaker 1: some of the some of these like Filipinos, etcetera, like

641
00:36:04,640 --> 00:36:07,319
Speaker 1: got fully bought in. They were persuaded like, yeah, this

642
00:36:07,360 --> 00:36:09,319
Speaker 1: is a great thing, it's a great investment, this gonna

643
00:36:09,320 --> 00:36:13,160
Speaker 1: be my livelihood, quit their jobs in some cases, bought

644
00:36:13,360 --> 00:36:16,040
Speaker 1: the in game property, and then of course it all

645
00:36:16,120 --> 00:36:19,359
Speaker 1: kind of collapsed and like the property values created, and

646
00:36:19,440 --> 00:36:22,080
Speaker 1: so you know, you've got like Western it's all very

647
00:36:22,120 --> 00:36:25,480
Speaker 1: perverse in my view. You have like Western vcs like

648
00:36:25,560 --> 00:36:30,640
Speaker 1: waxing lyrical about like the amazing benefits that uh, you know,

649
00:36:30,680 --> 00:36:33,320
Speaker 1: Axe is bringing to logal places, you know, some of

650
00:36:33,360 --> 00:36:36,360
Speaker 1: the poorer countries in the world, and then like meanwhile,

651
00:36:36,400 --> 00:36:39,560
Speaker 1: the whole thing collapses and a lot of these folks

652
00:36:39,880 --> 00:36:43,160
Speaker 1: inside poor countries are left holding the bag, and so like,

653
00:36:43,239 --> 00:36:45,800
Speaker 1: not only is this just like a Ponzi like system

654
00:36:45,880 --> 00:36:48,799
Speaker 1: that was like pretty obviously going to fail because like

655
00:36:48,840 --> 00:36:51,080
Speaker 1: nobody played the game for any reason other than like

656
00:36:51,120 --> 00:36:54,319
Speaker 1: the token dynamics. It had this like nasty, sort of

657
00:36:54,360 --> 00:36:57,319
Speaker 1: like colonial vibe to it, and I think ended up

658
00:36:57,360 --> 00:36:59,320
Speaker 1: causing a lot of kind of real world damage to

659
00:36:59,360 --> 00:37:03,040
Speaker 1: people that couldn't really afford it. It is very dystopian,

660
00:37:03,400 --> 00:37:05,640
Speaker 1: isn't it, Like these people sort of toiling away on

661
00:37:05,680 --> 00:37:08,799
Speaker 1: their phones in order to get like tokens back to

662
00:37:09,080 --> 00:37:12,920
Speaker 1: rich people in advanced economies. Um, But just on the

663
00:37:12,960 --> 00:37:17,640
Speaker 1: topic of use cases that are not related to ponsionomics,

664
00:37:17,640 --> 00:37:21,560
Speaker 1: like where are those? Because I think the thing that

665
00:37:21,600 --> 00:37:25,880
Speaker 1: makes a lot of people suspicious of crypto as a

666
00:37:25,920 --> 00:37:29,600
Speaker 1: whole is that we've been told now for over a

667
00:37:29,680 --> 00:37:34,680
Speaker 1: decade that this is life changing, world changing technology, but

668
00:37:34,760 --> 00:37:38,640
Speaker 1: it feels like people are still trying to force a

669
00:37:38,880 --> 00:37:41,680
Speaker 1: use case. Like if it was so big, it feels

670
00:37:41,760 --> 00:37:45,759
Speaker 1: like the use cases should come relatively naturally, but they

671
00:37:45,800 --> 00:37:48,440
Speaker 1: don't seem to. And I think something you said in

672
00:37:48,800 --> 00:37:52,160
Speaker 1: your own UM post recently was you know that there

673
00:37:52,200 --> 00:37:56,840
Speaker 1: just aren't enough bitcoin specific companies for you to invest

674
00:37:56,920 --> 00:37:59,840
Speaker 1: in as a VC. And it feels like to some extent,

675
00:38:00,080 --> 00:38:02,799
Speaker 1: like there are a lot of crypto companies out there

676
00:38:02,880 --> 00:38:05,799
Speaker 1: that are fundraising and asking for money, but there are

677
00:38:05,880 --> 00:38:09,120
Speaker 1: a lot of necessarily good ones. So where are those

678
00:38:09,160 --> 00:38:11,600
Speaker 1: good use cases, those good companies, and why does it

679
00:38:11,600 --> 00:38:14,759
Speaker 1: feel like it's taking so long? Yeah, I mean I

680
00:38:14,760 --> 00:38:18,000
Speaker 1: would carve bitcoind bitcoin out here and say, you know,

681
00:38:18,080 --> 00:38:20,359
Speaker 1: think of it as a lodder day. Not to like

682
00:38:20,440 --> 00:38:22,200
Speaker 1: make the pitch to either of you have heard a

683
00:38:22,239 --> 00:38:24,120
Speaker 1: zillion times, but you know, if you think of it

684
00:38:24,160 --> 00:38:26,839
Speaker 1: as a lodder day kind of improved gold with better

685
00:38:26,880 --> 00:38:30,879
Speaker 1: auditability qualities and you know, better self custody and it's

686
00:38:30,920 --> 00:38:34,120
Speaker 1: cheaper to take physical delivery and so on, then you

687
00:38:34,160 --> 00:38:37,880
Speaker 1: don't really need that much adjacent infrastructure or applications around it.

688
00:38:37,920 --> 00:38:39,520
Speaker 1: You need ways for people to store it and hold

689
00:38:39,520 --> 00:38:42,480
Speaker 1: it and transact with it. But that's kind of it,

690
00:38:42,520 --> 00:38:45,520
Speaker 1: and so so it is naturally constrained sort of the

691
00:38:45,520 --> 00:38:48,839
Speaker 1: startup environment for bitcoin. And that's kind of okay. Like

692
00:38:48,880 --> 00:38:52,839
Speaker 1: the bitcoin movement is more about ideology, as you say,

693
00:38:53,280 --> 00:38:56,000
Speaker 1: and it's like I call it a revanchist. I don't

694
00:38:56,000 --> 00:38:58,560
Speaker 1: know if that's how you pronounced that movement to sort

695
00:38:58,560 --> 00:39:00,840
Speaker 1: of like take back what we want ad so to speak,

696
00:39:01,880 --> 00:39:03,480
Speaker 1: you know, in terms of trying to find a way

