On The Brink with Castle Island - Weekly Roundup 12/31/21 (Year in review, why gamers hate NFTs, 2021 predictions evaluated) (EP.273)

Episode Date: December 31, 2021

Nic and Matt return for the last episode of 2021. In this episode:  Someone makes an unauthorized Nic NFT Microstrategy buys more BTC Blake Masters sells a political NFT Why do gamers and artists hate NFTs? We look back at our 2021 crystal ball predictions Best predictions of 2021 Our outlook for crypto policy in 2022 Our favorite OTB episodes of the year We look back at the Token Daily 2019 crystal ball predictions What it's like to be in crypto for an entire decade Midterm implications for the crypto industry Our favorite OTB episodes of 2021 Content mentioned: Tokendaily, 2021 Crystal Ball  Sponsor notes:  Corporations and institutions can allocate cash into Circle Yield to gain crypto lending exposure and earn superior returns compared to traditional markets. It's secured, overcollateralized and built on the leading dollar digital currency. Visit circle.com/yield to book a meeting 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  

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 constituted 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 this episode is brought to you by Compass, and it's also brought to you by Circle. More on those companies later in the episode. So this is the last episode of the year.

This is the last episode of the year. It's a light week this week. I wouldn't say that it was a big news week by any stretch. But the show goes on. We're still working. Yeah. I mean, we're contractually obliged to do these, so we don't have a choice. Well, the deals keep on happening.

So you got a report on the deals. People who did deals this week, they just, they did them because they want to be showcased on this podcast, get a little bit more airtime, you know? So, yeah, I mean, virtually nothing happened this week, but it's okay. We have plans to fill the airtime. Don't worry. So you did a podcast this week with the guys at Arcade. Yeah, I had Gabe Frank and Robert Masiello on from Arcade, which is one of our more recent

investments. So that was a fun one. So they're basically building a financial structure. services platform for NFTs. You can take out a loan against NFT collateral. They're also building out an OTC trading desk. So it's an exciting space. Doesn't remind you a little bit of maybe like the 2013 era for Bitcoin in terms of just the maturity of the NFT infrastructure out there around trading venues and OTC desks and quality of data services, things like that. A lot of parallels to the early days of Bitcoin. Speaking of NFTs, actually, I found out today that someone made a

a sequence of mining NFTs. So they did like avatars for just a lot of folks in the Bitcoin mining space. And then also did one of me without asking me. And also my avatar looks crazy and not like me. We'll have to put that in the show notes. What type of NFT is it? Is it on Ethereum? It's on OpenC.

So yeah, I presume it's on Ethereum. I did not. I was not aware of this. Someone just sent it to me. And apparently it's a thing that happens is people make NFTs of you and apparently profit on your likeness. I mean, look, I'm not sending DMCA takedown requests. I don't really mind, frankly. But also I have nothing to do with mining. I mean, aside from the very well-reviewed mining miniseries. So I don't know why they would include me. Wow, that's pretty fascinating. That reminds me of when your BitClout status just kept on soaring.

People were just buying your BitClout ID, sending you skyrocketing. They really thought that I was going to legitimate my Big Cloud. And then one day it was disappeared. One day, it happened to a lot of people, I think. But yeah, my BitClout's vanished. Not that I intended to do anything with them. Well, it's like when Nintendo goes after a node operator. It just, things disappear off of these blockchains sometimes.

I mean, you joke, but I think that's going to happen. I've taken to calling them mononodal blockchains. So like blockchains that are so centralized that they have effectively one node. Mononoddle. I like that. Mononoddle. Sort of, sort of like a database. Yeah.

Yeah. But with a bit of decentralization magic. So there's a lot to talk about this year. I guess before we hop into any of it, I see that that's an orange pillow behind you. Is that a Fidelity Digital Assets gift bag back there? That's correct. That's correct. They were kind enough to send me a pillow and like a blanket.

So thank you for that. I got one too and a candle. And a candle. I don't think I've ever lit a candle with the intent of like making. the room smell nice or whatever. I don't believe I've ever done that. I'm not a big candle guy myself, but it seems like it smells pretty good. I don't know if you've opened it yet. It's pretty good candle. I don't know if maybe I'll maybe I'll try it in the office or something. Is it like a Bitcoin scent? Is that is there a thing? I don't know if there is a thing.

