TFTC: A Bitcoin Podcast - Tales from the Crypt #41: Ryan Selkis

Episode Date: September 4, 2018

Join Marty as he sits down with Ryan Selkis, Founder at Messari, to discuss how Ryan got into Bitcoin, how writing helped him carve out a niche in a budding industry, what it was like to work for Digital Currency Group and CoinDesk, what he learned there, how he's using those lessons while building Messari, and a deep dive into Token Curated Registries. Follow Ryan on Twitter: @twobitidiot Follow Marty on Twitter: @MartyBent Check out Messari: https://messari.io/

you should do this with alcohol but cheers well i'm kind of disappointed that we're not drinking i know well i wish i was i was certain that you were going to try to pressure me no i think the podcast is making me a bit of an alcoholic i think i gotta it's not just crypto No, that won't. It's not just you? That might just be me, in my Irish blood. So we got a little ad-lib intro there. What is up, freaks?

Welcome back to Tales from the Crypt. It's your boy, Marty. As you know, sitting here at 11 a.m. on a Wednesday in Flatiron. Back in Flatiron, not at Barstool, at Anchor headquarters. The Anchor.fm team was kind enough to host us in their office to record this podcast. So we've got a really cool view overlooking 25th Street right by the Flatiron Building. But time is precious today. We only have an hour, and I have a lot to talk about with my guest.

I'm sure you all heard him, but you don't know who he is based off his voice. He is formerly at a digital currency group, Coindesk, and part of the consensus or planning the consensus conference here in New York City. He's since moved on to a new media venture at Masari. I want to introduce you all to Ryan Selkis. Ryan, welcome to the podcast. Thank you very much for having me. Thanks for coming on. Like I said, time is precious here.

Let's just jump right into it. How did you get into Bitcoin? So I got into Bitcoin in 2013. I'd heard about it a couple of years prior, but at that point, if you wanted to buy Bitcoin, you had to go to a coffee shop and give somebody money for like a USB stick. That didn't seem like a good investment opportunity. And I was actually really heavy into gold at that point and short the U.S. dollar. Like every single metric, it was colossally bad trade.

But it was around like the debt sequester. So I started to think about like the U.S. debt crisis and what is money and what does our reserve currency status look like in 10, 15, 20 years as China emerges and the global economy decouples a little bit from the U.S. dollar. um but i didn't come back to it because i'm not an engineer so i didn't really poke through the inner workings of it at all until 2013 and at that point uh fred wilson invested in coinbase the winklevoss twins came out with their etf proposal and the clincher for me was when they shut down silk road because then it was clear like okay this isn't just going to be like terrorists and like kiddie pornographers and and and you know uh the like it could actually really get legs because it was pseudonymous and you know yes it's private and you can take steps to ensure that

you're private and you have kind of unseizable wealth that you can store but at the same time if you're actually moving money around and facilitating illicit activity there might be ways to track that through you know analytics because it is all available on blockchain so that was i made kind of full dive down the rabbit hole in september um was actually in the process of winding down my previous startup and I just deferred business school for a year. So I basically was sitting there with 10 months on my hand, which is not really enough time to get another job. But I just had this, you know, investment that went up six times and about, you know, five and a half, six weeks. So, you know, I just went down the like buy, sell, hold type of investor diligence

process. And then, you know, 72 hours later is, you know, you and so many other folks in the industry know, you know, you come out like having like showered and your mind is exploding and, And from there, it was kind of like no turning back. So I started writing pretty much immediately, which I know you've obviously learned how much value you get just out of writing every day and being forced to actually put something out there to learn about this industry. Jump into that, your daily newsletter, which was the predecessor to Marty's bet as the best newsletter in crypto. Yeah, something like that. I mean, until I kick it back off with my team in September. And then, you know, yeah.

you'll never like how what what made you want to start the uh the newsletter like what well i was i was writing months off yeah i mean i was writing about it and and really just sharing some thoughts with some of my friends from vc and um it it was just an email chain uh and and i was you know kind of posting comments and and trying to learn from folks on reddit and and you know the fastest way to learn something on the internet isn't to ask a question is to be wrong. So, you know, some of my friends had suggested, Oh, you should, if you're doing this on Reddit and this, you know, this thing could still implode, you don't want to tie to your reputation. So, you know, you should start a blog, but just do it with a pseudonym. So that's where the tubid idiot was born. Um, and you know,

within a matter of months, you know, I had a few hundred executive followers because at that point there was no one kind of putting together, um, day-to-day info and actually having any type of informed commentary about what was going on. And so I had a couple, you know, pretty good posts that people picked up. One was kind of a back of the napkin on what I thought Coinbase was worth, or at least what they were doing in revenue and EBITDA. Another was on kind of the inner circle. At that point, Circle was two months old. They just raised, at the time, the largest Series A in the industry. And no one really knew anything about them. But I kind of gathered a little bit of intel because they were a boston-based company i was still up in boston and um and then

from there you know things kind of spiraled out of control pretty quickly when i got the mount cox documents and then you know broke that story oh yeah you broke oh yeah you did break the mount cox story i forgot about that so what what was that let's explain the mount cox story for it so a lot of the a lot of the listeners are uh relatively new to cryptocurrency uh probably came in uh last year during the bull bull market and i think it's imperative that people know their history in this space and you broke one of the most integral stories uh in bitcoin's history i would argue so let's let's go back to mount maybe maybe the biggest in terms of like market impact at the time yeah it's still i because you know it wasn't just me i mean there was a lot of

