On The Brink with Castle Island - Weekly Roundup (04/01/22) (Greenpeace and Chris Larsen attack Bitcoin, Axie sidechain hacked, the ECASH Act, SEC goes after AMMs) (EP.304)

Episode Date: April 1, 2022

Nic and Matt return for another week of news and deals. In this episode: Mora et al rears its head again Chris Larsen and Greenpeace team up to try and eliminate PoW from Bitcoin  Who is the protagonist in the Ripple vs SEC lawsuit?  Rep. Stephen Lynch introduces the ECASH Act  Axie Infinity suffers a $625m hack   Is there any debate remaining about the utility of Bitcoin?  Circle selects BNY Mellon to custody their own assets  Grayscale mulls a lawsuit against the SEC over their continued ETF disapproval Can the government create a truly private CBDC? Rep. Tom Emmer and Sen. Ted Cruz look to ban CBDC creation  Is the SEC obliquely regulating AMM LPs out of existence?  When will Bitcoin be sovereign scale?  Seed stage bets on aspiring members of congress Content mentioned: Martin Wolf in FT, A New World of Currency Disorder Looms Bloomberg, Ukraine's Crypto Banker Describes how the War is Changing His Life Bloomberg, Crypto Miners in Texas Face Approval to Energize Hurdle Sponsor notes:  Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Learn more at fireblocks.com Subscribe to the Coin Metrics State of the Network newsletter

Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. This episode is brought to you by Coin Metrics, and it's also brought to you by Firebox. More on those companies later in the episode. Let's hop into the Coin Metrics Minute, this Metrics Minute, brought to you by Coin Metrics. This week, all about mining. Bitcoin's hash rate reached an all-time high of 200 XA hashes per second, when measured on the 30-day moving average. An Exa is the prefix for quintillion or 10 of the power.

of 18. It's a lot of hashes. Ethereum's hash rate has been growing steadily. It's close to breaking a thousand terra hash per second. Remember, you can't compare Ethereum and Bitcoin hash rate directly because they have different hash functions. Bitcoin miners have generated $3 billion in revenue in 2022. Ethereum miners outstripping them at $3.7 billion. And the total Bitcoin donated to the Ukrainian government has now passed 390 Bitcoin. That's the coin metrics metrics minute. So you got a haircut. That's a hell of a haircut. You just that's to start Bitcoin conference season, huh? I mean, look, it's getting hot here. I can't be walking around with a lot of hair encumbering me. So you like I will say, you know, this is, we're not doing a podcast with video, although we're going to maybe move in that direction.

Rumors are that there's a podcast studio being built, you know, on each of our respective sides here. But for those who are listening on audio, which is everyone, you don't have. of hair on the side of your head right now. Yeah, I mean, look, I went to my Cuban barber and like, she doesn't speak a lot of English, to be honest with you. And I asked for like a fade and this is what she did. So, you know, I'm going to have to live with it. You kind of look like a pencil, like that you have an eraser on the top, but there's like nothing on the side. Wow, okay. All right, getting roasted over here. It's, well, you'll probably have a little bit grown up by the time conference season hits next week. So be on the lookout for Nick with the new haircut.

If you want to discuss these matters, head into our official, I want to say subreddit, but it's not. I don't know, community on GM.xyZ. It's a thriving community. We have 110 subscribers. It's a, it's we put out the call last week and some of the best and brightest on the brink listeners showed up, became GM officiantos and just hopped right in. So look, you've missed your chance to be in the first hundred members of Brink Nation on GM. They're probably going to get a, you know, a special trinket, a digital trinket. There's a meme up there right now. There's a Will Smith, Chris Rock meme.

All right. Narrate the meme for us. It's Nick Carter is Will Smith slapping Chris Rock. And Chris Rock is Mora at all. And Mora at all, of course, is a reference to this terrible, terrible paper. that said that Bitcoin will increase the, what would they say, two degrees Fahrenheit, increase just the, like how hot it is in the world. And it was thoroughly, thoroughly debunked.

