TFTC: A Bitcoin Podcast - Tales from the Crypt #26: Charles Hwang

Episode Date: May 2, 2018

Join Marty as he sits down with Charles Hwang, Managing Partner at Lightning Capital and adjunct professor at Baruch College, to discuss what it's like teaching the subject of Bitcoin to college students, how regulators are and should classify Bitcoin, brain wallets, the introduction of a new segment "Freak Questions", and much more! Follow Charles on Twitter: @cryptocharlesh Follow Marty on Twitter: @MartyBent

what is up freaks welcome back to tales from the crypt it's your boy marty bent here on a rainy friday evening in new york city as always very excited for tonight's episode uh we're gonna jump into what it's like to teach blockchain and cryptocurrency to young students who are hungry to learn. Our guest tonight is managing partner at Lightning Capital and an adjunct professor at Baruch College here in New York City teaching cryptocurrencies and blockchains to the world's youth. I want to introduce you all to Charles Wong. Charles, welcome to the podcast. Thank you for having me here. Hey, thanks for coming on. I know you're a very busy man. I appreciate you taking some

time out of your Friday night to join me. We've got a lot to talk about today and we actually have a new segment that we're going to add at the end of the podcast so stick around for that um before we jump into anything i think we got to fix your mic setup here okay so yeah yeah oh i see all right that's much better yeah here we go like that i know i know you guys complain about the sound a lot so i'm going to make sure it's it's as perfect as can be tonight so charles you've been teaching at brook college you've been teaching for how long there how long have you been one semester now one semester and uh i want to thank you thank you for for inviting me to come speak with your class last week that was uh that

was a very interesting experience for me i hope i did okay yeah i thought you did a great job the students really enjoyed your talk yeah that was the uh the first time i've uh ever talked to to a group of of students it felt weird i don't know if uh i don't know if i'm i'm prepared to be a teacher or I don't know how prepared was it how prepared did I see seem I'd say it was a little mixed because you came out and you told them you weren't prepared so they probably knew from that but I would say um I'll get you back in for another class next semester get you some more experience yeah and then you'll feel more comfortable with the students all right I like that um let's try this mic because you're coming in a little weird really yeah all right check check

check check oh much better a hundred times better okay um yeah i came in unprepared but it was a it was a good conversation i feel it was a very give and take q and a like that's the way i like to do it that's the way i like to do this podcast yeah what did you think of the students questions i thought they were good i thought they were very curious asking really good questions and like the one thing i was actually very impressed with was how engaged they were like there was a lot of eyes on me there was only a couple students looking at their phone throughout like i remember When I was in college, I would not pay attention most of the time. But I think the subject is so captivating that your class in particular must have a high engagement rate.

Oh, for sure. I would say, one, it's limited to 30 students. And so when they put this up on the course schedule, it got filled up very quickly and there was a long wait list. Yeah. And I had to deal with the drama of students trying to get into my class. and so being at baruch it's part of the cuny system and it's very bureaucratic and so there was no way for these students to get in yeah so on the first day of class i try to scare the students in some sense and telling them that this is going to require a lot of work this is an

elective so if you're not going to take this class seriously you're not going to come to class on time then you might as well drop it and give another student a chance who does want to be in here anybody uh drop no one dropped boss yeah but people still are showing up late in class so somehow i gotta figure that part out you only got three weeks left right this semester's not uh yeah that's true so i'm trying to figure out for next semester okay how do i want to get the students fully engaged and brook comes from a unique background in the sense that when you think about new york city baruch is new york city yeah you're talking about immigrants from all walks of life coming to the school coming from different backgrounds and a lot of them i would say majority

are not coming from privileged backgrounds typical immigrant family so these are students who are struggling who maybe their parents don't even speak english and they're trying to make it in this country living trying to live the american dream yeah it was a very very diverse class yeah it was um it was inspiring um to see how engaged they were how like how much they wanted to learn And so how have you structured the class? Like what's the curriculum been based around? Like what was the syllabus like? Yeah, so the syllabus, the way I looked at it is I'm more focused on the business, regulatory, legal aspects of it.

Not a lawyer, but I could talk on a high level about the regulations and legal aspects of what's going on in this field. I would say that I'm also not a technologist. So I couldn't go into depth of the data structure of how Bitcoin works. But what I can do is provide a high-level explanation of that. And then how does this whole ecosystem work? I think that's very important. And this whole cryptocurrency space is interesting because it has to utilize different parts of your brain. Yeah.

Right? So you're thinking about economics. You're thinking about game theory. you're thinking about law right so you got to be knowledgeable in all different aspects of it and technology too right so the most important part and this is where it becomes very different than any other major i would say that you would pursue and that's how i totally pursue this to try to educate students to look at it at different angles and seeing how it all plays out and how is it relevant to them.

Yeah, sort of giving them the tools to learn more about this space. Exactly. And then I brought in, for people who wanted to learn more in depth on the technology, I brought in guest speakers. I brought in you to talk about Bitcoin, right? But I also brought in Bitcoin core developers, Ethereum core developers. Today we actually had Stuart Haber. I don't know if you know who he is. Refresh my memory. That name sounds very familiar though. The steward is mentioned three times in the Bitcoin white paper, in the footnotes. Oh, wow. Really?

Yeah. So, he's like the inventor. If you want to, I would say you could call him as the inventor of blockchain. Really? He didn't call it blockchain at the time, but he had a patent for time stamping. He came up with all these ideas. It's really part of him and some other people early on in the 90s that came up with this idea that eventually it became Bitcoin and blockchain. So, with the proof of work added to the time-stamping aspect, that's sort of the novelty of Bitcoin

in particular, right? Of course, yeah. So, what was Stu saying today? What was that conversation like? I feel like it had to be leaps and bounds more interesting than my conversation. Well, it's different, right? I would look at it as a different perspective. It was very very much in the granular details of how data structure works how merkle trees work and so it was good for those students who had much more knowledge about this space right in terms of the technical aspects yeah because the challenge i have in this class is it's it's

considered a cis class so computer information systems but what i learned is not every student knows how to develop code um and so some of these students what they do well i should take a step back some of these students are not even cis majors that take my class they're accounting majors they're finance majors um and so they're from all different backgrounds so it's it's a challenge for me to teach this class because of that and so when i have to teach game theory i have to take a step back and teach the fundamentals of big game theory and then how does this tie into the space yeah right so that that's how I sort of approach it and for some students it might be easier when I teach that aspect for those econ majors but for some you know they need that uh

foundation yeah yeah I mean that's what we talk a lot a lot about on this podcast is just like the breadth of knowledge needed and I I feel like having to put together a syllabus to teach this class was an onerous uh endeavor oh it's definitely a challenge and after teaching it this semester this is my first semester of teaching it, I'm going to revamp the syllabus to make it even better. Yeah. And you get some iterative process, right? It definitely is. What do you think you're going to change? I think I'm going to add some more details from different areas. I haven't really thought this through yet. But even I think when you came in and talked about the history of money, I want to delve into that more. Yeah. So people understand that. Because I think one of

the issues is, I was an econ major in undergrad, and I remember learning about fiat currency. And I never, at that moment, I was like, what are you talking about that U.S. dollars are worthless? That's what my professor was telling us, right? It's not backed by anything. I knew that concept, but it took me a while to figure out that, oh, wait, the U.S. dollar really is just a piece of paper. And we just believe that it's worth a dollar. And so, since everyone believes that, then it's worth a dollar. But that was a concept that took me some time to figure out. It takes everybody some time, right? Yeah. But then to leverage that, I think once I discovered Bitcoin, it took me a lot quicker to understand why Bitcoin's valuable. But I needed

that foundation there. And without that foundation, I think it would have taken me a lot longer to understand Bitcoin's valuation. Yeah. No, I think similar story here, economics background i think that helped me understand it a lot quicker than than a lot of people um was because of that fact uh so again like trying to teach a class of of engineers economics before you can dive into to like the holistic view of cryptocurrencies again an onerous task of course yeah i applaud you thank you for doing it and i'll say I signed up for the class late last year. And then Baruch started a cryptocurrency club.

