TFTC: A Bitcoin Podcast - Tales from the Crypt #52: Dan Held

Episode Date: December 5, 2018

Join Marty as he sits down with Dan Held, co-founder of Picks & Shovels, to discuss the early days of Bitcoin, "Planting Bitcoin", shaping narratives, the beauty of PoW, and much much more. Follow Dan on Twitter: www.twitter.com/danheld Follow Marty on Twitter: www.twitter.com/martybent Check out Picks & Shovels: https://picks.co/ Shoutout to our sponsor Blockfi! Go to www.blockfi.com/talesfromthecrypt to get $25 of free crypto collateral for loans under $10k and $50 of free crypto collateral for loans above $10k!

Well, hey there, freaks. I hope all is well. It's your boy, Marty Bent, here on a beautiful Wednesday morning in December in the year 2018, year of our Lord, here to introduce this week's sponsor. Very excited for this sponsor to be coming on board. It's a new sponsor. You guys have actually heard of this sponsor before if you're longtime fans of this podcast. We interviewed their CEO a few months ago, so after this episode with Dan Held, definitely go check out that episode. If you're interested to learn more about this week's sponsor block fi uh no one likes having to sell their crypto if they don't want to whether you're paying off credit cards or buying a house block fi helps crypto investors use their bitcoin

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certainly did what is up freaks welcome back to tales from the crypt it's your boy marty bent back in the studio apartment on a wednesday wednesday afternoon i believe uh wednesday afternoon beers with with a good friend i've uh been conversing with online for a while now just had the pleasure of meeting in purpose or excuse me in person i'd purposely like to introduce all of you freaks to dan hell dan welcome to the podcast thanks for having me marty well thanks for coming on for you freaks that don't know dan is the co-founder of picks and shovels uh which is a company that is getting into a couple things from what i understand one of your portfolio companies under picks and shovels is interchange correct yeah picks and shovels is

the company name and it interchanges the product there we go uh but we'll get into it uh later you guys have a lot of plans for different types of products or not a lot of plans but you're you're keeping your mind open to building other products that's right yeah we're we like the idea of having a parent company to where we could have a portfolio of products underneath that exactly which i would agree is uh is a very good format to start a business from um but before we get into what you're building now you've had a long storied history in bitcoin let's hear your tale how the hell did you find this shit a survivor's tale it's uh it's been a long journey i uh so you know in 2012 i had a buddy uh an engineering buddy and he paid me back for some beers with a cassatious

coin so it is kind of cool that my first bitcoin was a cassatious coin and i think they played a really nice role in the early days of being somewhat tangible yeah for you freaks that don't know cassatious cassatious coins uh it really has these tangible gold coins with a sticker on them right that revealed the private key it's all the coins that you see in the news articles yeah all those big shiny ones that that every single news article has kind of splashed across would you be today would you be comfortable holding a cashless coin or would you want to uh redeem it for for a different type of cold storage. I definitely wouldn't be comfortable

having a Cassatius, Cassatius coin. Right? Because you don't know if the producer is just holding the private key as well, right? These were only worth like eight bucks at the time, so the stakes were a little bit lower. That's what we've been talking of, eight bucks at the time.

Now they're worth, some of them have like 20,000 Bitcoin on them, right? Well, these are only one Bitcoin. I guess my buddy was cheap. Yeah. We were talking in a group chat earlier. somebody somebody claimed a cashless coin in the last couple weeks you were able to tell um and it had like something crazy like thousands of bitcoin on it yeah i saw that it's funny that someone

would hodl that long and sell now right i'm not really sure i understand that but who knows maybe they're just looking to upgrade to segwit i don't know if it got sent to an exchange or what happened with it true we just saw it move we didn't know where it went yes so your friend's giving you this cash is going it's 2012 where are you i'm in dallas texas and i worked uh in finance at the time that's what i studied in undergrad and for me i was i was always a big austrian school of economics sort of guy libertarian ideology um you know for for going through undergrad during the 2008 financial crisis i learned that everything that i had read and all the smartest people at university and all the people quoted in my books had no fucking idea what they were talking about

at all right and i got fed that same michigan bullshit too it's this you know complexity theater as nathaniel um nathaniel whitmore puts it this this hand wavy oh we couldn't we we didn't see this coming so that means no one could have seen it coming we're not responsible for an event that is you know a tail risk event and just seeing you know seeing the reactions of of stakeholders in the system when everything goes poorly definitely kind of scarred my my um my belief in the system whether that be the monetary system or the political system and so when bitcoin came around with my libertarian ideology and those scars from the 2008 financial crisis i was more open to it i think than a lot

of other people um more cognizant that this was a solution yeah that's very very similar way uh that i came into it i don't know how far along undergrad you were but i was a senior in high school taking uh an economics elective while 2008 was going on that fall and that's what opened my eyes i didn't find bitcoin till four or five years later but uh that definitely was the the spark that event and being in that class at that point in time was the spark that sent me down the path that would eventually lead me to find bitcoin um so what was the first realization you had like was it the cashless coin or did you have to well yeah and then i started playing around with man my first wallet was the bitcoin qt wallet and uh bought some coins on gox

and i'm you know fucking wiring money to japan and i'm like what the hell am i doing you know i didn't have a ton of money at the time right it was right after college for me and so i'm sending my preciously earned money in my you know first analyst role outside of college it's mark carpellus's cat the ceo of melcox yeah mark carpellus is the ceo enjoying his really frothy milkshakes or whatever he does huge did you see that picture that big coffee with like whipped cream and like cherries on it there was it was a thing during the the meltdown of mount cocks for people were kind of critical about that and his bouncy ball chair he seems like a frappuccino type guy yeah yeah well he's lost some weight he looks good now i would have lost weight too if i

had that amount of stress on me on my shoulders yeah he's like tan and skinny now yeah well so yeah i'm wiring money to to mount cocks and sending transactions here and there um you know for me really thought the immutability of it and the you know the idea that it had a really you know really hard money characteristics um with the 21 million hard cap was really really interesting and then my the small investment firm i worked for relocated me to san francisco in january 2013 so i get out there and i go try to find other people that believe in what i believe in and so i find the bitcoin meetup which was hosted by trade hill jared kenna and ryan singer ryan's now over at chia as the ceo okay and so it's bram cohen's project right that's right

yeah um which is an interesting one and we can dive into that a little bit later but yeah so they uh trade hill was the the host of the party um or host of the event and they were the first u.s exchange before coinbase before anyone else and at that event there was only 10 other people and it was like charlie lee brian and fred from coinbase jared kennett uh jed mccaleb um brian from lightning and me and a few other people and uh it was like a really tiny community really tiny group and march 2013 hit you know and that the old group all we had was like a cooler full of shitty pbrs you know there's no budgets this was this was everyone pitched in a little bit of money and um march 2013 hit and the price went from ten dollars to 260 and the place

was jam-packed with like a hundred people and there's vcs literally slinging out business cards i just remember a vc literally going person to person like handing out business cards and that was the moment for me when i decided i wanted to go build my first product was was right around then had you so you're in finance before so we have a very similar past in i was in finance and then wanted to get into product stuff as well so what drew you to products in particular was there anything uh outside of bitcoin were you seeing consumer apps that were sort of piquing your interest i know you worked at uber eventually down the line um so there's something about like i want to i want to touch on this because i was in finance too and i was

drawn to the allure of tech and and building stuff i just feel like i wasn't afforded that opportunity in a financial job i think finance people are a pretty good fit for product um they're typically forward good communicators they can look at strategically and then break that strategic goal down into like more granular goals and communicate that to the other stakeholders also whether it be like feature set or product strategy being being cognizant of what the market wants and what the market's doing which would be like does your product have features that the market's going to want in the future and so i'm not going to pretend like i was an expert back then i kind of stumbled and bumbled my way through it we uh so the product was called zero block

i remember zero block yeah it was uh so people really liked it for its simplistic design it was flat ui before flat ui was a thing it was like portfolio news right yeah it was kind of like the block folio equivalent yes in 2013 yeah it was the most popular crypto mobile app in 2013 which is kind of like being the tallest midget but you know i had it i got that going for me i guess um but yeah like the design was really simple because i designed it in photoshop myself and i couldn't design anything more complex i couldn't add like bevels and and you know a really good color scheme so i just went black and white and people liked it because it was super simple and later when i formalized my product skills i realized what i had built was something that

showed someone the value in the product right away so i basically had removed all onboarding friction and then when they sessioned after they installed the product for the first time they found value immediately right it's like craigslist craigslist is uh not the best uh ui from the aesthetics standpoint but you know exactly what you're going to get when you get on there hey i found housing here i can buy junk here that's right yeah that's my favorite uh example of a product with great ux but terrible aesthetic design totally i'd like to say that my product was better designed than the craigslist though yeah but the the point uh trying to get out here is that the minimum the minimum viable product really does need like the bare minimum

and and that's what it was it was a bare bones but but a needed set of features and and one of those key features was real-time market data which all the other developers in this space hadn't they weren't pinging the apis every like minute they're doing it every 15 minutes and in the 2000 early 2013 bubble from 10 to 260 everyone was sessioning on these mobile products all the time and it was really hard to find the real-time price and as the price is fluctuating everyone wanted to check it and so that's why we built it we kind of built it for ourselves What was zero link in particular? What was like, or zero block, excuse me,

in particular, what was the biggest lesson you learned that first product? One was removing. You wound up selling it, correct? Yeah, blockchain.com bought it. Oh, yeah. Blockchain.info for the old timers. I still type in .info.

They'll redirect me, but. It's a weird brand now. I'm not sure why they've kept it. Back in 2012, 2013, it made a lot of sense because blockchain wasn't a popular term. but the brand confusion that they have now is incredible i i don't know anyone in san francisco knew someone new that i've met that understands what blockchain.com is as a company really yeah i haven't met one person who who recognizes that brand yeah uh it's different than bitcoin

bitcoin i actually had a conversation about bitcoin.com today it's a similar situation but i feel like they they took the better route to blockchain.com if you're gonna try to corner a certain name and or a certain word in this the space fun fact i i loved the redesign of bitcoin.com when it was uh when roger first purchased it really yeah so if you do the wayback machine i think to like mid 2014 i forget when the redesign was did he buy it straight from a registrar from a person he brought it he bought it from a person it was with him in miami when he did um i'm not gonna identify the person but i'm not gonna yeah we're not we're not about doxing on this right right i know that wasn't the intention but yeah he uh when he purchased

that we were trying to figure out what to do with the property and he kind of like leased it to blockchain.info really yeah so we had yeah i mean this is a long time ago i'm trying to think details wise but essentially my role was to i was like well what do we do with this i mean bitcoin wasn't nearly as popular as it is now so i'm like okay well you know what do people want to find on this site ultimately it was like people want to figure out how to buy bitcoin right so that was the the above the fold content it's uh now that is probably the number one use case of bitcoin.com that i find these days of people looking where to buy bitcoin and they actually do have a thorough list of exchanges if you're looking it's not uh not too biased towards bcash

but that's where i'm a little disappointed with roger i like his libertarian ideology but fraud isn't libertarian and purposely intentionally confusing someone when you call something bitcoin core and you use a different logo you know that and calling bitcoin cash an upgrade i think is is malicious and honestly i don't understand how you can kind of like live with that decision uh knowing that you're like tens of thousands or maybe a hundred thousand people go there and you're intentionally it's like you go to the store and there's someone who has pepsi and coke they've taken the coke wrapper and wrapped it around the pepsi right or even worse taking the rc cola that yeah that's that's uh what's that bitcoin sv