But of course, now Chris Larson is out there peddling it with Greenpeace, talking about this paper that was just complete trash and immediately debunked. That's a great meme. That's the first meme in our little Web 3 community. The Greenpeace Chris Larson thing, I mean, pretty fired up. And you too, actually, you had to be your soul. spicest ever tweet about it. I just think, I mean, I don't want to go off too much on a tangent here, but Chris Larson, man, I, like, ethics, I don't know, like not, I don't have a lot of positive

things to say. I mean, like, the guys, like, being sued by the government for, like, allegedly selling an unregistered security. I mean, where's the moral high ground? Like, how can he lecture us on, you know, the externalities of Bitcoin? What about the externalities of Ripple, man. That thing destroyed so much value for like so many rubes out there. The part that really made me upset. So for those of you who are not familiar, Chris Larson is one of the original people behind Ripple. He was the CEO of the company. Ripple is the company that issued XRP, which is a allegedly an unregistered securities offering that the SEC is coming after them for. Chris Larson's also being personally prosecuted. Anyways, Chris Larson is

spending $5 million with Greenpeace to come out with a series of commercials taking aim at people in the Bitcoin ecosystem and recommending that Bitcoin just change its proof of work consensus to something that is more eco-friendly, completely unrealistic from a technical perspective. The idea has no merit. But the part that actually really upset me was that some of these ads are going to be targeting people like Abby Johnson and Jack Dorsey and Elon Musk that are very prominent in the Bitcoin ecosystem and that have actually done great things and built amazing. businesses and that are like these actual entrepreneurs building on this public protocol and to just

have someone like Chris Larson just take a pot shot at you. It's just so ridiculous. So the substance of their critique is also wrong to be clear. So they cite some like very flawed academia. And it's the craziest thing ever because it's like so they spent five million dollars on this campaign, probably a couple million bucks on this PR company that helped them make the snowsy website. But they couldn't spend 10 minutes like making sure that the. sources that they're relying on are credible. Like, they couldn't read the article. Like, if you read the more at all article, the one that claims the Bitcoin's going to warm the climate by two degrees, it's obvious to anyone with a brain that the assumptions are completely

unrealistic. Completely unrealistic. So what, they couldn't just like read. And that's the quote unquote fact number two on the website that they created. Why didn't they just read the very academic article that they're actually citing as justification? What is the game here? Like, does this guy think that the SEC is going to just say, hey, just kidding, this wasn't an unregistered security and we're influenced by your crazy public campaign with Greenpeace here to just cast doubt on whether or not Bitcoin should be a thing? Like, what is the play? I mean, I've seen him in action. Like, I've actually seen him privately lobbying, you know, various high profile individuals, you know, against proof of work and against Bitcoin. The craziest thing, I think, is that he also thinks it's immoral for Bitcoin to mine with completely renewable energy sources because he thinks that there's like an alternative use

for that energy. And so in his mind, because proof of work is such a waste, it's wrong to even use completely decarbonized energy to mine it because there's always something else you could be doing with that energy, according to Chris Larson, the energy expert. But of course he's wrong. Like if the market had some other alternative,

and abuse, it would be using it. But the fact that there's so much stranded energy available speaks to the contrary. In certain nodes in Oklahoma, there's 25% of hours in 2021 were negatively priced. The energy was. So, like, there's a vast amount of stranded underutilized energy out there. The miners are scooping up and nothing else is. Wait till this guy finds out about closed dryers and Christmas lights. I mean, this guy's proposal to eliminate these just completely useless things from our lives. I just can't wait to hear about them. And I guess it's not even about uselessness. I think it's just people take umbrage at Bitcoin itself because Bitcoin is clearly useful. It's used by probably well over 100 million people. You had this interview that came out today

with the founder of the Ukrainian exchange talking about why Bitcoin and cryptocurrency was so useful specifically in the case of Ukraine to help fund the government to get liquidity for regular folks when the traditional banking system was just not working. So there's no question of usability anymore. Like that question has been resolved in our favor, right? There is utility. That debates over. Well, I mean, I was saying it in jest about the clothes dryers in the Christmas lights because it's like, obviously people think that they're worth something. They're spending money to put them in their houses. and they're spending money on the electricity. So it's a free market.

