On The Brink with Castle Island - Weekly Roundup 03/18/22 (EU PoW ban defeated, Lummis bill details, Ukraine legalizes crypto) (EP.298)

Episode Date: March 18, 2022

Matt and Nic return for more news and deals of the week. In this episode:  Too much Tom Brady content? Can Roman Abramovich sell Chelsea? Former skeptics coming around on Bitcoin Arbitraging tungsten cube NFTs? Why isn't physical tungsten rallying? Facebook's Diem is back from the dead Takeaways from Laura Shin's book The Cryptopians Tom Emmer's letter to the SEC Details of Sen. Lummis' bill start to come out The EU almost bans PoW cryptocurrencies Instagram announces plans to add NFTs Ukraine legalizes cryptoassets The story behind Nic's Tucker appearance Bitcoiners growing beards Content mentioned in the episode:  Rep. Tom Emmer's letter to the SEC  Decrypt, Bill From 'Bitcoin Senator' Lummis Would Alter Capital Gains Landscape for Crypto Coindesk, Ukraine's Zelenskyy Signs Virtual Assets Bill Into Law, Legalizing Crypto Sponsor notes:  Compass Mining is the world's first and largest online marketplace for bitcoin mining hardware, hosting, and ASIC reselling. Start mining your own bitcoin by visiting compassmining.io Subscribe to the Coin Metrics State of the Network newsletter

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 concentrated 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. Today's Metrics Minute is brought to you by Coin Metrics. We're going to cover a couple data points from their weekly newsletter of the state of the network. First up, Paxos' gold-backed stable coin is growing. It's up about 75% year-to-date. The market cap recently crossed 600 million. It's snapping at the heels of Paxos's dollar-based stable.

coin USDP. Next up, the Ukrainian government has received 300 BTC and 8,000 eth in donations of the 320 BTC received. 98% has been moved indicating its great liquidity profile in converting to fiat or general acceptance for payment. That's the coin metrics minute. Subscribe to the state of network link in the show notes. And we just had a little bit of an argument before we started because I was like, well, the big news is that Tom Brady's back and you just, you didn't want to get into it. He said, We've talked about that ad nauseum. I think we've mentioned him on the show like 50 times. I mean, so I guess I'll keep a brief.

He's back. How does one man produce so much news? I think the bigger story here is like, is anyone surprised at this? He's like, you don't really like resign when you're at your absolute apex as a football player. Well, what does this mean for his NFT startup? I know that's still happening. I'm sure that's still happening. It means he'll be generating more NFT content,

throwing more touchdowns, breaking more records. We'll see who the head coach is for the bucks this year. It's probably not going to be Aryans. So I saw a tweet saying like, I think it was something like 99% of Brett's don't know who this is and it was a picture of Tom Brady. And one of the replies was, well, if they listen to On the Brink, they know.

Oh, really? Because we can't stop talking about them. Well, it's the same thing with me in soccer, although I'm a huge Liverpool fan now. I've made some friends on the other side of the pond. They sent me some swag, actually, in the mail. So I have a kit now. I have a hat.

My kids have a kit. So thank you to the Liverpool team. Do you have a training kit? That's the one with the Tazos logo on it. My kids have training kits, yeah. So they can like run around the backyard. You know, they're ready to go. So on the soccer front, actually, my team has, you know, is being sold.

Chelsea Football Club is being sold because I guess like Russians can't own, you know, English Premier League teams anymore. Yeah. So big story, Roman Abramov or Bromovich. or however he's that. Bromovich. Yeah, honestly, I thought he was a pretty good owner. I'm not going to lie. He actually, certainly being an oligarch,

questionable wealth, you know, the origins of his wealth were very questionable. That was known. But he did have a genuine passion around the team. So I really have mixed feelings on the sale. So he sells it. How do you actually get the money if you're him? I mean, what does he take payment in?

