On The Brink with Castle Island - Weekly Roundup (ETF chatter, Tungsten cubes, USA #1 in mining, insider airdropping) (EP.250)

Episode Date: October 15, 2021

Nic and Matt are back for our 250th episode! We discuss:  ETF chatter heats up Where the Tungsten memes come from Why tungsten is good Coinbase launches an NFT platform Ribbon airdrop controversy How DeFi airdrops are like the McDonalds monopoly game Does the token industry need a disclosure framework? Miami plans to pay employees in Bitcoin Stripe is getting back into crypto Jamie Dimon wants to know how it ends at 21 million China's hashrate goes to virtually 0 The USA is the center of hash We retire an old FUD Content mentioned:  Jump Capital, Stablecoins: The Impending Rise of a Multi-Trillion Dollar Market Sponsor notes:  This show supported by Coinbase Prime, an integrated solution that provides advanced multi-venue trading, custody, and prime services for institutions. For more information see coinbase.com/prime

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 to Britain's ailing economy with a new round of Concentive Easing. You print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called a Bitcoin. Bitcoin.

Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to you by Coinbase Prime. More on that company later in the episode. So we're recording this on Wednesday afternoon. So this usually means a lot's going to happen on Thursday and we're just going to miss it. But such is life.

You guys know the drill. I don't think we've ever done an early recording without, you know, crazy earth-shattering stuff. happening later. Just be some massive company coming in, just buying a lot of Bitcoin, buying a lot of Ethereum, big deals announced. You know it's going to happen. Well, you know it's edging closer and closer. What, the stock to flow date? You're talking about 100K. We're going to 100K. Is that do this? Yes, the stock to, uh, the stock to flow model. Yes. I don't know which one. There's so many. They proliferated. That's the thing about me, you know, making, you just make as, you know, more and more models. One of

them will be right. Did you see that the that YouTube de-platform Pomp for like three hours this week? What the hell was that about? I mean, that actually happens a lot. So like Pomp like, you know, made a meal out of it, which is like fair enough. But yeah, I mean, that actually does happen quite quite a lot. They have automated processes and then you have to appeal it and you get your count back. But I don't really understand why that would have like what automated process would have picked up that they should have taken his entire channel down after having plan B on. It could have been coordinated reports. You know, like this is why we need Web3, the D-Web.

You know, like these things are really easily gamed. Seriously, I mean, what better advertising for public blockchains than deplatforming during an episode like that? Yeah, so what is inching closer? I mean, maybe it's the stock. Who knows? There might be some stock to flow catalyst. is the mutual fund, sorry, the ETF approval for the ETF's built on futures. So I believe the critical date for the first one is the 18th, just in five days.

I think Eric Balcunis had a tweet a couple days ago, and Bloomberg actually put odds on this. How do you think they did those odds? That doesn't seem to make any sense how you could handicap this race on the Bitcoin futures side. Yeah, I have no idea. But there's a lot of filings here. Yeah, they have odds on them. That's right.

I'm looking at it right now. So there's something like eight or nine filings. Arc just jumped into the race last minute. Block five is in the race. We've got Bitwise in the race. Galaxy Vanek and Vesco Velcroi, Pro Chairs. They have pro shares as the most likely effective date. For pro shares is the 18th.

So basically they just filed. And then you sort of wait to see if the S. does anything. I think that was about six months ago. So they've waited and the SEC has not done anything. So who knows? Maybe we'll have an ETF this time next week. I continue to think that it's such a unlikely event that they would approve just one. It seems crazy to think that there would be a monopoly on ETFs. But if there is one, I really hope it's a Castle Island portfolio company. There's, yeah, currently the odds of that happening. are the combination of 100 and 200 to 1.

So you're telling me there's a chance. That is. There's a chance. According to Bloomberg, but, you know, Eric has been very good on this. And Eric, if you're listening, I'm sorry I insulted passive investing the other day. I didn't mean it. Okay. Take it back.