the bch sv excuse me oh man i can't keep track no but it is i think we're actually going down like an interesting path here and i like it because let's touch on this like roger like i think he he is a victim of being too early and i think uh you and i think you are a perfect example somebody who explored these uh options and ways of scaling early on and sort of realized that hey these don't work i'm not gonna like force the issue just because of my ego whereas because you worked with change tip which tried to do that's right transactions we'll talk about that a little bit but uh it seems like you've evolved more with bitcoin's evolution than a lot of people have and i think that is uh a thing that scars a lot of early adopters or a few at least a few

in particular who just let their ego get in the way and have their perception of what bitcoin was at a certain point of time dictate what it is going forward and we have to be very uh open to the fact that bitcoin is a living changing organism nice nice uh you know i think with roger in particular um you know remember he had a persona called bitcoin jesus so this became something deeply embedded in his psyche yeah like who he was was someone who could give away bitcoins or convince you know look i've been at the restaurant dinner like the dinner's at restaurants where he's convincing the the restaurant owner to buy to accept bitcoin it's a very uncomfortable conversation and just take it

look at yeah it's you know the hard pitch is different than someone who's looking to to believe in it anyway so you know i think for roger like the cheap transactions you know giving away bitcoin seeing you know he's he's getting these merchants to use it he's the one who's using it at the merchant you know he's he's a true you know 100 percent bitcoiner right yeah and so evangelist a true evangelist yeah and so when the hard decision happened when it's like well do we maintain cheap transactions or do we give up the only reason why any of this is valuable which is like the immutable the immutability of bitcoin he couldn't divorce his emotion like his emotion and psyche away from the best you know he couldn't divorce what he

wanted and what he was with what the protocol really needed and so i understand why he chose the way that he did yes and roger if you're listening out there i thought you are we'll accept you back with both open arms man i don't know if we'll trust you 100 we'll definitely have you uh cheerleading bitcoin if you ever want to come back we won't trust but we'll verify and yeah you know i i think i think at the end of the day roger does come back yeah um i don't see a really bright future for bitcoin cash well after what i witnessed last night with what's going on with lightning it pretty much uh covers every use case that he's been clamoring about for years uh lightning you know this is another this is like this increases

the gravitational pull of the bitcoin black hole so before we get to bitcoin's gravitational black Cole, let's talk about the lessons we learned specifically with ChangeShip because ChangeShip was, because I think it's important to go in this order to realize the lessons that we learned and again, a lot of people were too

early and we're now realizing throughout time that the use cases that you guys were building back then are possible, just need a little bit more infrastructure. Right, you know, I was kind of in a unique position being the first product manager at blockchain and

product manager at change tip where we explore these early use cases like merchant adoption micropayments over social media and and then i have a i think to to add to that perspective i left and i didn't leave because i i i was still very much in love with bitcoin it was just that there was nothing to do in the cold crypto winter the last one there was a really tiny space it was it was brutal it was like and still to this day i would say like please do not quit your jobs for crypto but like back then people weren't even thinking about it like this some people did but not very many like you uh it was definitely a hobby or a passion project it still is to this day for me yeah i mean coinbase probably didn't even have 100 employees back then

so you know to find a job in the space in the winter was impossible yeah and you weren't going to learn you know like a players they look for learning opportunities with every job they get and if you stuck around the last cold crypto winter you didn't really learn anything you just survived you didn't you didn't mature you didn't build products that like you know you weren't at uber going from 10 000 users to 10 million you weren't like iterating and launching in new countries you were just sitting and waiting let's talk about that uber yeah you in there because i i actually believe i was one of the first 10 000 uh users oh nice in chicago when uber first came out which is one of the first three cities i believe correct well maybe uh maybe

one of my buddies can look you up see what what's your uu ideas i remember coming back one fall for like thanksgiving i was like telling people about uber they're like what are you talking about like it's an app where this you can like literally call a car like a cab it'll come pick you up and they thought i was like the bougiest motherfucker in the world like oh look at you i'm like just weight well back then it was black cars so yeah you looked really bougie yeah yeah um you know he was a really good fit for a bitcoiner or like a crypto person because it was very libertarian very meritocracy focused um you were in the cultural values encouraged toe-stepping on your on your superiors which is an incredible sort of culture to have where everything was about data

and if you had the data and you had a rational argument if your boss said no you should go around them and that was really empowering that you know i think i think everyone is very professional like i don't i don't consider there was never a moment where people were yelling or any sort of i would say no one was an asshole but people were very forward it was just no bullshit no bullshit uh environment let's fucking get it done yeah like let's get it done let's not ask for permission let's beg for forgiveness we're here to conquer the world which they did and that was you know i mean uber was illegal in every single city i went into i remember philly was a strong from philly philly was a strong holdout for a while until like two years ago i think but

capitalism wins right and and uber was a cool culture where it was kind of this really exciting world where we're like we can we can build anything that consumers want like rules later in life i've learned that there are no rules that's the rule right that's i think that's one of the most liberating moments in my life i don't know when it was i can't tell you when it was but once you realize that the people that you think are running the world actually most of them have no idea what they're doing is actually i do remember when it was i don't remember the day but i remember i was working at this managed futures fund and we were a fund of funds so we were an index of hedge funds just layers of fees uh would not recommend a fund of funds if you're

looking to save on fees but the benefit of the job was i got to meet with crazy successful i would say smart uh traders and hedge funders but at the end of the day i realized holy shit you're just a normal person you're sort of you're winging it to a certain extent like what's to stop me from from being in your position in 20 30 years totally everyone wings it and i i think uber was really cool in terms of and to kind of tie it back to bitcoin here because we could go off on a tangent for a while oh we can do this we can do this all night how many beers do we have in the fridge at least 30 so i could take down i could take down half a case if you got the other one so speaking of which you keep going all right cool a couple more yeah and what was really cool

about being at uber was i you know i had always worked on products that were you know from 10,000 users to maybe a million and at uber i had exposure to products that were you know 100 million monthly active users and these users were in every country in the world and in terms of our product breadth in terms of like coverage like geo coverage there's not many products like it i mean facebook's not in china right i believe right or is it google is it google or facebook i forget I think it's Facebook. Facebook's firewall and Google is making it so the Chinese government will be happy with the Chinese Google.

Uber was in China. We even took on China. We were everywhere. And to see the brilliant people that helped scale this product and then opening up different product lines like Uber Eats, Uber Driver, Uber Riders, what we call the Rider app, the app that we all use. It was incredible to see best-in-class product people,

marketing pr and and you know coming back to crypto you know they were look we we didn't know what the hell we were doing back in the day um we were trying our best and we made some good shots at it but later on seeing like the scaling problems that like the scaling problems for uber where we tweaked one component of our incentive model for drivers and it destabilized the entire system what do you mean so i can't go into too and too much in depth on it but we tweaked one variable which incentivized the drivers in a certain way and so we always need to balance riders and drivers on a block by block basis all over the world because of this it it hurt the supply side it hurt the driver side because the drivers were responding to an incentive

that we had misaligned okay and so that that that effect destabilized the supply side which then made rider etas higher okay which then had a ripple effect right because then you lose market share so i just seeing the complexities and the intricacies of operating 100 million monthly active user products you learn that the amount of data-driven decision making you need to make is you need to make is huge and the people working on it are brilliant and we controlled every variable and even with that we still made mistake we still make mistakes so a little butterfly effect there we don't even understand right where it's coming from so yeah yeah you figure it out probably you know everyone's monitoring their own kpis and all of a sudden you've got like two data

scientists going whoa this uh i'm seeing some really fucked metrics here uh what's going on and so you know being in those war rooms as well to debug critical issues and i was in the war room for the the uh writer app rebrand or the redesign where they re-skinned the entire app not re-skinned they actually rebuilt it from the ground up you know being in the war room with the executive leadership team and like ed baker that had a growth you know seeing how those people operated and seeing how we thought through problems when it came back to crypto it seemed hilarious just just the immaturity of the space was ridiculous yeah what uh so how would you contrast that like with i don't want to say i'm not going to pick on changed it but uh let's think of the companies

that came and went in the last bubble. Well, to dig in on that a little, let's talk about use cases. You know, why would a consumer use something that's slower, harder to use, and more expensive to pay for something online? It makes no sense. It's silly.

It ignores basic product thinking, which is like be customer obsessed and build something that someone wants. I am the biggest proponent of decentralized tech. I want to decentralize all the things use vpns etc but i'm not buying alpaca socks online and if i'm not convinced i shouldn't spend my bitcoin because i'm ideology like because it's part of my ideology i should spend it because it's providing me utility as a consumer like it's faster cheaper easier to use and that's where i

realized all the payment ideology was ridiculous like for merchant adoption um same with micro payments i mean it was fun i really like the change tip team and i'm still good friends with Nick? I like ChangeTip. I'm actually curious to see if I ever cleared out my ChangeTip account. You should email Nick. You can still, yeah, you might have like a 0.1 Bitcoin or something in there. That would be dope.

I'm pretty sure I did, but just in case, I'll email Nick. I did that the other day. I went through all my old exchange accounts and found like my little scraps. I've got, can I say, I can say this. Yeah, I've got old laptops with like old Electrum wallets from years ago. And I always like, once a year, I'll just be like, maybe I forgot something. so i'm gonna check them out when my parents moved i could have sworn i left a hard drive when i moved from dallas to to sf and and uh in my old room there and so i went

found the hard drive i didn't have the power cord for it it was an external hard drive so i had to like buy a new power cord and i'm like oh wallet dat file i'm like oh my god could this be the moment you know that uh that you read about right um and at one point it held a nice amount but there weren't any weren't any in there no that's what i'm actually interested to see is in the future there will be a like huge garbage server garbage pile treasure hunts looking for uh looking for wild dot that files on old old servers you know i've often wondered too with old bitcoin companies a lot of them most people didn't redeem their money when they went when they were shut down like a random service right maybe like a dogecoin tipping bot yeah what do you do with

that money as the as the founder of the arbiter yeah if no one just wait 15 years and sneak away into the darkness and just kind of fade away i guess i don't know what else to do with it you can't give it to the state that's what you're supposed to do but there's no method for the state to collect crypto in ohio there is now right well it's got to be on the the unclaimed assets office so while ohio as a state is accepting bitcoin for tax payments i'm not sure if like their unclaimed office state doesn't have a place on the balance before yeah i don't think they've got like a you know custodial solution hooked up so i'm not sure what would happen well hopefully with better ux a better product mindset we can get there and i think you're uh getting to the

point before i interrupted you that that are we better off now than we were during change chips days from a from a product standpoint i'd argue we haven't really progressed much private key management is still terrible um user experience around a transaction like okay i sent it what happened and there's and you know i'd like to highlight that um really like the guys over at IDEO uh guys and gals like Tara Tan and Dan Ellitzer yeah Dan's I've tried to get him on this podcast he's out in San Fran right yeah he's out he's out there he's Dan's a great guy um really sharp they bring they've always been kind of like you know been bringing that championing the uh you know design first mindset which I really really like and then I'm you know I'm