You can do whatever you want. If you want to have a clothesline in your backyard, you're more than willing to do it. So it's just that got me fired up this week. Yeah, that was a tough one. We had a good podcast week. You sat down with Michael Son and Sean and Craig Somm at Grayscale to talk about their filing to convert GBDC to an ETF

and their potential plans to sue the SAC. did I hear that right? Yeah, so it's always fun catching up with anyone in the DCG umbrella of companies. And Grayscale has been really pushing the envelope here in terms of this campaign to get people to write letters around the approval of the CTF product, which would be great for the industry. We didn't get too deep into it in the podcast, but they came out the same day that the podcast was released with some coverage.

I think it was in Bloomberg, talking about, the Administrative Procedures Act in the fact that there might be grounds for a lawsuit, gray scale against the SEC, to try to get this product approved. That'll be interesting to see. Part of that hinges on the fact

that the SEC approved the futures-based ETFs, but has not approved, obviously, the spot product. So there might be some grounds. And one of the legal opinions that was submitted here basically said that there was grounds

for a lawsuit. So we'll see if that happens. Well, I was listening back to some of our oldest episodes recently. I guess just for the purposes of nostalgia. And a very common topic of conversation on those early roundups was the premium of GBDC

and why it was unsustainable. Actually, there was one episode, I think it might be 36, where I was convinced the premium was going to go away and you took the other side of that opinion. Did I say it was never going to go away? you thought that the premium might just last for forever yeah i mean there's there's some structural reasons why it was there obviously in the first place but um more competition came to the

market right and so it uh you know and a lot of supply got created on a lot of supply there product side of money and there was obviously some sell pressure there that thing is that it's still at a crazy discount it's really you know i think gbd is gbdc the most discussed topic on this show? Aside from like the assets themselves. Well, I think you know, SEC rule 15c3-3-3 is pretty well-discussed topic. People know where we stand on that one. It's been covered.

We've covered it. Yeah, it could be. Nothing ever changes there. You did an episode with Ben Gagnan from BitFarms, another part of the mining miniseries, ongoing mining miniseries. That might be like the longest running miniseries we have. have. Yeah, it's a macro series. Yeah. Now, but Matt, as a native French speaker, you should be able to say ganillon. Gagnon. Gagnon. Is there, do you pronounce a Gagnon in English? What's the, I want to appeal to more of our,

you know, the Americans. We're partial French speakers so we can say Ganyo. Ganyo, which means the winner. We win, basically. We're winners. So Bitt Farms is interesting. They mine with Hydra in Quebec. Speaking of stranded renewable energy, a bunch of heavy industry left, and then they stepped in to kind of fill the gap. Pretty interesting episode also because Ben talked about why they're not moving into Texas, or sort of at least not in the near term. So looking elsewhere for fresh mining territory, which is quite relevant as actually Texas came out just this week with some new guidance saying large, loads are going to have to kind of get pre-approval to turn on. They're going to have to

meet certain qualifications. So it could well be the case that Texas is actually maybe slightly less hospitable to new miners. Yeah, that was a good episode. So we'll continue with the mining macro series. Always fun to hear people's perspectives in that category. You want to hop into some deals? All right. So tons of deals this week. First up, Cross River Bank, their cryptos, first banking company. There is 620 million from Andresen Horowitz, Horowitz, Eldritch, Industries, and others. You'd love to see these banks get in the mix. Talk about an industry that is right for disruption. Try opening up a bank account if you are a crypto-focused startup. Just put the word blockchain or crypto in your application and be prepared to wait for a very long time. Cross River,

signature, Silvergate, these guys are onboarding a lot of new customers just because they are open for business to the industry. So next up, we have Coinbase. They are reportedly looking to buy Mercado Bitcoin, which is Brazil's largest crypto exchange. They apparently have 3.2 million customers. That would be a big acquisition. So this looks like it was a locally reported story. So we'll see if that comes true, but it would be a huge, huge acquisition for Coinbase.

