TFTC: A Bitcoin Podcast - Tales from the Crypt #24: Pomp

Episode Date: April 19, 2018

Join Marty as he sits down with Anthony "Pomp" Pompliano as they dive into a meandering conversation about mining, tokenized securities, memes, and the need for better UX in crypto. Follow Pomp on Twitter: @APompliano Follow Marty on Twitter: @MartyBent

what is up freaks welcome back to tales from the crypt it's your boy marty ben here on a wednesday morning early in manhattan uh got in the studio early because we have a very special guest uh we're going to jump right into it because he only has an hour i'd like to introduce you all to anthony pompliano also known as pomp on twitter welcome to the podcast thanks for having me Thanks for coming on. Very excited to have you in the studio. You've blown up on Twitter over the last six to eight months, I feel like, spitting out truth about Bitcoin blockchain and how this technology is going to change the world. One thing we were talking about right before the intro was one perspective that we haven't gotten really on this podcast

in particular is uh the the perspective of tokenizing assets that's something we haven't dove into here so that's something i'm excited to talk about with you uh especially since morgan creek capital just just bought a full tilt to start a 500 million dollar uh fund uh in the crypto asset space yeah it's uh one of the tricks we have up our sleeve but There'll be more. Yeah, nice. So what in particular drew you to this space? This Tales from the Crypt, what's your tale?

Yeah, so I actually got started on the mining side, right? I was at Facebook in the first time I'd heard about Bitcoin was in 2014. There was a bunch of guys who were talking about it, and I think I really heard about it as a remittance option. And, you know, it was interesting, but it wasn't really my thing. didn't really care for anything fintech and i just thought it was you know going to be some you know random fad and go away uh and so i kind of didn't pay attention to it again um but then in uh 2016 started looking at uh the infrastructure and so i'm very familiar with like the data center

co-location uh networking uh type businesses um and what i realized was in a traditional like cpu-based data center there's space power um hardware and software same thing in mining and so um the difference is that the revenue you can generate on uh on those uh on that hardware and so we built a um really small uh mining facility start uh then we built a couple more and the one that got the uh kind of the most attention i think was uh we um we've got one that does waste to energy so we take car tires put it through a thermal demanufacturing process it turns the tire into oil steel and energy and then we basically sell the oil and steel as a commodity and we take that energy we mine cryptocurrency with it and so that's a business

called PRTI that my partner at Full Tilt CEO of and runs full-time. Wow I've never heard of that type of mining operation that's yeah we're the first ones to uh to do it there's a lot of people now who are starting to use waste energy um there's uh i actually didn't really know too much about the energy component um but there's a lot of people who take trash they take tires they can all this stuff and they basically just break down um these uh you know these assets and create energy with them so it's usually a pretty cheap power it's crazy how uh the incentives in the system work yeah driving people take tires turning the steel money money makes the world go around so yeah so i did that and then uh you know once you kind of get in on the mining side then

all of a sudden you're like okay now i have these tokens like what do i do well should we hold them should we trade them should we sell them and you just start kind of it's like a spider web right just kind of you go through the whole thing and next thing you know you're sitting there and you're like oh wow i probably should focus on this a lot more because you know that there's a lot of opportunity here and uh back then i think it was uh you know there really wasn't that many people who were talking about it um the kid who actually really got me into it is a uh i met him when he was in high school right and he like i think he was like 18 he just kept like yelling at me he's like bitcoin bitcoin i was like what man and then eventually one day he sat me down like and i was

like oh yeah you might actually be right about this let's go let's go explore it yeah i feel like i was that kid at one point in my life though um i got laughed out of an office i'm pretty sure but um yeah i think that's one thing we can dive into is like the potential upside of this space like how much value creation is about to come out of of bitcoin and cryptocurrencies in general like you your your slogan on twitter is tokenize the world yeah yeah um so yeah so you know i think that there's uh i break down how can blockchain you know really impact uh different industries in a couple of ways so one is just you know we look at the currencies and kind of these exchange of value store value um that will happen right is it the kind of you know gold standard of the world

i don't know um but i think that we already see bitcoin right i don't know very many people under the age of 35 buying gold right they're buying bitcoin and so at some point that pays off for decades to come that people are putting their store value in this digital currency so i think there's that bucket of stuff uh there's the core technology which is just the actual blockchain itself um and i think we already are seeing people you know use that in kind of interesting ways in corporate america um then there is all of the decentralized networks right and kind of decentralized applications that can be built um i tend to think that which is unpopular opinion that um that stuff is unlikely uh in the short term um maybe in the medium term but then highly likely

in the long term and uh and so um you know there's a lot of hype and attention and kind of all this because there's prices and you know it's kind of like penny stocks a little bit um but but i don't really see anything that's going to get built in the next two years that'll be used by like a mass consumer uh and then the last bucket in the bucket that we're you know most interested in and i think is going to be the biggest opportunity um which i'm biased on is uh tokenized securities right and so this is um you know literally take every single thing that's on wall street and we're now going to create token version of it um and to technologists that's really boring but uh to us you know 700 trillion dollars of assets that are going to be tokenized we uh we'll take a little

piece of that no 700 trillion dollars that's such a big you can't even you can't even fathom it right right it's unfathomable to a point and that's um that's sort of like the beauty of the space and i really like that you touched on that the timing is sort of not lining up for those assets right now like it's going to take time to build out this infrastructure that's one thing that sort of perturbs me about this space in particular like yes we should be pushing for innovation at all times trying everything that we can i go back and forth to whether or not we should try it as fast as we can because money's a model these protocols and retail investors have access to it it's like uh should people be losing money on this experimental tech i go back and

