Tech Brew Ride Home - (Bonus) Year-End Checkin On Crypto With Brady Dale of @coindesk

Episode Date: December 14, 2019

For the final weekend bonus episode of the year, I wanted to check in with Crypto. What a year for the space! Seemingly dead at the beginning of the year. But then the Crypto Spring™ happened. And then Libra happened. And so… where are we? No one better than CoinDesk’s Brady Dale to catch us up… Sponsors: PixelUnion.net Mealime Sofi.com/ride Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the Techmeme Right Home. I'm Brian McCullough. So for the final weekend bonus episode of 2019, I wanted to check in with crypto. What a year for the crypto space.

Seemingly dead at the beginning of the year, but then the Crypto Spring happened and then Libra happened. And so where are we now? No one better than Coin Desk's Brady Dale to catch us up. So I know this is the most annoying question to get asked as a reporter on your beat. But let's start off with Bitcoin and the price of Bitcoin. Because I think the last time I spoke to you was right when the so-called crypto spring was happening and Bitcoin was back above $10,000. So in the intervening months, what has happened? I see we're back under $10,000 and have been for a while.

7,000. You know, I mean, no one ever really knows why the price is. the prices. But like, I can tell you that, like, as spring was coming, you know, I had people telling me to, who argued that, like, every time Bitcoin starts to, like, really do a rally, it, like, does enormous rally and look for a giant number by the end of year, and that really doesn't seem like it's going to happen. I think, you know, this is just my explanation, just based on some stuff people have said to me around the space, but I think folks continue to be disappointed by the fact that big players still aren't moving into the space. And so,

you know, that's what I'm going to go to for my explanation. But, you know, a million things are happening. Another, you know, another important, another useful thing, though, and we don't really know why exactly, but one of our reporters today's story recently that was about how the, the correlation between the stock market and Bitcoin is really starting to break down. So it used to be that as stocks would fall to Bitcoin in a much more decisive way. And that's just, that's happening so much less now that it's, it's almost like their correlation isn't even really there anymore. And there's people who've always questioned that correlation. That's another part of the story that some folks are seeing. It's not a, it's not a place to retreat to as much as it once was.

Let me, let me come back to what you said about, you know, the big institutional players or the big money not really showing up. Because I feel like that that's a lot of what I was, And I did report on this stuff, was talking about earlier in the year that it was, you know, Goldman or whoever was opening a crypto desk and there was going to, there were futures contracts being traded and things like that. So I felt like the first half of the year, it was all about getting that institutional infrastructure in place. Did it not follow through? Did it not actually happen? The big scale stuff hasn't happened.

You know, I mean, there are futures contracts out there that you can get. And, you know, I think some of the, I think some of the bigger players are messing around with this stuff a little. But, and I think one thing that we don't know the extent of that's happening because these institutes tend to be so private that is I bet there are, in fact, more like, you know, I had a story about a year and a half ago, a couple of retirement funds taking a very small position in a few cryptocurrencies through another fund. And I bet there's more of that than we actually. know about, but there just hasn't been like, there hasn't been like much marquee moves. You know, it's like a giant banks themselves taking positions in Bitcoin that I think, I think people were before. You know, I'm sure that the smarter people than me have thought this, but I was thinking the other day, like, you know, maybe that original first rally was just, you're talking about,

like, big money, like hedging and like nibbling around the edges. Like, what if that big rally was just everyone that had a lot of money, Just, you know, if I was a billionaire, I'd be like, yeah, okay, I'll throw a million dollars into Bitcoin just to be as a hedge. You know, you never know. I'm maybe like all that money that's already happened and no one's ever had the conviction to follow through and jump in with both feet or something like that. Yeah, maybe. You know, there's a, there's a guy, Travis Kling, it. I'm going to say the name of it something wrong. It's like a guy asset management. You know, he made it pretty strong. argument recently that the crypto spring Bitcoin rally was all just a hustle of a few whales in Bitcoin that they did for reasons of their own like they wanted it for a minute and so they just they did it. So it's just it's always hard to know. I think you know, one of the, if, the thing that crypto keeps wanting to see and the FCC keeps refusing to give them is a Bitcoin

ETS and a part of the reason why the FCC refuses to do a Bitcoin ETS they keep saying is because they still feel like the market is manipulatable. And so, and if clean analysis is right, you know, it still is. And so, you know, and so that's a part of it. And then, which would also explain why bigger institutions are still somewhat nervous about it. What about all the other coins, which I have not been following up on at all, you know, everybody from Ethereum to, you know, you name it, has it been, was there, sort of a similar spring for them that's sort of ebbed away as well?

If you just scan over the charts, you know, they all tell a pretty similar story. The world has not, the broader correlation between these assets has not changed dramatically. So the other thing, the last time we talked, and it's almost, we've gone through a whole cycle with this subsequently, but a lot of people were saying that it was because Facebook was getting into crypto. And so there was a rally because everyone thought that that was going to mainstream it.