697
00:39:03,480 --> 00:39:07,120
Speaker 1: to obliquely um regain a gold standard. And so that's

698
00:39:07,120 --> 00:39:09,839
Speaker 1: sort of like the bigcoin movement and there's maybe not

699
00:39:09,880 --> 00:39:12,400
Speaker 1: that much to invest in aside from custody and exchanges

700
00:39:13,080 --> 00:39:15,239
Speaker 1: sort of in the in the broader crypto space, which

701
00:39:15,280 --> 00:39:18,240
Speaker 1: I guess has been rebranded to web three for reasons

702
00:39:18,280 --> 00:39:21,920
Speaker 1: unknown to me, there's definitely a few things which are

703
00:39:21,960 --> 00:39:24,359
Speaker 1: you know, really, I don't know why we call it

704
00:39:24,400 --> 00:39:28,160
Speaker 1: that now, but I'll oblige. Like I am a proponent

705
00:39:28,200 --> 00:39:31,600
Speaker 1: of stable coins, I have been for a long time.

706
00:39:32,080 --> 00:39:35,040
Speaker 1: I think they offer I think Baladi calls them a

707
00:39:35,120 --> 00:39:38,760
Speaker 1: hundred x improvement over FIAT. You know, send an international

708
00:39:38,800 --> 00:39:40,919
Speaker 1: bank choir and then send a stable coin and you'll

709
00:39:40,920 --> 00:39:43,640
Speaker 1: know what I mean. I think there's clear product market

710
00:39:43,640 --> 00:39:47,240
Speaker 1: fit there. They are a way to dollarize the world,

711
00:39:47,440 --> 00:39:50,840
Speaker 1: and there's definitely crypto dollarization occurring out there, especially in

712
00:39:50,880 --> 00:39:55,360
Speaker 1: emerging markets where maybe your local banking system is questionable,

713
00:39:55,360 --> 00:40:01,640
Speaker 1: in your local currencies inflationary or untrustworthy. So that sector alone,

714
00:40:01,680 --> 00:40:04,520
Speaker 1: I don't think he needs any justification. It's sort of

715
00:40:04,600 --> 00:40:08,560
Speaker 1: is very useful today. Obviously there have been failures there,

716
00:40:08,680 --> 00:40:12,719
Speaker 1: but I'm pretty optimistic about the sector, assuming we can

717
00:40:12,760 --> 00:40:16,320
Speaker 1: find a way from a regulatory perspective to treat tokens

718
00:40:16,360 --> 00:40:19,279
Speaker 1: as equity right to sort of bite the bullet and

719
00:40:19,320 --> 00:40:23,640
Speaker 1: acknowledge that tokens are or should be equity most of

720
00:40:23,640 --> 00:40:26,440
Speaker 1: the time in a kind of an explicit way. I

721
00:40:26,440 --> 00:40:29,799
Speaker 1: would say that would be a significant improvement over kind

722
00:40:29,800 --> 00:40:31,480
Speaker 1: of the default. Like right now, if I wanted to,

723
00:40:31,960 --> 00:40:34,720
Speaker 1: you know, start a company and pay someone in equity,

724
00:40:34,800 --> 00:40:37,000
Speaker 1: that would be really difficult to do with, you know,

725
00:40:37,080 --> 00:40:39,560
Speaker 1: like just some you know, pay a user in equity

726
00:40:39,680 --> 00:40:43,120
Speaker 1: for contributing some data or something. That would be very

727
00:40:43,200 --> 00:40:48,279
Speaker 1: challenging to do, probably with traditional structures and tools. If

728
00:40:48,280 --> 00:40:50,879
Speaker 1: you look at yield farming, I don't like the name,

729
00:40:50,960 --> 00:40:57,160
Speaker 1: but that's basically contributing basically protocol equity to market makers

730
00:40:57,680 --> 00:41:01,920
Speaker 1: that are providing liquidity. You can imagine a world where

731
00:41:01,960 --> 00:41:04,720
Speaker 1: you know, Uber is paying its driver as an Uber

732
00:41:04,719 --> 00:41:07,319
Speaker 1: stock um maybe as a kicker on top of their

733
00:41:07,360 --> 00:41:10,919
Speaker 1: normal salary for every mile driven, and you can maybe

734
00:41:10,920 --> 00:41:13,239
Speaker 1: figure out a way to do that with you know,

735
00:41:13,280 --> 00:41:16,840
Speaker 1: regular old equity. But that's kind of why people like tokens.

736
00:41:17,360 --> 00:41:20,000
Speaker 1: Is one reason builders like them, because they just give

737
00:41:20,000 --> 00:41:22,399
Speaker 1: you tons of flexibility in terms of like dolling out

738
00:41:22,719 --> 00:41:25,680
Speaker 1: de facto equity and your thing. So I like that.

739
00:41:25,760 --> 00:41:28,719
Speaker 1: I also like the transparency you get from you know,

740
00:41:28,800 --> 00:41:30,160
Speaker 1: you can go look at any of these DE five

741
00:41:30,200 --> 00:41:32,920
Speaker 1: protocols and see the cash flows rolling in in real time.

742
00:41:33,840 --> 00:41:36,560
Speaker 1: I think that's a big enhancement, a big improvement over

743
00:41:37,400 --> 00:41:40,879
Speaker 1: your quarterly disclosures, right, and so you know, real time

744
00:41:40,920 --> 00:41:44,719
Speaker 1: financial disclosures is really cool and uh, you know, very

745
00:41:44,760 --> 00:41:49,120
Speaker 1: optimistic about that. The startup in question that you know,

746
00:41:49,200 --> 00:41:53,280
Speaker 1: really kicked off the whole hullabaloo was a wallet based

747
00:41:53,560 --> 00:41:57,480
Speaker 1: authentication log in startup. That's another one which which is

748
00:41:57,480 --> 00:42:00,160
Speaker 1: an easy when which is already you know, doesn't really

749
00:42:00,200 --> 00:42:03,480
Speaker 1: need any defending because it just works because basically, if

750
00:42:03,480 --> 00:42:06,640
Speaker 1: you're using a password set of passwords, you're probably using

751
00:42:06,640 --> 00:42:09,040
Speaker 1: a password manager, which means you are a custoding your

752
00:42:09,040 --> 00:42:13,120
Speaker 1: own sort of cryptographic material. This just sort of formalizes that.