Next one up is blockchain.com. They have apparently raised an undisclosed sum at a $14 billion valuation from Lightspeed and a number of other investors. So monster raised there for blockchain.com. And you'd have to think that that might be one of the last rounds before they go public. Next step, we have layer zero. They're an interoperability protocol. They raise 155 million from Andreessen, FTCHA, and some others.

The next one is helium. So this is the decentralized telecommunications. network. They've rebranded to Nova Labs and they've raised $200 million from Andrescent, Deutsche Telecom and others. Nova Labs. Do you like that better than helium? I like helium. I like helium actually as a name. I wonder if there was like a trademark issue there. Next up we have the Avalanche Foundation and open that's open spelled with a three. It's a web three social media platform. They launched a $100 million culture catalyst. fund to invest in entertainment and pop culture creators building on avalanche.

That's a big round. Next one up is Salad. This is a compute sharing network for the Web 3 ecosystem. They have raised $17 million from Left Lane and Origin Ventures. Then we got Blur, which is an professional trader-focused NFT marketplace. They raised $11 million from Paradigm and others. Next up is Cow Protocol. all. This is, of course, the creators of Cow Swap Decks, and they've raised $23 million from their community,

ethereal ventures, and blockchain capital. Here we have a ecosystem fund. The H-Barr Foundation, the NAD behind Hedera Hashgraph, has announced a $155 million fund to incentivize Defi development on Hedera. Believe it or not. Hidera, yeah, it's Hedera. There's a lot of smart contract platforms out there. A lot of smart contract platforms. Next one up is Gumi Cryptos.

This is the fund that we're in a couple deals with these guys. They raised $110 million for their second crypto-focused venture fund. So congrats to the team at Gumi Cryptos. Next up in mining miniseries-related news, Greenidge, the New York, based mining firm that we had an episode with a while back. They've announced plans to triple U.S. operations after securing $100 million in debt financing. Next one is ZK. Lend. This is a money market protocol. They're building on Starknet. They raised $5 million from Three Arrow's Capital and Starkware. Then we've got Burrow, which is a money market building on NIR. They raise $5 million, very similar deals

from Dragonfly, Parify, and others. Burroughs, yeah, that's a very, like ZK. Landon Borough right next to each other. Almost exactly. Yeah. Hopefully our intern got that right. That could be a typo, you know. It'd be a real shame if that was wrong. Shout out to the intern.

And then a couple more here. So Battleground, which is a play to earn gaming startup, they raised 4.8 million from Andresen and others. We'll talk about play to earn in a second. and almost there. Altiverse, their metaverse gaming startup, there is 5 million from Binance. Second, the last one is Cross the Ages.

This is an NFT collectible card game. There is 12 million from Ubisoft and Anamoka. And then we have Crypto Raiders, which is a NFT-based RPG. They raise 6 million from Defiance Capital, Delphi, and others. The deals, they keep on coming. This was a big all week of deals.

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the act that made absolutely no sense and went nowhere, didn't get any approval, but he wanted to turn everything into a security. he's at it again. This time it's not as overtly hostile, so I didn't really get that worked up over it, but he has introduced a piece of legislation. It's called the Electronic Currency and Secure Hardware, E-Cash Act. And if it passes, it would task the U.S. Treasury

with piloting an electronic version of the dollar. They would want to have privacy preserving features as part of this, kind of a physical cash analog. and they want to have this done instead of other alternative methods for CBDCs. And Rohan Gray is actually the guy who wrote this act, similar to the state. Yeah, I mean, Rohan is up to his old tricks. So I tried to not get to work up over this. I mean, so it's interesting because Rohan claims to be pro-privacy.

I don't really understand that, you know, trying to get the government to gain more control over cash itself does not seem to be an attitude. which comports with being pro individual liberty and privacy. You know, like I've never met, you know, encountered a government program which gives the government more power and also somehow restores in like sovereignty and autonomy to regular citizens. So this whole thing seems like very contradictory. But yeah, in theory, eCash is a, actually it would be like a hardware-based. product, whether a credit card or some other device, it would apparently not require internet to operate.

