Bankless - Udi Wertheimer | Layer Zero

Episode Date: January 11, 2022

Udi Wertheimer is a notorious persona on crypto twitter and is endlessly difficult to pin down. At the very least, Udi is an interesting and unique character, describing himself as a cynical optimist with a tendency to antagonize and troll. Udi is also insightful and pragmatic, constantly making connections and critiques of the space with a sharp eye and a relentless desire to call things out when he disagrees. He blurs a lot of lines, and you always have to be on your toes when Udi’s around. There’s value in having members in the community who never give the benefit of the doubt and act as a philosophical razor for the space. Udi is full of takes, and this conversation twists and turns through the entirety of crypto—trading, culture, communities, memes, the metaverse, and beyond. ------ 📣 ONJUNO | Crypto from your Checking Account! https://bankless.cc/OnJuno  ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🍵 MATCHA | SMART ORDER ROUTING https://bankless.cc/Matcha  🚀 SLINGSHOT | LAYER 2 SOCIAL TRADING https://bankless.cc/Slingshot  🏦 GEMINI | TURN FIAT INTO CRYPTO https://bankless.cc/Gemini  🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants  ------ Topics Covered: 0:00 Intro 3:30 Udi, a Meme Tactition 9:08 Trading Ponzis 15:58 Not Changing the World 22:22 Optimism, Memes, Community 30:20 Winners & Decentralization 38:33 Composability & User Experience 42:14 SBF and Competition 49:10 Culture & Meme Communities 55:30 Bitcoin Twitter vs Bitcoin Reality 1:01:00 Pricing Values 1:06:30 Critique of Ethereum & Bankless 1:14:53 2022, Metaverse, Resolutions 1:22:19 Closing & Disclaimers ------ Resources: Udi on Twitter: https://twitter.com/udiWertheimer?s=20  ----- 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://newsletter.banklesshq.com/p/bankless-disclosures 

Welcome to Layer Zero. Layer Zero is a podcast of unscripted conversations with the people that make up the Ethereum community. Crypto is built by code, but is composed by people, and each individual member of the crypto community has their own story to tell. Cipherpunks understood that the code they write impacts the people that use it, and Layer Zero focuses on the people behind the code because Ethereum is people all the way down, and it always has been. Today, I'm talking with Udi Wertheimer, and Udi is one of the most interesting and unique characters, I think, in the crypto industry. He's frequently cited as a troll by many of the people in the Ethereum community. And I think that's just because of his generally cynical and antagonistic disposition. He likes to poke fun. He likes to make some funny jokes.

But overall, he's also just really insightful and makes some connections that I think a lot of people fail to make or just forget to make or tends to be a little bit more pragmatic. And so I've always wanted to get Udi on in a much more unfiltered sense. So I think this is a perfect podcast for this because Udi has a persona about him that it's hard to tell if it's a facade, if he's like playing a role or if that's actually Udi. So I'll let you determine for yourself what you think about that. Before we get into that conversation with Udi, we must hear about some of these fantastic sponsors that make the show possible. The Brave Browser is the user first browser for the Web 3 Internet with built-in privacy and ad blocking to keep you in charge of your digital footprint. And inside the Brave browser, you'll find the Brave browser, you'll find the Brave one. wallet, the first secure crypto wallet built natively inside of a Web3 crypto browser.

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trades and they will go through automatically while you're away. So when you're making a trade, head over to Macha.xy-Z slash bankless and connect your wallet to start getting the best prices and most liquidity when you trade your crypto assets. Hey, Udi. How's it going? Hey, great. What's up? No, nothing much, man. Trying to fight this onslaught of frogs that are in my Twitter mentions. I don't know if you saw that. It's all that antics on Twitter or not. It's always Twitter Wars. Always Twitter Wars. I like the frogs. Yeah, you're a friend of the frogs. I want to make sure the frogs here that I like the frogs. Yeah. Why do you like the frogs? I think it's, I think it's a cool meme. I like the meme. What is the frog meme to you?

It's all about the anti-VC movement, isn't it? That's what it looks like. I don't know. You never know how real this stuff is. Like, if you're a VC, shouldn't you start a meme about being anti-VC and pretend to not be a VC. What would be the game theory behind that? Why would you want that? Well, I mean, you always get a story, right? It was a narrative to get people excited.

That seems like a cool narrative now. Are you talking about how like... Clearly, every coin starting out, like the big thing that everyone has to say about it is that now these VCs, they got a location to try to dump it on you. You know, there's the whole Jack Dorsey thing going on. There's a lot of memes around VCs right now.

Yeah. Are you saying that like it's a tactic that people are leaning into? I mean, isn't everything? Yeah, for sure. It is. I'm a very cynical person, David. Yeah, you are, you are quite cynical. Yeah. Udi, how did you get into crypto? It's like, it's probably been around roughly 2014. And I, I back then used to think that, you know, like, Stuff like BitTorrent and decentralized file sharing is cool, like technologically. Like I'm a software engineer by trade. So I was excited by the technology behind it. Then someone told me about Bitcoin.

I was like, hey, that's similar. That's cool. And also I had some brief experience with online poker. It wasn't really very good, but I played like recreationally, you could say. I somehow managed to not lose money. And I believe there was this big event that they called the Black Friday of online poker, which I think was in 2011, but I'm not sure anymore. And what happened was the, you know, the FBI kind of froze the funds of a bunch of big poker size.

And that's where a lot of poker players realized that their money isn't, you know, their digital money isn't really theirs because, you used to log in, you see a number, you say, okay, that's my money. And then one day it's gone. So I kind of had this concept that I think a lot of people didn't have back then of, well, most digital money isn't really yours. So that was easy for me to grasp how Bitcoin is different in that way, which I think a lot of people, you know, looked at me very confused when I would try to

explain that. So that's probably why I was excited about it. It took me a while, though, to, you know, get over my, fears and to really dive in and look at it as an investment. That took a while for sure. You know, I went through, I went through, you know, this one hype cycle where, you know, I bought some Bitcoin. I saw it. I don't know, whatever it was, like triple in value fairly quickly. And then, you know, dump 50% fairly quickly again or whatever. And I was like stressed. So I was like, okay, I'll get out with my 30% gains.

feeling like a very smart person. And it took me a while to see that it's a long-term thing, which is probably how I also kind of realize, okay, it's not just about the technology, to me at least. It's also, you know, there's a financial revolution going on here. Probably when I started realizing that you can, you know, you can take your Bitcoin, you could put them in exchanges and you can, you know, you can use it,

you can do stuff with it that I knew for a fact that I otherwise couldn't do like, you know, I live in Israel for me back then. It was very difficult to get, you know, to get an account of a foreign brokerage, right? It's a difficult thing that we'll have to go through hell to do that. But with Bitcoin, I was like, oh, I just deposit the thing. I can do whatever I want. That's amazing. And that's probably where when things started to click.