That's part is very confusing to me. If he's on a sanctions list. That's actually a great point. you give him money? Like, how can they effectuate that sale? That's a great point. And the interesting thing is, Roman, it was speculated that he bought Chelsea to elevate his profile in the West so that it would be much more challenging for Putin to kind of like go after him like he did all the other oligarchs. So it's not like he was a friend of Putin necessarily. Like the oligarchs in Putin, like, you know, a lot of the oligarchs died or a

you know, is suspiciously, right? Kortokovsky was in jail for like five years, the guy who was at Ugos, Yucos. Yeah. So implying that they're on the same team here is odd. But yeah, that is a great point. I don't know how the heck Roman, you know, takes to, you know, sells a transaction. It's got to be in crypto.

Well, they're just going to have to classify the football team as oil and then it's fine. Yeah, it's an energy product. It's confusing. Well, we had a busy podcast week again. We're just turning out these three episodes a week at a good clip here. So you had Isabella Kaminska talking about reconsidering skepticism in the Bitcoin space. That was a really good episode. Yeah, that was actually a very long episode.

It was like 90 minutes. And also we had 20 additional minutes of banter, but then we lost the audio for that part. I lost the audio of mine this week, too. I had a cutout when I was doing the Brett of Harrison episode. We've had massive AV difficulties. I don't know what's going on here. Yeah, we're having technical issues like you wouldn't believe. So you're just going to have to imagine 20 minutes of banter between me and Isabella.

You know, suffice to say, it's very witty. You know, it's very clever. But yeah, Isabella, you know, she left the FT. She ran Alphaville, which I thought was great, although albeit very, very critical. of Bitcoin in the crypto space can it remains critical. But the thing is, Isabella, if you noticed, she actually moderated her stance on Bitcoin. Well, I noticed because, and so I got her on and turns out she did almost a 180,

maybe like, let's say 160 on Bitcoin, like not 180 full degrees, like most of the way. And yeah, so she explained why. And, you know, we spent a lot of time talking about like her Polish upbringing, which would, you know, I think is pretty relevant in the whole thing. You don't meet a lot of people in your travels that, you know, A, have the ability to reconsider their previously strongly held opinions. And the other type of person you don't meet a lot of is folks that have really been to the bottom of the rabbit hole on understanding blockchain technology and come away just saying

that it's all BS. those people don't really exist at least in my world yeah so i don't even know if the rabbit hole has the bottom it's still ongoing i guess but you don't meet anyone that deeply understands these things and can explain to you how they work how these public blockchains work and has the view that there's nothing here well i thought izzie was a was a rare skeptic actually because she had very very sharp and well-informed critiques of the crypto space, which some of which she shared on that episode. The good fud, there is good fud out there, right? You do meet people that talk about the stability

of the block reward post-having. I mean, that's like the archetypical fud when it comes to Bitcoin, but like there's a ton of stuff as far as defy's concern, like stablecoins. Like Isabella years and years ago, actually in 2017, made the stablecoin euro-doll. comparison, which I thought was really clever and, you know, really prescient ahead of its time. So we actually talked about that too. But basically she was just a highly informed, you know, commentator. It just so happened that most of her commentary was very critical.

And then of late, she's kind of revised her opinion. It takes a lot of humility to do that, you know, to go on a crypto podcast and explain. why you changed your mind. So anyway, I was really glad you did that. I thought it was a great episode. That was a really great episode. And then I sat down with Brett Harrison. That was a fun one.

I've been meeting to have Brett on the podcast. He's the president and CEO of FTXUS and talked about a bunch of stuff, talked about derivatives, talked about market structure, talked about the roadmap for adding equities onto the platform. So that company is just executing at a crazy, crazy rate. the pace of product innovation over there is just insane. So plenty of deals this week, some sizable deals, in fact. Yeah, let's get into it.

First one up is Gauntlet. This is Tarun Chitra's company. This is a defy risk management company. They raised $23.8 million from Ribbet, Polychain, Paradigm, and others. Next up, we have Metaverse Game Studios. They are a blockchain gaming studio, unsurprisingly. raised 10 million from Pantera, Anamoka, Solana Mechanism, and others. Next one up is Magic Eden.