And I went to their first general interest meeting sometime in December, if I remember. It's either November or December. I forget the exact date. And there was so much interest. I mean, I've never felt like if you walk in there, it's the feeling you get. The buzz of just everyone's so excited about this space. and I've never seen that before while I was so I just to take a step back I am a graduate of Baruch I went to get my master's accountancy there that's my sort of connection there I didn't know that

yeah so I'm never and I've been to plenty of clubs at Baruch I've never felt that buzz before in my life and it was just a cool vibe and when I talk to these students they learn so much faster than i have learned in this space and when i ask them you know how long have you been studying this they're like three months or two months and they just dive deep into it and they get this so much faster yeah it's uh i was on on the laptop doing some research right now think of a terrence mckinnon quote that that came to mind when um when you said like the feeling in the room that you got when you walked into that cryptocurrency club miles suitor mentioned on this podcast many times in the past has shared this quote on twitter i am looking for it right now give me a second

here all right so here's the quote then uh that you made that you brought to mind when you were talking about the vibe in that room i don't know how many of you have ever had the privilege of being in a society in a pre-revolutionary situation but the cafes stay open all night and there's music in the streets and you can breathe it you can feel it and you know when it's happening the dominator is being pushed like that's the vibe you get whenever you go to a bitcoin meeting like we go to the bit of new york like there's always like it's crazy how packed they get and how engaged they are like especially bit devs um that's that's actually not where we met but we see each other there a lot yeah that's right and but it's always engaging everybody's

like always like very engaged and the conversation is always very lively it feels like we're on the cusp of a revolution oh for sure i mean i'll take a step back and i traded through the whole dot com boom and bust and i and i'll think what i think about is i don't know if you know the history of stock trading so a little bit so i don't know if you remember there's something called so's traders So small order execution systems. Essentially, this was back in the day. If you think about the 80s, brokers used to rip people off because they could charge $1,000 commission fees. And then slowly these online, what happened was,

social traders came about where these orders, essentially market makers made such large spreads and trades. And the rules changed that allowed something called social traders where they can get best execution. and eventually what happened was there's a guy named josh levine who believed that this should be fair for all people we should not be ripping people off on commissions yeah and so he created something called island and for every trade he only charged a dollar right regardless of the size and so it was revolutionary and this is what caused change discount brokers start started to come in yeah and this is why when we go online to our brokerage systems we pay

like five dollars a trade now mm-hmm whereas before we're paying a couple hundred dollars yeah and a large percentage of whatever what did that do to liquidity with those oh yeah so this this is interesting right with the fees well with the high fees yeah I think so I mean I think the look there wasn't much liquidity I'm sure the spreads were very wide right I wasn't way too young to even know, right? But what I saw was obviously when trades got cheaper, liquidity increased. But eventually this whole, I mean, there's lots of books that talk about this. This is what eventually led to high frequency trading. Okay. Yeah. Right. To the bats exchange and stuff like

that. Exactly. With all these different ECNs, electronic communication networks. But what I find, no one knows what happened to Josh Levine. I used to work at a firm where he worked in one of these offices, right? He didn't really care about money, right? What do you mean? Meaning, like, he could care less how much money he made. He just wanted to change the world and make the world a fairer place. That was my impression whenever, like, people were talking about him.

And this is what I, when I feel the buzz when we go to BitDevs, this is exactly what I feel. Nobody, the ones that come consistently that we see, right, all the time they don't care about the money they're caring they're they want to change the world at least that's the feeling i get from these guys i would concur and i should say girls too right we have a few women that show up too um but they're they're not in it they could care less the bitcoin price right we rarely talk about bitcoin price no it's always very technical jay does an incredible job of moderating exactly keeping everybody on on path exactly and and that's

where that's where i think that's why i believe bitcoin's gonna do really well in this space because you have all these people that are dedicating their time to this and they're not some of them are not even getting paid for it right um and that's that's why whenever i hear people hate on bitcoin i'm like you have no idea what's going on in this space right you should just attend a bit devs meetup and you'll realize like how great this is because i love it you know i i hate following prices granted you know i do it for a living like i gotta do pay attention right yeah um but what i'm saying is i love it when the bitcoin price does go down because now you know who the true diehard bitcoiners are um and the ones and then the ones that go away you know they

were just in it for price they could care less about the technology and this what leads you know a long-winded way leads me back to why i decided to teach at baruch because it got to the point where whenever i went to different meetups people started talking about price alone and not about the technology itself and they just i felt my impression was and it could be incorrect that people just wanted to get rich quick no i have this very same impression i stopped going to any other meetup in the city just because of that same that same problem like you go these people talk about vaporware uh a future promise of technology and then most of the conversation would shift to the amount of value that could be taken over by the promise of that

vaporware that had not been written in the code yet that's right yeah and it's like all right what are we doing here and that's why i like the bitcoin meetups that we go to is the bitcoin meetup that we go to here in the cities because it's always very technical it's not talking about vaporware it's talking about things that are we talk about pull requests we go on the bitcoin or the github github.org slash bitcoin uh repository and look at the pull requests and talk about them and talk about what would happen if they get implemented like what are the possibilities of them getting implemented the changes to the protocol that would happen who's working on them what people are saying about the pull request and it's crazy it's crazy to see

this the system evolve in real time like that's the beauty of open source technology is that you get to watch it evolve right in front of your eyes of course and no one can predict what's going to happen no right there's and that's why i don't think the the debates that are out there are bad right it's good i think it actually helps improve on the protocol yeah no it's uh you gotta vehement vehemently debate all this stuff i mean it's because again that's one thing i say a lot too is that nobody has any idea how this is going to pan out like we're all that's the other beauty of this space is that we're all discovering it together it's like of course yeah there's nobody with perfect information in this space there's no way

there's no way one person's going to be able to bet everything that's going to happen with bitcoin in the next 10 years i would say the next 10 months yeah that's true yeah for 10 weeks let alone yeah um yeah so so you had jn to your class right yeah that's right what uh what did he talk about when he was um yeah so he talked about data structure utxo and uh lightning network yeah what are your thoughts on Lightning Network? I like it. I mean, I think I'm still mixed about Bitcoin's ultimate use case. I have theories, but I don't know what will actually pan out. What are your theories? So, one theory is, I think it could replace

gold altogether. Like, significantly, right? Maybe not completely. I said altogether, but maybe not completely, but a significant portion of gold. And it's a much easier way to move money around. Because it's borderless, right? If I wanted to move a million dollars worth of gold, it'd be very difficult. You can't put that in a backpack. No. But it could put a million dollars of Bitcoin in my backpack, right?

You could put it in your brain. That's right, a brain wallet, right? Yeah. And you bring up the brain wallet. I always wonder, if you actually have the brain wallet and you're going through customs, do you have to declare if you have more than $10,000 worth of Bitcoin? I think you would be dumb if you did. It's just a thought exercise, right? Right. I don't think you do.

Even if you had a million dollars on a Coinbase account, I don't think you would have to declare that because it's technically on Coinbase's servers, right? Yeah, that's what I think. But if it's in a brain wallet, let's say you put on a hardware and then you put in cold storage, but you have the brain wallet, do you have to declare it? Yeah, you'd have to play stupid. Be like, I don't know my private keys are in the ground somewhere. I don't know that. Yeah. That is a good one.

Would you have to declare it? Would they be able to retroactively punish you? Yeah, because in theory, if you go to another country, you could withdraw the Bitcoin, off-ramp it, in that country. I've done that before. Okay. But actually, this is U.S. Virgin Islands, so I didn't cross that border. Okay, all right. So I didn't go to another country.