My question on the pillow is where do you put that pillow? It's sort of like a little head pillow. Is it for like the airport? What would exactly you're going to use that for? I put on the couch. It's I, you know, it's decorative. I think, you know, as if people needed more reminders about Bitcoin, you can't escape it. That was a pretty great swag bag. So thank you to the, to the folks of Fidelity for sending that over. They got some good ad placement out of there, just that free, free Fidelity Digital Assets, Adron. That's true. One interesting gift, a Christmas gift box I received this year was pears. Oh, love pairs. Yeah. They're like foil wrapped pears. I don't say who this is, but

I didn't, is that, is that a thing that you've heard of giving people like eight pears for Christmas? I have, I've seen that. I don't know if that's a mainstay necessarily, but I guess that's a lot healthier than just a box of chocolates. So apparently it's a thing. It's some kind of tradition that I wasn't aware of until now, which is like really nice pairs. Huh, were they good? For Christmas. Yeah, they're great. I love pairs.

Yeah, they're great fruit. I got a couple of swag bags from the banks, a couple of our bank partners, SVB, shout out, First Republic Bank, sent wine. So a lot of people getting on the board with great swag this time of year. It was a successful harvest.

Why don't we hop into some deals? First one up is debank. This is a D5 portfolio tracking company, kind of a data company. They raised $25 million from Sequoia, China, Dragonfly, Hash Global, UB, Coinbase Ventures, Crypto.com, Circle, and Ledger. It's incredible how startups in the Crypto Space go through this life cycle of being a startup and then themselves getting an adventure. I mean, just look at the last four names in that deal. Crypto.com, Circle, Coinbase Ventures, yeah.

And Ledger. And Ledger. And those are all venture-backed companies in and of themselves. Yeah. DeBank does have some great defy data. Strongly recommended. Next up, we have Ready Player Me, which is a Metaverse-focused startup. They raised $13 million in a Series A from Tavit and Stan, Convoy Ventures and others.

And the last one of the week is Yumi, UME. This is a lending protocol. They raised $32 million via a token sale. So no rest at the end of the year for these startups. Just keep on raising capital. So those are the deals. It's also relatively sparse on the news front. So Cracken is building a marketplace for NFTs that will include lending.

So you'd have to think these exchanges are just very well positioned right now to start to get into this. So from the perspective of the trading side, from the perspective of getting more aggressive on the lending side, And I actually think there's a great opportunity here for the exchanges to be, this might sound antithetical, but sort of a centralized bridge from different blockchain, like from one blockchain to another and from layer one to layer two to move some of these NFTs around and absorb some of the gas fees. I'm a little bit surprised that custodial models of NFTs haven't taken off. I mean, given how intermediated the sort of spot crypto landscape is, most NFTs are still, quote, unquote, non-custodial or sort of held by end users. I mean, OpenC, for instance, is basically an interface to the blockchain itself. And I'm a little surprised that it's remained so on chain, like the whole NFT marketplace experience.

I mean, again, this goes back to the early days of Bitcoin where there's a lot of parallels here. You remember when Coinbase was getting started, the big controversy was, why would you ever want custodial, intermediateed Bitcoin when you can just hold it directly? Blockchain.com was getting started around the same time and taking a totally different approach. So it does remind me a lot of that era. Right. Yeah. And blockchain, that was their flagship product, was a Bitcoin wallet. but initially non-custodial. Non-custodial wallet. And then remember that they probably still have this,

but the fee estimation API was always the amazing thing that those guys built out of the gate. In addition to just the charts and the tooling, I remember we used to use in the early days of Fidelity, the number of wallets as an indication every week. We'd be just actively monitoring number of wallet addresses on the Bitcoin network through blockchain.com. Yeah, that data gets misused a lot.

actually people think of it as a proxy for the number of like active users I think it actually is I don't think it's actually the number of wallets on the network I think it's the number of like accounts opened on blockchain.com but it's often used as a proxy for bitcoin user adoption well over time that started to really deprecate in terms of a useful metric because so many of the exchanges and the brokerages just were proliferating wallets just to kind of mask identities and things like that. So it became less useful over time, I think. But yeah, they did have great on-chain data. I mean, that was a lot of the inspiration for coin metrics was the blockchain.com data sets. The idea was just to do that for other blockchains, too.

There was some really interesting early data plays that some of them didn't end up being companies, but you remember Johnny Levin had coin metric, I think, which was an early data. It wasn't a company, but a project. Bit info charts I used to be on all the time. They're still around. They're still around. But yeah, I actually was not aware of coin metric when I came up with the name for coin metrics. I didn't do my diligence on that at all.

Just added an S to it, yeah. Yeah, I'd never heard of it. Well, not to be upstaged this year. I feel like we've talked about this company a lot. So micro strategy, which is, of course, the software business that is actually just a Bitcoin business. They purchased $94.2 million worth of Bitcoin this week. So they cannot be stopped. Yeah.

So this, you know, it's funny how I guess about 18 months ago, they started buying Bitcoin. and now it's completely routine almost to the point where it's barely even news that they buy Bitcoin. So they have 124,391 Bitcoins. They hold them at the average price of 30,159. So they're up on that, but catching a little bit of a bear market here towards the end of the year, it feels like. So they're not up a crazy amount. So micro strategies, Bitcoin holdings are worth. about $5.9 billion.