I think we're going to have to have the spotlight feedback on why the spot ETF is actually a way better product at some point. But I feel like I've talked myself into a start. on that one. I can't talk about it again. Yeah, we cover it on every episode. And rule 15C3-3-3 as well, cross the one off the bingo. I don't have to bring that one up. Can we talk about something else, which is really important, which is the metal tungsten? Yeah, what do you got? Well, we've talked about tungsten on this show before, I believe. Am I wrong? No, you're right. And there's some big tungsten buyers up here in Boston, I'll tell you. CMS guys.

cornering the market on tungsten so you know i've been sort of semi ironically uh i guess shilling tungsten the metal um for years i looked on it's been years three four years now and it finally took off and now tungsten is the hottest literal commodity on crypto twitter uh the tungsten cubes and so you started the meme i think so i mean i made this great meme a while back about why tungsten is a superior metal really, I think it's pretty persuasive. It's got a lot going for it. Highest melting point of any naturally occurring metal. You know, great tungsten carbide is a really useful sort of industrial alloy. There's just a lot going. It's got a lot in its favor. What about tungsten NFTs? So we have a portfolio company dust that makes what I can effectively

call it's an invisible barcode made out of diamond particles. You put this on the back of a piece where if you put a little bit of that dust onto a tungsten cube, and we do NFTs. I'm not sure I fully grasp the concept, but... We're going to do real-world NFTs. That's the concept. Rocket pitch on tungsten. I have seen requests for tungsten fud dice.

Rest assured, I've looked into it, and it seems like it will be incredibly expensive. I mean, the cubes are not cheap. They're status symbol at this point. And can you engrave on tungsten? Yeah, you could. Yeah, tungsten is just very hard to sort of deal with generally because basically no metals can hold it in it. You can't really smelt it. Think about that because you need a metal that can withstand the heat to be the crucible, you see. So what's the whole point of this tungsten thing is that you think that this should be more valuable than gold and it just didn't happen that way? Well, I mean, it doesn't have as good industrial properties as gold. I mean, it's really kind of the opposite. Gold is very,

has a low melting temperature, it's malleable, it's ductile, you can do stuff with it. Tungsten has a high melting temperature, so it's annoying to deal with. It's brittle, and it's kind of hard and annoying to shape. So Tungsten is a terrible metal for jewelry purposes, for the most part. That said, it does have the same density as gold. I think it's something like 19.4 grams per cubic centimeter, and so that's why you get, you know, tungsten fillings inside gold bars. is pretty interesting. Well, congratulations on getting everyone excited about tungsten on Twitter. Seriously.

Congratulations. Well, the point of this is that Midwest tungsten, the sort of primary manufacturer of tungsten, they aren't acknowledging this, and they should obviously sponsor the show. That was the point. So I don't know why the heck they haven't been in touch. They just think that a bunch of randos are buying tungsten cubes because they're great. Yeah. So, I mean, I'm sure the sales of their tungsten cubes, especially the coveted.

3 inch or 4 inch cube. I mean, I'm sure it's through the roof. And like, do they even have like an analytics guy, like looking at the data? I'm being like, oh, that's weird. Why are these like male 25-year-olds that are into crypto, like buying our cubes? I mean, have they even interrogated that? You know, there's just some marketing guy who just has like an outdoor billboard, like a clear channel outdoor board that he bought like two or three months ago.

It's like, hey, look, guys, this is driving the traffic. I'm a genius. I'm starting to think that the tungsten dudes are just not on top of modern trends here. I mean, like this is like engage crypto Twitter. Get on the Discord. Make some NFTs. Come on. Where are you?

Crazy. All right. Well, let's hop into some deals of the week, shall we? Yes, sir. What do we have? Big deal to start elliptic, uh, blockchain forensics company that you all know. I'm sure they raise 60 million in a series C from Evolution Equity Partners soft bank vision fund to Wells Farger strategic capital.

DCG and others. Next one up is Moonpay. So I don't know if this is a completed deal, but it's reported by the information that Moon Pay is raising $400 million in a round led by KOTU and Tiger. Moon pay is, as far as we know, it's bootstrapped. So what an awesome story that is. Just one of the prolific founders in the space with Ivan Soto.