forth with it but absolutely that's the one thing that perturbs me in this space in particular is like the impatience of some people who want everything out of the box and it's just like this stuff's going to take time we have to build out the infrastructure like you working on things like mining is definitely i think more worthwhile at this point in time yeah it's um so the decentralization is uh is really kind of a hot topic for me right so uh every single one of my friends thinks that like we're gonna go decentralize the world the current world we know is gonna like burn down and we're gonna have this new like you know utopia of whatever um and i tell them like that'd be awesome. Right. Sure. I get it. Like, you know, uh, I'd love to democratize power and

wealth and all this stuff. But, uh, in reality, um, I always ask them like, do you think your mom actually cares that her date is on Facebook? This is something like, you know, cause everyone's talking about it. Right. Like probably not. Right. And she wants the convenience. Right. And so like the network effect that's been built in a lot of these businesses, whether it's Facebook or Uber or Airbnb or, you know, whatever, um, it's going to be really hard to break apart just on the single premise that um hey i want a decentralized version of this right some people will find that more valuable but the mass consumer is not going to jump into that in the next you know two five years now where i do think it gets interesting is um actually like in more enterprise stuff right so

where uh you've got sophisticated people on both sides of a transaction those people really care about like performance or security or you know something like that um i think that's why you're seeing the blockchain technology be adopted very quickly you know everyone from the ibms to you know supply chain etc because those people are that's their job right is to find better performance better technology and so i think it's going to uh kind of find a home there first and then all of the the mass consumer adoption will happen over a longer period of time which is okay like like we don't need to be upset that that's going to happen right that is okay yeah no and this is uh just the ux of handling private keys is arduous enough like i don't think like you said i don't think my

mother is ever going to learn how to store private keys yeah yeah well and part of it is hopefully she'll never have to right in terms of like the underlying technology like somebody will figure out a user experience where people are able to use this technology they don't even realize they're using it right and it's just like you're good to go this is just a this is where you put your money right this is where you put you know whatever your digital asset is um we're not there today and i don't see a path there you know i don't know 12 24 months like it's not very likely that's going to happen yeah that's one thing the space needs more ux designers um but i will say the some of the new apps that are coming out where i've seen the best ux are like some of the lightning

network apps like jack mauler's app app that that ux looks somewhat impeccable compared to other softwares i've used in this uh in this space absolutely and then you have uh companies like ido with dan ellitzer they're uh a huge design company dedicating a team to trying to figure out how to make the ux better it will come it's just going to take time and that's uh that's something that pisses me off sometimes when people like this doesn't work the way it's well so here's another important thing that uh take takes time but i already see this happening and i think it's a good signal right so it's the brain drain from wall street and tech yeah you were tweeting about this yesterday like um i'm seeing right now probably on a daily basis two to three like

relatively big names in whatever niche industry that they're in leave a big wall street firm or leave a big silicon valley tech company and go into crypto and so if that happens every day right you're seeing two or three people well there's a bunch that aren't getting announced right and that brain drain into an industry in the short term everyone's like you know it's all exciting it's hype it's all stuff again that pays off for decades right because now you've got these people who um are they're not gonna leave that job for two years right maybe maybe longer and so as those people are coming in every single person that comes in they turn right back around they tell that person that they're you know the tech company or wall street hey what do you do like come on

you gotta come you gotta come work with us and so it's just the small the snowball's rolling downhill now and and i think that uh it's only going to accelerate it's a it's a couples with another tweet that you tweet a lot the virus is spreading so so listen if anyone from barclays is is listening to this I saw yesterday they had an analyst who they wrote a whole thing about how cryptocurrencies are like an infectious disease right and and then you know they're saying how all the different you know the infected population all stuff or anything and immediately all these people start tweeting at me you know they stole the virus is spreading I was like yeah well so they just said it in banker speak right they said

the uh the uh the infectious disease we've got a contagion on our hands no that's uh we'd like to get cosmic on this podcast but like the idea it's so uh captivating that yeah like it's hard to meet somebody that's dove into this stuff in earnest and not been like holy shit this is absolutely potential change the world it um the two things that uh i really feel strongly about are uh the power of blockchain bitcoin etc is uh it's captured the mind share and energy of an entire generation right like every single person i know is talking about this like this is not going anywhere because the people who are leaving their jobs to join it the people who are buying this stuff like it's here not going anywhere so i think that's you know it's a known fact but probably

people don't put enough uh emphasis on it right if that's just their entire generation looking at the second is uh you know it's like killer app so everyone's always talking about like you know what's going to be the killer app of you know whatever technology um and david sacks uh he tweeted the other day he said uh capital formation is the killer app of the blockchain right and so i think this goes back to like tokenized security stuff is like look all this decentralization like this is all fantastic and it will happen over a long period of time but the killer app over the next decade is going to be these tokens and this blockchain allow us now to move money and form it raise it you know do things with it that we previously weren't able to do and it not only

allows the people who are already in the financial system to do that it also includes or kind of brings in a whole population of people to participate in that financial system that previously weren't there yeah and that's um that's one thing i debate a lot on this podcast is is how i agree that like we're gonna have these assets sort of with pointers to the blockchain at some point everything's gonna be connected but just the path that we take to get there it's uh i mean it's nobody knows the exact path at this point so there's like the many the many schools of thought like uh i would trend towards bitcoin maximalism where i think like you could do it on top of bitcoin and second layers but other people believe that uh you're gonna be able to create like a ux

experience where tokens are very interoperable and uh you're you're able to exchange them somewhat seamlessly in on the back end of things yeah i am i'm so i i uh am a short-term bitcoin maximalist meaning that i haven't seen anything yet that has convinced me not to be um but but i'm definitely open to something else coming along that could do that obviously i think the other one that's really interesting is ethereum and kind of what they're doing there but i think there's some scaling issues and and that type of stuff but but bitcoin i've got um very strong conviction in that you know that it will continue to be valuable uh and the um the other things on the tokenized securities multiple times a day now people are coming to me and saying i want to tokenize x

