On The Brink with Castle Island - Weekly News Roundup 07/02/20 (Zimbabwe re-dollarization, Bitcoin's GINI coefficient, more issues with 'market cap') (EP.98)

Episode Date: July 3, 2020

Matt and Nic cover the top stories of the week. In this episode:  The MPC custody debate NYDIG raises $190m for a Bitcoin fund Zimbabwe bans all mobile money services and contemplates redollarization 4% of the UK population owns cryptocurrency, according to the securities regulator What a long-defunct exchange has to do with Bitcoin's GINI coefficient Why the 'market cap' of BCH and BSV is significantly overstated Why 'market cap' remains a problematic measure to compare cryptoassets Ark Invest's rebuttal to Goldman Nic gets a paper published in an antitrust law journal The looming antitrust wave against big tech

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of Concentive Easing. You print a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called a Bitcoin. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And that was a 21-minute delay in getting this podcast off the ground because the final countdown in other 80s songs were playing in your microphone. And we don't know why.

Yeah, this is like a chronic issue with this podcast. Our mics are so sensitive that they pick up radio signals. And this time, it was the final countdown. It's a great song. It's like taking you into the 4th of July weekend. Yeah, I'm super into it. I love that song. Well, we did a couple episodes this week that did not involve any interference. Luckily, how are you going to do this going forward? It's just like last week it was Latin music, it's 80s music this week.

It's, you know, when we're doing these big podcasts, as our viewership grows, or as our listenership grows, rather, you know, you can't have this happening. We're just going to have to live with it. It's a chronic condition. Well, we'll live with it. Let's talk about the sponsor for this podcast episode. It is Zen Ledger. So if you are going to be paying your taxes this year, which we definitely recommend,

text deadline season is coming up, by the way. So not April 15th this year. It's July 15th. And if you are, you know, transacting in crypto assets, you better get organized. And Zen Ledger is the best way to do it. So head over to zenledger.io. Use the coupon code, Castle 15, and you can get 15% off. actually you might be able to use Castle 20 and get 20% off too I'm not exactly sure

try different combos letters and numbers see what you got let us know what works drop us a tweet let us know if you got 15 or 20% off but it's good software and it will make sure that you're in compliance if you have bought any blockchain based assets or sold them you got to pay your taxes so head over to zenledger.io and get it taken care of yeah you know let's be real the moral case for taxes is declining by the day. By the day. But, you know, that said, there's still kind of a staying out of jail case to be made for paying your taxes. Yeah, I'm always been, you know, a big rule follower when it comes to taxes. And I, you know, I'd recommend that our listeners

do the same. It's kind of like one of those crypto rights of passages turning in a tax return that's 30 pages long full of all your trades from the year. We have a, we have a, a lot of listeners that buy and just never sell. So we might have a lot of listeners that have never have that problem. That's true. There's no tax impact if you literally never sell. There's a lesson in there, I think. I think you're right. I think you're right. So we had some good podcasts this week. We had Lynn Alden. You did a really nice episode with Lynn Alden. Yeah, that is our, that's currently our sixth most popular episode ever. So Lynn is closing in on Terrence. Dempsey so Terrence watch out. Oh, we'll have to have Terrence back. You're going to be dethroned here.

The number one undisputed champ of this podcast by far is Dan Medashevsky. Oh, by far. He has two in the top ten, including the number one. So Dan's lead is really, I mean, John Pfeffer, if John came back on the podcast, he would be able to challenge Dan. You know, if you're Dan and you're looking at those numbers, you have to start a podcast, I think. or just come on on the brink every month or something if you're listening to dan yeah Dan's rhetorical style just it gets me you know and i think a lot of people really vibe with it well he knows what's happening in the industry too so he's a very knowledgeable guy and he has a you know the best podcast episodes that we do are the ones where you can't really google the answer