The market cap is $6.1 billion as of today. But if you're thinking of buying Bitcoin in a discount, you know, if you do that analysis and wait to buy when they trade below the book value of the coins, remember they also issued a huge amount of debt. So you have to take the liabilities into account too. Yeah, it's not a pure play way to get exposure. to Bitcoin, that's for sure. Another story this week that was interesting. So Blake Masters, who was the co-author of Peter Thiel's Zero to One Book, he's running for Senate as a Republican

in Arizona. He's selling a set of NFTs to finance the campaign. So basically if you max out on your campaign contribution in the primary and the general, then you'll get one of these NFTs. I'd have to imagine those will sell out. Yeah, so this one is quite interesting. So Blake, is definitely, I would say, one of the more crypto-forward candidates for office. Although there are a number of, you know, explicitly pro-crypto candidates these days, it probably makes sense. And so it's an NFT, which is basically a digital image of the book, zero to one. He sold 99 of them. I think they were all sold out and basically you have to donate $5,800 to the campaign to get the NFT. So it's kind of, you know, you start to wonder like, well, what is the NFT exactly?

Sort of deconstructing the idea of the NFD. The other thing is that they weren't apparently available for purchase with crypto. Why not? So it was purchasible with Fiat. I wonder if you just can't, yeah, I wonder if they didn't have the infrastructure to accept crypto donations into the campaign or something. I think it was a compliance question of not wanting to receive inbound payments from, you know, entities that weren't identified, which I think makes sense in the context of a political campaign. So that was an interesting thing. So you're seeing kind of like fiat NFTs now.

That is pretty fascinating. It's a cool thought experiment. I mean, if you could own an NFT and prove that you were a donor to, you know, Obama's first election for, you know, state Senate or something, you'd have to imagine there'd maybe be some value there. Yeah, so we're just going to see, you know, it's funny because on the one hand, there's an enormous amount of pushback against NFTs from a bunch of communities, but like artists communities for sure

gamers gamers hate NFTs for some reason yeah so if you look at the discourse around it outside of crypto Twitter on other Twitter like regular Twitter I guess the hatred towards NFTs is so strong it's like I wouldn't

I was I was going to say it's like nothing I've ever seen but that's not true it's like the hate against Bitcoin frankly which has subsided a bit, I would say. But they're so despised and I think it's very telling, right? So among artists, they're hated because it's seen as like cheapening and, you know, commoditizing or excessively financializing art. It, there's rampant sort of digital art theft. So basically, what's it called copy minting or, you know, taking someone else's art. And I, uploading it as an NFT and selling it.

So that happens all the time and there's no good system to tackle that. Like OpenC actually took down their automated reporting system for art theft on the blockchain and now you have to send them a letter, like a DMCA letter. So artists don't like it for that reason. And it made a lot of the wrong people rich, I guess, you know. and then gamers hate it because they well I guess partly

you know quote environmental reasons even though a lot of these NFTs aren't on base layer Ethereum a lot of them are on L2s and then also because the gamers live in fear of being you know of being harvested I guess by the game developers

and and and you know suffering even worse, you know, financial experiences at the hand of the game devs with microtransactions and things like that. And I think they also fear that the games themselves would be like excessively marketplace driven if you incorporate an open loop real world value assets. So it's just, I don't know, it's incredible to me that like millions of people now you know, have such a negative view of NFTs, even though all an NFT is, is just a chain of custody around some digital data that means something. But now it carries this enormous baggage. And it's just like a widely reviled concept. I wonder how widely reviled it actually is. So I agree with

everything you're saying. I just don't know that NFTs are in the popular culture at scale yet. So I think the most surprising thing to me was, yes, it's incredibly wildly reviled within like the Discord communities. And the fact that the Discord CEO came out and tried to make that NFT integration and there was such big pushback from the gamer community is shocking to me. And it's really just they're going to lose the battle to become the default Web 3 chat service at this point. You know, all of these Dow's, all of these projects, tons of startups build community. on Discord, and Discord is now openly hostile to Web 3 and to NFTs. And so people are just going to build around them and build alternatives.

Talk about a blown opportunity here. It's like the banks, just not getting onto cryptocurrencies early. Well, that's one of those things where you kind of held hostage to your community. So it's like another version of the innovator's dilemma where instead of corporate strategy, you know, causing inertia. It's actually the attitudes of your user base. I mean, one thing that, like if you want to be entertained, so this is game called Stalker and they had announced, it's a pretty popular gaming franchise, they'd announced they were going to incorporate NFTs into the next, into Stalker 2. And then the announcement where they walked that back and said they

wouldn't got a hundred and twenty four thousand likes on Twitter wow six thousand quote tweets thousands of comments and read the comments for like some insight into how I guess game like regular old gamers think about NFTs and it's with so much hatred it's like it's incredible that like a digital verifiable property rights and claims and you know a chain of custody around digital ownership can you know elicit such strong feelings at the end of the day it's just like hating a file type it's like people that listen to CDs hating MP3s or something it just seems like such a strange thing to have contempt for because it's just such a general idea and And of course, like specific implementations of NFTs, like things to critique.

