TFTC: A Bitcoin Podcast - Tales from the Crypt #56: Chris Dannen

Episode Date: January 24, 2019

Join Marty as he sits down with Chris Dannen, co-founder and Partner at Iterative Capital, to discuss a range of topics including the evolution of software development culture, destroying the technostructure, the poison that is mainstream media, and much more. Follow Chris on Twitter: www.twitter.com/chrisdannen Follow Marty on Twitter: www.twitter.com/MartyBent Check out Iterative's thesis: iterative.capital/thesis Thanks to our sponsor BlockFi! Head over to www.blockfi.com/talesfromthecrypt to peep the special offer they have for you freaks!

hey there freaks welcome back to tales from the crypt we have an incredible conversation for you today with chris dannen from iterative capital but before we get to that interview i'd like to introduce this week's sponsor you guys know all about them already blockfi a lot of people are forced to sell their crypto when they're trying to buy a house fund a business or even pay off their taxes with blockfi you can keep your crypto and still pay for all your projects with a crypto back loan use your bitcoin ether or litecoin and get us dollar funded directly to your bank account with loan sizes ranging from two thousand dollars to ten million dollars lucky you if you're able to do that blockfi is perfect for reaching financial goals of all sizes visit blockfi.com

slash tales from the crypt to learn more about putting your crypto to work without having to sell that's blockfi.com slash tales from the crypt they've got a little uh little um special deal for you freaks so definitely go check it out see what you can do there BlockFi these loans take minutes to create and is a cool service check them out and I hope you guys enjoy this interview with Chris I know I did what is up freaks welcome back to tales from the crypt We are back in the relegation studio. This is the relegation studio. I didn't tell you that.

We're recording on a Wednesday night. It's Wednesday, right? Yeah, Wednesday night. Yep. Here in Brooklyn. My wife is cooking dinner right now, so we've been relegated to the shared studio in my apartment building. Very excited for this conversation. We just had a little pre-talk, and I'm excited for the topics we're going to dive into.

I want to introduce all of you freaks to the co-founder and partner at Iterative Capital, Chris Dannen. Chris, welcome to the pod. Hey, Marty. Thanks a lot. Hey, everybody. Thanks for coming on. It's a long time coming. Yeah, my pleasure. Absolutely. You're one of my favorite people to meet up with in New York City and talk about Bitcoin. Thanks, man. Likewise. Bringing down the techno structure.

Yeah, absolutely. So that's your bio. Before we jump into the topics we were discussing before, as is par for the course for Tales from the Crypt, how did you get into all this? How did you find Iterative? How did you find Bitcoin? How did you end up where you are today? well so without without like reciting my whole resume i can say that the thing that tipped me

off to the value of cryptocurrency generally was a consulting project i did for blackrock in 2013 i would say so i spent some some years as a management consultant doing technology strategy for big fortune 50 companies who were essentially trying to figure out uh and a lot of these companies were enterprise software companies they're trying to figure out you know where the market was going what what kind of enterprise software would people be buying in five or ten years how to how to develop it you know choosing the right technology and then also how to take it to market and build a narrative around it and uh an example of this sort of conceit is the cloud right this term that we we know the cloud that is the infamous cloud the infamous cloud that's a

completely manufactured uh the narrative of the the migration to the cloud is a completely manufactured narrative brought to you courtesy of ibm microsoft hpe all the usual suspects some great propaganda they pushed out there it is and it powers a lot of what people think is common knowledge about tech is actually very very carefully laid uh marketing narratives for enterprise software really why why do you say carefully oh you were you were in the uh the belly of the monster per se so yeah so the i think the insight so i probably did the most work with hpe and hitachi um and the insight there is that technology is agnostic to purpose so if you if you want to sell something as being futuristic you first have to convince people that that is

the future and then you have to introduce your product offering second what you can't do is say here's our our line of cloud you know cloud services or cloud servers and oh and by the way like this is going to be really big like you actually have to spend if you're one of these companies and you're you're trying to propagate these massive vendor relationships which are worth hundreds of millions of dollars in some cases and they last for many years you need to think of what people will consider to be the future in five or ten years now is that actually going to be the future you don't care because you're just trying to sell your your product so so you're doing this uh and what drew your your eye about bitcoin in particular

So the project that I did for BlackRock, which I think is probably fine to talk about now, was a project around selling financial products direct to consumer. So like a lot of their competitors, BlackRock sells products through financial advisors and people like that. And they'd rather be able to advertise to you and have you click directly and buy a retirement product. because they know that millennials who will be retiring at some point like to buy things digitally. And the reason this project went nowhere is because there just was no infrastructure to initiate the transaction and close it

all within the same browser session. You couldn't do it. And so is this trying to cut out RIAs? Not as much RIAs. I mean, for BlackRock in particular, they deal with this network of freelancers who kind of get referral fees for selling their products. But the point here is that in order to have a really lightweight financial transaction that's web-based, there is no infrastructure based on Visa or MasterCard that's going to make that easy, right?

You have to pull out the card. You have to pull out the wallet, you know, your physical wallet. And you can't really get over that as someone who's trying to sell a digital product. And so Bitcoin basically as that sort of fuel for those types of products sort of caught your eye? yeah i didn't i wouldn't say that i conceived of a natural solution on the spot but i thought i thought oh this is why some people that i know in the in the in the engineering world are really excited about bitcoin because this is kind of the kind of digital native financial infrastructure and that's as far as i got as of 2013 yeah that's what uh we've mentioned that mentioned this many

times on this podcast but what is it the 402 error is like the payment payment gateway like They thought they would have an innate payments network on the internet when they first built it, but it just never came to be. Yes. And some would argue that Bitcoin is what they envisioned or would be what they envisioned. So your first step in, if I recall correctly from our first conversation we met eight to 12 months ago, you started messing around mining, correct? Yeah, pretty quickly after that. Well, first, so I'll be completely honest because there's no shame in that. well first i i looked at bitcoin and i was like this is really cool but i'm not a c++ developer

i had always hacked on things that were higher level newer languages and uh like i i built iphone apps um so i was pretty good with objective c but at the time like i just didn't want to put in the work to learn it felt old-fashioned like i didn't get it at the time and i looked at ethereum and then uh and i thought oh this is something that an idiot like me can program right which should have been the first sign there's a bad idea but um but i i so i started looking into it more and at and you know subsequently i moved on to another consulting project at bloomberg where i was working with the core infrastructure team helping them recruit young engineers and they're they're i mean this is relevant i promise their whole approach to recruiting young engineers

their their idea which management didn't love but but i did was let's talk about how much free open source software we use let's talk about how much we use apache and so i kind of put these two things together and i thought oh there is a need for financial infrastructure but it needs to be it needs to be low level it needs to be really really competently built and and architected and it needs to be free and open source i mean like unabashedly free and open source and already ethereum was showing signs of commercializing a little prematurely or centralizing and so that's when i kind of became more enamored of bitcoin at that point what necessarily about ethereum did you find centralizing well i could tell infura was going to become a problem like it was it was

obvious how quickly the blockchain was growing and um but this was all before you know the bubble of 17 so i sort of thought we got like five to ten years for this thing to slowly smolder but no No. Yeah, and that's like Infura is a topic that's been more popular in the last month in particular, but is, was, I would argue, sort of under the radar for a while. People don't really realize the role that they play in the centralization that they do provide for Ethereum in particular. I mean, all the major apps that Ethereum users dole over use Infura as a third party. And then behind that, Infura is using Amazon as a third party at the end of the day, too. So it's just layers of centralization. You found BitQuint.

How did you come to start Iterative? When did Iterative come to Bit? So Iterative was born out of a... Love the name, by the way. Thank you. Incredible name. As a UX, somebody with UX design experience in the past, like I think iterative, just the concept of iteration and always looking to improve is a great sort of mantra. I don't know if that's your mantra, but I love it.

Yeah. Well, thank you. I appreciate it. It is. That's how we mean it. And, you know, it's also why our business is always evolving. You know, the thing we started at or started as was an MVP of a fund. So the idea was at the time when I realized that there was a broader need for like really digital native financial infrastructure and I started to see all this excitement building up here in New York and other places that I went.

So my business partner and I decided to leave our respective jobs and launch a fund. And at the time, we were pitching digital infrastructure. And the idea was to do traditional equity investments in companies that were building off of Bitcoin or off of a comparable blockchain, which at the time I thought existed. Now I realize it's basically just Bitcoin. But at the time, I thought, oh, there's going to be this litany of different ecosystems, and this is a good place for kind of a new venture fund to play. And then very quickly, we realized that the prices of the assets themselves were growing. and we amended so we raised our fund um we closed it at the end of i guess well mid 2016 um or early 2016 i should say and then we very quickly amended our lpa to be able to just buy

bitcoin and we started doing that and we returned the fund in february of last year like at the peak well congrats on that great timing there how hard was it to make that amendment was it easy uh you know the writing was on the wall and uh we had one very big office family office that was staking most of of you know our aum so they they got it i think right away so return that fund recently raised another fund correct or and now we have like six or seven different investment vehicles but it was it was after that fund that i realized that the ico thing was just going nowhere i mean we had made most of our money off of just the appreciation of bitcoin but there was a period where i was really nervous that the whole token thing would really take off

because we weren't pursuing that we didn't advise projects we didn't you know we didn't actually go on and do any real venture activity we we made a couple seed investments um but we were not you know my business partner is a former securities lawyer um and so he could see right away that this stuff was going to be problematic for a long time so that's why we kind of consciously made the decision uh i guess in the middle of 2017 early 2017 to get really serious about mining looking at mining yeah and so what was that like uh during that mania sitting on the sidelines being like oh shit are you looking back in retrospect are you happy that you uh that you missed that yeah because the truth is our fund returned something like a 12x multiple and you know if we had if we had

gone into ico tokens with more focus we could have increased that multiple but we also could have earned a subpoena or any number of other obstacles um which a lot of our competitors did get subpoenaed and we've got you know we got nothing we broke no law so so you know we're in it for the long term we want to be around when crypto when bitcoin particularly is very mature yeah so i think before we jump into mining in particular i think it's important to talk about your thesis so for you freaks out there that don't know uh iterative came out with some of hottest content uh in bitcoin last year with it was 104 pages something like that even like you look at the draft it's online uh seven sections of a of a grand thesis of why uh bitcoin