It would be, in theory, private, so they claim, peer-to-peer, anonymous, apparently, and retail-focused. And of course, you'd be transacting dollars. It sounds a little bit fantastical to me. Like, it doesn't seem like a real technology. but I think the biggest problem with it is just that I just don't believe that the government would create a version of digital cash, which actually has the qualities of physical cash in terms of privacy. And additionally, they do mention that part of the plan would be to impose transactional limits and other such things on the protocol or the network. So, you know, already they're thinking of ways to make it less. like cash and make it more controllable.

Yeah, I didn't get too worked up over this because I just don't think this has a real shot of getting passed. So, I think we'll, no, it has none. It has none. But, you know, it's all, it's all weirdly interconnected. You know, you have the same group, really, of individuals and policymakers. It's pushing CBDCs or eCash now, which is kind of related. they're just pushing for more state control over finance.

And then almost exclusively, the members of that group all are generally against stablecoins, which is the private sector's version of creating digital bare instruments that track the dollar. And they're pretty, for the most part, vehemently against it. So paying attention to this stuff matters because it also kind of affects the fate of stable coins too. I mean, I just think that Stephen Lynch is a lot of priorities up here in Boston. Like we got potholes on Route 3A. That is a problem. And we got all these Dunkin' Donuts that got rid of the chocolate stick.

That's a problem. There's like some pressing needs in the constituency. People don't want to hear about this e-cash thing. Like focus on the price. There's a lot of traffic. There's other things that this guy can be doing. The parallel or alternative to this that was also playing out, is Ted Cruz is apparently now teaming up with Tom Emmer on a bill that would actually ban the

creation of CBDC. Yeah, he saw that and he just said, I'm going to take the other side of that trade. I noticed that, yeah. He was pretty quick to get on that. Quick reaction. So we got both strands. Frankly, both of them, neither has a likelihood of passing for now, as far as I can tell. But there's, yeah, those are the yin and the yang of CBDC.

I just don't. Yeah, I don't think Stephen Lynch's constituency really cares about this. I think you've got to focus on what people care about. You're going to get reelected if you can solve the traffic issue. You're going to get reelected if you can get some more buildings built. Like that's try to focus on the real stuff here. All right, let's hop over to Axi Infinity. This is, of course, one of the largest blockchain-based games in the entire world. They have a side chain. It's kind of a private permission-dish side chain called the Ronin Network. And it was apparently exploited to the tune of $625 million worth of Ethereum and USDC. This is like one of the largest hacks in the history of hacks. Thoughts. Yeah, I mean, this is the biggest defy hack ever, I believe. And the funds were not, you know, returned immediately. That sometimes happens, believe it or not. That didn't happen here.

So they might actually be sort of out of luck. there's a lot to talk about I mean the hack wasn't discovered for like almost a week that's crazy how is that even like let's talk about that first how like how does that happen who's monitoring these contracts

why why doesn't that exist I don't know that's insane to me the funds were apparently held in a five of nine multi-sig but it was really more like a one of nine multi-sig because the team I think Sky Maven had four of the signatures, and then the Dow that was associated with Axie had one of the signatures. The four got compromised.

Turns out the Dow's signature could also be made by the SkyMaven team. So it was really just a one of nine multi-sig. All they had to do is penetrate one entity, and then they were able to sign. So like the notion of admin keys and multi-sigs, it didn't really get a lot of discussion. It hasn't really been covered that much. But we're talking about billions of dollars at stake in these things. And there's just no established best practice.

There's no real disclosure around it. A lot of teams are really secretive about it. That's something where there's significant room for improvement as an industry. Well, you wrote the paper with Linda Jang talking about admin key kind of exploits and some of the sensitivity there and the fragility in the system. That was like half a year ago. And you know, at the time, there was virtually no mention in the academia about that as a kind of critical risk factor for defy. I think it's going to be in a lot more people's radars now.

But the price didn't really move that much. That was a crazy thing. A massive hack. It was down like 10% or something like that. I think it's kind of people assume that there's very well capitalized entities that can step in and make these things whole these days. following the wormhole precedent. I don't know if there's anybody that has 625 million that can shore up AXE here. And frankly, that system was in distress already.