friends with Connie Yang over at over at Facebook she's had a design or sorry uh she was formerly at facebook now she's head of design at coinbase okay but you know we had a working session um it was it was us and a few other designers in this space i'd like to caveat they're the experts i'm not a designer but i'd like jamming about user jamming on user experience problems right so we talked about state change for on-chain transactions like even that is a little bit anxiety provoking like when you're double checking that you put the right address in two you know you like if you're a newbie and you press send and it's like unconfirmed you're like fuck is it does that mean it's gone i don't know what does it what does that mean you know and

and then like has it been propagated to in the network has it it's sent sent where um one confirmation what does that mean right and so the really basic stuff like private key management transaction visualization well we're still lacking this kind of like basic ux what is the um the ux principles that are written in the 90s um there's like 10 bullet points but they're very like is this dita rams no the simplistic design principles i think dita rams uh riffs off of this but it's like a standard i forget what it's called it begins with an m i'm pretty sure i forget but whatever they're in the 90s uh basically uh as they were building out web browsers and the internet people realized a problem similar to the one that we're bringing

up now that bitcoin has is that there really wasn't any like concise heuristics for which to create a user experience online which is pleasurable or pleasant and natural more importantly ergonomic to an extent so they created these standards like hey if you're going to make a website and you're going to have calls to action or asking your user to do something make sure this this and this is obvious and this is placed here and blah blah blah and here's like a bunch of heuristics to follow to make sure that your website has a somewhat at least a stable user experience where the user knows what they're doing i would argue with block explorers wallets exchanges they may need this type of heuristic guideline going forward to say hey if you're

going to be a block explorer if you're going to be a wallet or an exchange and your user going to interact with your product in this way maybe you should have these pointers like hey you just did this here's what's happening now or something like that yeah and i think maybe like a a neutral third party like ideo would be a really cool spot for them to kind of like champion some of these standards um yeah you know or like how do you show denomination or how do you talk about like sub one bitcoin basic principles around well yeah you know do i can't buy a whole bitcoin well you can buy part of one right you know a little bit of an educational role as well design can fill an educational gap and it was actually doing this uh not via design but via tutorials hodl hodl i just

interviewed uh max and roman two co-founders from there unfortunately as u.s citizens we cannot use their service but uh we can go on their website and and look at what it would be like if we could use it and one thing they're doing very very well is their tutorial videos they had the mindset like hey we feel a grave amount of responsibility like facilitating this this exchange which is very arduous for the end user to an extent at this point so we want to make sure we're at least attempting to educate them on what they're doing so here's how you create a wallet here's how you send in a transaction here's how you create a multi-sig wallet uh and everything you can think of from like using and sending bitcoin they've got it covered and then cash app similarly with

there what is bitcoin book was very chat it was like a children's book but i think it did a very good job of getting the message across of what bitcoin is uh we need more of that like onboarding like i will say coinbase in particular rubbed me the wrong way with the recent like uh ethereum like push via the email like the ethereum uh shill via email basically telling people to buy ethereum before educating them on exactly what it is at a high level yeah and you know i'd like to highlight that coinbase played a really important role in this space early on oh yes and then i'll dig into kind of the more recent stuff and so really like what they've done over the years um i do believe that there is a little bit of a lack of education um and i think i tweeted about

this just to get people's opinion on it and people were kind of split some people believed exchanges shouldn't have to educate users at all i'm personally on the side of that you should educate them minimally um for example like if i go to coinbase and i'm looking at bitcoin bitcoin cash ethereum and ethereum classic look most users are going to want to buy bitcoin and ethereum they don't want to buy the forks but when you list the assets next to each other and they look almost identical and one's cheaper that's going to lead to some weird decision making and i i think you know if you want an e-trade and you sell apple and apple cash That would be a serious issue.

And so I think we'll see the exchanges over time kind of be more user-centric and design interfaces that are more geared around intuitively what they want. And so I know at big companies, it takes time to restructure websites, design, to be modified for that. But I do believe they should play a minimal education role,

a minimal role in education based on the the desires of their users which is probably to buy just bitcoin and just ethereum yeah no and i like you said we wouldn't probably would not be sitting here talking right now if coinbase didn't exist what they did in 2012 and 2000 2015 i would argue it was invaluable to the space and got it to where it is today but with that being said i feel uh the last few years in particular they sort of spread themselves thin i would argue um caught onto a lot of hype and i think they're also pathfinding for revenue yeah which is makes sense for a company they lived through one winter i think they're looking at expanding the number of crypto assets available simply put because a lot of that that value is being captured by binance

and the other exchanges yeah so it's kind of inevitable that they went down that route inevitable but they might be shit out of luck because they're they're handcuffed to the u.s regulations whereas like a binance or somebody else is not um so it'll be interesting to see how they try to compete and maybe uh which people are trying to uh to assume with their new stable coin is that they're trying to create a framework from which to go after tether or something like that yeah i think they're just examining all pathways at the moment kind of chasing down everything and going for it fun fact i actually worked with cz at blockchain really yeah he uh he was only there for a few months and then he went on to okay coin he was more of a trader type

you know obviously he created binance so centric he was cool he was very very sharp yeah um very you know markets focused and yeah i think just that blockchain it wasn't like it didn't make a lot of sense blockchain was mainly about the wallet product and the block explorer and so i think he was more excited about okay coin um but yeah it's you know it's it's kind of funny to see how the space has developed some some of the early people some some left forever and i haven't heard anything from them some went on to be cz to go work at binance um you know it true the space truly developed in no way i thought was was actually going to like develop it what do you mean by that like the explosion of icos like that was crazy because we already had the 2014

altcoin bubble right and so i thought you know okay well people would look back on that and go well you know by the way i mined prime coin just to let everyone know i am a i do love bitcoin i'm a bitcoiner but i did mine prime coin i was staking shit coins in 2015 i was full i was a full-blown shit coiner in like 2014 2015 i liked the back in that day i thought the idea of useful mining which proof of work is already very useful but for some reason i thought finding prime numbers made it more usefully just use yeah use became even better like at what point does prime coin become like a possible like a do we know it's still still running i think i don't what the market cap is does it always have does the i'm not sure how the minor you have to find

a higher prime every time or i guess i think yeah i think it's just a bigger prime yeah which i'm not sure i don't know how the difficulty adjustment works with that but uh anyways yeah i actually mimed mind a whole block of prime coin there we go and which is kind of fun but yeah you know it was i've gone through you know after going through that bubble i was like certainly we've all learned our lesson but no no not at all a a whole new wave that would be massive much bigger than i could possibly imagine happened that was wild i love talking about uh the mania of last year and the fact that i worked at barstool sports as it was going on and being in that zoo of an office is every like everybody in the office was fascinated with

everybody's buying tron every shit coin you could think of wait was that your video someone had a video of an office where everyone was buying shit coins oh yes i mean it wasn't my it was a video of barstool i did not yeah i was there but i did not uh i did not record the video okay you know the video i'm talking about though right where he's walking around the camera and everyone's like on coinbase right now yeah or like poloniacs that's how crazy it got like yeah the volume was so heavy that exchanges weren't even working for that like for a good couple weeks it was like questionable whether or not you're going to be able to get a trade through i mean i left uber in november 2017 to start picking shovels but november was still very hot in the space and i'd walk around the

open desk sort of environment that we had you know we'd have 500 employees on the floor with with no walls and a good five percent or ten percent of the of the um you know the laptops were opened up to coinbase right or some sort of chart website and it was like so i got in the bar stall i was basically trying to be like all right i was trying to be the voice of reason like i was like all right these guys are not gonna like listen to me if i tell them not to buy anything so i was like just buy bitcoin and only buy a little bit at a time like if you have to like It's probably not a good time to buy. But, of course, they all went for Tron and every other shit coin you can think of.

It's a better Bitcoin because it's faster. It's faster. They got a lot of partnerships. A lot of partnerships announcement coming up for Tron in particular. And branding. Tron just sounds cool. Right? I mean, come on.

Come on. Bitcoin? It sounds old. Bitcoin's the MySpace. Tron is like Facebook 4.0. I had some shill hop into my Menchies today. uh chilling a coin and the coin's name was nexty and i was like that's like the laziest you're just gonna like your coin's just gonna be next and expect people to be like oh next uh it's the

next bitcoin um i think by this point we've tried every possible brand name for a coin i mean how many thousands of icos were created like at least 10 000 at least we're running out of cash tags yeah or or exchange tickers yeah yeah there's gonna have to be a to kind of dig in on that there's something that i've been thinking about writing about which is the 51 attacks on proof of work coins given that their market caps drop below a certain certain level that will cost exchanges a lot of money and so i think we'll see a lot of exchange d listings where they're going to go you know a bitrex lost six hundred thousand dollars with the bitcoin gold 51 attack so what happens when like you know a semi-big chain like maybe in the top 10 gets low enough

well slush pool decided to reorg bch abc bch sv right now they could like right it's very centralized right and that's where i'm actually waiting like i want i want these bigger pools of hashing power to attack these weaker chains i want i'm waiting to see it uh a lot of people like oh it's not ethical but it's like it's possible and i want to see it in the wild but it would that's what i'm actually interested to see is like would uh an attack of the chain like that like would it be such a burden on the infrastructure the exchange infrastructure in particular that it would set the space back for uh for a considerable amount of time because of imagine if there was like a hundred block reorg yeah uh that would be that would be a lot

of money for for an exchange it could be the end of an exchange if there are 51 attacks that happen and the the amount was large a very large amount and that's where i don't see anyone talking about this and i'm like well that's why proof of work exists and that's why it's best if it accumulates on one chain because then that provides security um and and yeah so i i think we're going to see a lot of that happen as these market caps market caps drift lower well i think this is a perfect segue into sort of your your magnum opus of this fall which is your series uh planning bitcoin and you get heavy into pow and uh the environment in which bitcoin was launched and we were that chatting about that a little bit before and i had to stop you because i wanted to make sure we

got it all recorded uh and and sort of the phases that bitcoin has gone through and its species what it is and describing it as a living organism that we are sort of taking care of so i guess i don't want to repeat too much of what you said on peter's podcast but give us a gist of why you did it why you decided to write it and and it uh you you and jill were spitballing uh she was she was the uh inspiration for it and yeah well you know i gotta give props to jill i'm not a writer and and so she kind of incepted this idea on the way back from tahoe it was her me and melton uh driving back from tahoe earlier in this year and and you know her and i are in the front seat i forget what what melton's doing probably sending emails and jill and i uh we both really like

ambient techno by the way it's a it's kind of that's what i score oh this is yeah this is another uh very important part of your four-part series is that you have music to go along with each uh each part that's right that's right i i had to score each part of it because i felt like music added more emotion to the narrative it does which was fun you know i think i looked at the SoundCloud statistics and I think like 10% of people played it.