753
00:42:14,080 --> 00:42:17,720
Speaker 1: It means you can, you know, hold your own online

754
00:42:17,719 --> 00:42:22,640
Speaker 1: identity self sovereign and instead of allowing Google or Facebook

755
00:42:23,080 --> 00:42:26,359
Speaker 1: to own it or Apple and then, um, you know,

756
00:42:26,680 --> 00:42:28,400
Speaker 1: it's kind of hard to express in words, and I

757
00:42:28,400 --> 00:42:30,680
Speaker 1: guess there's probably been a bit of a failure among

758
00:42:30,719 --> 00:42:33,319
Speaker 1: the vcs that have talked about this, but yeah, the

759
00:42:33,320 --> 00:42:36,000
Speaker 1: ability to log on with your keys, you know, that

760
00:42:36,120 --> 00:42:39,360
Speaker 1: to me is like a critical part of um of

761
00:42:39,480 --> 00:42:44,399
Speaker 1: flattening the Internet topology, of eliminating some of those hierarchies

762
00:42:44,440 --> 00:42:47,400
Speaker 1: that give web two companies so much power and and

763
00:42:47,440 --> 00:42:50,520
Speaker 1: restoring a measure of power back to the users. So yeah,

764
00:42:50,560 --> 00:42:52,759
Speaker 1: I actually think that's a you know, that's another sort

765
00:42:52,760 --> 00:42:57,000
Speaker 1: of key went in here. So I'm actually really into

766
00:42:57,600 --> 00:43:01,000
Speaker 1: the ease of signing in with that type of wallet.

767
00:43:01,080 --> 00:43:04,040
Speaker 1: And both Joe and I have experimented with this. I

768
00:43:04,080 --> 00:43:07,480
Speaker 1: can't remember who who sent us our names as like

769
00:43:07,640 --> 00:43:13,160
Speaker 1: Ethan identity I forget. Yeah, yeah, I feel really bad

770
00:43:13,160 --> 00:43:16,560
Speaker 1: that I've forgotten. Whatever. It's interesting and I can totally

771
00:43:16,560 --> 00:43:20,520
Speaker 1: see the use case for them. Yeah, that's right. I

772
00:43:20,560 --> 00:43:25,560
Speaker 1: think he was preemptively squatted on our son on the

773
00:43:25,640 --> 00:43:27,880
Speaker 1: day that we became It was so that the toxic

774
00:43:27,960 --> 00:43:31,120
Speaker 1: bitcoin maximalist wouldn't take them and do something nefarious with them.

775
00:43:31,120 --> 00:43:35,040
Speaker 1: But anyway, UM, we've experimented with that, and I guess

776
00:43:35,040 --> 00:43:36,960
Speaker 1: my question is, like I can see the use case

777
00:43:37,000 --> 00:43:40,799
Speaker 1: for that, but does it justify the amount of money

778
00:43:40,840 --> 00:43:43,040
Speaker 1: that's flowing into the space, Like is it a big

779
00:43:43,160 --> 00:43:45,840
Speaker 1: enough market to justify some of the valuations that have

780
00:43:45,880 --> 00:43:50,400
Speaker 1: been put on this The justification would be that you

781
00:43:50,440 --> 00:43:54,319
Speaker 1: can actually really architect the whole Internet, and you know,

782
00:43:54,880 --> 00:43:58,640
Speaker 1: maybe that's a little bit questionable. Certainly, the amounts of

783
00:43:58,640 --> 00:44:01,680
Speaker 1: money flowing into crypt oh Web three early stage venture

784
00:44:01,680 --> 00:44:05,040
Speaker 1: in general private equity, I think we all agree are

785
00:44:05,080 --> 00:44:08,880
Speaker 1: probably likely to drive or turns down just based on

786
00:44:08,960 --> 00:44:11,520
Speaker 1: sort of like historical norms, and I think that a

787
00:44:11,520 --> 00:44:14,160
Speaker 1: lot of that has been a rotation. It's just a

788
00:44:14,200 --> 00:44:17,120
Speaker 1: function of sort of like institutional allocators rotating into those

789
00:44:17,200 --> 00:44:19,160
Speaker 1: riskier asset classes. You know, I don't know what the

790
00:44:19,239 --> 00:44:22,040
Speaker 1: right number is in terms of Web three investment, but yeah,

791
00:44:22,040 --> 00:44:23,680
Speaker 1: I mean, like I think if you wanted to tell

792
00:44:23,719 --> 00:44:26,799
Speaker 1: yourself the exciting story, you would say, look, the fan

793
00:44:26,880 --> 00:44:29,959
Speaker 1: companies are the biggest companies in the world, and they've

794
00:44:30,000 --> 00:44:33,960
Speaker 1: built those valuations on the back of, you know, building

795
00:44:34,000 --> 00:44:37,839
Speaker 1: these huge data silos systems that aren't interoperable, that are

796
00:44:37,840 --> 00:44:41,640
Speaker 1: hard to leave, that are very sticky users kind of

797
00:44:41,680 --> 00:44:44,440
Speaker 1: stuck in those systems, and they can't you know, effectively

798
00:44:44,600 --> 00:44:46,840
Speaker 1: like to you know, to take a different analysis, you

799
00:44:46,880 --> 00:44:50,160
Speaker 1: could say these are like digital fiefdoms, you know, whether

800
00:44:50,200 --> 00:44:54,520
Speaker 1: it's Twitter, Facebook, TikTok, whatever, Like the shareholders get all

801
00:44:54,560 --> 00:44:57,880
Speaker 1: the value and the users that do all the work

802
00:44:58,040 --> 00:45:02,000
Speaker 1: get nothing. They're the surfs, you know, toiling away in

803
00:45:02,040 --> 00:45:04,160
Speaker 1: the fields. They don't even own the fruits. They're labor.

