WEBVTT - Fred Ehrsam

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<v Speaker 1>Hi everyone, I'm Emily Chang and this is Bloomberg Studio

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<v Speaker 1>One Point Oh podcast, a series where I speak with

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<v Speaker 1>the biggest influencers in technology and media. Over the last decade,

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<v Speaker 1>I've had in depth conversations with the very people shaping

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<v Speaker 1>the future of business of our world, sharing their vision

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<v Speaker 1>for what comes next. Today, we take a deep dive

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<v Speaker 1>into all things crypto as we speak to a true

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<v Speaker 1>crypto o g Not long after bitcoin was born, Fred

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<v Speaker 1>Urson became an analyst at Goldman Sachs. The new mysterious

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<v Speaker 1>digital currency had been invented by Satoshi Nakamoto, a pseudonym

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<v Speaker 1>for a person or group that wanted to circumvent the

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<v Speaker 1>traditional banking system. On a good day, the price was

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<v Speaker 1>mere sense and almost no one knew what it was.

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<v Speaker 1>But Ersome saw the potential. He bought in as much

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<v Speaker 1>as he could and found himself obsessively checking early cryptocurrency

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<v Speaker 1>exchange mount cox and scouring Reddit threads, where he met

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<v Speaker 1>another bitcoin enthusiast, Brian Armstraw. As mount gox was hacked

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<v Speaker 1>and going bankrupt, Armstrong and Ersa were building coin base,

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<v Speaker 1>which would become the most mainstream place to buy, sell,

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<v Speaker 1>and store cryptocurrency in the United States. In the span

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<v Speaker 1>of a little more than a decade, the crypto market

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<v Speaker 1>went from zero to more than two trillion dollars, with

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<v Speaker 1>some upo highs and gut wrenching lows in between. Joining

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<v Speaker 1>me on this edition of Bloomberg Studio at one point,

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<v Speaker 1>oh to talk about that wild ride and where it's

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<v Speaker 1>going next. Co founder of coin Base and the crypto

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<v Speaker 1>investment firm Paradigm, Fred Erson, take me to the very

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<v Speaker 1>beginning of your crypto journey when you were an analyst

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<v Speaker 1>at Goldman Sachs. What was it that drove you to

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<v Speaker 1>this emerging technology. Jeez, I think I was lucky because

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<v Speaker 1>I had three core ingredients to understand crypto. One was

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<v Speaker 1>I was a computer scientist and engineer by training. The

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<v Speaker 1>second is a Goldman I was trading fact specifically the

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<v Speaker 1>Euro him watching the European crisis unfold every day, watching

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<v Speaker 1>the I m F give the next tranche of bailouts

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<v Speaker 1>degree seeing how the Euro would trade on that, thinking hey,

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<v Speaker 1>maybe this isn't working so well. And the last is

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<v Speaker 1>I was a hardcore gamer in high school. I was

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<v Speaker 1>on the best team in the world at a video game.

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<v Speaker 1>Lived in these virtual worlds that had virtual currency all

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<v Speaker 1>the time, so that idea was pretty natural to me.

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<v Speaker 1>UM and this was right around the time that bitcoin

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<v Speaker 1>came out on the Internet. Around UH and nights and weekends,

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<v Speaker 1>I would just spend my time getting further and further

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<v Speaker 1>into it. Tell us about the moment when you realized

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<v Speaker 1>that this crypto thing was really something, when the world

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<v Speaker 1>and your friends probably had no idea what was going

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<v Speaker 1>on or thought you were crazy. Well, when we launched

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<v Speaker 1>coin base inve out of two bedroom apartment in San Francisco,

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<v Speaker 1>it did seem like a crazy idea. At the time

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<v Speaker 1>you walk down the street, nobody would know what bitcoin was.

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<v Speaker 1>Those people who knew about it probably thought it was nuts. Um.