and cryptocurrency in general are probably here to stay and and and uh what people should be looking at and you did tell people to avoid icos and tokens in particular but i think what's most important is the fact that you guys dove into the history of important uh most importantly free and off open source software and cryptography and sort of uh documented how those that the technology cryptography and the movement of free and open source software uh sort of evolved over the last four decades in particular so i think uh it would be uh advantageous for us to sort of jump back to to the history how things have changed over the last four decades why you guys decided to go all the way back that far and sort of preface your thesis uh as a story almost that's what i loved

about it was like a story thanks as an investment thesis it was easy to read to get through uh even considering how long it was so what uh what was like the brainstorming session like and and why did you guys decide to go all the way back and then and then frame it this way well it started with it started with like just a lot of clues that I had been collecting I mean one of the one of the the really enlightening moments was when I read some of the the things that the Microsoft folks had said about Linux in the in the early 90s or excuse me the late 90s early 2000s and and I realized that that they were shockingly similar to the comments that um, activist investors were making about Bitcoin. And I thought, well, now I know what it looks like

when an empire is threatened, you know, or, or is already beaten maybe if you, if you're going back to 2000 and Linux. So I would say that that was one motivation is that I started to see signs that this, that we've seen this before. This has happened before, um, at least in software. And the, and the other reason was I was not satisfied with the narratives that people had put out there about why bitcoin exists i just didn't think that it really encompassed uh the the real motivation and um i'll say two things about that one is that uh you know in college like taking computer science and choosing not to be an engineer i saw a lot of my friends go into engineering and um and and i saw it as being a kind of high risk decision in the sense that it becomes very easy

to get locked into an unpleasant role if you're not really, really sharp about how you pick your jobs or your expertises. I mean, it's an interesting gamble. Like if you study certain types of engineering in college, it's possible that type of engineering just becomes irrelevant in 10 years and you now have an expertise that nobody needs.

So I was shocked by how careful software engineers had to, all kinds of engineers, but software engineers too, had to be about picking and choosing what they became good at. And I noticed that they had very few reservations about getting good at a framework that was free, open source, and really popular because that was job security.

And that goes back to what I was saying about Bloomberg. They were trying to tell young engineers, hey, if you come here, you'll learn Apache frameworks, right? And you can go anywhere and do Apache. Anybody that's running a web server is going to need your help. So that was a big motivation.

The other thing is I think that it is interesting to talk about central banks And it's interesting to talk about how our existing monetary system is sort of a scam perpetrated by people who thought these things up 300 years ago. However, it's not a very accessible standpoint to look at Bitcoin from. And I thought there has to be a way to appeal to the self-interest of normal people who all have jobs and they all go to work and they know what it's like to be stuck in a shitty position or with the wrong skill set or wishing they had done something else career wise. This is something that everybody can sort of empathize with, and I thought that would be a better way into the whole free and open source thing, which is surprising and counterintuitive for people who are not from the software world. Why do you think it's so counterintuitive? Well, going back to, you know, in the thesis, there's a study that I cite from MIT, which I think was done in 2005, and it's about the motivations of people who contribute to free and open source software projects.

And the authors of the paper say interesting things like, you know, it might defy logic that people would act altruistically in sort of a business setting. That they might build something and give it away. If it's worth money, why would you do that? And that I've sort of taken for granted kind of coming up in the world of tech. But I realized that there was a big disconnect between why a monetary system should be free and open source and what's motivating people to go into to work on free and open source systems. Right. You sort of have to get comfort there before you can move on to Bitcoin as an implementation of a free and open source monetary system. You know what I mean? Yeah. No, it is a huge leap. I mean, I was only introduced to like free and open source software after I had left finance, dove into UX design.

And then somehow, so I took that UX digital design bootcamp, worked in UX for a little bit, and then I wanted to learn more about the back end. I ended up working for the software development company, focused on Drupal in particular, which is not the sexiest, it's definitely not the sexiest technology, but it is an open source community. So I learned a lot about the LAMP stack and sort of the ethos behind open source just by getting thrown into it for two and a half years. And it really wasn't until you experienced, like, oh, now I get it. Like, this makes sense. Like, if you build tools that you then give away, like, your tool could become more powerful. And everybody's combination of building these tools together just makes the system that much more powerful. There's so much more leverage you can get by sharing it.

Right. And you would never appreciate all that if you don't start out appreciating how difficult it is to build software. And how redundant a lot of the software in the world is. and how desperate people are to share infrastructure if they can do it in a way that doesn't put them strategically at risk. That's, you know, the car companies do it with their replacement parts. They standardize. This is the ISO system.

This is most of the industrial world is standardizing around the size of brake rotors and, you know, all these things because otherwise supply chain management becomes a complete nightmare. So, but, you know, it's a lot of context. for for somebody that doesn't doesn't have a window in from one of those worlds how are you supposed to get bitcoin you know yeah and that and it and it's a it's crazy because that's like you touched on your thesis it's been a 40-year process like going back let's talk about how different the engineering culture is now in a corporate environment like now the engineers are

running uh running the show like they they have the most leverage as opposed to 40 50 years ago And that was not the case where the leaders of the hierarchy sort of dictated down. Now we're at a point, especially it's probably taken a generation, a few decades for people, engineers specifically realize like, wait a second, like I have to leverage here. Like, yeah, I'm making this happen. Yeah, there's sort of been that revolution and more and more people are waking up to it. But it is it is a very different mindset than what the world was used to for so long. Yeah. Oh, yeah, absolutely. and and that's just the engineering mindset i mean you brought up a good kind of ancillary

topic which is that there is a that tech itself which used to be you know engineering dominated obviously um and and used to be very focused on planning you know if you go back like 25 years or 30 years if you built a piece of software it was planned from soup to nuts like five years ahead of time waterfall baby waterfall exactly exactly so so the the whole birth of the agile movement and um which i think actually comes from manufacturing right like the whole just in time concept that toyota developed in the 80s for making really really lean manufacturing processes that that kind of bled out into information manufacturing if you could call it that and people started to think well let's just see how far we can get by whipping things together and

then iterating and that that's a design that's design thinking like if you talk to anybody that's that's an architect or um or an artist i guess if they're trained then then they're they're taking a specific approach to conceptualizing the problem building a solution or something that they think sends the right message towards a solution and then it's this reflexive process where you as the as you're understanding the problem improves your product improves and it's that's really easy to understand when you pick up you know like this bottle or or any number of ergonomically designed things in this room right you can see it because industrial designers have become so good at their craft but in software that's still a fairly new thing that we only really got like in the mid

2000s with Airbnb businesses like Airbnb which was founded by two designers who basically said hey we think we can merchandise people's homes the way that you know Marriott merchandises hotel rooms if we just send a really good photographer right think about how unlikely of a pitch that is if you come from an engineering mindset and you're like no no this is all about price matching and search and discovery and these guys basically said no it's about painting a picture of your destination and selling that that's a very underrated concept i think is that you can design anything everybody thinks you can design anything you can design processes you can design your day you can design this podcast is designed in a certain way like people don't realize that

you can apply design thinking to every aspect of your life and it's thinking at the end like keep harping on ux but like harping on ux like at the end of the day and making it a pun intended iterative process like quick iterations in particular is is why airbnb was able to get to the level they are and which should be crazy important to include in this diatribe we're going off on right now or this tangent we're going off on right now is that the free and open source software movement in particular and then just the software movement in general is driven the cost of production to such a point where you can get two minds in the case of airbnb four minds in the case of instagram and build a fucking multi-billion dollar business right which is

insane and which is insane and people still don't get that concept either because it's what we're talking about right before we hit record i told you to stop talking i want to talk about it now is like the concept of the work week and we are stuck in this hell as a society, stuck in this structure and this form of the industrial age and literally people can't break out. People are still working in cubes all over the world and it just is not necessary with the technology that exists today,

I would argue, but you have some strong thoughts about that as well. Yeah, absolutely. I mean, I think that everything that we've learned about design in the last 20 years from not just industrial design but software design and the way that software has kind of wormed its way into every aspect of our lives. If we now understand that the best way to solve a problem is iteratively, what are we all doing

picking our careers when we're 21? Something about that doesn't make sense. And there is not a socially acceptable way to kind of just fuck around for a while and figure out, learn some skills, figure out where you want to apply them right the world is very very unwelcoming to that approach to life and uh that's why i am sympathetic to the generation of freelancers that has popped up right there's a whole i mean many of them are living in this neighborhood around us this is

this is the neighbor williamsburg is the neighborhood that freelancing built i think the mecca the mecca of the freelance lifestyle and obviously there's a ton of bullshit associated with this right there's a ton of people that like essentially live off i assume live off their parents if they're paying their rents in this neighborhood they don't have jobs they work when they like and i'm not talking about that i'm talking about people who can see that locking themselves into a corporate gig whatever their skill set is whether it's tech design you know marketing uh any literally anything um they see that they are better off developing their skill set and dealing on a client basis with people and i love this because it gives people repetitions

with different employers in a very short amount of time granted if you do it wrong like i said you may learn nothing and just ultimately end up broke but um i think you can make progress a lot faster as a highly motivated ambitious freelancer than you can as an entry-level employee i would completely agree and i wouldn't consider myself a freelancer at all but i would say i did buck the trend a little bit my early to mid-20s and i was sitting in a very cushy job working at a futures fund in chicago had a very good career trajectory but kept on it and i literally just viscerally could not take sitting in a cube from 6 30 a.m to 5 p.m every day oh it's deadly it is deadly and uh i've been on a journey since then i would argue i'm still on the journey still don't

know exactly what i'm gonna do but it has been an iterative process i went into ux design and back-end development and went to barstool to figure out how to do podcasting and media and shit like that now hopefully i'm in the process of building my own thing but it has been a shit i quit in 2014 the summer of 2014 so it's been a five almost five year journey that's excellent but i want to change it i mean i did not make as much money as i could have if i stayed in that job but i wouldn't change it for the world at all but i do think there is that social pressure just like i got a lot of shit from my parents i'd be like no i don't want to do this i'm sorry like i'm out i know you guys are worried but this is what i need to fucking do but there is that