right and it's like real ass it's like things like uh there's one yesterday a guy came to me and he said hey i want to tokenize this thing and i was just blown away by what he had and i was just like wow you really want to do this he's like absolutely because it's better and so i think that we're going to continue to see um you know these assets come to uh come to the blockchain and i think that only helps with not only adoption but uh that that kind of capital formation and again it's just a whole new virus yeah um sorry i just switched mics there this one wasn't sound way better yeah right and um sorry if the sound was messed up first half this podcast i was on a bad mic um yeah and it's it's well not the most important ux hurdle to come with this stuff is

custody like how do you how do you know you own it how do you how do you make it so like you don't lose a private key uh easily like it's it's hard storing that stuff right now like what do you think i mean is what what what an example of a great ux experience in the space right now be for you yeah so i think uh it's got to match the experience i have with my bank account today or be better okay right so i always say that people are not going to switch actually i think it actually has to be better people are not going to switch if they just get the same experience right even if you tell them it's better security is you know whatever it's just there's no point to right and so if you can't provide a better experience than you know kind of the current

banking system you're you're just dead in the water now here's the good thing for the blockchain in space grand banking system sucks in terms of like the ux like like it's not like we've got you know this big uphill battle right now they've got size they've got you know kind of network effects they've got all that but uh i don't think that they're necessarily um you know miles and miles ahead and so you know we got a shot at least yeah and that i mean and the banks are so i would say handcuffed to a point too because of how big they are and how monolithic they are and moving the regulations they have to overcome they're sort of handcuffed to that that system and the whole buckminster fuller quote like we're building a system without that and we sort of don't have

those handcuffs right now but that topic is is uh is rearing its head with the sec subpoenaing a lot of these icos and that uh that regulatory uncertainty is starting to become a little bit more certain it's still very uncertain but uh is that one thing you worry about uh going forward no so uh i'm not worried whatsoever about the regulation uh i think that there's two things so one is uh tokenized securities stuff we're looking at we don't need any change to regulation like all of it is perfectly legal within the current framework and there's no gray area like pete you know lawyers have been doing this for you know a decade yeah and so like i think that's also why we're so interested in this because there is no uncertainty

right so you know it's pretty de-risked now when it comes to the uh utility tokens and and you know is bitcoin a commodity a currency whatever i think uh the nice thing about being in the united states is the regulators have actually been fairly reasonable and they've been very light touch in terms of their actions now they've been you know somewhat vocal i've never seen the sec and cftc write a op-ed in the washington journal right like i saw that i was like wow they are really trying to get the message out and so um you know they're if you look at you know a korea japan whatever you know they ban icos they don't ban them they they you know exchanges are getting shut down now they're allowed and and there's all this like chaos and kind of um you know just just

uh it's not even uncertainty it's just like you constantly are churning right it just becomes something where people don't even want to step in when you say okay this is this is something you're allowed to do yeah right and so in the u.s what they've done is uh they've said hey we're looking at this right you know don't be dumb and don't be greedy right and so like it's general life rule um and then they said uh you know look just follow the current laws now there's people which are necessary people who will argue hey the current laws you know don't fit this new thing this new thing doesn't um you know it doesn't apply to the laws you know all that kind of stuff um and so i think that the regulators are uh they're being like fairly collaborative

as well right they're they're having conversations with people in the industry and they're saying how like explain this to me how should this fit into the law um and i think that you know i'm hearing rumblings that they've got uh some solutions that'll uh that'll be announced soon that you know they sound actually like much more forward thinking than i would have expected them to come down on yeah we're lucky to have uh companies like coin center down in dc really advocating for for the innovation in the space i think peter balkenberg is that his name correct yeah uh did a really good job on capitol hill when uh the senate i believe had the hearing a few weeks ago on blockchain technology and he did a really good job of doing just what you just

described is hey this technology is very innovative and a lot of the laws we have now do not apply and a lot of people some of the hardcore cypherpunks in the space like the anarcho-capitalists the hardcore ones will say like coin center is like the opposite of what we need we don't need anybody interacting with the government but yeah you have to be a realist at some point like if you if you just turn your back they're they're going to try and come down hard well yeah and and the way that so those people uh and i'm very like open with them about i said listen i understand your like general sentiment and where you want to end up the way to get there is not to be divisive and to you know basically stick your middle finger up to them right yeah feels great in the moment right

then afterwards like man that person hates me and like they're gonna look to screw me yeah right and And so I think that, like, to your point, the more education that's done, right, look, a lot of people in the government actually, like, they use technology. You know, some of them have been in business before. And so, you know, there are definitely the people who, like yesterday in the Facebook hearing, are like, you know, I emailed on WhatsApp. You're kind of getting it, right? So, like, there's definitely people like that that are out there. But for the most part, I think that when they're told, hey, here's how the technology works, they generally get it and make it be thoughtful. When people complain about regulation, I always tell them, I say, do you want that job?

Because I don't. I don't want anyone to go anywhere near that because it's just a hard job. It's a hard job. And I would argue it's like getting impossible with how big we are and how – You can't please everyone. No way. No. And I think we're seeing this play out on the global stage as well.

There's chaos all over the place. I mean, Trump's tweet that we were talking about earlier, he just threatened Russia. I forget the tweet exactly. It was right before we came on. But basically, he almost incited nuclear war. It's just a Wednesday morning. Right, yeah, just a Wednesday morning in April.

By the way, happy birthday to my wife. It's my wife's birthday today. Um, and I think the sort of chaos that's going on, like around the world, I would argue, uh, I mean the world's, this is like, cause yesterday I had, uh, another, uh, guest on and we sort of got into this. It's like, damn, the world is the best it's ever been. It's statistically like the best it's ever been. We live in the safest, most prosperous time in human history.