10-20%. So I'm happy with that. I did it for myself but it sounds like other people enjoyed the music as well. I'm a big on vibe setting. Hence we have the music on here. You freaks can't hear it. It's that low. We got a Christmas tree in here

too. It's very Christmassy. It's smelling like pine tree in here. um no but i think that uh reading reading your pieces with that that transient music in the back is it's reminding me of uh michael goldstein's everyone's a scammer because he makes you listen to like old western music yeah i've read that article yeah it's a season uh season part two was my favorite one to score because it it was the 2008 financial crisis timeline and i wanted to set how ominous the tone was how this was this was the death and destruction of everything we knew and i think a lot of people forget that because it's been 10 years you know

it's been a long time and so people forget how anxiety provoking and fearful everyone was and that that was the moment when that when bitcoin seed was planted was in that moment of absolute despair and uh and yeah this is we can dig in on this a little bit this season because that's that's what we were talking about right before we started recording um you know certainly satoshi didn't choose the decade in which he had played in which he planted bitcoin it's unlikely he chose the year he was coding it up quote like he said i was coding it up uh since 2006 so late 2006 early 2007 approximately like two approximately like two years or a year and a half before um so i'd say the year probably wasn't super purposeful like that wasn't intentional

but the month and the day certainly were intentional there's no way you can say that he just shit it out on october 31st for for shits and giggles like no he purposely he chose halloween and so this isn't included this is not included in planting bitcoin but i'll cover it today on the podcast uh and it will be included in the uh planting bitcoin book coming out in january january right that's right and i believe you know satoshi was a polymath uh his deep and i use the by the way i'm from san francisco so i gotta i gotta clarify this he uses the pronoun he i use the pronoun he because that's what satoshi chose on his peer to peer foundation profile so i'm respecting satoshi's gender choice yes so just for

clarification here um you got to do that these days you know you never know hey we are in williamsburg you could get you get attacked if you if you walk out of here and don't clarify that I just want to be up front. So, you know, he definitely understood physics, cryptography, economics, and financial history, or the origins of money. Kind of the same thing. And so, like, how does value get transmitted through different mediums through time? And so Satoshi definitely understood this because he's familiar with the term unforgeable costliness, which is what Nick Szabo came up with

which refers to gold mining how there is no free lunch to dig the gold out the cost is equivalent to the revenue and I think Satoshi definitely had a he was at least someone who enjoyed reading about history and by the way I'm extrapolating a little bit here but let's go with it I'm full on this wavelength

I'm stepping out on a limb here a little bit However, I think I have a decently logical basis for how I've stitched this narrative together. So the origins of Halloween are with Samhain, which is a Celtic festival. And it was, you know, there's, it kind of, you know, the TLDR of what the, the summary of what that festival is about

was the end of cycles, the end of seasons. And I think that's why Satoshi waited for October 31st. interesting was that this marked the end of an era the end of central banks and the birth of bitcoin but only birth through the death of the previous one and so i think that's why he waited till october 31st this is a very uh very convincing narrative you have here well if we had music it would be even more convincing right do you think he was that prescient i mean obviously he was prescient about a lot of thing so what surprised me the least bit that he was prescient about this uh making very very

pointed poignant statements with actions uh over words yeah i mean he was incredibly mature to be anonymous uh to to prove the distribution was fair which we can cover that i wrote an article on that um to critically remove all you know external out external input as much as possible for example like choosing an inflation rate um bitcoin is disinflationary it has a 21 million hard cap and he did that because you don't have to rely on a trusted third party to tell you what the inflation rate should be um so all of those things together and the difficulty adjustment i mean these were brilliant really forward thinking and so for him just to not spend any time on submitting bitcoin like not to think about the exact day or the the year or sorry the day or the month i find

that difficult especially because he registered bitcoin.org in august 2008 right so he was preparing why did he launch why didn't he launch it in september i don't know but he certainly was preparing and had waited and if you look at the the queries for financial crisis on google search trends it peaks in october 2008 really so he waited for the peak moment of despair which was coincidental but also purposeful you can't say that he just did it accidentally i think that he waited and he was like it's not going to get any better than this moment let's do it now what if bitcoin's successful in the long run and we just have this rando anon guy give us like the most perfect money in the world well satoshi's he's seen alien see god he set himself up as a

hero because he sacrificed his horde right which was a promet as nick carter says a prometheus sort of moment um in a quasi like if you want to use jesus as an analogy as well like the sacrificial lamb yeah which i think and this is where i believe that he did read deeply into like cultures and religion and in history because he seems to understand what the what constitutes a hero like all of his replies on bitcoin bitcoin talk and and the uh cryptography email threads were very very calm especially since people were berating him they were like this doesn't make any sense you know i think he was very calm very very open um to any use case he's like you know this is a socially scalable protocol

so you can do whatever you want with it. He was cognizant that he didn't want his tree, you know, after being planted to get crushed by a storm. You know, so he was a little worried about WikiLeaks. You know, he goes, we've kicked the hornet's nest and now they're coming after

us. He was emailing Julian Assange directly, right? Like it's not... Was he emailing directly or did he just say on the forum, like, it's not a good time, please don't blow us up? i think it was on the forum that's all i've read maybe he did email lasange directly too but you know as a good gardener gardener he was very focused on making sure that he protected his his his tree the the bitcoin tree and protected it in a way to where he would

survive yeah and he had a very uh until he left a very servant leader type mentality where he was obviously down in the trenches doing everything and trying to lead by example um yeah very much so i mean i it would you'd be hard pressed to find an individual give also given that bitcoin had no value for a year and a half right i mean this was an experiment this wasn't we look back on it and we're like oh of course of course it was going to be successful but that wasn't very obvious at all i mean this was mainly a bunch of cypherpunks tinkering away at it like this wasn't a community really it was a bunch of people who really loved cryptography yeah and not long after that year and a half he was gone so he saw hey it's running it's up and running and i'm out

of here right and the fact that he hasn't moved his coins the fact that he was very open and and and he had a very fair launch i mean he wrote the white paper october 31st 2000 or published the white paper october 31st 2008 and then uh january 3rd or 9th i forget the exact date he uh january 30 mine the genesis block right and then yes okay yeah the first block was mine january 9th or something yeah genesis block was created before the first like publicly minted block um and that's where genesis block included the the infamous chancellor on the brink of the second bailouts at the bank yeah not for visa on the verge of raising processing fees yeah it's it's a stitch together the narrative that satoshi built this all for like cheaper payments is ridiculous i mean

you look at the genetic code of bitcoin how it was constructed you look at the traits that that develop from the genetic code you look at the season which he planted it you look at all of his comments talking about the root of all problems start with central banks you get the message in the first block you got his super libertarian ideology his reference to bitcoin being a precious metal literally he's like this is similar to a precious metal the idea that supply remains um the production or the the uh minting of supply happens in a constant form which he knows and he's publicly stated demand will fluctuate and it will be it you know essentially creates bubbles and and it's a sort of feedback loop where the the value

increases the more people are brought in the more developers are brought in and there's more hash rate yeah so he he constructed it to be the perfect pump well yeah it's designed to pump forever and that incentive system is something that fascinates me is it the best incentive system we've ever seen and it's really primitive it's beautiful right it's beautiful in the simplicity right it feeds off a creed which is like fucked up it's not fucked up to say it's just like the way humans work it's just the way humans work there's nothing wrong or right about it it's just who we are right but it is such a perfect incentive system like we're we're experiencing this so right now we're uh bit devs last night we just had a seven percent difficulty

downward difficulty adjustment our last uh last week or two weeks ago next one's expected to be 11 so we're going to keep dropping difficulty but that is why the difficulty adjustment exists right to keep that feedback loop going as soon as that difficulty gets lower it's going to become more profitable for miners they're going to turn them on and start start confirming transactions on the network like it is almost impossible to kill via unless you're doing it via force i don't think you can kill it with apathy at the market at this point it's an incredibly robust system given the very primitive nature of the incentive model which i'd like to highlight a quote from charlie munger in which he goes you know charlie munger's old he's in his 90s yeah maybe 80s i

I forget, but he's very old. I think he might be in his 90s. And Charlie Munger goes, he goes, you know, I'm in the top 5% of my age cohort who, I'm in the top 5% of that cohort who understands incentives. However, I continually underestimate

how strongly humans respond to incentives. And that's what was so brilliant about Bitcoin is it assumes people are going to want to make money, which is a great assumption to make because they do. people love money and when the fact that we have the opportunity to remake money not only make money in a sense of like getting paid for your work but like fucking remake the concept of money and how humans interact with it is just like a thought that blows my that's why i'm still here

it's that blows my mind every day the thought that we may be in the process of creating a new money if we want to get really meta with it let's go let's go there yeah we we should we should so So, you know, really Bitcoin is the most efficient thermodynamic money that has ever been created. Why do you say this? Well, so proof of work inherently is about transmuting electricity into digital gold. It's a one-way function. And that bridges the physical to digital world. It's the first time we've had a tie from the physical to digital world in a provable way, 100% provable.

in addition you know thermodynamics isn't just about energy which you know some of the basic principles where they're like energy cannot be created or destroyed um you know bitcoin bitcoin efficiently harnesses that electricity to use it to build digital walls around the network to protect it or some people use the analogy of amber i think that was uh andreas who used that analogy which is really good yeah i like i like sharing the uh jurassic park picture of the mosquito this is what your utxo is that's right and it's these like you know it's converting energy to thermodynamically protect or reduce entropy and the ledger to where there's no one can change the ledger entry unless they control their private key and then these layers of amber

or energy layers have been laid on top of that to permanently compress and kind of keep the UTXO set from changing unless people choose to. In parallel, there's something called information theory, which is what all computer science is based off of. Nice, nice. Pointing to knowledge and power right now. Information theory is very similar to thermodynamics,

which is in a couple different thoughts on that. One is information cannot be created or destroyed. Same sort of train of thought with thermodynamics. And part of what really got me excited about Bitcoin recently was reading, I think it was George Gilder's information money, which, so I'm sure a lot of people here are familiar with efficient market hypothesis, which is that all information is reflected in the price of something.

So a stock, so for example, there's different forms of efficient market hypothesis which is that all public knowledge has been factored into the price of apple and then there's the stronger form of that which is that all inside insider and outsider information so all inside information all public information have been factored into the price and bitcoin is really interesting from an information perspective because the monetary policy is perfectly transparent and all actions all financial transactions currently now this may not be in the future when we have lightning and stuff like that but lightning still needs to settle on chain so that eventually becomes transparent so what i'm

trying to say is that because we can now see everyone else's actions in the market is the most information efficient market ever created to where all information has been factored into the price which is to which is to say that the price of bitcoin is the compressed data of the entire market blowing my mind here dan the compressed data of the entire market is it fair to say that's sort of like a confidence interval too or so here's the way to think about confidence interval confidence index or something like that so let's go to hyper bitcoinization bitcoin is worth actually i i think bitcoin will be worth one quadrillion dollars in today's in today's dollars post hyperinflationary uh event or pre hyperinflationary well uh because there's not a

static you can't can't move 250 trillion dollars worth of assets or store value assets into this new asset class without moving the price up as you buy in right um if you moved it in a perfect perfect function it would just easily transfer but as mark as you buy all the bitcoins that people are willing to sell people are inevitably you're gonna have to buy them at a higher and higher value um so post hyper bitcoinization holding bitcoin turns you into a central bank because you own the world reserve currency and you are the world reserve you are the central bank in essence and choosing to hodl or not hodl influences the risk-free rate of return which is hodling bitcoin so if you hodl bitcoin you earn the risk-free rate of return it's risk-free

technically and by each entity whether that be like an investment bank or hedge fund or individual who holds bitcoin you either hodl or you lend spend or invest and that dictates the risk-free rate of return and so in that scenario the risk-free rate has been perfectly as perfect as you can perfectly reflected in the market so the the entire world's perspective on what the risk-free rate should be which is manifested via the hodl or not hodl that's all market data compressed to the risk-free rate that's kind of a deeper explanation of that of that idea yeah no it makes a lot of sense because once you have the whole world operating on one one formal currency you can derive these sort of efficiencies in these rates and it's it's great because then we can

all make our purchasing decisions based on the most transparent data we can possibly have exactly and so the market becomes super efficient because everything in that semi-transparent form can you know it's all it's really tough in mainstream markets because we're all inferring are spending, are investing in spending and investing. If you're operating in the global economy in particular too, there's somebody switching costs and taxes and friction to take into consideration too that sort of distorts the price of everything.