some just has some deep knowledge in a certain area um and that's what dan is and that's what lynn was too Yeah, that's right. So Len is just a really excellent commentator on kind of macro issues, commodities, inflation. I link to some of her pieces in there that genuinely enhanced my own understanding of this stuff. To be frank, I didn't really know what QE was. Like, you know, you kind of know what these things are, but you don't really know, no. So that's the value of her work. It actually kind of lets you intuitively and deeply understand the stuff. So I highly recommend that podcast. She also is like, you know, very comprehensive thoughts on Bitcoin, which is pretty cool to see, like, people that aren't known for being like Bitcoin commentators per se,

developing fairly sophisticated opinions on Bitcoin. Yeah. Yeah, it is. Great to see that. That was a good episode. And then we had Dave Balter on later in the week. So Dave is, this was his second time on the podcast. We're good at getting these return guests, you know. And Dave is one of our entrepreneurs in the Castle Island portfolio. He's the founder and CEO Flipside Crypt. a business intelligence firm. And he wrote a book. And it's called The Humility Imperative. And it's lessons on leadership.

It's a collection of essays from his startup journey. So this is his seventh startup. It's pretty crazy. Not a lot of people have seven under their belt. Set a couple big exits too. That is, that's a lot. I mean, talk about being a serial entrepreneur. And so I prepared well for this podcast.

I read the book, you know. So I feel like I'm sort of in your homework. Yeah. You know, it's like all these people. people that go on other podcasts and they promote their books. This was the first time we had once. I had to read the book. It was really good. It just talks about the roller coaster that is starting companies. It's emotional and talks about firing people, talks about his personal life and getting divorced and getting remarried. And it's a really good book. So check it out. It's called

The Humility Imperative. If you haven't been through the process of starting a company, You know, it's hard to describe, but it sucks at times. You know, it can be pretty tough. Yeah, it's not something that like, you know, well-grounded like people do. It's kind of a crazy endeavor. Yeah, you'd be a little nuts to do it. You do. I know it was just like thinking to myself about starting seven companies and like one is enough, you know.

So some great episodes continue to check out our website. And we'll have some good ones next week. We're going to keep it going. We don't rest for the holidays. You want to get into some deals? Yeah. So we had actually a lot went down this week or a lot was announced this week. So Curve, C-U-R-V, many of you will have heard of these guys.

They raised, they were a multi-party computation crypto custody company. They raised $23 million from commerce ventures, coin-based ventures, DCG, teammate, and digital garage. So MPC for custody is an extremely hot space right now. Yeah, and this is a big debate too. So the interesting thing about this category is a super hot space. There's a bunch of companies that are doing MPC custody. Fireblocks I would also, I guess, put in this category. It's kind of a different approach to MPC.

But it's interesting because there are divergent opinions on it. And so, you know, if you talk to someone like Mike Balshi, he doesn't really believe in MPC believes that it's unproven. And obviously his business has a completely different approach, so it's not surprising. But it's a hot debate right now. Belchie's written a great blog post about it. That goes

into a lot of detail on his rationale too. But clearly there's something here. I mean, there's a lot of interest. It's a good user experience, I think, is what it comes down to on the MPC side. Yeah, it effectively allows for what I would describe as off-chain multi-sig.

And obviously, you have Cusidodians that are doing on-chain multi-sig, Casa and Unchained are two examples. BitGo, too. Yeah, BigGo. And, you know, actually, if you look at the distribution of Bitcoins on TXStats.com, which is a website that Antoine L'Kalvez made, you can see that a really large number of Bitcoin's are encumbered in multi-sig or other kind of P2SH outputs. I haven't done the estimate recently, but it's definitely in the multiple billions.

I think north of $10 billion worth of Bitcoin are incumbent in multisag. So talk about defy. Like that's a smart contract right there, you know? It's a simple one. But yeah, so then the question is, do you want to use fancy your cryptography to generate these schemes off-chain? And that's kind of the thinking behind MPC. Another deal that happened this week, Paradigm, which is a trading infrastructure company.