804
00:45:04,880 --> 00:45:07,759
Speaker 1: And so then the kind of Web three story is like,

805
00:45:07,840 --> 00:45:09,600
Speaker 1: we're gonna do a kind of a digital form of

806
00:45:09,680 --> 00:45:14,160
Speaker 1: enclosure where we're gonna you know, put up a fence

807
00:45:14,200 --> 00:45:16,360
Speaker 1: and you're actually gonna be able to have your forty

808
00:45:16,400 --> 00:45:18,960
Speaker 1: acres in a mule and uh, you know, really take

809
00:45:19,000 --> 00:45:22,560
Speaker 1: ownership of the digital value you're creating. And that's a

810
00:45:22,640 --> 00:45:25,600
Speaker 1: very appealing story, you know, I I believe it to

811
00:45:25,600 --> 00:45:29,120
Speaker 1: a certain extent. And and so part of the tools

812
00:45:29,160 --> 00:45:33,200
Speaker 1: necessary there are these like decentralized domain system like e

813
00:45:33,360 --> 00:45:36,279
Speaker 1: n S for instance, that's one while it based sign

814
00:45:36,280 --> 00:45:39,120
Speaker 1: on tools where you're self custodying the data that's tied

815
00:45:39,160 --> 00:45:42,200
Speaker 1: to your own identity. The pathway to get there is

816
00:45:42,239 --> 00:45:44,439
Speaker 1: sort of like unclear, I would say, as of yet.

817
00:45:44,440 --> 00:45:46,440
Speaker 1: So maybe it's a timing question whether now is the

818
00:45:46,520 --> 00:45:48,520
Speaker 1: right time to deploy a ton of capital against it.

819
00:45:49,320 --> 00:45:52,320
Speaker 1: But the destination I think is clear, which is taking

820
00:45:52,360 --> 00:45:55,840
Speaker 1: these very centralized, you know silos where you're very exposed

821
00:45:55,880 --> 00:45:59,160
Speaker 1: to what a small handful of people in silicon Valley

822
00:45:59,200 --> 00:46:01,120
Speaker 1: think about the world and the way they want to

823
00:46:01,160 --> 00:46:05,480
Speaker 1: moderate things and uh, you know, completely changing that, putting

824
00:46:05,520 --> 00:46:08,600
Speaker 1: the power back in the hands the users. Maybe the

825
00:46:08,680 --> 00:46:12,239
Speaker 1: users are actually getting ownership in these platforms which is

826
00:46:12,239 --> 00:46:16,719
Speaker 1: commensurate to their contribution. You know, you maybe there's a

827
00:46:16,760 --> 00:46:21,319
Speaker 1: notion of digital property rights which emerges here, but yeah,

828
00:46:21,440 --> 00:46:23,759
Speaker 1: I would say it's still kind of like a bit

829
00:46:23,800 --> 00:46:26,239
Speaker 1: of an unclear vision overall. So when you made your

830
00:46:26,400 --> 00:46:29,640
Speaker 1: recent investment, one of your points that you made is,

831
00:46:30,080 --> 00:46:33,520
Speaker 1: you know, this is an equity investment. This is a company.

832
00:46:33,640 --> 00:46:36,440
Speaker 1: I'm buying private shares in it and hopefully it will

833
00:46:36,480 --> 00:46:39,239
Speaker 1: be worth more. And you made the point is like,

834
00:46:39,640 --> 00:46:42,600
Speaker 1: this is not about getting access to some token. This

835
00:46:42,719 --> 00:46:47,279
Speaker 1: company is not launching some new excrement coin that all

836
00:46:47,360 --> 00:46:50,600
Speaker 1: the I don't know what I say that my understanding

837
00:46:50,760 --> 00:46:55,719
Speaker 1: is in recent years many vcs have In fact, like

838
00:46:55,840 --> 00:46:58,279
Speaker 1: it seems my impression, the way it works is you

839
00:46:58,360 --> 00:47:02,040
Speaker 1: ostensibly make an investment in a company, but then the

840
00:47:02,040 --> 00:47:05,920
Speaker 1: company itself has a big treasury of its own coin,

841
00:47:06,640 --> 00:47:09,839
Speaker 1: and either you know, the ideas that coin goes up

842
00:47:09,880 --> 00:47:12,760
Speaker 1: in value and so therefore the equity and the company

843
00:47:12,760 --> 00:47:15,000
Speaker 1: that holds those coins gives up a lot in value

844
00:47:15,120 --> 00:47:18,440
Speaker 1: and then the vcs or maybe the vcs get a

845
00:47:18,440 --> 00:47:20,759
Speaker 1: direct allocation of the coins. But then they also have

846
00:47:20,880 --> 00:47:23,720
Speaker 1: like a incentive to like pump the pump the network

847
00:47:23,760 --> 00:47:25,560
Speaker 1: or pump the coins to the public. And these are

848
00:47:25,600 --> 00:47:29,480
Speaker 1: like on publicly. These are like publicly traded stock in

849
00:47:29,480 --> 00:47:32,640
Speaker 1: many cases, except not regulated. And also I get the

850
00:47:32,640 --> 00:47:35,440
Speaker 1: impression there's like a huge gap between what some of

851
00:47:35,480 --> 00:47:38,800
Speaker 1: these private rounds were and then where they immediately trade

852
00:47:38,960 --> 00:47:41,320
Speaker 1: once the tokens are listed on binance or f t

853
00:47:41,600 --> 00:47:44,439
Speaker 1: X or coin base or something like that. What's your

854
00:47:44,560 --> 00:47:47,880
Speaker 1: view on what happened over the last couple of years,

855
00:47:48,080 --> 00:47:50,719
Speaker 1: and what's your view on sort of like vcs doing

856
00:47:51,040 --> 00:47:55,799
Speaker 1: token investments. Yeah, I mean, uh, you know this one

857
00:47:55,840 --> 00:47:58,680
Speaker 1: in particular, this company question they I don't believe they

858
00:47:58,680 --> 00:48:01,719
Speaker 1: have any intention to create a token, and but you what,

859
00:48:01,920 --> 00:48:04,840
Speaker 1: it's very common and when you're making any equity investment,

860
00:48:04,840 --> 00:48:07,160
Speaker 1: the most common model is that is safe with a

861
00:48:07,160 --> 00:48:10,400
Speaker 1: token warrant. So even if there is no token, it

862
00:48:10,520 --> 00:48:14,600
Speaker 1: just gives it gives the investors the ability to you know,

863
00:48:14,680 --> 00:48:19,320
Speaker 1: exercise that option if a token does emerge. And basically

864
00:48:19,920 --> 00:48:24,280
Speaker 1: you know, most vcs will pressure their investees into creating

865
00:48:24,280 --> 00:48:27,160
Speaker 1: a token, even if it's spurious merit less has no purpose,

866
00:48:27,400 --> 00:48:30,800
Speaker 1: right because token valuations are just a function of the