people that were thinking the industry's fucked yeah right it was it was half a billion dollars worth of bitcoin that disappeared it was the largest exchange it was um you know kind of known amongst the insiders in the industry that that there were a lot of you know it was a lot of dysfunction at mount gox some told us it was solvent yeah one told us i'm less controversial these days so i'm not i'm not i'm at least i'm trying very hard so i'm not going to comment yeah exactly um but uh but that was that was that was interesting right because I was at the time, I think I was 20, just turned 28 maybe, working basically for my kitchen counter and warding off like real trolls, like the real troll army, like the hardcore Bitcoiners that just lost their life savings at Mt. Gox, thinking that I was just lying about this and spreading this news. And basically making it impossible for Mt. Gox to emerge solvent because I posted these documents that basically was their crisis strategy draft, essentially them game planning on how they would just hide this and then make it all back in terms of fees over some period of time, which based on the four different hacks that Mt. Gox had experienced previously is probably a questionable assumption.

But the great irony is now everybody's going to get their money back and then some. Not in Bitcoin dollars, of course, but they are going to make money in yet terms. Yeah, it's the Mt. Gox saga. It never ends. It never ends. It's still ongoing. And the Mt. Gox trust is another source of FUD. So people are watching that while to see when those coins move and they want to blame price

movements on that. But that's just a narrative. But staying on Mt. Gox, it's interesting to see because that's like when I first got in as well. And that was like the darkest time in my crypto journey or my Bitcoin journey, I would say. And I think I said this on Pomp's podcast yesterday, but I think it's important for people to keep a journal and remember what they felt while these events were going on. Because I feel in this bear market, I'm a little calmer, a little more at ease having gone back to seeing what I felt in late 2013, 2014, 2015. So don't fret out there, people. This stuff has happened before, and I would argue that this bear market is nothing compared to that.

What would you say? Well, it's easy for us to say because we're still way above water. You know, anyone's first 70% downdraft, that's, that's, that's, that's, that's a kick below the belt. So I, uh, you know, I didn't feel great from, from the end of 2013 to January of 2015, when, when Bitcoin went down almost 90%. Um, but you know, you kind of knew what you were signing up for. You knew that this has happened, that, that had happened historically. And, and, and the thing is the people that kind of passively speculate they'll say you know fuck this and they'll they'll cash out and that's it right but the the ones that actually where where the bubble

is the thing that kind of hooks them and then they get into the industry and and do fall down the rabbit hole i feel like you start to a develop a thick skin and then b as you see all of this infrastructure getting built out and all these risks uh getting de-risked one by one you start to think, well, if I was excited back then, maybe I should put in more money. And so, you know, people, and I did this too, right? I remember being at the Miami conference in January, 2015, and I was on the roof deck with my now wife. And somehow she said, yes, even though I lost like 80% of our money in 14 months. But at the time I remember saying like, Bitcoin just went down a 200 there is like this this this this this and this are happening these 10 different companies

just got funded these like you know dozen entrepreneurs that that are just like world beating entrepreneurs are all in on this all the major venture capitalists are talking this up you know this something is out of balance and like i want to buy more and she was like okay i trust shoe. Um, which, you know, uh, and, and hindsight looks like, uh, like it was smart, but, uh, but you know, obviously it could have just as easily gone the other way. And I think that's the thing that, you know, uh, you know, whether you call them Bitcoin maximalists or, you know, name your favorite cryptocurrency, I think people, um, they get way too definitive about, well, yes, we're here now but we're going to be at a million yes it's binary people it's binary yeah it's still

very still very binary um no it's interesting and actually one thing that comes out of these bear markets uh is building and i would argue what you're doing now i'm sorry you guys are building so before we get to massari specifically i think it would be uh i think it would be advantageous for us to sort of jump into your history with coindesk what it was like to work there at that point uh in bitcoin's history and crypto's history what you guys are doing there and then um if you are able to uh transition to how you decided to to build masari and uh based out the lessons that you learned at coindesk and dcj sure yeah it it is kind of all part of the same story i mean you know um so you know after mount gox was about six months you know i continued

to write i was doing a little bit of consulting and and you know i through the newsletter got to know, a lot of the industry's execs, mostly because it was so small at that point. And the Mt. Gox story, you know, everybody knew me, you know, for better and for worse, right? And so I got to know Barry Silberts at DCG and joined him before DCG existed as kind of the first Skunk Works hire at Second Market that was working on this newly created entity that was in the works. and initially given my vc background i'd i'd just signed up to help him with seed investing from day one though the goal was okay i can help you with the fundraise as we go through this transition process from second mark to dcg i can help you know we can recruit more members of the

kind of core team we can um and and kind of in the process i can help blocking and tackling on on the investing side so i did that for about a year and we closed the fundraise right on cue um we announced that at money 2020 we met with jeremy bonnie the outgoing coindesk ceo at money 2020 uh later the day that we announced around and and and basically started talking about the acquisition of of coindesk um and we already had plans to do a large global kind of flagship conference here in new york in may but um we didn't really have the marketing engine to pull it off we had all the relationships to get like the speakers to get you know some of the early sponsors just given the size of the DCG portfolio and kind of how well networked we were. But we

were missing kind of like the front page content marketing funnel. And so that's really where CoinDesk became interesting because, you know, the company was not doing well because the industry wasn't. And, you know, the ad revenue model is really, really tough business. But they had run a small version of ConsenSys in September of 2015 that did very well. Citi Ventures was a title sponsor it was very well programmed um june and wong uh who went to courts during the transition actually he's now back at coindesk he just rejoined he's uh doing their south korea coverage yeah well he's well he's i think europe and asia but he's he's basically been spearheading the singapore conference so i'm sure it's gonna be great because you know he and jeremy and and a