Like, yeah, if you are, you know, a hardcore environmentalist, okay, maybe you're offended by Ethereum's ecological footprint. Or if you, you know, feel very aggrieved about artists, you know, other people profiting the work of artists without the artist getting a cut, you know, you might be aggrieved at the history of NFT marketplaces. but the concept itself is never going to be erased. Like it's here to stay. And it'll be in a form that makes sense and has low fees

and probably won't involve proof of work, blockchains for much longer. And, you know, the whole thing will work. And people will forget the ugly, messy beginnings. So it's just odd, I think, to, or maybe it'll fade away, but it's odd to have like such a strong view on it at this stage. I mean, people, people confuse the implementation for sort of the underlying idea. Not to make this an episode about the ESG considerations here, but, you know, these people

that are critical of NFTs because of the environmental concerns, wait till they find out about artificial intelligence. It's like, you want to know how much Google is spending and how much environmental impact there are, just running the AI business unit. It's staggering. I mean, and, you know, the thing is like, it's very uncommon to reason about energy. Like, I feel like we're conceding so much ground to kind of illegitimate argument by saying, by trying to defend specific uses of energy. I mean, generally speaking, the onus is on the state typically to arrange and regulate the energy grade in such a way that it's, uh, it's, it's renewable and clean and it works.

and we don't look at, you know, specific uses of energy and say that's wrong. Like, oh, you know, this power is feeding, you know, Netflix and video games, frankly, for that matter. And say, okay, well, it's wrong. I mean, that's not how we've historically operated. So trying to take a line item veto to specific uses of energy, it's completely impractical for a start. And it's just also not how policies made. if it was, you'd have a lot of people knocking on doors in my town asking people to turn off their Christmas lights.

But the fact that gamers are apparently, or claim to be aggrieved by the environmental footprint of NFTs is truly comical and deeply, deeply ironic. It is. 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. Bitcoin mining is only getting bigger and so is Compass mining.

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That's circle.com slash yield. Well, why don't we transition here into some of our 2021 predictions? And would we get right? Would we get wrong? And who else had good predictions for the year? So I've done Token Daily crystal ball, I think, three years running. And I think I missed the mark this year, actually. All right.

So let's read yours, actually. And you're on it, too. Yeah, I was on this one too. So yours, let's cover yours first. So I wanted to make my predictions very specific so that they could be evaluated. Like a lot of people do vague ones, not myself. I went specific, but that's also ended up hurting me. Yeah, no, I like the vague ones.

That way you can kind of be right. Yeah. I was specifically wrong. Yeah. Yeah. So you said an episode of crypto dollarization is acknowledged as playing a significant role in the collapse of a sovereign currency, which is not the Venezuelan Boulevard. So how did we do on that one? So I'm going to give myself partial credit. I mean, you know, I'm not an impartial judge here,

but I'm going to go ahead and say the lira was collapsing, partly due to the existence of crypto infrastructure in Turkey, which is a very highly crypto penetrated region. And the Turkish government, you know, really aggressively went after the exchanges due to the collapse of Lira because they felt that the crypto markets were an off-ramp. I don't know if it was crypto-dollarization per se, but certainly the Lira's collapse is at least partially attributable

to the existence of crypto markets. I feel confident saying that. Another instance of crypto-dollarization, which is worth noting, which hasn't happened at mass scale, but I thought it was interesting, it was the Myanmar one, which we talked about last week.

Yeah. All right, I'll give you some partial credit on that one. The next one was a major stable coin with more than a billion dollars of free flow. It suffers a bank run and trades under 90 cents on the dollar for an extended period of time, at least a month.

That one did not happen. Yeah, so that just 100% did not occur. Yeah. Doesn't matter if these things are backed ultimately, right? I think there, were stable coin crises and stable coin sell-offs. But I don't.

UST had like a little speed bump, but it was not more than a month. It was pretty short-lived. Yeah, actually, great. Great point. Let's see. Yeah, so UST lost its peg for like, what, a couple days? Okay, here we go. All right.

Well, okay. All right, let's look at this. It lost its peg in May. of this year, and it traded down to apparently 94 cents on the dollar, according to corn market cap, and then regained its peg about a week later. So there's a significant departure from the peg, yes, but it doesn't meet my criteria here. Next one that you had was investors start to question the qualities of governance tokens and begin to demand more explicitly codified token holder rights.