Right. Right. It doesn't feel like that sometimes. Right. Like absolutely. But yeah, exactly. it doesn't feel like that like it feels like the there's sort of an old way of doing anything that's brushing up with a generation that's trying to do it a new way yeah and it feels like

and i think a great example of this is like the senate hearings where you see like in person like the the uh the tech illiteracy it's like after a certain point like within the government that's making laws for us and there's definitely just like a a give and take there where people just want want to like break free and just let innovation like fly absolutely well i mean here's a perfect example right so uh take all the stuff that's happening around like gun control after the uh shooting in florida right and so like forget which side of the debate you're on whatever just if you can you know kind of unbiasedly look at uh the tactics used right um and people have been arguing about gun control for you know decades right yeah you know hey should

we have guns you know whatever well it's always like somebody who's in a suit right who's very professional who would never lose their temper on television or anything like that right um and you know they'll schedule a press conference and they you know do all that kind of stuff these kids are just like no they're just yelling and screaming and they're using you know their phones and they're and they're you know creating memes and it's just like a whole different type of um you know to some degree like a propaganda war right of just like hey these kids understand how to use the tools that they have at their disposal better than the adults and so you know what i'm seeing is i think on both sides of that debate the adults are like oh shit like like we're not

going to be effective here because these kids are way more effective at debating this than we are just based on the tools that they know how to use and we don't yeah i mean there's some adaptable adults uh donald trump being one of them means when the presidency a lot of people will say i'm gonna make america great again you know so here's the thing about him that's really interesting uh i read this book uh by scott adams um who was uh the dilbert founder yeah and so somebody was like hey you should read this thing called win bigly and so the one of the uh anecdotes in there that was really interesting was uh hillary clinton did she came up with like 100 plus slogans they did all the testing and you know focus groups all stuff and they ended up with uh

stronger together right and so it's this uh you know a fairly like down the fairway political campaign slogan you know whatever uh and they said that trump walked in the room and they were We're going to call it a slogan. He goes, make America great again. Just like, just, just right off the, right off the cuff and like, and it works. Right. And, and, and it's catchy and it's all the stuff. And so, you know, again, you can argue all day long about his politics.

You can argue about, you know, his ethics and all that kind of stuff. But the one thing that you can't take away from the guy is like, he's a great marketer. Right. And he understands how the psychology of the human consumer works. And so I think that kids have an element of that today too, because they've been exposed to it online and they were to see some pretty cool stuff across technology, politics, you know all this stuff over the coming decades yeah i mean that's uh that's a very uh it's a growing uh area of millennial income as influencer i'm like instagram thot is doing swipe up campaigns

if you know how to meme the world you can make some money out of it now too yeah it goes back to the uh to the idea that uh audience is currency in today's world right and so i mean barstool is a great example right like if you got the eyeballs and you can get people to you know do things that you want them to do you'll figure out a way to make money and so i think that that's uh you know adults definitely don't understand that as well as uh you know kind of people under the age of 35 or so yeah and it's about being authentic you know that's how dave got this company dave and dan and kevin got this company to where it is you know they they were just authentic throughout and people really connected with that i feel like we were growing into a world

that wasn't authentic it was very advertised and very uh sort of cookie cutter like sitcom world and people were sick of it and things like barstool are just like a breath of fresh air and fortunately or unfortunately i would trend towards unfortunately people connected with donald trump and i mean he really played to those emotions yeah yeah well and there's an element of um you know i think at least when i was growing up like you would never see a star or somebody of importance like really suffer a negative uh event and if they did it was career ending right it would be you know um you know so and so like cheated on his wife done right and just like it's over um i think then you started to see the you know the kobe bryants of the world and and they

became um you know a little bit better at using the media and stuff like that to kind of like recover from you know these these potentially negative events uh today like it's actually if If you don't have something like that going on, then you're inauthentic, right? Because it's kind of like, hey, where have you made a mistake? What negative thing is going on? And I think you see that with Trump and you see it – I mean, look, Dave and Barstool and all this stuff, like every single controversy, it actually thrusts them forward. And I shy away from the all press is good press type thing,

but to some degree, I think that the people in the limelight are absolutely seeing that. And if we bring it all the way back to the blockchain, and like look at the people who are you know kind of the the uh you know thought leaders or kind of the the main you know nodes if you will in that industry um a lot of them are like embroiled in controversy right yeah roger vare you know jihan you know vinnie lingroom john mcafee like like why are these people known why do they have influence why do people care what they think like right it's because half the world actually you know half the industry actually hates them like like it's like if you just have everyone love you right to some degree they're they're

just not that interesting right it's like oh you built this little cult but a guy like john mcafee i don't know if he's right or wrong right and i don't know if he's pumping stuff like whatever but you gotta have haters in this world they're gonna be successful yeah i guess this is summing up it's just like if you don't have the haters then you're not important no it's crazy um that is another interesting thing about this space is that it is so known so raw that anybody can bootstrap themselves and come into the space and try to make a name for themselves and it's funny more recently seeing uh seeing some people like kyle samani and and those guys come in and just like in the last six months to be like i know i'm here to fix everything like i know how this stuff

works so i've talked with kyle and uh the one thing that i really respect about kyle is he doesn't give a shit about like what anybody else thinks i can tell he just he'll just fire off like you know bitcoin doesn't work you know like wait wait wait explain this right and and you know he'll have his theory and whether he's right or wrong that doesn't really matter frankly right He plays the Cunningham's Law Yeah It's just You need those people

Right Like you need You need the people Who are there to always say Like I don't believe that You know There's a bunch of guys On Twitter that

You know It doesn't matter what I tweet If I tweet anything positive They're going negative Right And like Then when I have a conversation With them kind of offline

