Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Ryan Selkis: “Too Many Variables” – Understanding the Lasting Effects of COVID19

Episode Date: March 17, 2020

This week we have a special episode on the entire globe's most talked about topic, the Corona Virus. We are joined by guest Ryan Selkis, CEO of Messari. Ryan was one of the first people in the space to start talking about Covid19 and has been very vocal on this subject on Twitter and his newsletter since the crisis began in January. We discuss how this virus has become so deadly and the current health and economic conditions, containment and protecting yourself, how the markets, crypto and startups have been affected, and what is yet to come.Topics covered in this episode:How Ryan become so interested in the Corona VirusThe current global health and economic impact of Covid19The provisions Ryan is making personally and on a company levelMessari's plans for virtual events over the coming weeksA deeper look into the global financial impact of Covid19What does this all have in store for startupsThe stimulus being put in place in the US and its monetary effectsThe current state of the marketsThe long term effects from a societal perspectiveRyan's prediction on what happens nextEpisode links: Ryan Selkis TwitterRyan's List of Must Follow Expert Accounts on TwitterTBI/Messari 2019-nCoV TrackingCoronavirus: Why You Must Act NowRIP Moon TimesMessari Corona Coverage & ResourcesMainnet Events, by MessariDonald G. McNeil Jr.Google Sheets - create and edit spreadsheets online, for free.Epicenter 2020 Audience SurveySponsors: Status: A multi-purpose communication tool that combines a peer-to-peer messenger, secure crypto wallet, and web3 browser - https://status.im/ShapeShift: ShapeShift is the leading crypto platform offering zero-commission trading - https://shapeshift.com/This episode is hosted by Sebastien Couture & Brian Fabian Crain. Show notes and listening options: epicenter.tv/331

Hey there, Sebastian here. You know, the podcaster listener relationship is too unbalanced. You know us a lot better than we know you, and we want to narrow that gap. So please do me a favor and answer our audience survey. It takes four minutes, and it will help us to continue producing content that informs and inspires you. You can find the survey at epithenter.combs slash survey. And at the end, I'll tell you how you can get a free, keepkey, hardware wallet, courtesy of ShapeShift, to thank you for your time. time. So thanks in advance and on with the show. This is Epicenter, episode 331 with guest Ryan Selkis. Hi, welcome to Epicenter. My name is Sebassinkutio. My name is Brian Fabri and Brian. Hey, Brian, good to have you on the intro for once. It's been a while. Yeah, I know, I know. Well, we're recording this actually over the weekend, so it's one of the reasons why we need to record the intro fairly quickly because this will go out actually just in a few days. And so today we are doing something a little outside of what we usually talk about, which is we talk about the coronavirus because it's on everybody's mind, of course.

And well, who better to have on the show in the crypto space to get that coronavirus crypto overlap than Ryan Selkis, who's been quite vocal about the coronavirus on Twitter and on his blog. Yeah, I know. I was super, I mean, I've been. pretty obsessively following this topic now for quite a few weeks and you know been Ryan's new excellent newsletter at Missouri if people not subscribe it to that I highly recommend it you know it was one of the first you know there was a few kind of places that I got alerted for this fall I think it was like Jay Kwan of Cosmos who was like very early on started tweeting about this it was Ryan Selkis who started writing about it on his newsletter and you know he's done a fantastic

job at kind of like covering this. Yeah, we had Ryan on and could talk about this topic. I mean, it's super important. I think at this point probably most people have realized, but it's, yeah, we do seem to be at a really critical point, both in terms of, you know, on a lot of different metrics. So in terms of like how the markets have reacted, although, you know, it could go even worse, but we've seen like a significant effect on the market, but also just in terms of how states are starting, especially in the West, are starting to react. So, you know, in Europe, like where we live and also in the U.S., although varying degrees of severity, I'd say, and urgency. Yeah. So in the podcast, we really covered a lot of different stuff.

you know, we talked a little bit about why this thing has become, you know, so deadly. What the scenarios are, you know, some of the really negative scenarios here. Also talked about containment and why Ryan is actually very bearish on this and thinks that we kind of like missed the boat there and there's going to be a, you know, there's going to be a deep pain coming, especially in the US where he's focused a lot of his intention on. Then we talk about what you can do to protect yourself. You know, we talked about the Fed response, government response, the markets. On that end, we talked a bit about what it means for crypto, you know, what it means for crypto startups,

what it means for the crypto market for Bitcoin. And yeah, we talked also a lot about what's going to happen in the long run. You know, where are the opportunities here, how it might drive some change and maybe some good things coming out of this in the end, even though probably what is ahead in the next six months is going to be pretty dark. But I think in the end, there's always opportunity in crisis, and this one will be no different. Yeah, that's true. I mean, there's always the light at the end of the tunnel, just how long is that tunnel, how dark does it get? And when do we start seeing the light is, I think, the question on a lot of people's minds right now.

I mean, we talked about this during the podcast. So this is slightly tied to what I talked about on the bonus. episode last week about ETC is that, well, you know, a lot of us who are at CETC are, you know, are sick or maybe are worried that maybe we've contracted something. And question for me, for instance, is, okay, well, I'm sick. I was sick before ETCC. I don't have any severe symptoms, but at which point do I go outside? You know, is it when I feel better? And at that point, how do I know that I still don't have a virus or that I haven't contracted something? Then I'm not just asymptomatic. So there's a lot of questions, I think, that people have. And I think until people's confidence that this is really gone starts to increase, then, you know, people are just going to stay indoors and not much will happen. On that note, there is a, just because I was at ETC and a lot of you were too, there is a spreadsheet that will link to in the show notes, which transparently talks about, like, who has been contaminated and who's positive and what events they were at. And so you can.

Add yourself to this list. You should if you have anything to report and also see if you should take the right precautions to protect yourself and your family and friends. Before we go to the interview, I'd like to tell you about our sponsors for today's episode, starting with status. And I'm so excited to tell you that the status app has been out now in the Apple App Store and Google Play Store for the last few weeks. Once you've installed it, please join the public channel Epicenter. Come and say hi. And if you ask us, we'll give you some SNT tokens. so you can get started with an ENS domain name, for example. Status is so much more than just a messaging app. In fact, it's a network of projects with a common goal, and that goal is to help build the tools that enable sovereign, open, socioeconomies,

and their team is really driven by this principle. I was at ECC a couple weeks ago, and I sat down with Corey Petty and Dean Eigenman, both of the status team to talk about this vision, and we talked about all of the tools and infrastructure which make up the status network, So we talked about the app, of course, but we also talked about key card. I have one right here.