So these guys do OTC messaging, kind of an RFQ workflow for options. So they announced that they raised capital from Dragonfly, DCG, OKCcoin, a number of others, NIDIG, coin shares, Alameda. So this is interesting. And I think the big thing that's happening here is that we're seeing just an explosion in the growth of the derivatives market, particularly options. I think the options market historically, if you look at other asset classes, it's just orders of magnitude larger than SPOD and other types of derivatives like futures. And I think what we're seeing here is that the options market is just getting ready to explode here. And so we're starting to see trading infrastructure companies that are supporting options. And Paradigm is out in front on this.

So it's exciting. Yeah, Paradigm has done really, really well. Obviously, they were the main way to arrange an option block trade on Deribet. And Deribet has seen really explosive growth. And so too has paradigm. Previously, what options traders would do would, they would place a bid and then message their counterparty and say, like, hey, go find my bid in the order book on the exchange. and by the time they got there, might have been partially filled or something like that.

So Paradon lets people basically arrange trades and then settle them on an exchange like Deribate. They're actually on the CME now. So really successful product there. We've also, a new deal we have announced this week is Derivodex. So speaking of derivatives, so they're a decentralized exchange for derivatives built on top of Ethereum. There is 2.7 million from Polychain. Dragonfly, electric capital, coin-based ventures, CMS holdings, shout out down, three-arrow's capital. So some of the smartest funds in the market infrastructure space in that deal.

Yeah, this one looks really interesting as well. And they have a blog post that came out that we linked to in our newsletter. If anyone wants to read more about the approach that these guys are taken. Another big one in the trading space. So are you getting a theme here? just a ton of trading infrastructure deals announced this week. So SBI Holdings, which is a Japanese financial firm, they announced that they've invested $30 million for a minority stake in B2C2, which is a big institutional trading platform, crypto asset trading platform. So this looks like

kind of a minority interest deal. SBI holding has been very active over the years in the crypto landscape. So it's great to see. I think we're seeing a lot of plumbing being built right now. Yeah, it really is the week of financial market infrastructure. The last deal on our list is that NIDIG, the New York Digital Investments Group, raised $190 million for its institutional Bitcoin fund. Yeah, and this is just an access vehicle. And so they've been raising this for a little bit. $190 million, that's nothing to scoff at. That's quite a raise.

So congrats to Nidig. Is it clear in the disclosures if they've already deployed it into that fund or they're sitting on dry powder or why? Yeah, it looked like they've been raising it, I think, since 2018. So my guess is that it's deployed. That would be nice if it wasn't. If it was just sitting in cash. Yeah, that is a hefty chunk of change there. So let's move on to some news.

So we just do a quick one on this. So last week we talked about Telegram and they're doing the settlement with the SEC. after we released the podcast that formally was announced, I think it was pretty much as reported by all the news outlets. So they have to return the funds, $1.2 billion. They have to pay an $18.5 million penalty. And I guess not surprisingly, the big question from a lot of the media coverage was, you know, what happens to the SAFT. And so a lot of people in our industry will read Dan Premack, he's the Axios columnist who writes a daily deals newsletter. And he wrote, a piece on Monday called RIP SAFs, 2017 to 2020.

So definitely not settled as case law, but that's sort of what people are saying. And, you know, I don't know that I have a fresh take on the telegram one, but, you know, I think the big one to keep an eye on now is just what's going to happen with kick and kin. They're sort of the last large token sale project that's still fighting with the SEC. And so I guess I'd expect them to keep on fighting, really. I mean, they've raised some money for their legal defense. and I think they're sort of committed to go into a trial, it looks like.

So I guess we'll see. I might take the other side of that. I think they'll settle. Yeah, that would be pretty boring. That's how 98% of court cases end. Yeah. But yeah, maybe one of these safs is going to try and take it to the Supreme Court, and then we can find out for once and for all.