that social pressure there and a lot of people get stuck man you talk to people they're like how'd you do it it's like it wasn't easy man that that summer i took that ux boot camp i lived off a chipotle bowl a small like grande starbucks coffee a day i was poor as fuck yeah there's pictures like i slept on i was a 23 year old sleeping on a sophomore in college's like couch for the summer i got skinny as fuck but it was the funnest summer of my life yeah i felt free yeah holy shit i'm learning something new and that's the other thing if you get stuck in a job you're not always learning you get stuck in a rote script and you don't learn new things yeah i think that's what drove me crazy yeah like well yeah you become used to clocking out at you know five or six and

not thinking about your work and actually you know i have a lot of respect for people who take the approach that work is not their identity like i think that i actually that this is a sort of circular continuum that um you can become so involved in your work that you can't talk about anything else sometimes i'm afraid i'm one of those people and uh i and i know how kind of deadly boring that is like if you get stuck with next to one of these people at a dinner party and it's like geez this guy just wants to talk about maritime law or something you know what i mean it's like nobody else cares so there is a so i i can appreciate the the attitude that like you know what i am who i am from nine to five and then i'm gonna be whoever else i want

from from five to nine like i that that's a that's a reality that i that i like i prefer that and that's why i sort of think if you can get to a point where your work is just a set of skills and all of your other time is spent building up a personality and being the person you want to be you can sort of merge those and um and right now we don't have a lot of good examples of that because so much work is corporate and people instinctively don't get too dedicated to corporate jobs right because it's a corporations are are by nature a tragedy the commons like nobody gives a shit like everybody's just showing up i mean i shouldn't be too cynical but it's not like any one person you're being too cynical i think you're being very descriptive well i guess

it's not that these people don't work hard and they're not driven it's just that it's not their company it's not their baby right and i'm not saying that you should always work on your baby you should have a little distance however um when something is yours you get all of the credit for when it succeeds and that makes you behave differently it makes you i think work harder and uh and doing that outside the corporate system without all the support and the and the infrastructure that corporations provide is especially admirable and it's and you get especially rewarded for that so i see i see bitcoin as infrastructure for a transition period where we're not all earning money in the same exact way we're not all getting direct deposit

every two weeks that requires a little flexibility that requires a financial system with a little flexibility maybe some of us are selling things directly maybe some of us are selling services maybe some of us are selling data for for you know amounts that are too small for visa or mastercard it's really about a broadening of use cases and a long tail of transactions that just are not supported by you know the the narrow band of payment rails that we have today yeah maybe you're selling podcast ads or something like that it's actually no but i'm happy you uh you mentioned that small amounts of data it's a tangent but uh love that uh that newsletter on uh using lightning to sell to sell small amounts of data was that yesterday yesterday yeah so if if if scam artists

are doing this right they're selling personal data for 10 cents per record but they have to sell it in bulk in 10 blocks because presumably i mean they must not be using bitcoin i don't know what they're using that article didn't mention it didn't link to the dark market dark the dark market site but um yeah i mean that's always how it starts it always starts yeah so if you freaks that don't know a bunch of uh bitcoin exchanges got hacked matt and i'll matt And Odell and I will probably talk about this tomorrow, Friday, on Rabbit Hole Recap. I'm going to have to text my wife to tell her to bring some more bourbon. But yeah, a bunch of Bitcoin exchanges and altcoin exchanges got their KYC server.

I don't know if there's KYC servers. They got hacked and a bunch of people's personal data is out there, like passport pictures and internet. And it's being sold on the dark web for like $10 a pop for all the data. That's the real exchange exit scam right there. Right? Yeah. you can't stage a hack just sell sell all the data hey you want some passports and who doesn't right yeah but i mean and that's a whole nother tangent is like the whole kyc aml

thing it's a fucking it's a fucking ruse okay i'm like i'm all drunk here on bourbon already i haven't drank in like three days so i got a tolerance tolerance right now but um the kyc aml like today just came out the deutsche bank and bank uh what was it bank denke we're laundering hundreds of billions of dollars slap on the wrist like they just go oh slip up really they're criminals and yeah these kyc aml laws exist to stop these people from under like money laundering but really what it does is just put a burden on small businesses and the little man and the people at the top just launder the money anyway through traditional banking systems so yeah it's all bullshit on its face and then it makes everybody worse off because you have that data out there and

now fucking people's passport information out there people's identities are going to be stolen because of the need to collect this data to trade to trade funny internet money people are going to take this risk let them like yeah and the worst part about this is that this system is is uh it's completely avoidable if you are rich enough right and you know like the i don't know if you've ever looked into the the british um the offshore trust system but the the reason that the the reason that the that the government of great britain is so eager and the government united states too is so eager to suppress and eliminate swiss banking secrecy is because they have this whole alternate system of anonymous trusts which are generally based out of grand cayman or another

british kind of offshore cayman usually yeah or jersey isles or uh guernsey or there's a bunch of malta um although malta i think is not a british property but but whatever it's you know the fact remains like if you have enough capital you can basically hand it over to a trustee and there is no qualification for being a trustee there is no central database of trustees there are no reporting requirements for trustees it is like i mean it's it's actually completely amazing if you are if you're in the position to avail yourself of it but um it is certainly not fair and i don't know if every system necessarily needs to be fair however uh that's actually an interesting point i want to touch on after this yeah i mean i'm this thought's probably not going anywhere

but but all i can think is like if centralization of liquidity provides more credit to a system like if you don't have liquidity hiding in little pockets hiding from regulation or tax in little pockets more credit in the sense of debt or like credit in the sense of stature credit in the sense of debt okay um and this this may be an idiot thought that you're gonna have to edit out later but i would think that you would want i would think that you would want a system where all the liquidity is addressable right so it's it's great to have a limited issuance of of coins but ideally you'd be able to address coin holders or at least have them connected to some system this is an idiot thought but but um my point is like

some of that capital which is locked up in trusts which by definition can't move is not being lent out right so it's not being it's not being deployed as venture capital it's not bearing interest uh it's not really doing anybody any favors it's just hanging out and it's somebody's rainy day fund and um and i think that in a macro sense everybody would be better off in a system where it's it's not so necessary to hide liquidity and it's not it's not so common to hide liquidity yeah right but like why why are people forced to to use these offshore trusts that's the other thing it's like it's it's all because there's no pseudonymity with the actual asset right and if there was again i you know i haven't thought this through until just now but if there was i would

think that people would be if they could invest pseudonymously or they could lend pseudonymously in a global market without any particular regulator having jurisdiction which is sort of where i picture bitcoin going i i picture it as an international unstoppable global market for stuff where um probably not physical stuff because that gets you into you know jurisdictional issues but But information and financial transactions, if it becomes like a global kind of supranational network for moving liquidity around so that people can buy and invest in different places, that I think means that the system becomes more meritocratic. Because even an idea that's not politically popular or an idea that is ahead of its time will find someone globally who is willing to invest. and so essentially it's an information problem that that today the markets are balkanized and not only an information problem but a flow of information problem right right it's uh and i

mean and this has been another big topic in the news of bitcoin recently is the deplatforming leading people to bitcoin but it is uh it is there for these people right it is a form of free speech at the end of the day if you will it is as many things it is sound money it is free speech it is uh code is many things at once but incredible things that i i think you and i would agree humanity needs particularly at this point of time where i've actually been having more and more conversations i think as a society we're losing touch with reality and i think when safety dean in the bitcoin standard says that bitcoin is the only set of objective truths in the universe potentially at least earth we know uh to be certain like there is this need

for society in my mind i don't know if i'm getting too cosmic here but i do feel like we're getting further and further detached from reality and i would argue that the core of that problem is money creation and bitcoin can help us get get more anchored into reality um just from having a literally a truth machine. Like, hey, this is what happened in the last 10 minutes. Here's the block to prove it. We spend a lot of energy and money to prove the transactions that happen throughout time.

So that's another thing that drives me to Bitcoin is the search for objective, undeniable truth. I don't know if I just got too cosmic there. No, that's very enlightenment of you. But I think that is at the core of a lot of this stuff. And I think the counter-argument is that, well, if anybody can – and this is also a counter-argument to free speech. But if anybody can spend their money sodomously and invest in things while obviating a regulator or a supervisor, then surely people will fund all kinds of terrorist groups, right? That's the natural counter-argument.

However, if you look at, like, who bankrolled the Third Reich? It was a union bank here in New York, right? It was Prescott Bush, George W. Bush's grandfather. It was the Warburgs. It was... Who took all the gold from the Czech Republic and gave it to the Nazis, the BIS. Yeah, it's all the same clowns. It just so happens that they get their own secret system, right?

The system essentially works for them. And, you know, I think everybody knows this on a certain level, but I don't think that people who haven't read history realize how acutely well understood this scam is i mean banking is just it's a it's an outfit it's a it's a racket for international families to push politics around and uh there are so many warning signs throughout history i don't i don't care who writes the laws give me the power to create money and i'll like that's all yeah that's that's mayor rothschild right that said that i think yeah and then you have andrew jackson and thomas jefferson like

warning about banking and yeah i love i love jackson was not an educated guy that was his whole shtick right and even he knew to kill the bank shout out jackson the last the last man to bring down a central bank in america he's uh no thank god we had him uh there there was what there was believe it or not there was a central bank before uh the central bank that we have now in the states the federal reserve what was the first federal reserve bank the federal reserve bank we're on now is number two and number three number three yeah oh yeah so hamilton created one that that was

put down i think by the revolution of 1802 jefferson when he was elected yeah um i could be botching the history but uh but but yeah the third one was the one that jackson took down and they shot him like three times yeah you know when he was involved in like five duels i'm pretty sure well yeah but i mean also assassination attempts i think he died with like two two bullets in him from um from people who were known to be agents of of offshore banks and the europeans have constantly been trying to i mean now they've succeeded but since 1913 but uh they've always been trying to insinuate their banking system into the u.s yeah no and that's how do we how do we like i don't want to say shake people up but like wake people up to i want to grab people like