It was all Ponzi's, by the way, but still. What was all Ponzi's? I mean, the, you know, the things you could trade, mostly old Ponzi's. Definitely back then, you know, like, it was really ridiculous. Like, the alt coins of 2014 and 15 were absolutely insane. They were mostly jokes. Like, I think most people saw them as a joke. Did you take any of them seriously?

No. And you didn't consider Bitcoin to be a Ponzi. You thought it was Bitcoin is the one thing. And then it's just inside of it, it's just a see. of Ponzi's. Yeah. Yeah, I did. It was, I mean, it took me a while to see Bitcoin that way too, but yeah.

And I think it was easy to think that back then, right? Because the, the others were literally clones. Like they literally, they took Bitcoin. They changed a couple of lines. They changed the logo and the name. And that's it, literally. That's all it was. So it was very easy to see them as jokes.

And, you know, have you ever heard of, what did they call it? Aurora coin. Oh, vaguely. Yeah. It's been a while since I've heard that name. Yeah. So that was, it was hilarious because that was, I think, I think the story was that it was the coin of Iceland or something like that.

And like obviously, you know, obviously the government had nothing to do with it. They were like, they were just saying, oh, we're going to. I think they have the claim that the government has some sort of an open database of citizens. and they claimed that they would just airdrop a number of tokens to every citizen. But before they did the air drop, there was like a long period of, I don't know, a month or two where it was just, you know, they just sold it to the market. And then, you know, they pumped the price very nicely. It was actually one of the biggest, everyone was talking about it because it grew spectacular.

But it was complete, you know, it was ridiculous, obviously. I think it was obvious to everyone. This was not going to become the coin of Iceland. But, you know, people bought into the narrative. And then, of course, you had dozens of other country coins. Like, people popped up with a Greek coin and a France coin. And they had a coin for every country. And obviously, like, you know, two or three months later, that stupid narrative died and it disappears.

That's just one example. But that was, you know, just like everyone is talking about. Leo 1 in Metaverse now. Back in those three months, everyone was only talking about country coins. Yeah, I was about to ask, these antics, this behavior seems very, very, a lot of parallels to some of the antics I think we see today in 2021. Would you agree with that? Yeah, for sure.

And, you know, it's true for traditional markets, too. I think it's just more pronounced here in crypto, a lot more pronounced. but yeah it is similar however I think you know the quality of the jokes improved they're they're not you know it used to be so so stupid it was absurd and I think I think it has a lot to do with you know how a lot of the earlier bitcoins still see old coins as a complete joke because

you know that's what they were they really were and I would say they've improved somewhat. It's not like, you know, it's not like it's amazing now. They've improved somewhat. Improved in what sense? What did they improve upon? I think so, you know, first of all, things, you know, they're actual things that work, right?

That's a big difference. Okay, so they're going from Ponzi's to actually, like, legitimate projects with legitimate things behind them. A lot of them are still Ponzi's. So, you know, like a cool thing to do now apparently is to do a, you know, a game, with a play to earn game or whatever and attach some, attach a token to it. And a lot of these tokens,

I'm going to name Nays. A lot of these tokens are really built as a Ponzi with 3D or 2D graphics, basically. And so a lot of them are still Ponzi's, but at least there's something going on. And also, you know, I don't mind if people want to participate in Ponzi, be my guest there, you know. Do you subscribe to the notion? that every financial asset is a Ponzi at the end of the day?

You could say that maybe, and it's fine. You know, there are definitely a lot of dynamics around, you know, most token projects that you look at today, it's like their main focus is how to incentivize people to stake things for the long term or the poor term or whatever. And like the entire focus of what you're doing is the Ponziomics of it. Is to make number go up, right? Yeah. I mean, but you could say that about like a company on like the NASDA or NYSE, right? Like the purpose of Apple is to make number go up, right? It's the same thing. I think the difference you're highlighting is like, well, in order for Apple to make number go up, they make really good iPhones and they make better and better iPhones. Whereas they're trying to make a fun game, but like it's really about like where the intentions and how quickly they're trying to go after the token price rather than actual like a legitimate product. Yeah. And I think probably at the end of the day,

You know, some people will say that it's because of regulations. Like Apple would have done the same things if it wasn't regulated that way. I think that's not true. I think that the reason that it's happening is because that's what it's doing now. That's probably not going to continue forever. The demand for Ponzi's at some point, I don't know when, at some point, is probably going to die down a little bit. And then, you know, people will be forced to do something else to,

make number go up. Right now, it's easy and effective. So that's what people do. Because crypto is just like filled with all these ponzies of different flavors and kind of always has been since the Genesis. Is that one of the reasons why you are, describe yourself as cynical or were you cynical before you got into crypto? Oh, I was always cynical. Always been cynical. Yeah, it's a genetic thing probably. Has your sense of humor changed by being in crypto? Or again, has your sense of humor always been what it is?

Uh, you know, probably probably has been always similar, but, um, but the topic change. Yeah, it's the same idea. Have you ever developed like a core thesis about crypto? Oh, I, I have developed a billion, billion core thesis and I keep changing them all the time. In that case, I don't think it counts as core. I think it just counts as theses. Fair enough. It's a short-term core thesis. it's designed it's designed to be a core thesis but then it fails um i think you know above all else and i think i think we probably talked about this before actually on one of the other podcasts i think

to me and i think to most people i see it's not really about the technology even though i'm kind of a technologist at heart i don't think that that's the issue here i think the thing is that to just do whatever we want with our money. And that's very new, relatively. And just, you know, because that happens, then a lot of crazy shit is going to happen with it. I think that's, I think that's all it is. And it's very hard to predict, like, how it plays out.