So congrats. Yeah, an enormous deal. And very, you know, very large market, actually. Fiat to crypto on ramps, I think one that's kind of underappreciated. Next up, we have Celsius, the crypto lending platform. There is 400 million from Westcap, CDPQ, and others. CDPQ. This next one is Ajara.

This is a Cameroon-based crypto financial services company. They raise $2 million from coin chairs, Anthemis, Mercy Corp, and others. Then we have Re-NFT, which is a platform that facilitates NFT. lending. They raised 1.5 million from Anamoca brands. Next is Future Swap, which is a decentralized exchange for perpetual swaps. They raised $12 million in a round from Ribit Framework, True Ventures, and Placeholder. Then we have Yupp, a crypto social media company. They raised $3.5 million from distributed global Dapper Labs and others. That's my favorite company of the week. Yupp.

I don't know what they do. How do I get on Yupp? It's what was that one a few years ago? Yo. Yeah, yeah, though I do remember that. I was on yo. And you could just, the only thing you could do on it was say yo to people, right? So maybe that's, that's the premise of yupp too. It's like, yep. All right. I like that a lot. All right, I'm a buyer. Next one is easy crypto. This is a New Zealand based crypto asset brokerage. They raised $17 million from Nuance Capital, Seven Peaks, Hutt Capital, and others.

Then we have art blocks, which if you're an NFT collector, you'll be very, familiar with their digital art market. They raised 6 million from True Ventures, Galaxy, collaborative currency, and Libertus. Yeah, art blocks is blown out. Jesse Walden started a, he did NFTs when he closed his fund and they were art blocks. A little known fact.

Maybe that's a very well-known fact for all I know. Next one is. You sound like you may be the owner of one of those NFTs. I may or may not be the owner of one of those NFTs for sure. There you go. It's pretty slick. By the way, some of my frog ones are just fantastic. I was going to mention the frogs.

How are the frogs doing? They're roaring. Really? Yeah, they're roaring. Periodically, people will hop into my DMs and give me updates. I don't really follow it as much as I should. But these frogs are going. I think Jason Williams is really pumping the frogs.

I think that's what's happening. Well, don't own more frogs than you can afford to lose. Is that it? I don't know. Just, yeah, I don't know. I don't know. Is that kind of like a long-term buy and hold, you know, for the autistic quality? I think of these chill frogs is more of a store of value.

They have a real store of value property to them for me, at least. I've got one with a pink hat. I've also got one with a little bit of a blue hat, kind of like a devil-raised blue. They're good. My captures are not doing anything. Not doing good. Yeah. I sold most of my NFTs, so. Oh, you're out on NFTs? Just as we're getting started here, just as Coinbase is starting an NFT platform, just as the mainstream's coming in, you're out. That's true. Maybe I should FOMO back in. There we go. You definitely should. All right, next one up is

Shield Market. This is a crypto prime broker. It's based in France. They raise $10 million from Matamico and semantic. Then we've Republic, the equity crowdfunding platform. They raised a $60 million seed fund focus on equity opportunities. And the last one, at least for this week, is JAM, J-A-M-B-B-B, Jam. This is a digital comedy collectibles marketplace. They raised $3.5 million from Arrington, Anamoka, Parify, Dapper, and others. So those are the deals of the week. And as we said, there'll probably be more on Thursday that just won't make the cut here.

So some interesting news, as you mentioned, Coinbase launching an NFT marketplace to compete with OpenC, I mean, this seems like a no-brainer. Because OpenC is, you know, very much on-chain, very much sort of crypto-native. You have to know how to use Ethereum to use it. I imagine the Coinbase version will be much more custodial in nature, which kind of makes sense. I mean, your average NFT purveyor may not be a crypto-native. So I haven't seen the platform yet, but certainly makes a lot of sense to me.