This is a Solana-based NFT marketplace. They raised $27 million from Paradigm. I think the first order business on that one should be, let's get those tungsten cubes moving. Magic Eden is the venue for trading the tungsten cube NFTs, and those things are just docile right now. They're inert, just like the metal. They don't trade.

There's no value. I don't understand it. I don't understand it for the life of me. I mean, it's a receipt on the blockchain that's redeemable for a physical lump of metal. I don't know how exciting that can become. I mean, I'm going to have to redeem it because the NFTs aren't doing anything for me. Yeah, you're probably at redemption value. Yeah, I think I'm going to have to. Or even trading. Yeah. So someone take a note on that.

Below one, price to book. The problem is you can't complete the arbitrage by, you know, selling the tungsten back into the market. Well, never say never. I mean, some of the earliest arbitrage, Sam Bankman-Fried has talked about some of the Korean trades. I mean, where there's a will, there's a way. We're talking about someone has to go to Midwest tungsten and become like a redeeming agent. And here's the thing. Every other commodities market has rallied like crazy.

Where's tungsten in all this? Tungson. I don't understand it. Why haven't we rallied? If nickel can do a thousand X over a course of a week, why can't we? Yeah, who is squeezing the tungsten market? I mean, who is trading the tungsten market, first of all? What's going on?

I won't be satisfied until the tungsten market is broken because it's limit up four days consecutively. And you know that if it's an NFT marketplace, they're not going to shut it down. Like, they shut down the nickel market. There's crazy fake commodities like nickel. Yeah, blockchain. fixes this. Our commodities markets will never go down. No, there's no one to bill you out either. You're really going to just going to get wiped out. So, yeah, I don't know what's going on. Tungsten. Can you join the rally for the other commodities, please? I think we'd maybe it did.

I mean, I haven't even looked, actually. I think this Midwest Tungsten, they just need to be a little bit more vocal on the social. Where do you get? I heard that actually speaking at the conference, Bitcoin 2020. So really? Oh, really? Well, probably have some merch. Where do you get a price quote for tungsten? That's what I want to know. Is there a coin market gap for metals? There should be. I mean, that's a call for startups right there.

I don't know. Is there a reference rate? We should probably get coin metrics to come up with a tungsten cube reference rate. Next up, Treehouse. They're a defy analytics company. They raise $18 million from Binance, light speed, winter mute, mass mutual, and others. The next one is TravelX.

This is a project. They're building a protocol for the travel industry. they raised 10 million from borderless, Algarand, Dapper, and others. I always get a, it's always interesting to see multiple layer ones in a deal. It's kind of like a fight for where you're going to build the thing. So it's kind of interesting to see these deals.

That's a great point, actually. Yeah. I mean, it's kind of an odd situation where we have virtually every L1 has their own ecosystem fund too. Every exchange and brokerage that's successful has their own venture capital group too. Because if everyone has an ecosystem fund, then, you know, I don't know. As a developer, it's like if you build on an L1 and you're not being paid to do it by the L1, something has gone wrong.

Imagine if TCPIP and OSI had ecosystem funds. Imagine the cash flowing into the early internet. But I mean, it still worked, you know, the internet still got built. So, you know, don't you kind of want it to be the case that you don't need to be paid to build somewhere? You just want to build there because you can make money building there. You don't need a subsidy. Maybe. And I think there's going to be a lot of divots and holes in the ground here, similar to dot com.

But the good news about all the capital and the ecosystem funds is that it's just subsidizing a lot of new development. And a lot of that development is open source and modular. So it's not like one of these dot-coms that was building siloed off technology that when the company goes out of business, it'll never see the light of day. A lot of these projects are building in the open and you can build other stuff on top of them. So you could argue that these ecosystem funds, well, maybe they won't be successful from a return on investment perspective, maybe, but they'll probably subsidize a ton of interesting projects. Speaking of which, Aptos is a layer one, blockchain. raise 200 million from A16 Z multi-coin, three arrows, Tiger, FtX, and Coinbase.