Yeah. You know, but I don't know. I think that's unlikely. The legal consensus seems to be that actually, these investment contracts aren't anything particularly new, even if they are writing on blockchain rails or they exist in token form. At least that's what I've encountered from most of the lawyers that have asked about this. We should do another legal podcast once there's a little bit more clarity on this. Yeah, the one we did with Jake Trevinsky was so good. And Brian Klein too.

Yeah, we've got to get some more crypto lures on the show. There's a few of them floating around. I'm not going to reveal any secrets here, but there are some high profile lawyers that are joining crypto asset infrastructure companies in the next couple of months. Like big time lawyers. Okay. All right. Stay tuned. We can just stew on that one for a little bit.

Like big draft picks. Here's some interesting news. So Zimbabwe, a country famously known for its monetary stability, has banned all mobile money services in the country. So I guess they're trying to secure their borders against. capital outflows and try to impose these capital constraints. But it does seem like they're fighting a losing battle here. I don't think you can ultimately compel anyone to hold a fiat currency if they really don't want to.

Yeah, I mean, this just doesn't look like it ends well, right? You can't really restrict people, especially in this day and age. And with the advent of stable coins, it's just getting easier and easier to hold synthetic exposure to dollars if you're in one of these countries. So, you know, I always talk about this. previously you get paid and you go out and you just buy as much as you can at the grocery store, you buy hard goods, you try to get out of the fiat system. And now it's you get paid and maybe you do some of that, but you also hold dollars on a smartphone. Maybe you meet up with someone and do a in-person swap on a smartphone to just hold stable coins.

That's where we're headed. Yeah. And you know, what's interesting about Zimbabwe is that obviously they had currency collapse last decade. and they dollarized. And then there wasn't really enough physical cash laying around. And the government issued this IOU. I think it might have been called Zim dollars or Zimbabwe dollars or Zeebills or something, like a digital IOU, which was meant to be redeemable for dollars. But it was kind of a bait and switch.

And so then it ended up not being redeemable for dollars. And so then they actually de-dollarized. And that's where we are right now. They've de-dollarized and the government's trying. trying to get people to only use the local currency. And it's possible now that they're going to re-dollarize. So not just dollarize for the first time, dollars for the second time. Because they appear to be going through another kind of spate of currency collapse here.

This is tough. It's so ugly on the people that go through this. Yeah, because it's just waves of savings confiscations, which is why we talk about the welfare benefits of this more porous approach to monetary goods. It's because it's regular folks that have their savings confiscated. And, you know, not every sovereign nation is going to like this, but we've just entered this new era now where fundamentally it is easier for regular people to take the off ramp from their local sovereign currency to exit that local monopoly and to opt for another one, whether it's Bitcoin or it's just US dollars. Or gold, right? It can be anything.

It can be, it doesn't, it can really, the design space is pretty large in terms of the assets that you can hold on these public blockchain networks. Yeah. And previously you were limited by kind of black market imports of physical dollars, maybe through trade or commerce or smugglers. Now you're not limited by those physical supply chains. That was always the issue that you could never really import enough physical dollars. And now this, you know, there's $12 billion worth of stable coin sloshing around. Obviously, the financial infrastructure isn't particularly well developed in Zimbabwe to create that access point to stable coins, but it certainly could.

I mean, look at Paxfool. Paxville is a peer-to-peer market similar to local Bitcoins, heavy emphasis on Africa. In fact, they've just flippant local Bitcoins in terms of volume. So this stuff is getting built. Increasingly, normal people worldwide are going to have this access point to crypto should they want it. even if there aren't local crypto exchanges. Yeah, I mean, these are Craigslist style transactions.

You're just meeting someone in the street and giving them dollars and swapping it for fiat is really what it comes down to. Yeah, and there's really not that much you can do about that as the state. And I think the lesson from all this is not, okay, well, there's going to be rampant currency collapse. It's more that the existence of crypto is this massive disciplinary force, which will require that the state simply behaves better. Did you read this UK Financial Conduct Authority Research note this week, Crypto Asset Consumer Research

2020? Yeah, I thought it was really great, actually. You know, there's some central banks that maybe they don't like Bitcoin per se, but they produce a lot of research on Bitcoin. So the number one in my book is the Bank of Canada. They had a great one on CBDCs last week, Central Bank Digital Currencies. That was so good. They also do a yearly report on just the penetration of Bitcoin and the uptake of Bitcoin in Canada.