I think there's a huge market for NFT custody that Coinbase is going to be able to tap into here. If you can have your NFT in a vault, in a Coinbase vault or something, have a couple days to be able to take it out as a security measure. I think that would be huge. I think having your own multi-sig NFTs would also be an enormous opportunity. There's a lot of design room here. But seeing Coinbase, this is a very fast kind of entry, don't you think? Coinbase is on this in a very quick way, like a couple months in a head of this product. and market. Yeah, it's impressive. I mean, I guess we'll see the product. I mean, I also think

that there's scope for an off-chain execution. I mean, does every NFT trade need to be on-chain? I don't see why. It's kind of like if you want to trade Bitcoin or Ethereum, it doesn't need to be on-chain. So OpenC, you know, makes me think of something like a local Bitcoin's where, you know, every trade is actually settled on-chain. Do you strictly need that? that for NFTs. I know NFTs only sort of really make sense if you sort of actually, you know, own them and you hold them directly. But it seems to me that there would actually be a huge amount of demand for off-chain execution and then custody with third party. Yeah, it's the same type of, so many things about NFTs remind me of early days of Bitcoin.

Like when Coinbase was getting started, people were looking at it and say, well, that doesn't make any sense to have someone else hold your Bitcoin. And the blockchain dot info way was a little bit more popular actually. Just build a wallet and hold it yourself. I think we're going through this right now with NFTs. And it seems to me like a lot of the infrastructure that needs to exist around NFTs is a bunch of the infrastructure that was built for cryptocurrencies around trade execution platforms and analytics and we'll probably have a coin market cap for NFTs, the whole nine yards. This show is brought to you by Coinbase Prime. Coinbase Prime offers trading, custody, and financing tools for institutions. With trade financing, you can trade from cold storage

instantly and acquire margin for lending and shorting. Coinbase custody is battle tested with dedicated, on-chain addresses, and industry-leading insurance. Coinbase Prime offers integrated trading tools, including real-time market data, smart order routing, robust analytics, and algorithmic execution strategies. To learn more, visit on the brink.link.link slash coinbase. So in other NFT news, OpenC delisted a project named Dow Turtles for apparently violating its terms of service. Apparently, it broke their rules about being too security-like as far as I understand it. Yeah, I don't know if they came out and overtly said this, but that was certainly the chatter in the community that Dow Turtles had a lot of properties that looked like they could be unregistered securities. And this is the other thing that's going to come to this market is, you know, the SEC eventually will start to look at some of these NFT projects and many of them will probably be deemed to be securities.

My guess is that that will mean that the ATS venue play here becomes pretty interesting at some point as well around having. NFTs that are securities. So controversies abound with the turtles. I guess the problem is implying that the holders would sort of get something on an ongoing basis in exchange for holding a Dow Turtle.

If you look at the prongs of Howie, I mean, it doesn't take that much to look at something like that and say, well, we're relying on the others and there's a common enterprise here. Although, I mean, that said, you know, take it outside the NFT wrapper and look at a lot of tokens, which have cash flows associated with them. And then, you know, it seems like there's a kind of an inconsistent standard being applied, perhaps. Well, that's a good dovetail into some of the policy things

that are going on. So Bloomberg had a nice article this week. And Andreessen Horowitz is apparently on a big policy push in Washington talking to lawmakers, regulators. There's also some chatter and Brian Armstrong said this on POMP's podcast that Coinbase will be coming out with some policy proposals. Overall, I think this is really a positive to have some of the biggest voices in the industry actually proposing things. It's better to get out in front of this and start to propose frameworks as opposed to just sitting back and waiting for them to happen. Now, I guess the devil's in the detail in terms of what are these, you know, what exactly is being proposed here. The Bloomberg story was interesting because it floated the idea that Coinbase had been talking to certain lawmakers and floating the idea of having a crypto-specific regulator.

And Gensler is apparently, you know, not surprisingly, not for that. It'll be interesting to see where this one goes. Tough time to throw into your hat into the ring in terms of crypto regulatory policy. We'll see if they can make progress in Washington. seems like it's pretty polarized against the industry for the most part right now. Yeah, it does seem polarized. To me, Senator Toomey is apparently listening and collaborating with a lot of, you know, the bigger financial firms that are looking for some clarity on this too.