This is the DM blockchain being brought to life. So it's a team consisting of former Facebook employees or meta rather. So the DM slash Libra blockchain lives. that would be something if this ends up being a monster network and sort of stands as a proxy for what Facebook could have done absent all of the issues they ran into on the regulatory front what could have been yeah for for meta next one up is hex trust this is a crypto custodian they're based in hongong they raised 88 million dollars from animoka liberty city ripple terra and others that's another deal with a couple layer ones in it this this one makes makes a lot more sense to me because you have a, you know, you have a custody play. So all of these L-1s, they want infrastructure around trade execution and custody. And you want to promote a vibrant ecosystem of good infrastructure for institutions that want to hold your token. So next up, huge deal here.

Consensus. Everyone knows consensus. They are the Ethereum Studio, I guess. They raised $450 million in around led by Parify with participation. from Microsoft, SoftBank, Temasek, and others. And they are apparently going to be keeping their balance sheet in Ethereum as well. Just go out there and market buy $450 million worth of Ether. It looks like that's coming up.

I just finished Laura Shin's book. I know you haven't read it yet, but I thought it was really good. It focused on the early history of Ethereum, at length about the Dow Hack. Talked a lot about Polo. So there were some really interesting nuggets in there about Polo that I wasn't aware of. But in general, just a great book. What a time to be a writer about cryptocurrency.

There's so many stories yet to be told. What was your main takeaway from, or your biggest surprise in that book? So I thought all the Ethereum stuff was, I had sort of either known or there had been other books, but I thought it was really good at just some of the interpersonal dynamics there between the early Ethereum team and some of the tension that existed. I had forgotten that one of the early co-founders was involved in colored coins and kind of stepped away from Ethereum because he was building colored coins. And it sort of brought me back to that time when we were talking about open assets protocol and we were talking about moving real world securities on top of the Bitcoin network via colored coin implementations. So that was a nice little trip down memory lane. The skepticism that a lot of people had around Ethereum in the early days because the mental model,

was talking about MasterCoin. That was interesting. The Polo stuff was fascinating. I mean, Polos, someone could probably write an entire book about Poloniacs, but just some of the characters involved in the Polo management over the years and how they ran that business. That was probably the biggest surprise to me is just kind of how strange that organization was.

I haven't read the book. however my understanding is that it's not very flattering towards Charles Hartz-Chanceon is that correct I so that's what all the you know there's a lot of tweets about that and he seemed to be pretty miffed about it but it seemed like a very factual representation of what happened I mean there's a lot of quotes in there from people that were engaging with Hoskinson he was he was just that maybe like the facts

are not flattering right is that could that be the case that merely listing the facts is not flattering. Yeah, I mean, he put himself out there and he was the CEO of Ethereum for a while. And, you know, his management style, there were a lot of people that are on record in that book is not really enjoying that management style. And he wanted to build a centralized corporation. And a lot of people didn't want to do that. And obviously, they didn't go in that direction.

Let me give you a little anecdote. The number one coin, the people. people cab drivers and Uber drivers, shill to me in this city is Cardano. That's unbelievable. For what it's worth. I mean, I don't meet a lot of people that are enthusiastic about Cardano,

but I have met some over the years. And most of the people that are really into Cardano are big YouTubers. Like they follow the Cardano YouTube presence, and they follow quote unquote, Dr. Charles on a YouTube platform. He seems to be pretty captivating on that forum. Yeah, I mean, I guess not everyone gets their news from on the brink. Are there other platforms for news out there?

Yeah, I don't know. Back to this book thing, briefly, I think there would be a great book to be written just around like how companies were wrestling with blockchains in the early days. So all of these private blockchain hype cycle type of things that happened with R3 and digital asset holdings and, you know, the countless other attempts to just take something that existed in the real world and slap a blockchain on it. There's a whole other story there around just the misadventures in that ecosystem and

how people were wrestling to figure it out. So call to authors. There's a book out there. There's just not that many high-quality books about the crypto industry. There have been some good ones. But there could be so many more. There could. I mean,

Defi itself, like there's probably going to be someone that catalogs the time period that we're living through right now. And, you know, when compound launch, like that, that's probably a book there, right? Like,

there's a lot of interesting information around some of these new protocols launching on top of Ethereum and even some of the predecessors that were attempting to do some of these things like Ether Delta. You know, you can look at Ether Delta is really the, maybe something that inspired Uniswap. The problem with writing about any of this stuff in a formal way, like I've been involved in a couple books as a chapter contributor. It's like there might be a year in like after the content is written before the book is actually published.