And it's like this constant upwards trend. It's just the best thing because we're talking about random samples of the whole population, you know, representative samples. So honestly, I don't even know why they do this. But it's just fascinating data points to find out that, you know, 6% of Canadians own Bitcoin. So, you know, shout out to the Bank of Canada. Big props to those guys.

Yeah. Yeah. Keep it up. We're waiting eagerly for the 2020 edition. Actually, 2019, too. You guys are late on the 2019 edition. Step it up. It's probably because it has like 30% Bitcoin ownership and they're worried to release it or something.

So the FCA is the equivalent of the SEC in the UK. And the UK is kind of more friendly towards crypto generally. You know, the UK is trying to be a hotspot of a fit. financial innovation. They have been a financial center for a long time. They're trying to kind of retain that advantage. And there is a definitely vibrant crypto startup ecosystem in London, to be sure. So the FCA did a survey of, you know, a representative kind of randomized sample of people in the UK and found that 3.86% of the general population own cryptocurrencies today. That is 1.9 million adults in the UK.

They also did something really interesting. Aside from that, they actually asked people how much coin they hold. And the weird thing is they didn't actually ask people which coins they hold. So it's unclear whether we're talking about Bitcoin, Ethereum, you know, God forbid, ripple, something else. So they didn't disambiguate that, which was weird to me. But they did get, you know, several hundred responses in terms of how much value you hold in cryptocurrency form, which is something that if someone called me up and asked me, I would not answer. Like, this preposterous question, why would anyone answer that? Like, how much money is in your Bank of America account? I mean, I guess they must really trust the government or something. So they give us effectively a Lorenz curve. So Lorenz Curve tells you what fraction of a population owns what share of wealth.

and using a Lorenz curve, you can compute a genie coefficient. Really fascinating stuff. Little known fact. Yeah. So the genie coefficient is just a measure of wealth or income inequality in society. So I took the data. So they find that, you know, the median owner has 260 pounds. And the average owner of cryptocurrency in the sample has 1,500 pounds.

So it's a skewed sample, as you would expect. So actually took the data. data set and computed the genie coefficient as one does. And I got a journey coefficient of 0.78, which, yeah, so one being maximally unequal and zero being perfect equality, right? I think that's low. I would have thought it would be higher. And so, yeah, so, you know, keep in mind, the genie coefficient is often and typically used to measure income inequality. Here we're to looking at wealth inequality and, you know, with the caveat that it's a small sample. But yeah, 0.79. I looked at it. It's very much in the middle of the road globally on a country level.

So very, very average. And so, you know, the interesting thing is if you actually look up Bitcoin Genie coefficient on Google, you'll get references and Noriel Rubini referenced us. You get references to a chain of blogs, which links back to a 2011 post on the Bitcoin talk forums where the someone asked the question what's the genie coefficient of bitcoin ownership and the owner of a bitcoin exchange called bitcoinsica i don't know if you remember this one i do remember that one yeah so this guy zootong who's infamous now because that was an exit scam right that's the theory that there was an exit scam so zutong posted the address distribution the ownership distribution of the users of bitcoinica and derived a genie coefficient of

0.89, I believe, which is pretty high. And so that was used and cited in a bunch of papers and blogs as proof that Bitcoin's journey is higher than North Korea. And it persists to this day. So Norrell Rubini, in his congressional commentary about Bitcoin, cited this stat from the year 2011. From a guy who kind of like ran off with the money or there's some big hack. That's crazy. A minuscule, super shoddy exchange that got hacked a bunch of times, you know, a just distribution of, you know, a couple thousand holders or something. Wow. So look, I'm not saying this FCA data on Ginny, which has a relatively small sample, is foolproof, but it's probably a better data point than 2011 Bitcoinica user data. Yeah, I feel like we can get, we can do better than that.