I went to another part of the world. It's in the U.S. territory. But yeah, I went on a trip, spent a little bit too much money the first week, had a couple more days. This was a few years ago. I had a couple more days on the trip and was strapped for cash. Luckily, I had a Coinbase shift card and had written down a private key

in one of my wallets and just spun up a wallet and moved some Bitcoin to my Coinbase account and was able to spend money. That's pretty cool, actually. That was an eye-opening thing, yeah. I just wrote it down on a piece of paper, put it in my backpack just in case,

and then showed up in the country, ran out of money, and was able to produce money basically out of thin air with a few words. That's pretty smart that you brought that with you. Yeah, yeah, right? Hopefully you weren't too drunk that you lost the private key. No, that would have been terrible.

But it shows, like, I remember showing my cousin when I was down there, my brother, I forget who it was, I was like, look, I'm just going to produce, like, I have some money in a Bitcoin wallet. I'm going to spin up a wallet with these 24 words and move it to my Coinbase account and be able to spend money.

like that's the beauty of the system man that is pretty cool i wish i was there to witness that right yeah yeah um i do not carry around private keys anymore so don't try to rob me um yeah and it's like and i don't feel it i feel like people have not grasped the gravity of how innovative that is just that fact alone you can walk around the world with millions of dollars in your head yeah so like i don't even the thing is people haven't used it right so one of the projects i had in my class was for everyone to get a bitcoin wallet and then i i moved my bitcoin to them did you specify a type of wallet i didn't i let them figure that part out a lot of them use blockchains wallet but i let them decide i put them in groups you know they could talk amongst

their classmates as to which one they picked so blockchain was number one what was behind it um anybody use electrum no one used electrum really yeah i'm trying to remember no one yeah i'm trying to remember what was the i remember blockchain being the top one i can't remember what was the second one that's uh i would say that's it is and you didn't give them any direction i gave them nothing so damn blockchain's got some good seo out there yeah they're doing well yeah i don't know how great their wallet is though but i haven't used it so i wouldn't even know i've never used it either but i and that's because i've been been warned not to um but for what reason just like blockchain doesn't have the best software they're not they don't have the best

priorities and i'm pretty sure it's a web wallet and that's like a that's uh that's not the best way to secure your bitcoin yeah that's for sure for five bucks it's fine right right yeah so i Yeah, I moved $5 around, right? And it was a pretty cool experiment for the students to experience it, to understand how the fees work. And we did it at a great time, right? The fees were, I mean, I think we were paying $0.05 to $0.10 for this transaction. Yeah, so these kids were, maybe that $5 returned them some money. Is it keeping it in their wallet?

That's right. I don't know. You know, what I did point out was, because it's traceable, right? Yeah. I just followed how, I tried to trace it back to how they moved it in, and someone must have bought it from a colleague, and they had a couple bitcoins. Like, I was like, oh, and I knew who the student was, right? And I said, you know, if you trace the transactions on this, you could tell there's a student here that knows someone that has a significant amount of bitcoins. Yeah.

That's pretty crazy. Yeah. Yeah. And that's another good rabbit hole to dive down is the privacy on the blog. It's not as private as people think. A lot of people think it's an anonymous currency. It's not. It's completely traceable.

And that's where the media has this all wrong, right? I think there are a couple smart reporters that get it, right? Joe Weisenthal. Shout out, Joe. Yeah. At the stalwart on Twitter from Bloomberg. He's very knowledgeable on the space, and I think he's got a very level head. and he's very uh objective and fair yeah i don't would say uh lauren shin too i mean she's very

knowledgeable she has approached us really well and she's very fair too right and she'll call out people right like that's what i love like she because there's some reporters i think they're they're afraid of ruffling the feathers and um because they're afraid they won't get the interview again right i get it um but she'll call people out if they're not doing something right that's what you got to do and you do yeah that's a great journalist right there when you do that yeah or you could go the route of just being like a newsletter rag where where you don't care about your reputation you can call out whoever yeah that's right uh but then there's a fine line where you become a troll right yeah yeah yeah it might be a troll that's okay it's okay trolls

are necessary to some extent yeah they are they keep people in check they do shout out kevin fam um yeah no that's crazy well that's a it's a good topic to jump into right now like vitalik was calling out coindesk this week for for linking to a bad omise go or omise go right uh like a scam site it seemed like a innocuous mistake like it seemed like an honest mistake by the journalist and it was interesting that vitalik was calling calling them out for for that one incident for that one incident for scamming their readers when the network that he's built has scammed people out of hundreds of millions of dollars i mean right the rc20 tokens with some of the ics not all of them so most of them what i will say is like when it comes to journalists

right is that we when we talk about incentive structures right uh-huh the problem with it is that they're paid by clicks now yeah so some of these some of these journalists are not paid well and so for them to generate the clicks they have to sensationalize it and sometimes they'll throw in a little bit of you know not not factual hyperbole yeah hyperbole yeah that's the right word hyperbole just to generate the readership right yeah um and so until we change that distribution model we're gonna get more and more fake news that's a huge question and it's like how do we change that distribution model is it possible do people want to pay for the content they're consuming it's uh that's that's the big question right and really that's where if we could

get back to the subscription model then we'll get much better quality reporting yeah right it's just a matter of whether or not people want to pay for it it seems like people don't like wall street journal new york times i don't pay for it exactly i'm in the same boat right i don't pay for it like But the thing is, I wonder, if we get to the point where the quality improves, will people start paying for it? Or are we all programmed that anything we get on the internet should be free? Well, I think so. I would argue so. But it's not free, and we're finding that out with Facebook and Google now.

Oh, for sure. Our data gets sold. It may seem free, but those companies are capitalizing on our data. This is why I'm not on Facebook, right? Because I was afraid of that. Right? How long have you been on Facebook? Um, I have, I will say I have like a profile, but I keep it just, just because, um,

Keep track of birthdays. Yeah. It's not birthdays, but more events. When I was in college, definitely need it. Right. When I was in grad school, that was the only way to like know about what events are happening. Um, and then my friends from, you know, other countries, it's the only way they reach out to me.

Yeah. Um, they rather do that than email. Makes sense. Yeah. so this conversation is bringing up one of my favorite quotes from the sovereign individual one of our favorite books on the tales from the crypt book club i like it in a world of artificial reality an instantaneous transmission of everything everywhere integrity of judgment and the ability to distinguish the true from the false will be even more important

like so we're entering an age where readers and viewers of information and content need to be able to judge and discern for themselves what is real and what is not and that is really hard it's very difficult you have to be paying like a lot of attention you have to have a uh like a grasp on the whole landscape all the variables that come into play of the topics that are talked about and written about and it's going to be hard things are going to get weird like we're getting to a point where you can create videos and fake people talking and make it seem as if somebody said something oh yeah it was completely not that well you know you bring up an interesting point a students shared a website where all you have to say is hello and they can mimic the rest of your

voice using different words what yeah i have to send this to you because it's i mean the implications of that is freaky right yeah i mean you could you can literally make anyone say something and people will think it's real right so that's like that's where things get really trippy yeah like you might not be able to know things for certain unless you heard them in person Yeah, so it got even, it took me to another paranoid level because you can have prank callers call in to record your voice to say hello and then they could like- Just run with it. Yeah, run with it. I don't know what they could do with it, but I mean-

Fuck. It's a scary world we live in now. And it's only going to get, it's like beautiful and scary. It's a double-edged sword. It is, it is. It's a double-edged sword. Yeah, but it's great. i mean we're living in an interesting time yeah that's the the age-old curse the age-old curse

but you live an interesting time yes um no but it's going to get weird like you're not going to be able to know for certain that something happened unless you saw it in person oh yeah for sure right at some point unless there's some way to cryptographically prove that somebody said something at some point oh wow can you imagine that yeah there might be some technology out there that can hash that yeah interesting to hash like the tones of your voice and maybe you have to have like private key management for speaking like you have to sign a private key every time oh right try to speak maybe i just found a found a way to get around this problem there you only speak like when you only speak in audio form like it's confirmed you when you sign

a private that is you yeah yeah interesting let's sidebar that talk about a potential little bit business venture after the podcast for sure it's like a kyc version right of your voice right damn that's some heavy shit man like just yeah like have you ever seen the videos of like george bush barack obama like people like mimicking them oh yeah yeah it's weird it is weird things are gonna get hairy what's like the uh what's like the thing you're most paranoid about like outside of this conversation you said your your paranoia went up a little bit you're paranoid already oh yeah i mean paranoid about everything right like paranoid about the security of bitcoin right um i would say you know i'm very much i'm doing this podcast but

very much very private life right like i don't want to be in the spotlight yeah you're not on Twitter no I mean I have a Twitter account but I don't tweet out that much right um I'm more of under the radar look I I'm trying to hopefully the way I I live is like I hope to one day be a positive influence on other people right in a way where hey I hope to become successful in this world and somehow give back to the world but I never want the name recognition yeah um that's Sort of the way, sort of anonymous in some ways. Yeah, pseudonymous. Pseudonymous.