867
00:48:30,880 --> 00:48:33,959
Speaker 1: hype for the most part that the team is able

868
00:48:33,960 --> 00:48:36,239
Speaker 1: to generate around it. They're not really grounded and very

869
00:48:36,320 --> 00:48:39,680
Speaker 1: much Now in some cases, you know, there's kind of

870
00:48:39,719 --> 00:48:41,880
Speaker 1: actually an interesting tug at war that's going to develop

871
00:48:41,960 --> 00:48:45,239
Speaker 1: here between token holders and shareholders. When you have these,

872
00:48:45,400 --> 00:48:48,520
Speaker 1: you basically have a shadow cap table, so you have

873
00:48:48,640 --> 00:48:50,279
Speaker 1: you know, the shareholders in the business and then you

874
00:48:50,280 --> 00:48:52,879
Speaker 1: have the token holders, and they're not necessarily the same,

875
00:48:52,960 --> 00:48:55,880
Speaker 1: especially if the token has been trading or you know,

876
00:48:55,920 --> 00:48:58,440
Speaker 1: there's a yield farming program or something like that. It

877
00:48:58,480 --> 00:49:00,640
Speaker 1: doesn't really make sense to have two cat tables, right,

878
00:49:00,640 --> 00:49:03,000
Speaker 1: It's like, oh, here's the equity and here's the junior equity.

879
00:49:03,120 --> 00:49:05,920
Speaker 1: Like why And then even weirder if you have a

880
00:49:05,920 --> 00:49:09,839
Speaker 1: token that's accruing some revenue from the protocol or smart

881
00:49:09,880 --> 00:49:13,000
Speaker 1: contracts that the team has built, right, And there's a

882
00:49:13,000 --> 00:49:15,120
Speaker 1: lot of these things that accrue tons of revenue, right,

883
00:49:15,160 --> 00:49:17,120
Speaker 1: and so you know, I think it's smarter to just

884
00:49:17,200 --> 00:49:20,920
Speaker 1: be a straightforward company with a standard business model, or

885
00:49:21,239 --> 00:49:22,840
Speaker 1: if you're going to go to the token route not

886
00:49:22,880 --> 00:49:25,440
Speaker 1: to have the corporate equity, you know, kind of fighting

887
00:49:26,000 --> 00:49:29,359
Speaker 1: against the token holders and and we're gonna find there

888
00:49:29,360 --> 00:49:31,120
Speaker 1: will be a ton of debates here, especially with some

889
00:49:31,160 --> 00:49:33,840
Speaker 1: of these larger crypto companies that have both a token

890
00:49:33,920 --> 00:49:36,000
Speaker 1: and they have equity. What we're gonna find is there

891
00:49:36,000 --> 00:49:39,080
Speaker 1: will be fight here and the shareholders will probably prevail

892
00:49:39,520 --> 00:49:42,719
Speaker 1: because ultimately the token holders have a claimand nothing, which

893
00:49:42,760 --> 00:49:44,640
Speaker 1: is kind of the problem with the token. It's it's

894
00:49:44,640 --> 00:49:47,879
Speaker 1: pretty perverse, but you don't really have a claim at all,

895
00:49:48,680 --> 00:49:50,840
Speaker 1: and you know, when push comes to shove, I wouldn't

896
00:49:50,840 --> 00:49:53,200
Speaker 1: want to be a token at the moment. Like the

897
00:49:53,280 --> 00:49:57,239
Speaker 1: Unit swap token holders don't really have any either control

898
00:49:57,920 --> 00:50:00,520
Speaker 1: or claim or anything but that to can just trade

899
00:50:00,520 --> 00:50:03,439
Speaker 1: it a lot. At one point it was really valuable. Yeah,

900
00:50:03,600 --> 00:50:06,040
Speaker 1: it's Uni Swap as the poster child for this, because

901
00:50:06,280 --> 00:50:08,279
Speaker 1: it's kind of the company that you want. I think

902
00:50:08,320 --> 00:50:10,359
Speaker 1: it's called Uni Swap Labs. That's the kind it's that's

903
00:50:10,360 --> 00:50:13,120
Speaker 1: the thing you want ownership over. The Uni swap token

904
00:50:13,200 --> 00:50:16,319
Speaker 1: has and it's not clear what the claim is. There's

905
00:50:16,360 --> 00:50:20,120
Speaker 1: no real formal claim on anything aside from quote unquote governance,

906
00:50:20,440 --> 00:50:23,000
Speaker 1: which is not even clear the token holders control governance

907
00:50:23,040 --> 00:50:27,239
Speaker 1: either for that matter. So yeah, I think what would

908
00:50:27,280 --> 00:50:29,920
Speaker 1: be a better situation is if maybe we got some

909
00:50:30,000 --> 00:50:34,880
Speaker 1: legislative development which said, Okay, look tokens, we're gonna harmonize

910
00:50:34,920 --> 00:50:38,319
Speaker 1: tokens with securities laws, and you have to do these

911
00:50:38,400 --> 00:50:42,359
Speaker 1: kinds of disclosures and you can't lie about the disclosures either.

912
00:50:42,880 --> 00:50:46,359
Speaker 1: Maybe the tokens are or on chain business models are

913
00:50:46,400 --> 00:50:50,319
Speaker 1: more amenable to real ton disclosures too, so maybe it's

914
00:50:50,320 --> 00:50:53,600
Speaker 1: a boon for those regulators, but you'd have also to

915
00:50:53,680 --> 00:50:56,440
Speaker 1: tie that to sort of insider trading and asymmetries and

916
00:50:56,520 --> 00:50:59,640
Speaker 1: things like that. I think actually the European legislation that

917
00:50:59,760 --> 00:51:03,600
Speaker 1: just amount MICAH has some interesting templates that maybe US

918
00:51:04,040 --> 00:51:06,400
Speaker 1: regulators could follow. But I think that would be the

919
00:51:06,440 --> 00:51:09,080
Speaker 1: best outcome, because otherwise it's just going to be this nasty,

920
00:51:09,400 --> 00:51:12,360
Speaker 1: drawn out all these sequence of battles between token holders

921
00:51:12,360 --> 00:51:15,880
Speaker 1: and shareholders. Basically the shareholders are gonna win, and anybody

922
00:51:15,920 --> 00:51:18,640
Speaker 1: that bought the token thinking that they're getting a claim

923
00:51:18,760 --> 00:51:21,560
Speaker 1: on the you know, cash flows occurring to the protocol

924
00:51:21,640 --> 00:51:24,480
Speaker 1: or whatever, uh, they're going to be mistaken in that.