Yeah, that's a low bar. That is a low bar. Well, I was not expecting the conversation to go in that direction. That is fascinating. Yeah. So thank you to the FCA for dialing up 3,500 people and asking them how much Bitcoin they own. And to that question, I say none. Yeah, that's the correct answer 100% of the time. So let's talk about coin metrics, the free float stuff this week. Yeah, so coin metrics did something pretty interesting.

They looked at, I think all of the assets in the top. top 30 at least. And they had this view that market cap isn't really perfectly representative of the actual market-relevant supply because coins can get burned, they can get lost, they get squirreled away in treasuries, maybe it's a fork coin where half of the coins never even get used. Nobody bothers to clean the fork. And so they decided to create a free floating supply, which is a concept that exists in capital markets. Actually, if you look at equity market capitalization of regular old businesses, you will often get a free float version of that answer.

And this is actually how indexes are weighted. They don't count shares which are super illiquid because you risk having really extreme tracking error when you create an index. And if the free float of some stock is only 25%, acting like all of those shares are liquid, means that there's the big risk of a significant market impact of that trade. So this is also very much the case in the crypto markets.

Coins like Stellar, where 92% were illiquid. They're held in foundation wallet. So you're a way overstating the kind of market value of that asset if you're taking the naive figure. So anyway, coin metrics did a systematic treatment of this problem, and they developed this free float metric, which is live, you can see it for a whole bunch of coins on the charts page at coinmetrics.io. So we'll link to the blog post, but I'm really glad to see this. I think it's a big step forward in terms of a fair treatment of supply.

Yeah, and I guess why this matters is it comes down to, you know, a big part of this is going to be investment products. And so it makes creating indices for crypto asset investment products just more accurate. And so it's a big deal. Yeah, and it makes a big difference too. So you're overstating Bitcoin cash and BSV by a factor of almost half if you use the naive figure of total supply. Because on these coins, they're forked coins. And a really good fraction of the coins were never claimed on both of those forks. Because some people didn't care enough or they didn't want the security risk of claiming these coins.

For Bitcoin, they've opted to use this approach that eliminated. coins which haven't moved in five years. And now that's not saying those coins, you know, don't count in some fundamental sense. They're just saying these coins don't appear to be liquid. They don't appear to be market relevant. So it's just a more systematic and fair way to compare different assets on a like for like basis. They become market relevant when people are trying to show that Craig Wright is wrong. That's right. That would have woken up those ancient coins. Another thing I read this week, and I'm sure you did too, is the report from Arc Invest. So Arc is the thematic asset manager based in New York. They wrote a really thoughtful piece. It was

Yassine that wrote it, debunking common Bitcoin myths. And I thought this is a nice rebuttal piece to the recent Goldman Sachs report. I thought you were referenced, actually, and they had some coin metrics data in it. Yeah, I think they were kind enough to put a quote of mine in there. Yeah, about Bitcoin mining. But you know, Arc is really doing a great job. And, you know, Bitcoin and crypto assets is not their whole stick, obviously. It's a thematic ETF manager, really. But they're really on the cutting edge of understanding Bitcoin and explaining it to their clients. So it's really good to see. Yeah. And Art gets a lot of stick for their Tesla position. Their Tesla trade is kind of just one of

the best, you know, active manager trades out there. Tesla did pretty well today with Elon's tweet, huh? Yeah. I don't know if we, this is a PG-friendly podcast, so we, like, let's just leave it at there's a lot happening with Tesla as we record this right now. Yeah, there's definitely some chaos out there. But, you know, I remember visiting the arc offices. I think it was in, I was still doing my master's and Chris invited me to the office. And I met the arc team. And it was the tiny office in, you know, it was the tiny office in, Brooklyn, I think. And they had something like 150 million under management. And then fast forward a few years. I think they have over 10 billion under management today. Wow. And their their Bitcoin

trade, their Tesla trade, these were some just outstanding, you know, career defining trades. So Yassine has really picked up Chris's mantle over there. He's producing some really, really outstanding research. You know, it's not even strictly meant for a crypto-native audience, which is probably why it's so valuable because he's defining and introducing some of these concepts to their more mainstream user base. Yeah. So definitely check it out.