couple others on the editorial team kind of spearhead uh spearheaded the the september event so we knew that they had this like this great general media brand they had this great kernel of a conference and we could throw a lot of gasoline on it. Um, and so we bought the business in January. I ran the restructuring, um, over the next 18 months. Uh, and you know, we 10 X revenue and, and, you know, consensus went from a single day, 400 person events to, uh, in, in last year's events, 2,800, uh, attendees over two and a half days. And of course this year was, was I think even triple the size of that. Yeah. This year's was a, it was a sight to be seen. There's a lot of people. And that, that, I mean, that's a hell of a business that, that event business, it's not

super sexy, but they, you know, it, once you get the brand and, and, and kind of the network effect, it, it churns out a lot of cash or that's, you know, a lot of money that can get reinvested. Yeah. And, uh, and so CoinDesk is, is in great shape now. Um, but I left in, I left last summer and, um, and, you know, decided I, I didn't want to do a media business. So you introduced Masari is a media business. I'm sorry. No, it's fine. First page of crypto.

Yeah, exactly. So, you know, we're at the end of the day, we're trying to build an authoritative data source for the industry. And data by itself is not something that people generally come back to look at day after day after day. So you need to provide some context, some wrapper for data, which is why we've started with the kind of curated content and research. And to me, coming at this from the newsletter backgrounds, the investor background, running CoinDesk, from three different, four different sides of the table, I've been looking at crypto's data and information problems for five years now, which I think puts me in a category of maybe like three people.

And the one thing that was obvious is to actually build a trustworthy information resource, you really have three pillars that you need to get right. The first is very carefully curated content and research. So what news actually matters, what research actually matters, what analysis pieces are new and novel and exciting and not just, you know, vaporware or marketing jargon. The second is what is the quantitative data say, right? So what's actually going on, not just in the markets for these different assets, but on these different tokenized networks. What are the transaction volumes?

What's the fee market look like? Because, you know, can you measure the centralization or, you know, wallet activity? But then the third bucket, which really hasn't been captured at all, is this disclosures bucket, which we're really focused on. And that is how do you get these token issuers to make certain common sense disclosures about the activity of their ICO? um which really boils down to you know for us we're not trying to get like an s1 or kind of like a full-blown financial report out of out of these projects that actually sell tokens all we're trying to do right now is figure out who are the verified personnel they can speak on behalf of the project and and who's kind of affiliated with them in terms of the core developer team

what are their trusted communications channels right so if you see an announcement on this website or this blog or this slack channel you know it's coming from the authorized representatives if you will that are speaking on behalf of that entity and then finally how do you actually measure ongoing distribution of a project's token right so many of these projects now have token treasuries that they're unwinding they've got vesting schedules that apply to the investors to the advisors to the founders you know some have foundations some there there is no way of actually understanding how the supply is hitting the market. And in a speculative market that's just based on kind of future expectations, one of the only fundamental metrics that matter

is what is your expected annual inflation, right? And a lot of that's hidden right now because this is all pre-mined and it's distributed over time. So the question of how does this get distributed is very material, right? And Vinnie Lingham at Civic has been very good about this. You know, I'm not going to get into, like, you know, whether people think it's a good project or not. I know you're probably going to have strong opinions just because of Bitcoin. But he's strong opinions because I think he launched a token and said he doesn't need a token like a year later. Well, I don't know that he exactly said that. So there are shades of gray with like how the token is needed and not.

But I don't know. I don't know exactly what quote you're referring to. So regardless, he reached out proactively to us and I'm sure to my market cap and several others. And on the year anniversary of the token sale said, hey, guys, your supply information is wrong because we just hit the one year vesting cliff for our token. So a third of them are now liquid, which, by the way, translates into about 30 percent inflation if they were to dump it on the market that day. And they wrote a post about how, you know, obviously we have no plans on doing this. we're going to give plenty of advance notice for how we'll unwind secondary, you know, trades of these assets. That is not the norm in the industry, right? To even address that proactively. So

before we can get into, do you need this token or don't you? Let's figure out like who's getting dumped on and like when tokens are actually hitting the market, whether you believe in the tech or not. The market's going to, long-term things are going to play out in a way where the market will rationalize and good projects that have tokens that must be held and that actually have some type of value they'll stay valuable and get more valuable others will they do oblivion but in the meantime it helps to know like who's making money on the way on the way down um all right so two questions here first uh so you've got a growing army of analysts which has been very impressive to see and they're putting out some uh very good like pieces that

make you think so that's the first question what's it been like growing that army uh what tools are they using are you just letting them uh sort of find their own niche within masari and attack certain vectors and then two what are a couple of examples of token projects that you see having long-term value well for the for the army you know i wrote one post in january and had about a hundred applicants that said that they were interested in joining and kind of helping out early on so we should make clear that this is this is a kind of an organic community these aren't you know paid employees yeah they're they're just you know contributors to the open source library just like you would have with wikipedia right exactly and that's there's like a thirst to get in like

everybody wants like how do i get a job in crypto how do i get a job in crypto and i think this is actually uh a very good first step for a lot of people yeah and and and and what we said was you know from the onset look there is no model uh there's no there's no economic model here right anything that gets contributed is always going to be free and open source so if you'd like to contribute, great. We think we're going to build a fantastic community. There's going to be a lot of other smart people that are working on the same problems. A lot of people in the process of, you know, do your own research, right? Doing their own research are doing redundant, mindless work that needs to exist in one place, right? We shouldn't be doing research on what annual

inflation is for a given token. We shouldn't be doing research on who is the team. We shouldn't be doing research on on on where do i find the fucking white paper like those are the things that this community has been kind of like slowly cobbling together and contributing to this open repo because it needs to exist as a public commons some somewhere some some way some time and um and so the the thinking is you know if you're you're contributing to a kind of a greater public good uh if you will and and in the process you're going to get to you know engage with a lot of other like-minded people. And a lot of them are going to be in the industry for a long time. And, and, and I think the way that I was able to make that pitch, you know, somewhat credibly is