Be a Satoshi in the philanthropy world. It's an admirable goal to strive for. Yeah. So let's dive more into your background. What were you doing before you dove headfirst into crypto? It's just tales from the crypt. We haven't gotten into your tale. Oh, yeah, that's right.

How did you find Bitcoin? Oh, yeah, I could talk about that. And I'll just say shout out to Blake who connected us, right? Yeah. so and i think he's having a baby soon yeah blake and colleen congrats yeah congrats hopefully you guys are listening to this we'll be on the beach this summer all right um yeah shout out to blake yeah so you worked with blake at ernst and young ey yeah ey um we were in the forensic accounting department um so blake and i had an interesting project when we were down in florida it was

during the summer so i remember that he was going up every weekend to go to the beach but we had some good stories from there that's what I'll say and what uh what specifically were you guys doing at EY? So forensic accounting looking for fraud anti-money laundering type of work so mainly mainly focused on that when I was there I also did a quick couple months in evaluation consultant so doing valuation work for different companies who had M&A acquisitions yeah um i should merge urges and acquisitions and for they were trying to value uh intangible assets yeah okay so i did that and then even before that uh before i did that i was an equity trader um and so i traded through the dot-com bus trade through the financial crisis eventually got

a little tougher um i give you an example i'll date myself here and you'll realize how old i actually am um you don't look like a day over 30 thanks i appreciate that um i would say in 2000 when i started we had like about 150 traders on the floor in five years uh we only had like 20 traders they turned into servers yeah it just got tough right yeah it got significantly tough um to make money eventually i would say um high frequency in 2008 it happened during the financial crisis that high frequency trading got significantly better yeah proved greatly i remember when we traded in early 2000s we would see bots trading we take full advantage of them yeah for sure we figured out their strategy right but as it over time they significantly improved it really just

it disintermediated my business right yeah what i was doing well flash boys really sort of popped the lid open on what these high freaks were doing like they were able to write algorithms where they could see somebody making a bid cut them in line make oh for sure a fraction of a penny smaller or larger depending on which way they were trading and basically cut profits and so these high freaks were basically cutting people in line at the at the exchanges cutting like cutting cents like fractions of cents off that's right yeah millions and millions of times and just making crazy amount of money yeah it's like um what is it is it office space where you like just collect fractions of a penny i mean that's my image right they had the wrong decimal place though they got away with it

because of the fire but the fire didn't happen oh yeah that's right but but yeah i mean it's like it's like just vacuuming up pennies and those pennies add up to millions of dollars if not billions right yeah getting rich by a thousand cuts yeah it's uh it's crazy but hopefully i think there's got i think they've instilled not regulations but uh the uh the industry has sort of created um competitors for these exchanges that don't let people cut cut that's right yeah yeah yeah that's what flash boys was all about michael lewis another book added to the book list yeah that's a great book yeah michael lewis always does a great job michael lewis is he's like an incredible writer the way he tells stories i mean and his breadth of knowledge too

it's crazy like he wrote moneyball liar's poker big short my favorite is boomerang i think that's one of his most underrated books which goes through yeah uh sort of the aftermath of it and right goes around the world yeah that one's a short one right yeah very short but incredible Yeah. The end of the book was like an oh shit moment where he's riding a bike through, I believe, L.A. or San Francisco with Arnold Schwarzenegger talking about like the CalPERS like pension fund and how how doomed it is like in the long run because of how much they're paying like sovereign or excuse me, municipal pensions. Oh, I'm not surprised. Because if you think about it, we're living longer. So how are they paying that? My friends and I talk about this. So I went to inner city school in high school here in New York City. And so some have gone off to do blue collar jobs. right and one of our one of my good friends we were talking about oh you know he was saying if i when i was 18 and i went to the new york nypd i'd be retired soon right like you work 25 years and you'd be retired and then but but the thing is like how are they able to pay that pension

right the pension and the medical benefits um eventually they're gonna catch up to the cities and they're not gonna have enough money to pay that's what scares me like chicago's going through this calpers is going through this illinois is basically bankrupt um states in dire straits yeah financially and yeah these pension funds are for lack of a better word screwed in the long run like you're depending on an inflow of capital that's not gonna be there because people are i mean millennials kids my age are loading themselves up with debt so and then they're graduating with a degree that only gets them a job that makes 40 50k a year they're paying off their debt and there's not enough money to go into this these pensions oh yeah for sure and

this is where like i mean you i may open up another can of worms here it's like financial literacy is a passion project of mine where like i don't believe almost any debt is good debt right we're sold on this idea that student loans are good debt right yeah but if you go to school and you're paying a buttload of money and you're going to make $40,000, $50,000, you might want to rethink what school you go to. Yeah, or going to school at all. Yeah, exactly.

I mean, I'm of the, I like Peter Thiel's Thiel Fellowship, right? Where like he's encouraging students not to go to school. I don't think it's for everyone. So if you don't qualify, go to school, right? But I would say for some exceptional people, they don't have to go to college anymore. Our times are changing. changing rapidly i mean this is a topic we touch on every once in a while here is like

it's not for everybody it's not oh it's not yeah like so and that's why i caution it because i don't want your listeners to be like oh marty and charles told me to drop out of college right that's not the message i mean not everyone needs to go to college and there i have a friend who's an electrician who does really well and you never went to college right yeah i came from like a blue collar suburb in philly and a lot of the kids i grew up with i went to middle school with in high school or not high school but middle school with went to trade schools yeah they're doing well yeah they own houses they have a good pension they have a good a good steady salary and they're making good money especially like electricians plumbers like people like i don't know why some

people look at those jobs as lowly but they're very well-paying jobs you're working with your hands you're you're doing work that's much needed in this economy where a lot of society is has been pushed towards like this financialized world where you're making basically gains off of balance sheet movements and stuff like that um so it's good to to see sort of the re-emergence of i don't know if there's been a re-emergence but people should think more about trade schools and apprenticeships especially if your passion is something like pottery or you like working with your hands you know yeah and there's nothing wrong with that right like i think that's needed oh yeah for sure we need plumbers electricians contractors right like it's a special skill set that if you

have it you won't be out of a job ever yeah it's i mean that's one thing like that's actually one thing i think about a lot especially here in new york city with them about to start revamping the I saw a picture of the New York subway system. It basically had marks of the last year that the subways had been upgraded infrastructurally. And most recent is the second half subway on the Upper East Side finished a year ago, two years ago. And then before that, 1968, 1940s for most lines. It's been a while. And that's why we have so many problems with the subway system these days.

