Bankless - 158 - You're Not Bullish Enough on NFTs with Punk6529

Episode Date: February 13, 2023

✨ DEBRIEF | Unpacking the episode: https://shows.banklesshq.com/p/debrief-punk6529  ------ ✨ COLLECTIBLES | Collect this episode: https://collectibles.bankless.com/mint  ------ Punk6529 is a pseudo-anonymous leader in the crypto space. He’s heavily focused on the world of NFTs and the metaverse and is known for putting together extremely punchy and thoughtful Twitter threads, thinking about the world from first principles. NFTs will represent every single digital non-fungible token that exists…and there are going to be a lot of them. Is Punk6529 the most bullish person in the world on NFTs? In this episode, 6529 shares the benefits of using an NFT-backed pseudonym instead of your state name, why the “freedom to transact” is an essential human liberty we’ll lose without crypto, how the Metaverse is just a visualization layer of NFTs, and why NFTs are more important than DeFi…probably the most important thing crypto has produced. ------ 📣 MetaMask Learn | Learn Web3 with the Leading Web3 Wallet https://bankless.cc/metamaskshow  ------ 🚀 JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe  ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken  🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap  ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  👻 PHANTOM | #1 SOLANA WALLET https://bankless.cc/phantom-waitlist  ------ Topics Covered 0:00 Intro 8:23 Who is Punk 6529? 13:00 Digital Identities 28:30 Freedom to Transact & Crypto Values 46:50 NFTs 1:24:51 Why NFTs Are Inevitable 1:33:20 Closing & Disclaimers ------ Resources: Freedom to Transact https://twitter.com/punk6529/status/1494444624630403083  Making It https://twitter.com/punk6529/status/1435229502708322313  On the Shortness of Life https://twitter.com/punk6529/status/1507787390114488322  Punk 6529 https://twitter.com/punk6529  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

In an extreme example, people go and die for their national flag. In less extreme examples, people go tailgate every week in a football game. In other less extreme examples, people will pay $10,000 for a watch when a $15 watch will do the same thing. And I'm not here to tell you this is bad. This is fundamental to human nature. It's how we are. Identity matters, community matters, emotion matters. NFTs are the moment where we can take all of those feelings from an off-chain world on-chain.

Welcome to bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front-run the opportunity. This is Ryan Sean Adams, and I'm here with David Hoffman, and we're here to help you become more bankless. Guys, the most well-known pseudonymous brand in crypto is on the podcast today. Punk-29. That is this person's punk number, not his nation-state name, is the idea of a Cryptopunk. He says on today's episode that NFTs will represent every single digital, non-fungible token that exists. And there's going to be a lot of those. A few benefits and takeaways from listening to this episode. Number one, he talks about the benefits of using

an NFT-backed pseudonym instead of his state name. Number two, we talk about why the freedom to transact is an essential human liberty, one that will lose without crypto. Number three, we talk about how the Metaverse is just a visualization layer for NFTs. Number four, we talk about why NFTs are more important than Defi. This is according to Punk 6529, of course. He says NFTs are probably the most important thing crypto has produced thus far. David, in this episode, he calls himself probably the most bullish single individual in the world on NFTs. What's your take on that and your take on this episode as folks get into it? What does it mean to be the world's most bullish person on NFTs?

I think if I put myself into the shoes of Punk 6529, he just means that the reason to mint an NFT, the reasons will be so broad, so infinite, that almost an infinite number of NFTs will eventually become minted. And he'll walk you through the thought process, I think, in this episode. Punk 6529 really takes his time to fully unpack a thought. And so there's really only four or five questions throughout this whole entire podcast. But pay attention to each one because they do layer upon each one as they go.

We first start talking about what does it mean to have a digital identity? Punk 6529 as a digital identity in the metaverse is one of the foremost people exploring the world of online-only identities. And then we get into one of his first principles tweet threads that he put together, the freedom to transact and how the ability to transact financially in the world is a statement of self-expression, which leads into how NFTs can also help. people express themselves. So pay attention as we walk through some of these subject matters, because if you lose each one, you'll start to lose some of the benefits of layering each one

on top of each other, is what I have to say to the listener. Yeah, I really like the way this guest thinks, you know, one of those first principles thinkers as well. And David, I think we've got a lot to discuss during the debrief, particularly this idea of NFTs being more bullish than maybe the rest of crypto. I mean, he went as far as to say it's the reason crypto exists almost in a way. And of course, premium subscribers. You can access that debrief show right now on the bankless premium feed if you're listening to that. If you're not a premium subscriber, click the link in the show notes and upgrade, and you can get access to that. David, this episode is also coming out as an NFT collectible.

So on the day that this is released, the Monday that it's released, you've an opportunity to mint this episode and collect it. So if Punk 6529 is bullish on NFTs, maybe this episode as an NFT is also bullish, question mark? I'm not sure. It's definitely fitting his thesis. We're definitely proving it out. Yeah, we're minting it and seeing what happens. So far, the community has been really excited by these, and you can pick that up if you're interested later. Guys, we're going to get right to the episode with Punk 6529. But before we do, we want to thank the sponsors that made this episode possible, including our recommended exchange for 2023, Cracken. crackin has been a leader in the crypto industry for the last 12 years dedicated to accelerating the global adoption of crypto

crackin puts an emphasis on security transparency and client support which is why over nine million clients have come to love crackens products whether you're a beginner or a pro the crackin ux is simple intuitive and frictionless making the crackin app a great place for all to get involved and learn about crypto for those with experience the redesigned crackin pro app and web experience is completely customizable to your trading needs integrating key trading features into one seamless interface. Krakken has a 24-7-365 client support team that is globally recognized. Krakken support is available wherever, whenever you need them by phone, chat, or email. And for all of you NFTers out there, the brand new Krakken NFT beta platform gives you the best NFT trading experience possible. Rarity rankings, no gas fees, and the ability to buy an NFT straight with cash. Does your crypto exchange prioritize its customers the way that Krakken does?

And if not, sign up with Krakken. com slash bankless. Hey, Bankless Nation. If you're listening to this, it's because you're on the free bankless RSS feed. Did you know that there's an ad-free version of bankless that comes with the bankless premium subscription? No ads, just straight to the content. But that's just one of many things that a premium subscription gets you.

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Check out Ben the analyst Digen Pit, where you can ask him questions about the token report. Got a question? I've got my own Q&A room for any questions that you might have. At Bankless, we have huge things planned for 2023, including a new website with login with your Ethereum address capabilities, and we're super excited to ship what we are calling Bankless 2.0 Soon TM. So if you want extra help exploring the frontier, subscribe to Bankless Premium. It's under 50 cents a day and provides a wealth of knowledge and support on your journey west. I'll see you in the Discord. The Phantom wallet is coming to Ethereum.

The number one wallet on Solana is bringing its millions of users and beloved U.S. to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Solana staking inside the wallet and will be offering similar staking features for Ethereum and Polygon. But that's just staking. Phantom is also the best home for your NFTs. Phantom has a complete set of features to optimize your NFT experience. Pin your favorites, hide your uglies, burn the spam,

and also manage your NFT sale listings from inside the wallet. Phantom is of course a multi-chain wallet, but it makes chain management easy, displaying your transactions in a human readable format with automatic warnings for malicious transactions or phishing websites phantom has already saved over 20,000 users from getting scammed or hacked. So get on the phantom waitlist and be one of the first to access the multi-chain beta. There's a link in a show notes or you can go to phantom. dot app slash waitlist to get access in late February. Bankless Nation, excited to introduce you to our next guest.