And I'd have to say that did not happen either. Yeah, I mean, I might defer to like the governance experts like, you know, Dennis and Bertram or, you know, Larry, Sukarnak and Derek Sue. Maybe they have a view on this that's more educated than mine. But, yeah, I don't think that happened. I think people are pretty happy with this model of governance tokens. as a capital raising mechanism. Nothing's really gone badly wrong with them yet.

And I think something would have to go wrong for investors to start to question them and say, okay, well, let's really hash out what it means to have governance. Well, I think getting some clarity from the SEC on the definition of a security would go a long way and promoting some of those conversations. But for now, it just seems like not much has changed on that front since you probably made that prediction. Next one is the total supply of stable coins will exceed $50 billion. So you were right on that one. Yeah, I don't know what it was on the 1st of January when I wrote this,

but it very much exceeded $50 billion. It hit $140 billion, possibly $150 billion. Yeah, growing by the day. And then the last one you had was at least a half a dozen exchanges or custodians worldwide, Institute proof of reserve protocols. I don't know. Some did. Bitmax did it. You got others like Leden are doing it. I don't know if that satisfies the traditional proof of reserve. There's others that it's in progress. But yeah, this wasn't the year of proof of reserve that I'd sort of expected. So mixed results there, I think only really one out of five was correct, but yeah.

But now you were in the same one and you made predictions. So here's what you wrote and it was short. So I'm going to quote it in full. Actually, we'll just start one at a time. Man, this is like, this is on the brink bingo right here. Clarity from the SEC on custody under Rule 15, C3-3. You're absolute favorite will unlock even greater levels of institutional participation in the industry. This is big time wrong. Big time wrong. I don't think we heard anything about 15C3. So, you know, silly me, I thought the SEC would come out and give a little bit of clarity to

all those broker dealers that were seeking clarity on what it means to possess and control a digital asset security. And that did not happen. So I will not be banking on rule clarity from the SEC. see anytime in the future. I think I would happily never hear about 15C3 ever again in my life. Well, you might never hear about it again

because the SEC just might never do anything. That would be great. That would be great. You did slightly better on the next one. A U.S. Pension Fund will publicly announce a Bitcoin position and more than one Bitcoin ETF will be approved. Right on both counts. Partial credit for the second.

Yeah, partial credit for, I don't consider this sham ETF situation here we have with the futures really to be the real Bitcoin ETF. I was talking about a spot ETF. I thought that the spot... You didn't say spot. I mean, and these futures ones did accumulate. I want to say one to two billion in assets. They did. So we have a janky Bitcoin ETF that does not track the price of Bitcoin very well. But the Houston Firefighters Relief and Retirement Fund announced in, I think it was November, that they had bought 25 million of Bitcoin and Ether. And I think that was the first pension fund

that's publicly put crypto on the balance sheet. So that one came true. That was in November? That was in November this year. Well, that was a great call because it wasn't obvious that there were any considering it. I'm sure pension funds also have exposure

kind of indirectly through startups and things like that. Yeah. For sure. Yeah, and through venture capital funds and things like that. Yeah, totally. but a direct position. That was the bet, and you were right. Lastly, several crypto infrastructure

companies will go public via traditional IPO and SPACs. Definitely, definitely the case for sure. Yeah, a bunch of, a bunch of SPACs. Coinbase obviously went public this year. The mining companies are just, there's tons of public mining plays at this point right now. And that's technically infrastructure. So a little bit better. I don't know. I haven't done any predictions for this year yet. I'd have to think about that. Yeah, this is, I'm feeling uninspired and I don't, I don't have any predictions. I have such a bad track record with my predictions that I, when I have to retire. I will say on the 2021 crystal ball, I think Alex Adelman had the best one, which is several publicly traded companies, including Tesla, will add Bitcoin to their balance sheet.

And that very much occurred. and I went back and looked and in December 2020 there were some rumors about Tesla adding Bitcoin but that you know was by no means announced or

you know publicly expected so that was a hell of a prediction from Alex he should run a hedge fund he also said decentralization of workforces protocols and companies will continue central banks print even more money

in response to COVID second layer protocols will make spending, buying, and earning Bitcoin easier than ever. I mean, I think Alex probably wins this one. That was a terrific prediction. Yeah, he definitely wins that. Ballagy also had a good one that it would mark the start of BTC versus MMT as the battle for the next decade. the thing about ballagy predictions is they're typically on the mark but then it's normally stuff you don't really want to come true yeah that's true so actually also wrote a separate and complete additional um predictions um for the block

um and so i said some additional stuff in there I also said the thing about proof of reserve, which was wrong. And then I said the Bitcoin would bifurcate through FATIF guidance and you would have Wall Street and Main Street Bitcoin and you'd have your lit market and your gray market Bitcoin. Thankfully that did not happen. That didn't happen. The FATF ended up being a lot more reasonable than anticipated. So we saved that off for another year. I mean, 2022 might be the one. Some of these predictions around stablecoin reckoning over privacy, that was also, you know, that didn't happen.