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<v Speaker 1>The literal advertisement, even on the bitcoin subread at the time,

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<v Speaker 1>was a bad Microsoft paint uh painting of a wizard

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<v Speaker 1>that said magical Internet money. UM. So very very not

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<v Speaker 1>obvious at the time. The thing though, that really stood

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<v Speaker 1>out is the community was extremely strong, even though it

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<v Speaker 1>was small um And if you look at the early

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<v Speaker 1>coin based numbers, things grew really well, especially when we

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<v Speaker 1>added the simple feature just to buy and sell bitcoin

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<v Speaker 1>with any US bank account with one click. UM. So

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<v Speaker 1>while it seemed crazy to most outsiders at the time,

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<v Speaker 1>it was clearly growing on the inside, and I think

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<v Speaker 1>that's even true in crypto today. On some level you

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<v Speaker 1>have UM, these kind of radical believers on the inside,

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<v Speaker 1>and then many people on the outside who might still

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<v Speaker 1>be touching the elephants, still trying to figure out exactly

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<v Speaker 1>what's going on here. How did you meet Brian Armstrong,

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<v Speaker 1>founder of coin base, and what did you too set

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<v Speaker 1>out to do? UM? Well, like any great crypto venture,

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<v Speaker 1>it started decentralized in some sense. We met on Reddit.

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<v Speaker 1>On the Bitcoin subreddit, he posted a prototype of an

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<v Speaker 1>early version of coin base and I emailed them. We

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<v Speaker 1>met up at the now infamous creamery in San Francisco,

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<v Speaker 1>which is sort of the like back in twelve was

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<v Speaker 1>the place where everybody would would do meetings. UM started

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<v Speaker 1>working together fifteen hours a day for four weeks, weekends included.

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<v Speaker 1>It turned out we both really cared about building something

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<v Speaker 1>in crypto that allowed the whole thing to go mainstream.

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<v Speaker 1>And at the time where you bought in, like had

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<v Speaker 1>you invested your own money into this magical internet money

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<v Speaker 1>not knowing what would happen? Yeah, I was fully bought in.

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<v Speaker 1>Both financially and career wise. UM. I quit my job

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<v Speaker 1>at Goldman UM and moved out to the West Coast,

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<v Speaker 1>not even having a place to live. UM obviously started

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<v Speaker 1>working on coin Base, and then financially I didn't have

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<v Speaker 1>very much money, but the little money I did have

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<v Speaker 1>UM I invested in bitcoin. And it's funny, the most

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<v Speaker 1>expensive thing I own today is still a car I

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<v Speaker 1>bought in twelve. I bought it for nineteen thousand dollars UM.

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<v Speaker 1>At the time bitcoin was about ten dollars so an

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<v Speaker 1>opportunity cost terms, that's about a fifty million dollar car.

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<v Speaker 1>I still love the car, but just to give a

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<v Speaker 1>sense for how expensive real world goods are in bitcoin

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<v Speaker 1>terms over time. You were at coin base, co founder

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<v Speaker 1>until UM you were president I believe at the time,

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<v Speaker 1>and then you left. Why did you leave UM A

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<v Speaker 1>couple of reasons. One I felt like the company was

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<v Speaker 1>just in a very good spot. The second is for

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<v Speaker 1>much of crypto's history, so from ten when bitcoin sort

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<v Speaker 1>of came out two thousand nine up until really the

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<v Speaker 1>only idea that seemed possible in crypto was this idea

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<v Speaker 1>that it was a new global digital money. UM and

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<v Speaker 1>the thing that really changed in sen Is. All of

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<v Speaker 1>a sudden, the doors opened to much broader applications. Ethereum

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<v Speaker 1>came on the scene and showed that blockchain based applications

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<v Speaker 1>were possible to build, and people were both building very

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<v Speaker 1>early versions of them. Today we know those things better

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<v Speaker 1>as Defy or these decentralized financial applications that live on

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<v Speaker 1>the blockchain, and even more broadly, I think over time

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<v Speaker 1>we'll see mainstream consumer apps and perhaps n f t

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<v Speaker 1>s are a weird bleeding edge of exactly that. Um

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<v Speaker 1>so I found that that whole new frontier to be

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<v Speaker 1>extremely exciting. Coin bases direct listing it's now a public

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<v Speaker 1>company was a huge moment for mainstream institutional adoption. But

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<v Speaker 1>it still seems like so much of the world doesn't

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<v Speaker 1>get crypto and how big it can be. What do

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<v Speaker 1>you think they're missing? The short answer is a lot um.