This is a pseudo-anonymous guest goes by the alias Punk 6529 on Twitter. He's a leader in the crypto space, and he's heavily focused on the world of NFTs, the Metaverse. He's also known for putting out some extremely punchy and thoughtful Twitter threads. I think some of these threads reveal how he thinks about the crypto space, particularly from a first principles perspective. Punk, 6529. It is a pleasure to have you on Bankless. How are you doing today? I'm doing great. And it's a pleasure to be here. And I'm glad we're able to get the schedule. I'm looking forward to it. Yeah, I know we've been wanting to schedule this for a while. Ever since I started kind of reading more and more of your just banger tweet threads about this space,

and we'll talk about a few of those as we get in. But I think the first question on my mind, maybe some listeners' mind, is a little bit about you. So you're pseudo-anonymous, of course. You have a voice disdorter in this interview, this conversation that maybe listeners have noticed. What can you tell us about yourself about who you are, punk, and what you care about? Well, I can share the following. I think professionally I was historically in the finance industry and consulting industry. But then I took a shift quite some time ago into crypto and certain other areas.

And so it's been a long time since I've done those first two things. And I have spent a lot of time on, you know, initially Bitcoin and then more broadly cryptocurrency since 2013. Back then was when I first, summer 2013 is when I first really dug into Bitcoin. I had come across it in 2011 and didn't really pay any attention to it. But in summer of 2013, I dug into it some more. And I was convinced from then that the big idea here wasn't that we can now do wire transfers faster or, cheaper, or that you had global money, good settlement. All of these things are amazing things, right?

They're great. But that it was a very much bigger idea than that, that you had now, for the first time, a second way, you can store data. You know, we've had a database, and now we had a public blockchain. And that this was not only a major breakthrough in distributed systems, a major breakthrough in computer science that would have all types of technical offshoots. But ultimately, you know, it's an underappreciated fact that technology platforms, which their operators might be operating them neutrally, you know, a database administrator, a software developer,

the head of a firm that has databases and software developers, is almost certainly just trying to run their business and just trying to, you know, compete in the marketplace, and that keeps everyone very busy, and it's hard running any type of business. But a world that digitizes, has the internet, and is structured on databases, actually ends up centralizing. And very oddly, you know, what people would think of as back-end technology choices, that, you know, nobody in the social, political, sociological field has things. thought about for one second, actually end up reshaping the contours of society.

And this was clear to me back then. I thought it was going to be a 30, 40 year pathway before we actually saw the full potential of what we can do with decentralized, with distributed blockchains, with public cryptocurrencies, whatever you call them. It's basically all the same thing. and a horizontal technology like this takes time to get integrated. Like it was going to be a long haul,

but it was very important. And so August of 2013 is where there was a meaningful shift in things I spent time on. I still spend time on some other things, but I have spent a non-trivial amount of my times since 2013 broadly on this topic. 6529, you say a lot of words that always get me really excited, especially when you say

re-architecting the fabric of society and things like this. And I think this is definitely a topic I'd love to explore with you. But I first want to get into that conversation through you as an identity, because the world of crypto is no stranger to pseudo-unonymous people. We have pseudo-unonymous people on crypto Twitter all the time. But I think you've really taken your digital identity further than most people have. And you see this in the tweet threads that you write, where you refer to yourself as 6529, and you have a whole brand around 6529. You have this voice modifier. So you still are a very public identity.

The identity is there. And it's very digital because of the nature of how it's manifested on the internet. And it's also extremely anonymous, as in like you do a very good job kind of covering up your tracks. You use a voice modifier. You don't slip up. And so I kind of want to explore just the why behind the digital. identity aspects? Like, why lean so heavily into this world of digital identities and perhaps to unpack why crypto has, the tools behind crypto that has enabled you to actually have a digital

identity? Sure. I'm going to go forward and I'm going to go backwards on this. So the reason I started doing this turned out to be only part of the reasons that I actually ended up continuing doing it. And then I actually think it's not that crazy in a historical context. But let's start with the basics. I started getting very intrigued by NFTs the second time around in kind of late 2020. I had, of course, looked at NFTs in 2017, and I think like most people with my profile was like, okay, that's cool. Someone made like a cute game for kids or whatever. It's crypto kitty. It's fine. I mean, this isn't the important stuff. I mean, great. I'm glad people are experimenting on a blockchain, and that's great. Who cares?

And in late 2020, I started thinking, no, you know, I've missed something here. This is a much bigger idea. And I started getting involved and I bought an NFT and then I bought another NFT and then I bought a lot of NFTs. And I had seen folks like G Money and Punk 4156 that said, oh, use our, my PFP is their profile picture. And I said, oh, that kind of makes sense. I mean, if we're going to go to some type of hybrid digital space, It makes sense that people are going to have profile pictures or avatars later when we're in 3D. And it also makes sense that not all of these are going to be your LinkedIn photo with your nice suit on or something, right?

Like, why would they have to be that? And it makes sense that they could be something you own, right? Like the fundamental idea behind Bitcoin is you can own something digital, actually it, proveably owned it. and versus just uploading a j-page to Twitter, because you can do that right, you can be pseudonymous on Twitter and not own an NIFT, right? You can just upload any random picture.

I said, well, there's something to this. I say, well, yeah, this is my picture, but I actually own this picture, and I provably own this picture. Well, this seems like an emerging thing that people are doing. Let's try it. And I have this general approach to technology

that when you're not sure you should just try it, most errors on the technology side, like most people that start missing changes in technology is because they try and read about it and figure out by reading about it if it makes sense. And my experience is that just doesn't work. You can't read about in summer 2013 about Bitcoin and say, oh, does Bitcoin make sense?

You have to download a node and send someone to Bitcoin, maybe another side of the world. And then you do it and say, oh, wow, that was amazing. I can't believe that just happened, right? And you can't read about, oh, look, people, you know, the crypto bros have lost their minds again, and they're spending a lot of money on cartoons,

and it's probably some type of scam, I mean, all this stuff, right? That's if you read about it, that's what your takeaway is. No, no, no. Okay, people use PFP avatars. Let's use a PFP avatar and see what it feels like. Right? So it started like that. Now, pretty shortly thereafter, I realized another thing, which I sort of knew, but I didn't really know it until I started tweeting a 6-529, that like you, and I think like anyone, have a variety of interests of more and less differentiated. Here is where I like to have dinner, and here's my favorite pizza or whatever, right?

and at a first approximation, nobody cares about any of these things, right? My family cares, my friends care. I don't think you would have invited me on bankless to tell you where my favorite pizza is because I don't think my views are particularly differentiated on that topic, right? And the flip side...

Is it Domino's Punk? Is that one? Yeah, exactly. You know, the flip side is I have a Facebook account, right? and I have LinkedIn account and I have a Twitter account and my other my pre-existing identity

and the flip side is also true if all of a sudden I started spamming everyone there 47 times a day with NFT posts you know questions might be raised

about my you know mental stability right like what happened to right like and so I think that's look look I'm going to come here and talk about NFTs and I'm going to continue

the rest of the life, I'll go on Facebook and like, like, like, like my friends post because they got married or something, right? Great. And that sounds very simple, and it sounds very obvious, but it turns out that it's a very big deal. I feel I check in and check out of two different ecosystems. The ecosystem one is my ecosystem before July 2021 when I started tweeting at 6-5-29. and it includes my pre-existing professional life, my friends, my family, you know, where I eat pizza, etc., etc., etc. And that's normal. It hasn't changed. Right? It's fine. And it's real, and I have a variety of relationships, and they're all real and important. And in NFT, Twitter and Discord, there's now a completely other ecosystem and community of people.

some of whom are eponymous, some of whom are pseudonymous, some of whom are pseudonymous, and I happen to know who they are now because we've agreed to meet or what have you, some of whom I work with formally, some of whom I work with informally, some of whom I kind of feel sometimes

I get on Twitter and it's like going to cheers, but on a massive scale, there's like the same 1,000 characters, and I know who's going to agree with me know who's going to yell at me. And even though some of the people are yelling at me, it's comforting. Right. Like, it's a coherent world.

