TFTC: A Bitcoin Podcast - Tales from the Crypt #10: Arjun Balaji Pt. I

Episode Date: January 16, 2018

Join Marty and crew as they sit down with Arjun Balaji, a young crypto investor with a keen sense for finding value in the budding world of cryptocurrencies. Arjun let's us know the two cryptocurrencies he would hodl if he had to lock them up for 10 years, how these nascent technologies may shape our future, how they have changed people already, and much more.

What is up, freaks? Welcome back to Tales from the Crypt. It's your boy, Marty Bent, back here on another Friday night at the Barstool Sports Studios. As a full-time employee now, Marty Bent. Thank you, Lou. Thank you, Lou. I wasn't going to make that announcement, but I guess, Hey, yeah, full-time here, resident crypto degen, and helping out on the account team as well, trying to sling ads while we can. But yeah, I'm very excited about today's episode for a couple reasons, the main one being that this is our first non-Bitcoin maximalist we've had in the studio, which I've had a bunch

of people reaching out to me saying, all right, we need to get a different perspective And I'm very happy that we're going to get that perspective tonight. I'd like to introduce you all to Arjun Balaji. Arjun, welcome to the podcast. I'm happy to be here. Well, thank you for coming. Just a little back story here. Arjun and I met probably in August of last year, right before the massive run-up that we witnessed over the last six months.

Or not even six months, four months. It feels like it's been two years. That's ten crypto years. Exactly. Exactly. So a lot has changed. We've got a lot to catch up on. As you all know by now, Lou's in the studio with us and we got Nate hanging in the corner. He's over here trying to learn a little bit more. Just trying to learn about alts today. Just really trying to take it all in and just pick

this guy's brain a bit. Yeah. So I think the best place to start, this is Tales from the Crypt. The one question we have to cover first is how did you find Bitcoin? When did you find Bitcoin? And what drew you towards it? For sure. So, I was a little bit of a degen back in the day, that's how I found Bitcoin. This was 2012, it was my freshman year of college, and back underage drinking, everybody is looking for, and I don't condone any of these behaviors, but everybody is looking

for access to alcohol. Back then there was a guy on an illicit market, Silk Road, selling legitimate Ohio state IDs. I went to school in Boston, and one of the things we didn't realize is it's weird if you roll up to a bar with your crew and everybody has an Ohio ID, but everybody on my floor was interested in getting one of these Ohio IDs, and I was the resident computer science major who was tasked with looking this stuff up, and that's how I ended up stumbling on Bitcoin. The Silk Road, it drew a lot of people to Bitcoin. Rest in peace, and free Ross.

Free Ross. Free Ross. Ross Albrecht's still sitting in a jail cell on Tuesday. Although, if he did order a hit on someone, I don't know how I feel about that. Yeah, yeah. That's the touchy part with Ross. He may or may not have tried to have If somebody killed, that's a scumbag move. But the double life sentence because of creating the Silk Road, I think that's a little unjust, a little cruel and unusual punishment in the long run. Yeah, a single life sentence.

That would have been enough. Yeah. I think that's enough. Yeah. You don't have to put them in there for two lives. Yeah, so the reason I brought you in, as a lot of my listeners and readers know from the newsletter, subscribe, subscribe, subscribe. I'm what you would refer to as a Bitcoin maximalist. I know you trend maybe towards maximalism, but you're not afraid of alts. You're not

afraid of the alt markets. When did you start messing around with alts? Sure. I went through phases, I think, that everybody goes through. First, I found Bitcoin. Bitcoin was cheap. I bought a lot of Bitcoin. I was very fascinated with, and I went down the whole rabbit hole of ANCAP, anarcho-capitalism, found Mises' work, went down that rabbit hole. And then, eventually, my goal was, wait a minute, there could be things out there better than Bitcoin. And I was in that slightly disillusioned phase. And so, I messed around with that whole sort of, like, first run of altcoins in 2013 with, you know, Litecoin and, you know, some of them still exist, but, yeah.

Remember Archcoin, ZetaCoin, AuroraCoin? Yeah, ZetaCoin. Can I ask a question? It's time for me to jump in. So, 2013, I don't think, I think I was still trying to do, just starting to do Barstool stuff. What is, so, like, Marty's always like, you're going to get wrecked in the altcoin, you're going to get wrecked in the altcoin world.

But to me, 2013 is a different world than what we're living in now. Why do you feel, do you feel that now these altcoins are more here to stay than they were in 2013? Obviously, they're all not going to make it. If this is the new internet, they're all not going to make it. But is it different than it was in 2013? It is, yes and no. So, what you saw in 2013 when the market started to draw down significantly, with some of the altcoins markets, you'd see there just weren't enough bids. There weren't

anyone buying up the stuff. And you saw them dip lower and lower and lower, and some disillusioned guys would start buying the dip until they realized there was just no buyers left. And so, their investments became bags. They just ended up becoming bag holders. And I think it's play stupid games, win stupid prizes. I think I feel the same way about alts right now, where I think a number of them, the market's significantly more mature now. I think some of them are here to stay, and can be thought of as investments over a multi-year time horizon. But I think we'll see the same thing with the overwhelming majority of the alt market drawing down significantly.

Yeah, and it's the old saying, history doesn't repeat itself, it rhymes. And what we've seen this year, or excuse me, last year with the ICO explosion, reminds me a lot of in 2013, 2014, the pre-mined altcoins. It's basically what we're seeing, just a new iteration of that. Yeah, and so people talk about how all these ICOs are so scammy and how there's all these pre-mines. Now, dude, Bitcoin talk forums back in the day, 2013, those were the days of pre-mines. You know, guys would pre-mine tokens, they'd launch them, and then they'd steal lots of 50 Bitcoin, 100 Bitcoin, 500 Bitcoin. And, you know, it was a lot worse than it is now.

You know, at least now there's a lot more eyeballs. You know, that's for sure. Yeah. And, yeah, so I think one thing, a question I've been getting a lot recently is people get confused. And so, within the alt world, there's different types of alts. So, there's basically, there's coins that have taken Bitcoin's source code, tweaked it a little bit, and launched a new genesis block. Obviously, the most recent iteration has been Fortcoins, and then we have completely separate protocols that have been started from scratch. So, can you help us give a little color in sort of the differences of each end?

