The Pomp Podcast - 325: Michael Arrington On The Future Of Crypto

Episode Date: June 30, 2020

Michael Arrington is the founder of Arrington XRP Capital. He is also the founder and former co-editor of TechCrunch, a blog covering the Silicon Valley technology start-up communities. In this conversation, we discuss the modern media landscape, what he learned from TechCrunch, how regulation is affecting crypto, what is happening in US politics, why the 2nd Amendment is important, and a conversation around Bitcoin, Ripple, and XRP. =============================== Blockset by BRD is your hosted blockchain infrastructure. Blockset enables enterprises and developers around the globe to deliver high-quality blockchain-based applications in a fraction of the time, at a fraction of the cost. Using the services provided by Blockset, businesses can build professional custody solutions, accurate and near real-time portfolio management solutions, auditing platforms, commercial block explorers, and much more: https://www.blockset.com ===============================  Crypto.com is the only all-in-one platform that allows you to BUY / SELL / STORE / EARN / LOAN / INVEST crypto all from one place. Join over 1 million users currently using the Crypto.com app. Download and earn $50 USD using my code ‘pomp2020’, or use the link https://platinum.crypto.com/r/pomp2020 when you sign up for one of their metal cards today. ===============================  Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Michael Arrington is the founder of Arrington XRP Capital. He's also the founder and former co-editor of TechCrunch, a blog covering the Silicon Valley technology startup communities. In this conversation, we discuss the modern media landscape, what he learned from TechCrunch, how regulation is affecting crypto, what is happening in US politics, why the Second Amendment is important, and a conversation around Bitcoin, Ripple, and XRP. I really enjoyed this conversation with Mike, and I hope you do as well. Before we get into the episode, though, I want to quickly

talk about our sponsors. The first is Blockset by BRD, or BREG. BRD was one of the first Bitcoin wallets in the App Store in 2014, and they've now built Blockset. It's a hosted blockchain infrastructure. Blockset enables enterprises and developers around the globe to deliver high quality blockchain-based applications in a fraction of the time at a fraction of the cost. Using the services provided by Blockset, businesses can build professional custody solutions, accurate and near real-time portfolio management solutions, auditing platforms, commercial block explorers, and much, much more. I highly suggest going to blockset.com if you're looking for hosted blockchain infrastructure. Just like Amazon has AWS that provides infrastructure

to build on the internet block set provides blockchain infrastructure to help you build in the new digital world block set.com our next sponsor is crypto.com they're an all-in-one platform that allows you to buy sell store earn loan or invest crypto all from one place they've got over a million users currently on their mobile app crypto.com app and they've done a great job launching new products after new products again crypto.com is an all-in-one platform that allows you to buy, sell, store, earn, loan, or invest crypto all from one place. Head on over to crypto.com. It's a great URL, and that's where mass adoption is happening. Lastly, don't forget that I write a daily letter to over 50,000 investors about business technology and finance.

I break down complex topics into easy to understand language while sharing my opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get into this episode with Mike. I hope you guys enjoy it. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

all right guys bang bang i've got mike here thanks for doing this man we live we're doing this yeah we're live let's go are you ready i'm such a fan girl i cannot believe i'm on your show this is amazing i remember i met you and you're just a little tiny little blogger and podcaster in my house and uh and you came by and you have just you're all grown up now and look at you now so mike knows that the secret to podcast success is just lay the bullshit on real early um all right so for like the three people who are listening for the three people who are listening who don't know who you are uh give us a quick rundown of uh what you did before getting into uh crypto and running uh energy capital uh okay um

i thought you were going to say for the three people watching this podcast and i was like wow that's i think you have a few more than that how many people on average watch your podcast through all the different ways in april's the last numbers i remember 2.5 million people 2.6 million people total views and downloads no no no total for the month so it varies like uh the episode i did with chamas got a million views just on youtube alone i've got he knows how to do a fucking soundbite or are we allowed to swear sorry yeah he knows how to do a soundbite doesn't he so of course I mean the rich man it's uh when you tell the truth people pay attention right uh they do uh as long as you say it with the right way in the right way and he has that down