We have the link in our newsletter. And then your paper, which I had forgotten that you wrote, has been released this week. Yeah, I kind of forgot that I wrote it too. So talk about this a little bit. This is a fun milestone. So I had a paper that I co-authored published in an antitrust law journal, you know, past peer review and everything. So it took about 18 months to actually get it through committee and actually publish and issue of the journal. But so I read this paper with a professor of law at Leeds University called Consantinos Stiliano. And what we wanted to do was to equip

academics and regulators to determine how to assess the market share of crypto assets relative to each other. And so we experimented with a few methods. Actually, the free float supplies is very relevant to this. We actually talked about this back in the paper. And, you know, it might be weird to think about cryptocurrency in an antitrust context, but we wrote this with the assumption that there would be private currencies that were created alongside cryptocurrencies. And when we started writing this paper, Libra had not been announced yet. That's some good foresight there. Yeah.

So we felt that it was likely that we would get Facebook coin or Amazon coin or whatever and that these would then be relevant in an antitrust context. I know a lot of Bitcoiners don't like antitrust or don't believe in the state or intellectual property. But if there is going to be, if there are going to be cases, I think it's important. that people really are equipped with the best tools to actually measure the relative share of these assets relative to each other. And that's not a trivial task at all, which is why we wrote the paper. So we'll put that in the show notes in case you guys are interested in reading it.

And so what was the basic approach here? I read the paper when it first came out, but it's actually, I think it's paywalled now. So how did you calculate the market share? We presented half a dozen different methods to do it. So there's no one canonical way, and that's kind of one of the findings of the paper, that there really is no single way to assess the relative dominance of any money or any crypto asset. But there are definitely some pretty bad ways that have been proposed. So we're like market gap or something.

Just like a naive approach like market cap for the exact same reasons the clone metrics goes into. It's not that. Yeah, or like mining pools, things like, or if you saw a cash rate would probably be a bad one. Yeah, so we talk about mining in there. But yeah, this is my first ever published paper in an actual journal. So hopefully the first of money. We'll see. The Journal of Competition, Law, and Economics. I mean, this is my favorite journal now. So I've been told by reliable sources that this is the second most reputable journal relating to, antitrust law issues. Do you think it's going to be the first after this?

Maybe after this, yeah. So take that as you will. So, you know, take that as you will. Pump it. You know, actually, like,

antitrust is going to be a huge topic for the next decade. I think that is undeniable. There's this commentator that I really like, Matt Staller. I don't know if you've come across him. I have.

He writes this great newsletter called The Big. It's probably my favorite substack newsletter. and Matt is he's an antitrust guy, but he and a lot of other people have identified the fact that it's likely that we see another wave of this kind of tech lash, kind of like we had in the 90s with Microsoft, but with Google and Amazon and the crosshairs. I think it's very likely. I mean, what's going to disrupt these big companies is going to be antitrust or it's going to be public blockchains, I think. Yeah, I think. Or a combination of the two.

Yeah. But yeah, I mean, we know the DOJ is preparing an antitrust case against Google. And honestly, I think they're absolutely right to do it. I think they're totally spot on. Google is a monopoly, especially their ad business. There's a ton of monopolies out there. I don't know how they exactly happened. A lot of libertarians would say monopolies can't happen in a free market, but they definitely, they're there.

Well, these monopolies would be a lot less powerful if people had the ability to own their social graph. I mean, that would be one big thing is if there were some comprehensive legislation that allowed you to port your social graph from service to service, I think it would prevent the emergence of these monopolies. And maybe that'll be the outcome of this. And I guess that could be a crypto asset network. It also could just be open APIs. Yeah.