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But if you want to learn more about status and everything that they're building, go to status network.com and to get the app, just download it in the Apple App Store or Google Play Store. We're also brought to you by Shapeshift.com where you can get started and trade dozens of crypto assets on the industry's leading non-Custodial exchange. You know, back in the day, back in 2014, 2015, when Shapeshift sponsored the show at the very beginning, We used to talk about them as the Google translate for cryptocurrencies. You know, you plug Bitcoin on one end and you get Ethereum out the other. Well, it's so much more than that.

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I mean, that's a great deal. You can connect your ledger wallet, your treasure, or your keep key. And if you've listened to this podcast for the last little while, you know that we're giving you a free keepkey hardware wallet to anybody who fills out our survey at epicenter. dot rocks slash survey. So go to beta. That shapeshift.com to get started and be sure to do our survey to get your free keep key. And with that, here's our interview with Ryan Selkis. We're here with Ryan Selkis, CEO of Missouri.

Thanks for joining us today, Ryan. It's a beautiful day in the neighborhood. Yeah, I'm so happy you agree to join. And, you know, today we're going to finally speak on this podcast about the topic of coronavirus and COVID-19. I've been following this topic now, I guess, intensely maybe for three, for a month or something like that. But I also just wanted to thank you for, you know, for being really early and covering this topic super well and informing, you know, the crypto community and your listeners. So readers very well about this. So thanks so much. And thanks for coming on today.

Sure. Yeah, thanks for, thanks for having me on. Standard disclaimers. I'm not a doctor. I'm not even that's smart, but I am smart enough to listen to Bology when he calls me and he tells me to pay attention to something that could be a global pandemic in late January. So all credit there, I'm just happy that I was able to provide a bit more of a megaphone and that, you know, fortunately, I've got an audience where some folks have listened to me. Cool. So let's start a little bit of background on this. When did you start looking into coronavirus and why did you feel you wanted to talk about this publicly? It's funny. I kind of had this, it was almost like out of a pandemic horror flick. I was working out right before a board meeting in mid-January in San Francisco is at one of the gyms right across the street from my hotel. And I, you know, I finished a set of my workout and I look up at the TV and I just see the Shireon on CNN talking about the Wuhan coronavirus confirms, you know, X number more cases.

or whatever it was at that point, you know, like 20 or 30 because it was still small numbers. And I didn't really think, you know, much of it, but I was, you know, starting to at least pay attention to it, thinking about, you know, what that might do for the global economy. Because for a while, I think I've been waiting for some sign that we could tip into a recession after a 12-year bull market. It's, you know, what goes up must go down eventually, at least at times. And a week or so later, I had a conversation with Dan, my co-founder, where, you know, he was saying, hey, are you looking at all this?

You know, we might want to come up with some contingent sea plans for Massari or think about, you know, work from home policies or when we would pull the trigger if this thing spreads. And at the same time, I saw Bology tweeting about Apologies and investor in Masari and I shot him a note and said, hey, your tweets are freaking me out a little bit. what's what's going on is this you know how how bad is this thing going to be and he ended up calling me and we spoke for about an hour and a half and he kind of walked me through everything that he was reading and gave me some initial sources to poke through and once I went through the Johns Hopkins dashboard and some of the other you know off-the-shelf materials that men of the folks that were early to this

were thinking through you know Twitter accounts that were smart you know different you know blogs that were covering this, I spent about 24, 48 hours just pouring through everything and then kind of quickly went down the rabbit hole. And, you know, frankly, a lot of my responsibilities on the, on the MSari and crypto side started to fall by the wayside that week. And I, you know, more or less at the pause button and delegated, you know, more to the team and communicated that I'd be delayed with some of the things that I'd owed people because I felt this was something, you not even as a public service that I had to push, but I thought it might be potential Black Swan events that would impact our business, that would impact the industry.

And even if it was just a 10% chance case at that time, it was going to significantly impact the plan travel we had since we were thinking about a trip to Hong Kong to Singapore and to Beijing in March and early April. So I guess the timing was somewhat lucky because there was business reasons. for me to look at this from a travel perspective, but it was also quite fortunate that the apology had joined our last round and he was generous for this time. I wasn't thick enough to just ignore it and carry on with my day.

Well, let's dive. I mean, most people that will listen to this or everyone will have at this point kind of like heard a little bit about coronavirus and COVID-19, but I think it's still worth if you spend a little bit a little bit of time here to just explain what's going on here and you know why this could have such a massive impact on the world well it already it already has it already has yeah no matter what happens i mean even even if there was a you know miraculous turn of events and this thing just

dissipated with the warm weather which you know most health experts seem to not believe that's going to be the case and are planning for the worst case scenario, you know, some hospitals in the U.S., the best guess epidemiology of this is that there could be, you know, half a million deaths from the coronavirus in the U.S. But let's just say, you know, for the sake of argument that this thing dissipates with the warm weather in the next, you know, a couple of months and we're kind nearing the peak of fear in the broader market. Well, that doesn't really change the fact that we just did, you know, one and a half trillion dollars of QE and raised. and slash race to zero.

It doesn't change the fact that we've got this, you know, unprecedented stimulus. It's probably going to be bigger than the troubled asset relief program, TARP and, you know, 2008 bailouts. It doesn't change the fact that restaurant workers, five and a half million of them in the U.S., median salaries, somewhere in the low $20,000, $25,000 range. Their jobs are at risk because the restaurant business is down 35 percent year over year this weekend. and it's declining and really falling off a cliff. And it doesn't change the fact that a lot of folks are going to be massively disrupted because of the unforeseen health care costs that are very much up in the air in terms of how

that gets paid for or child care costs if they're forced to either work from home or their kids are first home from school. So no matter what happens, my biggest focus, at least initially, was what are the economic impacts of this thing going to be. Now, unfortunately, it also seems like the health impacts could be bad on an almost unprecedented scale if this isn't taken seriously, which is one of the reasons that I think I and so many other people haven't taken this so seriously. And it comes down to health care capacity and the percentage of critical cases. So if you think all the way back to six whole weeks ago when Wuhan in the Hubei province of China was shut down, They had 444 cases on January 23rd.