So it just ages terribly and your content unless you can make it evergreen goes out of date. So if you're writing about anything remotely current, it's hopelessly out of date by the time it appears in print. Yeah, I think that's right. I don't know. I thought Johnny Beers' book about the block size wars was fantastic. There's probably more to say about that drama as well. So there's a bunch of these niches within the cryptocurrency community that you could really go deep on. I think Ripple would be a great book.

I mean, I don't know if anyone has access or ability to write a book about Ripple, but just the whole saga, that would be a fascinating book. Yeah, I'd love to see what's the same John Carrey you. Theranos investigative journalist write that book about Ripple. You'd like to have him do that one, huh? Yeah, uniquely talented guy. I mean, the Ripple story is a true saga. Actually, speaking of Bimax research, they do have some great pieces discussing the history

of Ripple, which has gone on. Ripple's been around since, I want to say 2012, but even before that it existed. It's been around for a very long time. I kind of think Ripple's going to win. There was a story that broke on Friday. I don't even know if it was a big story, but they won some minor court decision, some technicality or something.

And the whole Ripple Twitter army went nuts, loving it. So it seems like that battle with the SEC is going to be waged over a year's time, rather than not anytime soon. Will that be figured out? Yeah, it's quite amusing how, the Ripple Army has now just, their main occupation is just following the facts of a case against the SEC very closely as if, I mean, it's kind of incredible. I guess if they win the case,

it is very positive, but you don't often look at a case of, you know, violating securities laws as like something exciting and good to follow as an enthusiast of like the company that's being prosecuted. You don't, but the industry probably should be watching this pretty closely because if Ripple was to win this, who knows what precedent it would set? Of course, they could win it on some technicality or something. But there'd be a lot of other things that would feel like they were not securities, a lot of other projects that would feel like if Ripple can win, then we certainly could win. But I don't know if the standard should be set that low, really. I mean, there probably is a world where Ripple was.

non-registered securities offering. It may well have been. And it may well be the case that that was an appropriate designation. You know, and like the question is, is it a really an all or nothing thing where it's an all, everything goes and, you know, for the sake of, you know, trying to reduce the amount of scrutiny that the industry gets, we have to embrace the ripple model, you know, as, as sufficient. I mean, that seems extreme. It feels to me like maybe the middle ground does not include Ripple's issuance model, which completely centralized, if we're honest. Yeah, yeah, I think so.

The one thing that's for sure in that case is just the billable hours must be staggering on both sides. I mean, the amount of time spent on that one case alone, you look at the lawyer, just the army of lawyers that Ripples hired. And I wonder how many people on the SEC are working on this. I mean, there's, that's a big, big case. This episode is brought to you by Compass Mining. Compass Mining is the world's first and largest online marketplace for Bitcoin Mining hardware hosting and ASIC reselling.

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Of course, alumnus of on the brink, brink alumnus. asking some tough and pointed questions of the SEC basically asking them why they've been kind of harassing crypto startups for quote-unquote voluntary request for information implying that they're engaging in overreach by pestering crypto startups

with pretty onerous quote-unquote voluntary requests which I guess everybody probably feels compelled to answer. So certainly pointed words from a significant bipartisan group of representatives in that letter. Yeah, I was pleasantly surprised at this. So there's a lot of pointed questions to your point. So I'm going to just rattle off a few of them. So over the past five years, how many voluntary document requests has the SEC sent to individuals, project teams, entities, or the like regarding actions related to cryptocurrency digital assets or other areas of blockchain technology. Year by year, what is the average timeline for each company

to respond to these requests? Please provide an approximation of such a breakdown is not available. Has the SEC conducted a cost-benefit analysis to determine the fairness and efficacy of its requests? When the document is requested, does the SEC indicate to the firm whether the SEC has already launched internal investigation into the company? So I could go on and on, but common common sense questions. So I presume that the response is has to be public, right? The SEC will come back with a public response, I hope. Well, I don't think it's polite if you get a letter from a bunch of members of Congress to ignore it.