We need to, again, thinking long term, we need to revamp the plumbing of these cities, the major cities. Oh, for sure, yeah. One example I like to bring up of a city that did it well was Chicago was afforded with a very, I mean, it was a very extremely unfortunate event, but it afforded them the ability to rethink how they architected the city, which was the Chicago fire. so the city burnt down and they were like it was a tragedy but they were able to be like all right so how how was the city like what could we have improved what can we improve on in the city and one thing they instituted that i believe i mean it's impossible for new york to institute at this point unless the city burns down but they instituted alleys keep the trash off the sidewalk right yeah bring it into the alley chicago is one of the cleanest cities i've ever been to in my

life yeah you mean you don't like the trash all lying around with the rats hanging out at the corner oh my god dude when i i lived on the upper east side on second ave right across the street from where the second half subway was being built and like at our corner was a second ave subway to be a stop and it was where people will put their trash i shit you not if you walk past that corner like after 11 30 at night there was hundreds not dozens hundreds of rats just climbing like it was yeah and at that point at night like they're they're they're brave like they'll walk on the side they'll walk on the sidewalk and they won't react to you like they'll act like they're part like they're part of like the flow of the side well that's when you know

there's something wrong because they don't even react when you look at them right i remember was seeing a rat that looked at me like what are you looking at keep moving right they don't they don't run away from you no no especially at like especially after midnight or something where like they just get this bravado they're like hey yeah this is my city too exactly that's a new york city rat for you and they're big man oh they're massive they're big they scare me i don't like rats well when you see thousands of them it's freaky oh dude like my wife didn't my wife didn't believe me and one night she was walking home she was like oh my god that's the most insane disgusting thing i've ever seen we would actually in the summers when it was too hot in the apartment

we cracked the window we'd actually laugh at people like walking down the street we'd hear people screaming as rats were jumping out you should have recorded that and put it on youtube we should have but like that was like you could literally hear people screaming as they walk down because rats were coming out of them right so how do rats we got sidetracked uh yeah so that'll happen here that'll happen here the whiskey lets you go down go down a path um maybe that's a good segue into like sound money and what i was talking about in your classroom it'll incentivize very good investment yeah so like this is one thing i like to talk about is a reversion to sound money which i think is a good thing and it's needed in this time will

will lead to people making more wise investment decisions like we're going to invest in infrastructure that's going to last right you know like so one thing in chicago that always pissed me off is that there was written to the contracts of the city that when they repaired the streets they would only use mid-grade like gravel because they knew that the streets would get cut up again and they'd have to fix them again year after year after year basically guaranteeing jobs right so a very terrible investment strategy like chicago if they wanted to fix their streets and they all they have to do is dump a bunch of money and use like a high grade gravel or cement that would would not create potholes year after year after the

snow and the salt, blah, blah, blah. So, in a world of sound money, I believe that people will make very wise investment decisions where they're only going to part with their Bitcoin when they know that the return on the investment is going to be worthwhile and it's going to last a long time. Right. I would make the argument that I think the problem is our society will still have both bitcoin and us dollars right yeah and we're very much a society that we want we like to spend we love conspicuous consumption oh for sure right we love going into debt we love having the latest gadgets um and that's going to take a cultural shift because back to like student loans right i would make the argument that student loans is our version of slavery these days

it's indentured servitude right right because you can't get out of them yeah you can't get out right you want to declare bankruptcy go ahead you still owe your student loans and so it forces you to work um and so that's why i think it's going to be hard like we need to somehow educate people more on finances and then so then they start making sound decisions even with fiat currency um and that's where i hope you know i hope that we start teaching this more um and people make better decisions with their money well that's one thing i was almost embarrassed to admit a couple episodes ago but i've never had a credit card i'm actually proud of that that's good i i congratulate you on that thank you yeah because i don't think we need debt

right like and i think you're right i think if people think about their decisions better they might not make the purchase that they wanted to purchase yeah right now yeah right see these pants i'm wearing yeah it's one of two pairs of pants i own nice now my question is how often do you do laundry once a week okay all right yeah keep them clean yeah they're adorable yeah yeah they look good yeah you know it's like the steve job zuckerberger you only need one look yeah that's right just keep it simple yeah you don't have to think about it you probably had multiple pairs of the same pant but right i keep it simple just okay just one or two that works yeah yeah you know and i'm sorry if uh anybody in the barstool

offices are getting bored of my attire but i don't care i'm convinced no one will pay attention anyways right when i had to wear suits to work i i joked i was saying that one day i'm gonna come in every day with the same suit and no one will notice did you ever do i didn't end up doing it i did that in high school i went to like a prep prep school in high school and we had to wear jackets and ties and every year i'd wear the same one yeah put in my locker or the same damn so what i did do when i had to travel for ey i only brought two suits for the week so i just keep on changing them alternating i don't know if anyone noticed one in one out yeah charles i thought i saw you wearing that yesterday is that the same suit yeah no it's my other one

be funny if i just bought the same one too yeah um so your experience at ey is a perfect segue into our new segment okay i think i think i'm gonna call this segment freak questions freak questions so you freaks out there i've been getting hit up on twitter like hey We'd like some audience questions Addressed on the podcast And finally I got the kick in the ass I needed By my good friend

Mr. Rogers On Twitter He reached out He DM'd me and said Hey I have a couple questions Would you mind answering them on the podcast So I think we're going to call this segment Freak Questions

So if you have any Questions that you want to send the podcast Send them to martysbent at gmail dot com martysbent at gmail dot com i only use that for my newsletter um so here we go first question so how do you see bitcoin and crypto overcoming the energy demands to be a viable currency yeah so we're gonna work through this together all right so i think uh two words elon musk

yeah so part of it yeah so i think i mean there's so i'll say one thing first is that But I do think if you think about the way we talk about game theory earlier, the variable cost for any Bitcoin mining operation is electricity. And so they're incentivized to look for the cheapest electricity and that happens to be with green energy at this point. And so a lot of the miners will congregate near those areas and a lot of those areas have excess capacity for electricity anyways. So, it actually helps our world in some ways because, in a sense, they're using that excess capacity that would not be used anyways.

So, that's part of it. And I don't know what you think about that. No. So, to jump in on that, I completely agree. It's like these miners are going to go find the cheapest electricity to keep their costs low, obviously. and again that is green energy but there's also like fossil fuel and dirty energy per se that just gets wasted that is never used so like for one example when you're drilling oil and natural gas in texas there's a lot of uh like when you're drilling and pumping the natural gas there's a lot of like discharge that never gets used it's just sent into the atmosphere it's never

stored it's never actually used but it is expended into the atmosphere so what i've heard recently is that there's a lot of people in west texas specifically going to these nat gas farms and basically being like hey we'll take that excess nat gas and use it to mine bitcoin and we'll pay you a cent a kilowatt or something like that right and that's great right because now you you made it more efficient yeah you made it more efficient you you there's less waste less weight exactly less waste and people are like oh it's using dirty energy it's like that dirty energy was going to be sent into the atmosphere anyway yeah exactly like you might as well use it for something productive which is creating one of the most secure financial networks in the history of

men right and i would argue that that is uh that is a um what's the word i'm looking for an admirable endeavor you know yeah for for sure so a lot of people like like to say bitcoin's destroying the environment no it's it's taking energy that otherwise would have been wasted and putting it towards a productive use which is creating censorship resistant peer-to-peer distributed transactions exactly and so i'll get i'll step into the next point that i wanted to make um with elon musk go for it so what i think in the future if he can execute what he plans to do is it would be great if solar city could put solar panels on all our homes right because i heard some people are already mining bitcoin on their teslas so imagine germany yeah so imagine

if we can he can even integrate the solar panels on the cars and so every tesla would have a bitcoin mining machine every home would have a bitcoin mining machine that has a solar panel right this would decentralize the network even more right imagine every home u.s home that has this yeah right so i'm hoping elon musk does this quickly um so we can have a large mining operation in the u.s well the margins on wind and solar in particular dropping drastically right like solar in particular is dropping to the point where it's going to become like very profitable yeah that's what's great right and i mean with technology everything gets cheaper over time So it's a matter of time until this happens.

Yeah, so the hardest part is storage, right? Storage and transportation. So if you have a solar panel on top of your car and you only have to store it on your car and transport it to the miner in your trunk. Yeah, exactly. Worth it. Definitely worth it.