So we'll see. I think there's room to be cautiously optimistic, but, you know, it's a long road. One thing I did want to get your take on this week was let's talk a little bit about air drops. So there was this controversy last week. It believed it happened after we recorded the podcast around Ribbon Finance, which is a defy project. So they were doing a tokenirdrop, you know, as is common with many platforms. And it apparently what happened was someone at Divergence VC, which is one of the investors in Ribbon, an intern, I believe, or an analyst, was sort of gamifying or something.

Sible attacking theirdrop. And so these tokens were ostensibly for customer acquisition purposes. But this person was able to generate 652 ETH, which was about $2.3 million. So sold the native token into ETH. And obviously the backlash here was pretty swift. Divergence ended up giving the money back, returned their original investment, you know, came out publicly and apologized. From my perspective, I guess let's put the,

specific incident to the side here, it really highlights some of the issues that are present with these airdrops and the fact that there are a lot of conflicts inherent. And to me, just really points towards the industry needing to get its act together from a self-regulatory framework perspective or else someone else is going to do it. Yeah, I mean, my my guess is that quote-unquote insider trading is rampant in the crypto industry. I'm sure this is not the only instance of this happening. There's a perception that there's no insider standard because we're dealing with what are believed to be commodities.

And I think it's pretty difficult to tie an insider standard allegation to commodities market. I think Matt Levine might have some exceptions that he's found in the archives, but I don't think there's a lot. I mean, like if you look at what insider trading is, conceptually, it's, you know, there's an information asymmetry and you are monetizing information which sort of doesn't belong to you. It's not yours to exploit. And that's why Matt Levine often describes inside of trading is theft of information, basically. Here, there was an obvious

information asymmetry like, hey, here's an air drop. These are going to be the parameters, you know, so you have a little bit of warning. So, you know, how to farm the air drop preemptively, which was meant to be retroactiveirdrop, I think. Wouldn't surprise me if this was just very common. It's just, you know, to bring this under the aegis of, you know, insider trading laws, I think a lot of these things would have to be reclassed securities. So in its current form, I think that's probably the least of the SEC's concerned is trying to enforce insider trading laws. Yeah. So I think the insider trading angle is a clear one to think about. There's other just general kind of FTC category concerns here too.

Some of this reminds me of, really, I guess, what these airdrops are trying to get customers. And so they're meant for customer acquisition. They're kind of marketing spend if you squint hard enough. So I don't know. Do you remember the McDonald's Monopoly game?

Do you remember that? I know the story. I never participated. Yeah. And so there was a lot of scandal. And so without even going into details on that, the McDonald's Monopoly game was that you would, you know, buy a meal and you would get a sticker and if you could make the whole monopoly board, you would win. And certain employees

game that. And to me, that's kind of the comparison here where if you're an employee of McDonald's and you know that, hey, we're going to put these stickers and these zip codes and then just go buy a bunch of Big Macs and those zip codes, you're really taking, you know, what is meant to be a marketing expense to get more people to come in. And you're just, I guess in that case, the company is still making money, but you're really just taking away from the company. It would be like you or I figuring out that BlockFi has a certain customer acquisition strategy and then just going out and gaming it and getting it all for ourselves. Meanwhile, we're equity investors in the company. That's actually a great analogy because, yeah, I guess you could describe the air drops as a marketing spend.

I mean, it's certainly dilutive for the existing token holders. So there's a cost to it. you know, it's cost of equity, effectively. And I've seen more of a reckoning recently, oh, like, are our airdrop rewards too high? Are the, you know, liquid, you know, yield farming liquidity, you know, rewards too high? So teams are sensitive to these things.