They had to rejigger all of the play-to-earn mechanics and the inflationary model. It was already suffering a little bit, and this is definitely not going to help. Just crazy, crazy news. All right, next one up is Circle. So, of course, the issuer of the USDC stable coin. They've selected Bank of New York Mellon as the primary custodian for USDC's reserve assets. That's a big deal to me. To see Bank of New York Mellon moving aggressively into the space, this is the largest custodian

in the world, I believe still, unless State Street overtook it with the BBAH acquisition. But in any event, it's one of the largest in the world. And to see Boney moving in aggressively here, we all know that behind the scenes have been hiring some just crazy talent over there. So it's great to see them in the mix here. What a deal for Circle, too. I think that that looks like a great partnership. Next up, Microstrategy has raised $205 million in debt financing from Silvergate.

For what else than just to buy Bitcoin? All right. So we got to talk about this. So micro strategy has set up a subsidiary. It's called macro strategy. And the way that they've done this. So keep in mind that they have been raising convertible notes and equity dollars to buy Bitcoin, historically. That's how they've bought all their Bitcoin to date. What he's doing now is taking out a loan

against Bitcoin collateral to buy more Bitcoin. So he has pledged 800 million in change of dollar of Bitcoin with Silvergate with a third party unnamed custodian and Silvergate is giving a $205 million US dollar loan against that Bitcoin collateral with the 205 he's going to go out and buy more Bitcoin. And so the kind of the risk here, obviously, is just like the price of Bitcoin collapses by 80%. And he gets margin called on that. I guess he's thinking that that's not going to happen. So I don't think that this is the type of guy that goes out and does one of these things. If you recall, he started pretty small with the equity type of deals and started raising more and more converts. If I had to guess, this guy is not done. He's going to start to lever up the balance

sheet and buy more Bitcoin. Well, maybe he feels that Doe Kwan has thrown down the gauntlet with Tara's purchases of BTC. It's kind of the same thing, right? He doesn't want to lose his throne as the top individual holder. I mean, well, what's next is maybe he starts to lend out some of the Bitcoin, maybe starts to make a little bit of passive income off of it. There's a lot of things you could do if you're sailor here. And we will be talking more about this. I'm almost positive. And never forget, this is the podcast where the news originally broke about micro strategy.

Just, yeah. Buying Bitcoin. That was an early episode, too. So here's an interesting thing. And I don't know if this really actually, I don't know what the risk is here. But so the SEC has a new proposed rule. It's 200 pages long. and according to certain crypto lures Jake Trevensky in particular,

it expands the definition of regulated dealers to include people who quote, employ passive market-making strategies that provide liquidity to others. So it seems to obliquely refer to people providing liquidity to, for instance, automated market-maker systems, without naming defy specifically. but it does kind of regulate this activity or puts it under a more regulated category.

So this kind of looks like really sketchy backdoor regulation targeting a very popular activity within defy. Yeah. So I look to a few people on crypto Twitter for an indication as to whether or not I need to really panic. Jake is one of them, Jerry Brito, Peter Van Valkenberg, Naraj. where are you on the hey this is like we got to start to panic about this scale i'd have no idea yeah i don't know so it's like it's in the category of uh jake keep an eye on it please and

let me know when we need to start worrying about this we'll do a podcast episode if we if this if this ends up being really bad please let us know it doesn't seem it doesn't seem great but we've kind of known that the cc has had an animus against defy for a long time Yeah, there's not a lot of friends, friends of Defi over there. It's not at the top levels. The odd thing is they haven't done much. So it's a lot of basically bluster and then not a lot in terms of either enforcement or specific guidance for the crypto industry.

I mean, they're pretty busy with Chris Larson. He's got Mary Joe White just filing all sorts of papers. There's only so many people at the SEC. They're all busy. I'm not going to lie. If you'd ask me two weeks ago, I probably would have been on Ripple side of that case. They lost me. They lost me.

That was the last draw. I'm back on the SEC side. I'm sorry. Yeah. SEC. I'm a statist. Yeah. There's some great people at the SEC.