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<v Speaker 1>I think. Look, crypto is its own rabbit hole UM,

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<v Speaker 1>and just like any new powerful technology, it's extremely powerful

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<v Speaker 1>because it reimagines very important systems that run the world

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<v Speaker 1>today from the ground up. UM. Most people primarily think

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<v Speaker 1>about crypto again as a new digital money. UM that's

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<v Speaker 1>really worked, especially with bitcoin, is a store of value

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<v Speaker 1>where we've seen bitcoin go from zero to a trillion

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<v Speaker 1>dollars in market capitalization over the last ten years, but

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<v Speaker 1>crypto goes much deeper than that. We think about crypto

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<v Speaker 1>at Paradigm, which is UH, the investment firm I've started,

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<v Speaker 1>along with Matt Long in three stages today, and of

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<v Speaker 1>course that this model will evolve over time. The first

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<v Speaker 1>is a new digital money, the second is a new

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<v Speaker 1>financial system, and the third is just a broad UH

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<v Speaker 1>Internet application platform. UM. So, in our minds, crypto isn't

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<v Speaker 1>just kind of this new digital money or new digital gold. Um.

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<v Speaker 1>It's a whole new financial system that we're seeing being

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<v Speaker 1>built from the ground up by talented entrepreneurs all around

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<v Speaker 1>the world. And while it's extremely early on the third frontier,

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<v Speaker 1>a new application platform, we think that over over the

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<v Speaker 1>course of decades, a lot of Internet applications that we're

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<v Speaker 1>all using will also be crypto based. I've talked to

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<v Speaker 1>investors who say coin Base could be the next a

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<v Speaker 1>o l it's the first exchange that's you know, really

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<v Speaker 1>gone mainstream, but it's too early and others will or

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<v Speaker 1>something else will surpass it. What do you think, I

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<v Speaker 1>think it's a fair question. I think history is yet

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<v Speaker 1>to be written. UM. My view is that it's a

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<v Speaker 1>very strong place to be to have the largest mainstream

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<v Speaker 1>brand trust um, not only with users but also with regulators. UM.

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<v Speaker 1>And that being that bridge into the crypto world is

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<v Speaker 1>a great place to start. Now, as you mentioned, you

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<v Speaker 1>now run a crypto focused investment firm called Paradigm. How

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<v Speaker 1>is the crypto style of venture capital different from traditional

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<v Speaker 1>venture capital? Yeah? Um, well I think in a few ways. UM.

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<v Speaker 1>Just to talk about why we started Paradigm in the

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<v Speaker 1>first place, myself and Matt Long, who was previously a

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<v Speaker 1>partner at Sequoia focused and running their crypto investing efforts. Um,

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<v Speaker 1>we we realized a couple of things. One, crypto is

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<v Speaker 1>a whole new field that needs focus. To the core

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<v Speaker 1>question that Matt and I asked ourselves and starting the

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<v Speaker 1>firm is is there anybody out there who if we

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<v Speaker 1>were crypto entrepreneurs building a business and Matt was a

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<v Speaker 1>former y Combinator startup founder, I obviously started a large

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<v Speaker 1>crypto company and coin base, who would we want to

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<v Speaker 1>have as our first backers? And we couldn't really come

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<v Speaker 1>up with a good answer to that question. UM. The

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<v Speaker 1>last is, uh, I think the expertise required both on

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<v Speaker 1>the team and operationally in crypto is very different. So

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<v Speaker 1>we're really trying to build a firm UH from an

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<v Speaker 1>engineering an entrepreneurial point of view to best support these

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<v Speaker 1>crypto native companies and protocols. The crypto VC lands game

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<v Speaker 1>is getting now more competitive, So where are you placing

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<v Speaker 1>your bets? How do you stay ahead of the curve.

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<v Speaker 1>The thing we're really excited about is a number of fronts.

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<v Speaker 1>One is the picks and shovels businesses UM so, now

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<v Speaker 1>that crypto has grown a lot, there are all sorts

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<v Speaker 1>of basic infrastructure businesses that are being built out to

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<v Speaker 1>support at ecosystem. Those of course include exchanges, also custodians,

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<v Speaker 1>tax providers, k y C, a mL providers, lenders, cryptos

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<v Speaker 1>back end as a service for any business that would

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<v Speaker 1>like to integrate crypto, all sorts of these picks and

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<v Speaker 1>shovel's businesses. A second big frontier, as we talked about before,

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<v Speaker 1>is defy all of these crypto native financial building blocks

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<v Speaker 1>UH that are being built out. Um and today's support

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<v Speaker 1>around seventy five billion dollars and user assets, up from

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<v Speaker 1>effectively zero three years ago. UM and This is sort

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<v Speaker 1>of the bleeding edge of what we see as a

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<v Speaker 1>whole series of crypto native applications. This is my conversation

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<v Speaker 1>with the co founder of coin base and the crypto

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<v Speaker 1>investment firm Paradigm thread person coming up. President Biden's sec

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<v Speaker 1>has made it clear that crypto regulation is coming. How

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<v Speaker 1>does Urson expect that to change the crypto landscape? And

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<v Speaker 1>with thousands of cryptocurrencies out there, how many is too many?