And, of course, that information was not there to act on. I think in the case, the monopoly competition, there was actually like one guy that sort of orchestrated all of it. Yeah. And he would like go up to people in the supermarket and be like, do you want to like win monopoly? Because, you know, it'd be too obvious if he and all this like close friends and family won, right? Yeah. So he'd actually go up to strangers and use them as proxies. And, you know, they'd work out a deal whereby he would get a cut and be like, yeah, you know, you're going to win a house. But like, you know, you have to write me $200,000 check or something. And I think it was something. And I think it was something.

like none of the prizes were won honestly. Yeah, I think that's right. It was as bad as that. Yeah, it was pretty rampant. But the monopoly thing was like a cultural phenomenon. People, you know, he was eventually charged. And so this caught up to him. That kind of reminds me of Whitey Bulger, the famous Boston mobster, gangster,

who won the lottery. It just so happened to win the lottery. Had to bring it back to Boston. Yeah, it all comes back to Boston. Did he win the lottery honestly? No, of course not. But he needed to show that he had a real income stream. And so he had the winning lottery ticket.

How he got it was that. Yeah, you didn't never heard this story. Yeah. No, I don't follow Boston folklore. Yeah, so he won a lot of. This is only true Boston natives know the story. But back to the ribbon airdrop. So if you think about what Salkis was doing with Masari a few years ago,

around the ICO vesting schedules and, you know, what terms the insiders had and what those lockups were. Something similar kind of has to happen here, I think, in terms of how can you be very clear about how you're going to distribute these tokens and not have a bunch of insiders know that, okay, we need you to put X amount of dollars in and interact with the protocol three times and then you're going to be part of thisirdrop because at that point, it just becomes a completely gamified experience. So I think there is some transparency that the industry could start to align on for these. Some of it's just going to have to be an honor policy, I guess.

Yeah, I fully agree on the need for disclosure. I mean, that's really what securities are is a set of disclosure requirements. So in theory, people can make, you know, educated decisions. And it also just enforces a certain rigor. You know, I mean, a lot of teams aren't you probably even aware of things that they would, ordinarily have to disclose, were they active in public markets. I've been continually disappointed by the industry's inability to put together a disclosure standard. And generally, my view is that a self-regulatory approach wards off later, worse, more onerous top-down regulation. So,

you know, I think it's in everyone's interest to actually do something like this. But I've never really seen any disclosure I would describe as like, you know, particularly transparent accompanying like a token launch or anything like that. Yeah. I mean, eventually it's just, it's really bad for the industry, whether or not the regulators take action or not, but this is the type of thing that makes retail users really doubt,

like the fairness of these systems. And so if the long-term goal is to grow the pie, this is among the most predatory things that you can be doing. Yeah. So we'll see how it resolves I mean I think this might be the nail in the coffin for the retroactiveirdrop notion because the thing is ever since they started

I think was the first one uniswap in terms of the retroactive air drop rewarding users for prior actions taken For some reason I thought it was compound They I think they weren't the first Synthetic was the first to have liquidity of liquidity mining but Compound was the first really popularized it.

I don't believe compound may have rewarded users proportional to their own use of the protocol. I know Uniswap did. The point is, once the cat was out of the bag on that, that became part of the public knowledge around how the game is played. And then users then had a incentive to engage spurious with any sort of defy-fired. project in an attempt to sort of win the, you know, sufficient on-chain credit in order to qualify for a subsequent theoretical air drop, right? Right.

And so, and there were a number of sort of high-profile ones, including Gitcoin, things like that. So, you know, I think the game theory was already played out. Like, people had already preemptively game them, whether or not they had insider knowledge. they would transact a lot and sort of civil attack these systems in order to score highly insert in the on-chain credit. So I think it was sort of already kind of decaying, like the fidelity of the measure was decaying a little bit.

And these airdrops are by no means a guarantee that people are going to stay on the platform. And so there needs to probably be more thoughtful design around some sort of a marketing spend that will actually incentivize people to come. It's one thing to give people a handful of Chucky Cheese tokens, but they just sell them before they even go in and they never go back to Chuckie Cheese. It's kind of pointless. Yeah, the risk is that you just attract mercenaries, whether or not it's liquidity rewards or just rewards for using the protocol in question. I mean, you know, it's not clear how durable these things are. And I don't think I've seen vesting with any of these hairdrops, which would be difficult to actually instrumentalize.