I worked in this industry for a year for free writing every single day with really no monetization plan. Um, and people notice, right. People noticed, uh, Chris Berniski as a junior analyst that wrote a book on the subject. And, and, you know, now he's got, you know, one of larger, more, more reputable funds. People know Nick Carter, right. There's so many examples of non-engineer, very rapid risers in the industry that are really in a position of prominence for no other reason than they just wrote a ton of really good stuff, you know, stress tested their ideas in public, and were able to ultimately earn an audience because of some unique insights.

Kyle Somani, you know, and Tushar are like, you know, other examples. So like there's a lot of these, you know, folks, and I think people look at those examples and say, well, if I'm doing all this research anyway, and I can, you know, have assistance and kind of a second set of eyeballs on, on any, any idea that I'm putting out and I might be introduced to new ideas. And so that's going to help me kind of cross pollinate any of my own pieces. That's going to make me much more valuable. Um, and, and ultimately, you know, help me, you know, break into this industry, uh, in, in, you know, maybe a non-traditional way. And so I, I think that the analyst, I mean, the analysts are awesome, right? Like we have,

we have Sunday morning calls, um, with, with the community. And I think the last one, like 40 of the 110 were, uh, were, were on the call. So like the, the engagement keeps going up. We've got a discord channel, um, that, you know, continues to see more, you know, daily active and, and kind of weekly active contributors and, and, and, you know, folks that sign in and it's because we're not just letting in anybody. It's, you know, I, I go onto some of these other, you know, Slack or Telegram groups and you know it's funny because like i'll see the pitch decks right i still i still see some of these things and you'll see people bragging about the size of their telegram group well you actually go to the telegram group and it's a bunch of people's you know when airdrop when moon like

it's it's it's awful there's a lot of vapid shit out there it's awful that's why i try to confine my uh data sources to to very uh very um uh tight-knit telegram groups yes only if it gets too noisy after a certain amount of people you got to keep it exclusive you got to standards yeah and and you know so i think you know we're very careful about how we we grow that community i could talk about the analysts all day uh but but yeah the the masari community is one of the things that i'm most excited about for the project because um they don't stop contributing right and and so even small increases in the size of the community will have a very you know large impact on a compounding effect on the quality of information that's in our initial

library. And then ultimately we'll start to get third party data partners that say, well, you know, we've done all this work. We're just going to contribute this as long as we're sourced and people can link back to us. Like maybe that is going to be a feeder for us for any of the paid products that we have. Right.

So like, I think we're kind of on the cusp of building a really interesting, you know, platform business. That's a way overused term. I just strike that. But actually, if you think about what a platform is, I can make the argument that we're trying to build a platform. So that was a very long answer to part one of your two questions.

I like long answers. Yeah, we've got plenty of time, too. So, yeah, I talk too fast, and that's why I got myself in trouble. So part two was, which assets do I like? Yeah, so obviously you know I'm a Bitcoin maximalist. I'm very skeptical of the token environment in general, just because I am finding it hard to see how any of these tokens accrue value

and why a lot of them are necessary. They seem like an unnecessary UX step for your average user. So when I'm thinking about this stuff, I'm thinking about the people below us on 25th Street right now walking around. Could that person work at MetaMask extension? Could that person work at MetaMask extension?

Could that person hold a private key? And right now, where it's at, I think a lot of what's going on in the tokenized world in particular is a lot of, I don't want to say groupthink, but a lot of developerthink, where a lot of developers are building apps that other developers can use, but they really are ephemeral after a few weeks, like we're seeing with Augur, which has been one of the most touted ICOs the last three years. that's a different token model uh with rep than a utility token i would say right correct they're uh it's a staking token yeah it's a staking token it's all you know the tech it depends on your taxonomy right yeah but it goes back to going back to like user experience like the only person the only i could make the argument that people aren't using auger because the the layers on top suck right no one's making markets yet there haven't been any markets that have been interesting enough you know so that but part of it is just it's it's very difficult to use exactly so that's

my point right now i'm skeptical in the whole space until it the ux gets improved drastically and i'm i'm concerned that that may not be possible with with a world with thousands of tokens it depends on the use case yeah i mean yeah so so so you know with bitcoin bitcoin was not easy to use for a very long time it's still like just like yeah still not exactly so um i think you where Bitcoin was in, maybe not 2009, but call it 2012. People knew about it, but it was still not easy to use. That's probably what you have to think about Augur and Gollum and some of these dApps and some of these new utility tokens, staking tokens, whatever, that just got launched, that are still in kind of the stress testing phase and and by what by the way which which work but

the markets haven't materialized yet and so that tends to be a ux and liquidity issue um and just like how how much of a pain point is the use case that you're talking about and and to what extent does it need to be decentralized as well well if you look at in trade so prediction markets i i I kind of think there's a few very interesting areas, um, to, to look at for, you know, kind of non money tokens. Um, prediction markets are exciting. Decentralized exchange are exciting. Uh, non fungible tokens I think are exciting. And then obviously a token carrier to registries, which is something that we're working on, I think are exciting. And there's going to be more of those, right. But, but I kind of look, you know, very use case specific in terms of what is