wake up like this is it's an anomaly like the way our money is currently run is anomaly in the course of human history people like uh people like to say uh the the technology and the civilization that we're handed today is because of this monetary policy where i would argue it's because in spite of that monetary policy but people yeah people are addicted to it man and it's getting it's getting weird around the world like today venezuela official kill it looks like the u.s is trying to take over another country just just endorsed another another president and some some dilapidated nation around the world yeah um i mean i'd love to see maduro get taken down but i don't know if i feel comfortable about trump being like this guy's the president now um yeah i know

that's where that's where the political spectrum becomes kind of a horseshoe for me where uh and i gotta like tread carefully with with anything political but um but i would say that this this scam of central banking has been well this the scam of i shouldn't say central bank the scam of fiat currency that people quantitatively ease forever is a really well understood phenomenon the first idiot to um to propose this was john law who became the finance minister of france in like 1725 and by 1789 they were in full scale revolution cutting people's heads off because his whole approach was like let's just issue paper money and we just keep printing it and he had kind of a wait and see approach he very iterative that guy he had a

wait and see approach um to like what's let's see what happens if we just go to a paper money standard and then just print money uh edward chancellor is the author is a great um recounter of that whole episode of history but uh but then we also have the weimar republic which ended which landed the german empire in world war one and then we also have uh japan in the 1930s which landed japan in world war ii um and what always it always happens the same way it's the military is the is the is the one you can't say no to the central bank or the government or whoever the treasury whoever's in charge of that country's money printing they are good at austerity except with the military and that's why these things commonly end in war because the military is just

building and buying whatever it wants i mean and this is a problem going back to fucking ancient rome that's why the roman empire fucking fell they spread their army fucking too far out they debased their currency was all tumsel what is it uh tongue sold or uh where you just put bunk metals in gold what's it called tungsten tungsten tungsten yeah tungsten yeah they just wound up like the soldiers thought they were getting gold they were getting tungsten and then the literally the drive to pay their soldiers to base their money so much that rome was sacked within like rome went from like four million people to like 40 000 in two years or something like that yeah there's also an interesting argument by a professor at oxford i think whose

name is joseph tainter if i if i have that right um who basically said that that rome fell because it ran out of people because culturally it was popular for romans to move to the furthest flung new conquered territory and that the city of rome was becoming so expensive and so um devoid of working age people that that eventually the bureaucracy sort of collapsed under the weight of its own expenses um but you know to your point like all this comes back to currency and paying people and people clipping coins right once the currency is in the wild any anything can happen to it um so you know it's it's about time that people had a conscious conversation about the fact that we are living in a money bubble and uh and the money bubble continues to inflate other

little niche bubbles like real estate or like equities or that's what like people are like where's the inflation after after quantitative easing it's like have you looked at equities markets like have you looked at housing markets have you looked at education like right it comes out in asset prices yeah exactly that's that's the thing i think probably a lot of austrians libertarians or whatever were probably wrong in thinking uh when qe was initiated originally that would cause price inflation i mean uh cause inflation of the dollar in particular but really it caused price inflation and financial assets um yeah and that's why we're at the levels we are today and that's what people don't realize like how can you honestly 10 years back 10 year

retrospective go back to 08 how can you honestly like look people in the face say our economy is better off our economy is better off but 60 of people can't afford a 400 emergency like don't worry about it health care is very expensive like and if you don't sign up for the government health care we're gonna fine you but two grand um oh shared responsibility my ass yeah that was like me like when i was struggling through my iterative process to find out like the path i was going on like i was unemployed a lot and i was learning a lot and my i was on all my parents health insurance wasn't on my wife's health insurance i was fucking on an uninsured for like two or three years yeah and i got fucking fined two times yeah i had like i was struggling

and down like i was willing to take the risk of not having health care but yet i had to pay two grand i had to come up with two grand two years in a row to pay that fucking tax like it doesn't make any fucking sense so you're taxing poor people there like these this this inflation is like that's the that's the crazy insidious part about it is that the inflation makes people wealthy on paper but they're able to leverage that paper wealth to fucking loot the world yeah that that is i was gonna say like that the the counterpoint to all the central bank inflation is that well we get to finance all of this amazing r&d that we do for cancer drugs and for iphones and yeah that's the argument that this monetary policy gave us this world it's bullshit it is

it's bullshit because at the end of the day this stuff is only available to you if you have money to buy it with and if your money is constantly losing purchasing power then these things are increasingly not available to you so i'm laterized by equities or portfolios whatever you have like yeah it's it is still a redistribution of wealth in in the wrong direction um you know upwards and it's you know it's it's hard to it's hard to think of a way out of this at this point um right even with bitcoin it's still like heavy it's like i don't think you could it's not going to be an easy transition even with bitcoin yeah it's not going to be pretty no i mean i like i am i am so sympathetic to the idea that we could have a debt jubilee but it's so idealistic you know the idea

that the entire that our entire generation of millennials would just opt out of the existing financialism and that that doesn't create just catastrophic problems for other people right like it's not it's a pipe dream that's why I actually had a Bitcoin Tina on last week and he was saying the most bullish case for the world is

a stagnant stock account or stock market for like a decade while Bitcoin's like getting built out like no returns for a decade and that liquidity just moves into Bitcoin or something that would be like the most optimistic case for a

move transition or something like that yeah but i don't think it can happen at this point because ever since greenspan all of our fed chairman have it in their heads that that their job is to create great conditions great economic conditions it's not right this is a far cry from like the policies of paul volcker which is like we need to take strong medicine to get rid of we need strong bad inflation we need somebody to clone paul volcker and bring him back is he still alive I think he is. He's like 96. I'm over here leaning over my laptop because I'm looking for a quote.

I believe Justin Moon. Shout out Justin Moon at Billal Boot Camp. Check it out. He tweeted something earlier. It was a quote. Let me find it. Right in this vein, though. Where the hell?

Come on. Come on. I should have had this up ready to go. it's the thing about uh i'll cut this out where are we 48 20 i'm gonna retweet this maybe i just liked it it was a thomas soul quote um so johnson was great he's got some real zingers no but it's basically like economics the study of economics should be

like you're observing emergent properties you're not pretty it's not predictive it's descriptive of the things that emerge and that's the problem with the the central bankers that run our world they try to predict what's going to happen when really economics should be a retrospective analysis of what what did happen right economics is the study of i mean human decisions at the end of the day yeah it's it is it is that at the very at the most abstract but it is also i mean what's interesting to economists is people at the margins his behavior at the margins it's not status quo behavior and um one of the interesting things about the you know the financial system that we're in today is and this this comes from uh timothy geithner who wrote a piece in foreign

affairs last year that was really shocking where he said that we did it wrong after the 2008 collapse he basically said we put in place too many capital requirements for correspondent banks and we now have a situation where the requirements for collateral and for liquidity held on balance sheets is so high that that the system has become more fragile than it was pre-2008 and after i read that i couldn't help but think like such bullshit it's itchy this guy seems not very uh conciliatory about the fact that oh did we did we tune up the economy in the wrong direction when it broke down like that that seems like a major bonehead move um so you know every attempt my point is that every attempt to improve things seems to actually just serve to

enforce the status quo which to your point is the opposite of what you want in an economic system you want an economic system that is accommodating of emergent trends right not not a system that is trying to suppress growth where it doesn't expect it or whatever it's almost like a ludic fallacy yeah exactly and and we're having this conversation as as a bunch of the people that's quote-unquote save the economy in 2008 are meeting in davos right now if you want to if you want a list of people that destroyed the world like look at who's in davos right now these are people completely disconnected from everyday people in the world like me and you and like i fucking selling like 68 hot dogs like and they're and they're it's like the world i could the world

economic forum they they present themselves as something out to save humanity yet to to be in on the club you have to fucking fly to davos switzerland switzerland the most expensive country in the world you have to spend thousands of dollars on a hotel room tens of thousands potentially thousands tens of thousands on ticket number two number one and then you literally go and it's a bunch of rich people disconnected with the world trying to dictate how the world works and they're it's it blows my mind that that is actually still palatable and the people that show up to davos and switzerland actually think they're helping the world when especially in the last five to ten years davos has gotten a pretty bad rap i i don't think that they think that

they're helping the world now i think that they i think that people the sort of folks that attend davos are very much informed about the fact that they are part of one class and that everyone else is part of another class and that their agenda serves them and and only has secondary impacts on everybody else i i don't think they they fool themselves i mean when they talk to press they they talk about they paint a much more um you know magnanimous picture but i think that they know exactly what they're doing but it seems as though like everybody i mean we're talking a lot about like the the cube working environment and getting stuck in a rut and picking your career straight out the gate but it seems like a lot of people stuck in that rut like look up these

people's idols and it's it's once you so i think that's what what it was for me early on luckily like where i worked for a fund of funds a very small boutique hedge fund but very very respected president who brought in a lot of money and so fund of funds may not be the best structure for the act fund there's a lot of fees but it was great for me because literally my job we were indexing other managed futures funds into an index product so across four or five products we probably had 21 managers so i got to speak and meet with 21 managed futures uh chief investment officers like monthly quarterly yearly like having calls with them when i realized i was like holy shit like a lot of these billionaires that i'm talking to like

aren't that much smarter than me like they don't really know what's going on they may have just gotten lucky and like once i realized that at like 22 23 i was like holy fuck like yeah that that's like a lot of people are stuck in that oh i don't know any better than this guy this guy's a billionaire he must be the smartest person in the world and then once you sit there you're like holy shit like you have no idea what's going on and then that was like an aha moment for me i was like all right there's something there's there's something going on in this world yeah absolutely and that's the ruse that's the ruse of being uh quote unquote elite right is that you purport to be some something better than human you purport to be something that is more than

like everybody else is walking around but you know in your heart that you're just some guy right and and the whole and the whole payoff of being at that level is being some guy and being treated like you're so much more and like what's funny is that you don't have to spend a lot of time with people who got famous young before you you get this vibe like very very quickly and um because they know right like they didn't really do everything that that is required to deserve whatever but but right place right time uh not to take away from the individual right action right choice right thing to say sure it's all important but at the end of the day the impact is so much greater than than any of these people probably ever anticipates yeah it's not like they