You know, I would imagine that the next year will be very different from the last one. You seem like a guy who rides the wave rather than tries to steer the ship. Yeah. Yeah, I can say that. I think steering the ship is hard. It's hard. And it's like there are things you can affect in life.

But the market probably not a lot of it. Right. If you try with the flow, I think that makes it easier to, you know, affect other things in your life that matter more. Right. So I'm a big believer in not trying to, change the world. Why unpack that?

Why do you believe in not trying to change the world? You know, Jordan Peterson has this thing where he says, clean your room, right? I don't know how cringe you think Jordan Peterson is. But he has this thing where he says, like, clean your room. And the point is, before you try to, you know, before you sit and try to describe how you should change the government and how you should change society and how you should change, like, first, you know, figure yourself out. And the nice side about this, it's a feedback loop, right?

Because if you start with yourself, while also, you know, you integrate yourself in the world, you don't become a loner. And you go with the flow where it comes to how society as a whole functions while trying to affect, you know, yourself, your friends, your family, or your immediate community. then, you know, you take power from the world, from society, and you use it to change the things around you that you care about, that you care deeply about. I feel like that's the way to go, at least for me. But there are a lot of, you know, there are a lot of cool people who are changing the world,

which I find amazing. That's amazing too. Isn't his notion of cleaning your room is like, if you're interested in changing the world, you've got to make sure that it's like put your oxygen mask on first before you put it on your neighbor, right? I feel like that's this similar metaphor. Yeah, it's, yeah, it's definitely also about, you know,

like really, how can you think you can, you even can fix society if you haven't fixed, you know, if you haven't cleaned your room yet, right? How can you even imagine that you can fix the government if you're, you know, if your family is dysfunctional? Is your room clean right now, Ouddy? Yes. Yeah, you have a clean room?

I blurt it out. I blurt it out, but it is clean. It is actually pristine. Doesn't that mean that, according to Jordan Peterson, you're ready to move and start to clean up the world because your room's clean. Step one is done. Step two is to help change the world. I might. I don't, I really, you know, I don't have aspirations to change the world, right?

I don't like, what would I change? I think the world is fine. I know that we love to say, crypto, that everything is going up in flames and we're going to save everyone. I don't know. I don't think the world. I'm old, David. I don't think the world is going up in flames. I think it's fine as it is.

And, you know, we have a unique challenge in the last year, but I'm optimistic. I'm optimistic. So I don't want to change the world, but you're right. There's definitely, there's definitely room to venture outside of the room. You said you're an optimist rather than a pessimist? Yeah. You're a cynical optimist. Is that an oxymoron or how do you square those two things?

To me, at least in my mind, I use cynicism to just, you know, just discern the world, right? And I at least tell myself that it helps remove layers of fake narratives and that it just helps, at least helps me personally analyze things. And I just happen to, once you do that, things usually aren't that bad. that said, a lot of things did go, did get worse in the last couple of years. I kind of established a lifestyle of a digital moment kind of because I wasn't happy with how things were going back home. So you could, you know, you could hold that a pessimistic view. But I think, you know, to me, and especially, you know, for me, I'm lucky enough to be able

to do that, to be flexible and to position myself in a way that even if, well, my home country is kind of flipping out so I can go somewhere else. And if, you know, my boss is annoying me, I can go somewhere else. So that's great. I know that not everyone can do that. But I think that's a good, you know, that's a great thing to strive for. And I think that's something that can give a lot of people optimism. You know, a lot of people are complaining about the situation that the world puts them in.

but will actually easier to feel hopeful when you feel like you can change things for yourself and for the people you care about. Instead of changing everyone around you, which I'm just not interested in doing anymore. I'm too old for them. Too all. They can do whatever they want. If there was one thing about the crypto industry that you could snap your fingers and change, what would it be?

Or is this something that you don't even consider because this is just not what you think about? Yeah. It's an interesting question. and probably the meme coins, right? They're so triggering. The meme coins trigger you? Man.

It's funny that you say that because some people would call you yourself a meme. But I'm not a meme coin. That's the difference. Like, memes are great. Memes are fantastic. I love memes. But meme coins, you know why people are so frustrated about them, right? Like, I'm not the only one.

Of course. I think it's the text message. You get a text message from a friend from high school. cool. And he's like, hey, I heard you're into Bitcoin or Ethereum in you. Okay. So like, so what do you think about a Shib? Fluffy Inu. Yeah. And I'm like, come on, man. Like, I don't even, what, what do you even say? And you don't want to say don't buy it because maybe it goes, you know, maybe 10 X is tomorrow.

I don't know. I don't want to be responsible for that. So, like, I don't know. I don't know what this, you know. And then. I know that a lot of people on the Bitcoin side are very frustrated about it. And I'm sure a lot of people on the same side are very frustrated about it, too, that you feel like, oh, there are so many things that I'm eager to talk to you about. I'm eager to show you and that are exciting. And that could change your life. And you're talking to me about this dog coin. And then to make it worse, they make money too.

Like, it's terrible. It's terrible. I kind of think that the world's only going to lean more into memes. I kind of think that, like, we are now living in, like, remember in 2017 when the Arizona ICT company added blockchain to their name and then their stock price, like 3X or whatever, like that was indicative of what was to come, I think. Like, Dogecoin is now a force to be reckoned with. Shib is a force.

I think we're leaning into more and more meme coins. And I think with crypto, we actually start to. kind of just change the game of what it means to invest. Now there's the fundamentals, but then now there's also like, all right, well, how good is the meme at the same time? Yeah. Which is kind of, in my mind, it's a little nihilist. It's like a little nothing matters.