And one of the worlds is, even in a world of Zoom, is still a little bit more physically based. And the NFT Twitter world is not at all physically based. I mean, the one thing that is for sure the case, I never have any idea where anyone lives or where they might be from time to time. Right? And when it turns out, it doesn't matter at all. Like the big breakthrough, like the first thing, I was like, okay, this is fun, let's try it.

But the big breakthrough is I have noticed no difference, if anything, a positive difference in how well I can formally or informally collaborate with a bunch of people around the world where in most cases or in half the cases, all I know about them is their cost. cartoon character, right? They're JPEG. I don't know where they live.

I don't know who they are. And it doesn't matter because they're the pre-players. They're a coherent personality. And I can model them just like I model people in a physical work environment and I can interact with them. And that was a little surprising, to be honest.

I wouldn't say I expected that at first. Then I think there is, and this is a bit of a crypto bug, not a feature. I spend quite a bit of time thinking about how this can be fixed. I think it's actually fixable. There's probably an aspect now that's security related.

I have a lot of NFTs both directly or through the fund. The NFTs are different because they're on-chain, right? Maybe I do or maybe I don't have a lot of Ethereum. You'd never know, right? It could be at Coinbase or finance or somewhere on chain, you'd never know. When I'm running around saying, oh, look, I bought this really expensive Fedenza, isn't it beautiful? Everyone knows I own a very expensive finza, right? And many other expensive NFTs are somehow related with other pools of those NFTs.

And there's probably something around, is that super great from a security perspective, if also people, people can, like, you know, walk up to my front door. Probably not. Now, it's interesting, because if they walk up to my front door, it's not like I have the keys here, but how do you provably prove that to someone so they don't hit you over the head, right? Like, that's an interesting security flaw. And I think it's solvable, but the way to solve it isn't that you're somehow going to hide that you own NFTs. I mean, NFTs have a huge identity component.

They're fun. But you have to be able to credibly say, like, look, you can beat me over the head, but it does not going to matter, like, there's somewhere else, right? And I think this is something that's an infrastructure topic. It will be solved by multi-sigs. You know, RFTs are in multi-sids to begin with, but like those sort of multisigs with known signers. So you can say, look, it's this guy or it's this even bank. It doesn't matter if there are only one signatory.

It doesn't matter, right? So you can actually say, like, yeah, sure, there's a lot of stuff there. It's protected by cryptography. And you can't get it out of my bedroom, right? And then, this is the going forward. The interesting thing is, you look back, I remember being on bulletin boards 20 years ago, 15 years ago, and discussing different things.

And I realized I didn't know the state idea of any of those people, right? They just had handles. Sure, they didn't also have a cartoon picture, but their handles warrant John Smith Social Security number 93, 527, 434. it was like, you know, doom breaker 11. And that worked fine, right? And this worked fine. And I'm often asked by sometimes if I'm speaking to a conventional audience, the starting

one is like, oh my God, this is so weird, this person's coming here. And what I tell them is, you know what, it's not weird at all, you're all going to do it. It's all going to happen in the next three or five or ten or fifteen years. you will also do this because there is people are multifaceted and people present differently online already, right? Like what you say on LinkedIn and how you present on LinkedIn

and how you present on Twitter and how you present on Instagram and how you present on Facebook are probably different. And this is a natural next step there and in a more genuine, authentic, and provable manner. Without the NFT, you don't know if 6-529 is this account, right? Like the NFT, there's only one punk 65-29. The JPEG, there could be unlimited, right?

You can civil attack the JPEG, but you can't civil attack the NFT. So it's probably a pretty long answer from what you expected, but I think how I see it. That's good. I mean, that's very helpful. I almost think you gave sort of the case for why people should experiment with digital identity handles, particularly NFTs. It's one part, separation of brands. It's another part kind of an experiment.

It's another part. You'll obsec protecting your security. And it's another part just like, if you actually want to understand this crypto space, you actually have to use it. I haven't said this in a while, but we used to say, David at bankless, like, don't trust anybody's opinion on crypto who hasn't used uniswap. Right? It's just because, like, I mean, if you're not actually using the stuff and immersed in technology, how the hell do you? you know anything about it. You don't know what you're investing and you don't know what you're talking about. And so I also see what you're doing with 6529 as kind of a testing of NFTs and

identity online. We want to get back to kind of go to the NFT topic. But before we do, you said something which I found interesting. The purpose of spitting up this Twitter account, 6529, and going anonymous was really so that you could talk to NFTs. And you didn't have to like, I don't know, annoy your friend's social network or family on Instagram or Facebook with these sorts of tweets. As you're talking about NFTs, though, you're also unlocking, I think, something deeper. I remember a thread from earlier last year that really impacted me, something that you put out there. And the topic was about freedom to transact. And you start the tweet thread this way. I don't know if you recall this from February 17th of 2022. There are no other constitutional rights and substance with,

without freedom to transact. No other constitutional rights and substance without freedom to transact. And you go on, you describe the other constitutional freedoms that we have, such as rights to speech, assembly, religion, that people are innocent until proven guilty, that the state cannot punish people without due process. Most Western liberal democracies have this embedded in some form of a constitution. You say all of that is meaningless, unless we have the freedom to transnational. transact. And you go on further in your thread and sort of emphasize how crypto helps give individuals the freedom to transact and how important that this freedom actually is. You can't even have freedom of speech without freedom to transact. I want to get back to kind of the why you're in

crypto punk. Why are you spending so much time on NFTs? Because I think somebody might look at your account some days and just be like, well, you know, punk likes getting wealthy, you know? And there's massive investment opportunities in crypto. NFTs are super fast growing, and that's why he's in the space. I'm sure there's an element of truth there. But I also get the sense that you care deeply about some of the values enshrined in crypto. And being here in the early days, that must have been why you started to enter in, at least in no small part. Sure, it was a database that was new, but also it was a freedom-giving database. Can you talk about the values underlying crypto? and in particular this idea that unless individuals on the internet have the freedom to transact,

they actually don't have any other rights. Okay, that was about 17 questions. So let's start with freedom to transact because that's a general crypto point. Then we'll talk about NFTs and a while we're here. But the freedom to transact point is the same point that I said at the beginning. it's the 2013 point. And what is happening is a progressive erosion of freedom that is happening very quietly, very much in the background,

without anyone particularly thinking about it, and it is being driven. It's the technological equivalent of the medium as the message. And the medium in this case is large-scale big data companies, that have network effects, right? And then secondarily in some countries, governments. And I'd like to illustrate this with a trivial example, an example that I don't think I've heard anyone other than me ever use,

so that you don't get into very high-minded topics. It's a very trivial example. I used to live in New York. And New York has yellow caps, and you hail them off the street. And you hail them off the street, and the yellow taxi stops, and you jump in and they take you, wherever they're taking you, give them 20 bucks, and you get out, right?

And the only way someone can stop you from doing that is by arresting you. You can be prevented. There's no particular way that any actor, including the state, can say, hey, Ryan, you're not allowed to use a taxi anymore.

That's just not a thing. They'd have to come, you have to be deprived of your freedom of motion. And to be deprived of that, you have to be, because we have strong constitutional protections, you have to be charged with a specific crime, and there's going to be a probable cause, and you get a lawyer and a jury of your peers,

and all of those things, right? Now, I think the market share now of Uber and Lyft in New York, and now the taxi cabs have their own app, I think it's like 50% and it's growing, and someday it's going to be all of them, right? Like someday everything is going to be app intermediated. Now, what is needed for Uber to say, I don't want Ryan using my service anymore. Well, absolutely nothing.

It's a private service. You have zero rights whatsoever to be on Uber's servers to hail taxis using Uber's system. I mean, arguably correctly, right? That's private property. It's their property. It's not your property. And so if you violate their terms of service, but honestly, if the CEO of Uber wakes up and says, I don't like the look at that guy's face.