Yeah. I think they might have this case locked up. Do you think so? I don't know. Who knows? It's hard to handicap. Why are there? If you could have like a D5 protocol to bet on who's going to win.

Where are the betting odds? It was a prediction market. Like, let's get a prediction market on which cases the SEC is going to win or lose. The SEC would love that. Yeah. I'm sure they would. And the CFTC. Wasn't that literally the first, you know, apparent, you know, killer app that everybody was looking for back in the early days of Ethereum was like, yeah, we're going to have prediction markets?

And then that was just not what happened at all. They forgot to make the prediction markets. I mean, I remember doing presentations about like blockchains and just being like talking about post trade settlement prediction markets and decentralized storage as being like the killer apps for blockchains. Yeah, the stuff we thought would be important wasn't and the stuff we didn't did. It's really hard. I mean, like I always say, it's like six months from now, we're going to be talking about

something that we couldn't have even dreamed about right now. So there's one article I want to draw your attention to. It's from Martin Wolf, columnist in the Financial Times. He's definitely not a crypto bro by any means, but he does effectively, he said something kind of startling, talked about how, you know, the economy is becoming de-globalized and how U.S. sanctions are potentially undermining the attractiveness of the dollar. Then he says, quote, in principle, one can imagine four replacements for today's globalized national currencies, private currencies such as Bitcoin, commodity money, a global fiat currency, or another national currency like China's.

And then he kind of walks it back and says that cryptocurrency can't work because it's only worth $2 trillion. But I did find this kind of shocking from, you know, very established columnist at the FT that's not known as a crypto enthusiast at all. Just the fact that this kind of discourse is mainstream now. And, you know, I guess he does have a good point. It's still too small. I mean, two trillion, that's less than one fifth the size of gold. Yeah.

I mean, this is always my rebuttal to people that say that Bitcoin is too volatile to be a store of value. it's like, yeah, of course it is. And it's too small to be a store of value too. So if it is going to become a store of value, it's going to be pretty volatile to get there, but it would probably be volatile to the upside if you actually believe it's going to happen. But yeah, these are conversations that five years ago,

you'd be shocked that we're having them. Yeah, it's not sovereign scale store value, that's for sure. But individual scale and maybe corporate scale, it is. So you just climbed the ladder. Yeah, I mean, I think, you're going to see some countries publicly come out owning Bitcoin, maybe even other crypto. Who knows? I think that'll happen within the next year. I think some people are watching South Korea to see what happens there because everybody

else is taking an anti-crypto pivot with maybe the exception of Ukraine and maybe El Salvador. But, you know, South Korea, new president seems to be per crypto. That's kind of an interesting one to watch, see what they come up with. Why is it that they're always has to be a tradeoff with these pro-crypto guys. It's like El Salvador, you take the pro-Bitcoin guy, but he's also a little bit of authoritarian. South Korea, it's like you take the pro-crypto guy, but he doesn't believe in food safety controls. Like there's a lot of craziness here. Why is it always like the guys who are a little bit nuts that are going for the crypto stuff? I think you've struck on sort of like a deeper analysis of like our psychology here.

It's like, come on. Let's just get like the reasonable people to, be like we're just going to put a little schmuck insurance on that. Those are the people that we need. Look, you have to be a heterodox thinker to be into crypto. You have to be a little bit psychotic. So I think that just clusters with other crazy beliefs. I think, yeah, I think that must be it. That's crazy. Some other tidbits this week will plug another podcast. Eric Golden has a great podcast under the Patrick O'Shaughnessy umbrella. This is the Colossus Network. It's called Web3 breakdowns. He had Tom Jessup from Fidelity digital assets on,

talking about what they're doing. More assets coming to FDAS was a reveal there. The White House is soliciting comments regarding crypto environmental impact. You have until May 9th to answer their request for information. You know, as much as I'd love to, I'm busy. I don't think I got time to help the White House do their homework. I feel bad. I don't have time to do that. I haven't gotten my letter in for a gray scale. I would love to be able to write a letter for grayscale because I believe strongly in what they're trying to do there, but I just haven't had time to do it.