Yeah. Right? That's my future prediction. All right, so that was free question number one. We're off to a good start here. I do see it being a viable currency, given the energy demands. And eventually we'll end up with Dyson Spheres

taking all the energy from stars in our universe. Second question, is Bitcoin something that will only be successful if it is globally adopted? Can it succeed while fiat is still a large source of transactions? I think there's a place for both to work out. Yeah, I definitely think there's a place for both. There's no place in my mind where I think Bitcoin's going to replace fiat currency. Fiat currency has its place in the world.

there's a part where I think where Bitcoin comes in it becomes a universal currency I think it'll be great at the point where other countries start to adopt it more like Japan has adopted it last year right and I haven't been to Japan since they adopted

it but I think it'll be so cool when I travel to Japan and I never have to convert to the yen and I could just use my Bitcoin to purchase things it would make my life so much easier I mean, there's certain countries where I have to deal with the exchange rate. It's a nightmare.

Well, that's what Janie, at Janie Gack, I believe I'm pronouncing that right, on Twitter, she wrote a great Medium post this week about the currency exchanges in Afghanistan. And basically, when you get off a flight in Afghanistan, you land, there's currency exchangers just right outside the gate like looking to exchange currencies like you have to exchange currencies immediately and bitcoin would be like an incredible incredible thing to just like be able to get off the plane and not have to do that yeah you don't have to deal with that and then also like i've seen like there's scams in other countries where they try to give you fake currency oh really yeah so like you give them like a large denomination and they swap it for a fake one and

then they tell you oh you gave me a fake one and they give it back to you right the fake one they give you the fake one right so it's like now you don't even have to deal with that crap yeah you can cryptographically prove that your money is real yeah exactly right so so i think i'll take i think that the key is we got to get more adoption in this um and i'll take time i think i'm in no rush i don't see this as oh it's got to get adopted within the next year or two right But I see this as a couple decades for this to get eventually really mass adoption, right? Permeate throughout the world. Yeah, for sure.

And then the UI and UX improves tremendously, right? It's to the point where I think you've talked about this in your other podcasts is that, look, we need our parents to be able to use this. To send a Bitcoin right now is too cumbersome. There's no way they're going to do it. They're going to miss a character. and it's going to go into no man's land. Burn it. It's going to go into the abyss.

Yeah, exactly. Yeah, so that needs to get better. It's going to take time. But in the meantime, they can definitely succeed side by side, fiat and crypto. I definitely think so. Yeah.

Yeah. I'll be surprised if it doesn't. Yeah. Question number two answered. Third free question of the podcast. Can you explain at a basic level what exactly a protocol is for cryptocurrency? love to be able to share this with friends uh if possible so i think just like defining a protocol

what is it yeah so i the academic answer to this is more of it's the rules or requirements of electronic communications network right um and those rules are generally defined very clearly but through consensus you can change the rules right yeah um or in some protocols you don't need consensus right no you just need social consensus that's right which is different um but yeah i mean that that basically governance it's like business logic right yeah when you get down to the nitty-gritty it's the code that dictates the rules of the system exactly and if you're not following the rules of the system you're out of consensus and you're you're not in consensus with the protocol that's right and it all comes down to consensus so basically a

protocol is a set of rules that govern uh what you're allowed and not allowed to do within a protocol yeah within a network i would agree with that yeah yeah all right last one here how do you think the u.s government and other governments will handle taxation of revenue made from investing in cryptocurrencies what about anti-money excuse me what about anti-money laundering policies and do you think governments will require some time of reporting from crypto exchanges not sure i get the last part of that question but we'll focus on the first two parts how do we handle taxation how are these countries going to handle taxation and uh what are they going to do about money laundering policies i think i i get what the third part is asking so i'll try to tackle

them all okay um one by one but i would say and i think what they mean not by revenues but by profits right like trading profits yeah um i would say look irs needs to be clear on how we can report this right yeah um especially the crypto to crypto transactions yeah um can we use lifo for that right last in first out yeah um ideally right because if you're putting new money into it you don't want to mark your bitcoins to the first bitcoin that you purchase assuming that you bought it at a very low price right maybe if you bought it at 20k yeah then maybe okay yeah we'll use fifo right but if if you bought it you know even a year ago right you'd be in the money yeah um and so i think the irs just needs to step forward and clarify it i think there's a part of me that

thinks they're extremely busy right they're they're they probably have way too much work yeah um and they're probably not paid well unfortunately right government place Yeah, unfortunately, right? So these are things where they need to come forward and either hopefully what I think is categorize cryptocurrency in a new asset class. I would agree. Yeah, and create different rules around it. It could leverage off of existing rules, but they need to clarify on it because from people I talk to, right, people do want to pay their taxes. They just don't know what they're supposed to do.

Yeah, they don't want to get taken to the laundromat either. No, yeah. Yeah. I mean, for sure, right? And hopefully they approach it the right way, that if they change the rules on us, that they don't retroactively attack people, right? Yeah. That it becomes- Like a going forward. That's right. This is what we're going to do.

Yeah. Yeah. No, there's definitely no clarity. Some states are treating it as a currency, CFTC as a commodity, SEC as a security. Well, they all want to regulate it, right? Yeah. So they'll call it what they want so they can put their hands in the pie. Exactly. And that's the other thing. So let's dive into this.

Like, is this, do you think this asset class is definable? Do you think it can be controlled or regulated? Well, so I don't know if control's the right word, but I think regulation's good. I think when we think about the DAO hack, when we think about bad situations, right, with uh even did you see the save android um ico where the guy essentially he wrote he he on the page after the ico he raised 50 million dollars right penis yeah that's the one no no that's not the penis one that's the other one but like this one he put a south park uh photo up and he and the words and it's gone oh yeah he just he just bounced yeah but he came up it was actually a

joke it was a pr stunt right yeah he took a picture in like the beaches of egypt or something like yeah exactly scammed you all yeah um but we need to protect our citizens in some ways right um to to prevent these things from happening and you know it sounds like an ico like centra right where it was a complete scam um and so regulation i don't think is bad people make it sound like it's terrible um but it's not look they're trying to do their jobs it's just a hard job that they have like look i wouldn't want to be in their position because i think it's hard to try to figure out how do you clearly define this for people yeah um and really think ahead about this right because people will try to find loopholes in the system and you got to make sure that they

don't think that way right and they there's no loopholes for them to take advantage of yeah i'm a little pushback here i'm in favor of light regulation but i mean it's probably in line with what you think as well yeah because like regulation is a slippery slope yeah i mean like you said all these agencies are fighting to define what bitcoin is so they can regulate it like so they can get a piece of the pie and that's what you had to uh that's one thing we have to worry about is regulatory capture exactly which is which is rampant and a problem that we have in our in our current economy but but you know regulators also think about regulatory arbitrage okay right i'm convinced they do think about this let's talk about regulatory arbitrage can we define it for

the freaks out there yeah so this idea that if if the regulation in the u.s i'll use an example right to make it easier if the u.s decides to ban bitcoin let's go through the extreme then there could be a flight, an exodus of talent in the Bitcoin space or crypto space to another country that's friendlier. And so companies constantly think about this. If the regulations come down hard, then people are going to leave the US. And we don't want to lose that talent. We want to be the forward thinkers of this. We want Silicon Valley and Silicon Alley in New York City to be thriving yeah to bring those smartest and brightest people here um and so that's why i think i think they're they're going to come to to the point where it's going to be lightly regulated um

and not heavily regulated yeah and i'm actually surprised uh surprised about the uh the senate the recent senate hearings specifically with the cftc um because i think they did a really really good job of being like hey this is definitely innovative technology it's going to change the world we don't exactly know what it is right now let's proceed with caution and not not handcuff this industry before it gets off the ground yeah i agree and and i'll sidetrack a little in that i think in china right china banned bitcoin trading many times yeah many times well i think they're gonna lift it again yeah right because they're they're really smart about this too right they they know i think they banned it because they wanted to just stifle the growth a