You're off the platform. No due process, no, what have you, because something that was decentralized in the physical world, hailing a taxi in the physical world is a decentralized exercise. There's taxis walking around and people walking around in cash.

That's how New York worked in all periods until maybe, I don't know, five, eight years ago. It's fully decentralized. it is now becoming centralized with a centralized chokepoint. And you might be blocked for purely private reasons, or as we have seen with Twitter, which is not the least surprising thing I have heard,

you know, the government might lean on private choke points, right? And maybe within their constitutional parameters, but lean on them. Oh, I don't know. We have some interesting information about Ryan. Maybe we don't let them get into all these taxis, right, into these Ubers. He does work at bankless after all. Kind of sketchy. That's right.

He works at bankless after all, right? It's sketchy. And what's happening is that is happening everywhere. Google has centralized media, right? Facebook has centralized interpersonal communication. Twitter has centralized another version of that. eBay has centralized on the yard sale plus. and YouTube is a huge percentage now of video communication.

And so you take all these things that were decentralized and they become centralized. That's one bucket. The second bucket that has gone along with this and it's one of these things that there's nothing wrong with it per se. It's just when you put it all together, you end up with a weird outcome. It's post-9-11, the U.S. has put an incredible amount of effort into AML and KYC. And this is one of those things. I am actually not like some weird anarchist. I do not believe that AML and KYC in principle is inappropriate, right?

But we have over a 20-year period, and it's very visible to me, because I take interest in the innards of the financial systems. We have gone from a point where cash was viewed neutrally to cash is now viewed with suspicion. There is no chance cash could have gotten launched today if it didn't already exist, right? Let's say cash did not exist. And then someone said, yeah, federal government's going to come up with this really cool thing. It's a piece of paper. There's no KYC, there's no AML, you can take it with you, there's no record of what you're doing it.

You don't have to, like, KYC are counterparty, you don't have to send reports. You can just use it. We'll never get launched, right? And it is progressively being pulled out of the system. some European countries that now, you know, cash transactions over $2,000 to $3,000 are illegal. Now they have a reporting requirement. They're just illegal. You can't do them anymore. Right. And so the net effect is being shaped by the technology stack. The reason this is happening now, and not in 1975, it was impossible in 1975 to have a global cell phone intermediated smart app intermediated

the taxes. And so tax is because you couldn't do the global part, because the global part needed, first of all, the internet, and then, you know, high performance computing of some type, right? Without that, you couldn't do it. And so taxes were decentralized. Now taxes aren't just centralized in New York. They're centralized around the world.

Like, if you get banned from Uber, you're banned from a taxi in many, many cities. And you can say someone's, oh, I'm not going to get banned for Uber. I have a 4.7 rating, whatever. Why does this matter? This is only for weirdos. are annoying people. That's not the point, right? The point is this trend is showing no signs of stopping. It is not dramatically changing from day to day, but every day the last 20 years, it's going into one direction only. And what happens at the end, the end state of this is you will have

X firms, where X is not a number like 13,522, but a number of, but a number, 20 or 50 or maybe it's 100. And why government services, which is a number less than 10, which might include CBDCs, and all of those very large databases will intermediate everything. And once that choke point exists, once that honeypot exists, there is a danger, it will be exploited. I spend quite a bit of time. I'm in Europe right now.

But I've got a bit of time talking to a major governmental institutions in Europe. And the logic is like, oh, look, once we have CBD's, it's going to be great. We're going to end money laundering and we're going to end crime. We're going to end tax evasion. And, in fact, we're going to end all types of social ills because we'll encourage, you know, eating vegetarian food and eating less meat and all this stuff, right? And it's actually well-intentioned for most of these people. it's just no thinking about the second order effects and the second order effects

is that well before we end all crime and enter a golden age of happiness someone, some very ambitious politician will gain control of the central banking node for their country and when it's election time their opponents won't be able to buy a tomato because you're going to have this unreviewable system that can instantly, programmatically, statistically shut down large numbers of people.

And if you can shut down transactions, you shut down everything else, right? I had been saying this before the episodes in Kent. In fact, now I'd say this example, it is, I'd say, Hungary. People are like, oh, yeah, I can maybe sort of imagine. Hungary, that might happen in Hungary. or Turkey or Russia or one of those places. It wouldn't happen in the United States, of course, whatever.

And, you know, for the purposes of this example, the Canadian example is perfect. Because Canada is very obviously not a dictatorship, like I don't think Justin Trudeau is some evil leader in anything. Do I think the truckers? I suspect my political views are probably borderline the opposite of the truckers. Right. I suspect I would dislike almost all the truckers

when we find them extremely annoying. None of that's the important part, right? The important part is, like, you know, a leader who was a fairly liberal and, like, Canadians are all like super nice, right, gets into a pickle. Thinks about it for a little bit, you know, not the first day, and they're like, oh, you know what? I'm just going to, like, cut off their banking and the banking of everyone around them. I don't have to go home. And that's what happened. They had to go home.

And the problem isn't, I mean, I have a lot of liberal friends like, oh, the truckers are jerks. I'm like, no, I understand that. That's not, you've got to think of first principles because, like, tomorrow this could be, I don't know, Black Lives Matters protesting, and Donald Trump's back in office and says, oh, this is a great idea.

I learned this from Justin Trudeau. Or just freeze everyone's bank account. And then you're not going to like it as much, right? Like, it says it won't seem as good as idea of them. And the thing is, all of this stuff is running outside of due process, right? The whole AML complex. Is the AML complex? Did it start with good intentions?

Yeah, I think so. They're trying to prevent terrorist financing. I think so. But then it grows and grows and grows like any bureaucracy. And, you know, it runs outside. I mean, if some bank says, you know, you can't have a bank account here, I've rescored you. You're too sketchy.

You're in a podcast called Bankless. That sounds very problematic. You can no longer bank at, you know, first third bank of Idaho or whatever, right? Well, you can't go to court and get your bank account back, right? It's just gone. And this infrastructure that is getting set up, bit by bit, that it's getting set up not because business leaders of America are evil. That's not why it's happening. it is an artifact of the technology that is available to us

and that technology the internet leads to network effects everyone knows is right all VCs like oh I want to buy the business what invest in the business has network effects is we're all going to get very rich right because the distribution the fact that you have zero cost distribution on the internet means that if you're slightly better you win all the business right Amazon wins everyone's business and so you'll end up instead of having 2,000 bookstores you have one right I'm simplifying, but it's that. Right.

And so you get these network effects, and those network effects in the digital economy become choke points. And so exactly in the opposite way, if crypto survives, all crypto has to do survive. If crypto survives, its own network effects, its own technology architecture, its own way it shapes its social environment, will be a huge counterweight problem.

because the way, you know, there is no CEO of Bitcoin, right? There is no CEO of Ethereum. Manifatal's a little closer, right? But he's not really the CEO, right? Nobody can prevent you. He cannot decide, oh, 6529 can't use Ethereum for this purpose. It's not within our corporate strategy, right? He's not like the CEO of Google.

And so the fundamental permissionlessness of the architect. will lead over time to significant, different, and in fact the opposite of what I'm worried about, social structures around it. And I think that's very, very good. And that's I've believed before NFTs, right? The freedom to transact stuff was a pre-NFT theory. It does not involve any NFTs. And I think it's really important, to be honest.