When you think about central banks, if you think about a central bank, you can think about it being an individual in the driver's seat in a car. and the economy being the car. But they're receiving old information. So it's like they're driving the car, looking through the rear view mirror.

It's old information, right? You can't compile market information that quickly. Some is instant, some is daily, some is monthly, some is yearly. And that's why I left finance, because I realized after a while, I was like, holy shit, these people have no idea what they're doing.

They sound like they do, and people believe they do, but they really don't. I wrote a thread based off a paper that a friend of mine wrote, Parker Hayes, or excuse me, Parker Lewis. I don't know why I said Parker Hayes. Parker Lewis wrote this paper. He used to work for Kyle Bass, and he dove deep into Fed policy over the years, going from 2005 all the way through 2012, the Fed minutes that were available, up until that point in time. actually might be 2013 because the fed minutes become available like four years later um and basically prove that like march 2005 like before uh real estate like really hit a head like in 2006 and 2007 ben bernanke was like i never never like housing market's as healthy as it will be

and then like 2007 beginning of the year there was like a five percent s&p correction that had to do with it coincided with like a downturn in the housing market and ben bernanke was like oh this will be contained to 10 billion dollars in losses and then lo and behold it led to i believe seven trillion dollars that were wiped out of the market in the course of six months and this is somebody supposed to be leading the economy and just trying to say hey don't worry this is only gonna be a 10 billion dollar or excuse me 50 billion dollar loss in the long run turns out to be seven trillion so he's off by uh 14 orders of magnitude you know really it's a data problem and that's where that's where i have a an article coming out of our own deflation

which basically argues you know we all know that socialism doesn't work because of the information problem because to efficiently allocate capital you need to absorb all local market information and if there's no incentive model to absorb that market information efficiently like i'm the local business owner who has a restaurant and i choose what's on the menu based on my local diners preferences you know centralized entity is never going to be able to absorb enough information to adequately develop services and products for that local area it's a data problem keynesism keynesism um you know uh what the essentially the monetary policy that we have is just a modified form of socialism or central planning that's what that's what pisses me off is that people like try to

bash capitalism capitalism capitalism in america today i'm like you motherfuckers don't realize we haven't lived in a truly capitalistic economy in a while this is a so both capital both keynesianism keynesianism and uh and socialism they're both based on control and one controls a lot more than the other however with a federal reserve and a treasury you still control the base layer of the market and that's the problem is one like how do you even how do you even calculate an inflation rate that that alone as a question is something that is they don't calculate it they dictate it right well you know it's really difficult how do you measure what i meant is more how do you measure inflation so one would be like can you measure it accurately and how do you

measure it oh you can't you can't in this system because they change the underlying variables every other year they do yeah they change the they change the they move the uh the cpi basket or i'll just yeah underlying variables instead of instead of a they're moving goalposts you know They're moving goalposts, and they're changing what the goalposts look like. And then, okay, so first, how do you absorb enough information as that centralized entity in order to make decisions for the economy? And then one, how do you even measure it? Two, if you knew how to measure it and you had the right data, which both are impossible, then what do you do? What actions?

Yeah, what levers do you press to control the market? What's an appropriate level of a rate of inflation? I don't know, is it 2%? I mean, 2% sounds nice. It's a nice whole number. It sounds nice, and it's all window dressing, though. They say 2% and all. Like we said, the CPI has changed.

To say that inflation has been contained over the last decade, when you look at health care, housing, and education prices, it's like, don't piss on my face and tell me it's raining. That's the way I feel with a lot of the central planning in this country in particular right now, is it's a lot of pissing in everybody's face and telling us it's raining. And the Fed's in the driver's seat,

and they're driving the car with just the rear view mirror and they don't even have the whole rear view mirror. They're getting little bits and pieces. They don't have the whole picture because they don't have all the information. And then they press the gas or the brake pedal, but there's a 15 second delay. And so when you think about it that way,

you're like, oh, this is crazy. How could you even possibly control a system given your very, very, like very laggy inputs and outputs. And so that's where I argue that Bitcoin is very efficient when it comes to inputs and outputs. It's near real time, which means all market participants can base their decisions

on the best real-time information that we have. That's, thank you, Dan. Something I've been trying to point out for a while on this podcast is Bitcoin, while slow, dumb, and rudimentary to a certain extent, It just provides a certain level of certainty. Like, hey, you know a block's going to reproduce roughly every 10 minutes.

Depending on what block it's at, it's going to give out a block reward of so-and-so. And depending on what demand is for transactions in a block, at any given point in time, the fees to get in are going to vary. Yeah, and do you ever do the follow Fridays where you tag some people that you like to follow? Every once in a while, yeah. so i did a list um a few weeks ago and i had a section that said you know i think like these like either like these guys take lsd or like if you want to get really crazy or weird with it

follow these guys just desantis desantis basically desantis types right which by the way he has me blocked and i don't know why i don't know what it did but andrew why are you blocking dan i don't know if he's listening i'm blocking bro but uh the crypto ray and a couple other types are like really meta you know essentially because of relativity all local time is relative you could say that bitcoin's time stamping function is the universal clock right of the universe because it's not based on local time based on block time yeah it's almost like a metronome too it is that's right it's just there it's constant it's uh and we can't change it uh at least me and you personally and that's what's kind of cool is because of that predictability

because bitcoin's monetary policy is predictable because we know we have a 21 million hard cap we now have an accurate way to measure the economy whereas before it was all relative and not measurable now we have our standard unit of account which is like kelvin's like kelvin celsius meters centimeters now we have bitcoin right and we'll know bitcoin's made it when we uh transition from the gregorian calendar to block time we literally just base base time uh off the block height or history this would be hard to predict it's like say hey meet me at block height 600 000 now that's getting full bitcoin right there right that's that's going all out but that is uh like it is heady like that like uh speaking of desantis uh i think he has the best definition

for bitcoin uh bitcoin um when implemented correctly is uh a time stamping uh time stamping protocol that doubles as a value storage service totally yeah time stamping decent distributed or decentralized time stamping is a huge problem yeah distribute yeah important important prefix prefix to that being distributed distributed time stamping protocol that when implemented correctly uh results in a store of value right yeah it you know and satoshi references that quite a bit where i think like it's a bit esoteric to like get into it for the layman but it is pretty fascinating yeah a lot of people nick carter is probably the biggest proponent of this think we made a big mistake of making blockchain a thing it should be time chain really happy for nick and

everything he's writing in the space definitely brings you know his container ships articles or his container ship slide was really good right um that's actually something i want to get on riffing off of your interview with peter on what bitcoin did uh you're talking about narratives like we had the early on narratives uh and you mentioned nick carter in particular like he's coming around uh the piece of him and hasu wrote particular of the changing narratives for all time it just seems like it's getting more as a soft fork with bitcoin sort of tightens the rules a little bit it seems like the narrative is getting a little tighter and yeah and i'm very happy to see this because it is like what is this like what is the best way to market this to the masses and

specifically new people have never bought or interacted with this and we have obviously fucked up the narrative in the past and and spit out false narrative so what is the the base layer narrative that will be true and into perpetuity you know and i want to defend some of the businesses that did promote the merchant adoption narrative. To get VC capital, you had to. Hodling doesn't make you a lot of money. No. So I get it.

I get why they did it. I don't agree with them attacking the protocol or trying to change it, but I do understand why they made that decision. They're standard incentives. Yep. They're incentivized. Incentive, yeah, exactly, exactly.

So, you know, what's really cool now, I think I've never been more bullish about the Bitcoin narrative than I have been in 2017, 2018. Like we saw the Nick Carters and Marads and Hasu and Arjun and Vijay. I'm forgetting a lot. And Marty, yourself and Peter and you guys are...

We bring you guys on to spit the narratives out there. Well, it helps. I think people, when you propagate the narrative, you see how the rest of the community reacts to it and then that comes back as a feedback loop. yeah um but i've never been more bullish on on seeing the narrative get compressed to hopefully my prediction is in the next few years the narrative will get so compressed that it will be compressed enough that everyone gets it right that's what uh we actually had fun

on twitter today i've got uh matthew from crypto voices you listen to that podcast at all i don't he's uh he's like a hardcore economist uh but he has the voice of an angel or of a god excuse me very low very authoritative voice so we're gonna record some commercials next week and we ask the freaks uh to send us like some like one-liner bitcoin uh uh advertisements we got a couple here i'll read a couple bitcoin and bitcoin alone is sovereign uh what else do we got here you don't change bitcoin bitcoin changes you i'll take credit for that one bitcoin the verse asset that you truly own just trying to condense the narrative in a couple uh cases i think this might be the best one bitcoin just in case yeah and you know i think you know i think

in the early days i was back in 2014 i was constantly trying to tell people we don't need to teach people like how the hell bitcoin works they don't know how their cell phone works they don't know how their fridge works we need to tell them why it's important to them like in layman's terms so i'm going to interrupt you here and come into the narrative that i've been trying to form i recognize this too because i always try to say attack bitcoin from the tech perspective where more recently i realized it's impossible especially for the layman they're not going to understand nodes miners and the the intersubjective consensus that they meet with all the stakeholders it's a bit complicated yes so riffing off barstool barstool is a blog for the common man by the

common man i i i really think we should start parroting bitcoin as the currency for the common man because right now the common man to save his purchasing power throughout time has to go seek yield in the market instead of being able to throw a couple shekels in a wallet or a bank account they are forced to chase yield in the stock account bond market mutual funds whatever it may be they cannot simply park their wealth in an account and expect that it will maintain purchasing power so the common man who's already got a tough life of working a grueling nine-to-five potentially raising a family working paycheck to paycheck has the extra burden of figuring out what investments are going to help him preserve his purchasing powers around time whereas bitcoin

it's pretty simple you put a percentage of your work your harder earned work earnings into bitcoin and you know that your slice of the pie will never be depreciated. Yeah, that's a good point in terms of with the Federal Reserve, they've kind of cattle prodded people into riskier and riskier assets. But the common man doesn't understand how to allocate capital effectively. And so you're forced to rely on institutions that allocate your capital for you, which is a bit of seniorage where you've got like your local broker who's like, trust me, bro.