That city shut down on January 23rd, and they took unprecedented measures to quarantine the population there, to instruct pretty draconian self-isolation schemes. They had fast, you know, drive-through testing capabilities. They were building hospitals within 10 days. The Chinese were able to mobilize, you know, their national workforce in the medical community to flock down to Wuhan and really get a handle on this thing. And even with all of that, the case load went from, you know, 444 into the

80,000 range or, you know, a little bit higher than that, with several thousand deaths. So they barely averted crisis, I'd say. And in the early days, the fatality rate of, you know, this novel coronavirus and this flu-like virus, it was upwards of 6%. Now, disproportionately impacted the elderly, disproportionately impacted men, probably because there were smokers and there's major social imbalances in smoking rates in China. But really what that rate signified was that the health care system,

once it gets overrun, there's kind of no turning back in terms of how bad all the critical cases can get. And with this disease in particular, every single piece of literature or every single medical expert or epidemiologists that, you know, I follow it and tried to absorb as much information from over the past six weeks, it seems that the critical case rate is at least 10 percent, probably close to 20 percent, of which a good chunk of those are going to have to spend time in the ICU. And that gets especially, you know, exacerbated if you have, you know, co-morbidities or are otherwise more susceptible to this.

in the U.S. and the West, that's very bad news. We've seen now what's happening in Italy with their health care system, you know, more or less being overrun. And being here in the U.S., it's been surreal the last couple of weeks. And last week in particular, watching, you know, the national address from Trump, followed by the Thursday market sell off and then the, you know, inexplicable rebound on Friday. It doesn't really seem like many people are still taking this seriously, it's uncharted territory. But we'll see. And as I felt from day one, hoping that I'm very wrong about this and just being a little bit of a chicken little here. Yeah, yeah. Because I mean, just to go to sort of the characteristics of the thing that make it so hard to

contain, or the one hand we have something that's like extremely infectious, something that can be transmitted without people having symptoms, right? So people spreading it without being aware of it It goes very far and very quickly. And then, of course, yeah, it's just the severity, as you pointed out, right, that a lot of people either die or they have to go to the hospital, they have to get medical attention. And then as we've seen, right, in China and Italy, Iran, maybe, that, yeah, that just completely overwhelms the response.

And then now we have, we are now seeing a lot of responses, like, let's say, you know, here in Berlin, schools are all closed, right? Kindergards are all closed, like events, basically. everything's getting canceled, right? So this is, there is now, you know, they're starting to test, like widespread. So there is this response coming. I guess the key question is going to be, and I think that's sort of what you alluded to, right, with when they started doing that in Wuhan, you know, whether it's too late and whether the responses are like strong enough. Like, so what's your take there? Do you, so your, I guess your opinion is that, you know, at least in the US, it's,

it's too late. Do you think which countries are going to be able to kind of still get this under control versus not? I mean, I have no idea. But the thing is, I don't think anybody really knows. I just, the only thing that I can really speak to is my perception of a lack of seriousness or urgency on the part of many in the West and in the U.S. in particular. And I do think a good chunk of that has to do with the political polarization of this being an election year and extremely one-of-a-kind, never-before-seeing president in the U.S. maybe, in terms of the way that he communicates and makes decisions. And the piecemeal approach is maybe the scariest thing because when Wuhan was shut down and the Chinese were able to mobilize, you know,

thousands of personnel and ship equipment and do these really incredible and been incredibly rapid countermeasures to prevent a broader nationwide outbreak, they were dealing with the epicenter. And it started in a city of one. In the U.S., and throughout Europe, you're seeing this now. There's a chance that multiple cities hit Wuhan-like levels at the same time, but with nowhere near the flexibility, speed, or existing capacity to actually keep an outbreak in check once it's actually spread. You know, what's happening in testing in the U.S. is, you know, I think it's a national disgrace.

How slow we've been to roll that out. The U.K. has, you know, seemingly made its bet that, you know, the Brits are going to need herd immunity for this and everybody's going to get infected. And look, that's probably true. But if you get a couple of those calculations wrong and, you know, the infection rate accelerates and you can't, you know, quote unquote, flatten the curve, then, you know, the system gets overrun and your critical case load instead of it being, you know, 1% or half a percent fatality rate, it ends up being close to, you know, three, four,

five percent, which is a lot worse. And the thing that, you know, freaks me out a little bit, you know, just speaking personally, I mean, I'm in, I'm in pretty good shape early mid-30s, but I've had asthma. Most people don't know how fucking scary it is when you can't catch your breath. Like, they have no idea. It's unclear whether even some of the people, people that fully recover if they ever get their lungs back. Because right now, the severe cases that have come out of the hospital that have recovered, many of them are still showing permanent damage or at least significant damage, it might take a long time to rebuild in their lungs. I think there's also a perception issue with how this affects people at lower risk.

So I don't know if you've followed this journalist at the New York Times, Donald G. McNeil. he talks about this massive study that was done in China where a large percent of the population was only what they called like mildly affected by this. But like the criteria for mild goes all the way up to pneumonia. I think like for most people, pneumonia is not a mild like mild, like mild symptoms or like mild effects of a virus. And then the other thing is too, just people that have asthma might have high blood pressure or diabetes or smokers, for instance, you know, might be affected by this and far worse than people who are in sort of better health or, you know, aren't smokers. I'm not sure when this episode is going to go out, but this is a viral clip that was just out,

I think, yesterday with McNeil on Rachel Maddow on MSNBC. And there's a six-minute clip where he talks about tactically speaking what the Chinese did that was so effective and why they were so effective and why some of the Asian countries have really been ahead of the curve on this. And it's night and day. Congress in the U.S. has criticized Trump for breaking families apart up immigrant families. Well, you know, the Chinese have done it and they've managed to curb the growth of coronavirus, right? Americans are spoiled. Everybody knows that. We come to other people's country and we wear like,

you know, USA rah-rah t-shirts and we're boisterous and obnoxious. And I just generally think that we've had it so good for so long that no one has any appreciation for what could be coming. Hopefully it just disappears and there's some, you know, key variable that no one really thought of or the virus mutates and it becomes less deadly or, you know, whatever. Let's hope that that's the case. But so far, you know, hope's a pretty fucking stupid strategy if it's not backed in any, you know, reality. And there are ways that you can help yourself instead of just, you know, relying on blind faith

or hope that we're going to get through the other side. What is the best strategy for protecting yourself and your family, practically speaking? I don't think anybody really knows all the, you know, science around the transmissibility and kind of when you're at risk or who's at most risk or susceptible. You know, the good news is I have two little boys and this doesn't really seem to be affecting kids. That's good news. My wife and I, knock on wood, are, you know, relatively healthy, like I said, and young.