As do we. That's why this show is called bankless, right? No intermediaries. No in between you and kind of the money system. Anybody can open a Bitcoin address and eth address anywhere in the world. All they need is an internet connection. I mean, that's powerful social technology. And I think, I guess the point you're making is that all of this is happening in the background,

and it's not necessarily a kind of nefarious conspiracy set of actors causing it. It's just the network effect of the internet and digitization. And if we're not careful, if we don't establish decentralized protocols, and embed that in our internet protocols and kind of our internet constitution, then we may inadvertently lead to a world that is incredibly centralized and incredibly fragile. In fact, that's the world that we are moving towards. And I am surprised like you, 6529, that more people don't think in first principles, don't think as the founding fathers, the framers of the Constitution,

originally thought about balance of powers and what we should include in the Bill of Rights and these sorts of things. And they just seem to be thinking about the first order consequences and nothing else downstream. I feel like we've lost that, but I feel like crypto has preserved it. And indeed, it may be the case that I think it probably is going to be the case, that there will only be two types of money in the world, free money in crypto and then controlled money, everything that comes out of the nation state. But let's switch gears a little bit towards NFTs, because you're right. I think I embedded about 17 questions, my earlier question. we talked about the freedom to transact and how that underscores all of the values that interest you in crypto.

But there's more of the story here. What about NFTs do you see? Is there a link here? Continue the story, if you will. Yeah, I actually think NFTs, and this is probably the most controversial thing I believe, and it's certainly the most controversial thing I believe among longtime crypto people. I think NFTs are our best shot, or if not our best shot, an equally good. good shot as everything else combined at achieving this decentralization. That's why I started

6529. And let me tell you what the thesis is. I don't tell you like why 659 is doing what six five to nine is doing. Can I ask you first though? I just want to push back because people are hearing that at the beginning of 2023. And I think 2022 NFTs have left that year with kind of a stain, at least in the mind space of what I would call mainstream. So if you go to your friends, 6529, that aren't on crypto Twitter that don't even know who 6529 is, they just know you as you, whoever you are in the real world. You ask them about NFTs. My guess is

they're going to have a negative response to just even the term NFTs, scams, frauds, pump and dumps, all these sorts of things. Now, here you are at the beginning of 2023, and you're saying that this is fundamental, that this is extraordinary technology, that

this is good for humanity. Your viewpoint on this hasn't changed or been shaped at all by 2022? No, first Like, let's start with, I have been broadly speaking and in fairly public ways promoting these principles since summer 2013. Do you know how many times I've been told crypto is a scam? Do you know how many times I've been told crypto is all wash trading, it's money laundering, it's a pump and dump. Ethereum is a scammer, it's a pre-mine, it's a blah, blah, blah, blah, blah. I mean, my view of my average friend's capability to think sensibly about Ethereum is zero.

I value my average non-crypto views, views on NFTs, about as much as I valued on Ethereum, which is literally absolutely nothing. They're completely clueless. So the fact that they read that we're money laundering monkeys or whatever they think we're doing is no different than in 2013. when they thought that for some strange reason, 2013-6529, had lost his mind and was super excited

about buying a tulip bulb bubble that only heroin dealers care about. And since I'm not, you know, like a heroin user or anything like that, they basically thought I had lost my mind or had been like caught up in some multi-level marketing scheme

or some Ponzi. So the idea that that has any impact on me in 2020. This is the classic argument against crypto. The thing that I find funnier is a lot of people who believed in Bitcoin couldn't get there to believe in Ethereum. And a lot of people who believed in Ethereum

can't get there to believe in NFTs. I am not surprised that my area friend who has used none of these technologies thinks NFTs are a scam. What cracks me up is that people who use Ethereum or maybe Defy and don't use NFTs sometimes try to convince me that NFTs are a scam

and I'm like, you look yourself in the mirror have you actually like are you, do you have any slightest self-awareness of what industry you're in? Do you have the slightest self-awareness that like literally every single person has said the exact same thing about every stage of crypto development

from the time they've heard of Bitcoin? It's all a scam a bubble, a pump and dump, it's over, it's done, it's dead. Why would anyone touch that stuff if they cared about their reputation ever again? I am a hardened veteran of being yelled out. The idea that people might have read something in, I don't know, the new Republican don't like NFTs now, who cares? This means nothing. So let's talk about the why. Yeah, let's do that. Let's see that. It does interest me that people in cryptos tend to get off the train in a different station, right? Some people get off on Bitcoin, some people on DFI, some are still riding the train.

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a lot of people I know who were very sophisticated about crypto. I mean, people who were mining Bitcoin in 2012 and, like, have a portfolio of 50 fungible tokens and no, like, obscure side chains of whatever, like, super deep, technical, like,

crypto lovers, hit NFTs and are like, and I understand this. I was like, that went to 2017. I'm like, okay, or whatever, that's cute, but like, who cares? Like, why, why? I mean, it's just a JPEG. I'm not into art. Oh, why would I want this kid stuff? Right? Like, no, this is important. What's important is automated market makers. That's really important. That's the

important stuff. Right? And I actually think in practice, it's going to be the opposite. Explain that. And I'll explain why. So this is a multi-part theory. And you kind of have to take the parts together for it to make sense. The first part, I have spent an awful lot of time onboarding people to crypto for the last time, an awful lot. And the whole period, I knew the following. I was in the pre-product market fit era of a technology. Why? Because you're just talking about the technology. Ethereum is proof of stake and Bitcoin is proof of work.

Solana does more transactions per second, but it's more centralized. You know who cares about this? Nobody. This is literally like saying, imagining people are going to say, look at this amazing new application. It's called Instagram. Did you know that they're using Python on the back end? Literally, not a single person has adopted Instagram because it uses Python.

Instagram does use Python, I've checked. But who cares, right? You don't get to a consumer scale app by telling people about your technology stack, right? And all of crypto, pre-NFTs is literally just harassing regular human beings with your technology stack. Now, I like learning about proof of stake and proof of work and how mining works, whatever, but I'm a computer nerd. Right? Like, that's different.

No normal human being cares about this stuff. They all fall asleep a second you start talking about it. It's like those ads you see in the airports of like, should you use an Oracle database or IBM databases, which ones are faster? And those are literally just targeted to the CTOs, right? And the CISO, no one else cares. So when you buy a crypto punk, to stick with the example, right? everyone knows it's settled on the Ethereum blockchain, right? Everyone knows that Ethereum, when I bought my product, used proof of work, and now I used proof of stake.

But it's not why you're buying it. I didn't buy the one with the cool hoodie because of some technical. Oh, these are cool, right? Like what are cool? Oh, and look, these cool blue glasses. I like that color. And everyone else that I got into this with is actually talking for the first. time one layer

up the technology is in the background doing something, you know, theorems and all the things it does to give you confidence that you actually own that token. But the whole discussion in the NFT space is at the quote unquote application layer.

And I have had people who I've known for a long time who have shown no interest in learning how pancake swap works and why should they? Being like, oh, yeah, buy that one for me. It's cool. I'd like to, I like that one, right? And I've had very sophisticated friends with lots of money and not enough time, nonetheless, like,

discuss with me which, Fidenza or punk or whatever to buy, right? It's an application layer. And this is a truism in technology. When you start talking about the application, not the technology, you are at the beginning of the consumerization. So that's, One A, one B, unlike every previous form of crypto assets, large organizations have an incentive to get involved in an FDFT space. Again, by example, I was an NFT, NYC, semi-undercover, and I was invited to the Dolcegabana party in fall of 21. The only thing that matters in that sentence is that Dolcegabana was at a crypto conference. I haven't a lot of crypto conferences, but I've never seen Dolcegibaba at a crypto conference, because why would they come to an Ethereum conference? do it at a Ethereum conference? What would they do at a Bitcoin conference? What would they tell

Adam back? What would they tell? Dolcea Gabana. I assume Dolcea Gabana also doesn't go to host parties at Cisco network administrative conferences, even though they probably use Rathers somewhere in their business. But because NFTs are generic carriers for intangible assets, and Dolceabana owns an extremely viable intangible asset, their brand reputation, customer base, sense of style, they can transport some of that latent and tangible value into a more tangible token and earn money from it. And so they did and they won't. And it is why you see Artifact and Nike and Adidas and over the next two or three years, you'll see a lot of people in the lifestyle fashion areas, start onboarding NFTs. And from there it will go to every other area.

that has large groups of customers, sports teams, and it's already happened, right? It'll happen more. Religious groups, university alumni associations, right? Donate to the Ohio State University. You don't just get an email receipt. You get this Buckeye, super Buckeye gold-tipped thing to put in your wallet to show that you're the ultra-buckeye fan.