925
00:51:25,760 --> 00:51:30,000
Speaker 1: So I want to go back to Twitter abuse. And

926
00:51:31,200 --> 00:51:33,520
Speaker 1: you know, I mentioned in the intro that last year

927
00:51:33,800 --> 00:51:36,239
Speaker 1: one of one of my worst experiences with it was

928
00:51:36,320 --> 00:51:40,719
Speaker 1: this tweet about bitcoin after the CPI numbers came out. Joe,

929
00:51:40,840 --> 00:51:44,720
Speaker 1: you also tweeted the same chart on that same day,

930
00:51:44,800 --> 00:51:48,120
Speaker 1: and I actually I I screenshot at this for posterity

931
00:51:49,080 --> 00:51:53,640
Speaker 1: because I'm really into data analysis obviously. So my tweet

932
00:51:53,760 --> 00:51:58,480
Speaker 1: got sixty one replies. Your tweet of the same chart

933
00:51:58,719 --> 00:52:02,719
Speaker 1: got twenty seven reply. None of them were ad hominem attacks,

934
00:52:03,239 --> 00:52:07,280
Speaker 1: nothing sexist, nothing racist, or you know, like personally insulting.

935
00:52:08,000 --> 00:52:11,399
Speaker 1: So I I guess my question is, like Nick, when

936
00:52:11,400 --> 00:52:15,040
Speaker 1: it comes to bitcoin maximalism, like it feels like a

937
00:52:15,120 --> 00:52:19,120
Speaker 1: part of it is I'm thinking how to characterize it.

938
00:52:19,239 --> 00:52:21,680
Speaker 1: But you know, it feels like women bear the brunt

939
00:52:21,760 --> 00:52:25,720
Speaker 1: of a lot of criticism from a lot of bitcoin bros.

940
00:52:25,840 --> 00:52:29,840
Speaker 1: And they're almost all guys. Can you explain that aspect

941
00:52:29,880 --> 00:52:33,040
Speaker 1: to us and like what needs to change in order

942
00:52:33,080 --> 00:52:36,520
Speaker 1: to bring more women into crypto, because it does feel

943
00:52:36,520 --> 00:52:38,680
Speaker 1: to me like, if this is about creating a network,

944
00:52:39,840 --> 00:52:43,560
Speaker 1: leaving out half the population seems like a mistake. Yeah,

945
00:52:43,600 --> 00:52:46,560
Speaker 1: and and it's very uncomfortable terrain. And I don't think

946
00:52:47,160 --> 00:52:49,840
Speaker 1: many bitcoiners want to reckon with this, but there is

947
00:52:49,880 --> 00:52:56,120
Speaker 1: an identitarian element to this whole philosophy, culture, religion, whatever

948
00:52:56,160 --> 00:52:58,520
Speaker 1: you want to call it. And yeah, the hardline or

949
00:52:58,560 --> 00:53:03,239
Speaker 1: bitcoin maxie types are basically homogeneous of you know, their

950
00:53:03,280 --> 00:53:06,680
Speaker 1: male for the most part white. You know, they are

951
00:53:06,719 --> 00:53:09,799
Speaker 1: all kind of think and act the same. And uh,

952
00:53:10,320 --> 00:53:13,279
Speaker 1: you know, it's really nasty strains in there. That's just

953
00:53:13,360 --> 00:53:15,520
Speaker 1: a fact, you know, not just against women. There's a

954
00:53:15,560 --> 00:53:19,000
Speaker 1: big anti Semitic strain in there, which is evident if

955
00:53:19,040 --> 00:53:21,680
Speaker 1: you look onto the surface any movement that makes it

956
00:53:21,680 --> 00:53:25,800
Speaker 1: it's hard like certain conspiracy theories about finance or central bankers,

957
00:53:25,960 --> 00:53:28,680
Speaker 1: like it's just a couple of degrees away. We all

958
00:53:28,840 --> 00:53:31,880
Speaker 1: we all know where that goes. Yeah, And like I

959
00:53:32,360 --> 00:53:35,320
Speaker 1: try to be pretty nice online, I've sort of maybe

960
00:53:35,360 --> 00:53:37,799
Speaker 1: patchy track record there, I think, Tracy, I think I

961
00:53:37,880 --> 00:53:40,719
Speaker 1: probably actually you probably look along the replies you'll see

962
00:53:40,760 --> 00:53:44,000
Speaker 1: me and yes, you have, you have been filed on

963
00:53:44,280 --> 00:53:46,360
Speaker 1: to me. I will just point that out. But I

964
00:53:46,400 --> 00:53:50,799
Speaker 1: do think I totally acknowledge that. I don't think I

965
00:53:50,840 --> 00:53:54,359
Speaker 1: ever said anything too on toward. But yeah, I look,

966
00:53:54,600 --> 00:53:56,360
Speaker 1: this is why I think it's important to draw a

967
00:53:56,400 --> 00:53:59,760
Speaker 1: line with you know, and disassociate myself from from this community,

968
00:54:00,120 --> 00:54:02,279
Speaker 1: not a bitcoin er. It's like, I just think you

969
00:54:02,320 --> 00:54:04,720
Speaker 1: don't Bickoin doesn't have to be a religion, it doesn't

970
00:54:04,800 --> 00:54:07,719
Speaker 1: have to be a lifestyle. It doesn't have to be

971
00:54:07,760 --> 00:54:11,040
Speaker 1: something that is hyper emotional and causes you to lash

972
00:54:11,080 --> 00:54:14,880
Speaker 1: out at anyone, whether it's journalists or you know, Paul Kirgman.

973
00:54:15,120 --> 00:54:17,799
Speaker 1: I mean, frankly, he probably deserves some of the ire,

974
00:54:18,320 --> 00:54:21,799
Speaker 1: but um, you know, it doesn't have to be. It

975
00:54:21,880 --> 00:54:25,640
Speaker 1: doesn't have to be this nasty, nasty movement based on

976
00:54:25,680 --> 00:54:29,000
Speaker 1: ad hominems. You're not defending bitcoin from anything, You're just

977
00:54:29,080 --> 00:54:34,120
Speaker 1: making it look incredibly insular and resistant outsiders. Now, I

978
00:54:34,160 --> 00:54:37,280
Speaker 1: think bitcoin is gonna be fine. Right, Like Bitcoin's good idea.