So changing gears a little bit. So Miami is now putting together a plan that would pay city employees in Bitcoin. That's good. That's good to hear. Yeah, I believe this was described as a major priority by Mayor Francis Suarez. My understanding is that the city of Miami cannot actually hold cryptocurrency at this point under its kind of sort of existing statute. So there's sort of a number of hurdles they should climb before they can do any of this. Well, maybe at some point they'll be able to do it through Stripe infrastructure.

Do you see they're finally hiring out a crypto team? They kind of had a cup of coffee a few years ago, but it seems like they're getting a lot more serious about it. I certainly remember when they trashed crypto in a blog post, pretty acerbic blog posts a couple years back. But, you know, they know where the world is going. So it's better late than never. So speaking of better late and I guess probably never, J.P. Morgan, let's talk about Jamie Diamond, came out this week and he said, I'll just challenge the group to one other thing. How do you know it ends at 21 million?

You all read the algorithms. You guys all believe that? I don't know. I've always been a skeptic on stuff like that. Talking at the IIF event earlier this week. So it seems like he's still not a believer. I mean, the thing is that it's literally five lines of code. So, you know, even for the layperson, it's not really that hard to comprehend the having logic.

Yeah, Brian Armstrong had the best tweet. He said, yes, I read it, and then I wrote it, coded up your own Bitcoin node to make sure I understood it. It's like, yeah, it's, I do believe it's $21 million because it's out there. It's public. Yeah. I mean, God forbid, you know, he gets into. to actually educated critiques of Bitcoin. I mean, I kind of figured he'd learned his lesson a little bit

because, you know, J.P. Morgan sort of have a bit of a rapprochement with Bitcoin. I mean, they're not as hostile institutionally to it than they were, right? It's got to just be, they have so many talented people over there on the blockchain team. And so it's going to be such a demoralizing thing to have your boss come out and just trash the industry and just not even educate it takes. It's not like he's coming out and saying, I'm really worried about the stability post, you know,

post-block subsidy going away, will the fee market emerge? I'm really worried about that. I'd love to hear it. I'd love to hear it from them. Speaking of FUD, actually, quality FUD this week, so Cambridge reported new data

saying that China's hash rate went to effectively zero. I don't believe it's zero, but, you know, their data shows that it's zero because it's based on pool IPH addresses. And the USA is over one-third of the Bitcoin network, apparently. That's amazing. So the Fudd dice needs to change. We got to scratch off China FUD and just scratch on USAFUD because you can bet that within a few weeks people are going to be trolling Bitcoiners over the, you know, worrying amount of

hash rate that's domiciled in the U.S. Which I mean, I can assure you will continue to grow. The U.S. is the absolute number one destination for Bitcoin mining without question. know I absolutely love USA paraphernalia. I love USA shirts. I have a pair of pants that's a golf pants that are just American flags. So there's got to be some meme that we can do. Start getting the getting the memes going around just USA Bitcoin mining. Well, we do sell a hat, which has the U.S. flag and a Bitcoin logo on it. Is that actually live on the store? Is that not live yet? Because people have been asking. I don't know. Our merch guy is just, he's hard to get in touch with.

If you're listening, you know, let's get the hat going. That's the USA and Bitcoin, you know, USA and Bitcoin, they got a lot in common. USA, USA. So, we're the number one. Take that, China. We won, okay. But it's actually good that all the Bitcoin mining is here, to be clear. It's actually good.