You're going to say, like, these applications aren't very serious. I am here to worship Lord Satoshi and Vatariari. like I'm doing very complicated things, but like consumers do not adopt very complicated things. If you want widespread option, widespread option of crypto looks like this. It does not look like something that requires a PhD in computer science to work on, right? And so bucket one, I think there's a pathway contingent on. We don't end up with legislation that makes crypto in general unusable. The legislation is going to come into place in January 1st, 2024, arguably makes

crypto unusable in the United States, right? Like, if you do a transaction more than 10,000, it is a felony if you don't report, if you do not report your counterparties, KYC information within 10 days. It's absurd. What specific legislation while we're on this, just point of detail?

It passed the infrastructure bill last year. Oh, I know what you're talking about. Yes. It's the transposition of the cash requirement transaction to crypto, but it is written extraordinarily aggressively. Right. And I don't see how you could use actually a defy exchange if that comes into law.

Right. Like, you don't know what the counterpart is. Yes. My understand from kind of our crypto lobbyists and the people fighting in D.C. is that there's still hope that this gets stripped out out of kind of like finalized versions of this. Yeah, but okay. But this is like we've lost and we're hoping it gets stripped out. Like it's in a lieu of action, it becomes the law on 101, 2021, 2024.

And it's a little bit more survivable in NFTs because what will happen is, I don't know, open seal KYC or something so you can sell NFTs that are more than 10-Eath, right? And do the reporting for you, because if they don't do the reporting for you, everyone's going to go to jail. This report the counterparty in 10 days or it's a felony is a very, very strict rule, right?

They can't send everyone to jail, can they? Well, I just... No, they're not. They don't need to send everyone to jail, right? They just need people to pull back, right? People do not like committing felonies, right? saying like, oh, you're committing felonies is bad for adoption. If you buy your, you know, whatever, nice generative art online, you've now committed a felony, it's very bad for an option of crypto, right?

But it also means, like, when you're on the other side of an exchange where you don't know at all what the counterparty is, you have more sense of what the counterparty is than an NFT than you're doing it in a decentralized exchange, right? Decentralized exchange, if this continues as is, they're finished. right like they will have to become completely C-D-Fi K-YC

blah blah blah to be compliant anyway so contingent on crypto does not become unusable I believe there are gigantic consumer apps

for NFTs that do not exist for fungible tokens it is not a surprise and it is not some type of you know I'm going at this 10 years

tell me pro-crypto gentleman, which large organizations are using Bitcoin and Ethereum in their day-to-day operations with large numbers of people? I will tell you which. None. NFTs are going to get used, A, for the reasons I mentioned, but also because they're more expressive. You could, I'll give you an example. You can represent, let me give you a totally stupid example. I'm not saying this is a good idea. I'm just saying it's an idea you can do with NFTs that you cannot do with Ethereum. You could have an NFT that is your employer

ID that it says David has these access rights and so they're right there in the metadata and Ryan his other access rights and it links to your access card and if you have an NFT opens the door. And so you can go to your office, you go to your other office, you can swipe it at the cafeteria. I'm not saying

this is a good idea. It's actually a dumb idea. But this very simple, dumb idea you can't do with Ethereum. You can't do with Bitcoin. You have to go back to all of the like colored coin early 23, 24 stuff, that's clunky and doesn't really work. And, you know, the Bitcoin community doesn't want you to do it on Bitcoin anymore anyway, right?

They're kind of like, oh, we're all wholly, we're just doing transactions. Okay, fine. So, NFTs are like infinitely expressive. And so you can do, you know, there's this open discussion if we're going to have NFT gaming. There is no open discussion if we're going to have fungible coin gaming, because obviously we're not going to have fungible coin gaming. It's impossible to have fungible coin gaming. You need non-fungible objects to do gaming.

So the next part is, you know, all of us talk about Metaverse. And Metaverse is another one of those. If you talk to 50 people and everyone's imagining something different. And mostly people are imagining, oh, I don't want to wear VR goggles all day. And anyway, I put the VR goggles and I went to some of these Metaverse sites and they all suck, like, oh, I don't want to do this, this sucks, right? And I have a much more abstract definition of the Metaverse. The Metaverse is just the Internet.

It's not going to be one website. But with better visualization, visualization has been getting better the whole history of the Internet. You know, I'm watching you live and global video streaming, and we couldn't have done this 20 years ago. But it's still the fact that you're like two. inches in size on my laptop screen is a bug, not a feature. I'm pretty sure you're more than two inches. It's like the Picasso thing.

I'm pretty sure you're more than two inches in size. In a decade, we'll have the glasses that Ryan's wearing, to be mixed reality glasses, and we'll have this meeting. And let's say I wasn't pseudo, or maybe you'd see me pseudo in the three. We'd see you full size in 3D, either in your recording studio or on the top of Mount

Everest or in the 6529 museum or what have you, right? So visualization is going to get better. With visualization getting better, there will be more need and use for persistent digital objects. What are persistent digital objects? Well, a PFP, an avatar, a piece of art, a three-dimensional space, anything, right? And because NFTs are one of those things that are deceptively simple, they don't look like very much, are just a token with some metadata. But that very simple structure allows you to represent anything with them.

And we start with something as simple as. Let's say I build my own three-dimensional space, right? It's my office. It reflects my personality. Should I be able to own that the same way that I can run a web server and own my web server? Or do I have to only do it as a page on Facebook, right? And it's a 3D page. And this would be like if the internet only allowed you to make Facebook pages, right?

You couldn't have your own website that wasn't allowed. Right. And so if we think the issues we have now with centralization of social media, right, which, I mean, they're amazing issues. Right. They're a complete failure of internet architecture. Notice how we have had zero Republican versus Democrat debates. about who gets to have an email account. And the reason is, of course,

not that email is less important than tweeting, it's more important, right? It's a more important technology than tweeting. You can survive without Twitter. You cannot really survive in the modern world without email. But no one has come and said, my favorite political opponent should be banned from having an email account.

And the reason is, not because they don't want to say that, it's unfeasible because email is SMTP, and sure, Google might ban you, and Outlook might ban you, but some email provider will take you, and even if no email provider takes you, you can learn your own email server.

The architecture of Web 1 came out of academia, and because it came out of academia, it was all open, interoperable standards, and that's why Web 1 is basically okay on the centralization aspect. Web 2 came out of Silicon Valley for a bunch of people who think carefully

about network effects and value capture, and the second generation of Internet, protocols ended up being companies. Facebook is medium-sized messaging. Twitter is short-form messaging. LinkedIn is your career graph. All of these things could have been protocols, should have been protocols.

Twitter came the closest. Fred Wilson talks about this all the time. He was on the board then with Jack. They knew it should be a protocol. They couldn't see how to do it. This was like 2009, 2010. If we had understood Bitcoin better, we would have made it a protocol. And if Twitter was a protocol, none of these fights would be happening, right?

The whole idea that who is allowed to use the dominant short-form text messaging protocol in the West should be determined by who the CEO of Twitter is from time to time is ridiculous. Right? Imagine thinking from first principles, that's how you should architect the Internet. Right?

Like, it's bad enough to think we should have some type, of political decision on who gets to use the internet, but the idea that that political decision should be some random, decent size, but random company in California that decides us, is nuts. Why did you do it that way? And it was because these protocols got captured as companies. Now, if this is bad, and I think this is bad, think what happens in a decade, right?