Therefore, like, f it. I'll just ape into Shib because nothing matters. Yeah. It's, if you think back about, let's say when you started out with Ethereum, I don't know much about that period in your life, but I can imagine, I can guess that you probably, I mean, I'm sure that you saw a lot in the technology and I'm sure you saw a lot in kind of the opportunity to build. But also, I'm sure you saw, you know, a community and a chance to belong with like-minded people who have more motivations to you. And now if you're, you know,

If you were an investor in your very early 20s, right, sometimes even younger. So first of all, your motivations are not going to be about the tech. You don't care. You don't understand it. You don't care to understand either. And it doesn't make you a bad or stupid person, just not one of your interests, right? You have other interests in life. And the reason you're doing any of this is because, well, you can't, you will never own a home, right?

If you just continue working as an Uber driver, that's not going to work. So you have to try other things. That I have no issue with whatsoever. I think it's excellent. And then you find a community of like-minded people who are saying, look, I'm going to try anything. I will try anything to get out of the threat race. And now you belong to that community.

And whether or not like, I don't know, whether or not are you, is it actually going to work for you? It's mostly a lottery. I don't know. But you are going to be with those people, with those like-minded people. And I think if you stick around with the people, not with the coin, then eventually you'll probably find something that works. So that's okay. The counterpoint though is meme coins have such short lives sometimes, not all of them, but sometimes.

So like how long is this community going to last? But if you pick correctly, I think there could be something there, maybe. Do you have opinions as to which blockchains, which currencies, which tokens actually, like, quote unquote win out. Do you have desires about what the end state of crypto looks like? I doubt that the winners are going to be the names we're familiar with now. Maybe some of them. Does that include Bitcoin?

I don't know if Bitcoin even competes. I think that, you know, like who's competing with Bitcoin right now? You'll probably say theory, but I think it's, you know, I think it's very different, right? I just don't think, you know, I think when I think of who's competing in crypto, I'm like, And Binance and FTX and Solana and, you know, whatever. I don't need to say all the names. And then there's going to be probably new ones. And I don't know.

Like does just JP Morgan get into that? Can they play that game at all? I don't know. Like, who knows? But it still seems early enough to say who's going to win. And Bitcoin is just, I don't know. I don't know, man. It's just money.

It's just like money is a big word. It's just like, it's literally digital gold, I think. And that's, you don't talk about, you know, digital gold or like physical gold competing with Apple stock. So I don't know. I don't know what's different. Do you think that there are winners, though? I think, you know, so there are, okay, so they're going to be, they're a bunch of vertibles, right? So if we're talking about the smart contract thing, I think that I would imagine as we go on and assuming,

that this becomes mainstream, it still did not, right? Like, I guess NFTs is one thing that kind of went mainstream and the rest of it didn't really. So, so let's let's take the NFT example. I would imagine that in, you know, in two, three years from now, assuming the NFTs are still around, then probably people will not know which chain their NFTs on and which chain the, the marketplace is on. And they're just going to have an answer. app on their phone, they're going to use it, and they're not going to be exposed to bullshit like transactions

and gas and whatever. It's just going to work. Does it even matter who powers it? I'm not sure. Eventually, in the end state, does it matter? I don't know. What do you gain from being the infrastructure of that? I'm not sure that anything.

Because, again, like you could say, okay, some networks will try to, you know, attach the tokenomics of their preferred token to the usage of the network, but if you do that, then long term they just want to use

your token, because why would they pay you? They could use AWS, especially for NFTs, right? It's just, you know, you don't need anything. So they'll go, what I'm trying to say is I think eventually as time goes by, that will move and that can take years, but that will move to

probably just the cheapest option. I don't know what that is, but that's probably where. And people wouldn't even know what they're using. So I don't know, I don't even know what it means to win that in the long term. In the short term, sure, someone will, you know, win big. At least in things like, you know, market cap and price and, you know, the war seems to have been picking up a lot of steam lately. If you think that a bunch of users won't care about what system, what chain that their NFTs are on or they won't know, they won't even care to investigate, and they're

just going to migrate to the cheapest option. In your mind, does that simultaneously also mean that people just don't care about decentralization and then let us go to the most centralized chain? Because that's how you get cheap fees. Yeah. Yeah. I mean, well, it depends what you're doing, right? Like, I'm not. But if I were to provide liquidity to some shit coin with a hundred million dollars, maybe I would care a lot about decentralization. Maybe I would be concerned and about, you know, people having control over this and I would want to remove as many trust assumptions as I can because it's a lot of money. But if I'm buying penguins, why would I care?

Like, I don't think you care. I don't think most people care. That's fine. I don't think it's a bad thing. The fact that they can do this at all owes some credits to decentralization. If you didn't have a coin you can pay with, then you couldn't do any of this because PayPal isn't going to let you do this. and, you know, like, whoever isn't going to let you do this.

You know, there are some NFT drops that you can buy with a credit card, but they're definitely not going to let you do the marketplace thing with a credit card usually. Although I think that in NBA TopShod did that, I think they did. But it's complicated. So you can hold that to centralization, and maybe that's how things kind of progress. so you're going to have these apps that are mostly centralized, not entirely centralized, but maybe they will use stable coins or Eiff or Bitcoin or whatever is their currency.

That kind of makes sense to me. I don't think that people will care too much about decentralization. Now that depends on the people, right? Like if you're an early Ethereum community member and you bought or got punk's early or you got one of the other ones early and you're like, this is part of your identity, and you believe in that, that might never change. And maybe you're going to continue focusing on owning that with your own keys and whatnot. That's fine.

Maybe that community is going to keep doing that. But what I'm saying is that's going to become a niche. And if this thing stays mainstream, you know, new people are not going to care about this history. Like, they'll be like, okay, if I can afford this, we'll talk about it then. But until then, they're not going to care about this. Oh, I can't imagine they work. It's almost like, you know, right now it's like it's an obstacle they have to go through. And, you know, we see everyone making fun of, you know, Bay C holders right now for losing their keys and whatever.

And it's easy to make fun of them, but like, what are they supposed to do? They just found out about this. And it is confusing. And if it was a centralized aptitude down to your phone and it won't happen. And, you know, Coinbase is going to get into this more heavily and they're probably going to be others. And I would imagine that they'll try to push the more custodial centralized approach because, honestly, I think for most people, it's better, it's a better user experience.