And, you know, we're going to get into this in a second. But is the fact that seemingly maybe Libra is not going to be as big a thing as people thought, sort of dampening people's excitement? Probably. You know, I think if there were folks who were pricing and then we were happening soon, they were crazy. That was often going to take a while. But, you know, I think maybe also So there's a chance that I think maybe some people are getting afraid that Libra is kind of educating legislators on cryptocurrency, and they might take a broader look, too. Maybe that is making folks nervous. I don't know. But certainly, yeah, the Libra's story certainly hasn't helped.

It's been a lot of negative attention. Well, so what's your take on, you know, Libra's health at the moment, seeing as how it's not actually alive yet? But, I mean, are all of the payment companies basically out of the association at this point? I believe Pay You is still in, right? They're a pretty small one out of Latin America. So I'm pretty sure they still aren't in. But, yeah, like all the other ones that everyone has left. And, yeah, Payu is still in.

And they left. That was a wild day. They left, like, all in the same day. So it was, it was, it was really wild when it happened. But yeah, you know, Visa, MasterCard, strike, they all backed out kind of at roughly the same time. And it looked, you know, it looked like a really, looking people were like, Lieber is dead. I definitely don't think that's true.

I think side project stood to gain. Right. I mean, on the one hand, it would seem like if, if Lieber were successful, it would sort of cut into the business. of, if you're a payments company. But then was it also just as simple as, you know, why, if you're Visa MasterCard, PayPal, why do you want any sort of regulatory scrutiny? You're doing fine as it is. Like, is basically that's the bottom line. They're just like, why do we need this this hassle? Yeah, I think they viewed it at first as a hedge. You know, they're like, well, if this is really going to, you know, eat our lunch eventually, let's like kind of be a part of it.

But then they were, and then I think they thought it was just completely not worth it. Like you said, it's just too much regulatory scrutiny. They don't want anyone to have any sign of them doing anything wrong or enabling going anything wrong. So, yeah, I think they disappeared. You know, the thing that I think is, not that I'm like, I want to like carry Zuckswater here or anything, but, you know, a part of the story, which I feel like has been missed about Libra is, if we take Facebook at its word, and I think this is at least somewhat true, that the point of Libra is to bring functional financial systems to parts of the world that don't really have it at a price that they can afford quickly and easily, allow them to kind of like leapfrog in the same way. A lot of developing world's leapfrog landline systems. If we take them to face value, and I don't completely dispel to you, but I do think they want to do that, it is kind of crazy. that we're just completely stifling this company's ability to reach the developing world for a million percent first world concerns. You know, I mean, this is this is all Europe and America

pushing back and for reasons that are, you know, from. But everything you guys, the tea leaves that you guys are reading, Facebook is still going ahead with this, right? Do you think we'll see, what are the odds that we would actually see a, a, a, product launch in 2020? You know put that at 15%. Why? Because it's going to it's going to take them years and years to now that they're in the regulatory

quagmire, it's going to take a while to iron that all out. Yeah, and I think there is a chance that they will eventually move fast and break things. Like I think there's a chance that they'll eventually just do it somewhere. Employ a million team of lawyers to say relevant.

you know, U.S. law. I think there's a chance eventually they'll do some gigantic backflips to do that. And I would not be surprised if they weren't preparing a plan to do that now. But they're a giant company that's making lots of money. They have plenty of runway. They're not going to do it next week.

They're going to wait a while and see if they can, you know, get some approval. You know, one of the things I wonder about is if we do actually see the launch of any sovereign crypto currency. So, for example, China has, this one is sort of talking about. I'm a little bit more interested in the one that Marshall Islands is talking about.

But if there were a sovereign cryptocurrency that it worked to appear, I'm going to say that Libra being able to do. And so it feels like that's a world become easier for Facebook to roll something out if there was some kind of sovereign coin out there that people took seriously. So I think if something like that happened, it could move things along. And I think Facebook will make an argument for that side of the planet that are watching for things like that. do sort of believe that Libra is existential to Facebook, and so I don't. I did not cover this story, so I'm going to have to lean on you a little bit to actually

explain the story before we talk about it. But this Ethereum guy that just got arrested, Virgil Griffith, is his name? Yeah. First of all, tell us what happened, and then was he a big deal in Ethereum? Yeah, so Virgil, he wasn't like a famous guy, but But yeah, people really like him in the Ethereum world. And he had like hacker cred well before Ethereum too. So, you know, he was well known in like, for example, the Tor community, like, well ahead of ever being involved in Ethereum.

But he was a good friend of Italics. He did like special projects for the Ethereum Foundation. So which meant that like he was largely just going around the world trying to like find new ways to move Ethereum forward. So for example, we did a story not too long ago. about how he was trying to get Ethereum approved as compliant under Sharia law, a Sharia law, the Muslim law, there's been some cryptocurrencies that have succeeded in doing that so far. He was trying to get that for Ethereum. So he did things like that.

People liked him. You know, he was viewed as something as like a mentor figure. But he also, and I don't know, Griffith. I know a lot of people who do know him, but I don't know him personally. But he is, you know, he's kind of one of those dreamery hackery types. He's, you know, sort of ideological. And so the story of what happened is in April this year, he took a trip to North Korea with a few other, you know, non-North Koreans, not a large number, we're told.