So that's good news. But I'll just tell you, you know, from our part, we've got several months worth of, you know, food and provisions. I feel like every single week that goes by where things get worse, I add a month or two of provisions. So we're exponentially growing our provisions as things get worse instead of just like dipping into it like some people might be tempted to. And then just, you know, self-isolating, right? So the last trip that I have made or have to make one more quick trip today.

And this is the March 14th we're talking about is just prepping our balcony. So at least we have some outdoor space where the kids can run around. But I'm not anticipating we're going to be spending much time with other people in the next couple of months. that's probably the biggest thing is just, you know, we're not going out. And it, for people that are in the city, that sucks. And that's why I think it's going to be that much harder to contain because the weather is getting nicer, especially in cities like New York, the winters are awful, right? Everybody looks forward to spring and just, you know, gets cabin fever wants to get outside. The weather is getting nice at maybe the exact wrong time because now everybody's going to want to go out and congregate. So, you know, just staying put where we are is, you know, probably the best bet. and just minimizing, you know, contact with everybody else. The only thing above and beyond that is that we sprung for, you know, I do have some masks, but I didn't hoard them. I don't have, like, a zillion of them.

I have enough in case we need to do, like, runs or, you know, my wife's pregnant. So I am assuming that we're going to continue to go to her prenatal OB appointments. And if she needs them or I need to take her, then we have those at our disposal. But on that, it's just, you know, having plenty of food and wasting time with anyone, except for in virtual reality, which we can talk about. So I think this has been sufficiently dark so far, maybe. Let's get darker. We can keep getting darker.

I think the one thing that I'm very happy that I did with respect to our company and team is we bought everybody, Oculus goes. And a couple of us actually sprung for the quests, the slightly more expensive. And I got to tell you, I'm not a gamer. I've not been into VR. I've not played a video game in probably two decades since I started playing sports instead of video games when I was in middle school. And they're just wild. And the teams love them so far. So we've done some VR hangouts.

So the managers are doing one-on-ones in VR. Just it's a little bit more interpersonal. You are fully locked in when you're in the Matrix versus just being on Zoom and then kind of toggling back and forth between Twitter or turn it off the screen for a second. like grabbing a snack. I think one of the better moves that we made in the camp of, okay, this sucks, but how do we mitigate some of the social losses? So we all just don't go nuts or we don't lose productivity. And I think that extends both to the workplace culture, but also, you know, interpersonally. I'm trying to encourage more of my friends to get these VR headsets before there's a shortage and they're just stuck reading books or something

catastrophic like that. I've done a lot of the same thing. So I've been like last, under three weeks or something, basically had almost no social contact and just being at home. But the VR thing is definitely something to try out. I mean, we're going to be hosting a ton of meetups. You know, we just on Thursday, you know, as you guys know, I used to run Coin Desk and built out the consensus series. So, you know, for the last three years, I've wanted to get back into the events game because I've done pretty well putting them on and people like the experience from when I was

a producer before. And B, I just know that it's great for, economically they're great if you pull them off in terms of community building, business development, and information flow. There are a ton of benefits to being very good at event production, particularly in this industry. What I didn't want to do is I didn't want to fill the calendar with another live event because we're already so full of events internationally within crypto in particular. This has changed things up a little bit. and we were actually planning a small virtual event around blockchain week in New York this May. Coronavirus kind of kicked into high gear. And we said, well, we need to throw us some more resources at this.

Eventually things got so out of control that, of course, now consensus has moved their ethereal summit online. And CoinDesk has moved their summit online as well. So we're going to actually push that back events. But we have a ton of ideas for how to make a virtual attendee experience light years ahead of anything that we've seen so far. the platforms that are there are interesting. Because of this forcing function to get more people into VR, there's a lot more that we're going to be able to do in terms of virtual hangouts and meetups as well that aren't just like Zoom dialins.

If people want to kind of stay up to date here, is there a website they can go to? It's that mainnet.com. So mainnet events. Cool, cool. So yeah, we'll put that in the show notes. Let's dive a bit more into impact this is going to have on the world. economy. So something's obvious. Right now we see tourism is basically dead and is probably going

to stay dead for, I don't know, six months at least. And then you have other industries, right, like events, concerts, restaurants, right? So there's a bunch of industries that are kind of very obviously hit, obviously supply chains as well with China's factory struggling. So that is going to have a lot of impact. What is your take on just like what is ahead of us here? You know, are we heading for a recession or depression on the scale of the financial crisis or something even bigger? And like, what do you think are going to be the key determinants that are going to kind of shape how bad this will get? Well, I think first you have to think about the impacts and whether it's already been bad.

The answer is yes. And there's a couple, you know, major differences between this and the financial crisis. You know, the financial crisis in 2008 was entirely the result. of weapons of mass destruction in the financial market, the credit derivatives and, you know, credit default swaps and over-leverage in the derivatives ecosystem. So that was, you know, ultimately a liquidity issue. You've seen some Federal Reserve stimulus and you're going to see some more fiscal stimulus in the U.S. and internationally as a result of the pressures of the coronavirus, but you can't print your way to manufacturing at a greater clip.