little bit um but they also realized that it went underground yeah like the citizens are smart right they're like okay you want to ban it off the exchanges we'll find another way to trade yeah right and they figured it another way out like we chat apparently is the the app to use to trade bitcoin right now really um in china yeah i didn't know that and they're trading a significant sum right really um yeah so so i think what they're gonna do and my prediction is sometime this year is that they're gonna lift the ban and they're gonna institute all these rules on how they're gonna regulate this and how they're gonna tax it because they want to make sure that the bitcoins are not leaving china into the u.s and people are not using it to buy real estate here yeah right

because they don't want uh capital to leave the country yeah well that's been like a huge problem for china like there's like a lot of like vancouver in particular right the vancouver real estate market a lot of people think it's chinese nationals hiding their capital in the real estate market in vancouver yeah and other markets like here yeah even in new york city right city yeah yeah like that one building uh time warner center yeah on the edge of the park yeah time warner center yeah it's uh it's like vacant yeah they said like more than 50 is empty yeah but it's all bought yeah it's just people hiding capital in this building exactly that's crazy like life finds a way like these people people in general not these people i'm sorry that was

very rude of me people in general are going to find a way to save as much money as possible that's right i mean that's why apple is domiciled in ireland right or at least they're that's right all their patents are yeah right yeah so all their patents are domiciled in ireland for the tax benefits um funds go to the cayman islands puerto rico to reap the tax benefits there um and that's why there's this whole push to reduce the corporate tax rate right yeah so they start moving that those assets over here yeah so let's dive into that a little bit because a lot of people get pissed at corporations for not paying taxes but as a capitalist like you can't blame them no you can't blame them it's i mean if you if you put anyone in that situation where they had a business

and they can do that every person would do the same thing yeah right like you owe it to your shareholders exactly there's not one person i think that would be like oh i'll pay more taxes because if if you're that person i'm sure the government will take that donation right now yeah right and that's like the old saying like you're a liberal until you get your first paycheck like i don't like getting taxes taken out of my paycheck but i will say you know in defense of taxes a little bit and don't don't think like i love paying taxes but look it pays for the roads it pays for the schools right there's there's a there's some a benefit that we get from it um not all taxes are bad i just think sometimes the government doesn't spend it efficiently

not over i mean most of it goes towards war and inefficient shit yeah see that's i think that's a problem like cardi b cardi b came came out swinging at swinging at the irs oh i saw that exactly where her taxes were going that's the thing it's like i go back and forth like i i would i would say i trend towards the least amount of taxes possible ideally none and you you break up into smaller municipalities where you basically pay a fee for certain services like i think the government's gotten too big and it's too onerous where it's basically just a huge entity sucking and capital from its citizens and then allocating that money terribly well yeah i i mean i think i agree with you on all these and these points is that one of the problems also is that no one takes

ownership of the dollars that are spent right right so like i mean there's a joke around people i know who who try to work with governments and they say like those are the best governments the best client because they never complain right let's take it the contractors it's like when you go to war the contractors line up yeah exactly right they and i i wish the government would take more ownership and responsibility of the dollars they're spending right right and complain when something's broken right hey we want a refund or or something like that right and we're not doing that because no one no one takes real ownership of it because there's no accountability at the How do you hold the government accountable?

You say vote people in and out, but we're coming to realize that meet the new boss, same as the old boss. You can vote a Democrat, a Republican, a TV reality star, and not much is going to change. Well, that's why I would love the U.S. dollar to be on the blockchain. Because then there'll be more transparency of how our dollars are spent. And I wonder if politicians would be in favor of that. I doubt it. I probably agree with you on that. But I encourage, if anyone's listening who's a politician, I would encourage them to push for that, right?

Yeah. And, hey, why don't you stop being a psychopath, all right? And that was free questions. That was a good segment. I liked it. Yeah, that was good. I think we're going to keep this up. All right.

Did we get the other parts of that question? Taxation. Yeah, so we hit that. Anti-money laundering policies. This is something you can talk about, coming from an auditing background. Yeah, so, coming from working at EY and AML, I think this is important, right? It's an important point that people don't think about. We definitely don't want to encourage money laundering, right?

No, but let's preface the statement with, a report actually came out this week, that 0.03% of Bitcoin transactions are used in illicit activity, including money laundering. I believe that, right? So, the use case is very small right now. Yeah. I think it happens more with the U.S. dollar, unfortunately. Yeah. That's what people are like.

It's going to be used for money laundering. HSBC had teller windows perfectly sized for briefcases filled with cash, the U.S. dollar, that Mexican cartels would use to launder money into bank accounts at HSBC. Yeah, that's right. And they got a slap on the wrist. Yeah, see, that's the issue I have, right? why are these banks just getting away with that right and there's a part when i talked in class about this um we had this discussion that are the banks think about thinking about this is that

we know we're going to get a slap on the wrist let's pay the fine and just continue doing it it's the cost of doing business exactly and no one's going to jail like if you threaten the ceo of going to jail maybe he'll reconsider it right and that's where we get into regulatory capture yeah maybe like when you get like too overburdened with regulations like when the regulations dictate that you get a slap on the wrist for breaking them like it makes it easy to to be a criminal or to do illegal things yeah under the guise of official bank work exactly that's what's great it's like how many times does that have to happen before people completely lose faith in the banks you know like they were laundering billions like they

like they laundered billions of dollars billions hundreds of billions potentially for these drug cartels i think they got like a couple hundred million dollar fine right nothing like the profit they made on that deal was like well beyond that fine oh for sure it was basically a tax but but yeah it's essentially a tax right yeah um and i just don't know if how many people really will care in the end right because we don't realize what the repercussions are well you know for money laundry i think people are starting to care because you have people getting sent to jail for pot possession possession of pot of a harmless plant you know people spending years to decades in prison for holding a small amount of marijuana and yet these banks which enabled the grand trade

of this product get a slap on the wrist yeah well i hope you're right because i hope because i like to see changes right yeah where you know the media portrays bitcoin as the one system that all the money launderers are using which is not accurate not accurate at all um and yet the banks are facilitating the money launderers and we're not talking about that yeah um that's where i think you know the fake news in some sense like the the media needs to start reporting this more accurately well that's what i wrote about today i was like we need to get away from the two-party system we need to get away from our dependence on cable news in particular like we need to be having more conversations that's why i love twitter i fucking pump twitter so much on this

podcast because you have tutors twitter has its flaws too it definitely does it definitely does nothing's without its flaws but i believe you have the purest conversations and you get the most signal when you when you know how to filter and curate your twitter feed so that's the key right filtering it yes you can give we curate like i yeah like to fancy myself a master curator i'll have to follow your list then you gotta follow my list all right very good list very a lot of competing views look at my crypto list on my twitter account at marty bent um i've been building it for five or six years now and i'll kick people off if they're they're clogging the feed oh i like that all right um competing views i'm not it's not like just all

bitcoin people it's ethereum other shit coins all coin traders uh it's good to listen to everything right you gotta stay open-minded to this you have to you don't have to you want you want as much information as much signal as possible for sure yeah um but yeah i don't think you get that in the mainstream at all you get what what you get a message that that they tailor to manipulate you in a certain way i would argue oh for sure and and they have their biases right and this is something um i teach a lot in my class is that be careful what you read yeah because everyone has their bias and you have to know what it is um before you believe them completely yeah and this is something with the newsletter i have a bias but i make that well known right marty's bent like

the name of my newsletter exactly the inclination of what i like right my the bent the bent of the information that like i find the pertinent and what i agree with it's literally what i found interesting this is my bias and what i think what i do with the newsletter is like hey this is just how i'm seeing it and this is how i'm dissecting it in my mind this is my bias you should have your own and this is just something my bias is something for you to riff off of yeah and everyone has a different filter right yeah and so people don't think that when they're reading something online with let's say new york times or wall street journal yeah every journalist is going to have some level of a bias and so it's important to be able to interpret that information correctly

like one of the things i was pointed out was jp morgan called bitcoin a fraud earlier right last sometime last year right yeah and but he had his own agenda um did he really believe it was a fraud yeah jamie diving yeah yeah i i don't know if he really thought that right i mean i think that the guy's really smart i think he really he knew what bitcoin could do to his business yeah um so maybe he was trying to shut it down by saying that to see how powerful he is right not powerful enough jamie well he he did help his clients get bitcoin cheap afterwards so he wins either way right yeah he wins either way yeah his daughter owns bitcoin too he said oh yeah that's right yeah so let's see And she probably bought more when it went down after his statements.