Yeah, yeah, sure. I think about tokens as, you know, what is their intended purpose, right? So, you know, I think you have a number of these tokens that are competing for, you know, what I would call the money use case, right? So, store value, a payment rail, and, you know, some of these tokens have distinguishing features. Others are just trying to be, you know, Bitcoin. So, you have tokens that fall into that camp. Then you have, you know, what I would describe as protocols. You have tokens like Ethereum where, you know, they're attempting to build what they see as a protocol for, you know, call it programmable money.

where they may or may not necessarily be competing with Bitcoin, despite how Maximus sometimes view it. But the founders have definitely a different intended use case. And then you have a whole host of tokens that are built on other protocols. You have a lot of what people call utility tokens that are built on top of Ethereum that try to serve some sort of purpose. And then lastly, I would put the rest of tokens into a bucket That's mostly, you know, useless tokens.

You have a lot of tokens that don't need to exist. That was exactly what I was going to ask, is when you're looking at alts and you're reading about them, what are you looking for to separate the ones that are useful and then the ones that are just absolutely made-up fairy tales? Yeah, yeah, that's interesting. The thing that I always think through is what value will accrue back to the token? If I'm a holder of this token, why is it going to go up in price over time other than just other speculators piling into it? And so if there's a real use case for it where it'll need to be used in some sort of network that'll cause people to hold the token, causing the price to go up, then it might make sense as an investment. So that's one of the big things that I look for is what value is going to accrue back to the token.

And so to follow up on that, do you look, do you kind of separate alts into two different like buckets, one to hold for a long time and then the reason that like, the reason I got into alts is because it looked like a great way to make quick money, like just really quick, you know, just the whole pump and dump thing. So do you, do you look at alts? I know, I mean, realistically, you're going to get wrecked. So, but do you look at them two different ways? Like these are good to hold and these are good for right now, but not long term? Yeah. We were talking about this before we hit record, but in terms of what I would hold for a really long time, it's called five years or 10 years, there's only two tokens that I would hold. For me, that's Bitcoin and Monero. Everything else, I have a different time horizon on where I find the thing really interesting for now, but I can see many reasons why that thesis could change over the next two years or three years, or even six months in some cases um and uh but then there's a lot of tokens where i know the thing is going to go up um just because of other speculators stuff like uh you know we saw tron you know do this crazy run up

oh yeah i gotta ask you about sorry we got matt brown our like our my our like account manager kid like lewis has a mini me i have like a mini me who like runs around has to do everything i tell him to do his adopted uncle yeah he's marty's adopted uncle he i need i need a minute on tron because he will not stop asking me to ask you about Tron. Tron, oh God. He probably doesn't want to hear my opinion on Tron. No, no, we need it. No, we need it.

We need it. He asked me a hundred times today, just get the opinion on Tron. Did you hear that they're partnering with Alibaba? Did you hear that they stole most of the Filecoin white paper? Yes. My favorite moment of Tron's existence, short existence,

was when Juan, the founder of Filecoin, tweeted out about Tron And he said, you know, he specifically pointed out the pages that were straight up plagiarized. And then he said, just in case the PDF gets taken out, I'm going to archive this on Filecoin. And, you know, there's no better way to write something. Proving a use case. And, you know, Tron's taken a pretty big hit the last couple days. But, you know, I think that in general when you're investing in things that have no code written,

nothing that you can sort of publicly play around with where, you know, the use case doesn't make a lot of sense, The team, you know, copied other white papers. You know, I personally try to stay away from that kind of thing. Yeah, Matt, if you're listening, when you do listen to this, Tron's out. You're an idiot. He's planning on bag-holding this. Yeah, he's been trying to talk him off the Tron train for a while. Tron's also just kind of a ridiculous name.

Like, can we just – it's absurd. Like, why would you name your token Tron? Hey, we're talking about it. And this is another good segue, because Strong, it's promising the world to people, and I feel like the retail investors specifically don't really know how constrained these blockchains are from a scalability standpoint and the functionalities that they have. So, let's bring it back to sort of what blockchains work right now, what are their purposes, and what may be functional in the future.

Sure, sure. I think that, you know, inherently, blockchains trade off, you know, significantly on, you know, with convenience versus things like transaction speed. And so, one of the things that noobs always sort of get suckered into is, you know, hey, Bitcoin has, you know, X transactions per second. I don't remember what the exact number is. I think it's like three to seven. I think with Segwit, it bumped up to seven or something like that. But, hey, we have Ripple or some other hot token that has X order of magnitude more transactions per second, therefore it must be better, which is a trap that token investors often fall into, which doesn't actually make a lot of sense if you think about why people buy Bitcoin,

Bitcoin's perceived use cases. And so, often times, investors will fall for these grand narratives of, hey, Ripple is partnering with all these banks, which I'm not calling a narrative, it might be true, but ... No, I mean, the tweets that have come out in the last two weeks, the people working at the banks coming out and saying, yeah, we're never going to use this. We've said, we'll work with it a little bit. In some cases, in the case of IOTA or some of these other tokens, they're promised some sort of crazy new engineering structure. You know, hey, we'll use a DAG,

directly acyclic graph, and it's so much better than a blockchain. This is the future architecture. And, you know, what they don't realize is that, you know, decentralization, true decentralization, trades off a lot of things. And, you know, so that's one of the big

sort of red flags to watch out for. Yeah, and that's what I'm trying to get through to people with the newsletter and this podcast is let's remember like the core reason why this technology was created and that is so people could transact uh in a way that will never be censored and yeah their trade-offs so if you want if you want that censorship resistance you need decentralization and to a certain extent the blockchain is going to be a little slower it's going to be a little bit more arduous at the protocol level um and what i'm really excited to see this year specifically with

Lightning is working on the second layer and opening people's eyes up to a second layer that is much quicker and sort of people figuring out the separation of the protocol level from layers on top of it. Absolutely. I think that, you know, once the Lightning network is sort of fully deployed and, you know, I've seen some of the UX I've played around with, it's awesome. And so, you know, once we see that, I think that a lot of people will be less, you know, they'll be more disenchanted with a lot of the altcoins whose sole purpose is just, hey, I can send you money from my wallet in two seconds and you'll receive it and you'll be able to see it. But I think that there are differentiating features that make some altcoins interesting. So, you know, privacy is something that I think is very interesting across a couple of projects. I mentioned Monero earlier. I think the two leading candidates, both of whom use different

privacy mechanisms, are Zcash and Monero. Right now, Zcash uses something called a zero knowledge proof. Monero uses ring signatures. Both different privacy mechanisms, different teams, different team governance models, and both competing for what is the private money use case? What's going to be used on darknet markets and things like that? Yeah, that's what Matt Corallo and I talked a lot about fungibility when he was on here. And again, it's interesting to see what coins are experimenting with that, and the different governance models they're pursuing as well. So, one thing I like about Monero is that they have planned hard forks, which sort of pushes the issue of, hey, we're going

to upgrade and it's going to be done, which is interesting to see. For sure. I think that it's also awesome that you have a number of these developers who, you know, nobody really knows who they are, right? It's going to be, you know, I think it makes it that much harder to shut something like that down. I'm ignorant to this. I always thought that Ricardo started Monero. Who is the anonymous dev that started Monero? Yeah, I'm actually not 100% sure. I know Ricardo is sort of the public face of the project, but I'm not actually sure who the original dev or sort of founder was.