I guess you could, but it doesn't seem like the best career choice. Hopefully we see the correspondence here. Representative Emer is clearly one of the most active friends of the crypto industry in Congress, if not. I mean, alongside Cynthia Lemus, I think maybe the most strident defender of the cryptospace in Congress. The list of defenders is growing, though. So to your point, there's eight Congress people on this list. It's bipartisan, so there's Democrats and Republicans here. And I think we're seeing a lot more Democrats start to wake up to this. So Politico had a really interesting story this week called Elizabeth Warren's anti-crypto crusade splits the left. And it highlighted that there's growing tension in the Democratic Party because there's a number of Democratic Congress people that see this as a political issue that's going to impact their re-elections.

And so they see being pro-innovation on crypto is something that could help them. and they don't want to run into this quagmire, really, that Elizabeth Warren and the like seem to be really hell-bent on shutting down the industry as much as they can. So I think this is a good tension to have. If you're someone in the crypto industry, it's great. You know, having some natural dialogue here

and not having one party anti-crypto and one party pro-crypto, this should not be really a political issue. I mean, I think monetary and questions are inevitably going to, be political, especially if one camp is more intent on politicizing finance than the other. So that's just the reality. But, yeah, I mean, you look at the left. Darren Soto, Florida representative, very active in support of the industry.

Rokana, progressive out in California, super engaged, super supportive of the crypto industry. actually went on Pomp's podcast recently, which was an excellent episode. We're certainly welcome to come on on the brink, if you're interested, join the very fast-grown cohort of sitting members of Congress that have done this show. It's growing at a rate of infinity percent because you went from zero to one. So, yeah, there absolutely are progressives and Democrats that are. are active and engaged and, you know, willing to learn about the reality of the cryptos space. So it's certainly not a monolithic.

On that regulatory point, so decrypt has a good article this week. We can put it in the show notes around the Lummis bill. And so this bill is going to be called the Responsible Financial Innovation Act. It's still being drafted. But Lummiss's staffer, Tyler Lindholm, revealed a bunch of the things that are in it. And we've talked about it. So I won't into too much detail, but there is a tax exclusion of on the up to $600. So the thing that Coin Center has been pushing for around Dominioness exemption. It's going to really codify under the UCC what a cryptocurrency is. It's going to define the word broker, make it clear, you know, who is and who is not a broker.

So it's going to clean up some of this infrastructure bill stuff, hopefully. And I just hope it's viable. I don't know the politics of these things, but hopefully this is a bill. that has some legs and can get some bipartisan support. There's quite a few bills floating around. I've been told that the law misses bill will be bipartisan. Of course, that doesn't guarantee. I think I don't know what the yield is or conversion rate for a bill,

but a lot of times bills are introduced just as a way of sort of stoking debate and things like that. I'm sure it's in the low single digits in terms of the odds of a proposed bill actually becoming a law, maybe even less than that. But there are a bunch of, you know, crypto-focused bills percolating around those bills that would undo the broker language from the infrastructure bill. I think that's the Keep Innovation in America Act. There is the Digital Commodities Exchange Act, which would basically make it much more clear who regulates what in terms of the breakout between the CFTC and the SEC. And then we have Lummiss's bill.

I think maybe these might have to wait until the midterms to go through. But either way, there's a huge amount of activity in Congress and much more optimistic about 2022 as opposed to 2021, where we only took L's that year. I think the big question is just who is going to get oversight of the crypto commodity spot market. And that's the big question that would really unlock some of the potentially more exciting things that could happen in the institutional channel. So it might be that you're not going to get a Bitcoin ETF until there's clarity on that issue because it seems like the reason why the SEC has not approved this is because they want to just

control the whole thing. So Jan Van Eck was on Pomp's podcast this week. And he's the founder of Vanek. They have an ETF proposal. He just outright came out and said it, you know, basically that the facts and circumstances should support a spot Bitcoin ETF being approved. but the reason that the SEC has not approved it is because they want oversight of the spot market and they want to land grab that and it's not there.