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<v Speaker 1>And we have to ask is dos coin a hustle?

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<v Speaker 1>I'm Emily Chang, this is Bloomberg Studio. At one point, Oh,

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<v Speaker 1>stay with us. There were something like four thousand cryptocurrencies

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<v Speaker 1>at the start of the year. I mean, is that

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<v Speaker 1>too many? Do you expect more? It's just like the Internet. Um,

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<v Speaker 1>people are going to try all sorts of things. There

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<v Speaker 1>will be millions and millions of cryptocurrencies and crypto assets,

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<v Speaker 1>just like there were millions and millions of websites. Most

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<v Speaker 1>of them won't work, especially early in the technology. There's

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<v Speaker 1>a lot of dedicated communities out there and lot of tribalism.

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<v Speaker 1>Is that a good thing? It's an interesting question. I'm

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<v Speaker 1>I think every new, powerful technology tends to feel very

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<v Speaker 1>polarizing at the beginning. UM, So I think some level

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<v Speaker 1>of tribalism is inevitable at paradigm. We think that we're

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<v Speaker 1>super early in this technology, so getting too caught up

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<v Speaker 1>in any singular view or belief or paradigm no pun intended, UM,

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<v Speaker 1>is probably unwise. What do you think about does is

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<v Speaker 1>it a hustle or do you give it more credit

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<v Speaker 1>than that? I think, UM, well, perhaps framing it from

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<v Speaker 1>Ellen's point of view, and it's always dangerous to guess

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<v Speaker 1>what's going on in the mind of Elon. Of course,

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<v Speaker 1>if crypto has taught us anything, it's never to dismiss

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<v Speaker 1>a good meme that could later manifest into UM more

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<v Speaker 1>concrete progress. UM. I I tend to think there's less

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<v Speaker 1>of that on the ground today. More holistically, I think

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<v Speaker 1>whether it's does or more the n f T phenomenon,

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<v Speaker 1>I do like that there are UM there are a

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<v Speaker 1>lot of things recently that I think have just brought

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<v Speaker 1>crypto to a much more mainstream awareness and audience. One

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<v Speaker 1>joke we often tell is UM n f T has

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<v Speaker 1>made it really obvious that most crypto insiders sort of

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<v Speaker 1>word nerds that tended to care a lot about monetary

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<v Speaker 1>theory or the intricacies of the financial system. And what

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<v Speaker 1>n f T s really showed us is that, um,

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<v Speaker 1>a lot more people, it turns out, care about culture, music, art,

0:14:42.640 --> 0:14:46.040
<v Speaker 1>basically everybody does, UM, and that that's been a huge

0:14:46.080 --> 0:14:49.120
<v Speaker 1>boon just for for public awareness of what the technology

0:14:49.120 --> 0:14:51.600
<v Speaker 1>can do. Okay, but howsn't the n f T market

0:14:51.680 --> 0:14:54.280
<v Speaker 1>kind of imploded over the last few weeks. I mean

0:14:54.360 --> 0:15:00.080
<v Speaker 1>sales in almost every category or drawing up what's happening there, Yeah,

0:15:00.200 --> 0:15:02.520
<v Speaker 1>is definitely down. And again I think that's natural, just

0:15:02.640 --> 0:15:06.160
<v Speaker 1>like the cycles in crypto are. I go so far

0:15:06.240 --> 0:15:10.200
<v Speaker 1>as to say that n f T s produced today

0:15:10.200 --> 0:15:12.840
<v Speaker 1>probably will have little to no value in three to

0:15:12.920 --> 0:15:15.560
<v Speaker 1>five years. You could say the same thing about early

0:15:15.600 --> 0:15:19.520
<v Speaker 1>internet companies in the late nineties too, though. Um, it's