979
00:54:37,560 --> 00:54:41,240
Speaker 1: It kind of works just fine, whether or not there's

980
00:54:41,400 --> 00:54:44,680
Speaker 1: armies of like cyber Hornet, toxy Max, he's quote unquote

981
00:54:44,719 --> 00:54:47,840
Speaker 1: defending the protocol or anything like that. Bitcoin is pretty

982
00:54:47,840 --> 00:54:50,960
Speaker 1: indifferent to that. It's indifferent to sort of me defecting

983
00:54:51,200 --> 00:54:53,880
Speaker 1: from hard line bitcoinism. It's indifferent to all that stuff.

984
00:54:54,200 --> 00:54:56,480
Speaker 1: I think it's just sort of the economics that are

985
00:54:56,560 --> 00:55:02,080
Speaker 1: ultimately persuasive. But yeah, I don't know. I I think, um,

986
00:55:02,120 --> 00:55:05,360
Speaker 1: this is why I'm I'm trying to defect from. And

987
00:55:05,440 --> 00:55:07,799
Speaker 1: to be clear, I never consider myself a maximalist. But yeah,

988
00:55:08,000 --> 00:55:10,720
Speaker 1: this is why I think it's important for a movement

989
00:55:10,800 --> 00:55:15,759
Speaker 1: of like call them bitcoin secular risks to emerge rationalists

990
00:55:15,800 --> 00:55:18,680
Speaker 1: as secularist people that believe in bitcoin but are also

991
00:55:19,000 --> 00:55:22,400
Speaker 1: open minded. They believe in facts the world of reality,

992
00:55:22,560 --> 00:55:25,520
Speaker 1: and acknowledge that there's development and other block chains, that

993
00:55:25,560 --> 00:55:30,600
Speaker 1: it's not deeply sinful to build elsewhere too, transact elsewhere right,

994
00:55:30,640 --> 00:55:33,960
Speaker 1: that you don't need to tie these like fringe beliefs

995
00:55:33,960 --> 00:55:39,520
Speaker 1: and acts to a monetary and technical project. Nick, I

996
00:55:39,560 --> 00:55:43,279
Speaker 1: remember years ago, I don't know, maybe like twenty nine

997
00:55:43,640 --> 00:55:47,239
Speaker 1: or something years ago on TV I asked you if

998
00:55:47,280 --> 00:55:50,400
Speaker 1: the having was a myth or whether it's priced, and

999
00:55:50,680 --> 00:55:52,520
Speaker 1: you said it was, and You're like, yeah, it doesn't

1000
00:55:52,520 --> 00:55:56,000
Speaker 1: really make any sense. And so the early seeds of

1001
00:55:56,040 --> 00:56:01,000
Speaker 1: you going soft were evident even back. And but Nick,

1002
00:56:01,120 --> 00:56:03,240
Speaker 1: it was it was great to have you on odd

1003
00:56:03,280 --> 00:56:06,239
Speaker 1: loads is a conversation I wanted to make happen for

1004
00:56:06,280 --> 00:56:09,239
Speaker 1: a long time. So I really appreciate you, really really

1005
00:56:09,280 --> 00:56:12,520
Speaker 1: appreciate you coming on Thanks Joe, Thanks Tracy, Thanks Nick.

1006
00:56:12,600 --> 00:56:19,480
Speaker 1: I found this conversation very cathartic, very good things about

1007
00:56:19,480 --> 00:56:34,959
Speaker 1: the bear market. All right, Thanks Nick. I like that conversation.

1008
00:56:35,160 --> 00:56:39,719
Speaker 1: You know, I've always, even during his more Maxi period, Maxie,

1009
00:56:41,200 --> 00:56:44,960
Speaker 1: I've always thought Nick was like a bitcoin realist as

1010
00:56:44,960 --> 00:56:47,839
Speaker 1: opposed to a religionist, even during the more extreme thing.

1011
00:56:48,200 --> 00:56:52,839
Speaker 1: And I think he is pretty realistic still about like

1012
00:56:53,160 --> 00:56:55,960
Speaker 1: the pluses and minuses of all of it. Well, so

1013
00:56:56,120 --> 00:56:59,399
Speaker 1: I question here's what I think. I think it all

1014
00:56:59,480 --> 00:57:02,200
Speaker 1: boils down to whether or not you think bitcoin is

1015
00:57:02,200 --> 00:57:05,719
Speaker 1: a technology play or a cultural play. And I do

1016
00:57:05,880 --> 00:57:09,160
Speaker 1: question nixt statement at the end about bitcoin doesn't have

1017
00:57:09,280 --> 00:57:13,600
Speaker 1: to be a religion, because if it doesn't have these

1018
00:57:13,600 --> 00:57:16,440
Speaker 1: certain connotations attached to it, then all you're left with

1019
00:57:16,720 --> 00:57:19,120
Speaker 1: is the actual technology, and I think there's still a

1020
00:57:19,200 --> 00:57:22,920
Speaker 1: question mark over how useful that actually is. Now. If

1021
00:57:22,920 --> 00:57:26,320
Speaker 1: you're going to treat it as you know, something like gold,

1022
00:57:26,440 --> 00:57:29,080
Speaker 1: which to me is much more of a cultural thing

1023
00:57:29,160 --> 00:57:33,600
Speaker 1: that's about gold's position in society, then like you cannot

1024
00:57:33,640 --> 00:57:35,920
Speaker 1: divorce it from the way people feel about it. This

1025
00:57:35,960 --> 00:57:38,720
Speaker 1: is a really well put I actually I completely agree.

1026
00:57:38,760 --> 00:57:42,560
Speaker 1: Like on some level it's like why does a bitcoin

1027
00:57:42,680 --> 00:57:45,840
Speaker 1: have value? So it's like on Thethereum or on these

1028
00:57:45,880 --> 00:57:49,960
Speaker 1: other chains, you can actually sort of like explain pretty

1029
00:57:50,000 --> 00:57:52,960
Speaker 1: crisply why it has value. Like I can transfer dollar

1030
00:57:53,080 --> 00:57:57,320
Speaker 1: denominated stable points very easily to you on ethereum and

1031
00:57:57,760 --> 00:58:00,400
Speaker 1: you sort of like pay the ethereum holder is for

1032
00:58:00,600 --> 00:58:03,720
Speaker 1: the service of conducting that transaction for us. There's no

1033
00:58:03,840 --> 00:58:06,480
Speaker 1: faith involved with that, there's no But why it is

1034
00:58:06,480 --> 00:58:09,960
Speaker 1: a bitcoin? Why is it worth something and not nothing?