So they clearly don't have oversight of the crypto commodity spot market. And so it's a political issue. Yeah, I mean, as we've sat on this show many times, we believe it to be a political issue. There's no reason the SEC should have sole or even partial oversight over a spot market for commodities. That wouldn't make any sense. Speaking of legislation, the EU had a little drama this week. Their mica legislation, which stands for markets and crypto assets. So the EU's mica legislation had a provision banning proof of work based cryptocurrencies, believe it or not.

So not just saying you can't mind, but also saying you can't even host markets. for these coins which are mined. That's embarrassing. That's tough. That's crazy. Absolutely ludicrous. I mean, they know that like, you know, physical commodities, like steel and aluminum have the like emissions associated with their mining and production.

Would they ban those things too? I mean, who knows? Like, does this thing have any legs? We're not experts on the European political climate. So it, um, the language. that was due to ban crypto assets that were created or had proof of work associated with them, was struck from the final bill for now

by 30 to 23 vote. Ooh, that's tight. And so it was close. There was an alternative legislative proposal that will be presented by January 2025. stating something, quote, with a viewed, including in the EU, sustainable finance taxonomy, any crypto asset mining activities that contribute substantially to climate change mitigation and adaptation. Don't know what that means.

But basically, we dodged a bullet as far as literal, you know, proof of work asset exchange in Europe. It wasn't just about, you know, banning mining or something. There's very minimal mining that occurs in the EU, Sweden. hosts some mining, I think probably with exclusively sustainable energy. I don't think there's really many, well, Georgia, the country of Georgia, obviously that's where Bitfury was originally founded out of. So there's like some very limited mining that occurs in the EU, but this was actually much beyond that. It was about the trading of the asset. So basically the analogy I would draw as like, it'd be like if the EU banned the ability to buy,

gold jewelry because some of that gold was mined in China with coal-powered electricity or something. And by the way, gold's extraction footprint from an emissions perspective continues to exceed that of Bitcoin. So I think the analogy is not even an analogy. It's basically the same thing. So, I mean, a ludicrous thing for the EU to attempt, I think they should be reconsidering some of their like green stances, given that that ended up compromising all. of their security because they are unable to tackle Russia as a consequence of that and their failed renewable transition. So it doesn't really seem to be the time for them to be digging in their heels and doubling down on that kind of attitude. Yeah, it's kind of scary to see these

type of things floated out there. So I'm glad that that didn't pass. But maybe you'd see something like that reintroduced. I wouldn't shock me if eventually they did, you know, I mean, it'd be a complete pretext because it's not like they ban the exchange of other commodities that have an emissions impact. Every commodity ever does. Whatever, you know, you name it. Concrete has a huge, like they're not going around banning markets and other things that have emissions impact. So it would be a completely pretextual. It would just be a way to sneak into Bitcoin ban. So turning the page a little bit here, Mark Zuckerberg was down at South by Southwest and he made an announcement that Instagram will be adding NFTs to their platform.

What do you think this will look like? Similar to Twitter in terms of just avatars? Or do you think it's a deeper integration? Well, Instagram is a huge e-commerce platform. So you could conceivably imagine an NFT issuance platform, a minting platform. But at a minimum, you would have to think that it would involve verifying ownership of NFTs the same way that Twitter has it.

Because Instagram is a place you go to flex. and NFTs are the, you know, digitally native flex devices. It's smart. I mean, it's definitely a smart play. There's a lot they could do there. I mean, you could do everything from brand loyalty, living receipts.

You could do something as simple as the avatars, proving ownership. It's clearly where the puck is headed, so I'm not surprised to see Zuckerberg pushing them there. Obviously, he gets it. I mean, he has had much bigger ambitions. with Libra than he was allowed to execute on, but maybe this is just a consolation. Yeah, there's just nowhere that is recognized as the default place to show off your NFTs right now.