Because, you know, the U.S. is not like an authoritarian single-party state that can, you know, violate the property rights of, you know, thousands. of individuals and a whole industry overnight the way China can. So there's no possible world where the U.S. sort of requisitions all the miners and does a state, you know, enforced reorder the blockchain, or is that was a sort of a maybe outside possibility in China. So, you know, it's not the same situation at all, to be clear. In the course of just explaining or doing 101s or talking about Castle Island or talking about crypto to various people over the past five or six years, I cannot tell you how many times I've been asked about China. And wouldn't they just 51% attack

the network since the whole thing is controlled by China? It is by far the number one question that people ask from a critique standpoint. Well, we've officially defeated the China fud. I think that might be the first fud that we've ever officially retired. But it's done. We won on that specific topic. There's a lot more fudge. There's a lot more fud. We got to cross the dice. The dice have got 12 sides and there's three. We're four. Are there four editions? The dice? Yeah, there's four. Remember, we did that conference. We did the limited edition run, the white ones. We had some repeats on there. But that's 48 possible sides for fud. So, you know, it might be about the quantum fud next. I haven't heard much, I haven't heard about the quantum fud lately. Quantum is on there, actually. Quantum is. Yeah, it is.

People just aren't bringing it up. It's sort of an esoteric fad, though. You need to brush up on your quantum resistant algorithms that we're going to slap onto these blockchains. It's all about the educated fuds, you know. Those are the ones that are more fun to... They show that you've done a little bit of research, you know, into the fud scene.

So I respect that. Hasu will come strong with some good educated fud. Yeah, I mean, you know, if any... We don't want them to be too good, though. I mean, we don't want them to be too compelling. Well, that's what I'm saying. Jamie Diamond, you're better than that. I mean, you can do better than this terrible thud that I don't believe there's $21 million.

It's right there in the code, man. I mean, he could be doing ESG FUD. Speaking of which, you know, there's a lot of developments on that. We're actually kicking off a podcast series on the collision of Bitcoin mining and the grid. That's coming. So stay tuned. Wow. Yeah.

he should be getting on the jinny coefficient fud is a good one that's a good one although it keeps getting more distributed so what can you do uh tether yeah i'm surprised he didn't go with tether that's still a good that's that's an outstanding fud we haven't retired that one yeah tether that'll be with us until the heat death of the universe the um along the lines of jp morgan so financial times had this opinion piece this week on in the the title was traders at banks fear missing out on the crypto party, it's well worth a read. It just talks about the slow-moving nature of banks. And for me, the biggest takeaway was, you know, if you're a bank that doesn't have senior management buy-in, just good luck. I mean, this is just never going to happen because you'll have this compliance

apparatus that just comes in and is not incentivized to make things happen. So I thought the FT article did a good job of calling that out. It's rare to see an article in the FT that isn't incredibly hostile. and generally bitter about the crypto industry. I actually think the FT is getting a little bit better on that front. They might be changing their tune. Maybe we can retire the Ft Fudd. I mean, in particular, it's Alphaville, which generally takes quite the sardonic tone.

So maybe they're learning. They very well might be. Did you read the Jump Capital piece on Stable Coins? It's titled Stable Coins, the impending rise of a multi-trillion dollar market. It's from Peter and Shanav over there. I thought it was awesome. Yeah, they don't mince words over there at jump.

And to their credit, they've been very right about stable coins. I think they're the biggest stable coin bulls out there. I mean, alongside us, to be clear, like we've been on the record extolling the virtues of stable coins. But yeah, they've been well ahead of this. And in particular, you know, what I like about this article is pointing out, how stable coins are far more useful. They have far more utility than simply being a settlement between exchanges and traders and things like this. I mean, and they're detailed in the examples

they give of how it's actually, you know, potentially quite useful beyond just crypto market. So that's something, you know, people sort of accept that stablecoins are here to stay now, but they don't acknowledge that they actually have real world utility. And so that's kind of the next stuff we need to move towards. All right. So I think that's it for the week. We'll be back on Monday with another episode. Been busy on the podcast front this week. We had Mark Coe this week. That got some good feedback, public equities and blockchains. And we actually have a big NFT guest, a pseudonymous one on Monday. And then as I said, we're diving into the mining energy collision. There's a collision underway. Very interesting stuff.

All right, everyone, have a safe weekend, and we will see you on Monday.