interesting. There's a lot of payment tokens right now. None of those are interesting to me, right? General governance tokens, not interesting unless they're securing some very, very valuable information resource or part of like market infrastructure. And that's kind of more of a token model. Um, but, uh, you know, I, I think I try to break things down in three buckets. Um, I agree with you. Most of my, but just so I'll be kind of very transparent, not about the amount or proportions, but my only holdings right now are Ether, Bitcoin, Bitcoin Cash, Monero, and Zcash out of kind of the core like money tokens. And that's the majority of my portfolio. And then the rest is Decentraland, 0x, and Filecoin. Very responsible disclosure

on Tales from the Crypt. Thank you, Ryan. I try, man. And I don't recommend necessarily that anyone one purchases those because my cost basis is going to be different than yours. Yeah. Right. So, but, but for me, it's just, you know, I'm not, I'm not trading. So it's like, I bought some of this stuff and now I don't really think about it. I evaluate it kind of every few months. But, um, the reason for those, uh, those, those investments is, is a just like long

term, if these end markets materialize, they will be massive. And I think that these are kind of like the best in class that are working on these different components of the industry. But far and away, I agree with you and other maximalists that money is the killer app. But that's one half of the barbell. You've got this then very skinny part of the barbell, which is what I would say utility tokens will represent. And then the other massive side of the barbell that no one really talks about is crypto securities. I guess people are starting going to talk about it this year. But that's really an inversion of the whole blockchain, not Bitcoin meme. But now instead of talking about, oh, we're using the underlying blockchain

technology, now it's saying, oh, we're using like cryptocurrencies, but using kind of traditional securities frameworks. So it's like a complete 180 based on what Wall Street could get behind because of the news cycle. But regardless, I do think that there's going to be some really interesting securitized products that get built that are very unique to blockchain tech in terms of, you know, what they enable. So you think about things like, you know, cross-jurisdiction insurance products, right, or derivatives that are unique to, you know, virtual worlds or prediction markets or any, you know, digital currency itself, like DYDX and Dharma and some of those projects kind of come to mind. So I think there's going to be a lot there that's not just

let's tokenize the umpire state building right which i don't know how interesting that it may maybe it is maybe it is you know but but that we're we're like 10 years away from that being interesting what you will see across the board is what is a really unique use case according you know when it comes to new money when it comes to new forms of of capturing network utility when it comes to securitization um and then you know there's obviously a ton of subcategories particularly in the middle uh that a utility token uh barbell and and that could be you know on the one hand resource tokens you can back into some fundamental value of file coin right you just look at the replacement cost of file storage or golem you look at the replacement cost of like centralized

compute um for a staking token you want to own some amount of a token if it's going to give you you the right to earn network fees that are X? Because you can start to think about it like pricing a traditional income-producing asset. So there are scenarios where these assets have value. The question right now is just, all right, everything's gotten ahead of itself. Everything is wildly overvalued compared to where the tech is today. Should you buy at these prices? Probably not right for for for many of the assets right but i'm not going to go buy sell on on on on every single like individual like asset that's like another because i don't know anything and neither does anybody else that's that's right that's that's right um like we don't know like

that's i mean this has been expounded upon many times on this podcast but nobody knows me included what they're talking about nobody knows how this is going to unravel That's why the number of newsletters and podcasts is so entertaining. We all know as the writers of them and the speakers of them that we're just kind of, I think, I think there's so many of these, quite honestly. It's kind of gotten taken to the extreme, right? Like I started writing, I think you started writing just as an excuse to learn. Yeah, I was unemployed and like people were like, so why not reaching out?

I was like, you know what? I have this newsletter. This is like the equivalent of my like one and a half year old trying to sound out new words like the number of newsletters and the number of podcasts it's just it's like this is an excuse for people that don't know what they're talking about to like try to say a new word and i would uh i would agree and for me yeah for me it's more trying to make it approachable so i try to bring like the barstool boys to this space because again that's what the better ones do for sure it's like a lot of uh a lot of people reaching out may june last year like what's

going on like i know you've been my bitcoin friend for the last like four years like what the hell is going on i was like all right i'll write this newsletter those sirens are the new york department of financial services coming after us we don't have our bit license uh we actually had to pay anchor with bitcoin and they don't they're not registered as a money transmitter so we're screwed yeah um game over but uh yeah no i think and especially in the bear market i think people are just trying to sort of not validate but uh try to keep the the hype alive and focus on like the important thing things like the building and stuff so in the newsletter i try to say i don't talk about price that that often at all if at all um really just try to make people

think about the ideas revolving around the space like the idea of uh anarcho-capitalism free open software sound money uh the effects of mining on the environment and stuff like that focus on those ideas and how we may be able to change the world and i think uh that's what's important especially in these trying times trying times but going back to trying times of bitcoin at 7 000 right but going back to like the uh like there's a ton of projects are extremely overvalued right now like maybe maybe like like there's been a price appreciation the last few days people are like oh bear market's over i'm like i don't know if you tweeted out like tron still at like a billion dollar i think it might even cost some money it's like tron still like a 10 billion dollar market

or something like that like this bear market is is nowhere near yeah i mean joe weisenthal does that too like yeah he's playing the home game denta coin is still 130 he said he said that's like his his barometer for whether we've actually hit a capitulation which i think is kind of a good one on the episode he i posted yesterday with him uh he said you'll know uh when the bear market is hit in earnest when when bloomberg journalists are are too embarrassed to come on a crypto podcast so it's it's uh you you change your you change your uh your linkedin to to make it look like you never worked in crypto and and you go on to something new um we'll see there's a there's a there's a lot i just think that i should change my linkedin to blockchain thought leader oh my god