And he just types a couple of things into a computer to allocate your capital across stocks and bonds. And he takes 3% for doing it. Right. and he didn't do anything and he has no idea how the markets work and no one really does

right they just if I did I would be a trillionaire right I'd have all the bitcoins and so not yet

there's still four million to come or three and a half yeah yeah so you know I think I think like narrative

is really important and that's why I love Nathaniel Whitmore's thoughts in the space he's got a really brilliant clear-headed perspective on narratives yeah

uh he he does pr professionally so he's really good at like dissecting narratives and spinning narratives and understanding how they influence opinion his weekly reads tweet threads are awesome yep that's what i look forward to every sunday yeah if you're uh if you're looking to condense your uh news consumption in the space down to one hour uh just wait for sunday afternoons he's got great narrative compression and you know with that i think um you know the narrative for bitcoin like i think that the common man's money is a good one that's what's great about the space is there is no pr team right so individuals decide what narrative they think is cool they propagate it and they see what the community likes

you know it'll they'll either like it or they won't either either work with new people or it won't sort of a experimentation platform for narratives because there is no central planning committee twitter is a great place to uh to uh field test these narratives it's a fast feedback loop right you know right away if people like it or not which uh my my new favorite one that i came up with to to show myself a little bit uh would be my electricity police oh my god it's i wanted to touch on this i'm happy you brought it up please explain this you're doing god's work Yeah. So a lot of people think proof of work is inefficient. And so if you believe that or you have doubts about proof of work's utility, I would encourage you to read my article, Proof of Work is Efficient. um and so here's one and this is an example of some of the content from that article

which would be the subjective use of electricity so we all use energy typically in the form of electricity for various things we have a christmas tree in this room that has christmas lights on it we have a television there's a candle there's a light there's a laptop they all use electricity and marty and i are sitting here talking about bitcoin and we've got music on and and we're using our electricity however we'd like to use it because we pay for it yep we're gonna do whatever we want with this damn electricity we can waste as much as we want on it you know we could do whatever we want with it we paid for it right i got a i got a bitcoin miner right here i can plug it in we can be mining some bitcoin with this as well you could do whatever you want with it

we could go watch the kardashians we could take some selfies my wife will be doing that later you know it's it and that's what electricity police really highlights is the absurdity of someone stepping in as the moral police over someone's usage of electricity well it's crazy that bitcoin gets painted with this brush so vigorously uh and bitcoin alone i would argue other i mean obviously fossil fuels and cars and travel is another the biggest one behind that but i feel like people are signaling out bitcoin just because they want to be able to prove point and be like ah it's using that much energy like that's why it's stupid it's completely virtue signaling right if someone's rational and data driven they do not take that side of

the argument and i find it kind of like a little bit disingenuous well it's very disingenuous because unless you subjectively like unless you look at the relative usage of bitcoin's electricity to existing financial systems and then look at the benefits that we get from it it's incredibly efficient and this is something satoshi said like in one of his first bitcoin talk forum posts or one of the first emails i think it was actually the first email chain after he released the white paper it's about gold right gold mining yeah he's like gold mining can be viewed as inefficient but the value we get from the gold is very useful it's a net positive totally yeah yeah he says net positive um and i think most people that use the proof of work is

is wasteful argument typically believe that bitcoin has no value i think that's what really undermines that whole argument or like kind of underpins that whole argument is that people who say that just don't believe bitcoin has value how do we how do we help these no coiners well one is teaching them a little bit about thermodynamics everything is energy we use energy for everything so one would be like okay well let's start there because nothing's free there's no free energy we have to go pay for it or use it or harness it so everything requires energy is bitcoin's utilization of energy done in a transparent and you know useful useful way i would say yes and then how does that compare to other systems that would be comparable to bitcoin

like gold mining central banks etc which i'd so i did an analysis at the end of the article which basically looked at bitcoin's energy consumption and cost relative to the existing financial system and it's tiny um and that analysis did not include judges or the courts right this that did not include uh what else did that not include it did not include a bunch of different energy sources and costs that i could have added i think it was just it was just the financial system and and that and that just that just does a great job of pointing out the absurdity of the intellectual dishonesty of the people calling out bitcoin it's like i don't want to sound like a pompous prick but it's like come on think a little harder like

think critically like i think they know and they choose not to i think and like vitalik's a really smart guy but it's intellectually dishonest for him to be this vocal against proof of work look he's shilling his own bags right he's shilling his product i get it but you're going to lose credibility in the long run if you don't at least acknowledge the utility of proof of work you can still acknowledge it and still say i think i've made something better which i don't agree with that but he subjectively might say that but to ignore it completely and just to like scream and like point in virtue signal and be like look at all that waste i think is going in the long run going to hurt their narrative. Here's a prime example. This is one of my favorite ones between

proof of work and proof of stake. They're CapEx costs. So the cost to purchase a miner, let's say it costs $500 to purchase a miner, or I could go stake that $500. Because dollars are fungible, because I can use that dollar to go dig a ditch or pay for my electricity or eat a burger, because my dollars are fungible in how I spend it and those dollars are fungible and how i earned it if i dug a ditch i was paid if i came up with a new way to efficiently route cars at uber i was paid because dollars are fungible or fiat is fungible and encrypted is fungible because they're fungible the energy costs to create an asic miner is identical to the energy costs to stake that money yeah so if you want to even have the argument

around proof-of-work versus proof-of-stake energy consumption, you're talking about OPEX. But you still have to run servers for staking. And so if you really compare it, you're like, it's actually, if you really fully believe that proof-of-work is a terrible waste of energy, you still can't logically make the argument

that proof-of-stake doesn't use an enormous amount of electricity as well. It costs just as much, and it's not secure. The costs are just, Paul Sports, i say sports because i don't know how to pronounce his last he's got a really hard last name to pronounce truth coin dot info he's written about this in lang proof of work first proof of stake and basically proved what you just said like the the cost are just pushed to another area and then you do not have the same security the proof of work has like that is why proof of work

is the end all be all and why we're here is like having the certainty that or close to certainty that uh that the the power expended uh produced uh a block at a certain point in time we see a you know with proof of work we have a a wall that was built in a transparent manner so we know exactly how much it would cost to dismantle the wall and that's why it is the most efficient is because there's no more trans there's no more way that there's not a way that it's more transparent that would show how the wall has been built.

It's possible. Yeah, you can obfuscate it with proof of stake, but inevitably there's energy underpinning that. And a lot of people they just they see, they don't think critically about it. And Paul's a great really, really brilliant because his proof of work stuff influenced my piece.

However, I had to read it four times because he... It's so long. They're like two hour blog posts. They're really long, and he's very intelligent. But, yeah, it's a little hard to get across for us plebs here. Right. You know, or plebs, but yeah. I'm actually talking to Paul.

I might have him on later next month. I'm going to have my fingers crossed if he's in town. Oh, that'd be cool. Paul, if you're listening. Yeah. Yeah, we'll cut. Where are we at? Minute 27?

45. Next one. 127. 43. P-break. We were talking about proof of work versus proof of stakes. Talked about, touched on Paul. For you freaks out there wondering where we went, we just had a bathroom break.

We're back now. Time flies when you're drinking beers, having fun, talking about Bitcoin. You forget you have to pay. You take it to the brink to where you got to run to the bathroom immediately. Nothing better to talk about. um so touch on proof of work versus proof of stake so this is one thing i've been thinking about like so last night at the bit devs meetup there's a lot of ex post consensus people there people

that have previously worked at ethereum vcr consensus and they were at bit devs looking at bitcoin and lightning in particular with uh with with an open mind and open eye and It seems as though, to me, I would argue that we're at a point where a lot of the token projects that spun out between 2015 and the middle of last year that purported to build on a perceived inefficiency or inability of Bitcoin are being proven wrong in the long term. because what a lot of Bitcoiners, including myself, have said over the years is that, hey, we're going to be able to do all this. It's just going to be pushed at different layers of the Bitcoin stack in time.

And it seems like that may be coming to fruition. Would you agree with that? Let's see. Let me replay that. Were you saying that, like, that, like, layer one, layer two is being built, like, a little bit more slowly? No.

So I'm saying, like, Ethereum. Let's use Ethereum. Ethereum was built saying, hey, bitcoin is very rudimentary can't do a lot we want to make sure that you have smart contracts you can do script computing at the blockchain level i would argue that's not a good design but oh but the the desired functionality is very worthwhile and i have been arguing for years and as of many others i'm not alone in this saying i agree i want that as well but i think we'll just come to bitcoin at different points of the stack and i think we're very much in the beginning parts

of people starting to realize that this is coming to fruition i think to build to build a building you have to build it on a solid foundation right and um stellar had a good blog post about building a dap on ethereum that it was building skyscrapers on skyscrapers and i think that's a completely logical way to think about it and you've seen concessions from vitalik which he wrote in a blog post about two months ago that he doesn't believe anymore that you have to have a full turning complete scripting language on the layer one which is a he doesn't he doesn't call out bitcoin in terms of the core development team's maturity but that is a big concession from vitalik right which indicates that you should push you should have layer one be as efficient

and lean as possible and then allow for experimentation to happen on layers above it as you would building any sort of like strong sturdy foundation to mature development like development mindset yeah um and it's just it seems to me that that just should be common sense to people but it seems that with this i hate to keep picking on ethereum because i've done enough of that on this podcast but for a project it's number two in market cap it might be number three i'm not sure number three you've got ripples ripple two now well ripple because banks like it ripple just because it is just because the ripple foundation can do whatever they want with that 60 billion ripple they have um but ethereum in particular like just looking at

that like bitcoin works as is now ethereum needs to do this that another thing to become viable in the long run to actually work uh as they market it uh as a world computer yeah and i have this huge thread uh on twitter it's been going on for over a year now where i say i don't think ethereum's ever going to transition to pos in fact it's like the longer they delay it the longer it will be delayed and very nassim nassim talib of you well i quote the seem to live in the first tweet like the longer it takes the longer we'll be expected to wait we've been waiting for a while and i just think to to build on a a system that has no idea what it's going to be in the future is just a big risk uh if you're a developer but then if you're storing your money in that

protocol that's like a risk i'm not able to take well as a as a startup founder why would you take startup operational risk and then compound that on protocol risk like for developers building daps it's incredibly risky right and you've got like a very low survival rate for most startups and then you're compounding that you're compounding that risk by building on a protocol that is not scalable in the slightest you know for its intended use case arguably it's never going to be scalable you know i so at uber um and we we didn't really touch on this earlier but the teams i was on i was on writer growth which was the writer writer app is the app that we all call uber and that was led by andrew chen he's now a gp and andreessen horowitz so he was my manager

and we did onboarding engagement and virality and then later on i worked on the global data team which took outside external data and then wove that through the decision-making fabric of uber and while at uber people knew me as the crypto guy the bitcoin guy and i like i even in the bear market i still got a shill i wear that guy's that guy's bear but a badge of honor yeah i i wasn't you know there was a chat room at uber called crypto so i was very prolific in there and um very very active in there and so um me and another guy got together and we got the top product managers like the senior pms of dispatch dispatch does the supply demand modeling for all of uber marketplace which does the pricing and we and payments and identity and we got all the

senior product managers from those teams because we reached out to jeff holden the chief product officer of uber and about blockchain tech and he was like brief me on it you've got three hours which is pretty big to get an executive's like three hours of a c-level executive's time and so we briefed Jeff Holden on how blockchain might disrupt Uber's business model and the smartest minds at Uber who work on these products or who work on these teams. We definitively kind of walked away from it going, payments and identity might be disrupted in five to ten years.