You can't print your way to more health care capacity. You could print your way to financial services companies having capital buffers and sufficient reserves. But you're talking about physical versus digital. And 12 years ago, it was really about digital. And eight years before that with the dot-com bubble, it was very much the same. It was just, you know, paper gains evaporating. It wasn't cogs of the machine. grinding to a halt, which I think is very, very different. So, you know, so much of how bad

this gets, I think, ties back to how effective some of the major Western economies are at containing this and avoiding the worst case scenarios over the course the next couple of months. And then after that, how quickly capacity is able to come back online. It sounds like from what I've read, and it's actually hard to get good information out of China right now just because, all of the information groundswell and flood is, you know, all focused on the West now. So I've actually been trying to go out on my way to, you know, figure out what's going on in China, at least from an economic standpoint, because if they're able to turn it all their factories and capacity back online and shipments are able to, you know, start coming back through,

then at least from an economic standpoint, perhaps some of the fallout can be mitigated. I think this is at least as bad as 2008. But honestly, my guess is as good as anyone else's. I'm not an economist, but they don't know what the fuck they're talking about either. And they certainly didn't a month ago. So it's a very overused term. And, you know, frankly, I was a little bit wary to come on and talk about this subject beyond what I've already written, which is much more thoughtful, just because I know people are going to say, well, you're neither a medical professional, an economist, an epidemiologist, you know, public policy

expert, you know, whatever. But with Black Swan events like this, no one really knows. So everybody's just winging it and trying to use, you know, common sense. to put all the puzzle pieces together. And I think the one reason I feel not confident, but at least comfortable talking about this, is if I'm wrong, that's a good thing, number one. And if I'm not wrong, then at least I've been able to tick and tie

and footnote all of my assumptions and we're all my beliefs are getting informed and coming from. One thing I've been pondering, and I would be very curious what you take is and it sort of ties into like what will happen in challenge, as well. So, you know, we have these social distancing measures now and, you know, they're increasingly getting more severe and stepped up. And, you know, let's say they will manage to decrease

infection rates a lot and, you know, hopefully get this under some sort of control. And, you know, I guess we'll see how bad it is. But one thing that is unclear to me is like when are you actually going to be able to say we can relax those again and we can go back to some sort of normal? Like when can you say again, okay, it's fine to have a concert with a thousand people or it's fine to have, you know, open restaurants again to have a conference. Do you think this is going to take us, you know, like a year and a half down the line when there's vaccines? Or, you know, will we be able to get there earlier with this like widespread testing or like, how do you see the path going back to normalizing it? No one knows. If you just look at all the information that's available today, I would,

find it pleasant, but not to be expected surprise if things dissipated over the summer and we were ultimately able to contain and crush this type of outbreak. I think you probably need herd immunity. You probably need most people to get this over a couple of year period and or have the vaccine release rolled out, mass manufactured and ultimately distributed to everybody that needs it before you can truly feel confident that this is properly tamped down. I thought was the worst case scenario in some of my early posts, which is, okay, let's assume 50% of the world gets this, or 40%, just to use round numbers, right? 40% of the world gets this, that's 3 billion people.

If 2% ends up being the fatality rate, once you've factored in a hospital overwhelm in some regions, but, you know, lower fatality rates in others or kind of this variability in when people get infection, say it's 2%, or say it's 1%, well, it's 1%, that's 30 million people that die. from this, which is a pretty big number, but 60 million people die every year globally. You're only talking about a 50% one-time spike in the overall rate of fatalities at the, hopefully the worst-case scenario. Yeah, and some of those people were probably going to die anyway. Exactly. Like, your probability of dying any given year in your 80s is, you know, in the double digits. If your fatality rate from this is 15%, you know, 20%, whatever, that's still only impacting your personal probabilities by a factor of two versus an order of magnitude.

So that outcome is ultimately not catastrophic from a global perspective if it happens. It's just all of the secondary and tertiary issues that arise from that if we don't get the assumptions right and you don't control the chaos. if you can control the chaos, and that's the worst case scenario, it's still pretty bad. A lot of people are, you know, going to experience pain and suffering, people lose family members. But at the end of the day, it's not, you know, crippling to the world order and economic structures. And it's not going to, you know, put us, sink us into a global depression. Then the number of variables you have to manage it. It's just complete chaos. So, so no one knows. And I think you would much rather roll the dice, especially in the West where you have reserved currencies, even if they get put under extreme stress. You probably want to roll the dice on overcorrecting in the short term because you can always print your way out of any economic hardship that service workers might have, and then you can have a massive stimulus program on the back half of this to kind of make up for some of the lost temporary growth, just like you would, like a hurricane or a snowstorm or some other natural disaster, which, you know, there's precedent for. But the big difference, of course,

is that you've never seen anything like this that would impact entire country's continents, global population all at once. Normally, if you have a tsunami, it can be very, very bad, but it only impacts one region. Forest fires, same thing and so on. So I would certainly put the impact at somewhere between recession and depression if we keep bucking it up like we've been doing in the West. The one thing that I will say, though, when it comes to crypto and when it comes to startups, I think the one thing that this does is it totally resets the startup fund rate.

ecosystem. So one of the couple of highest impact things that I think could happen in the next couple of years for startups is at least, you know, I'll speak from a U.S.-centric perspective. The accredited investor rules need to be relaxed pretty much immediately because you need more liquidity and, you know, more capital capable of flowing into the private markets in addition to the public markets. I think you need to raise the caps on reg A plus and reg CF in terms of the amount of money some of these companies can raise from non-accredited investors because the venture capital market is just going to completely seize up. And the other thing that you could do if you fix the accredited investor rules, you could open up some of the top-performing funds and basically

creates pools of LP capital from non-accredited investor, non-institutional investors that could flow in much more easily. So all of the venture funds that are trying to raise follow-ons don't have trouble replenishing their own coffers. You're still going to have massive liquidity issues, but for any incremental improvements that you can make to the fundraising process and to making it easier for startups to not run out of cash is going to be pretty critical. I think overnight the entire startup funding ecosystem is just completely reset. And that's going to have trickle-down effects in the coming quarters and years, really,

as startups lay people off and even in the best case, limit their high in pace. Speaking of trickle-down effects, I'd like to come back to the situation in the U.S. and I may perhaps even more globally the situation in Western countries and how they've been dealing with this. So the Fed just reduced interest rates to zero and injected like a massive amount of stimulus into the economy. In Europe, we're seeing a slightly different approach, at least here in France.