linkedin what do you think could i get away with that i think i mean you probably get hit up uh that's basically all that's basically all that linkedin is used for right now i all i get is spam on that piece of shit network so i might as well just go all in on like the thought leader and see see if that like has some type of reverse the uh psychology on on the the pollution that is my my in mailbox there's a lot of scammers out there especially on linkedin i uh i just use linkedin to syndicate the newsletter i just like post it and then forget about it for the day and then show up 9 a.m the next morning like what the hell's going on on this vapid site um all right back to cryptocurrency let's talk about token curator registries what's the whole idea behind

it what um what are the mechanics of how it works i know you're thinking about uh launching a token to make this happen but you're very uh very open to ideas of how the this registry can be created yes and it's definitely nothing that's completely fleshed out yet correct yeah it's not i mean we're kind of iterating on in real time so uh so first disclaimer um we have no intention of selling this to non-accredited investors the natural users of a token in our system are going to be exchanges funds underwriters maybe the projects themselves all of whom have some vested interest in creating a transparent library of disclosures for this industry without a top-down kind of enforcement mandate from any one regulatory body so that's the kind of the starting point right like no

don't expect to you know see this on on you know any publicly listed crypto exchange anytime soon um so with that said so a token curator registry is essentially a way to bootstrap a credential without some trusted issuer of that credential so it's a decentralized morning star or something like that not ours in particular right but but if you think about lists and credentials uh like any kind of information heuristic that we use it's actually probably one of the few use cases in crypto that's older than money, right? What plants should you eat? What are kind of the rules of the village? You trust the village elder to just kind of like hand those down from on high, right? And today, it's actually not that different, right? We trust the Harvard and Ivy League and

Stanford admissions councils to vet really high quality candidates. And we expect that if they have a diploma from those universities and they're worthy of some job, they're worthy of some uh, respected for their kind of intellectual, uh, curiosity and abilities. Um, if you want to go to a doctor, uh, you're going to expect that they have a pretty good medical license. If you're going to, and, and if the stakes get higher and you're going to go to a neurosurgeon, you want to make sure that it wasn't, you know, a, a small Caribbean school. You want to see like the, like the, the Harvard diploma on the wall, right? Because you have some expectation that credential is weightier, is meatier than what you, you know, would get from just not having that information,

right? If your buddy just said, you know, go talk to this guy, he's going to take care of you. So I think we agree that there are some credentials that have intrinsic value because people are very clearly willing to pay for those credentials in some form over time, whether it's an investment of work, an investment of kind of time and energy or actual capital, right? With a TCR, the assumption is some lists, some credentials can be better curated. The body of the membership of folks that get that credential, that get that recognition on a list will be higher quality because it is not just top-down mandated. And so what you have to look for with a TCR, at least one that's going to work, is some market that is dysfunctional because

there's a global coordination problem. In crypto, that could be regulation, right? These assets trade 24-7. They trade cross-border. It's a game of whack-a-mole. It's just the resources are not there for every global regulator to crack down on issuances and trading of these assets, just because you can route around them, right? And without a global regulator that sets standards on disclosures, you can't have a global self-regulator because self-regulatory bodies get their mandate from top-down regulatory bodies, right? So the CFTC has the National Futures Exchange, the SEC has FINRA. Those bodies exist, you know, because of the SEC and the CFTC. I found out, I have a buddy who works at FINRA. I found out, I didn't know they were public until,

they were like a public corporation until like last weekend. It blew my mind. I thought they was a government entity yeah i mean so it was like the national association of securities dealers and then uh the the the self-regulatory component of nicey um merged to create finra back like five so i'm gonna botch the dates but some some in the 2000s right yeah yeah um so uh yeah so so with with crypto you don't have necessarily an sec you don't necessarily have a finra that's going to say here are the standards for disclosures and kind of ongoing reporting if you're a token issuer But we all agree that this is a problem. So how can we agree on very bare-bones disclosures, very remedial bits of information that can be a starting point for some transparency policy and disclosure policies across the industry? Well, one thing that we could do is we could create a whitelist of projects that meet these minimum standards, and we could have that governed by all of the global exchanges, the major investment funds that are participating in the ecosystem, and any underwriter or potential broker-dealer by another name.

We could have them actually vote on who should get onto this list. And if they do the work to actually assess whether a given candidate is eligible or should be eligible, then they should be able to earn the application fees that those issuing projects pay to get onto the registry. Now, just because you apply doesn't necessarily mean that you get on, right? You could still lose your fee and not get on. So there is an expectation that if you pay the application fee, you think you can get in, just like you don't apply to Harvard if you have a 2.5 in high school.

and, you know, you just play video games the entire time. Hey, I was pretty ambitious, right? What's that? I was pretty ambitious. You know what? I'd hire you at a 2.5. Yeah, I mean, a guy like you should have been admitted to Harvard if no questions asked.