So I do agree that leaning into like maximum decentralization on your assets is like super not appropriate for newbies until they know what they're doing. but I feel like the easy answer to that is like, well, Coinbase has their NFT platform coming out and it's going to be a custodial centralized thing. That should be where people start. And then being able to withdraw it because they've also indicated that a Coinbase NFT platform isn't going to be a walled garden. You're going to be able to put your apes in and move your apes out. And so like so long as you have the ability to like live a decentralized life by like doing your stuff on decentralized things, I think you'll be able to easily like migrate between centralized platforms like, you know, Coinbase is. NFT platform and whatever decentralized version of OpenC comes up.

How do you feel about that version of the future? Yeah, it sounds reasonable. But even then, like, why do you, why do you ever into an NFT to a decentralized platform rather than moving it to another centralized platform? So like, let's say you buy it on Coinbase. Now you want to sell it and you believe that maybe for whatever reason you can get better price on another platform. So that will be a reason to move.

Honestly, that's the only reason I can think of to move. I mean, you can say, oh, I want the custody of my NFT, but like, what does it mean, man? Like, it's a penguin. Like, I don't know. I mean, I really don't know what it means. I don't know. I don't know why would anyone want that. Again, fine, you know, if you buy, I get it, you buy an NFT for it from a million

bucks or 10 million bucks or 50 million bucks, then, okay, maybe. you have some thoughts about custody then. But like if it's, what are we concerned about that that Coinbase is going to steal your NFTs, that they're going to get hacked and people are going to steal the NFTs? Like that strikes me as ridiculous. Like I, you know, if that happens, then Coinbase will reissue the NFTs. Like, you know, it feels, it feels absurd.

I think rather than like the technical properties of decentralization, like if you want to do like money Lego types, stuff with your NFTs. If you want your NFTs to be composable, you kind of have to have self-custody over it. Well, yeah. You don't necessarily have to. You can have composability with centralized APIs too, but so far, that's not really what's happening.

So I get what you're saying there. If you want to, you want it to use it and leverage it in other apps that are not marketplaces. Yeah. Maybe Coinbase isn't going to offer you all the services you want. Yeah, okay. I can kind of see that, but that's, that's really like the, you know, at least for now, that's the very sophisticated end of the market.

When it comes to tokens, when it comes to coins, on NFTs, it doesn't really exist significantly yet. So could it happen? Maybe, yeah. I feel like it's probably going to be, probably going to remain sophisticated things. Sophisticated people do. Bankless is proud to be sponsored by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans,

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you look up to? Come on. Obviously, Sam Banking Free, like, that's the default answer. Yeah. Yeah. Why Sam? Look, the guy showed up, uh, what was it, 2017? And he just bootstrapped an empire at the time when, you know, it's funny. But back then, everyone thought like, hey, if you don't have an exchange running by now, that's it. You're done. It's going to be Betricks forever or whatever it was back then. I guess Binance.

I mean, he bootstrapped an empire very quickly. I think that's amazing. What about Sam? Is it just his accomplishments that you have a ton of respect for? No, so I was about to say, and the thing I really admire is that he seems to be very flexible in his thinking. So at least from what I can see publicly, seems to change his mind fairly often.

And he adapts to new information very quickly and very well. And I think it's a very likable ability to have. I mean, he's really good at it. He's really good at changing his mind. I think that's a good thing. Look, the world changes so often in the last couple of years that I think you need to be very flexible. and the way you look at things.

But crypto moves so much faster than the outside world. And so I think inside of crypto, there is benefit to changing your mind less. Yeah, you need an anchor right. You need a reference point. Being able to adapt is really, really useful. But if you're trying to adapt as fast as crypto is, like you're probably a retail person who's just trying to chase pumps. Well, you know, if we're talking about Sam, then...

Yeah, no, I wasn't talking about Sam, yeah. I'm pretty sure he has some deeply rooted beliefs. as an anchor. If you're asking about me, I think that, again, what I find exciting about all this is that we can finally do whatever we want with, you know, just money. Doesn't that require decentralization? Because the whole point about we can do whatever we want

and it's enabled by permissionlessness, which requires decentralization. Yeah. So I've been thinking about this a lot for years, really. and the way I see it these days is that I think it's funny because a lot of, you know, back in the 2015, 16, 17 block size wars in Bitcoin, which are kind of mythological at this point, a lot of the losers of that debate used to say what I'm going to say now, which is multiple ways to go about decentralization. Like, you know, there's the Bitcoin way, which is very protective and defensive and tries to imagine, you know, the worst things that could happen and optimize for that, which is why I think, you know, Bitcoin will flourish in a doomsday scenario of the world. Just don't know that I particularly want that to happen. But I think Bitcoin is great for that.

And there are other approaches which are going to say, okay, technically, there are definitely switches. that you could use to turn off a thing, but the existence of multiple competing platforms with different switches and different jurisdictions and different individuals, and some of them are anonymous and others are not, and some of them are in Singapore, and others are in the Bahamas,

and others are the US, God forbid. And all of those differences between them, they ensure continuity of the movement. Is one of those going to fail? Probably, yes. At least one. Probably. But you don't necessarily have to have the most robust, reliable option.

It's very unlikely that the most robust and the most reliable option will be the only one that survives. Because for that, they will have to be able to attack everything else, which has different weaknesses. So that's hard, you know. So they'll probably go after some of it. You know, one thing that is very central to this whole thing, obviously, is tether and New SDC and the others. Those seem like very obvious targets. But even there, we have multiple and we don't have only one and they're different approaches.

I feel fairly confident that, you know, at least some of them will stick around. And I think that's a better way because, you know, I don't know what the best approach is. Like you could say if some stable coins are more decentralized than others, whether they better, I'm not sure because they have their own issues and their own problems. So I think it's great to have multiple options. That's what true decentralization is. We don't know which one is going to get attacked harder and more effectively. So we have a lot of them.

I think that's the way to go. And Ethereum is much less likely to fall than, let's say, Solana. It's much more likely that Ethereum will stick around for the long term than that Solana would. but it's still not guaranteed in my mind. So I'm happy if there are other approaches. That's how I look at it. Who else other than Sam in the crypto industry, do you consider a hero? Hellfini.