1035
00:58:10,240 --> 00:58:13,240
Speaker 1: Is sort of like this really difficult question to answer

1036
00:58:13,320 --> 00:58:15,880
Speaker 1: with respect to bitcoin, And I do think there's a

1037
00:58:15,960 --> 00:58:18,760
Speaker 1: large faith element and even and this is something I've

1038
00:58:18,760 --> 00:58:23,680
Speaker 1: always thought interesting, like even gold. Why did gold take off?

1039
00:58:23,720 --> 00:58:26,000
Speaker 1: In part, like one of some of the early mythology

1040
00:58:26,080 --> 00:58:29,800
Speaker 1: was like gold doesn't tarnish, and so the ancients said, like, oh,

1041
00:58:29,840 --> 00:58:33,480
Speaker 1: this must be a divine metal because it's unlike everything

1042
00:58:33,520 --> 00:58:36,520
Speaker 1: else that exists on earth. Gold doesn't have this sort

1043
00:58:36,520 --> 00:58:40,400
Speaker 1: of u uh, it doesn't degrade over time. It's divine

1044
00:58:40,880 --> 00:58:42,919
Speaker 1: and something like that. So I do feel like even

1045
00:58:43,040 --> 00:58:47,080
Speaker 1: if even just sort of like a reincarnated gold. But

1046
00:58:47,120 --> 00:58:50,520
Speaker 1: how do you how do you separate how do you

1047
00:58:50,560 --> 00:58:53,240
Speaker 1: separate it from the culture and religion? So I agree.

1048
00:58:53,360 --> 00:58:55,960
Speaker 1: I agree, Like it's hard to know what bitcoin is

1049
00:58:55,960 --> 00:58:58,000
Speaker 1: if there's no culture, right and even today we talk

1050
00:58:58,040 --> 00:59:01,600
Speaker 1: about you know, gold bugs, which obviously connotes like a

1051
00:59:01,640 --> 00:59:05,400
Speaker 1: certain portion of society and a certain belief system. And

1052
00:59:05,600 --> 00:59:09,240
Speaker 1: because of that, gold still has like a role in

1053
00:59:09,280 --> 00:59:13,640
Speaker 1: traditional financial assets. Also thought nixt point about like sort

1054
00:59:13,640 --> 00:59:17,800
Speaker 1: of the bitcoin laser eyes as kind of I don't know,

1055
00:59:17,840 --> 00:59:21,760
Speaker 1: maybe LARPing is the right word, or stolen valor where

1056
00:59:21,800 --> 00:59:24,439
Speaker 1: like there were one point these sort of like big

1057
00:59:24,480 --> 00:59:27,360
Speaker 1: conflicts with the history of bitcoin, and people are trying

1058
00:59:27,400 --> 00:59:30,080
Speaker 1: to change the protocol, but that's gone and you know,

1059
00:59:30,160 --> 00:59:32,000
Speaker 1: now that's not a big thing. People have moved on.

1060
00:59:32,200 --> 00:59:34,480
Speaker 1: If you don't like bitcoin, you can like build some

1061
00:59:34,520 --> 00:59:37,440
Speaker 1: other chain. And so it feels like there's this desire

1062
00:59:37,560 --> 00:59:41,400
Speaker 1: to continuous state of conflict or perceived threats, like all

1063
00:59:41,440 --> 00:59:44,760
Speaker 1: the central bankers or after Jamie Diamond is after us whatever.

1064
00:59:44,760 --> 00:59:47,520
Speaker 1: It's like, no, they're probably like they don't know they're not,

1065
00:59:47,720 --> 00:59:51,000
Speaker 1: but that's sort of like they that they have to

1066
00:59:51,080 --> 00:59:54,040
Speaker 1: maintain that like permanent state of siege mentality to keep

1067
00:59:54,040 --> 00:59:56,400
Speaker 1: it right. I mean, I would be happy if we

1068
00:59:56,440 --> 00:59:58,760
Speaker 1: could just go I don't want to go back, but

1069
00:59:58,800 --> 01:00:01,680
Speaker 1: if we could just have a situation where you can

1070
01:00:01,720 --> 01:00:05,280
Speaker 1: have a conversation about the strengths and the weaknesses a

1071
01:00:05,360 --> 01:00:08,760
Speaker 1: bitcoin without someone screaming at you. You know this is

1072
01:00:08,840 --> 01:00:12,760
Speaker 1: fund or have fun staying poor or just like insulting

1073
01:00:12,800 --> 01:00:14,360
Speaker 1: the way you love. Well, now we can say that

1074
01:00:14,440 --> 01:00:17,880
Speaker 1: to them. We can it have fun staying part Yeah,

1075
01:00:17,920 --> 01:00:19,680
Speaker 1: now that big plant has lost so much money. This

1076
01:00:19,880 --> 01:00:22,720
Speaker 1: is a cathartic episode. All right, shall we leave it there?

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Speaker 1: Let's leave it there. This has been another episode of

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01:00:25,320 --> 01:00:28,240
Speaker 1: the All Thoughts podcast. I'm Tracy Alloway. You can follow

1079
01:00:28,280 --> 01:00:30,960
Speaker 1: me on Twitter at Tracy Alloway and I'm Joe Why

1080
01:00:31,000 --> 01:00:34,280
Speaker 1: Isn't Thal? You can follow me on Twitter at the Stalwark.

1081
01:00:34,560 --> 01:00:37,040
Speaker 1: You can follow our guests Nick Carter on Twitter. He's

1082
01:00:37,200 --> 01:00:41,920
Speaker 1: Nick Double Underscore Carter. You can follow our producer Carmen

1083
01:00:42,000 --> 01:00:45,000
Speaker 1: Rodriguez at Carmen Armine and check out all of the

1084
01:00:45,000 --> 01:01:02,040
Speaker 1: Bloomberg podcasts onto the handle at podcasts. Thanks for listening

1085
01:01:05,960 --> 01:01:07,800
Speaker 1: year to