They're like Yeah like I see the power Of this thing right But just there's so much Like positive hype Etc And I'm like Absolutely

So like we need those people In the room Because frankly the truth's probably somewhere in between yeah right it's not 100 positive it's not 100 negative it's not going to happen as fast as we think it's going to happen um and so like i appreciate those people now maybe they can like chill out with the trolling on twitter but you still need those people around i'm an internet troll i would say so i used to not respond to them and now uh i've got a couple of go-to phrases that i'll hit them with and one's just like thanks for your opinion

and have a nice day and then get him with a smiley face or the other one I like is I'll just tell him like get out of here with that noise go back under your bridge

and like people are just like wait what you gotta respond when it's absurd and people are like oh I thought you were gonna engage me

it's like no this is Twitter this is a mud war absolutely it's you know whichever coin center Neeraj meme god

yeah yeah he just he's got a meme for everything man he just whips it out and you're just like wow he's quick with it too

that dude it has some quick wit it's pretty crazy how fast you can spin something up my favorite was when the whole at bitcoin uh handle drama was going on last week and some random person had it for like 12 hours i think and their first tweet was murder m-e-r-h-d-a or something and he just took a screenshot of him dming the at bitcoin account and murder and had a tweet that said don't worry guys i'm making contact now he's good you know what we need to do is uh the one thing that uh i was upset didn't really catch on was uh when janet yellen was doing the uh the hearing you know like a couple months ago and the buy bitcoin guy uh so uh i immediately actually thought barstool needs to uh just like you guys do on game day with the signs like we

We just need to start a whole little thing where people start to buy Bitcoin signs on television or wherever, because we've got to get this market turned around from a bear market to a bull again. Yeah, well, I don't think that'll be hard. There's a lot of people in this office that bought Bitcoin at a pretty high price point, so they'll be happy to pump it if they can. They'll be putting QR codes up everywhere. Who do you think bought it at the highest price? Nate is our office counter-indicator. Whenever he's over euphoric or very pessimistic,

we start selling or buying. Nate. Depending on Nate's mood. Yeah, Nate did tweet at me one time, and he basically, he was just like, hey, man, it's over, I'm depressed. I was like, it'll be all right, man, it's going to go back up, just wait.

It's like, that's the thing. And it's funny, because I come in here, and I told everybody, they were like, should I buy, should I buy? I was like, you should get some skin in the game, but only buy a little bit at a time. Don't go all in. I literally told people,

Is it going to run, like, 20, 25K and then get cut in half, maybe more? Yeah. Well, here's what's crazy is, like, people are acting like this is, you know, the next great investment, right? It's like, you know, like, oh, we found oil. Let's all go buy oil. Like, no, this is, you know, most of these things are penny stocks. Yeah. I mean, you know.

Most of them are garbage. I ask people all the time, like, what's ZRX or what's this or what, you know, like, whatever. And, by the way, I'm not, you know, I don't even know what ZRX actually is, right? So, like, I'm just, like, picking some random letters. and people are like, oh, this is, you know, it's going to decentralize the financial system and, you know, they name a country I've never even heard of before.

I'm like, wait, what? No, and then... Like, just go buy the index. Go buy the blue chips. Just buy, like, Bitcoin, Ethereum if it's... I mean, I would not recommend buying Ethereum, but that's... some people would. I could be terribly wrong, people.

But that's the thing, like, and people put so much credence into these projects and they're 99% marketing things like IOTA and Tron, and it comes out that... Tron's the best, right? Tron is the best. They copy and pasted Ethereum's white paper, basically. I'm still trying to figure out how that guy is tweeting

and saying things like, tomorrow I have a big announcement about an announcement the next day on this guy that we might hire. Like, wait, what? And he's got incredible engagement. It's like all of Asia is just like, Tron's going to be the next best thing. the white paper i haven't seen any code like i just don't know what's going on and then i see

people who like i thought were smart are like tron i'm like wait no what's marketing and then yeah it's crazy how like smart people can get caught up into it too and that's like that's why short like you said your short-term bitcoin maximus i'm a bitcoin maximus because nothing else has worked up to this point in my opinion um and bitcoin again i say this time and time again bitcoin is the only blockchain that does what it markets it'll do let's enable peer to peer censorship resistant transactions it's been doing that for almost 10 years now yeah and the part that i think uh is really really interesting about bitcoin more than anything is if you are bearish on any other global economy any other financial system right bitcoin is your

alternative yeah everything else is trying to attack technology talk you know companies you know all these other things but the one thing that everyone has in common that everyone can use is the economic you know the economy and the financial system and so that's going to be the king for probably ever yeah right why not just put it where there's probably the least amount of risk and it ends up being the king maybe you don't get the 30 000 you know percent increase in that ripple saw last year that's okay if you just 2x right like you're okay so people people aren't happy enough with uh 10x gains they need that 1000 but this is i'm happy you said that because there's things that i thought were rumors a couple weeks ago that have since been proven via video to be

very true is that venezuela is turning their oil into bitcoin with mining farms like they're not they're not marketing it like the petro was apparently like a huge uh ploy just to confuse everybody and they're really like mining bitcoin and turning the cheap oil they have into bitcoin they have like mining farms and they're doing it on the dl i've seen like videos of absolutely so uh this is going to get a little bit more towards the anarchist uh uh mentality but um i i've got this theory that uh one of the greatest wars we are going to fight over the next i don't know 10 15 20 years at some point it comes to a head is uh the fight for energy computing power and digital assets right and it's going to be between nation states and so if you look at north

korea you look at russia look at china venezuela united states all of these guys are positioning themselves to who can get you know renewable energy right that's cheap who can get as much computing power as they can under their command and then what they're using the energy and the computing power for is they're all mining digital assets and so like you know when you're trying to put economic sanctions on north korea and there's like cool we got billions of dollars of you know this other asset can they keep up i don't know right like i don't think that we've seen it play out yet but um you know the computing power you know arms race if you will is like a very real thing and frankly the united states is behind and so we we've got to um we've really kind of got to