hold secrets in their mind that that are unattainable to you that's what i think a lot of people sort of have blinders i'm like ah that could never be me right it's not a difference in intelligence it's not a difference and there's actually not a lot of differences except motivation attitude approach i mean i so many business meetings i think come down to like who is willing to say the uncomfortable thing that needs to be said right so if you're negotiating and you know that there's something in the negotiation that isn't serving your purposes how do you bring that up and then how do you bring it up in a way that positions you to push the negotiation more in your favor that you know if anything it's it's a negotiating uh

it's a negotiating skill set and not not raw intelligence it's not even you know what family you were born into if you're if you're more intrepid than the other guy you're gonna win every time uh and that that is a matter of attitude and discipline and things that are mostly internally held i think yeah no i think i think it's important to make more people aware of this like you i don't want to say fake it till you make it but like there is some credence in that like you can you can present a confident face and people people will think that that you are able to back up that confidence and a lot of the it's a lot it's a big bluff i don't want to say a bluffing game obviously there's a lot of smart people who got to where they are because

they're very smart and very strategic but it's not as it's these people are are not the pedestal that you put them on is not as high as it should be that's what i would say and certainly not if they if they got there by playing the corporate game like there's a there's a lot of people who have titles that belie their actual skill sets and it's because they've just been climbing the corporate ladder using essentially social proof and and kind of other tricks um to get their way to a position that sounds like it is you know much bigger than it really is and that's what it's one of the reasons that i am so uh insistent on destroying the technostructure and kind of destroying the corporate um the the the corporate apparatus which presupposes a lot and delivers

very little you know right and that's all right let's bring it back to bitcoin and talk about bitcoin like 30 minutes this is great but bring it back to bitcoin that's why i'm drawing the bitcoin i would imagine you are as well because it is such a meritocracy and you have anonymous people writing things online and the the cream is just rising to the top based on what people say and there's some people who are not anonymous some people that are but i think this is like uh the corporate types got blown out between 2013 and 2017 like all the hashtag blockchain experts and people with very print and proper headshots

and their avatars have their suit and tie look sharp as hell, look like they could sell you a great mutual fund. But Bitcoin, that doesn't mean shit. Unless you're providing good content or good ideas, you're going to get shot down. I think that's what draws

me. It's like, alright, there's no bullshit here. The bullshit gets called out immediately. There's something invigorating about that. I always feel intellectually curious and driven in this space which i think is imperative and again again going back to like if you pick your career out of college and you're sitting in that cube and that's your career for the next 30 years you're not going to learn like again this is an expanding universe bitcoin and cryptocurrency in general we're literally figuring out the boundaries of

these systems every day as they're used more and more like that's what drives me intellectually it's like all right what's going on now like we're learning new learning something new there's potential this information is new to the whole market there's potential i could understand it before a lot of other people and there's something vastly exciting about that yeah absolutely it it's uh what draws me to bitcoin is is the opportunity to be to delay gratification on an insanely long time scale right that's actually that's if anything that is the thing that i felt like i was missing growing up and that i think a lot of people you know who were born in the 80s and 90s were missing is that you know the 80s and 90s were a go-go time of short-termism and that

if you're growing up in that time like you can't help but absorb some of that that it's all about fast money and um not even fast money fast interactions fast fast um like if you're posting a picture on social media on instagram fast satisfaction like that's it's like you want that instant instant instant there's crazy stats coming out well they focus on social media in particular right now but like this high time for preference mentality that our society is stuck in again like i think our society is disconnected from reality and it's driven uh i would argue by easy money policy which has led to a society of conspicuous consumption which where you think on a month-to-month quarterly to quarterly basis instead of building years in advance

and there's stats coming out since the dawn of social media in particular there's a joe rogan episode last week or two weeks ago i forget the dude's name bill biked or something like that but he like dove into the data of middle schoolers like over the last 10 years and suicide rates in particular and the the emergence and proliferation of social media has driven this like high time preference society where i was at my sister-in-law's house uh earlier this week and she was telling us a story if she has a daughter in middle school or her she's got a friend who has a daughter in middle school who like they have to like in middle school now like girls in particular it's worse for girls than it is for guys like we're lucky there were guys we're like meatheads like girls have

like a terrible case of FOMO in particular and like in middle school right now like girl like this is just anecdotally but this one particular girl that my sister-in-law knows like if she does not post a picture and get a certain amount of likes the day before she goes to class like she will not be talked to in the lunchroom like that is that high time preference like what are you doing for me now like i'm emagulated like out to a social aspect instead of like a financial aspect isn't it funny how high time preference reduces everybody's base level of humanity right that when when that's what i'm getting back to like we're disconnected from reality in a high time preference world it's what have you done for me lately yeah right it's like who were you today

it doesn't matter who you were yesterday fuck that right uh that creates i mean especially for a child which by nature of children accomplish nothing right their their their purpose in life until they're 18 or whatever is to just play around and like learn about the world and then you you put that person in an environment where they need to deliver something before they're considered legitimate right they're going to grow up with a sense that they don't belong to the human race unless they produce a certain amount of reaction with their peers and the truth is that some people are really good at that intuitively by the time they're like seven they know how to be a ham but a lot of people take uh and i think there's research on this a lot of people take

their whole lives to deliver something worthwhile to humanity there are people that literally work i mean you know jeff bezos is is sort of an example where i don't know if he was famous in the world of hedge funds when he was 30 but i doubt it i doubt it right he was a rank and file guy at de shaw but he worked for like 25 years to put together a vision and now by the time he's in his i don't know how old he is 50 or 60 he's delivered something to humanity and um there are some people like him that take their whole lives and there's some people that by virtue of their uh precociousness can crap out something amazing by the time they're in their 30s like einstein or whoever else but but we cut that opportunity off if we bring people up in a high

time preference environment i think yeah and it's it's scary man because particularly with social media like because it's so new like it's just as old as bitcoin like facebook was what 2006 2004 maybe yeah like it wasn't available to high schoolers so 2006-7 at least it was dot edu up until that point but like we do not like these high time preference social media platforms in particular they are creating uh an environment and again girls in particular like guys just use it to make fun of each other and just do meathead shit but girls in particular it's creating like a a fucking environment of FOMO and if you look at the data like in middle school in particular it was like this this is happening to people whose brains aren't fully formed like and they're saying

in high schoolers it's not as pronounced but like if your child has a phone between sixth and eighth grade and have access to social media like the data is like the data of self-harm and suicide attempts is is is raising at like a hockey stick pace which is scary and i i would argue that it does revolve back to high time preference like high high time preference money creation number one like incentivizing all this and then uh individuals not having the low time preference to plan for the future and and yeah well i mean imagine if you're a parent and you go deeply into debt to send your kid to college you would of course prefer that kid gets out of school and gets a really high paying job right off the bat because at least at the very least you know you're

not going to incur more debt for this human being staying alive than you already have right and maybe at the best they pay you back for school or whatever they co-sign the loan so it's um there's always an institutional or uh yeah i would say institutional there's always an institutional angle to to all these pervasive social problems and i think that the the issuance of student debt the idea that like kids are barely out of school before they're freighted with all this all these loans that makes it very very difficult for them to approach their careers iteratively right and that makes that in turn on a macro level if you're providing these guaranteed loans to everybody it means that people are going to make more conservative choices by nature because

debt makes people more conservative it's just i just humanity it's just how we think if we're rational so um so i worry that there could be some kind of like cataclysmic end of experimentation or end of like wild youth where uh everybody just gets out of college and goes straight to some loan killing job and that's that would be the worst thing for the economy it'd be the worst thing for this economy it'd be the worst thing for people's happiness i think yeah don't even get me started on college loans it's insidious man like not only do the students not understand what they get into a lot of times the parents don't uh either like they don't understand the the dollar amount on the tuition that they're paying like i don't want to bring my own family

into this but my brother and i strongly convinced my sister to drop out of art school last year she was going to a very good art school paying a pretty penny she's uh she's a potter she's a rameses she's not gonna be able to focus on her pottery until her junior year she's gonna have to go 100 100 grand in debt just to get to like a point where she could then work on what she's good at so we can like she's good at what she does too so we're like and she sells she's already like at a position where it's like she's selling her pottery like people like it and she's making it for people so we're like it is not worth worth it for you to go to 120 grand in debt to do something you're already good at like go get a job in a studio and start working out she's happier

i hope uh than she would be and a lot less debt than she would be as well um but it is it is a problem people just get like hey this is this is the dream i was fucking told when i grew up like you have to do this this and this i'm here checking off college off the list and that just so happens to be hey i'm gonna go 60 to 100 grand in debt don't worry i don't know what that means just to kick things off right it's like yeah i mean there's a lot of analogies that come to mind but name one can we take a quick break yeah go for it we're breaking at 106 55 all right back from the bathroom break we got pretty off topic there we got pretty cosmic we did but it's true i think these are important topics to talk about um again going back to the

theme of this episode i think a lot of people are disconnected from reality and i think conversations like this help people get a little bit closer or back in touch with it um our world is changing at a crazy pace i mean that's one thing i think your thesis didn't say outright but sort of highlighted is is things have changed drastically yeah and i think that that's another theme of this podcast overall is us humans adapting to the pace of change in particular like we have never experienced a pace of change of technology population growth economic growth ever as a species yeah and i think the reason that our thesis is is well one of the motivators for writing the thesis, one of the reasons that I think it's relevant to people, even outside