Yeah, that's slipped by me as well over time. But yeah, and that's the other thing. Yes, you should diversify, but the whole maximalist argument and where I come from is that one day Bitcoin's going to be able to implement iterations of these features onto their blockchain, maybe not at the protocol level, but maybe there's a lot of arguments coming out that Lightning's going to help fungibility as well.

Yeah, can you give me some Lightning? Give me some Lightning talk. I'm a big Lightning guy. I watch what's going on, and I envision this world where Lightning has all these use cases, but I'm like, is it really going to happen, though? Or if it does happen, when do you think it happens? Yeah, so I think that that's...

Sorry, Marty. Oh, that's a great question. that eventually, once that starts being adapted for everyday payments, that'll be interesting. I think that the way that I think about investing, personally, whatever I think wins the money use case is going to be more valuable than everything else. I think that store of value, a payment mechanism, a means of exchange, is still the most interesting thing to me. That's why Bitcoin and Monero, for example, remain top of mind for me. I think that, like Lightning Network will prove, if it proves out the way I think a lot of people are expecting,

that'll be a significant improvement for Bitcoin in the eyes of many people who are unable to transact due to the very high transaction fees. Yeah, and that's one thing I harp on a lot on this podcast and in the newsletters, that there's so many impatient motherfuckers out there who literally don't ... I'm right here, Dan. Wait, we're allowed to swear? This is Barstool Sports. this is barstool sports

you got the most impatient motherfucker on the planet sitting across from me I'm right here fucking the baron of bitcoin if we're not rich in fucking six minutes

it's the end the entire world's ended if he's not if he's not literally draped in gold like a like a goddamn pharaoh

in the next in the next hour it's over the entire thing's over I'm jittery I'm jittery about it but that's the one thing like that

it does piss me off I get pissed off cause like like the bcash people and everybody else. Bitcoin cash. Bitcoin cash. Arjun just gave me the finger.

But it's like, this is a brand new alien technology. It's going to take time to build out. Have some motherfucking patience. Like, this isn't going to happen overnight. And that's why I'm a big slow and steady. Keep it simple, stupid, slow and steady build, brick by brick. That's how this company was built. Exactly.

No, I mean, even if you were to invest in altitude, It'd have to require a lot of discipline, portfolio management, position sizing, I'll call it. You don't want to be too overexposed to stuff that's basically a prototype or stuff that you're not sure of. So then what's your blockfolio breakdown? I'm 85% Bitcoin, 15% and crazy shit. And I guess that's my big question is that you obviously know a lot more than me. Like, I don't have, I mean, I have, my team is Bitcoin Marty and a 20-year-old kid. So, like, I have a lot of work to do all day long.

So, like, how are, like, for the people who want it, like, I know this is very important. And, like, I try and do as much time, like, spend as much time learning about it as possible. But I'm not, like, I don't have all the time in the world. Like, you're, like, in this space. Yeah. You're in it. Like, there's no financial advisors for this at the moment. So, like, how do we, like, and I don't think I trust, I don't think I'd ever trust a financial advisor anyway.

Like, what is the easiest way for the people that are busy but do have capital to, like, and that's way off of my other question, but we can get back to the Blockfolio question. Yeah, yeah. I think that, you know, the easiest way for people to get exposure to something that's not Bitcoin is obviously, you know, going on Coinbase or Gemini or, you know, whatever exchange you feel comfortable with. Now you have a couple of options. You have Bitcoin, you have Ethereum, and you have Litecoin. So, you know, sort of picking something like a 70-20-10 allocation maybe. You know, something like that. This is, by the way, I should probably put out a disclaimer.

Not financial advice. No financial advice. No financial advice ever. I'm going to do exactly what you say, so. We are not your financial advice. We are no financial advice ever. If you're taking financial advice from this company, you've got a lot of issues. I've been buying up a lot of pizza.

A lot of pizza. A lot of pizza. Yeah, so I think that's the easiest way. In terms of my personal block folio, I would say it depends on the day, but somewhere between 60% and 70% in Bitcoin and other forks. So, Bitcoin, Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond. Gold, Platinum, Diamond. Yeah, I don't even know how many forks there are.

Rhett Creighton's about to launch Bitcoin Private. Yeah, I saw that. Let's make sure we grab some forks after this. You owe me some forks. You have all the forks. I don't think I do. They're on your trezor. If you have Bitcoin on your trezor, they're there.

All my Bitcoin's on my trezor. Actually, you don't use a trezor. You use a ledger. If Bitcoin's on your Coinbase, then Coinbase has all your forks. So just shoot them a very, very angry email. Oh, yes. So let's get into that. So that's one thing, not Coinbase specifically, but the nature of this technology.

It was made to be peer-to-peer, decentralized, and a lot of people are holding their decentralized currency on centralized exchanges. What are your thoughts on the ethos of the space? And would you encourage people to educate themselves on how to manage their own private keys? Or do you think it's too risky right now from a UX perspective? No, no. So, I think that I want, you know, I personally, I have, like, the sort of, like, crazy out there, you know, everybody's an individual and, you know, everybody manages their private keys. I have that vision of the future. I do as well.

But, you know, I think that Bitcoin is, like, will turn into sort of, like, you know, the way that we interact with Bitcoin. Not, you know, we as in this room, but, you know, people generally, I think, will interact with Bitcoin like they do with, like, the early internet protocols, right? If you take SMTP, it's a good example. SMTP is the email protocol on the web. People don't run their own email servers. People interact with Gmail and Hotmail and Outlook and a number of these other centralized providers. I think that most people interact with Bitcoin or Ethereum or, you know, sort of these decentralized protocols the same way where, you know, they'll hold their tokens on Coinbase or Gemini or, you know, Zappa or some other custodian because they want exposure to it and they want to interact with it and they want to transact in it potentially and move it around. But it'll be optionally decentralized for all the people who actually, you know, really need that and care about that. The same way you can run your own email server, you'll be able to run your own full node. I love that. So the people that want to cross borders and need to sort of know that their wealth is stored securely in their possession. Yeah, exactly.