But you're never going to have your dispatch system on a blockchain. It's extremely inefficient. Blockchains aren't very good for a lot of things they're very good at very few things right like less things that you can count on less than one hand i would argue um and i think it's taking time for people to realize that totally so in this in this early first decade of bitcoin like bitcoin growing up and the people interacting with it and learning about it growing up alongside it like that's what we're coming to realize is hey we're not may not be able to blockchain the world just because it's open source tech and you could fork it and try to apply it to these things well and that's where i

think blockchain became a terminology as a shelling point for all tech kind of innovation as a whole right you know if i'm in a big company and i want more resources it's a blockchain project and i'm a startup and i want to get more money from a vc well i put it on a blockchain people respond to incentives right and so it was totally intuitive i guess in retrospect it's intuitive how it all kind of blew up um in popularity because it's the one word you can use to represent something innovative and it's not saying innovation it's not saying synergy it's like fintech wasn't cutting it anymore fintech wasn't cutting it you know this is mobile social local but the 2017 edition which is blockchain yeah so you know i think blockchains are very bad

doing doing almost anything yeah and that's like and i think james o'burn at chain code he when he came on the podcast he really drove it home and had me understand like these systems only work in adversarial mindsets and most my or most aspects of life are not uh you don't want to be adversarial and you're not money is one of the few that you do want to be we're like hey we should all agree that at all costs we should fight each other to make sure that this money stays the money that we believe it was at a certain point in time because money isn't just a number money is energy and time it's stored energy and time it's got that potential energy and to to store you to create that that that medium in which you can transfer that value you had to give up energy and time to get

it and so it's incredibly important that we maintain a ledger a ledger that can't be tampered with because we're not talking about just money here we're talking about lifetimes we're talking about a billion humans lifetimes right um it's important that that record is kept in a way that is not to be tampered with that it's kept in a way that can't be manipulated by someone bigger who would like to take it away from someone else and that's what's so beautiful about this is it's the best record keeping of our of all of human life in a way it's it's the stored value of all of our energy and time it's so beautiful how do we get people to realize the gravity of this innovation though i mean obviously we do i would argue um are we are we naive number one are we

naive number two if we're not how do we how do we convince people the gravity of this well uh i heard there's i heard there's some good lsd in san francisco um some good lsd in my freezer yeah you know i think i think there's a lot of so i think both the adoption of bitcoin and the adoption of crypto primarily bitcoin but i'm gonna use crypto as a whole is there's two factors one is narrative compression where the narrative gets smaller tighter condensed makes more sense easily verifiable easily understood in conjunction with environmental so like a 2008 financial crisis um you know i i can see i can see a moment where both of those pair really well where there's like another like crisis of confidence in institutions whether they be governments and banks in

conjunction with a really good narrative that is really kind of the spark that ignites like the layman's understanding of this yeah i think the tinder's drying up uh and i have a feeling that the narrative is going to be condensed over the next 18 months in particular leading up to the the next halving and around memorial day 2020 i have some very interesting theories uh having to do with the u.s election bitcoin the halving and that condensed narrative i think bitcoin may become a ballot issue in 2020. That would be really cool. I'm excited with how robust

the community is. The community and the infrastructure. Bitcoin survived despite all these odds. This little seed was planted in the fucking weirdest part of the internet. Right.

And it survived. It magically, you know, magic at the gathering online exchange, a Dungeons and Dragons trading card site is where it's first traded right like you couldn't have picked a weirder started by easier yeah by jeb mccaleb at uh on some beach house in costa rica right i mean

it's incredible that it survived and honestly mind-blowing that it even made it past year one or year two or year three and so now i'm i'm more bullish than ever because i'm like wow the community the amount of money the institutional traders that are coming in you know we've only had retail flow so far like wait till we see you know most of the world is managed by institutional traders wait till we see those those macro traders go hmm well my portfolio is a hundred billion dollars and if i add bitcoin to my portfolio it improves my sharp ratio i don't even have to like it i just know i need to allocate to it yeah and and that's when things get exciting and it seems like uh clayton clayton from the cftc was giving some pretty positive remarks at consensus yesterday

he said you clear up a couple of things when it comes to custody and trade manipulation but if you clear up those you should be good to go that's what it sounded like yeah so you know um so i think giancarlo is with the cftc and then you've got clayton with the sec so many alphabet soup of different regulators right so many um but yeah i think cftc is overwhelmingly bullish which is really cool giancarlo is really giving the community a thumbs up which is really really cool sec obviously is more focused on on ico side of things um you know i think i think like we still don't have a mainstream retail product like an etf that would facilitate 401ks like this so you get your 401k 401k into bitcoin yeah i mean that's

huge like trillions of dollars locked away that can't touch bitcoin for decades right well it's been a decade hopefully now another decade hopefully it'll be an etf will be approved in the next couple of years. But these are the infrastructure, these are the core pipes that are being plugged in to where I'm extremely excited about the next run up because this will finally, you know, we had like a little kiddie pool

and now we've got this like ocean with all these pipes connected and the ocean's really low right now. But the ability to flow capital into Bitcoin, those pipes are the biggest they've ever been and all it takes is a moment where people all collectively share the same illusion that we share.

Right, and I really liked the way, believe it or not, Novo phrased it at the Bloomberg conference, I believe it was last month, where they were talking about Bakkt and Fidelity in particular. No, it was Fidelity in particular. Fidelity announced that they were opening

their accounts for institutional clients to get exposure to Bitcoin in the way Novo basically described it. It's going to be a trickle at first, but the infrastructure has been built in such a way that it can take an onslaught, a fire hose of volume or liquidity when need be. But it's going to start out as a trickle

and eventually build up into like a roaring waterfall. And a shameless plug here, with Interchange, the product that we're working on, we're one of many different service providers or software providers for institutional traders. So we're part of the infrastructure, the core pipes that are being built. well let's end let's end on uh interchange what are you guys building yes uh what do you got what

do you got in store for picks and shovels as well yeah so picks and shovels you know the company name uh is the company name and then interchange is the product so interchange for the uh just a kind of easy way to think about it is that it's a mint.com for crypto hedge funds okay that's a good easy understandable i have ab tested this narrative and many many conversations it's uh it's the one that gets across the quickest and then i can dive in a little deeper on that on what that really means so right now if you're a hedge fund family office or a venture capital firm and you've got xyz cryptocurrency in different wallets on exchanges when you ring and you've got them you know so you've got on-chain data you've got exchange data

You've got manually entered data if you bought into a SAFT. So we take all of that disparate financial data and pull that all together. I think anyone here who has actually reported their taxes, which I'm one of them, I'm one of the 800 Americans in 2014 who filed their tax return that claimed Bitcoin cap gains on it. For the individuals who want to be compliant, which all institutional traders have to be, we help them wrangle all that data together. pull all of that in sanitize it standardize it and then run complex portfolio metrics that enable them to better manage their portfolio and their risk this is uh something that is vastly needed in this space because i have heard horror stories of some fund managers who don't even have pnl sheets uh that's right daily pnl sheets uh we we found that you know there's a lot of very

sophisticated fund managers there's a lot that are just trying to make things work you know i'd say 20 have their own in-house development team they've got engineers internally that have to custom build this these tools for them because that's what they had to do right the other 80 use uh google sheets right which is use google sheets they have their treasures in like a safety box in their office it's so bushy like coming from the like the big leagues where i was in charge of pulling data from blueberg uh doing all of our daily daily monthly weekly returns every day to send out to our investors as a report those were pretty in-depth like heavy duty pnl sheets that took in a lot of data a lot of crunching and they were excel sheets but they

were hooked up to to algorithms and stuff like that so it wasn't like uh like number one it was excel so we owned the data we're not keeping it on a google sheet where google can see your pnl as well uh but number two it was it was a sort of concise process that you need to have i would imagine before you even start investing uh just to have like a reporting and the not even reporting tracking your portfolio like yeah it's ingestion of the data it's tracking of the assets and it's the um you know transparency that you can show to you know report on the reporting side of things It's showing the different stakeholders that you talk to, like your internal team, your external stakeholders, like your fund administrator. It's showing them what's going on.

You're providing visibility to different stakeholders and what you're doing. Whereas now you're kind of shuffling CSVs back and forth and it's delayed data and maybe like your pricing methodology might be kind of funky. right um so yeah it's with the explosion of icos and blockchains and the complexity bitcoin's complexity alone is huge right but then you add all these chains too and it just became enormous an enormous challenge so we're this simply put we take complexity and we turn that into simplicity i like that i'm a big fan of making a complex thing simple that's what i'm trying to do here with this podcast and the newsletter is try to simplify all this simplify all these narratives you know it's funny because uh you're uh i first learned

about you when someone at bloomberg sent me a screenshot of your uh what you had you had taken one of my tweets and put it in your newsletter and this is back last fall and uh they were and this was someone at bloomberg so guys at bloomberg are reading your uh your content shout out to uh shout out to the bloomberg crowd shout out joe weisenthal i know you're reading i see you every okay dude joe joe's actually pretty sharp joe's been on this podcast we've had oh really yeah oh i gotta i gotta listen to that episode he's really he's one of my favorite skeptics he's one of the few skeptics that i uh respect with with uh that i have a lot of respect for i think he's very rational he at least he at least comes with a well intention to like have a rational

conversation and he's a great instigator he's a he's a great instigator i appreciate his instigations um no but thank you for reading thank you for for humbling me with that but i think you are doing the same with your the book that you're putting out and the based off the series that you just wrote and these are very important things it's because people we know from experience like newcomers coming is so daunting to try to jump into this this rabbit hole where the fuck do i start yeah your buddy's like hey tell me about bitcoin and And you're like, okay, well... Do you legit have a week?

Here's three Medium posts, a tweet storm, and the Bitcoin standard, which, you know, safe is great. Bitcoin standard is definitely written for Austrian school of economics, crypto or Bitcoiner types. Yeah. It's not made for the layman.

No. I think it's a good start for the layman test. It's like to start questioning money. It's like, all right. Because that's my favorite part of the Bitcoin snare is they barely talk about Bitcoin. They just talk about the history of money. It's the best content we have now.

Yeah, exactly. But like you said, we're on the front lines of strengthening this narrative and I'm happy to be on the front lines with you and I think we're making some progress. It's been fun to fully understand a topic. You have to teach it and you have to explain it simply.