Yeah. Yeah, I kept thinking that stable coins would have to somehow require disclosure for on-chain transactions. That has never occurred, even though some. members of Congress would like it too. So yeah, our very questionable track I agreed with predictions. I thought you'd the best probably maybe behind Alex. Mine were terrible and wide of the mark. And I will not be offering any this year. Well, some of these things, you just have to go back and look at predictions from a couple years ago and those will probably happen this year. Like, I'm looking at last year, Suu, one of his first ones was several central banks will announce

substantial stakes in Bitcoin. That might be a good like 2022 or 2023 prediction. Oh yeah. I think it'll happen for sure. So the I think the first crystal ball that Token Daily did was 2019. I believe that's as far back as it goes. And I thought I had a good one. I said two of DFINITY hashgraph, AllGrand, Telegram, or Filecoin, which had all raised to that point, failed to launch or would delay their launches another year. That definitely happened. They delayed. I think only one of them is gone, though. Well, yeah, only Telegram has sort of been eliminated.

I said Ethereum would sound proof of work. That happened. And then I was wrong. I said some of the most liquid exchanges would close down through. regulatory action. Yeah. Yeah, those are pretty good, some pretty good predictions that year.

I think Suzu had the best one that year. He said Binance will firmly take the lead ahead of Coinbase in terms of users, volume, and interest. Probably true. And famously, he said, we will pump off the bottom extremely

quickly, leaving most sideline investor stuck in Fiat, and certainly in 2019, we rocketed off the bottom, which would have been we wicked down to maybe 3,500 or something like that. Yeah, that was a really good prediction, for sure. So Spencer Bogart in 2019 said the next generation smart contract platforms like Haschcraft and Telegram will launch and find there's little to no demand for what they built. Well, I guess that was right, right? Well, I don't know if anyone uses. hash graph or anything. Telegram we never found out.

But then there were a bunch of next-gen smart contract platforms that did incredibly well. But that's what I'm saying. Spencer's a genius. You have to phrase these things like they could be right or they could be wrong. But you kind of have to phrase them like both sides of the coin flip you win.

Because I could look at that. He was technically right here. He was technically right. Yeah. He was technically right. Yeah. Marad said the Bitcoin would trade under 2,500. he wasn't far away actually where's marad these days my prediction would be that marad comes back at some point

that would be great i mean it's been a long time marad made i think he like crafted some of the most potent bitcoin memes we could use an injection of maraud's energy probably right about now so marad if you're listening please come back yeah come back to the fold You hate to see these people that just fold out of the industry. I mean, that's the crazy thing is, you know, people leave all the time, like stalwarts of the crypto space. I mean, I think it's quite hard to be around for like 10 years in the crypto industry and stick around and like, you know, stay relevant, keep doing stuff. Well, it's a 24-7 grind, right? So depending on what you're doing in the space, it's easy to get burnt out pretty quick.

I think. Well, you've been professionally involved in crypto since 2014, right? That's right. That's seven long years, almost eight years. It's been fun to see these waves. Some people, you know, I give Melton a lot of credit for her stamina because she's been in crypto for 10 years now. Yeah.

I mean, think about that, the amount of stuff that you must have seen. Think about these guys running the trading desks. I mean, these guys have war stories for days. If you were involved running an OTC trading operation, you met every character in the industry over the past 10 years. I mean, respect. You've been scammed in all sorts of ways. What are we going to call people that have done 10 years of crypto stuff?

Like, maybe we should, because that crop, you know, there are a lot more people involved in 2012 and 2011, so that crop is going to mature this year. I just, I can't imagine having paid full-time attention. to the lunacy that is crypto markets for an entire decade. Oh, yeah. I mean, you'd have to have been on all of the living on the subreddit, living on Bitcoin talk.

Trying to get information in that day and age, it's just impossible. It's just so much information to process, and it's just like it moves so fast, so much happens to you. I mean, it's just draining. I remember the part of my routine every morning would just be to go and read the sub.