Can if they want to. So they have the option. Exactly. I mean, Mnuchin, he had a whole statement today where he was like, I hate Bitcoin, something like that. He was like, I hate Bitcoin because Bitcoin is like a Swiss bank. And yeah, thanks, dude. It's exactly what it is. it's a Swiss bank in your pocket, right? Yeah, and Michael Goldstein was joking. He was asking all the wallet providers, telling them that they had to go through KYC AML, and he didn't realize it's open source software, and you'd be KYC AMLing yourself if it were

to play out that way. Yeah, no, I think that people who are advertising Bitcoin should use him as a testimonial. They should say, Bitcoin is a Swiss bank, and you can use it as an uncensorable store of value. I think that that's awesome. I think for people who need to do that because they've suffered from hyperinflation or they don't trust their own government's money, I think that they'll always have that option. And for people who just want to move money over borders and not worry about that, they'll have that option too. But for the overwhelming majority of the people, it's an outset like anything else, and they'll hold it like they hold gold. Nowadays, at least my generation, they don't buy gold. They buy the GLD ETF. yeah and now digital gold and now digital gold exactly um and uh

yeah so one thing i want to touch on is i want to get your opinion where are we right now and in the mania fate like this this wave this wave of mania because i remember like 2013 2014 that wave before mount gox that was big and that's the thing about the space it comes it comes a wave So, like, the first one was probably, like, 2011 when Slashdot wrote about it and it went from, like, 10 cents to a dollar. That brought a wave. There was a crash. People leave. Then 2013, people come in.

Mount Gox falls. That wave was a little bit bigger. And now the wave that we're currently engulfed in is massive. You got CNBC talking about, tweeting about it, talking about shit coins every day. You know, shout out BK for putting Poloniex on CNBC. Oh, my God. That was absurd. I'm surprised you didn't try to pump Nautilus coin again.

Yeah, he pumped Stellar yesterday. I know. So, yeah, it was a little bit cringy. So, yeah, so let's compare this wave, this mania wave, to prior ones, previous waves. I mean, because this is, like, being in Bitcoin for so many years, you always, like, imagine, like, long term, everybody's going to get into it. But, like, when it starts to finally happen, it's like, holy shit. I didn't feel like it was going to play out like this. It's not predictable at all. Yeah, it's a little surreal. I was having a conversation with a friend who's been a four-year investor in crypto assets.

That also comes from a traditional finance background. He and I had the conversation. It was surreal. We both, you know, sort of in our minds expected that this would happen. But now that it's happening, it feels, you know, it's like, what the hell is going on? Yeah, I'm like trying to grab onto something to, like, catch my bearings. Yeah, yeah, yeah, exactly. So, one thing that's been interesting about this run-up the last year is that we've had a lot of these, like, sort of mini-crashes, you know, called, like, 30%, 40% drawdowns. Yeah, there was, like, seven 30% corrections last year. Yeah, yeah, yeah.

So, you know, Jamie Dimon and, you know, China, and now South Korea is the new China. when it comes to banning Bitcoin. And so we've been having... Real quick, fuck Warren Buffett. Fuck that guy. If that old-ass man died today, I'd be happy. Fuck him. Wow.

Nate just coming in with the side commentary. I forgot how much I hated him until you just started mentioning Jamie Dimon. Warren Buffett's old-ass going on TV being like, Bitcoin, fuck you old dude. The baron of Bitcoin coming at the Oracle of Omaha. I love it. Yeah, he's coming at me.

He's trying to hurt my fucking bottom line. See, you're too emotional. You're too emotional. No, so Nate, he's saying Warren Buffett's going on TV. Don't try to talk rationally to me about him. Just fuck that guy. We can move on. Sorry, but fuck that guy.

Let's talk rationally about him. So he's going on TV saying I think most of what's out there is going to zero over, say, call it five years. Yeah, he said he put a five-year put on it. Yeah, a five-year put. Would we buy the same five-year put, like going out and looking at all of the dog shit that's out there right now? I probably would. Yeah, exactly. So, okay, yeah.

But what he said was, he's like, I can't have a position on something I don't understand. But then he's talking about it as if he understands it. So he just completely contradicts himself in his position on it. Like, just don't talk about it then, Warren Buffett. Yeah, no, I think that, you know, he's, the other thing is, you know, with all these media personalities, they always want to get the sound bite. They just want the story. So, you know, it is what it is.

I think that, you know, Warren's done really, really well. I say Warren like it's my friend. Bud Warren has done well for himself. That's an understatement. He's done well for himself, in his circle of competence. But I would tend to agree, I think that most of what's out there is going, if not to zero, it's going to draw down significantly. I think that most teams will not deliver on everything.

But he said Bitcoin specifically. Yeah, Bitcoin specifically, I would take the other side of that bet. With all this being said though, I approach my crypto investing with a Warren Buffett mentality. I'm going to buy and hold for decades. That's Warren's advice to people, only invest in things that you understand. I don't completely understand it. I understand it enough where I can see the vision of it playing out. If it does play out, where I'm willing to risk money and hold it long-term. Yeah, exactly. There's a lot of very,

very sharp investors from Silicon Valley who've taken the other side of that bet. Either investing in funds that are investing in crypto or that are holding positions directly. Peter Thiel, the contrarian he is, announced that a few years ago he had bought up a significant amount of Bitcoin close to the bottom. O' Hundreds of millions of dollars worth. And Chamath Padapatia, am I saying that right? No, the Warriors owner, right? O' Yeah.

Yeah, the guy who co-owns the Warriors. I think it's ... Yeah, I'm not even going to try. Chamath. I agree with your investment strategy, but he's been in it. He was one of the first to invest in Facebook, was their head of growth when they first came out. We don't really agree with Facebook at this company anymore. Not that we don't agree with it, it's just, it hurts what we do. It's a, whatever. No, it hurts what we do, but I'm a big fan of like, let's use Facebook to build products, but we'll talk about that another time.

Yeah, you know. Being on Facebook's probably not good for you. No. Long term, definitely not. It's fine I could feel but he you know, I remember a couple years ago He got up and he said, you know, everybody should have 1% You know in Bitcoin more if you're younger and you know I still think that that's true

And if you have a long enough time and this is where you know position sizing gets really interesting where you know If you have 1% the whole the thing could draw down 80% But you don't actually lose all that much Yeah You know if you have 5% the same thing if you draw down any percent you don't actually lose all that much you can afford To keep investing and buying the dips and buying more more. But if you're overexposed and you get wrecked, it's really, really tough to get back from that. Yeah. We don't want to be taking out

second mortgages on our houses to get in this or anything like that. Invest what you can, and again, it's going to be an asymmetric return. You're either going to lose that investment or you're going to have a very, very, very lucrative investment. Exactly. Proper sizing will give you ... It's actually, I would say, more risky not to have 1% to 5% if you're a young person in Bitcoin, rather than the other way around. I think it'd be more risky to not have that kind of exposure at this point. O' Agreed. If you're 20, 22, like Matt Brown who's not here, I wish you ... It seems foolish to not have it. It seems almost at a point where it's like, why would you not

take that opportunity? The other side is true. If you're sort of 70%, 80% in, and you're already up so much, but you haven't taken anything off the table, then that's really scary. It's good to have some cash to buy those dips. That's one thing I was happy to do last year, is get my initial investment off the table, just free rolling everything. So, what do you roll? Everything I free roll. I'm free rolling too, but it's like the ETH run up in May of last year like from 60 to 300 put me like i can't even i don't even want it was i couldn't believe

that how quickly that happened and i was just like okay like this is i guess i'm in this for life that's when we met we met in may yeah across the street here it was uh it's been a last year was a crazy year but so i think what would be great advice right now is like so so let's let's talk about our debt let's speak to our demographic here let's be frank it's probably most people working paycheck to paycheck, scrimming for rent, stuff like that. How can they get exposure? What's the best strategy for them, do you think?