Bitcoin, is that when more and more people are working in technical roles or ancillary roles to software, it becomes very important to consider how software gets made and who gets a say in how it's made and who owns it and who can look at it and all the rest. And that's, as the economy digitizes there are more and more people who are working in pseudo software environments which was not the case 30 years ago or something and uh and that can be i mean for people who are maybe used to getting satisfaction out of jobs in an old-fashioned way like making things with their hands or checking off a list or whatever you know sublimating all that into software can can feel a little unsatisfying or at worst like a little bit dirty you know i think that's

if you've ever like laid in bed all day and just been on the internet like you don't feel great about yourself at the end of that right it's not the it's not the same process going to a library and digging through the same topics so if that's the working world where we have this information portal and we can sort of use it either to earn money or to waste our own time or some combination of both like it becomes a question of personal choice and discipline do i learn skills do i read information or do i get paid to essentially be in the matrix and uh do i just hang out and play candy crush all day you know that that's a real that's becoming like a lifestyle choice right so if you if you don't see any personal satisfaction out of at the end

of the tunnel for the former option right like if you don't see how learning skills and and getting good at interacting with people can become satisfying you might be tempted or a new generation of kids might be tempted to just just like waste their lives away on the internet even if it pays them money even if they're earning money passively somehow from doing something on the internet they're never going to be or not never but they may not be happy that way and this is the first time that you've had the option of being a complete blob i think in human history right in historically the lowest paying worst jobs were always physically the most arduous and now it's sort of the opposite where the lowest paying worst jobs are mentally

stultifying like actually in duane reed the other night uh i was i was in the checkout line and i went to the cash register and this woman who was running the cash register was on facetime and her phone was propped up on the register and she was having a whole conversation with this person and never looked me in the eye never said anything hello or goodbye never asked me for a rewards card nothing it was like she processed my whole thing all of my items without ever interrupting her conversation and for a minute i was like there's something kind of dope about that like she basically at home like she just moves uh context right and she keeps doing the same thing that she would normally do on a saturday but then i thought like how is she supposed to look forward

to going to work every day right so these are two sides of the same coin and i'm worried about how how these choices get made in the future right i mean so i mean the big trend is automation is uh self-driving cars and you want to talk about the fucking biggest demographic of workers in this country it's truck drivers and you're talking about potentially having the biggest demographic of one uh the biggest demographic of workers in the country being displaced over the course of the next 10 years or at least male workers yeah um that like so that's the thing that worries me like we're at the point where the pace of change is changing so quickly that if self-driving let's use self-driving trucks as an example if they come to fruition

which it seems very possible in the next decade uh decade to two decades that's five to eight million jobs i believe oh yeah yeah it's a huge proportion of people working age people yeah that's like two percent of the whole population probably eight percent of the working population yeah more which is crazy to think like what how do we transition that like how do you how do you transition in economy during that that type of change well so let me ask you a question do you think that everybody should be a knowledge worker like do you think it is do you think that there's any merit to the happiness that a person gets from from manual labor or low-skilled labor and should we try to preserve that path to happiness

um just from personal experience i do think there's value in it i think i think learning the value of hard work's important i mowed a lot of lawns i shoveled a lot of driveways i worked at a hot dog stand for eight summers like eight summers eight summers 13 to 21 damn man yeah but i do i do think the value of manual labor i think i like the thing it's taught me a lot but i uh so what did you learn in the eight summers selling hot dogs there's no such thing as a free lunch you gotta fucking work yeah every minute when you're paid hourly yeah yeah i worked uh landscaping and construction in high school and college and it was like just counting down the minutes till 4 30 because we'd start at like 7 or 8 in the morning and uh literally anything

i could do to pass 10 minutes was my favorite thing to do and see i have a different experience So my experience, I worked at a hot dog stand. My hours, I was from 13 to 21. My hours were 11 a.m. to 4 p.m. I got paid out in cash every day. And I was on the beach. So it was girls coming up, talking to the hot dog stand. So it was like a place to wrap some game a little bit.

And that's pretty great. I will say, I will pat myself on the back a little bit. For the last five summers, I didn't miss a day of work. I worked 72 straight days. like just because it was like you got paid every day like it was like hey i need to go make money i'm gonna go work but um it was a terrible way to get introduced to money getting paid in cash every day that's true you're like yeah well that's all right so that that that reinforced some good lessons probably i'm guessing yeah oh totally like despite getting paid in cash every

day yeah it's like getting paid in cash every day like uh like even when i went to college like i my parents supported me a little bit but i was like i had to go get a fucking job like i went worked at a japanese restaurant for a while yeah i mean the reason one of the reasons that i went to uva for college was even out of state it was like 22 000 a year which was literally half the price of every other college that i got into and i thought like i should do myself a myself i should do my future self a favor and like save some money and it was also an excellent school so i didn't feel like i was giving up anything but but while i was there during the summers i would work i would come back to new york because this is where i'm from and i would do landscaping construction and

i remember this one particular summer that um where i was doing landscaping for a big like outdoor mall in westchester and it was a lot of mulch i was i was wheelbarrowing which is the worst thing to work with so hot it was it was like bucking mulch with a pitchfork into a wheelbarrow and just rinse and repeat like hundreds of times a day and but the the silver lining of this was that early in the morning when it was really cold out the mulch would be really warm and you could lay on the mulch pile before the bosses showed up you could pile mulch on you you could nap for like 20 minutes and be the sweetest 20 minutes of your life and then as soon as the boss would show up you know they'd throw shit at you to wake you up and you have to get to work but i remember like

now when i look back on that i really know the value of 20 minutes which as an office worker now like 20 minutes fritters away in no time and um so i i have some i'm romantic about the world like the old school world of work and i'm loathe to leave that behind yeah no but even that being said like the the value of 20 minutes like i work from home now and that's something i'm hyper cognizant of is like i could easily dick around and waste time like it has happened like i'm it happens a couple times a week at least but you do have to be like oh shit like that's 20 minutes i could have gotten this this and this i'm like especially if you're working from home remotely which probably going to be the bigger trend going forward like it is

an adjustment like hey i don't want bubba here to keep me on task we're gonna fucking like keep myself motivated but but that is something uh i have been working on like the last four years even though i work from home now i work that company that software drupal company i work for they're based out of ecuador and i worked here by myself so like they even like back then i was at a we work by myself like trying to figure out how to to structure my day and it is it is liberating what is also like holy shit like it is a lot of responsibility yeah and even just even just being in your own context like that being a remote worker is so much different than let's say well even 10 but let's say 20 years ago or 30 years ago you get hired at an entry level something

or other in a company and you're part of another class just like you were in high school and college oh this is my class of entry level people and we all kind of rise up the ranks together and there's a real group mentality that comes with that and i my my sense is that that was the norm until very recently and then you know i was born in 84 so i'm not going back that far but my feeling is now that is you coming out of college it seems like kids are free to outsmart the entry-level job system right they can come up with all kinds of ways to work for free and build skills and then ladder that up to something or other but that is now like an every man for himself and herself type of employment scenario where before it was it was much more of a follow the pack like who's hiring

now like like plastics haven't you heard plastics right that that's so 1980s like well you gotta go you gotta like skate where the puck is going right that is not economically how anybody thinks anymore as far as i can tell they are much more looking for a match with their internal compass and their internal interests and their values and it's much less about like well you know what's hot in 2019 um no it's um i and i find more and more people like coming around to it like all right uh i know people who are like fuck i went to college for finance it's not what i wanted to do at all and now i'm 10 years in i fucking regret it like how do i change like what do i do what do i do and for any of you out there who have these thoughts like just fucking rip the band-aid off

that's my recommendation i mean consider your situation i ripped the band-aid off when i was a single poor 22 year old but um i do think it was worthwhile for me in general and it and that's like i'm fascinated we fell down this rabbit hole we haven't really talked about bitcoin much tonight but bitcoin does play a role into this and and and there's a lot of big transitions and paradigm shifts that are ahead of us and being able to identify them and react accordingly like it's not going to be an easy transition but just being able to visualize like hey this is probably going to happen in our lifetimes especially the the automation of the workforce i mean it's already happened to a great extent it's only going to get again faster and and more extreme going forward

yeah and figure and that's a lot of like i don't know all the answers but those are a lot of big questions that we as a society i mean we need to get reattached to reality and then figure out like how we're going to figure this all out together because it is it is pretty heavy how how many people could be left behind or will be are being left behind yeah because of the advancement of technology and how fast it's happening yeah and accommodating all these new and fanciful college majors and and areas of study that don't always have immediate off ramps into employment it means that there's a lot of people who pop out of college and oh and they have like a deep sense of something or other it may be it's disconnected from reality dude it could also be that but it

could be that they're just very very tuned into one particular dimension of reality like um in addition to so i took a lot of computer science college but i also took a lot of art classes uh like sculpture and photography and so if you get like if you just study that stuff and you come out into the world you're going to totally misapprehend how the plumbing of humanity works right like what is really the banking system is not going to be top of mind for you let's say but you will interpret everything through the lens that you created with your education and so you'll think that the solution is this or that and it just creates more oh it creates a broader spectrum of opinion and it creates it makes it harder for people to

consolidate on one viewpoint which is which is probably in the abstract a good thing right for people to develop different viewpoints but it makes it really difficult to come to common ground and decide how do we build a system that all humans with human needs and human wants can survive in and uh and that's ultimately why i love bitcoin because right it provides this doesn't care who you are it doesn't and it provides a common mission of us like hey we can make a better world like a better monetary system at least and then on top of that monetary system a better world at least that's what I believe it's a monetary co-op is what it is

it's an acknowledgement that we have this common problem or a common need and that if we let one or a group of people fix that common need themselves they're going to come up with a solution that's awfully self-serving and you know one of our engineers

used to run the Park Slope Food Co-op like all their technical systems and the Park Slope Food Co-op is a fantastic social experiment in you know cooperative retail where people own people co-own residents of park slope and brooklyn co-own this this co-op and they contribute a few hours of work a week and as a result they're able to buy produce at basically a cost or close to cost and but that means that the infrastructure for that co-op has to be minimal right it can't people are the reason that they're working

at the co-op a few hours a week and the reason they're members of the co-op and they're Involved in the politics of the co-op is because they get really good produce at cost or near cost. So if you start to introduce margins on top of that the co-op system becomes Just the same as any other supermarket, right? And why would you put sweat equity into a supermarket if you're not getting cheaper food, right? and so the situation we have now is is that with money and I think Bitcoin feels like a Cooperative monetary system where we all have to do more work individually or we all have to do more we have to all pitch in in some respect

whether it means running a full note or doing a podcast to help people understand stuff but at the end of the day it gives you cheaper access to value transfer and so like any co-op the payoff is well worth the work I think for everybody

in the group this conversation reminded me I put up my phone here in a group chat with my college friends I had my semi-annual bitcoin shill my college group was like somebody brought up bitcoin i was like hey this will be like the one time every six months i say it might be a good idea to get some but yeah the idea of money in venezuela came out like because of what's going on and one of my buddy fabio said money