Seems to have been a really cool guy. Do you think he's Satoshi? Well, who knows? I wouldn't really know. I think it seems like it's possible, but I don't have anything smart to say about it. Okay. Maybe. What about outside the crypto industry?

in the real world. Do you have any heroes there? I showed some affinity to Jordan Pearson already. Why Jordan Peterson? Are you religious? No, I'm not. I'm not religious, but I, you know, I'm lucky to have friends who are each in their, you know, I'm not going to mention them, but itching their own way. I find to be some of the most, you know, moral and upstanding members of whatever community they want to be a part of and productive. So really just great human beings.

And it might be a coincidence. But that's my impression. That's the kind of the luck I had, meaning people who do consider themselves religious. So I, even though, you know, I grew up in an environment that, you know, looks at religious people kind of funny,

I actually appreciate religious people a lot. Well, I'm not myself. I find that, you know, there's a popular from, what, you know, people of faith believe. Udi, do you consider yourself a lone wolf, or are you a part of a community somewhere? I still consider myself a Bitcorner, even though the Bittman community is very angry most of the time.

But like, aren't they angry at everyone all the time? Well, they're angry at a lot of people. That's true. Some niches of the Ethereum community. And when I'm saying some niches, it's true for it's true for. It's true for Bitcoin too, right? Because a lot of people, look, most of the Bitcoiners I know are not, well, probably not most by numbers, but the Bitcoiners I'm closest to. I didn't meet on Twitter and I met them in real life.

And they're nothing like the personalities that you do meet on Twitter. That's kind of a small sect of what Bitcoiners are. I think most Bitcoiners are, you know, fairly pragmatic. Like, look, to be honest, if you're someone who was early-ish to Bitcoin, that you're probably somewhat insane. If you bought Bitcoin early and stuck around, there's probably something wrong with you. But it worked out.

So, yeah, you're going to have, you know, those people are colorful. They're interesting. But most of them are great people. We started off this conversation talking about the frogs. And I kind of think that like there's a significant amount of overlap between like the cyber hornets and like the frog nation. The Bitcoiners will like come after you if you say something dumb and it feels very much in the same way that the frogs will do the same. Do you agree with that? I mean, I think it's a strong community.

Look, this happens. But I don't think that that's the main thing I see from them, you know? The Bitcoiners. Okay. So not from the frog people. And the Bitcoiners, I think it's gotten worse this year. Well, not this year, last year. But I don't know if it's me that noticed it more or if it really did get worse.

But it feels like it got worse. Define worse. Well, I think, you know, I think a lot of the more moderate people kind of disappeared. And what was left was just very extreme. I'm not known as being the nicest person in the world. And it's, I'm fine with people not being super nice on Twitter. I don't think it particularly matters if you're nice or not nice. It's like whatever, you know, people have their own personalities.

But there's this, there's this stain to any form of knowledge, really, which is alarming. Like people refuse to even look into stuff. You know, when I used to give, you know, you're hearing people shit all the time, at least I knew, what I was talking about technically, you know, like at least I, you know, I did my homework, right? Now, a lot of my analysis was wrong, but at least I was analyzing, yeah. Yeah. So I think the reason that matters is it just looks bad when you decide that you have to talk very confidently and very negatively about something that clearly you do not understand at all.

then it's just a bad look. And these days I think that a lot of the people who are new, I think most of the people, it's not all the people who get to Bitcoin these days, almost without a doubt went through some other coin before they got to Bitcoin. I think that's great. But you can't fool them because they're not idiots.

Imagine you log into Twitter. You're only like two, you have two money. of experience in crypto, then this Bitcorner shows up who has whatever. He's holding Bitcoin for, I don't know how many decades. And he's telling you, no, you don't get this and you don't get that. And that's not how it is. And he's like, but dude, you do not know what you're talking about.

I have two months of experience. I know more than you. That's not a good look. That's not very impressive. And again, that's, I think that's not Bitcoiners. I don't think that's the Bitcoin community. That's a small sick that unfortunately. became more and more seen as representative of the Bitcoin community.

I mean, of course, we can wax poetically about how there's no official representative and there's no that. But that's what people see. You know, they log in. There's a bunch of people with a Bitcoin logo and there's their profile picture. And that's what they see. That's what people perceive as bitcoins. And that's a problem.

I hope that changes. I think there's a good answer to this change, because I think it's kind of jumped the shark last year. What about Bitcoin, jump the shark? Well, not Bitcoin. Bitcoin is great. Bitcoin doesn't need anything. Oh, the Bitcoin community? The loud parts of the Bitcoin community.

Yeah. You know, what's the Bitcoin community? The early Ethereum community is a Bitcoin community too, right? A lot of people who are bitquiners are also, you know, they're dabbling in shitcoins. They might not even call them shit coins. Some of them do. some of them don't. So I would them see a lot of interest in NFTs.

And I think that will continue. Some people were kind of afraid to talk about that. I see that changing too. So I am optimistic about this. I think there is a chance that it will get better. How strong do you think the correlation is between the goodness of a community and the value of an asset on the secondary markets?

Well, look, there is in the sense that I mean, you need people to hold the thing. And one of the reasons that they're going to continue to hold the thing is the quality of the memes. We talked about this before. So the community does affect things. And I think, you know, like Michael Saylor was probably at least partially kind of orange-pilled by some of the more prominent Bitcoin community members. So it has an effect for sure. but again, the Bitcoin community is not what we see on Twitter.

There's so many people who hold Bitcoin and don't even bother to, they don't care what happens in Twitter. They don't know it exists. They don't buy Bitcoin books and they don't watch Bitcoin podcasts and, you know, they have better things to do in life. It might be most as influential, if not more influential. They just do it in other ways. Yes, community matters.

I'm not sure that this is really the community. It looks like it is, but, you know, like a lot of these people, honestly, don't want to be a dick about it. But honestly, they joined fairly recently. They don't hold a lot of Bitcoin. So, you know, how much effect on the market can they have? So we have to put it in perspective. And I think that Bitcoin is bigger than all of us, really. I don't think that our little fights are going to change the long-term trajectory of Bitcoin.