I think the best strategy for them, for most retail investors, it's dollar-cost averaging. Buying a little bit every single week. There's no need to rush. There's no need to do it all at once. Just a little bit every single week. Setting aside a little.

You know what's the amazing part about Bitcoin? Has turned every single young person I know into a saver. It's crazy. That's what I always say. I'm like it's same everyone like this This office went from like buying gold bottles to like how can we just save all our money? Literally it was like let's go out to the club on Friday night

And now it's like how can we like sit in and like eat cheese sandwiches and save our money? I'm like it blows I'm not gonna say any name so we have a guy named Caleb who? He loves like going out to the club very fun guy he reads more about like alts and bitcoin and like how to like improve like his positions and like how to like grow his money like he's so into this and if you met him last year like you know he would wanted to go to one oak on a tuesday and now he wants to like go home and like read about like some alts with like nobody even knows about he's like yeah look at like the candlesticks and like the the fucking parabolas it's like caleb like what are you talking about so i mean that

We won't say his name though, but like he's, it is, and he's, you know, 22, 23 years old. It's completely changed the way like young people have looked at savings and like money and like just all this stuff in general. Yes. Let's touch on that. How did it change you? How'd it change me? It's definitely changed me.

And I see that watch. Oh, that did not need to be said. We cut that out. It is a nice watch. I mean, it's a nice watch. So I think for me, it's, you know, one, I hate sending money now. That's how to watch this. I hate spending money. I try to save a lot of money. I try to ... It's totally changed ... I think the Bitcoin teaches you, it's time preference

essentially. It teaches you ... It really, really reinforces when stuff ... Warren Buffett, he says, he tries to ... I know you hate him, but he tries to teach time preference over 30 years. It's so abstract. It's hard to try to visualize that, try to visualize compounding. But when that shit happens in like six months, you're like, whoa, this is totally different. I think for me personally, I'm on my sort of like, I guess, individual path to what I see as sovereignty, financial independence, sort of like doing what I want to do in the world, which is continually learning more and sort of like serving all of my curiosities, working on whatever I want to work on.

That's an incredible point. And that's something I try to stress that people come to me like, what do I do? What do I do? what do i do i'm like this is a very personal decision like you need to you need to understand what you're getting into and then understand the gravity of what this technology enables and make a personal decision make a plan and figure it out yourself i'm not here to hold your hand and do it for you like yeah it's uh another thing is uh you know sort of uh you know if you're selling out of your bitcoin what are you gonna go buy right like you're gonna buy uh

you're gonna go buy equities by the s&p 500 are you gonna buy you know it's everything sort of like, it seems, you know, it's been, you know, a while, you know, we've been, we're nine years separated now from the last recession. You know, it seems like everything is frothy nowadays. The VIX, is that an all-time low right now? The VIX? The VIX has been very complacent recently. Yeah, there's all these volatility traders on Wall Street Journal, like, from their home office. It's crazy, you know? So, it's, I think, you know, for me personally, I, you know, I don't feel comfortable buying any of that stuff. That's not, again, not financial advice. So, So, you know, real estate, hard assets, gold, you know, nobody can take your house away from you if you have the money to buy it, you know, or land.

And that's another thing I touch on is we were just born into this system, born into this, the way our world works. And you just start running like you don't even like most people don't take a chance to take a step back, basically evaluate what's happened over the last 50 years and and realize how much the internet and now bitcoin is going to change us and our tendencies and you're so again you're born and you just start running things work this way and that's what you're taught and that's what you think and you really don't challenge it and that's what that's why i got into bitcoin because it was it was a prescient thing for me like i was a senior i've told this story on this podcast before but i was a senior in high school in the fall of 2008 in an economics class and i was just like

how the fuck can this happen? And like went down this path and was like, oh my God, maybe the system that we were born into isn't the best system in the long run. And the system's way better. It's a more meritocratic system, in my opinion. You know, we have, you know, it's not just in terms of access. It's, you know, whatever papers you want to read,

the research you want to read, you know, if you want to read other people's opinions, if you want to go check out source code, it's all up there. You know, you can go, there's nothing that's stopping someone want to go start contributing to Bitcoin D or the Lightning Network, they're looking for developers. Shout out Lightning Network. They're looking for devs right now. There's nothing that's stopping someone from going out and doing all these things. Consequently, the other side of that is, if you want to be an investor, you don't need

to call up Goldman Sachs and get your prime broker and be accredited and go get solicit funds from your LPs. You can go, you can trade alts. Soon, we're going to be able to do it totally decentralized via atomic swap or the decentralized exchanges that are coming out. And soon, we'll have decentralized versions of derivatives and options. And that's going to be a game changer. It's really democratizing access and contribution to all this stuff. it's crazy and that's what and it is it is crazy it's crazy specifically for us because we were born at this inflection point where it's like all right things are going to change drastically like the last big inflection point in human history was probably the printing press

and that destroyed the catholic church which was the quasi-nation state of the time and now the transistor maybe you know like transistor industrial but i'm talking from like a uh create destroying the internet no i'm saying i'm saying the internet's like okay you're including that the internet and bitcoin i would couple together yeah bitcoin's a layer of the internet i would say okay um i'm but like really destroying the the hierarchical structure that runs the world so from 15 or 1080 to 1500 that was the catholic church yeah now from 1500 to 2000 and up to today is the nation state but the internet and Bitcoin are starting to really butt heads with the nation state exactly one of the first

things that we talked about when we met in Williams or coffee shop I don't remember variety variety right I have one of my favorites coffee is crack it's actually it's extra strong the one of the first things we talked about when we met was the sovereign individual thesis you know sort of violence is you know the basis of the nation state. O' The logic of violence. The logic of violence. I grew up ... when I first read it a few years ago, shout out I think Naval for turning me on to it. First read it, was blown away. It just blew my mind. O' It predicted Bitcoin on page 25 in 1997.