0:15:19.520 --> 0:15:21.560
<v Speaker 1>sort of inevitable in a new technology that people are

0:15:21.560 --> 0:15:23.160
<v Speaker 1>going to try a bunch of stuff. Most of it

0:15:23.160 --> 0:15:26.120
<v Speaker 1>won't work at the beginning, but the technology itself is

0:15:26.200 --> 0:15:28.920
<v Speaker 1>really important and really valuable over the long run, and

0:15:28.960 --> 0:15:31.120
<v Speaker 1>there will be a few things that end up being

0:15:31.120 --> 0:15:34.160
<v Speaker 1>fundamental building blocks that really do matter. I want to

0:15:34.160 --> 0:15:36.760
<v Speaker 1>talk about regulation because the US government has yet to

0:15:36.840 --> 0:15:40.080
<v Speaker 1>really take a stand on crypto, but President Biden's SEC

0:15:40.240 --> 0:15:43.280
<v Speaker 1>has made it clear that some sort of stand is coming.

0:15:43.560 --> 0:15:46.440
<v Speaker 1>What kind of regulation do you expect? So, I think

0:15:47.120 --> 0:15:51.480
<v Speaker 1>the US is at a very important crossroads with crypto today.

0:15:51.720 --> 0:15:54.960
<v Speaker 1>The US is blessed with the best currency and the

0:15:55.000 --> 0:16:00.840
<v Speaker 1>world's reserve currency today. UM. It also tends to be

0:16:00.920 --> 0:16:04.640
<v Speaker 1>the defect of financial regulator for a whole bunch of

0:16:04.640 --> 0:16:11.560
<v Speaker 1>the world. We also have a history of being the

0:16:11.640 --> 0:16:14.960
<v Speaker 1>strongest technology country in the world. If you look at

0:16:14.960 --> 0:16:17.880
<v Speaker 1>the most valuable companies in the world today, most of

0:16:17.920 --> 0:16:21.760
<v Speaker 1>them are American Internet technology companies, the Google's, the Microsoft's,

0:16:21.760 --> 0:16:27.440
<v Speaker 1>the Facebook's. I do think, UH, that crypto is a

0:16:27.560 --> 0:16:32.360
<v Speaker 1>nuanced issue, UM, and that it's possible the US gets

0:16:32.560 --> 0:16:37.120
<v Speaker 1>crypto wrong. I'm I think today you have a lot

0:16:37.160 --> 0:16:39.760
<v Speaker 1>of regulators whose job it is to mitigate risk and

0:16:39.840 --> 0:16:44.560
<v Speaker 1>keep us all safe, and that's that's very appropriate. UM.

0:16:44.600 --> 0:16:47.320
<v Speaker 1>At the same time, I think crypto is the next

0:16:47.360 --> 0:16:50.560
<v Speaker 1>Internet sized opportunity for the United States. I think as

0:16:50.640 --> 0:16:54.520
<v Speaker 1>the potential to create as many if not more jobs

0:16:54.520 --> 0:16:58.760
<v Speaker 1>in the Internet, similar with economic growth. UM. I think

0:16:58.760 --> 0:17:01.240
<v Speaker 1>it has the potential to who square the circle on

0:17:01.280 --> 0:17:03.680
<v Speaker 1>the privacy Internet issues that we've been talking about with

0:17:03.720 --> 0:17:08.399
<v Speaker 1>big tech companies for the last ten years, namely, we

0:17:08.480 --> 0:17:12.800
<v Speaker 1>could use these technologies um to continue to own our

0:17:12.840 --> 0:17:15.960
<v Speaker 1>own data while still getting all the benefits of the

0:17:16.000 --> 0:17:19.200
<v Speaker 1>Internet platforms we know and love. Today, China is taking

0:17:19.240 --> 0:17:21.399
<v Speaker 1>a stand on crypto for better or for worse, and

0:17:21.400 --> 0:17:23.639
<v Speaker 1>that's also where most of the mining is happening. Do

0:17:23.680 --> 0:17:27.080
<v Speaker 1>you have concerns that China is going to beat the

0:17:27.119 --> 0:17:31.000
<v Speaker 1>US and crypto and that that's kind of a big deal. Yes,

0:17:31.240 --> 0:17:33.480
<v Speaker 1>and it's on multiple fronts. To your point, one is