So people didn't even really talk about crypto on Twitter back then, which is kind of hard to imagine. Like right now all the talk is on Telegram, Twitter, and Discord, but it wasn't like that. People were just screaming at each other on the Bitcoin subreddit. Yeah, I was a big Bitcoin subreddit guy back in the day. Yeah. You'd have these knife fights about the block size wars. Yeah, it was a simpler time. The other thing is just people's personal blogs, like Chris Dixon,

had that c dixon dot org thing and he used to talk about bitcoin on there so i used to remember getting you know a lot of information from just random people blogging so not to go back but actually i think wan had the best prediction in 2019 what was it certainly certainly the most poetic these violent delights and keep in mind this was in early 29 well late 2018 that these predictions were made i think the bitcoin price was you know around seven thousand dollars these violent delights will have violent ends but all greatness grows from meager land 2019 will be a year to manage our expectations and keep our bankroll tight that was completely right is that a prediction would you classify that as an actual predictive statement yeah basically saying like

like, you know, a lot of bills are going to come due and, you know, don't get too aggressive in 2019. And she was right. I mean, that was the second year of that long bear market. Yeah, that was a, we had just launched our first fund in 2018 and right into the bear. Yeah, that was a, you know, it was a lengthy period. I mean, I was very confident that we were going to emerge from that. But yeah, a lot of people left the industry, you remember?

I mean, it's happened in 2015, 2016. People washed out. Same thing happened in 2018-19. Happened in the bare market of 2022 through 2045, too, I'm sure. I remember about six months into our first fund, and Bitcoin had gone, I don't know, down a lot. And one of our LPs just said to me, kind of talking about the industry in general,

oh, that's like too bad that just like didn't happen, huh? I was like, what do you mean? He's like, that crypto thing just like didn't happen. I was like, well, it's still going on. Like, don't worry. It's not like we're entrepreneurs didn't decide to just like stop building stuff. Yeah. I mean, it's hard to imagine what it must be like to, you know, lose convection in the crypto spaces.

I think it's impossible now. You know, you can't put the toothpaste back in the tube. Yeah, but there are times over the years when it was in question. You know, the coming off. of like the Bitcoin is for credit cards, Fizz, and all of those companies washed out, and the block size was a civil war, and you weren't sure how that was going to break through. Ethereum hadn't really, like, launched yet. Those are some dark days. Yeah, I think after, for me, after Gox failed was a moment when I thought, okay, maybe this is

actually not going to work. But then when it came back, that was what did it for me. And I was like, okay, wow, this thing can't be killed. Yeah. Yeah, people kept on building. So that was, yeah, happy new year, everyone. That was our 2021 in retrospect. Who knows what 2022 will bring.

But we're going to be back. We're going to be back every week. two episodes a week. We're energized. Taking a little bit of a breather this week, a little bit, I guess. Yeah, energized is one word. You're still monotone.

I've gotten a lot of feedback on, we might need to lift your volume levels. We can do the volume. I mean, I can probably even tweak it with post-production to add more vocal range. That would be great. That'd be great.

Get a little feedback there. Just put a permanent voice filter to make me sound more excited. Yeah, but yeah, I expect that the podcast will last. You know, we hit a million downloads for the show. Oh, did we? Yeah, so thank you to Brink Nation. Thanks for listening.

We're getting a podcast studio this year, so that'll be fun. Is that right? I was not aware of that. Yeah, under construction. All right. We actually do have some pretty great episodes lined up. Mining miniseries continues. everybody wants it to continue it'll continue we have some really exciting guests actually very very excited

to share with you and I am going to make one prediction just that and this will be immediately true and it'll be immediately apparent in the first quarter but I think the crypto industry the entrepreneurs the builders the investors are really going to flex their muscles in terms of public policy this year. I think this will be the year that the politicians finally realize how strong and aligned this industry is. So I'm excited about that. Yeah, we took some real licks in 2021. We took a real bruising in Washington. But yeah, I'm with you. I think, you know, and I'll add, I think we will actually, well, not we, but Congress will pass legislation undoing some of the worst provisions in the infrastructure bill regarding crypto.

Yeah, I agree. That's a definite prediction that I'll make. I think we'll see like one to two dozen explicitly pro-crypto candidates elected to Congress in the midterms. That's another definite one I'll make, I think, Blakemasters among them. but yeah, I think that'll be a feature is that crypto will be a significant policy item and pro-crypto candidates are just going to do well. Yeah, I think it'll be obvious to a candidate that's on the fence here to hop on the pro-crypto side because there are not a lot of people actively on the other side of that.

So just from a pure selfishness perspective, I think you'll see politicians hop on the bandwagon. Yeah, it'll be really interesting. to see if there's ever a candidate that emerges where their platform is specifically being anti-crypto. Well, it's like Brad Sherman and Stephen Lynch, right, and Elizabeth Warren. Those are like the only three that are just irrationally anti-crypto. Yeah, but that's not their primary sort of concern, but there are certainly, you know, and most likely will be elected members of Congress where, you know, maybe their first policy agenda item is crypto. Yeah. Well, you're already seeing that, right, with Cynthia Lummis, and it'll be interesting to see where that bill goes.