Maybe because the, I mean, this industry is like one letter writing campaign to the next, you know. We might need to just think about a professional letter writer. Well, I know. Our intern's doing a really good job with the newsletter. So maybe he can start to draft up some letters. Like I want to say, some letters to some Congress people encouraging them to take some better stances here. We've seen a lot of bad stances. One of my approaches is to lobby them before they even get into Congress. So it's sort of like a seed stage political investing. Oh, speaking of which, Bruce Fenton talking about a guy who's getting in. So he's running for for Senate in New Hampshire.

Bruce's former, we talked about this last week. We covered it last week. But he's, it's official. So there's a good. chance we're going to know a senator here. I mean, there's a number of very pro-crypto candidates running. There's some races where, you know, several of the candidates are pro-crypto. It's kind of a win-win. That's the best ones. I think you're right. I think we need to build a stable of like seed bets on people that could become senators. That's what you're really going to do. You got to get them when they're at like

city council. I know a city counselor who's in the suburb of Boston, kind of a city suburb of Boston, really pro-crypto. I think he's going to place his seed bet. I'm not going to say his name. And I'm not going to let someone else get behind. He might have like a ripple person. Don't give up the alpha. Yeah. Yeah. I mean, look, Stephen Lynch has to go. I hate to say it. I hate to say. That's not my fight anymore. You know, that's not my turf. But he's got to go. Yeah, he can go become like an advisor to a private blockchain company. There's a lot of stuff out there for him to do. So, okay, mining a little mining update here. Urcott, everyone's favorite,

it's either an ISO and RTO. I never remember which one, but Ercot kind of administers the Texan Energy Grid. They are actually hitting the pause button on new minor additions to the grid. So they are now asking for miners to get prior approval in terms of putting large amounts of capacity. passing on the grid. So it's kind of an interesting situation where I think

miners are always, to a certain extent, going to be swimming upstream and fighting these political headwinds. And it's the ones that are the most adept in terms of navigating political dynamics that are maybe going to do the best. That's interesting. Because they're always going to be, you know, clashing against someone's agenda, even if one that's very favorable, generally speaking, like Urquot. So this is going to be potentially a bit of a headwind for all these miners that have planned hash rate and especially as the market takes those planned expansions into account. You have to remember, like even if you have the machines ordered, you know, the sites scoped out,

there's always political gray squans that can happen there. It's hard to underwrite, right? It makes it a lot harder to be an entrepreneur in that category. Yeah, there's just so much political. risk embedded in that business. There's also, like, sometimes you don't get the miners that happened. Actually, this quarter to Stronghold, who we interviewed recently, they just did not receive minors they'd ordered. And they were savaged in the public markets on that basis. So it's a tough industry. All right. So I think that's it. We do have some backlog. So we got some podcast episodes it's coming out next week. We're going to keep up the Torrid pace.

All right. Yeah, I think we're going for another episode of the mining miniseries never ends. We'll see you next week. Actually, we may not do Roundup next week. Is that what I'm hearing? We might not do one. I don't know. We'll have to see.

So we did fail to produce a roundup last year. That was the Lost episode. Yeah, we did record it, though, right? We've recorded it and then I just I guess I forgot to edit it. Yeah. Yeah. Well, we'll see what we can do.

Next week we both have like a conflict. Yeah, I mean, there's a conference. So we're going to try, but no guarantees. But if you miss us, you can post on GM on the subreddit on GM. GM. We'll plug that. GM. YZ forward slash C, forward slash on the brink.

the other place that I'd tell people to check out if you want to engage is on the brink. Dot shop. Don't forget about that one. Yeah, actually got some DMs recently from people with their swag. That's always really cool. There's a really, there's some good stuff on there. Actually, there's a hat, like a dad hat that says GM. There's a camo hat with the US flag on it with the Bitcoin logo that I designed.

Pretty happy with that. That is pretty cool. Yeah, that is a really good one. Yeah. So check those out. And we'll see you next week. maybe not for the roundup, but there'll be some podcast episodes. So have a safe and healthy weekend.