0:17:35.160 --> 0:17:40.760
<v Speaker 1>there are government programs to explicitly build using crypto. This

0:17:40.840 --> 0:17:44.119
<v Speaker 1>is true both with their dc EP initiative, which is

0:17:44.160 --> 0:17:47.920
<v Speaker 1>basically making a digital remanby. It's also true of local

0:17:47.960 --> 0:17:51.480
<v Speaker 1>governments who are trying to use blockchain technology. UM. And

0:17:51.520 --> 0:17:55.440
<v Speaker 1>then to your point, historically most crypto mining has been

0:17:55.440 --> 0:17:58.520
<v Speaker 1>in China. Recently, there was actually a government crackdown in

0:17:58.640 --> 0:18:03.960
<v Speaker 1>China UM on mining, oftentimes because energy was being siphoned

0:18:04.000 --> 0:18:06.359
<v Speaker 1>from the Chinese grid in ways that may or may

0:18:06.400 --> 0:18:08.920
<v Speaker 1>not have been kosher. UM. So I think there's actually

0:18:08.960 --> 0:18:12.320
<v Speaker 1>a huge moment of opportunity today, UH for miners in

0:18:12.359 --> 0:18:16.680
<v Speaker 1>the United States or globally to h to step in

0:18:17.040 --> 0:18:21.560
<v Speaker 1>and on the crypto side to make it more decentralized. Um.

0:18:21.600 --> 0:18:22.840
<v Speaker 1>And then if you want to view it from a

0:18:22.920 --> 0:18:25.560
<v Speaker 1>nation state point of view, to make sure that no

0:18:25.760 --> 0:18:33.480
<v Speaker 1>single country is in control. You're listening to my conversation

0:18:33.520 --> 0:18:37.000
<v Speaker 1>with cred or some co founder of coin base and Paradigm.

0:18:37.080 --> 0:18:39.520
<v Speaker 1>Up next, The big promise of crypto is that it's

0:18:39.560 --> 0:18:43.320
<v Speaker 1>the next so called iteration of the Internet. But how

0:18:43.359 --> 0:18:46.360
<v Speaker 1>long until we get there and we bust the biggest

0:18:46.359 --> 0:18:51.920
<v Speaker 1>cryptocurrency myths? Spoiler alert, It's not all about speculation. I'm

0:18:51.960 --> 0:18:55.000
<v Speaker 1>Emily Chang. This is Bloombrook Studio. One point out, stay

0:18:55.040 --> 0:19:14.440
<v Speaker 1>with us. There are folks out there who think crypto

0:19:14.760 --> 0:19:17.600
<v Speaker 1>is a gimmick or a Ponzi scheme, or an unsafe

0:19:17.600 --> 0:19:21.399
<v Speaker 1>hedge against inflation. What do you think are the biggest

0:19:21.440 --> 0:19:25.800
<v Speaker 1>myths about crisp crypto that you want to bust? Oh jeez,

0:19:26.119 --> 0:19:29.679
<v Speaker 1>so many good ones. Um. Well, perhaps number one that

0:19:29.760 --> 0:19:35.359
<v Speaker 1>crypto is all about speculation. Um. I think all investment

0:19:35.440 --> 0:19:39.400
<v Speaker 1>can be framed on some spectrum from it from speculation

0:19:39.520 --> 0:19:43.600
<v Speaker 1>to extremely long term holding. And I think as people

0:19:43.640 --> 0:19:47.240
<v Speaker 1>get more comfortable with the idea of crypto and why

0:19:47.320 --> 0:19:51.680
<v Speaker 1>it is a superior money and store of value across

0:19:51.800 --> 0:19:56.520
<v Speaker 1>all these different dimensions of money, whether it's scarcity, portability, divisibility,

0:19:57.359 --> 0:20:01.120
<v Speaker 1>UM that people are viewing at as a more long

0:20:01.200 --> 0:20:04.320
<v Speaker 1>term holding. In addition to the fact that there is

0:20:04.400 --> 0:20:07.880
<v Speaker 1>real utility for crypto being built today all these financial

0:20:07.880 --> 0:20:11.159
<v Speaker 1>services and new Internet applications. A second big one, of

0:20:11.200 --> 0:20:14.560
<v Speaker 1>course is energy. UM. This is one of the hot

0:20:14.600 --> 0:20:20.640
<v Speaker 1>topics no pun intended around crypto today. My meta view