Instagram could be that. It's the default place you go to show off other things. Other stuff for sure, yeah. Yeah. So why not your digital property too? There's a huge market opportunity there to be the, you know, the platform on the internet where you have a trophy case. and here's all the cool stuff I hold. Something interesting that just dropped, I think, this morning,

and we're recording us on a Wednesday. So if anything happens Thursday, which seems to be, you know, huge quantities of news seem to be happening all the time. So it's probably likely. But anyway, this morning, Wednesday, Ukrainian president Zelenskyy signed into law a bill legalizing crypto assets.

and so kind of undoubtedly accelerated by the fact that they received $100 million in donations in crypto format. So interesting what you do when you're motivated, Ukraine was already one of the most sort of pro-crypto countries on Earth by measure. If you look at any of those measures of adoption, yeah, it's funny what a $100 million incentive will do to you. Yeah, I guess, I mean, I didn't know that crypto is not legal. in the first place in Ukraine. So maybe this is just making it easier for companies to get bank accounts and be integrated into other types of financial services.

But they've made good use of that $100 million. They've been out there buying all sorts of defense equipment. Yeah, I guess, yeah, maybe crypto wasn't explicitly illegal, but certainly now it is explicitly legal. There's other stuff around requirements, registration for, you know, crypto service providers and things like that. It just, it's hard, I think, now to stomach any talking points by no corners that,

you know, there's no genuine use. There's no genuine adoption of this stuff. I mean, there's just no ability by opponents of the crypto industry to say this anymore. Certainly not since Ukraine, you know, received $100 million in crypto donations over the period of three weeks. I mean, as far as I'm concerned, the debate is over. Yeah, that makes sense. Russia, by the way, lost another general this week. So the losses are mounting, obviously on both sides in that situation. Not that this is like a military strategy podcast, but one interesting thing that I saw is the Ukrainians are making good use of these really cheap

Turkish drones, which are like orders of magnitude cheaper than, you know, the U.S. Predator drone, for instance. And because this technology, you know, batteries got cheaper and this technology got miniaturized, it tips the scales back in favor of, you know, the asymmetric defense, basically. Because you can use a $10,000 drone and destroy a multi, many multi-million dollar. piece of equipment, which was Azerbaijan actually used similar drones to great effect in the war with Armenia they had recently. Which is interesting to see the sort of like the core battle logic change again on it, you know, because of a technological innovation or really just because

making drones is cheap now. One of the many fascinating things about the past few weeks here. Switching gears a little bit. We're getting some inbound on the socials around. who has better facial hair right now, you on your Tucker Carlson appearance or Alex Thorne on his real vision appearance with the long beard with Alex Thorne, the head of research at Galaxy. So, you know, I'm just going to go out there and say that Thorne might have you. Oh, yeah. I would grow a beard if I could. I'm not really a competent beard grower. I will say with that Tucker appearance, the story behind that was I actually did that inside a van. parked on a street in New York.

So it was meant to be in studio. And then last minute they pivoted and had me head into an unmarked van that just parked outside with a camera in it. And that's where I did the appearance. You're in and out. It was good. It was like a 90 second hit. It was very brief.

I think they, you know, first time, they're like, yeah, we'll just jam him in in front of the ad break. Next time we'll see if we can maybe advocate for like a five minute. slot. Yeah, you got to get your voice out there a little bit more. But the mustache got a lot of attention and, you know, the facial hair in the crypto industry, people need to understand. That's a thing, you know. It's most of the people that came around talking to us about blockchains back in 2014 when I was at Fidelity. They kind of looked like they were right out of ZZ Top. I think it's a sign of, you know, financial and professional autonomy is being able to

style yourself however you like. Yeah, I don't know. I sometimes when I go with the beard, I shave it when we head into a fundraise. Some people trust you a little bit more if you don't have the facial hair. So you've got at least a year's time now where you can do whatever you want. Yeah, and I might just try to replicate the thorn beard here. So I think that that wraps it. We got two more episodes coming on next week. We're on this three-week cadence. So don't know what they're going to be yet, actually. Have a safe and healthy weekend, and we will see on Monday.