Predicted Bitcoin, predicted mobile phones, predicted the internet, predicted populism Trump. Yeah, exactly. Everything. Not a lot of people write about the future in a really sort of lucid, articulate way. Such a prescient way. Exactly. Exactly. We're done stroking it now, but no, it's good. It's good. Everybody should go read it. I think it's print only, actually, which is dope, too. You actually have to buy it and hold it. One of the crazy things is, I wrote it off almost a little bit. I was like, this is cool, but, you know, sort of like way out there. And now it's like, it

feels like we're so much closer. I'm like, wow, like this is, you know, it doesn't feel like it's that far out there anymore. You know, soon we're going to be able to, you know, trade derivatives with whoever we want. We're going to, we're already able to move money wherever we want. You know, and that's, that's sort of like, I think I see, I see that as the first step. You have all these nation states that are, you know, sort of pushing towards, you know, hyper Bitcoinization. You know, they're, they're talking about holding bitcoin reserves they're talking about you know setting up mining operations um you know and these are all rumors but you know some of them i hope you know turn out to be true and they're all

actively threatened you know we saw munitions comments today um they should be yeah they should be and i i'm happy you mentioned that i got uh papa wasa coming in in two weeks the uh the guy trying to convince uh ghana to fuck papa wasa papa wasa he blew up a couple blew up on twitter yeah he blew up on twitter a couple weeks ago he's trying to convince one of the central banks in Africa to buy 1% of their reserve assets in Bitcoin. So, he's going to come give that case in a couple weeks. And in five years, they'll be able to buy the whole continent. Yeah. That's the crazy thing. And again, that's what I talked about last week. I had Zao on

the podcast, who's from Zimbabwe. And what people in the States don't realize is, yes, we don't need this stuff right now. But if you go to Zimbabwe or other countries where hyperinflation has affected a country, they need it. This is a use case that is actually working now. It's not helping everybody. It's not helping the whole country, but there are people within these countries that are using Bitcoin as sort of a safe haven. Yeah, and it's fascinating with my parents, too, because I'm from India. My parents are gold bugs. The Indians love gold. It's a very cultural thing over there.

Yep, yep, yep. They love gold. Now, when I first explained Bitcoin as unsensible store value, digital gold, they were like, oh yeah, this is super obvious. So, they got it pretty much instantly. What's more interesting, and now we've had not just hyperinflation in Zimbabwe and a bunch of other countries. Even in India, my parents saw the demonetization game, they saw people's money taken away, now they're like, okay, cool, and it's exploding in countries like that. I think that there are so many speculators, like Nate, that are coming in, they're like, yeah, let me get my quick buck. I mean, I see the long-term value of it, but when you spend all day with Lewis, you kind

of just get excited. You're like, all right, let's go, let's go, let's go, let's go, and then you have to be reminded, like, all right, chill, bro. But we'll see this over and over again. People come to speculate. They see the value. Some of them will leave. Some of them will stay. Some of them will get wrecked.

Then they'll leave. Some of them will stay. And, you know, that's how these things tend to go, right? Carlota Perez has written a lot about this. Yeah, was one of the lucky ones to get wrecked and stay. Yeah, exactly. You know, I was lucky to get wrecked early on my different alt plays. If you had to make one bold prediction for the year,

like something that wouldn't shock you if it happened but it's like a bold prediction like where would you go something that wouldn't shock me if it happened but it would be like the way i don't know like if someone said last year like that in like one day like bitcoin would go from like 10k to like 19k you'd be like that probably won't happen like what what would be like a big prediction for this year uh i think i think that it's very possible that bitcoin could hit 50k Wow. This year. Legitimately, what I'm seeing, the first wave of institutional capital isn't even in yet. Pension funds, mutual funds, none of it's in. The one black swan event that I'd worry about is regulation, if there was something serious that came out around that. But ultimately,

you know how i when i take the long-term view on that you know governments can't regulate this stuff um you know it's really what are you gonna do the democracy can't regulate this stuff no because i mean because the the case for plausible deniability is so is so large in this space that like it it it is going to be like you said impossible to regulate yeah it's actually really plausible deniability alone this week uh when south korea which is you know very very democratic country, came out and they had two conflicting ministries that were both saying opposite things about Bitcoin and they were both feuding with each other as a result of that. It's going to be really, really hard. I think that everybody here in the U.S., the

Treasury, the Federal Reserve, the SEC, a number of government functions are all looking at Bitcoin, but it's going to be very, very hard to do something about it other than close that fiat on-ramp, but at some point I do think it's going to be too late. I actually just retweeted something about the Korea situation earlier today. The people,

the Korean citizens got so pissed off that the ministry did this. They started signing petitions. They had two petitions with 100,000 signees saying don't regulate this, don't regulate this. How dare you talk down the markets. They were coming at the finance minister for

manipulating markets. yeah the finance minister wanted to buy the dip yeah exactly just like Jamie Diamond did earlier this year or last year I kept saying this year it's 2018 2018 Marty alright let's get a little bit more cosmic here I was going through your Twitter and I found

a really good quote by Niccolo Machiavelli that you posted it's all courses of action are risky so prudence is not avoiding danger but calculating risk and acting decisively. Make mistakes of ambition and not mistakes of sloth. Develop the strength to do bold things, not the strength to suffer." I thought that was a very intense quote. I

feel like that goes into the long-term view of investing in this space and basically creating another book which I think everybody should read, sort of an anti-fragile mentality. Absolutely. I think it's actually one of my favorites. I think that the view that I take is, we all have limited time in this universe, we just try to do something that matters, that leverages our best talents that we see. For everybody, that's different. I'm fortunate to have worked in investing in the past. I'm an engineer by trade, found Bitcoin relatively early, found Ethereum relatively early. So, I see my way in this world right now is investing in what I see as core infrastructure that's needed for this space to gain mainstream

adoption, whether that's mining, whether that's investing in the exchanges of the future. And so, while in that process, doing my best not to get wrecked. And so, that's the view that I sort of take on it, is we have limited time before hyper-Bitcoinization, and so we've got to do everything we can to get there. Exactly. So, when do you think it's coming? It's actually July 22nd, 4.52 p.m. Eastern Time. That's the thing, nobody knows.

But that's why you said earlier, it's stupid not to get exposure. It'll surprise everybody, except for the people who were talking about it four years ago. It'll creep up on us, just like this run-up did. We all thought it was going to happen, but it's happening, and we're still like, holy shit, I can't believe this is happening. Hyper-Bitcoinization is going to be the same way. If Papawasa is successful in convincing one African central bank to put 1% of their reserves into Bitcoin, that might be the first domino that falls that leads us to hyper-Bitcoinization.