No way. But I think you get the comparison, right? So there's a certain standard. There needs to be a large enough fee pool that makes it exciting for the token holders to actually participate in the governance, the ecosystem, the curation of the list. And if you can do that,

if you bootstrap both sides of that network then you ultimately can bootstrap a credential um out of basically out of thin air it sounds like a scary thought to hardcore anarcho anarcho capitalist bitcoiners having gatekeepers credential projects um what would you say to people who are like this is sort of anathema to to the i would say it's an anarcho capitalist dream i mean what you know i'm i'm more on that side of the fence and i actually think that markets are going to replace a lot of the existing top-down command and control structures that we have so we should be able to do a much better job than the sec or any of its international counterparts with a market solution yeah right this is in my eyes this is like the opposite of scary this is you know the

the government is simply not going to be able to because of structural uh challenges get a proper handle on this industry so how can we reward good activity um and penalize bad activity to the extent possible. Um, cause you're always going to be able to regulate like centralized choke points. So, uh, I think market solutions are needed for decentralized ecosystems. And then the regulators, by the way, still should and will be able to, um, crack down on exchanges on centralized issuers that are clearly violating securities laws that are clearly fraudulent. You know, that's not going to change, but, um, what does change is, is the market is able to self-police a little bit more. And the folks that are involved in that self-policing have some

economic incentives yeah but going back to like the gatekeeper thing if it's just exchanges uh and sort of these huge economic players like maybe that leaves out the the a non-crypto twitter sort of self-policing that's been going on for years or you're stopping to crypts your dandark pills who have been calling out scams uh and sort of curating their own version of uh of following these token projects and calling out their fickleness and some of their their unethicalness is that a word it's it's it's tcrs it's it's an initial distribution problem right so i i can see that it's not a perfect solution um to to have to exclude anonymous participants but i would say that um identity does matter uh to to some extent now whether that that identity

is a pseudonymous actor that people have built trust in um or if it's a centralized entity that you know where the headquarters is. I think long-term it doesn't really care. For us legally to get this off the ground amidst all the uncertainty, it kind of has to be done this way with known third parties that are regulatable because the signal that it sends is we have a vested interest in getting this right because we don't want to go to jail and we want to be perceived as being part of the solution at the extreme. It's everybody's goal right now is just not go to jail i mean it's in some respects it's it's not a it's not an invalid concern no i think it's a very underscored concern in the space in particular but at the end of the day no one that

does you know white collar crime goes to jail so it's you know no one i'm not gonna i'm not gonna name names but there are certain projects that are are no one's gonna go to jail uh even the bigger the scam the more more you get away with so i again i'd argue that a market-based solution is going to be much, much more effective. Let's not even talk crypto, right? Elizabeth Holmes got, what, a half million dollar fine in probation? That's fucking bullshit.

That wasn't going to bring up fairness. Like, everybody knows it, right? And yet we just kind of pretend, oh, she got penalized. No, she didn't. All that shows is if you have enough clout and you have enough capital and you tried. She defrauded her investors like a billion dollars.

And then potentially more. And then, so yesterday is another, I'm happy you brought up like traditional finance, The CFTC just fined German bank Hamburger Spassky. I forget the last name. But like $75 million for manipulating a derivative of the U.S. dollar on a futures exchange. Yeah, this stuff happens all the time, right? It's just so—

$75 million slap on the wrist is nothing for a bank at that scale, manipulating that. They probably made— It's a joke. Yeah, I mean, the only people who go to jail are the little guys, right? I mean, that's why sorority girls don't go to jail. for cocaine, but, you know, black men still go to jail for crack, right? You know, I'm not trying to be like, let's just call it what it is, right? I mean, this is like a societal, like structural issue. And I would very, you know, strongly argue that a market solution that actually rewards

penalties and rewards kind of equally, right, regardless of who the applicant is, regardless of the size and kind of economic influence, and in some cases actually provides an outsized reward for the bigger whale that you take down if they're acting maliciously or unethically. I think that's a pretty powerful incentive mechanism. Yeah, and so where are we now on the course of going from zero to token curated registries off the ground?

Where exactly in that process have you found yourself and what have you learned so far? Well, there are a couple of TCRs out in the wild, right? the, the ad chain guys launched theirs. Um, and what you pretty quickly saw, this goes back to the initial distribution problem that I talked about. Um, those can, they can devolve pretty quickly into populist rule. Yeah. Like Facebook and the New York times were blacklisted from the ad chain TCR as like malicious organizations when it comes to like ad quality. Um, and you know, there's a reason for that, right. And it's political. So these, these things are, are by

nature political. So identity matters and kind of the voting structure matters. The way that we've thought about this is it's a fool's errand to expect people to buy tokens in a system and actually do the work and vote according to the work that they've done. Because if you're a crypto fund and you own 1% of the TCR, you're not going to do the same amount of work as 99 other analysts for 1% of the pro rata network fees. It just doesn't work like that. So what you will see, I think, is something that looks a little bit more

like the big four long-term, but hopefully a more liquid version of it or a more modularized version of like the big four accounting firms where to validate the kind of quality of reporting of a token project or really any, it could be an individual, it could be a non-token entity,

like just to actually verify that a given, um, organization or person is abiding by certain standards. Um, I think, you know, you, you need to be confident that those, uh, organizations are, are ultimately going to be kept in check by known entities. Uh, if it's just, you know, a bunch of bot accounts essentially, where it could be one person that owns the entire supply and then votes against the xrp army takeover yeah i mean and then you know it's it's it's it's not ultimately gonna be a very good list but you know that there is another element where um your incentives unless you want to kill the list for some reason your incentives are to be very uh judicious about

how decentralized that list of voters is because if it gets too centralized then the value of the credential goes down arguably yeah and that's um that's a interesting problem you're trying to solve and it's been fascinating watching you and that's the one thing i like about your twitter presence is your ears you're finding this out and sharing your your findings in the open uh with the community which has been um yeah i still think that we're too early to just like build something in a vacuum and then expect that it's going to be brilliant right especially me maybe maybe there's some people in the industry that can do that i mean even even like even the like the smartest folks in the end you know like zuko is one of the most transparent folks in the industry and and you