I need to really brush up on my government. I had a really bad government teacher in high school, just terrible teacher. So I don't feel like I learned it well enough. So how a bill becomes a law, I need to revisit that. I mean, that's very opaque to me. It's very important to remember this, 435 representatives. I know that one, yeah. Don't forget that, yeah.

when I did I did AP government we had to memorize every amendment so all 27 I want to say like so memorize what was in all them we had to also learn all the like something like the 30 most important Supreme Court cases

yeah yeah there was a lot in that but it was it was very useful because we spend all day talking about regulatory now so some of the procedural things I guess you can never just know because a lot of them are just soft power. Like how do these things actually make it through committee and what are the horse trading aspects of the job? Yeah, I mean, so much of it is uncodified and you just earn, you learn it by being on the rumor mill on Capitol Hill.

And you just can't know these things as an outsider. Yeah, it's like, it's some of the intricacies of, I guess the venture industry, or fit the same thing. same thing, but the swap is a lot smellier for politicians. I get the sense. And I have no interest to learn the intricacies of getting a bill through Congress. No, it's like, hey, do you want a new hospital in your district, or can we put a naval base in your district? That's the type of thing that's happening. So, okay, here's another prediction. I think we're going to get gridlock in Washington after the midterms. I think we're going to have, at least the House will change hands. I don't know about

the Senate, and that will seize up any ability to pass useful legislation, right? But I do think we will see a strong bipartisan effort to give us clarity on, in particular, the sort of security slash token space. You know, what it's like, what does it mean to issue token, maybe an update to Howie? I think that there'll be a lot of momentum around that this year. year as well. Well, so this is the part where I think it's going to be a little bit interesting and understanding the intricacies of the Senate versus the House is going to be a challenge here. So let's just say that there was a House bill that was seeking clarity on securities law issue. But then you have like a Lummis bill that's saying let's create an alternative regulator for

cryptocurrency. And, you know, let's basically pull this away from the SEC who's already proven to be incompetent in dealing with this and just ineffective. So how would that work? Like you have one thing that's saying, here's how the SEC needs to do it. And then another that says we're going to take the whole thing away from the SEC. Well, you need to both chambers have to pass the same ultimate bill. Yeah. So I worry that we don't, you know, hopefully they're not too much at odds with each other.

Kind of two well-meaning bills that kind of divide the Congress. Well, I think the blockchain caucus in both houses is still hasn't really sort of, you know, settled on a firm policy agenda just yet. You know, you're seeing a lot of sort of like vague pro-crypto positioning by, you know, members of Congress, but you don't see like these are our objectives just yet. So I think that will become clear in 22. But the problem is the midterms dominate everything. and people are just going to focus on getting reelected, frankly.

Yeah, I mean. So that sucks the air out of the room. You'd think that just like COVID situation will probably dominate a lot of the discourse around the midterms. So either way, this will continue to be a very policy-focused show, I'm sure, because we'll have no shortage of things to talk about. Hopefully successful legislation is supposed to, you know, failed efforts to, ward off bad legislation. It'd be nice if we could fix that one in the coming year.

Yeah, let's take some victory laps next year. That'll be fun. Well, this has been a fun year of podcasting. We'll continue it. And thank you to the listeners. Just amazing listeners. We really like getting the DMs and the email. So thank you for listening.

So maybe one final item to wrap. What are some of your favorite on the brink episodes of the year? Oh man, putting me on the spot. I mean, there's been so many good ones. I can go for us. I have a few that I really liked. Okay. So I really enjoyed my episode with George Selgin.

That was a great episode about, you know, the similarities between free banking and stable coins. George is obviously a thinker who's enormously influential in the Bitcoin space. although he has had a somewhat antagonistic relationship with Bitcoiners. Then I also really liked the Lancium episode on how Bitcoin miners could stabilize the grid. I thought there was just a lot of very strong detail in that episode that taught me a lot about this stuff too. So those are two of my favorites. Those were good ones. Yeah, I had a bunch of favorite ones.

I liked having Dick Bovon. So he's the, we talked about just the banking sector and the future of dollar dominance. I thought he was great. He's been a banking analyst forever. Really liked having him on. Some of the investors that we had on I really like chatting with. I like chatting with Mark Co about public markets. I like talking to Dan Tapiero about what they're up to at 10T.

Really like talking to Andrew Steinwald at Fermion. That was kind of before NFTs really pop this year. So that was, I felt like I was getting a two or three months. glimpse into the future talking to him. So that was a lot of fun. There's been a ton of them. It was a fun year of podcasting. Alex Thorne, I thought, had an awesome episode from Galaxy. So thanks again to Brink Nation and please buy our merch. I think we get, you know, pennies on the dollar for each item of merch you buy. And thank you to the guests for coming on the show and tolerating our inane questions. We appreciate you.

We do appreciate you. All right, everyone, have a safe and healthy new year, and we will see you in 2022.