0:20:20.680 --> 0:20:25.160
<v Speaker 1>of the issue is that it takes far more energy

0:20:25.440 --> 0:20:30.560
<v Speaker 1>and resources UH to protect and use physical assets than

0:20:30.600 --> 0:20:34.000
<v Speaker 1>it does digital ones. So does that mean you think

0:20:34.160 --> 0:20:37.600
<v Speaker 1>the energy concerns raised by Bill Gates and even Elon

0:20:37.680 --> 0:20:42.000
<v Speaker 1>Musk are a red herring. I think they should examine

0:20:42.000 --> 0:20:46.440
<v Speaker 1>the issue more closely UM, and I think the industry

0:20:46.480 --> 0:20:49.840
<v Speaker 1>hasn't done the best job of making legible exactly what's

0:20:49.880 --> 0:20:53.840
<v Speaker 1>going on here. So my personal view is, UM, it's

0:20:53.840 --> 0:20:56.320
<v Speaker 1>actually going to be a lot more energy efficient to

0:20:56.520 --> 0:21:00.240
<v Speaker 1>use these digital systems of value transfer over time time.

0:21:01.040 --> 0:21:03.600
<v Speaker 1>But it's understandable that there's a lot of confusion early,

0:21:04.000 --> 0:21:07.720
<v Speaker 1>especially given the nature of crypto, which is that it's decentralized,

0:21:07.720 --> 0:21:10.400
<v Speaker 1>so nobody has all the information in some sense, as

0:21:10.440 --> 0:21:13.160
<v Speaker 1>you said, you know, crypto is the next Internet sized

0:21:13.200 --> 0:21:17.159
<v Speaker 1>opportunity for the United States, And the big promise of

0:21:17.200 --> 0:21:21.239
<v Speaker 1>crypto is that it is the next iteration of the

0:21:21.280 --> 0:21:24.360
<v Speaker 1>Internet that could free users from the power and control

0:21:24.400 --> 0:21:27.480
<v Speaker 1>of the gatekeepers where whether it's the big banks, whether

0:21:27.560 --> 0:21:31.800
<v Speaker 1>it's Google or Facebook. How long until we get there

0:21:31.800 --> 0:21:34.919
<v Speaker 1>to that future that you see? Well, I think in

0:21:35.200 --> 0:21:38.560
<v Speaker 1>very small ways, we're already there today in the sense

0:21:38.640 --> 0:21:43.000
<v Speaker 1>that you can own your own global permissionless money UM,

0:21:43.040 --> 0:21:45.280
<v Speaker 1>and you can be your own bank in crypto by

0:21:45.280 --> 0:21:49.040
<v Speaker 1>simply downloading free desktop software that anybody in the world

0:21:49.080 --> 0:21:53.280
<v Speaker 1>can run. I think it will take decades and decades

0:21:54.160 --> 0:21:58.160
<v Speaker 1>for all of the applications to be built out around

0:21:58.280 --> 0:22:01.440
<v Speaker 1>that base, so a full blown financial system. I think

0:22:01.440 --> 0:22:05.040
<v Speaker 1>we're probably one tenth of one percent into what that

0:22:05.119 --> 0:22:08.920
<v Speaker 1>looks like in a crypto native form mainstream applications. I

0:22:08.960 --> 0:22:12.160
<v Speaker 1>think we're effectively at zero UM. And that's what we're

0:22:12.200 --> 0:22:16.320
<v Speaker 1>so excited about. A paradigm is watching that whole space

0:22:16.400 --> 0:22:20.280
<v Speaker 1>get built out UM and unferral. So what does that

0:22:20.320 --> 0:22:24.280
<v Speaker 1>mean for the Googles and the facebooks? Do they disappear someday?

0:22:24.760 --> 0:22:26.760
<v Speaker 1>I think this is kind of like e commerce where

0:22:26.840 --> 0:22:29.480
<v Speaker 1>you know, the world doesn't change overnight, but you can

0:22:29.560 --> 0:22:36.320
<v Speaker 1>see the seeds of exponential growth occurring already. Um so

0:22:36.880 --> 0:22:38.960
<v Speaker 1>I do. I do think we will live in a

0:22:39.040 --> 0:22:42.640
<v Speaker 1>future where for us to coordinate, we won't need these

0:22:42.640 --> 0:22:48.920
<v Speaker 1>centralized platforms today. That's already true of uh financial services,

0:22:48.920 --> 0:22:51.640
<v Speaker 1>in that in crypto you can be your own bank.