The approach is to sort of help small businesses and help people. people go through this crisis by offering to, say, you know, pay their mortgage payments or this sort of thing. But let's focus on the US for a moment. What does the Fed hope to do by injecting all this new money into the market and to allude something you said earlier, like, you know, if the machines, if the cogs start turning because people aren't going out and eating at restaurants and going to work and producing, what does that money do? What is it for? And what can people expect the benefit from this stimulus? There's two types of stimulus. The one that was announced last week was, you know, the Fed's easing and kind of treasury interventions to drive down

interest rates and just infuse unprecedented amounts of liquidity in the in the repo markets. That's one thing, right? But like I said before, that only keeps the treasury market properly functioning. It doesn't necessarily have any impact on the mainstream consumer or, you know, individual that's impacted. So the much bigger thing that you need to watch for and understand is how quickly some of these fiscal measures are going to get rolled out and how aggressive they're going to be. So that's, I guess this stuff just passed last night at midnight, so I haven't even had a chance to catch up on it. But I know that there is a pretty sizable package that is on its way to the White House for signature and should include a combination of tax relief and, you know,

a variety of other measures that are designed to limit the blow for everybody in the U.S. right now, at least in the short term, how effective those are in terms of creating structural improvements is anybody's guess. Again, it's if the entire global economy grinds to a halt for several months, there are cascading effects to what that means for companies as they think about, you know, keeping employees or laying them off when it comes to, you know, whether they're able to service their debts or not. I'm sure you guys are probably in this boat, but I've canceled a number of personal subscriptions just in the last week. We've got our personal burn rates and our T&E budget is basically

going to zero, right, outside of like Netflix and a couple of things for the home. Everybody's doing the same thing at the same time and it seems like it'll have a massive short-term deflationary impact. But what I think will be fascinated in a watch is when this gets resolved, what happens next. And this is kind of where the rubber meets the road for us in the crypto realm. Anyone that's shilled on Twitter or wherever about Bitcoin or crypto being a safe haven during a global recession just doesn't know what they're talking about. They never did. They probably never will. For the most part, the folks that I know, trust, you know, respect that think about crypto as an investment asset class, I've never thought about this being a flight to safety or, you know,

something that you want to own when all hell breaks loose like 2008 or like we're seeing today. But instead, it's a hedge against all of the other monetary systems failing in the background. So if this only lasts a couple of months and unprecedented money printing, you know, revitalizes the economy and the engine starts to get going again, will we see some currencies, enter periods of hyperinflation? Or will we see people start to, you know, flock into Bitcoin and other crypto assets because their inflation rates are close to zero and, you know, by extension, that makes this look like a more attractive investment than a negative yielding bond, which is going to be the norm, I think, for quite a while in, you know, the U.S. and in Europe in particular.

The title of this podcast could maybe just be too many variables because I know I keep saying it, but all the mental arithmetic that I put in a back of a napkin and think about how this could play out. A best case scenario is governments take this extremely seriously. They rev up the printing presses. they throw unprecedented capital with this problem. A vaccine is developed and mass distributed. We limit deaths globally to the low single-digit millions, which still puts this, you know, 10x as bad as global flu,

but still manageable. And then, you know, we have a severe but short-term recession in which, you know, after which time, everything, you know, starts humming again. And a chunk of investors, once they're more comfortable, we'll look at what's going on from, you know, inflationary pressure standpoint. And at that point, say,

we should have some crypto allocations. So that's at least on the monetary side. I think there's a whole slew of things that could be interesting on the Web 3 thesis side as well. I think on that side, I'm also wondering, you know, just to what extent this will change in the long term, the structure of markets and the relationship between government and private enterprise. So in Germany, they have announced that the government will basically like lend money to like any business in trouble with the virus. Now, I don't know exactly the parameters and stuff like that, but I would not be surprised, right? If that I wouldn't in the US, right, there's government by trying to help the shale oil industry.

And if you have these massive, massive interventions in markets, right, you're basically saying, okay, we're going to try to save all those businesses that, you know, would have been affected by coronavirus. Like, how do you step that back in the end? And if you have in the end, all of a sudden, maybe the government being a creditor to all these companies, because, you know, they said they're all ruined, with coronavirus gives a loan, or maybe on the other side, having the Fed or the government basically going and directly intervening in the stock market and buying up shares. It just seems like a crazy world ahead of us. That's the best case scenario. Yeah. In Germany, and I think France will have a similar approach, although they're not lending money specifically. They're offering clemency to companies so that they don't have to pay all their social charges. So basically all the charges you would pay, you know, for employees and things like that. And they're also offering unemployment.

to all the restaurant workers, for instance, that are not going to be at work. But the market has this ability to sort of weed out bad companies, companies that would fail anyway. But in this case, at least in France, it's indiscriminate. So if any company, like, Epicenter has employees in France. And so we pay social charges. We just need to send an email to the administration state. Like, we can't pay these. Who knows? Maybe we would have, we would have folded in three months anyway. But it's totally indiscriminate. And so the state is basically intervening in the market in a way that is absolutely unprecedented. It's like in 2008, you had like too big to fail and then they stepped in and said,

okay, these banks we have to save. But what if it's basically the same kind of approach before all businesses? Everyone. It's like nobody can fail. When it comes to any type of fiscal or monetary response, I'm just in a perpetual state of shrug emoji. I think we lost the window. I think that people in the West, our leadership in the West are so fucking cowardly that nothing positive is going to happen. I'm disgusted. Like there's no leadership anywhere in the West.

We're fucking spoiled. We don't take things seriously. Nobody understands the need to take things seriously until it's already too late because everybody likes to shit on anyone that's, you know, being a turd in the punch bowl and raising a justifiable alarm. And then the best part is if you actually do that right, you may be prevented something catastrophic. No one will ever be the wiser because they'll just say, oh, yeah, remember that flu? And we took it seriously and and there was only like 20,000 people that died. It's the same as like the typical flu when really if you hadn't taken any action, well then, you know, millions of people would have died and the economy would have gone into depression. Those are basically the two camps right now.

And then, you know, the third camp is just like the hope and, you know, thoughts and prayers camp. I'll call them in the West, right? It's the same thing that we do after every single mass shooting in the U.S. thoughts and prayers, but nothing actually changes. So maybe one day thoughts and prayers alone will be able to help us. But in a situation like this, it'd be nice if, if more people took it seriously and were scared out of their fucking minds. Absolutely agree. Well, let's talk a little bit about markets. So we've had an insane week in the stock markets, right?