runs the world rather than the good of humanity which is fucked and i said well you can't leave the levers of money creation in the hands of man it should be done by nature aka gold or technology bitcoin so man doesn't corrupt it which is inevitable in any system run by hierarchy of men and i think that's simple but like it was like for me like just explaining that to my college friends who don't like explaining in that way like money should be left out of the hands of men whether it's gold which i would argue has been bastardized by men via supply concentration or bitcoin once you have the fiat system the central banking system you allow men to control the levers that's what bastardized it so bitcoin is sort of a reversion to what we had for thousands

of years which is hard for people to see as well yeah yeah i i get that like a mental not a mental reversion but like a concept reversion upgraded many times over yeah it's a reversion to a um a more fair game like i i whenever i think about central banking i think about what so i'm a hockey fan and like a rangers fan and i i think sorry to hear that hey shut up they've been they've been winning lately um uh i keep thinking like what would what would hockey be like if there was no offsides like what if you just removed uh critical rules that contributed to momentum so you're scoring a lot great you have you have your cut the puck is constantly in the offensive zone great well if there's no offsides uh a slight offensive advantage becomes a blowout right and

so any system and that that's a very boring game to watch it's a very boring game to play so any system where one group of people is better with that set of rules than another is not just it's not just unfair because unfairness is not in principle good or bad it just is the state of things it's just very boring it's very boring it makes people not want to participate like and i think this is why probably a you know a massive proportion of our generation is watching netflix right now instead of doing any number of things that would advance their their personal situation because the feeling is like the rules are such that that that may i may not even know all the rules and i certainly can't take advantage of them to my to my benefit so i will just hang out and do

as little as possible. I mean, watch the second Firefly doc or Fire Festival doc. Right, right, exactly. Something I'm guilty of too.

I haven't watched it yet so I'm out of the loop. But, I think if, if fewer people were watching Netflix there'd be more people challenging

central bank sovereignty, things like that, right? You make the game boring enough and it becomes a status quo situation where people

can't compete, don't want to compete, lose interest in everything and they just want to get fucked up all the time and that's basically where we're at yeah yeah get fucked up all the time man the beer commercials the lulia like that's like somebody there's a tweet that came down like my tweet deck the other day like just making like making fun of the fact like every sunday especially between september and february like in america if you're a grown male but the age 18

you're expected to sit on your couch drink beer watch football cheer for other grown men like that is literally every sunday for four months what a man in america is expected to do that's yeah not very productive no it's the same shit every year the patriots are gonna go to the super bowl for the afc championship like you don't really get anything out of it yeah except for misery especially if you're uh indy eagles fan before 2018 but yeah it is no it is like we are in this weird weird state and the wall street journal had an article on the front page today about makeup for women that is meant to be worn at the gym it's like sweat proof what waterproof and the tone of the article was right on which is like gee you have to good look good like all

the time now you have to look good even when you're pouring sweat and working really hard and it's like this over uh over emphasis on your value in the sexual marketplace as a replacement for other occupations which might be more dangerous to the powers that be or to the status quo, right? You can't, you're not overturning or interrupting any societal norms if you are preoccupied with your appearance, right? You know what I mean?

And you're neutralized. Or preoccupied with the Kardashians or Vanderpump Rules or whatever fucking show or distraction it is. I would, like, again, like so this is let's get a little fucking controversial here with the fucking covington catholic boys thing over the weekend like that was like an incident between maybe 100 people in a country of 320 million people and the fucking hysteria that has been why like riled up in the

wake of that event it's like you people are fucking controlled to a t here like all somebody has to do is post a 30 second clip of something taken completely out of context and you literally rile up the animal spirits of hundreds of million people people are like legitimately angry and they don't even understand like exactly what happened why they're angry they're angry because they're being told to be angry and people don't realize that they are fucking being controlled by the media right i said it i said it oh yeah and and there are going to be people that listen to this and think and think immediately like well one side one side was right or the other side was right and that is completely missing the point right the point is that you the framing you're put in

a way to think it is the it's not just that it's you're thinking publicly you're thinking out loud you're you're producing a commodity which is your emotional reaction so uh whether you call it fake news or anything else like that the the media the powers that be um who have influence on the narrative they put stuff out there which is and i spent years working in media so i watched this process like gestate so i know exactly how purposeful it is they put things out there that they know we're going to get a reaction right and they call this relevance this is a fancy word that what they mean by relevant they're like this is really relevant which means it's really gonna piss people off and they're gonna they're gonna be beside themselves with fury such that they have to

like type some stream of consciousness stuff and then hit enter right and that you once you've done that now you're in the machine you're in the commodification machine and it is a machine that manufactures like quote-unquote authentic human emotional reactions which other humans because we have ancient biology which has been outrun by tech we are sympathetic to seeing other humans have really really emotional reactions that indicates something important to us and so we stop what we're doing and we're like oh look at who's pissed about what and we never realize that this is all a ruse it's a ruse it's a ruse yeah it's like it's all advertising you know who played this ruse perfectly the last two weeks two companies in particular gillette and gemini

gemini gemini played bitcoiners and crypto like a fucking fiddle gillette let me say something about gillette gillette published a book in uh 19 i want to say like 1904 maybe 1910 called the gillette industrial system and it was a fully scoped vision of corporate socialism really yeah And it is terrifying. It's terrifying in how accurate it is. I mean, for something that's over 100 years old, I mean, it predates the central bank. It predates the roaring 20s.

It predates all of the kind of speculative phenomena that we consider to be endemic of the early 20th century. And, yeah, look it up. I'm pretty sure it was 1905. Oh, okay. um so the the idea that uh the idea that you could bring people up in a matrix of social wants that are always unsatisfied has been the dream of every corporate scion for at least 100 years right not only not only corporate corporate like states so i i was actually i fell down a a yuri

uh besman of rabbit hole this week oh i don't know this guy so yuri uh besman of is a kgb defector who came to the united states in 1980s and basically explained how soviet russia used the media to sort of subvert uh public opinion and in the long run like subvert the the fucking government and the structure of society and basically explained how it might happen here in the u.s and like the early 1980s and everything has played out to a t like left first right like just divide and conquer just create strength like that's what people like if any of you freaks listen to this this podcast out there like people are out there trying to divide what we have to realize is most of us 99.9 of us have more in common than the 0.01 that are trying to control

everything via the media and yeah they are it's all of us against the people that have the very small group of people that have a stake in the existing financial system who have all been the same families for like at least a hundred years, more like 250 or 300 years. And if you're not one of them, you're a loser and you should never take their side because they also think you're a loser and an idiot, you know, for, for propping up a system that only benefits them. Yeah. And they manipulate you like people, like people that don't realize they're being like, and this is another one. You know what? We're going to do it again. We're going to go there. We're going to go to climate change so climate change is another one that pisses me the fuck off because dude the

mal dies has been falling on the water in 12 years for the last 50 years well you know we got 12 years of earth left yeah dude 12 the earth's gonna die in 12 years listen i do not deny that the climate is definitely changing climate change is like throughout humanity but the framing again the framing the the fear-mongering of hey the world's gonna end in 12 years we don't change if if we don't put guns to your head and take your money to figure out how to fix this problem when we're probably not going to be able to as a government and a bureaucracy that can't get shit done to think that they're going to be able to figure out global warming number one and then to fall for their fucking divisive fucking fear monger number two i know it's like you're being manipulated but

what's so great is that she what's funny is that she not not talking about alexandria ocasio-cortez who came out and said the world's gonna end in 12 years because of because of global warming yeah Yeah. And that we shouldn't worry about how much it costs to fix it because if the world ends, there's, you know, she insinuated there's like no point to anything. So what I think is amazing is how she says this stuff and then the older people in her party immediately distance themselves, right? It's like full Heisman treatment because they don't believe that, right? They're willing to let you believe that. They're willing to let their paid promotion groups put ads out there that say that, but they will never say that because they know that's not the case, right? And she, I think, is going to be amazing because we're all going to watch her get red-pilled on the national stage. I hope so. She's going to push this agenda. She has tremendous enthusiasm behind her. She's going to push this agenda to the point where it becomes necessary to get some solid science behind this.

And the science is not going to be there. And that's going to be a really amazing moment in history. Yeah. And my biggest problem with global warming in general is, like, the solution to all these problems is taxing people and just taking money when the solutions of the problem should be planting more fucking trees. Let's create more oxygen to pull the CO2 from the atmosphere. Oh, but haven't you heard? Carbon dioxide is a greenhouse gas.

So is water vapor. We better eliminate all this shit because it's all ridiculous. I know. But you can't talk about this. Chris, we can't talk about this. We're crazy. We're crazy. We are.

We must be. What's the fashionable term for like bad person now? I don't even know. Climate deniers. Are we deplorables? That's already out of vogue. i think there must be a new term there must be a new term there's always a new term uh uh but but i mean this is like like no and again like i'm not like and again like global warming is

just an example of framing that is used to divide people to to literally hey and that's like the one thing this is a fight my sister-in-law get into a lot in particular she's like and she has said like you gotta think of like you gotta think of your nephew like i'm not gonna name his name but like think about your nephew i'm like i'm thinking about my nephew like if you like honestly think that the world is going to end in 12 years like there are there are better options than than like forcing this this this weird framing of this debate like it's it's not black or white the world's not going to end in 12 years things may be getting worse like there's definitely more co2 in the atmosphere but like i don't think throwing money at the problem is going to solve it um i

think we should plant marcheries and that was my thoughts on climate change i hope you freaks are still here i hope you don't leave that's this is what i think did we lose everybody we lost all the green people i don't think so should we bring back the bitcoin sure sure let's bring it back i mean that ultimately in a monetary system with a fixed rate of emission exactly as a bitcoin yeah you can't get away with uh fanciful taxes you can't get away with people have a much lower tolerance for for all kinds of legislation that affects money if the issuance is finite so much of legislation sort of presupposes like oh we'll just print some money for that right like uh that's a that's sort of the budget right it's it's money that we will create in the future to to spend on

things that we need if that had to come out of pre-existing money or it had to it had to balance itself with pre-existing debt we would never get the spurious spending that we have and we would have a different narrative about what needs to be done when and how soon and how much it should cost yeah if you're really an environmentalist want to save the world bitcoin is your answer it cannot fund wars which destroy the world send planes and armies all over the world adding co2 emissions to the atmosphere destroying countries rebuilding them which takes even more fossil fuels uh and then just basically enabling the uh the wasteful spending of printed money to to use more energy that is the fiat system if you want a a system that uh will be uh much more efficient with the