But I care about short term too. And I think, you know, if it's kind of, can you imagine, you know, there's some people, this is something, for example, that I haven't seen in the Ethereum Man, ever. There are people in Bitcoin community who would say, we don't want, and they say that explicitly, we don't want people to join if they don't understand the greatness and importance of our ideals and our morals. and if they're not going to run their own note and mix their coins, then they're not real bitterners. We don't want them. And if they're not going to do it, that's great. And that, to me, is reprehensible.

It's like, if you truly believe that this thing is going to improve people's lives and you actively dissuade them from using it, how do you reconcile that exactly? That's insane. I don't know. If you truly believe that it's a good, you know, that Bitcoin is going to improve people's lives. And then you actively want them to stay out, then you're a pretty bad person. So maybe this is kind of what you're referring to in like parts of the Bitcoin community, like jump the shark.

I kind of think that like some of this energy comes from parts of the Bitcoin community just want to signal to the other parts of the Bitcoin community. Like, oh, I'm a big Bitcoiner. Like, look how much of a Bitcoiner I am. This is where I draw my maxi line. and you have to be at least this maximum list for me to acknowledge your existence. That's kind of what I think is going on. Yeah, yeah, I would agree with that. And I think it's a very, I think it's very similar to what, you know,

what happened with the so-called social justice warrior movement. Things just go, you know, it starts from, I'm not, you know, I wouldn't consider myself a progressive person at all. But I think that the original basic, basic ideas are at the very least, well, intention at the very least. So it starts with definitely good intentions. And then it just gets more and more and more extreme. And it becomes a competition of who's more extreme.

And at the end, it's almost unrecognizable, right? Like it becomes, it seems like insanity. And it's a cult. And I think if we don't stop, that's where we, that's where we end up. We've already gone quite a long way. But if we don't stop, I think that's where we end up. And it's funny. It's sad and funny to see, you know, a community that,

A lot of, you know, a lot of participants consider themselves very right wing, but they still fall to the same trap. So I guess it's not about size anyway. It's just human behavior. Yeah. What's your biggest critique of the Ethereum community? It's similar. I don't think that the Ethereum community is largely toxic, but I think that I see a lot of examples of people who, in my opinion, just don't notice what people's motivations are. And I think that's where the Bitcoin thing comes from too.

You don't understand what people are looking for. I mean, the community doesn't seem to have gone to the extremities that the Bitcoin communities have in the sense of really like ridiculing people for their beliefs and their motivations. Definitely gone far enough as to not understand them at all and to kind of just say, okay, so they're wrong. And it's the centralization thing and how the other thing. are less essentialized.

You know, I'm sure you can imagine. We had those debates in the Bitcoin community so many times. That's what people said about Ethereum. That's what they said about many other things. And it's like they're not despised and not their bad. And so for that reason, there's no need for them to exist at all. And it's just a repeat of the same thing. And I think, you know, maybe you believe that I think we talked about it last time,

kind of said, okay, but there is a right point on the spectrum to be on. And I think that Ethereum is exactly there. And I mean, maybe. I don't feel like I can be that sure about anything, really. Could be. But I don't know. And I haven't, you know, I haven't seen evidence to that so far. I haven't seen evidence to others either.

But that's why, you know, that's why I believe that in the future people will not even know or care. But I guess we'll see. What's your biggest critique of bankless? Well, it's the Ethereum focus, man. That's the only thing. I think you've done an amazing job this year, really. I told you that we've met a person too. I think you guys, you grew up very quickly and you became a household name in crypto.

I think you've done an amazing job. And I think if there's one thing that could make it better is if you focus in other things that are not just Ethereum. And I mean, I think you have sometimes, but you're obviously very ethereal oriented. I think for a lot of new people, that's just not going to be not going to be enough for them. The moral sense around it, you know, I disagree with. I find it difficult to find any superior morality within Ethereum that wouldn't exist on other change, right?

So I can't tell you how to do your job, right? You know much better than I do. But at least intuitively, and also a little bit from experience, I feel like it's easier. Let's say optimism or arbitram or stockware or whatever are finally at a point where they're really ready to take on the world. And I feel like it's going to be easier at that point to sell those, to promote those, after showing that you care about the practical solution and not just the politically correct solution, right?

So if you're saying, okay, right now, here's an interesting thing going on in avalanche and Polygon and in Binance and whatever. And then six months later, you're saying, hey, optimism is doing all of this but better. that's a lot more approachable and at least to me. But you know your audience better than I do. I would say a decent amount of the audience would be very, very, they would agree with you with that critique. I think perhaps the reason why we haven't done that is that we do believe that this entire

space stands on top of decentralization and there are other chains that are not engineered to reflect that truth. There are some chains that are engineered that just tilt towards centralization more and more and more. So just by the very nature of what these systems are, maybe they are, have some measure of decentralization today that makes them viable candidates for conversation and, you know, podcasts and hosting guests. But our critique is that over the long term, just because of the way the delegated proof of stake systems, the nodes that are just super high juiced up throughputs, that that system eventually tilts towards decentralization. So we think that we are front running

the tilt towards centralization by just not talking about it today. How does that justification land with you? Tilt. Was that tilt towards centralization or decentralization? Many, many of these alternative layer ones that are just like, they have compromised on centralization, but still have some semblance of decentralization. I think a lot of them, if not all of them, actually just tilt towards centralization more and more and more as time goes on.

And therefore, like, we're just not going to talk about them just because, like, well, they're in their maximally decentralized state right now and they're actually only going to become more centralized over time. Yeah. You know, I think that's a fairly reasonable prediction. I think it's definitely possible, probably more than possible. But maybe that's what people want. That's the only, I think that they will do most of them, you know, the good ones. I think they will do what's right for the majority of their users. And it's definitely possible that's going to be what's right. would be I myself would probably be more bullish on Ethereum if I thought that it would have at least

intentionality of a more centralized future because I think that's what people want and I think the modular approach might enable that to some degree like you know that's the thing like if you do the stockboard thing

whatever ZK thing and let's say that's a huge success I don't know maybe it is maybe it isn't who knows but let's say it is. And let's say people consider that the centralized networks. So, okay, what happens next? Well, obviously, you're going to have the other L1 do it too, right?