get it in gear um and you know i'm sure we'll be fine right but but it's uh that's the type of stuff that uh you know it sneaks up on you right and it's like you know that's how the empire falls if you will to a degree um and so when you see you know a country like venezuela who's like hey we got all these natural resources and rather than sell it to you idiots who are you know dependent on oil i'm gonna cripple you right because i'm just not gonna sell you my oil and then i'm gonna to take that oil and i'm going to use it to mine this digital asset and it's like oh shit like all right the game theory of geopolitics has changed there's been another layer at absolutely and and then when you get into like all the like privacy coins and stuff like that

like um you know my favorite thing in this entire space whenever i'm talking to somebody who either doesn't believe or you know you know is one of these like boomers right is uh i always tell them that uh the currency of choice for every criminal drug dealer money launderer etc around the world still the u.s dollar you want to use cash right and like the cops would love for you to have your hand on a keyboard doing anything illegal right right and so we'll see yeah and um yeah it's interesting to frame it that way i've never thought of that way as like the u.s falling behind specifically in the hardware game and that's something that we're finding out with bitcoin mining hardware is that companies like bitmain are creating hardware not releasing

it to the public and just using it absolutely without anybody knowing which is like another scary thing like monero and they hard forked i don't know if it's 100 yeah that was gangster right they look they warned them they said we're gonna do it if you release this stuff they released and they just bam hit them with it oh but what was interesting like it was a hard fork to make uh monero asic resistant and with this specific asic and i don't think i don't know i don't know for sure if it was just pure gpu mining before and they were like preemptively preparing for an asic that was about to be dropped but when they hard forked their hashrate dropped like 80 yep so some people are speculating that pitman already had asics on the

market oh they absolutely like yeah and that's where things get like whoa like these companies can build tech that has an efficiency magnitudes of order more than than the current tech we think we're using so i the advantages i may have this wrong yeah i may have this wrong but i saw uh literally this morning on twitter somebody was talking about uh a 10 millimeter um i think it was 10 uh mining rig that samsung has really that they've been using so i i don't know it was like a random like it's one of these things like it could be a photoshop photo you know whatever but um i've got no doubt that you know because here's the thing the guys who start some of these companies three five years ago like it's kind of like in a garage and they kind of figured it out

right and like oh sweet now i can like mine this stuff now you start getting the you know mit trained phds in a room and like watch out yeah like manhattan projects happening to figure out this asic game absolutely and so you know here's when i talk about the computing power stuff um some of it is the blockchain related but there's other implications of it right so and i've been looking at the space pretty deeply over the last uh six months or so um i'm pretty sure this is true uh that um companies like 23andme are taking like the dna data so you need to do the dna sequencing and they send it abroad right um i i think uh i saw the vice chairman i think of the senate intelligence committee say that uh somebody was taking i think it was 23andme was taking their

dna data and they were sending it abroad to uh i think it was china to get processed there and so like his sentiment was just like and i think he said too he's like i think this is true i may not be right so i just want to caveat you know with that um but he was like there are other situations like this we're taking super sensitive data and because we're behind in hardware and computing power etc that we're having to send it elsewhere and just like what are the implications of that should we be doing that should the government not allow us to do that like i don't know i'm not smart enough to figure it out i don't want to make that decision but that's the type of stuff where you know it's not just blockchain there's other you know areas where this is uh you know this

becomes really important yeah like crisper stuff like being able to edit genes it's a whole fucking other mind fuck it's like it's like we're getting into some weird territory i'm not gonna say who it was but somebody uh so one of my favorite questions to ask people is just like like what's the weirdest craziest thing you think that might happen in the future and this dude just it was like he was like waiting for the question well you know how everyone talks about you know the internet of things and using all of these connected devices to mine uh digital assets i was like yeah he goes what happens when we have computers in our brain and i was like i'm out right right and he was just like i was like i am out of this conversation but but like that i mean again

right he's got a point it's just those are the types of things that are going to start happening that you know and again this is 25 years away probably right but they're 10 years or you know whatever it is um who knows with how fast this stuff is innovating it's like feels like just yesterday the iphone came out and now we're on iphone 11 absolutely it is um you know and i think in the blockchain space the uh the part that's frustrating to people is they feel like all the other technology in the world is like you know moving so quickly right but if you just look in the last let's call it two years uh or since 2015 right so three years um we went from basically just bitcoin to now there's thousands of you know coins networks etc we've had thousands if not

tens of thousands of people run into the space right in terms of like actual employees at these companies we've had millions of people start investing dollars in billion or hundreds of billions of dollars of market cap created and i think that's like pretty good progress right right three year period like like we're we're moving right it just it just feels like you're running in quicksand but like we're moving well i wrote about this on monday i believe the hash rate alone it's crazy because i remember last july like not even a year ago um people were like in all that bitcoin's hash rate had reached 6x a hash a second and i just like i don't i haven't looked at hash rate in a while for some reason over the week and

i took a look in the last six months it's gone 3x it's gone from like 9x a hash to over 30 now like a 31x a hash a second so it took eight and a half years last summer to get to six x a hash took us like 10 months to oh yeah multiply by five oh yeah it's crazy how fast that growth is like it's going exponential and that i know people in the united states i know three projects that are over 100 megawatt mining facilities which is last year there was probably there was less than 10 around the world that were 100 megawatts or more right and now that's three that i know right now being built one of them is over 400 megawatts oh shit right and so like who even knows if they actually get it accomplished right you know they probably will but you know who knows but if you