The metaverse in a decade is going to be your all-encompassing, ambient digital environment. You'll be primarily in augmented reality. Your field of vision will be infused with data, images, conference calls, whatever. You're going to have AI assisting you in there. It's going to be great. Once a while we'll go to VR. Once in a while, you'll show it all off and just see the world as it is.

But you'll be mostly in augmented reality, and you'll do it because it's super convenient, and helpful when your productivity goes up for the same reason. We're all now addicted to our phones. The people are, I'm not going to do that. we can just safely ignore that. They all said they weren't going to get smartphones, and now everyone has a quote-unquote smartphone, right? And if that is a centralized firm that controls that digital space,

getting kicked out of that digital space is like being cast out into the darkness, right? Your whole work life will be there, your personal life will be there, your family life is going to be there. And it's even worse, right? Because how do some of these technologies work? They work by pointing a camera into your field division. Right? That's literally how good

reality works. And think of this as a thought exercise. Imagine if I sent him, again, I have no objection to Mark Zuckerberg. He's just useful CEO

of a social media company who can use, right? Might be a lovely guy. But imagine if I sent him like four cameras and I said, hey, I'd really appreciate this if you stuck it on your head

and your wife's head and your kid's head and just streamed the video of everything you're seeing back to the six, five to nine servers. There's nothing to worry about. There's nothing to worry about.

I have a privacy policy. As you can see, on the bottom of the website, there's a privacy policy. And so, of course, you'd be happy to stream your daily life to us, right? And, of course, I'd, you know, get told to go jump in a lake. But that's what the new Oculus goggles are. And whether the Oculus goggles are clunky, they work, they don't work. It doesn't matter. Eventually the hardware's going to work, right?

And eventually when the hardware works, if these are backed by a centralized company, what you're going to have is not only everything we've discussed so far but biometric data field of vision data all streaming to one place once you have that honeypot someone is going to abuse it right

my view is not that I am naive about human behavior it's not like the people who care about fighting crime are the cynical hard asses and I'm naive quite the opposite I'm more cynical I'm more cynical that really smart criminals will say, oh, wait, I need to become CEO of this company, or I need to become head of the central bank, or I need to become the political leader.

And if I become the political leader and then co-op these large companies and the CBDCs, what have you, I will have power unknown to even the most powerful dictator of 80 years ago. Joseph Stalin couldn't press a button and make someone 3,000 miles away unable to buy a tomato. But with a CBDC coming soon to a Western democracy near you, you'll be able to do that, right? It's a lot of power. And when there's a lot of power,

eventually some ill-intentioned person is going to take advantage of it. We know it's going to happen. So you put this all together, and you say, okay, well, which of our crypto technologies, I'm not saying this is easy, is actually going to do the trick.

Do you think the next decade we're going to have a super explosion of fungible token applications that for some strange reason the whole crypto industry has forgotten to invent for the last decade? I don't think so. They're not coming. I spent almost all day for the last 10 years

in crypto. Where are they? I think to myself, how can I use crypto into my day and day and day, other than accepting fungible tokens for payments and, you know, occasionally swapping some currency for another currency. That's great. That's uniswall. Super. That's great. It's travel X, right, but better. Right. And so my view is we have a moment in time. That moment and time is two to three years. It's right now. And it is while people think this is a joke.

Let me go back to Twitter example. When Jack and Fred were having deep thoughts about if Twitter should be a protocol or a service. The average media view of Twitter was like, this is some stupid service that, like, tech bros in California, tweet out that they're going to go get a ham sandwich for lunch. Who cares? Who cares about the stupid service, right? And it turns out, I mean, that was Twitter in 2009,

and it turns out from that point, 11 years later, the President of the United States considered it the most important tool he had this as disposal. right it's weird right there's only a decade right now people look at NFTs conventional people and say oh look it's a bunch of overpriced bubbles in random bad art or whatever leave aside that none of that's actually true even if it is true it's irrelevant there is just as clear a path that how you go from tweeting about your ham sandwich to Angela Merkel announcing her new economic policies on Twitter, there is just a clear path from

NFTs being for glitch artists to NFTs representing every single digital non-fundgible object, which is a lot of them. We're going to have a lot of digital objects. Our economy is not going to get less digital, it's going to get more digital. And right now, because there is

Twitter it's over you're not going to build a decentralized Twitter because they have the network effects, right? You're not going to build a decentralized face-cule. They have the network effects. It's very hard to break them. The network effects for metaversy type stuff are not built here.

Nobody has figured it out yet. And so we have a period where the underlying technology or platform or API that will be the network effect is up for grabs. So it could be just to simplify.

It's not exactly but to simplify. It could be that everyone issues their digital objects of NFTs or everyone issues them as digital collectibles on the Facebook Horizon API. Right now,

Facebook has not won this technology shift. These things happen. Technology shifts, you have a new scramble, usually another firm wins. Here we have an opportunity to actually win technology shift. We have an opportunity that the default way to issue a digital object is on NFT, we actually do not, I believe, as much as I'm an old-school Bitcoin maxi, I do not believe

we have any practical opportunity over the next handful of years that Bitcoin is going to displace state money. I actually don't think there is the demand for this displaced state money, and on the off chance it started to, the state has a tremendously powerful set of tools to fight back. Do I believe Ethereum is about to become the global computing platform? No. Amazon Web Services is a global computing platform.

Ethereum is useful for many very interesting permissions applications, but most computational loads are going to run on AWS, not an Ethereum. Is it an open question where you can store the database of arbitrary non-financial digital objects? Yes, it's an open question. It is an opportunity. It is an opportunity we can win. Not to have like 0.1% market share

as we do in like payments and banking, but 70% market share. And there's one last thing. I'm going to be quiet for a second. There are, of course, you can make an NFT into a security because you can basically make anything into a security, right? literally make a banana into security if you said the right things.

But you can make an NFT into not a security. In fact, you can make an NFT into First Amendment protected speech. If XCopy makes an NFT and says, hey, this is me saying, I don't like the government. It is going to be very

hard in the United States of America for the SEC to say, uh-uh, uh-uh, you cannot make that piece of art. You need to get pre-approved from the SEC. I think there's a non-zero chance, depending on how things play out, some NFT case actually goes to Supreme Court on First Amendment grounds. People try to do those with Bitcoin,

right? The Bitcoin speech and the math is speech or what have you. Bitcoin's like a money type thing. It's not speech. But art, it's going to be very hard to say, like, here, an ex-copy piece of art is not speech, right? If that's not speech, what is speech? and so there are places and it's my concern about defy defy looks like regulated entities

off-chain right we might not like that we might not want to think about that but uniswap will look to the eyes of the system as the type of thing that when it's off-chain they regulate an in-game sword in some on polygon in some blockchain game is that something that today there's a huge federal apparatus

to regulate the in-game objects in riot games? No. Is there some huge federal apparatus to check what galleries in New York are selling and make sure the buyers don't buy overpriced anti-warhol prints? No. These are things that are outside of the rate.

You know, there's some of all stuff even with galleries, right? But that's about it. It's not, you don't have very heavy regulatory infrastructure. So my view is, to summarize, it is possibly our first true consumer application. Second, it is possible you can tip over the large organizations

to say it is in our business interests, we will make more money issuing this digital wearable as an NFT than running it through Facebook. And one and two will work in tandem with each other. And three, it is in a part of the world that is not as threatening as to the state. Right? So you're not telling them,

I'm going to replace the Federal Reserve. Every time Bitcoiners say that, I want to just like, go hit them over the head. As if that's, you're going to go to Paul of Israel. I'm going to replace a central bank. You know what anyone's going to think?

This sounds like a very bad idea. Why would I help you do that? Right? What here you get to say instead is, look, do you really want Facebook extracting 50% of the digital economy for the next 50 years as a regulator, as a politician, does that sound like nothing?