I think that we, you know, right now we're talking about sort of the institutional investor arms race, where everybody is talking, you know, before the question was, you know, what is Bitcoin, you know, should we have exposure to it? Now it's, you know, what's your Bitcoin strategy? You know, right now with central banks, the question is, how do we regulate Bitcoin? How do we deal with cryptocurrencies? Soon it's going to be, what's our strategy? You know, what are we going to do about this? Are we going to be welcoming, you know, as a sort of call option into the nation states of the future? Or, you know, are we going to try to shut this down and take the risk of this becoming very, very real?

Yeah, the one thing, though, is, like, the people that would try to shut it down are so technically incompetent that I don't even think, like, anybody could describe how Bitcoin works. I don't think they would get through their head. I don't want to sound like a conspiracy theorist here, but... Hey, we're into it. We're into it. We're into it. America is run by rich motherfuckers.

That's not a conspiracy. That's not a conspiracy theory. But I think that we're going to get to the point very, very soon. Every rich motherfucker I know owns Bitcoin. It's going to get to the point where- Besides Warren Buffett. Besides Warren Buffett, who does not own Bitcoin. He's going to be dead soon anyway.

It's all good. Every rich dude owns Bitcoin. Imagine the lobbying dollars that the Bitcoin holder, the HODLer crew can put up on Washington. I think that it's getting to get to a point where we're going to have big Bitcoin. Shout out Neeraj from Coin Center, but he's going to be the face of Bitcoin. The best memer in the game. Him and Dan Darkpill are the two best memers in the Bitcoin game. Incredible.

I think that Bitcoin, in the US at least, if the United States has the chance to become the epicenter of Bitcoin, and all these rich motherfuckers are hitting up Washington saying, like, there's no way you can regulate Bitcoin, I have 10% of my assets in Bitcoin, 15% of my assets in Bitcoin, that's going to be very significant. I think that's definitely one angle, and that is definitely going to be significant. other thing is just like the delegitimization of our government to an extent like you have donald trump as our fucking president right now i feel like a lot of people are just throwing up their hands like what the fuck is going on like if anything though you know one of his first executive

orders was uh you know let's uh let's take a firm stance against regulation you know but i am waiting for the first donald trump tweet um to mention bitcoin i think there's a small contingency of tweeters that are all trying to get it trying to make it happen. Yeah, Crypto Medici is trying to. Yeah, and he's my boy. You should have him on the pod. I DM'd him. I haven't heard back. His DMs are probably. I'll text him. We'll bring him on. Yeah.

He's in New York, right? He's in New York. He's been trying to get that to catch on but I think, you know, at some point we'll get a Donald Trump tweet that's sort of like Bitcoin. What's Bitcoin? Yeah. The U.S. is the number one winner of Bitcoin. Bitcoin's

It's going to be huge. It's going to be huge. And we're going to win. We're going to win. Yeah, it's so exciting. It's never a dull moment in this space. Like we were talking earlier, Korea came out with this announcement this week. We got lightning coming out right now. Alts are hot right now. Everything's kicking up. I think that this is a dangerous time. This is a dangerous time to be an investor in this space, a new investor in this space especially. It's so easy to be seduced by stuff that's not very good. In terms of the main projects, I think that

they all have something on the horizon that's pretty promising. I think that the way I think about it is in privacy protocols and in tokens. You have, on the privacy layer, Monero, Zcash that are holding strong. There's a number of other smaller privacy tokens that are traded on other exchanges like Zcoin that are all working with different- Verge just got proven to not be anonymous at all. Verge, you mean Dogecoin Dark? I think it's Verge that was called Dogecoin Dark back in the day. Was it?

Yeah, yeah, yeah. And then, dude, the power of the rebrand. The power of the rebrand and the John McAfee pump and dump. If you're listening to this podcast and you follow John McAfee on Twitter, be very, very careful of that man. I think that he's still wanted by some South American government. Belize, Belize. He murdered somebody in Belize.

He supposedly murdered someone in Belize. He murdered somebody in Belize. Yeah, and they took control of his massive art collection. Yeah, and I'm pretty sure it's well-documented that he's a meth head, too. All alleged. Still a fun guy to follow on Twitter. Yeah, definitely fun. Great troll.

But yeah, be very careful of that guy. So Verge ran up. He was tweeting about it incessantly. But you have sort of the privacy tokens. Those are pretty interesting. The protocols, Ethereum. All of these protocols are going to suffer from scaling issues, just like Bitcoin's facing. Some of them already are.

Ethereum, and we saw what CryptoKitties did to the network. Well, I get yelled at for Ethereum bashing too much, but let's talk about what happened this week. On Ethereum's blockchain, it's not orphan blocks, it's uncle blocks, but the amount of nodes that were falling out of consensus on Ethereum went up precipitously because of CryptoKitties. Because it shot up the Geth client. Maybe this is something you can help me out with. So, Ethereum people don't like when you talk about the Geth client and how much data it takes to run Geth. So, right now it's around 900, no, it's around 600 gigs. It's a large number.

It's actually one of the things that's really funny about Geth is, and Ethereum, so I ran an Ethereum client for a little bit on AWS. And I fell out of consensus, and I was sort of like, you know, not that far behind, you know, the equivalent of maybe 20 minutes worth. And, you know, that was sort of like game over for me. Yeah, that's what their blocks are coming every 15 seconds or something. Yeah, no, it was a lot. And so, I think that what we'll see very soon is that every blockchain that is sufficiently decentralized will suffer from scaling. Especially if you have all these sort of computations that need to run on the network. I think we'll see that with Ethereum for sure.