start looking at how much hardware how much money is being invested here um like you know you open it up and you're like man incentives are like a you know a pretty crazy thing yeah well like it's probably the most secure network we've ever seen right and bitcoin and blockchain is probably the most viral product the world has ever seen right and so if you think of it that way it's like we're okay right like yeah of course i would love for it to you know accelerate and do all stuff but like not only are have we made good progress to date like to your point the speed at which it's accelerating is still healthy and so like yeah the prices are down that's fine everyone's got you know negative sentiment all stuff but like the core underlying you know factors and data points

are all still very positive and like i think it's kind of an arbitrage opportunity right right when everyone else is like super negative on it but like all the underlying you know it's the people who are like what are the fundamentals well let me let me actually tell you about some real fundamentals right because you guys are like literally looking at like how many users are you know you being using these mobile apps as fundamentals and i'm talking about no some dude just you know put 100 million bucks in and put computers and hardware and infrastructure all stuff in and now they're like mining like that's a true you know infrastructure investment versus you're trying to count you know how many people click the screen right exactly and it's it's

funny how i got two things i want to touch on first it's funny how people in december who are like oh i missed the boat wish i got it at 20 000 like it's at 20 000 now i missed it can't invest wish i could have bought like it crashes now now they're like short shroud and void like ha-ha, I told you it was going to crash. Don't even want to buy now. They're like, I'm not going near it. Yeah, they wanted to buy it. Man, I wish I bought 7,000, right?

Well, it's 7,000 now. No, no, I'm out, I'm out, I'm out. Yeah, it's like, all right, what do you people in this world? But then again, going back to the hash rate, it's getting to a point where it is the most secure network on Earth, and it's going to be hard for centralized nation states to attack it, and the gravity of that tipping point is pretty intense. absolutely look here so i said this early i've kind of backed off a little because people who

you know i get a lot of backlash on twitter for it but i fully believe that uh there's not a government in the world that can stop this right and everyone says well you know how's your server gonna do when a bomb drops on it right or how you know yeah you're gonna get killed by a bullet like i get all that sentiment this is a distributed decentralized network that is around the world and you cannot kill the idea yeah right and so like unless you're gonna go and you're literally going to attack the earth right and everybody on it you're just not gonna you're not gonna shut it down well let's walk through this from an incentives perspective too like if you start bombing data centers that's going to make mining bitcoin more profitable it's going to incentivize

more people to build more data centers like it's a hydra like it's like like the incentives play beautifully right it's so here's the uh the part that is crazy to me is um if you look back at how ruthless um you know the rockefellers and those types of you know guys were when it came to the oil uh drilling right um i'm very surprised at how uh little tension there is in in the blockchain space right um there's there's tension for sure right there's people who don't like each other there's people who are you know like you know they're the hated person in the room there's people who are loved and all that but it's not really that bad right it could be way worse and i think that part of it is just that everyone although i might not like you or i don't like

your stance on something whatever everyone is still tied to this idea of like we need to win together to make this industry this technology be successful and so like i'm willing to overlook our differences as long as like blockchain successful like cool like i don't really care if it's bitcoin bitcoin cash or whatever right um which i don't think very many other industries have which is an important feature of this yeah a common a common goal uh it's almost like a a new virtue to strive for right decentralization and and really allowing people to to make something on themselves and just be able to plug in and participate and not have to go through barriers and that's that's something that that is driving a lot of people like you said like

i think this is a space where we're we're very intense debate is is very welcome like people open it with open arms or welcome it with open arms and that's why i love twitter in this space because it's a bunch of people with different views meeting on on the internet and hashing it out it's not always civil but at least the arguments get out there and you get somebody else's perspective absolutely and that's the most important part it's just sort of look here's the so uh the things that i think are going to happen over the next let's say uh 12 months or so that have the potential to just light this thing on fire and just really take off um i think that one of the major tech companies is going to announce a token right so whether it's an ico

or they just introduce it uh the likely candidates i think are tesla amazon and facebook any one of those three pulls the trigger on this thing watch out like like just just strap in and we're going right and so i think that like when you start looking at you know huge monumental things like that 18 months ago no one would have ever thought that was possible right well like what else can happen if we're already talking about like it's not even a question of if they're going to do it it's when are they going to go do this stuff right um i think that we're going to start to see um you know massive projects uh around uh tokenized securities right um i i've already had multiple people pitch me on um like they want to start a sports league they want to

start like you know you know big real estate projects you know huge companies and so like it's not a question of if it's a question of when some of these large projects are going to really you know come out and be public um and then i think that uh something that we haven't really seen other than like there's guys like novogratz that you know they're very well known on wall street they kind of like walked away they have like a pause and then they came in the crypto world they didn't go direct but there's gonna be like a i don't know a cheryl sandberg or you know like some huge name either in silicon valley or wall street that's gonna leave and go to a tech company or uh and go to a blockchain company and it's just gonna send shock waves right it's just

like man there's there's the cannonball across the bow right and so um i think that like that's the type of stuff that i'm like just waiting for and when it happens i think we'll all be like holy shit yeah um there's probably plenty more things like that yeah again the virus is just gonna spread further and further it is uh the virus is spreading is uh is probably one of the funniest things i've ever tweeted because it was completely by accident and i said it and the reaction to it i was like oh that's a good one like i'll keep using that it's true i mean it's been it's been said in like bitcoin talk forums and shit like that too because it really is it's fucking it like it's hard not to get interested in it's like oh there's a new money it's like

what's that mean money what's wrong with money that's the other thing i love about it another thing we touch on a lot in this podcast is that it forces you to learn so much about so many things and absolutely it's i think it's going to be an overall net positive for society if we're bringing in this technology to sort of run our social infrastructure off of and then on top of that to be able to use that social infrastructure you sort of have to learn along the way as well absolutely like a south korea um i think it was i think i'm pretty sure it was sold they uh i don't know if they're piloting they're they're talking about doing it or they actually announced it um but they were saying they're going to launch a s coin and i saw something about that