With some fastest drop ever, I think. The S&P 500 completely crashing and, you know, stock markets everywhere. The treasury bond markets, right, have also gone through an enormous amount of insanity. And so the crypto, right? So we had crypto crash Bitcoin. I don't remember what it was, 40% in a day. What's your take on that? Do you think this has kind of like adjusted to the reality?

Or I'm sure there's a lot of volatility still ahead, but do you think to some extent it's kind of like priced in what's ahead or not yet? I don't think anyone, yeah, too many variables, right? I'll go back to that. It's just, you know, like it all depends on the response. It all depends on, you know, what the rate of the slope is. If things keep accelerating in a negative direction, then of course, this is not priced in. If things start to level off, then, yeah, maybe the worst is over from a market standpoint.

But I think crypto will probably be a leading indicator on the rest of the market at this point, because like I said, I think, you know, crypto was going to get eviscerated like any other risk on asset, which is really how it's traded historically because so many of the speculators are in it for. you know, the $100,000 or a million dollar upside long term. But, you know, once you've washed those weak hands out of the market in a liquidity crunch, you can kind of take a step back. And if the unprecedented economic stimulus that takes place over the course of the next six months year kicks in a high gear, crypto should be a pretty meaningful beneficiary of that, at least when it comes to, you know, the monetary pitch and, you know, the uncorrelated assets. that pitch. We haven't seen that. We've never seen an inflationary recession. It's always been, you know, something that people thought about as, as, you know, possible. It's certainly why I

invested early on. I know it's why many other early people invested early on. And quite frankly, you know, there are thresholds that I'm going to continue to to load up on Bitcoin if things get worse, right? The only reason I wasn't buying more the other night when we hit 3,900 is because I was locked out of my account. I'm not going to, I'm not going to name names as to which company prevented me from accessing my capital for that trade. Suffice to say, I miss that window, but there could be other windows like that in the days ahead. And I'm not alone, right? I mean, there is a certain lower bound, I believe, to the crypto price because there's a

diehard enough community of believers in this long-term macro narrative that Bitcoin provides, where the nominal value of all total Bitcoin will be low enough that someone will take cash and buy at that lower bound price. Right. And so, you know, right now, what are we at? Like 100 billion market cap, something like that? Give or take, right? I didn't check it, you know, right before we came on, you know, for 5,400 or whatever.

Let's call it, you know, $100 billion in total market cap. Well, you know, net out Satoshi's coin. you know, maybe 90 billion of that is actually, you know, currently owned float. If we go down to 3,000, you know, now you're in the $50 billion neighborhood, it doesn't take that many deep-pocketed investors that are worried about gold, that are worried about their national currencies, that are worried about their governments in this type of, you know, global recessionary environments, that that doesn't get bit up. So I don't know what the lower bound is, but I know that there are different thresholds.

that I will personally back up the truck. And I am a minnow compared to many other people that I've known in the industry that feel the same way. Yeah, I know, I agree. Let's speak a little bit about, you know, what are the long-term effects on this, maybe from a societal perspective in terms of sort of changing how the world works, how maybe business works. And you alluded to Web 3 as well, you know, what this kind of means for crypto. Like, where's the opportunity here?

for crypto decentralized networks in the medium and long term? Yeah, I mean, I'd written about this a little bit in my post on Sunday night. And, you know, I think everybody's talking about some obvious ones. Remote first software, VR, online gaming, online education, e-commerce, right? You know, anything digital or, you know, that requires less, you know, physical interaction. I also think that in terms of the losers, San Francisco is maybe, they're an example of a city that will likely suffer some pretty meaningful human capital shocks from something like this. If a good chunk of workforce management moves remote, if a good chunk of your engineering talent finally moves international and those local ties become less important than this could accelerate. what is already a slow ebb in the tech scene from San Francisco.

And that could be much more acute in the months, quarters ahead. And we've already seen a bunch of defections from within crypto to cities like Denver and Austin and even New York, right, from San Francisco. I think, you know, we already talked about the impact on the start of ecosystem. I think this probably should be the death of the American health insurance system, which just needs a radical override. I'm not necessarily advocating for any particular economic model, but this kind of exposes all the flaws in our employer-sponsored health care system, which, by the way, folks that are non-American might not know is a relic of World War II

because there were controls on wages, people coming back from the war. And a loophole that employers were able to exploit was to offer other ancillary benefits of their employees to compete for talent post-World War II. So this is an entire accident of history, right, unintended consequence where employers that never should have been involved in healthcare first place got involved, the world is a lot different now. And, you know, probably makes sense to retire that given the stresses that, you know, this pandemic is likely to put on the U.S. healthcare system. If we pay the most per capita for health care and fail the most catastrophically in managing this outbreak, I think it's fair to say that we should blow up and start the entire system from scratch. How likely do you think that is, though? I mean, like, it's such a politically charged issue that, like, do you think that even this can radically change the U.S. healthcare system at its most fundamental level?

I'd say the better question is, how many million deaths does it take? right if 100 million people get infected and the case fatality rate is 2% and we hit that or exceed that and 2 million people or more die and their two three four week demise is ultimately live tweeted and broadcasts and social media and blogs and it becomes permanently ingrained in the american psyche i don't think there's any way that any American in a crisis scenario like that could possibly think that the current system that we have is an acceptable alternative. I mean, pardon me for sounding a bit grim here, but just looking at the political landscape,

and again, I'm not an American, and I don't live in the U.S., but who's most likely to benefit from the health care system and who's most likely to suffer the consequences of the health care system? And how do those people typically vote? I think it's probably across the board. You know, older Americans, I think, skew more Republican, right? Younger, you know, more liberal. But in terms of health care coverage, younger, more liberal, lower income. So I think it's across the board.