And that's where constantly you see with ICOs, i think some were working on cool ideas but you constantly saw this complexity theater this hand wavy i'm an engineer here's really complex topic but when you boil it all down you're like wait a second you're just trading off this really simple thing for this simple thing exactly and you're just office getting that through this layers of complexity engineers being building stuff for engineers and that's my favorite thing when i talk about engineers we're thinking about these heady like uh somewhat abstract ways to apply this technology i'm like i'll go to a window i'll be like look at all these people

walking on the street down there like do you think any of them will be able to use this system in earnest at any point soon and the answer is usually no um and bitcoin like you said bitcoin's ux and private key storage and sending and receiving transactions is hard enough like let's figure that out and then go from there i would argue yeah we've got a bunch of basics to cover here one is like what is money how do i store it in this new cryptocurrency how do i stay safe and i think you know it's it's uh we came in and we're like what if we just decentralized everything and i'm like look i'm a huge proponent of that i gotta be like i've been torrentine since i was like 12 i think tour is awesome like you know i've even got the i just bought some go

tenas oh yeah i got uh daniella ceo of go tena coming on in the next couple months oh man very excited to talk to her nice nice big go tena fans here at tales from the crypt maybe you can get a discount code i bought i bought a pack of four so i can distribute it to me and my buddies that's what uh matt odell who's actually on his way here uh he's big go tena freak he's got like a bunch of gotenna relays running around the city they're like i'm sure he's probably got one hidden in central park somewhere well so early when i first got involved in bitcoin i i wanted to make it super robust very like anti-nuclear uh so looked at propagating blocks through hamnet or ham radio and uh satellites which is possible jeff garzik back in the day uh if you go on to bitcoin talk

his proposal for bit sat or propagating blocks through satellites yep zero block was i i don't know why i didn't create a personal account but the zero zero block comments on that and that was me really yeah so i was like this is amazing yeah this increases its survivability um and so a huge proponent i'm a huge proponent of decentralized tech and so to kind of bring this all home i'm the biggest fan for future like decentralized projects but all these icos i'm like you're just shooting yourself in the foot i i want it to happen but you're you're killing it like the way that you've structured your cap table or your token table having leaders having yeah remind with dexes we found that having a leader is really really risky right um with idex right

right i'm like look we built a permissionless system let's build some badass shit let's build some cool stuff yeah we don't have to ask for permission we can build whatever we want but to do that you need discipline you know you need to be anonymous you have to choose and doesn't mean that you can't be anonymous and have as like as e-cash like a privacy coin address you can still get paid in like an actually truly anonymous cryptocurrency um yeah and that's what's so disappointing is like the cypherpunks would have never done something like that while david chom did which is which is unfortunate yeah um oh yeah he came out with an ico that's right yeah yeah because that's uh it's one of our

favorite quotes here uh every uh there's a lot of scorned cryptographers and economists out there who wish they were satoshi and are trying to uh trying to uh beat him at what he did i'm thinking of larry white in particular with initiative q right now yeah yeah and that's where you know that was what was so brilliant about satoshi is he tried to make every possible every single step along the way he was like this is fair this is fair i'm trying to show you that it's fair i'm not trying to control too much i set these parameters because i've aligned all the incentives properly i'm trying to make sure it survives i've planted my tree i very carefully spliced the genetic code i then took that seed and i planted it in the right soil with this which

is the cypherpunks the right season and then i'm trying to cultivate it and keep it alive and to do this uh i have to leave and so as soon as gavin goes to the cia i'm out of here and it's all up to you guys now and here we are seven years eight years after his departure bitcoin's still kicking it's not aware it was last this point last year price wise but i would say fundamentally the infrastructure and the stack being built on top of it like that we can't die unfortunately we don't have enough time to jump into it but the the demo that i saw last night a lightning the lightning jewel.com by willow burn shout out will it is something it's like it was a tech demo i haven't had i've been apprehensive to say this

all day i wrote it in the news i wrote the newsletter i didn't say it in the newsletter i've been telling it to friends of people in private slack channels i haven't had the guts to say it until i've been three beers deep but i honestly have not had that like holy shit moment watching a tech demo since the first iphone wow yes okay i was an iphone freak i owned the first iphone i had to have it were you one of the guys down in manhattan like waiting two hours in the snow yeah or philly okay uh but i saw steve jobs give the first demo of the iphone i was like i need this is a piece of technology i need to have i want to have i think it's going to change the world and obviously it has over the course of the last 10 years last night sitting there at

bit devs new york watching will present this i was like holy shit this is the way people are going to use the internet in the future like there's like i thought immediately the wall street journal uh paywall that they put up and imagine if you had jewel the jewel extension not j-u-u-l you freaks okay jewel as in like an energy jewel if you had that extension the wall street journal would be able to say send you a message hey we noticed you have a lightning node hooked up in your extension do you want to pay two cents to read this boom three seconds not even done lightning i'm a i'm a huge fan of lightning and also i'm close with elizabeth stark before i came back into crypto because i during the cold crypto winter i went to go work at uber

wanted to come back uh elizabeth elizabeth was one of the people that i talked to to help me color in the new landscape because it was very different from when i had left and so i really admire her and what she's done over at lightning um and same with brian vu uh brian's over there as well he's one of the early guys at the bitcoin meetup and brian's just a nice person overall he's really great guy um so excited about like lightning i wrote a tweet storm by the way on lightning fud so if you don't believe in lightning lightning yet because you have some reservations about it please check it out on twitter just type in dan held lightning fud it's a 25 tweet tweet storm where he comprehensively very great tweet storm thank you thank you it i got a little bit

annoyed with the lightning fud arguments out there there are arguments out there that were kind of baseless i just don't get it because if lightning turns out to be a failure we can abandon it lightning here's what's great lightning in its worst form let's say completely quote fails it would still reduce on-chain transaction volume by like 90 because you could still have the big hubs open up a channel between each other right so like arb between exchanges would instantly kind of evaporate uh because you would have these channels open between um coinbase and in poloniacs i think it goes back to what we were talking to about earlier and uh a lot of ego gets in the way where uh previously uh previously vaulted uh vaulted is that the word i'm looking

for narratives sort of don't stand the the metal of time anymore yeah it's it's sort of like schrodinger's cat in terms of narratives you've got all these narratives that could exist but upon critical observation that wave function collapses upon reality yeah which is what what is real what works the narrative dies pretty quick when you realize that if you want to have proper block propagation and proper decentralization yeah you're going to need to make some trade-offs yep and i think lightning is a brilliant layer two solution it's it's the one of the longest running projects in the works there's a lot of people working on it a lot of people i think the challenges that they have are very solvable i don't see any material technical problems

and it brings about instantaneous payments it brings about almost no fee payments and it brings about confidentiality or you could you know fungibility it increases bitcoin's fungibility and that's something that no one's really not many people talk about but the onion routing is incredible well that's incredible because that is a possibility and then what will was describing last night is his vision of web ln which is like what ethereum is doing with web 3 but applied to bitcoin and lightning where you can be totally anonymous if you want to like you were saying but if you want to carry a reputation around on the lightning network you can use a specific node and carry your reputation from site to site each site will say

hey we noticed that marty's node has been a very good node it is it has allowed a lot of liquidity to flow through it so we are willing to interact with him you have sort of a reputation system that a lot of people thought bitcoin would turn into happening on the lightning network i think there's really cool stuff with like i know you've had jeremy welch on here jeremy's an awesome guy yeah um it's actually after after the um after the lightning jewel presentation last night i immediately introduced jeremy to to will i was like you two have to meet because i was like i want to download this extension and play with it my casa node and you need to like figure out how i can find my macaroons jeremy so let's make it happen i think the hardware nodes plus the hardware

bitcoin nodes plus lightning node are really critical components of kind of tying the physical world to the digital one um it's also i think probably going to be like a badge of honor or you go into like your buddy's place and if i came in here and i saw that you had a casa note i'd be like oh okay oh i have one it's my closet but why isn't it out you gotta you gotta proudly display that you gotta you gotta proudly display that marty boxes right here proof well now jeremy now jeremy's gonna know he's gonna know that it's not prominently displayed it's not i don't see it on your christmas tree you don't have it i keep my artifacts i keep my artifacts in the open i'm a 21 computer over here in the corner oh nice no that's nice nice that's uh that's my artifact

it's uh we're very old art people here in the bent household and uh 21 co the casa node will be out here in due time it's it's still useful right now you could you could kind of create what the uh the stevens brothers bart and brad have at blockchain uh capitals office what's that so by the way i love those guys they're really really cool spencer bogart's great too and derrick i love spencer spencer's a great advocate for the space he is when he gets on cnbc i'm like or uh bloomberg i'm like i wonder what he's gonna say by bitcoin when i see him i'm just like thank god it's him and not somebody else spencer is really eloquent really really clear confident um and brad and bart have done a great job in the space they've been around for a very long time derrick

kind of one of their newer additions he's really sharp too so uh love those guys anyways at their office they have a bunch of old miners so yeah so if you go into one of their conference rooms they have some of the old miners from like 20 like butterfly labs and like really old stuff they ever get their hand on a gall miner by chance i don't think anyone ever did right didn't josh josh ran away with all that money ran away with all that money man there's so many scammers in crypto that's why i say i've survived right i didn't lose my password i didn't i didn't um you know i didn't send bitcoin to the wrong address but do you do you feel like uh like you're stronger because of it yeah but i think i've aged mentally about 40 years are you there yeah it

which is interesting i've actually been talking to people about this um you know so we're at consensus invest that's why i'm in town and um talked to a couple people about this last night and it seemed to be people seem to agree with it which is that i think the cohort of bitcoin investors, because of our resiliency with many boom-bust cycles in a very condensed amount of time, we will be the most mentally prepared investor cohort in history to where after being in Bitcoin for maybe two decades, like 20 years, we will have experienced more boom-bust cycles than almost anyone would in their lifetime, which means that we can allocate capital the most efficiently due to our resiliency and our resolution and our sort of

ability to look into the future and then be patient you know the low time preference you're just battle tested most people won't have as many data points to to get it right that's right like if i sit here and i see my apple stock drop 20 fine it's cash flowing it's a business great like after surviving you know it's like the uh the bait like bane from from uh batman i was born and i was born in it i was i was born in the volatility you merely adopted it 2017 bitcoin i was born in it exactly for years you'll get used to it at some point yes exactly exactly we and imagine one more two more of these right like we'll be like we've survived and now i gaze upon these other asset classes with ultimate peace you think you can survive 80 drops consistently

you know like that that's we're hardened i have disdain for you crying after a 30 drop suck it up 10 drop i'm buying you know like it's crazy we we survived through this the most volatile asset class in human history well and that's actually a good sign right that it is this volatile because you would hope a new monetary good like if you it has to be this volatile it was going to be a linear path towards hypervigilization i mean that would never happen and i want to point out the quote uh i forget i think it was soil maybe uh alex hardy you quoted where bitcoin is more of a psychological phenomenon than it is a type technological yeah i agree with i mean alex and i we meet up in the city a lot we talk about this like it is and i say this all the time on

this podcast bitcoin changes you more than you change bitcoin bitcoin in the long run will change you more than we ever affect the protocol which is why i like it yeah exactly is that humans can't change it very easily but it but it is a psychology thing where it's like all right we're trying to rewire seven billion brains to come to grips with the fact that this may be an okay form of money for the future well if you look at the logarithmic price action and then you look at the supply they're really really close it's kind of crazy i mean the way that satoshi architected it was pretty brilliant yeah and some people bash satoshi for the aggressiveness of the supply schedule but i think it was necessary i also think he was human he was like i want to see this in my lifetime

right which is going to take decades yeah but he's like i don't want to wait 100 years i think yeah it's actually great that you brought that up how many people talk about this like why did you choose that supply schedule that issuance schedule yeah um yeah it's actually it's actually a fascinating thing to think about i wonder you know if satoshi if he went and he was like okay well if i make it too slow yeah how do you choose a proper issuance schedule that's really tough and so you know i'm really it's pretty fascinating how perfectly whatever he chose i mean what he chose is what we have it worked yeah we're here now we just in i guess the next big hurdle be to figure out the fee market can save itself i have confidence that it will be able to that's my next

article yeah all right well i can't i don't want to i don't want you to to spoil anything we've been here for two hours and 15 minutes almost yeah i hope everyone may have enjoyed their experience throughout this podcast it's been it's been a long we've had a couple beers so it's it's been a very enjoyable beers and i think uh the freaks out there are very much enjoying this conversation it was a great one dan you have a parting note for the freaks huddle hey you heard it from the man himself dan held is telling you to huddle he's held for a while he's huddled for a while he can say he is held throughout time it's working for him dan it's been a pleasure speaking with you it's a great two hours uh really really appreciate

taking the trip to brooklyn um i hope you have fun tonight uh i hope you come back uh and come through the studio again and i'm sure we'll have much more to talk about as bitcoin will be in a completely different spot the next time we speak well thanks for having me marty and glad we could finally meet up bang bang peace and love freaks