0:22:52.000 --> 0:22:54.560
<v Speaker 1>You don't need a central institution to hold your money anymore.

0:22:55.080 --> 0:22:58.399
<v Speaker 1>I think that's true in the web application sense, where

0:22:58.880 --> 0:23:02.960
<v Speaker 1>already today there are creators who are pushing their work

0:23:03.000 --> 0:23:08.280
<v Speaker 1>out over crypto rails from their own crypto wallet, where

0:23:08.320 --> 0:23:11.760
<v Speaker 1>the social graph exists directly on Shane. You don't need

0:23:11.880 --> 0:23:17.639
<v Speaker 1>Facebook or Twitter or Instagram um to have a follower graph.

0:23:17.880 --> 0:23:20.360
<v Speaker 1>It just all happens right on the blockchain. I think

0:23:20.359 --> 0:23:22.760
<v Speaker 1>that's where we're headed. We're headed into a world where

0:23:22.800 --> 0:23:28.200
<v Speaker 1>both users and creators don't need centralized platforms or institutions anymore.

0:23:28.520 --> 0:23:31.080
<v Speaker 1>Take me out ten twenty or fifty years. How has

0:23:31.119 --> 0:23:35.680
<v Speaker 1>crypto changed the world. What's different? I think one thing

0:23:35.960 --> 0:23:41.760
<v Speaker 1>people don't yet fully grasp about crypto is how, in

0:23:41.840 --> 0:23:47.000
<v Speaker 1>a world that is increasingly going digital, your crypto wallet

0:23:47.280 --> 0:23:51.680
<v Speaker 1>is the entire representation of the digital you. So that

0:23:51.760 --> 0:23:57.120
<v Speaker 1>means it's your bank account, it's your online identity, it's

0:23:57.160 --> 0:24:02.080
<v Speaker 1>your universal log in to every Internet application, it's your

0:24:02.080 --> 0:24:07.160
<v Speaker 1>digital resume, UM sort of your digital LinkedIn, and all

0:24:07.240 --> 0:24:11.000
<v Speaker 1>these things are in one place. You can use your

0:24:11.000 --> 0:24:17.800
<v Speaker 1>real identity, you can use a pseudonym somewhere in between. UM,

0:24:17.840 --> 0:24:24.119
<v Speaker 1>and I think, perhaps said quite simply, the future, I

0:24:24.160 --> 0:24:29.919
<v Speaker 1>think will run on crypto rails, and I think it

0:24:29.960 --> 0:24:32.240
<v Speaker 1>will be sort of the single source of truth and

0:24:32.280 --> 0:24:36.840
<v Speaker 1>coordination that all systems in the world use today. Well,

0:24:37.600 --> 0:24:39.600
<v Speaker 1>we'll have to check back in with you in fifty years,

0:24:40.000 --> 0:24:44.000
<v Speaker 1>but hopefully sooner. UM Renter or some co founder of

0:24:44.040 --> 0:24:46.919
<v Speaker 1>coin base in Paradigm, thank you so much for joining us.

0:24:46.920 --> 0:24:48.840
<v Speaker 1>It's been wonderful to have you, and thanks for answering

0:24:48.880 --> 0:24:51.960
<v Speaker 1>these very big picture questions and showing us of you

0:24:52.080 --> 0:25:06.280
<v Speaker 1>of the future. Pleasures always, m H. Bloomberg Studio at

0:25:06.280 --> 0:25:08.399
<v Speaker 1>One Point O is produced and edited by Kevin Hines.

0:25:08.520 --> 0:25:11.760
<v Speaker 1>Our executive producer is Alison Weiss. Our managing editor is

0:25:11.840 --> 0:25:16.320
<v Speaker 1>Danielle Culbertson, with production assistants from Lauren Ellis and Mallory Abelhausen.

0:25:16.720 --> 0:25:19.000
<v Speaker 1>If you like this show, please share it or write

0:25:19.000 --> 0:25:22.280
<v Speaker 1>a review. Wherever you get your podcasts, I'm Emily Chang,

0:25:22.320 --> 0:25:25.679
<v Speaker 1>your hosts and executive producer. This is Bloomberg