As did I. Yeah. All right, we're an hour and a half in here. Wow, that flew by. Right? It always does. Yeah. You want to do one more glass of whiskey?

Sure. We'll dive into this. Let's do it. What are we thinking? What do you want to talk about? Anything on your mind topically that's going on in the space that you want to talk about in particular? Let me think.

I can't think of anything right now. I mean you had we have is there anything on the list we talked about mining yeah talked about your class bitcoin.com lawsuit

I don't even think I know the bitcoin.com lawsuit how they're spreading fake news about it's not necessarily fake news so this is one thing like i am under the belief that people just need to stop talking about bitcoin cash and bitcoin.com you're just giving them free advertising basically at this point so people are freaking out for you freaks that don't know bitcoin.com uh is an exchange as well you can buy bitcoin and bitcoin

cash there and they're marketing bitcoin cash is bitcoin they're saying bitcoin cash is the true bitcoin and then so bch is bitcoin and btc is bitcoin core which is completely asinine like so there's a huge lawsuit going on there's a class action lawsuit people are suing bitcoin.com and roger burr for misleading investors and i think they have a i think they have a a very good chance of winning this class action lawsuit because people are buying bitcoin cash thinking it's bitcoin and then trying to use it at services and it's obviously just getting sent to a dead wallet like yeah um so you realize like roger vera's actually helping all the hodlers because bitcoins get burned well bitcoin the bitcoin cash gets burned so these people are going

also it's actually helping him yeah they're thinking they're spending bitcoin and they're sending bitcoin to cash to bitcoin addresses the guy's a genius it's definitely not dumb yeah Yeah. And you know what we could talk about? Because I actually think, I have the mindset that I think Bitcoin and Bitcoin Cash will both survive. Let's dive into it. Why? Right. Because I think it's going to... So I think that's why there's this push with Roger Ver to try to confuse people, right? And to try to get more people on Bitcoin Cash. But I think there is going to be two segments of the population where one will be comfortable

using bitcoin cash and one will be comfortable using bitcoin okay um and it's almost like i mean this is not the best comparison but it's almost like using using dollars and euros okay right where for whatever reason and this is where i think the whole point of educating the public and trying to get people hey bitcoin cash is the real bitcoin if you can convince enough people on that premise he can get some sort of network effects through that but but it's it's illogical and it's wrong i would argue because like so let's talk about bitcoin cash is not bitcoin like btc is bitcoin like then this is we can get into the branding debate but i'm talking like purely technical like if you sold bitcoin cash you had you had to basically create a bitcoin

like when bitcoin cash forked off the network to access that bitcoin cash you had to create a new wallet on a new protocol to access it and i did not have to do that with my bitcoin like i did not have to change anything i did not did not have to split it like it was my bitcoin right my wallet I didn't have to move wallets or anything. To access your Bitcoin Cash, you had to create a Bitcoin Cash wallet and use your previous Bitcoin private key to access it, and it's a completely different coin. Logically or semantically, it is a different protocol.

It is an altcoin, and trying to overtake the Bitcoin name by brute forcing it over the media is immoral, I would argue. right i think it's it's not it's definitely a little tricky yeah the way he approaches it right um and there's definitely some level of customer confusion with it yeah um for sure like it should not have bitcoin in its name right in some sense um but i just wonder and this this is where like who knows where this is headed right that's it yeah it's the other nobody knows right yeah no one really knows but i do believe there's going to be a place where bitcoin and bitcoin cash will both survive and when i'm talking about it's like 10 20 years out right i'm not talking about

in the near term where some people may for whatever reason and i can't like i can't figure out why people use litecoin right right like i but there are people that are using it right um but eventually some of these are going to i mean majority of these are going to go away right i think um some people believe blockchain will never die well i don't think blockchain will die but no blockchain like oh coin like no i think these all coins i think 95 of them are going to go away i'm not as much as i know you're very much a bitcoin maximalist yeah um i'm of the i'm of the mindset that i think there's going to be a few that are going to be around i don't know what that number is uh but i think they're gonna have different use cases for it yeah yeah i would

agree i mean i don't know if i agree completely but i would agree that there's gonna be different use cases but i think you can do that on different levels like using bitcoin it's like the the protocol that you hash data into could be wrong no i think so i do think you know going to bit devs and seeing what they're doing on bitcoin right there is that possibility yeah there is that possibility that hey if they they move um in the right direction and it doesn't have to be a first mover advantage they just have to produce a better product yeah um if they could do that i think yes we we might get there right the most important part of the network effect yeah the network effect is huge right bitcoin's got the best network effect right now by far yeah for

sure that's proven with hash rate yeah i i agree with that so bitcoin cash is b cash is trading like we're not trading is at like a 5x a hash a second right and bitcoin is at like 33 oh for sure and that makes it the most secure network there is right yeah um and we also got to think about that bitcoin is nine years old ethereum is like four right um and these are i mean if you want to count bitcoin cash it's really less than a year old right yeah so it takes a lot of these they have to grow um and the analogy i'll throw out is if we think about i'll bring the dot-com bubble again right um i don't know if you like this analogy but in terms of some thoughts on this is that if you look at and i've taught this in class too and if you look at 99 baron's had

this article called amazon.bomb i don't know if you've ever seen this um and basically you could look this online because they still have it and essentially what i was talking about was how all the retailers in the country are going to disrupt amazon and realize amazon at that time was selling books right yeah um and amazon already was talking about their vision of like selling clothes and everything else right that's hence the name the word amazon right that was the idea behind jeff bezos a little uh a little tidbit here i saw today on twitter if you invested ten thousand dollars in amazon's ipo you'd have eight billion dollars today it's pretty nice roi very nice roi yeah so like but i remember in 99 no one really thought amazon was going to be the powerhouse it is today

right and that's his 99 so it's about 20 years ago um 19 right to be precise but it shows you how long it took for amazon to be where it is today yeah and no one would have predicted it no but i feel like that's the the view of bitcoin right now too is a lot of people like yeah it's going to get overtaken it's the it's the first iteration like there's going to be better ones number one that's not true uh number two i think that again going back to network effects and hashing power in particular yeah i think bitcoin's going to win out yeah i I mean, that's possible, right? I don't completely doubt it. I think that there is definitely that possibility. Like I said, I think that there might be other cryptos

that do survive. O' Yes. If they have the ... O' I will concede that possibility. Okay. O' I will not say I wholeheartedly believe in it. I will concede it's definitely a possibility. Okay.

O' Where can we find out more about you, if you'd like to have more found out about you? would say you could check out my twitter uh it's called crypto charles h um that's a good way to follow me although i haven't been tweeting that much i'll admit that um that's that's probably the easiest way to find me do you have any advice for the freaks out there hodl hodl right that's the that's the best advice i can get give give to your uh listeners well that's uh that advice has been given out many times on this podcast by many guests i asked that and that's been said probably at least four or five times yeah yeah think long term right this is yeah 10 20 years

out time preference is key here yeah time preference is key no more conspicuous consumption don't fomo no no do not fomo dollar cost average in be disciplined yeah you can find more about me on twitter at marty bent subscribe to my newsletter marty's bent and if you like this podcast please rate subscribe and share we could really use the reviews we could really use some five-star reviews on itunes we're trying to pump it up all right um charles thanks for joining us hey thanks for having me this was great this was fun wasn't it yeah it was yeah well peace and love freaks now to stumble home this is awesome man it's fun dude did you have a good time yeah i love this yeah