And they're going to someone's quiet or eventually, or they're going to start their own L1. Like, one of those things is going to happen. And it's not going to be an Ethereum exclusive. That's for sure, you know, if it succeeds. So, you know, if it's a good solution, they'll do it. If they think that the centralized solution is better, they'll do the, that, I honestly don't know what's the best, but I think they will do what's best for users. Do you have any aspirations for the crypto industry in 2022? Like, is there anything that you

want to see come out of the crypto industry this year? Lightning Network on Coinbase. Why? No, I'm joking. Oh, that was a joke. Isn't funny how the people who don't religiously refuse to use exchanges, keep harassing exchanges to it as lightning. They listen to you. You're not customers. What do you want? That's a very good thing. question. I'm a big Metaverse geek. You know, during the first year of COVID, I used to run Bitcoin meetup in virtual reality every thing. That's something I used to do. And that was all fun. A lot of people used to show up for that. I think probably still to this day, the amount of active users we had back then is probably still bigger than the number of active users on, let's say,

decentralized today. That's something. But like, but, like, but So I'm a huge VR geek and nerd. So I don't know. I'm just excited about that field in general, but it's also extremely overhyped now. You mean the Metaverse or VR? Well, Metaverse specifically. But now, you know, all the VR people are now just calling themselves Metaverse people because, I mean, VR was a bad name.

Did you know that they used to call themselves XR because it's both AR and VR. Like both in the reality and the virtual reality. So they used XR, which is like, what is the same? What is this name? That's how they call it the XR industry. I did not know that. Yeah, no one did because it was a terrible name. No one cared.

And now it transitioned completely and fully into the Metaverse industry. We've been weeks. So I think at the very least, it's a better name. It's a better word. Metaverse industry? Yeah. You have an Oculus? Oh, yeah, of course.

Yeah. It's all of fun. I'd really use it a lot, but it's fun for fitness. They're cool fitness apps. Dude, like even some of the non-fitness outs can still like break out a sweat. Like, beat saber? Like, you can get a sweat during that thing, man. Yeah.

What's your favorite Oculus game? I mean, BitSaber for sure. And there's Supernatural is a pretty good one. It's very similar to Beat Saber. It's like designed for fitness. So it's, that's a good one. There's a very good PC VR game. I mean, the best, obviously the best is Half-Wife Alex.

If you have a VR headset, you have to play it. It's phenomenal. That's what needs like a wired connection to your PC, right? You can do it wirelessly too, but you need a gaming PC. That one is really good, really good. I mean, I said if you have a VR headset, but really you should get a VR headset for that. It's a phenomenal game.

In 2022, have you any New Year's resolutions? Have you resolved to do anything in 2022? Well, I don't want to share them because I'm obviously not going to actually do them. I don't want people to That's the most Ooty thing I could ever think you could say Yeah All right Why would you not want to do your own New Year solutions?

No, no, I will, but they're private And let's focus on people this year What does that mean? I don't know, I'm trying to say something inspirational I don't know I have no idea What do you think my New Year's resolution should be? I haven't formally come up with mine yet.

I don't know. Like if you do the same thing you did last year, but bigger, I think that would be good. You're bankless? Yeah. Look, no unreasonable should want you to stop. I think you guys are doing great job. If you continue to focus on people, then I think you will eventually become multi-chain too. We shall see.

Udi, what do you wake up in the morning? What do you care about? What ends up in your head, first thing? Man, the Bitcoin Prize. Yeah? Right? Check to Bitcoin? price first thing? Every day for 15 years. However long it has been, every single day. No, not really.

First thing I think about when I wake up is breakfast, man. That's it. I don't have any, who knows? Seriously, though, what I like to do in the morning is go out to the balcony and just look at this lively city. I love that. With your coffee? Are you a morning coffee guy? No, I actually don't do coffee at all. Really? What is your vice? Do you have a vice of choice? I mean, in another life, I would have been an alcoholic for sure.

I'm just fighting it very aggressively. But I for sure would have been an alcoholic. What's your favorite type of alcohol? My favorite is beer. And that I just don't drink at all and haven't had a beer in a very long time. Because it's also, it also doesn't fit into my diet because I'm doing it. the no-carb thing. Oh, you're doing keto stuff?

Yeah, most of the time. Well, it depends. Last time we met in Miami, I was obviously in one of my relapses. But I try, yeah. Yeah, well, it's hard to do crypto conferences and also stick to regiments at the same time. So, yeah, if I do drink, it would usually be whiskey, but I try to avoid it most of the time. All right, Udi. Well, any last things I should be picking your brain about that I haven't asked yet?

Well, we talked about Mataverse. So that's it. That's the most important thing. Madavira is the most important. Of course. Is Bitcoin greater than 50% of your overall crypto portfolio? Oh, yeah, for sure. Yeah.

Yeah. Yeah. Because I don't, it's a, you know, it's a risk-adjusted thing. I'm very, I'm very sure about Bitcoin. And I don't need to outperform everyone. It's fine. I'm okay. And I'm very sure about it.

I can sleep well holding Bitcoin. I do hold other stuff sometimes, but it's going to be a small percentage because there's a much greater risk. It's as simple as that. that. If Bitcoin dips 50% tomorrow, I'm going to be fine. I'm not going to lose a minute of sleep over it. But the other stuff, I'm going to give myself so much shit. You need conviction, right? You need conviction to hold things for long term. What advice do you have for people that came into crypto in 2021? You know, there are two ways to make it. One is to gamble. And that's going to work for some

people. The other option is going to be to really dive deep in research. And I think that if you do that, you know, you're going to need to, especially now, you're going to have to kind of find your niche. It used to be just crypto. And now you're going to have to find your niche inside crypto because it's virtually possible to deep dive into everything. So first of all, find that. Then do some very, very serious deep dags into the topic of your choice. And I think if you do that consistently, there's still, you know, it's still early. But you need to do that.

You can't just, oh, I'll just buy Eiff. I'll just buy Bitcoin. I don't think that this is going to give people what they're looking for. Well, Udi, thank you for coming on this episode of Layers Here. Yep. Thanks. Thanks for having me. Cheers, man.