Maybe Facebook shouldn't own everything for the next 50 years, right? It's an easier sell, right? And possibly, possibly, question mark, possibly. We can actually have some productive relationship with the regulatory state and disregard. So, I'm sorry that was long, and I grant you, I am probably the single most bullish person about NFTs on planet Earth. I grant this, right? but the first half of 2021, I concluded this, and everything 6529 is to get this message out. And it's obviously working because a year and a half ago, you had no idea who I am, and here I am on your show, right?

6529, we've hopped around on various different topics, and I want to make sure that we haven't lost listeners around the way because if they weren't playing close attention, they might think that we have touched on very different topics throughout the podcast. But actually, I think there's a very solid through line here. And I want you to help me kind of weave this together as we come to a close here. We started talking, asking you about your digital identity, your pseudo-unonymous NFT Punk 6529 base identity. Then we talked about the freedom to transact and how the freedom to transact is individual self-expression. And you talked about the homogenization of the decentralized network of taxi cabs into the centralized network of Uber's. And I think the idea was to really extrapolate that out to any sort of Web2 service. like with the idea that our freedom to transact is being lost through the centralization of all

these Web 2 apps. And now we have NFTs. And NFTs are this potential, because the cost to mint an NFT is so low that it can really resemble the counterforce to the homogenization of Web 2. It presents a Cambrian explosion of individual expression for Web 3. And there's something that we haven't touched on yet in this podcast, which is just like, humans just have this part of this brain that NFTs just light up, and we just like them for some reason. And among other reasons that we've talked about so far on this pod, like it just seems to be, people just have this when they get into the world of NFTs that, yeah, it's just going to take over inevitably. And maybe they can't really articulate that, but it's something that a lot of NFT people really feel. So as we take this home,

let's dive into that last part of the subject matter of NFTs and this incoming revolution of like digital commerce and free digital commerce that I think we all see coming around on this metaverse, which I agree with your definition is just a visualization layer with a bunch of digital objects. But what about NFTs seems so inevitable? You've given the case for why they should come and what we have to lose if they don't come. But what about just like the human relationship with what our brains is and how we like to collect things? Like what about the world of NFTs you think is just so inevitable? So in early Bitcoin days, people would say, you know, when Bitcoin in 2013 had, I don't know, like a $5 billion market cap in the fall.

NFTs today are about $10 billion. And back then, people would say, oh, look, what's the comp? It's gold. Gold's $10 trillion. So long as I know, it's not gold, it's M0. It's $20 trillion. Oh, these are very big numbers, very valuable things, right? Intangibles on corporate balance sheets are about $70-something trillion.

Bigger than gold, bigger than money supply. and there's an endless number of intangibles that are nowhere to be found on a balance. If you are an American and you believe in freedom and you see the Statue of Liberty or you hear about the land of the free or the home of the brave, you sing the national anthem, do you feel good?

Yeah, I think a patriotic market often feels good when you feel this is, right? Is that valuable to you as an individual? Sure, is it valuable to the country? Does the country work better if people are proud of it and happy? Well, of course, right? There are intangibles everywhere.

It's why people buy a Nike sneaker, not an unbranded sneaker. It's why people go to the ballgame of their university and cheer. They're fundamental to human society. It's that are really intersubjective myths, right? That the way any society of more than a couple of hundred people works is we believe a bunch of things in common. And when we believe these things, we feel emotion. about them. And because

if we feel it's emotion, I mean, in an extreme example, people go and die for their national flag, right? In less extreme examples, people go tailgate every week in a football game, right? In other less extreme examples, people will pay $10,000 for a watch when a $50

watch will do the same thing. And I'm not here to tell you this is bad. This is fundamental to human nature. This is how we are, right? Identity matters, community matters, emotion matters. NFTs are the where we can take all of those feelings from an off-chain world on-chain. The reason people's eyes light up is exactly the same reason people's eyes light up

when they're engaged in some activity that is lighting up their emotions in the off-chain world. We now just have a technology that can carry around any arbitrary intangible on the internet. well if you think the internet's a big deal I think the internet's a pretty big deal and I think intangible assets are a big deal in fact I think they're the most important thing in society right you start with it intangible that's what drives human behavior

I use this example sometimes yes we can and make America great it don't sound like much right but each of those two things gave the person who thought them up access to enough nuclear weapons to end the plan you know nuclear weapons are important things No, the important thing is who gets access to those nuclear weapons, right?

And the way you got access to those nuclear weapons wasn't by writing some complicated policy paper on nuclear weapons. That's by saying, yes, we can and hope and change and make America great and red hats and all these things, things that bind humans together emotionally. It's how actually all large societies work. You're talking about the meme layer of society. Yeah, I call it memes. career calls it intersubjective realities or myths, right? You can call it social construction. There is no question. It's how anything other than very small family groups of people

organize. It's how nation states are organized. Why do you do the Pledge of the Legion's every day in class in elementary school? Why? Is there any reason other than this? Of course not. Why do companies have logos? Why do universities have emblems? Why is there a Statue of Liberty in New York City, right? Sometimes people, particularly people like us who are like Google spreadsheets and math and computers and what have you, think like that's the important thing. Well, no.

The thing that's upstream of all those things is are people interested in putting in the work for a certain objective, right? And those objectives are all socially constructed. The reason anything that we do, religion, art, nation states, all those things are socially constructed, And what comes downstream is, you know, you do something in Excel because you're an Excel guy, right? So the fact that everyone who goes down the NFT rabbit hole might so forth like this is because you're just tapping that part of the brain that is the underlying fabric of society.

And now for the first time, we can make it composable on the Internet. And it's a very big deal. And it's very fragile, right? Like, I don't think, like, oh, cool, we can lay back and NFTs or crypto are going to win. It's my biggest point of, I know almost all the OG crypto people, almost all of them, both the developer types and the business types. And my biggest point of disagreement with them is, well, we're just automatically going to win. It's inevitable.

I don't think it's inevitable. Nothing in life is inevitable. Bad decisions get made by societies, and society goes back 30 years, right? And there is, if the path dependence of the next few years goes in a certain direction, I think NFTs will change the architecture. I actually believe it. In a good way. In a good way.

Punk 6529, I think we're going to end it there. This has been a fantastic conversation with you. And I think there has been, as David said, a single through line to this entire episode. And don't know who you are in real life, of course. But you echo many of the, I think, mental models. great thinkers in crypto that we've had on the podcast in the past, you know, the Belaghi Srinivasans and the Chris Dixon's and that sort of thing that have been exploring the space from the early beginnings and really see the long-term future. I think some will hear this

episode and they'll still think that we're out to lunch, honestly, all of us crypto people. But I guess 10 years ago when you were talking this way about Bitcoin, many of the early believers, they said that about them too. And so I think ultimately, history will be the judge of whether you're bullish position on NFTs, move the single most bullish person in the world on NFTs, whether that position is true or not. We're certainly excited for it on bankless. And the one thing I would say to listeners is, if this is not the way towards more decentralization, what other alternative do we have?

Name me a better alternative that gets society to an outcome that we're all hopeful towards. So punk 6529, we appreciate you being on bankless, and thanks for your time today. Well, thank you for having me and putting up with my ranting and raving about NFTs, and I appreciate your time. Bankless Nation, I hope you enjoyed this episode. I'm going to link to a few of Punk 6529's most famous threads. The Freedom to Transact, we mentioned it here. We'll also link to some of his metaverse threads as well.

He also has some fascinating life advice that we didn't get to in this episode, but I think you should look through a couple of threads, one called Making It, What Does It Mean to Actually Make it in Life? And another thread on the Shortness of Life. give them a follow as well. Guys, got to end it here, of course, with risks and disclaimers. Crypto is risky. You could lose what you put in.

NFTs are risky as well. But we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.