know i'd i'd put him in the in the category of smartest folks in crypto yeah i mean he was working on jim mccoy's uh was it mojo nation and it's like one of the jim aka satoshi yeah that's what people think that's one of the theories he's you you wrote about that right uh it actually wasn't my initial idea there was uh uh you know i don't i don't i don't remember who it was but i remember he didn't want to be um uh whoever sent it to me just didn't want to be affiliated with the post so i was i just kind of stole it okay but i told people it wasn't my kind of original idea but but i i checked out all the research and it it was pretty interesting so that's the um they had the satoshi finding satoshi do you believe that uh craig wright

is one third of satoshi by by chance did you i'm not sure yeah i'm honestly not sure because and and so this is the the real madman take that i have on craig wright um and and part of it is also you know kind of related to nick sabo now like i i just i just looked on twitter and i was blocked i was like i've never oh i was like what happened nick's been going hard right yeah i know i know and and and maybe it's the same playbook but what i've what i've said with respect to uh craig wright is um if you were satoshi and people suspected you of being satoshi one really great way to hide in plain sight would be to act uber irrationally so people just like automatically discredit you and and to do exactly what it which is like prove to some people that he was satoshi

and then you know and then have it called into question by all the other really smart people in the industry and then just say i don't have the courage to do this anymore and then but screw you i have more money than your country right like so like i was gonna say so so you know you have someone that you know in in some parallel universe or in this one who knows could actually be just hiding in plain sight that's it's a beautiful thought and that's another binary thing it's like a schrodinger's uh box i mean the thing is i don't really care like i've lost i've kind of lost interest in this i like the fact that there's 10 people that people uh that that uh are suspected of being satoshi like the more suspects we have the more that risk is the more the uh is you know

dispersed the centralized leader risk is dispersed um yeah so let's let's jump into like how how are you optimistic or pessimistic of the future of bitcoin and cryptocurrency in general how have your thoughts changed since 2013 i was actually thinking about this you doxed your age uh on twitter a couple weeks ago and i was like uh when you're talking about uh where you've come in the last five years you were 27 five years ago and i'm in a similar position now like i'm 27 now and it's like what what can i expect between 27 32 like what you just experienced and and uh so i would like to get your thoughts on uh are you more optimistic than you were maybe five years ago and and what is driving your optimism or pessimism at this point i'm very optimistic for just the

the future of crypto in general. Um, and I think we just got the five minute warning. So, so this is maybe, maybe a good topic to end on. I think I'm, I'm very optimistic on, on the future of crypto in general. Do I think we're going to see another hundred X for investors? Who knows? I mean, maybe, but that's going to take, you know, not years, but maybe decades to get to that, that level of penetration i think um so i think the the the best time to get involved in the industry was you know five years ago the next best time was four years ago the next best time was three years ago so uh and that's kind of a good thing right because it's it's getting a little bit more mature so you're able to attract more people with different risk profiles it's still

early enough where this is very wild west particularly in the non-bitcoin assets or or in kind of layer two, like, you know, building stuff on lightning or building, uh, things that, that, you know, could ultimately, uh, sink back into the Bitcoin blockchain through either side chains or, or one of these interoperability solutions, you know, tendermint or, or, or what have you. Um, it's, uh, it's, it's still kind of day one in the Jeff Bezos, like internet terminology. And unlike you, I actually think that there's green fields in thousands of potential decentralized applications and projects, none of which are going to be interesting anytime soon, but many, many of which are going to actually restructure our society. And the internet already

has in so many ways, obviously, but we're clearly seeing that it impacts literally everything, not just certain verticals, right? Certain verticals were first, newspapers, right? Now we're starting to see politics. Nation states. Like nation states, like rising and falling. Arab Spring was a precursor, then Brexit, then Trump, right? So like this whole sovereign individual thesis,

it is playing out. And that I think is one cause for concern. And it gets a little scary when you take things to the logical extreme. But I think if people are building with a long-term mindset, there's a really good book by this guy matt ridley called the rational optimist and it's basically been like every single like eon of human history or every single major you know

disruptive change uh people always look ahead like 10 years and basically say the world's gonna end in the next 10 years and it never does and life always you know generally gets better um so that's kind of like always in the back of my mind on one hand and then the other hand it's like the nassim taleb like every turkey has a great life until thanksgiving right and so i have no idea which of those maybe it's both combo right yeah i mean ultimately we're all going to be you know the rational stardust so rational optimist is uh staring at me on my bookcase it's been up there i've got i've yet to get it not not here but in my apartment i was envisioning my apartment um but uh that's when i gotta get to um yes we are pressed for time do you have a parting note

for the freaks out there uh listen to a variety of sources don't don't just get sucked into fandom of of any one newsletter or podcast uh or or opinion leader or technology leader in uh in crypto because all of them are going to be wrong i would agree there's there's a many views out there uh but this is a good one to listen to thank you and i say that because you i think are one of the few like actual maximalists that has a decent sized audience and it's one of the reasons i wanted to come on because everybody else is like very um i'm not saying this a bad way but everybody else is is is you know very open-minded about like all these other applications it's it's good to have like an extreme like uh focused personality that's that's

diving in and and it just doesn't become uh uh uh you know you interviewing bitcoin folks no i'm trying to trying to expand expand this was kind of training wheels because i mostly agree with you but i also see the like the upside i gotta get my talent in here we gotta we gotta talk it out um i think he would just like i'd be there like what did you just say uh but you should maybe you should start with the consensus guys yeah should i should get lane reddick on here he's not with consensus but um he is part of the the upper echelons of the ethereum development team um but that's all we have this week freaks peace and love thanks for coming on right thank you boom