I mean, look at open banking in the UK and Europe. That was just, that came about through legislation rather than technological enhancements. But that, you know, massively opens the door to more kind of dynamism in the banking sector. Yeah, I don't know. It's going to be interesting. I'm certainly not calling for that type of action, but it seems like that's inevitable. I think it's warranted. I think it's plenty of warranted.

I mean, you look at Amazon, you know, de-boasting competitor results in the search page and elevating their own Amazon product lines, you know, ripping off other successful product lines and then creating their own kind of bootleg versions of that. You know, like Google promoting Google shop results. And, you know, like, there's plenty of ammo for the regulators here. Probably be good for startups. Yeah. I mean, I think it's been actually kind of a stifling environment for startups in the last decade

with, you know, three or four big acquires that aren't even doing that much acquiring. Yeah. Yeah. All right. So some odds and ends. A couple of things. Carlotta Perez had a presentation at Bailey Gifford. Technological revolutions in the shape of tomorrow.

I thought that was really good. I put this in our newsletter and you said she's not a fan of crypto, but whatever. Yeah, I listen to her consensus presentation. She isn't. But actually, Bailey Gifford, they are also an incredibly successful asset manager. I used to live on the same street as the Bailey Gifford headquarters in Edinburgh. Little known fact. Yeah, that's right.

but yeah they've had a great decade as well kind of similar portfolio to arc but just on a bigger scale and then a bunch of good content this week coin desk covered some of the explosive growth that block viz undergoing right now which is awesome so they're growing at like 100% month over month and their coin desk is reporting that they're on pace to have revenues over 50 million so really enjoyed seeing that article tom lombardi from pepperdine he published a primer an overview of all the various Bitcoin investment fund vehicles. So this was also pretty informative. And I guess Tom is teaching a class on crypto assets out at Pepperdine. So check that one out. I liked it. And then a ton of good podcast. So Hasu, who's one of my favorites every time he's on a podcast, went on bankless.

You did bankless like two weeks ago, right? Yeah. The first question they asked me was if I'm an Ethereum or not. Yeah. And you asked for like what is an Ethereum? I had to fill Bustor that one. Yeah, they ambushed me. So I thought that was a good one. And there was also the Raul Paul's guys at Real Vision had a big conference this week. So there's a lot of content coming out of there. You did a panel with Alex Leishman of River. Yeah, I was on that. It was a great panel. We had Tour de Meester and Robert Breedlove on that one. I don't know if it's public if the videos from that conference are public, the crypto gathering. If they are, I'll put it in the show notes. But I think they might be private still.

Yeah, I think they're private still, but hopefully they'll become public in the next few weeks. And I think that's it. And we get the 4th of July coming up here. Any plans? Yeah, I'm going to celebrate. I know that's, you know, that's been discouraged in certain states and so on. So 4th of July, whatever.

Like, let's set off some fireworks, you know? So where I live, there's fireworks that are going off every single night. Every single night is a 4th of July. Yeah, that's kind of been the thing. There's been a whole bunch of conspiracies that it's like agents of the state doing it or like, you know, provocateurs of a sort. From my perspective, fireworks are super awesome and great. And if it were up to me, I would set them off all the time.

Yeah, I mean, I have seen some of the people that are definitely lighting these things off and they're not agents of the state. They're just having a good time. Yeah, so maybe we should actually decriminalize everything related to firewarkers. fireworks. Fireworks are just super, super dangerous, but they're a lot of fun. Yeah, but also just very cool and just great. Maybe in the kind of secessionist Bitcoin Citadel that get started, maybe by Balaghi. I feel like Balogies on the Cups. Could have talked about his little dust up with the New York Times this week. That was a bad one. Well, I hope that everyone has a healthy

Fourth of July. Don't hurt your hand on any fireworks. Don't do anything stupid. And we'll see you next week. We've got a bunch of good podcast next week. Have a great weekend, everyone.