We already are to some extent. And a variety of off-chain solutions will be explored there as well with Ethereum. Yeah, exactly. There's a number of off-chain solutions that are being explored with Ethereum. Eventually, one of my favorite Ethereum projects is around decentralized exchange protocol, 0x. I find decentralized exchanges to be super, super interesting. I think that they're going to be sort of the dominant way that we trade crypto assets in the future. You know, if we all want to have, you know, sort of custody and security of our assets,

why would we ever turn them over to a centralized exchange when we could just swap with each other? You know, a lot of these apps that, you know, look to do something at scale like, you know, 0x's protocol, all, they're relying on a number of activities to happen off-chain. They'll use the chain as a settlement layer the same way that people are looking at Bitcoin. I think that's another sort of innovation. The road was paved by Bitcoin. That's what people will never pay homage to. Privacy is interesting. Some of the protocols are interesting a lot of there's a lot there's a lot of scams out there but a lot of good activity happening there uh and some of the utility tokens are uh you know i think interesting there's there's

sort of ideas i find interesting but you know execution i don't think is quite right yeah let's talk about utility tokens for a little bit because i think putting a value behind them is it just doesn't conceptually make sense to me there's two things about utility tokens that don't make sense to me it's like if the token increases in value it becomes more expensive to use that token for the utility you're looking for to a certain extent and two the ux barrier that you create that you put users through by having to go buy bitcoin or ethereum and then get this token and then use that token on the utility network it just i feel like the barrier to entry in the ux of of that doesn't make sense it's not gonna it's not gonna be simple enough in the long run like i

like and i the way i envision it is like again like you're gonna be able to build things on top of Bitcoin where you can use on Lightning Network little amounts of Bitcoin as a utility token. Am I wrong in that sense? Yeah, I think that I think about it a little bit differently. Here's how I think about it. I think about it in a Clayton Christensen disruption model. He's a Harvard Business School professor, writes a lot about innovation. The way that he describes new innovation, and you can catch this even in the context of something like Uber, is that at first it's very limited in use case and it's more expensive and more inconvenient to use and people use it

anyway because they have there's some sort of fundamental need there that they don't have satisfied elsewhere and gradually as more people use it and there's you know sort of increased network effects that come out of it then it becomes cheaper and cheaper and cheaper over time at which point it's finally actually cheaper to use uh this sort of new innovation than it is to use some sort of like traditional, you know, player. The model that I would think of in the context of, you know, a utility token, you know, if you and, you know, I'm not saying that I think that this will actually happen. But this is, I think, the sort of theoretical framework, a lot of people are working with, you know, if you take, you know, sort of resource sharing in the context

of storage, you know, I'm putting up my storage, and there's a number of these storage sharing tokens, and I'm putting up my sort of idle storage that I'm not using, contributing it to this network. And at first, it's going to be way more inconvenient and harder to use than AWS or Google Cloud Platform or Dropbox or a number of these other traditional centralized storage providers. And it's going to be potentially much slower and harder to work with because with centralization, you get speed. It's very, very convenient. You can pay in US dollars. But I might have some fundamental need to use these decentralized file storage protocols. For example, you know, if something is, if I need something that's truly uncensorable, you know, I might need to use it

anyway, right? So if, you know, the Turkish Wikipedia is taken down and Filecoin puts it up, you know, that's actually a legitimate use case. And gradually, as more and more sort of like what I'll call storage liquidities contributed to the storage network, because more and more people are adding their storage because they know that they can get money for it, that increases the amount of storage and slowly brings down the price, to the point where finally centralized providers will contribute their storage and provide some sort of interface. So you'll have a centralized way to interface with the decentralized protocol. So this is where I get tripped up. It's like, yes, the price of storage falls, but

the utility token increases in value, where it becomes more expensive to access that. Right, but you'll still be paying in a fraction of the utility token, right? So, where you might be paying, you know, half a file token, you might be paying, you know, 0.1 file token when the thing goes up 5x in price, it'll track with USD. And the holders of the utility token at the beginning that never spent it, you know, if they're buying the token anticipating that they'll spend it in the future, they'll get significant benefits because they brought early. And if you're an investor and you bought the file storage token, because you think that people are going to use this decentralized file storage system, you'll get accrued benefits from it down the road. And that's what, when I say value accrues back to the token, that's what I mean, is that the more people that use the file storage token, the more valuable the network becomes. Yeah, the network effects drive that value. Now, it remains to be seen whether decentralized file storage is technically feasible or will be able to be, you know, executed upon.

What are the knocks on it? You know, it's just technically hard, man. Like, we, you know, we've had, you know, decades of now or, you know, a couple decades of distributed systems research that's gone into, you know, sort of examining how to do centralized services, right? And so now we're trying to do very, very advanced operations across these massive decentralized networks. Like, you know, who knows if this stuff is possible, but if it is possible and there's enough of a sort of initial demand for it, I think that bootstrapping some of these networks will be very, very interesting. Yeah.

That's why I'm, I'm extremely interested in Blockstack in particular because Maneeba Lee has, and Ryan Che have done extensive research and distributed networks and the whole, I mean, they're trying, if you don't know about Blockstack, they're basically trying to make the decentralized internet that was talked about in the last season of Silicon Valley happen to a certain extent. Yeah. It was actually, yeah, it was, it was eerily close, but it's funny. Yeah, Blockstack is super interesting.

I could build, for example, a decentralized Twitter, and you could choose to store your data for my decentralized Twitter interface. You could store it on your personal computer or your external hard drive or Dropbox or somewhere else, leave it internet connected, and it'll be accessed. And Nate here could code up a different client for decentralized Twitter, and you could use his client, you could use my client. It's pretty interesting. I think that it'll be interesting to see the apps that come out of this. I think they also have a pretty interesting governance model where they're putting bounties for saying, hey, we want to see this app built in a decentralized way. The best person to build this app will give them a reward of some sort.

Yeah, they did that with a bunch of portfolio tracking apps. Yep, yep, yep. I hacked on it for a little bit. It was pretty interesting just to try out the platform. How is it developing on top of Blockstack? It's cool. I mean, it's actually just like developing any sort of web application. Yeah, they're interacting with Node.js, right? Yeah, I used their JavaScript library, and you just sort of call blockstack.get, whatever,

and you can access the data that you have in your decentralized Dropbox storage. It was cool. It was very, very cool. I was pretty impressed. I mean, even Ryan both blow me away with how smart they are. Yeah, they're OGs. And for those of you that don't know, Maneeb and Ryan, the founders of Blockstack, they actually worked on an altcoin before Blockstack Namecoin. And they were two of the first to learn about the limitations of these blockchains, specifically around proof-of-work and SHA-256 algorithms specifically.

Yeah. So, I think that Blockstack is very interesting. They finally launched a token sale after sort of long awaited. We couldn't participate here in New York City. And they have some of the best venture investors in the world. I think that I would bucket them along with what I see as the protocol coins, where they're trying to create some sort of new paradigm for building applications. And I think that ultimately, most of the next generation of applications that come out and get mainstream adoption, especially with a lot of the issues that we're seeing around Facebook and Google and some of these large companies around data and how much data we give them. I think that most of those will

be decentralized, or at least decentralized in some form. They might be optionally decentralized. Let's dive into this. How would a structure like Blockstack differ from Facebook? Right now, Facebook, Google, they hold all of our data. We are products. Yes. If you're not paying for the product, you are the product, right? In the case of Facebook, you are using the product, you are the product, they take all of you ... It's actually super creepy sometimes i'm just talking out loud my yes and facebook has denied this a bunch of times spotify does it i'm certain i'm a hundred percent sure that both facebook and spotify do this