way money is used and invested and therefore the resources and fossil fuels and energy sources are are used in this economy bitcoin might be the answer for you yeah central banks generally exist to finance central governments and they're not financing your personal war they won't lend you 10 million dollars to go to go to war with some guy that runs greenpoint they're only interested in lending you money in excess if you're the head honcho you know so it's it's a um i got to your point it's it becomes a much different world when when everybody's money is sort of held equal yeah i got beef with greenpoint so if anybody wants to fund a 10 million dollar war with greenpoint let me know um chris thank you for going down this path with me it's an hour and 40 i'm sorry for

bringing you down this path i didn't even mean to like go off in the standard but i think it is important like these are important topics that i mean hard truths that a lot of people need to come to grips with like our economy's changing technology's changing at a crazy pace and you couple that with the basically irresponsible monetary policy you got a tinderbox the likes of which history hasn't seen i would argue but um we'll see let's end it on an optimistic note okay iterative let's talk about your otc desk and like sort of like your full full stack sort of vision for how uh a bitcoin company from a mining pool to to an otc desk uh may look in the future yeah so well there's a lot there i think uh so i'll start by saying for anybody that's

still listening this late in the podcast you deserve to know that uh that bitcoin has a tendency to consolidate and that anybody who's been in bitcoin since i would say the 2014 go around has seen how how quickly you can how quickly you can see growth and you can see venture capital follow that growth and then you very quickly you see a crash in consolidation And that is very difficult for VCs to wrap their heads around because they're used to out and out growth for like a decade or more before a certain subsector of tech or whatever consolidates. Maybe even more, maybe 20 years, whatever it's taken for social media since 2004 until now when we have our incumbents, right? It's 15 years. So it's shocking to people from the private equity world that Bitcoin has this pattern of inflating, consolidating, inflating bigger, consolidating more, inflating bigger, consolidating again.

And one of the reasons that we touch so many different layers of the Bitcoin stack is that I don't think that – well, I think that by virtue of Bitcoin being software, any service that relates to Bitcoin is also software. And as a result, there's no reason for you to isolate yourself in one layer of the monetary stack because the whole point of developing software, the whole point of software is zero marginal cost for services. That once you find product market fit with a piece of software or software service, you can deploy it to everyone that needs it. And it's basically zero marginal cost. um so i think that pays dividends doubly in in digital commerce where you ideally want a system where um where people can build whatever they want when they find something that works they can scale it without too much additional overhead and that's not the way the exist i mean the existing financial system does not welcome entrepreneurship so um not not to leave things

on too loose of a thread but I think that's why we see the entire stack consolidating essentially that the people who are mining are also the liquidity providers and they are also going to be the people that know when to trade and what to trade and who to trade it with

and that all of this knowledge is sort of a virtuous cycle so you know I should say please do visit i2trading.com if you want to buy large blocks of bitcoin or other proof of work cryptos um but you'll see when you visit that site or you talk to our traders that they really have a pulse on what miners are feeling what other desks are feeling when it

comes to bitcoin or things like grin and um and beam which are some of the new talked about coins this month um it helps to be involved at every level of the stack absolutely no that's something and i've sort of been waiting for it like it's always seemed innate to me like a miner should be an exchange as well right at the end of the day like why even like throw any more middlemen into it and i think uh just mining in particular being an industry filled with uh people who may not understand the full stack or finance and hardware and software i feel like you guys are are doing something very unique right now and when you describe the stack to me it's like holy shit this is like this makes a lot of sense thank you yeah i think we're probably the only american

mining group that manufactures its own machines yeah that's crazy yeah it is great i mean people have literally told us that's crazy we've been told that we're liars that we don't really have these machines like and i've you know be happy to sign any number of public addresses that well We've got a bang-up team. You and Brandon have built a hell of a team. Leo and Martine are... Leo and Martine is sharp as whatever. Very sharp.

Leo in particular, I've had a lot more conversations with him than Martine, but Leo and mining and his knowledge of the mining industry is, bar none, probably the highest caliber I've experienced in this space. Well, thank you. I think the same thing. I haven't talked to anybody that understands the ecosystem as well as our guys do. And at this point, they get it more than I do. And that gives me great pleasure, right, that they can continue to double down on it.

I mean, Leo is, if anybody doesn't know, Leo Zhang, who is our head of research, has thrown himself at mining in the last two years. And Leo has an interesting background. He studied math at Stanford, and his dad is a computer science professor back in China. and he comes from an investment banking work background and he kind of had the same intuition that I had when we met in 2016. It was like everybody's talking about ICOs and what's the right coin

and neither of us really cared about any of that. We were really focused on like, what are these miners up to? They don't talk to anybody. They don't share any information. Nobody talks about them and yet they are the critical commodity in this whole ecosystem is hash power where are people getting it who's providing it why um what

are the economic like this this is a fucking real industrial scale business and everybody in new york wants to talk about creating some goddamn ether token like what could be less interesting that you know then it takes two seconds to make an ether token right it takes years to put together a large-scale mine and do it without getting your face ripped off so there was something just naturally higher risk higher reward about mining that attracted us to it and he has you know by virtue of being Chinese and speaking Chinese he has access

to you know 50% more of the market than I do as an English speaker and and it's shocking how much the Chinese market knows that the American market does not and vice versa yeah I think this is a good ending topic that I was like how big is the

the gap between east and west when it comes to this oh it's gigantic it's gigantic but it's it's, it's, it's so much bigger than crypto. It has to do, I mean, the most, I'm passionate about this because, um, every time we do financings now, we, for any of our businesses, we always talk to American VCs and family offices, and we talk to Chinese VCs and Chinese family offices. And routinely the American VCs are more ideological. They are more narrative driven. they are more abstract with the things that they think they want and speaking to chinese vcs and

chinese family offices much less ideological much less idealistic about i mean i haven't spoken to a single chinese miner or or investor who thinks that icos are a legitimate uh vector for selling equity right like they all know that it's bullshit they all they all call it they call it uh reaping garlic chives which is uh garlic chives are like a dish in southern china so all the miners are southern chinese are also from sichuan and um a delicious dish that that i recommend you get if you go to southern china is garlic chives which are just chives that are cooked in garlic and butter and they grow very fast you know chives are like grass so they call icos garlic chives because it's a it's a it's a weed it's literally a weed that you that you like harvest and cook

and consume and then you're done with it right it's not it's not an oak tree it's a it's a it's a blade of grass and there's a fundamental disconnect in the united states where people get really caught up going back to the enterprise software narratives and like people here are so steeped in marketing that they can't stop talking about the world 20 years from now and they never stop to consider like what is it going to take to get us from this year to next year and china in my anecdotal and very limited experience has a much more of a zero to one mentality where it takes a lot for them to get excited about something and they're willing to participate in things that make money but they're they're not fooled that that's that speculation is the future whereas here

i look at what coinbase is doing and it looks to me like they're building a a web-based casino know for ether tokens and like the world does not need this you know like nobody's retirement portfolio needs any of that garbage and um so you know i i think that there's going to be a reckoning not you know not too far off from now where uh people realize where the real value is yeah interesting no and like that's something that fascinates me like going back so my first bit devs meet up here in new york was right after the hong kong agreement and that was the first time i really became cognizant of like the difference between the chinese miners the western developers and sort of the ecosystem and the like is there a need to bridge the gap culturally do you think

for bitcoin to survive or do you think this sort of uh de-alienation of cultures and sort of misunderstanding actually helps bitcoin survive to an extent uh that's a good question it's it's hard to tell because that the the thing that the thing that is always surprising to me culturally is that in the U.S., I've noticed that investors are not likely to invest in things that run counter to their values, even if they make money. I mean, some investors will, but a lot of people act, maybe it's just acting, but they act scrupulous. They, you know, if they think something's wrong, they don't invest in it, even if they know that there's something in it for them. Whereas the feeling that I get from talking to folks in China is, and some of this is, you know,

secondhand also um is that everyone believes in bitcoin and everyone is also willing to speculate on other stuff but they don't put it in the same category as bitcoin they would never confuse it with bitcoin oh really yeah and that that is really refreshing right when we talk to manufacturers who make asic machines they consider making machines for secondary networks or non bitcoin networks to be non-core and kind of a distraction and if they're going to make you know a zcash asic or a decred asic or a litecoin asic like somebody needs to give them a really good reason which means that somebody needs to basically give them enough money to anchor a batch of machines otherwise they're only interested in making bitcoin machines they don't really

have a motivation for any of the and so i think that's that's really telling you know they know that there's that there's one thing that is the real deal and that these other things can give them short-term benefits but shouldn't be uh messed with too much and i also feel that way that's fascinating i never knew that um we're almost two hours in here thanks for coming on this journey some of the like most wide-ranging conversation i've had in a while thanks it's been liberating i hope i uh hope i didn't drag you down too many too many rabbit holes here no i don't think i said anything that was too foot and mouth no i hope i didn't i usually do but who cares that's the nature of being a podcast host is that you after a certain number of hours

you're gonna say something after the yamazaki the bottle goes empty yeah uh but this has been a pleasure thank you martin thanks for coming in it's a long time coming here again you're one of my favorite people to talk about bitcoin with in this city in particular i'm very impressed with the team that you have uh built the thesis that you guys wrote uh i think it's very underrated in the space and then your vision for the future is just innately makes sense to me thanks thanks and for people who don't know you can go to iterative.capital slash thesis and read the whole thing and there's also an audio version and iterative like outside of marty's bent has the hottest daily newsletter number two i'm kidding no if you take it if you don't want to get shit

post and actually good dense information to your inbox every day leo's uh does a great job with your newsletter true he does and uh and you guys do what like a weekly piece like this week was on lightning um buying data yeah so the the weekly and monthly pieces are going to get longer and longer as we hire we're 12 people now uh and i think by the end of the year we'll be 20 so yeah count on more hell yeah can't wait um this isn't the last time you'll be in the studio i hope not um it's been a pleasure peace and love freaks cheers