they want to use the s coin as a digital asset in which they will deliver all of their uh social benefits okay so the government is a government issued you know centralized uh token that if you get you know unemployment or you know whatever social benefit program that they have that's how you get paid and so like you know you started looking at that and you're like there's no one who's going to be safe from this like you're going to have to learn a lot of wallet about how you know how this works and whatever and so i think that like that's all i mean we're in super early stages how long that takes to get implemented is it successful like there's a bunch of questions still um but if we're sitting in the beginning of 2018 and there's government saying hey i'm

to just issue my social benefits and in 2019 it it's just gonna be you know everywhere yeah and that's what 18 months yeah like 2020 can't wait like i don't know like elon might have you know like a mars coin by that point and you know it might be mining asteroids by then who knows but um no it's funny it because it's interesting it'll be interesting to see what i'm most interested to see like the brain drain you're saying like big silicon valley i'm interested to see the the uh the tech brain drain like the the engineering side oh yeah like and once we get in a tipping point of quality engineering talent that really knows how to build out these protocols and they're able to scale because that's one thing we have to figure out how to scale the

shit but that's something that we're we're learning more about every day and i hope i think like that's uh who was i talking to about this um i think it was tom garambone from tetris capital last week we were talking about it and he said yeah it's it's happening like people are starting to like the smart engineers that i know are starting to dig into this space and oh yeah and really like experiment with everything the beauty of it is like there's a difference between the like you know highest quality hacker and the highest quality engineer at facebook neither one is better than the other right they're just better they're like good at different things right right and so uh you need those hackers to like be able to prototype and like really kind of push

the edge of stuff etc but like you need the you know man or woman at facebook to be able to come in and like okay we got to build like a super secure super you know a high uptime scalable product like it's just a different type of uh skill set and different type of experience now the unicorns out there are the guys or girls who like they've got both right they've got experience kind of you know doing both and and uh you know when you see that we're mostly we're like overweight on the hackers and those types of folks right and now we're starting to get those scalable like reliability engineers and things like that coming into the space like i think that now you just start to bulletproof a lot of the stuff that we know is possible right but it's just like it

like we can't get the mass consumer adoption you know the the ux doesn't look right you know that type of stuff um i think that that's what the brain drain really affects it's not the you know hey who's pushing the edge the farthest because i think there's a lot of people in the space already doing that and there will be more um but but it's just like the the kind of like i don't want to say industrialization of some of this stuff but like it is to a degree yeah yeah you're gonna have people come in with uh their views and their way of doing things and it'll be uh better for the space overall and it's like that's what i think a lot of the people especially early adopters it's interesting because some of them don't like where the space

is now and they really want it to be that anarcho anarcho capitalist like utopia in their mind but it's like what did you expect that you want the masses to yeah to adopt this like they're gonna they're gonna want to use it in their way and yeah it's it's hard to to rewire seven billion brains well it's not so so the bitcoin versus bitcoin cash debate like cracks me up and i think like embodies this right it's this idea of like okay so bitcoin there's a white paper and everyone's like we're still building bitcoin right and my whole thing is like well maybe maybe not but like it's okay to evolve something over time right and it's also okay if somebody says hey i can build what you're trying to build and do it better like competition is good yeah and we don't need one to

fail for the other to succeed no right like the coexistence theory is is so like removed from this industry everyone thinks it's binary in every single situation right it's like that's not how the world works this reminds me of uh jameson lopp's great speech coopetition which is a great way to describe it like you're you're cooperating but you're also competing and that's what we desperately need in the space and the way he laid it out is we need to cooperate uh before the people that were like the structures that we're going to take down like realize how powerful this is and they try to shut us down yeah yeah i love him man he is uh he's got a he's got a little piece of mirage in him in terms of he's got the memes and he's got some you know quick wit and stuff and

then he's incredibly smart and great engineer and stuff and so he's uh he gets it for sure he'll be uh swinging through this studio next month really yeah he's coming in for consensus he he was uh kind enough to agree to an interview then i'm excited for that but um we've got two more minutes here what uh what advice do you have for anybody it's like coming into the space more recently or last six months somebody that's that's licking their wounds after after the crash don't look at the price and go learn i mean it's you know i say to joke around but at the same time like the if you get in your mind that anything other than maybe the top five you know networks are most likely penny stocks most people would just okay that's fine and it's hard to go

and learn about you know the 99th you know most important network if you don't understand the fundamentals of the largest right right and so it's like you really have to look at this as i'm going to be self-motivated to learn about technology how it works why certain elements of it are how they are um and then i think in this industry more than anything else i've ever seen like just start reaching out to people start like really trying to stress test your ideas your thoughts you know um theories like all this stuff uh and people are super receptive right like you know james is going to come in here like he probably could be a you know complete jackass to people and just be like i'm not gonna talk to anybody right but like he's super open he'll talk

to anybody like i think that that's the the beauty of this and part of it is that cooperation yeah right and so it's like don't watch price go learn and then find people to talk to that's uh some of the best advice that's been spit out here on tales from the crypt pop where can we learn more about you uh just on twitter on twitter at anything i do is on twitter my my girlfriend makes fun of me all the time because she says it's like my phone is glued to my hand and i'm like listen you you you would have your phone glued to your hand too if you've got you know all these people on the internet trying to snipe you every second i've learned if you just respond quick they shut up right we uh we learned that having haters is good on this

podcast so i think you're on a good i think you're on a good path um you can find me at marty ben on twitter at a pompliano on twitter um give us a follow if you like this podcast rate it share review thank you guys for joining us pomp thank you for coming on absolutely thanks for having me peace and love freaks that was fun yeah listen it's uh i always enjoy uh when you can talk about other shit