You've got, you know, a lot of different demographics in that. When you're talking about something as massive as health care coverage, I think it's, it's tough to, you know, put people into, you know, one political pocket there. But I think, you know, if there is a reset in the American health care system, then I hope Bology is as part of the redesign because he's called everything pretty well so far. He's got a ton of great ideas. And I know there was a rumor going around that he was in the running to be FDA commissioner back in 2017. And, you know, certainly wish that had been the case in many respects. But there's just so much. much it has to change in the U.S. healthcare system. So there is, you know, kind of one edge case where if things get, you know, pretty, pretty freaking bad, not nuclear and, you know, putting the U.S. and, you know, long-term depression bad, but, you know, bad enough from an optic standpoint, from a social urgency standpoint, then you might see some positive changes to how our healthcare

system structured. You mentioned the McNeil interview at the onset here. I mean, if you just contrast how quickly the Chinese were able to move on this versus anything that we've been able to do state side. It's just night and day. I mean, it's embarrassing, frankly, that we are so far behind in this. And it doesn't even seem like there's anyone with a coherent plan to actually bring this under control. Yeah, I mean, that definitely seems to be the case. Just one more question about markets. What do you think would be the market reaction if we found out that Trump had COVID? limit down 20%. I'll end on a positive note, right? You know, I generally think that, you know, life goes on. People get past things. But to just, you know, kind of throw your arms in the air and say,

oh, whatever's going to happen is going to happen. That's what's maddening to me. So, you know, what I think is a silver lining in all this is you're going to see a next generation, I hope, if things get bad, you'll see a next generation of, of, of leaders emerge that took the seriously, the ticket seriously, that, you know, run to the proverbial front lines to help in the crisis versus exploit the crisis. And the biggest thing that I think we need right now, you know, in the U.S. and, you know, internationally is just, you know, some semblance of courage and duty and a march solidarity. A march shore solidarity. Exactly. I think you're going to see plenty of people that are in that camp. I hope it's the vast majority. And the more people

it is, the sooner it is, the better chance we have that this goes away in a couple months. And everybody gets to talk shit to me on Twitter indefinitely because I'll just be like one of the chicken littles that was blowing this wildly out of proportion. It was just the flu and you're such a pussy and blah, blah, blah. I really hope that's the case. I feel like past a certain point, even if it does get worse, right? If we go into the summer and it, in a, and it, and it's, doesn't succeed and then we continue on to next year perhaps. Let's imagine like that worst case scenario. You know, people will adapt. Like humans have an incredible ability to adapt. And we're already seeing hints of that. If you look at like, you know, Italy, like people

singing on their balconies or whatever, like, you know, human ingenuity and their ability or ability to face hard situations is pretty incredible. And so I think that even if we're highly hindered as a society, we'll find ways to adapt. And like VR is a way to do that, right? Like remote work, we'll find ingenuitive ways, I'm sure. I think, you know, generally speaking, the best case scenarios are always, you know, when you have like a severe and like a very fast rip the band-aid off type of negative moment, but then, you know, tons of little positive, you know, incremental wins on the staircase backup. Because you want to see like the dopamine hits on the way up, because they're just more frequent, and it really doesn't matter what the magnitude is.

On the way down, get it all out of the way, adapt, move on, and then, you know, just get yourself in a state where you can move on to the next challenge or recover from a pretty major setback. I think the thing that's so frustrating is you just see the response and no one wants to rip the Band-Aid off, right? It's just this, like, deluge of negative headlines, days in the market, negative political bickering and just a feeling of helplessness, I think, from so many people. I think that's going to turn around. By the way, I personally think that come hell or high water, this will be turning around sometime in June or July. And it's just a matter of like how severe and how bad things get in the interim. But I find it hard to believe

that one way or another were not at the light at the end of the tunnel stage by sometime early summer yeah no absolutely well thanks so much for coming on Ryan it was it was great are you sure no absolutely no it's it was great it was great it was great you know the kind of effort you've put in yeah it's just informed people about that's been great will of course link to also your document so you've had a google doc a very big google document at this point that you've kind of kept up to date with lots of resources. So we'll link to that. We'll like to, you know, a bunch of other resources. One thing that maybe I can recommend here that I've been listening to religiously in the last, I guess, almost month now is a podcast called

Macro Voices. Yeah, they've done an amazing job at covering this as well. So there's been a bunch of really great resources. So we'll put those into the show notes so people can, you know, learn more about it, about, you know, what's going on, how to protect themselves, how to do deal with this. And yeah, so how to get through this. And yeah, I mean, I think in the end, there will be lots of, of course, we'll come out of this, right, as a society, and there will be lots of, hopefully, positives as well emerging from this. Yeah. So in the meantime, thanks so much, Ryan. Well, thank you. And I guess there's a parting word here, just to make things a little bit more real, Tour de Meester, just tweeted that there's 39 potential COVID cases from ETH CC Paris,

including Vitalik. Including me. Are you on that list as well? I mean, I'm not on that list, but I'm self-quarantining because I've been sick. I was sick since before ETC, and I'm still sick. So, you know. Yeah. Okay.

Yeah, I know. Absolutely. I mean, I was thinking about that conference before that. And I was like, this is a bit, you know, maybe a bit reckless, a bit risky. Although, to be honest, in my estimation, actually, with EFCC, I was sort of thinking, like, you know, probably still okay. but if they did like a week later it would yeah that's exactly what i was thinking too that was sort of my thinking a bit but i was like you know i personally wouldn't go i think it's a bit too risky but uh i think that's also the astonishing thing just that you know exponential growth is

even if you know that this incredible growth is coming it ends up being so fast and so powerful it's still it's still shocking and uh yeah i think we're seeing that and well hopefully at least the lessons learned that, you know, one has to be very careful with these events and not doing them for a while. I am going to shamelessly shill mainnet. Events as a closing point there because I think the community is going to need some places to rally and we've already publicly committed to donating 50% of the profits to third parties. Whether that's charities, I don't know, whether that's different development efforts or community funds just to ensure that that different major crypto projects don't run out of money to be determined. But we want to make as much money as possible

for this event in June. That way we can hopefully be at least part of the solution here. Thanks so much, Ryan. Thanks, Ryan. Thank you guys. Have a good one. Thank you for joining us on this week's episode. We release new episodes every week. You can find and subscribe to the show on iTunes, Spotify, YouTube, SoundCloud, or wherever you listen to podcasts. And if you have a Google home or Alexa device, you can tell it to listen to the latest episode of the Epicenter podcast. Go to epicenter.tv slash subscribe for a full list of places where you can watch and listen. And while you're there, be sure to sign up for the newsletter,

so you get new episodes in your inbox as they're released. If you want to interact with us, guests or other podcast listeners, you can follow us on Twitter. And please leave us a review on iTunes. It helps people find the show, and we're always happy to read them. So thanks so much, and we look forward to being back next week. You know, No.

ALEEN SULLIV. Thank you.