And it was sort of one of their typical tourist trips that they do. You know, everyone's approved to go. It's all scheduled. You're constantly with a minder the whole time. where you got to see some different parts of Korea, but it ended with this Pyongyang blockchain conference. And Virgil gave a presentation there, you know, allegedly on blocking. Subsequent to that, he volunteered to do an interview with the FBI about it, in which he told the FBI what he did.

He let them look at his phone. He showed him photos. And the FBI allegedly, one of the things in the complaint, you sort of wonder how much, It's a different thing. It's admitted to all these different activities, I think the most... This is a story that actually I'm seeing a bit of chatter about just today. We might give our first crypto-native senator, at least temporarily, it looks like. Yeah, well, and, you know, native or not, but of a division of the company that run New York Stock Exchange, ICE,

that is holding in exchange, and, well, specifically Bitcoin holding a business. acquaintance of exchange for folks backed. I mean, you know, future Sanderman, it's something like she's moving to the Senate at least. Right. This is, she would be appointed by the governor of Georgia for the interim position. And she has been. So as of today, oh, okay. Yeah, yeah, yeah. It was rumored in. But as of today, we now know that. Something else that came across my transom recently was something about the lightning network. And again, that was something that I feel

like I was hearing a lot about towards the end of last year, beginning of this year. Where are we on the Lightning Network? No, Lightning Network's going fine. It's still a beta network. What is the latest news on Lightning? I'm not really sure. They just had a big conference that a lot of people went to in Germany. And, you know, people are feeling pretty good about it.

And so I guess what might be helpful for your listeners to know is sort of what the Lightning Network is. Bitcoin is a seamless and fast way to move value around the world. But it is kind of expensive to do. You know, you have to pay a transaction fee every time you send a Bitcoin and not can be anywhere from a few cents to a few dollars depending on how much traffic there is in the network and how much demand there is for Bitcoin at the time. And obviously that's too much.

Any sort of really any cost at all is too much for making very small payments. So what the Lightning Network basically does is to make it insanely simple is you put your Bitcoin into this other wallet that knows it's there. And then on this second layer network, you can move on lighting as being held in these sort of central wallets. And then proceeding along well, and the community is getting bigger all the time. But I don't think there's been any like stories yet on lighting, but it is still beta. If you're like most millennials, you know you should be investing, but, you're probably not sure where to start. Getting your money right doesn't have to be hard, though.

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So go to sophy.com slash ride to claim your free stock today. That's S-O-F-I.com slash ride. Sofi Lending Corp, CFL number 605-4-612. Are there any big stories that I should be watching out for in 2020 in the crypto space that we're anticipating? In the crypto space? I mean, I think, well, I think we're going to be. continue to see more resolutions from the SEC's, the FCC's pursuit of various crypto projects.

So we still don't know what's happening with the SEC's case against KIC's Cryptocurrency KIN. Actually, KIC no longer owns KICT the app. They're basically just a cryptocurrency project now. There's only like 18 people on their team. We don't know what's happening with the FCC's pursuit of the Telegram token sale. So I think that's going to be any other big story.

So I think continuing to see sort of regulatory clarity, you know, with Woffler in the Senate and some ties to this community, I think that next year could also be the year in which we see the crypto community actually gets serious about pushing for new laws for itself. So I think that's going to be a big thing. Those are a few things. I think we'll also, I guess we'll, we'll, look for some more resolution in the world of stable coins. Stable can happen next year and for potentially die the surge. Maybe not, but it's definitely one of the more interesting projects on the, I did hit this major milestone this year by incorporating

to metal. Finally, real quick, you and I were talking about this offline, but I'm using that Brave browser now, so I'm sitting here looking at 1.8 bat. So the idea is I should be able to redistribute that to sites now that I'm blocking their ads from so that, you know, hey, and I didn't watch all your dumb ads, but here I'll tip you some bat, right? Yeah. Yeah, I think, I think, you know, Brave, Braves, I like the Braves bar. I don't think you shouldn't say that as a journal. I like the Grave browser.

I've been for a long time. And I'd be covering that for a long time. And, you know, I think Braves and Bat deserves some kudos. So they were one of the first big ICOs to actually start doing some of the stuff they promised. You know, there's a lot of ICOs that have raised a lot of money and services on sites, like subscriptions, but largely YouTube base. You know, that's kind of coming to something size, and that's pretty interesting. And they were one of the first. Can I trade Bat on Coinbase?

You can definitely trade. Yeah, I'm pretty sure that's on Coinbase. But I don't think you can take it out of the Brave Browager quite yet. I can't remember what the latest is on that. You might be able to. When it first came along, you couldn't. But when I first did the story about sort of earning Brave on that, you couldn't take it out of it. You couldn't personally take out of Braveser yet.

That might have changed. I haven't double-checked on that yet. I'm looking at the price chart on Coinbase right now. It doesn't look like this is one of those that's going to the moon anytime soon. But, you know, maybe I'll just hold on to it. It's got a $250 million market cap right now. The all-time high was $0.98. And it's currently $0.18.

Yeah, it checks out. Well, whatever. Listen, like I said, if I can find a way to pass it along to sites that I like, then I'll probably do that.