to a science so yeah he was a marketer originally so all right so me I uh what do I do I mean I'm known for TechCrunch which I started in 2005 and sold in 2010 so I've been away from TechCrunch for longer than i was there um but luckily the people that took over have kept it going strong and so it's still a known brand and that's great for me and um i go to the conferences and and all that um before that i was an entrepreneur and i started well i started off as a lawyer and then i started companies and um first company failed the second company was a mild success it's actually a fascinating story about venture capital which i'd be happy to talk about uh and it was in the payment space and then uh and i started like company after company after company either failed

or were mild successes and then i started tech crunch um in 2005 because i i was i was living on the beach in manhattan beach i was between jobs uh and i'm like i need to like start researching more because i i was sort of out of the loop and i realized there was no website that like just talked about startups you know it was like there were there were tech sites like cnet that talked about startups with a lot of other stuff, but nobody was focused just on startups. And I thought this group of people needs a place to call home. And there was no real social media back then or anything like that. And so I just started TechCrunch as a lark, as a hobby. And it took off. It was like the one startup I didn't intentionally start as a startup. And it was

the company that first made me some money. And that's it. After that, I became a venture Capitalist and I switched into crypto. And so when you started TechCrunch, it was just you writing and it was basically like almost like a beefed up blog really, right? And then it kind of grew from there into what we know it today. Yeah, you can actually go back and find the first posts that were terrible. And it was me sitting in my bathing suit on the beach in Manhattan Beach. I surfed every day. My life consisted of getting up, surfing, playing video games for like six hours or more, girlfriend come home yell at me for being a total slob and then I would you know start writing and uh and that was it and so um I did that for a few months and then it took off like I said so I was

able to start getting other writers started getting some revenue um we had some innovative ways of making money back then and uh at the end it was like 40 something people um we were in a house in Atherton which is in the middle of Silicon Valley and a crappy rental house in the in the richest zip code in America. It was a teardown house. And we had interns in our backyard on Ikea desks. The first thing you had to do as an intern was build your own Ikea desk.

And then they were in the backyard with extension cords running out on their laptops. And like, they're trying to shade the sun and look at their laptops and get work done. And finally the city came and shut us down. And after that, we became more corporate. We got an office and started doing things normally. But the best thing I did with TechCrunch

is I never took venture capital. Why? Like all of my competitors, the ones that did well and didn't do well, they all took venture capital. So even the ones that sold for a lot of money, the founders made nothing or next to nothing. Because I had learned, I remember I told you I had this first startup. It was called Achex. It was a payment startup. And we sold it to First Data Corporation 12 months after we founded it for like $32 or $33 million.

And you think, wow, there are a couple founders in me, and we thought we'd make money, right? We didn't. And here's why. We raised $18 million in venture capital from Draper, Fisher, Jervitson. Back then, 2x liquidation preferences were considered normal. Now it's 1x. And so that meant that the VCs got two times their money back before anyone else took any money. And two times 18 is more than the purchase price. So to not block it, they had to pay us off, and I basically had enough money to buy a nice car, and that was it. And I learned being an entrepreneur is great, but being a VC is much better if you want to actually make money.

So I didn't take money at TechCrunch. When you didn't take the money, how did that change the way you built the company? We had to run it from revenue. And so, you know, one of the things about venture capital is you can raise all this money and you don't actually have to know if your product fits. You know, the idea is you're spending money to build a product and then hoping people will come. If you don't have that luxury or decide not to take it, you have to find other ways to fund that business. And generally, traditionally, that's through cash flow. And so we were constantly finding new ways to make money through ads at first and then eventually through conferences.

Yeah. And I believe I've heard stories of like literally founders trying to show up to the office to get stories. Was that true or? By the way, one, just to go back to that, one of the really innovative ways we came up with making money is we had a webcam in the office. It was on all the time, or at least I think it was on 24-7. we had a whiteboard and heather our ceo who's my partner now still would write the name of a startup on the whiteboard and put the whiteboard like in front of the camera and she charged like thousands of dollars for that for a day and i mean we did that for like months and made lots of money like it helped us get through a rough period i think in 08 or whatever but uh anyway yeah people would

come it was sort of a rite of passage to come and show up to tech crunch and it was fine sometimes as it got weird like some dutch guys um the founders of the next web which is now a pretty well-known website and nice enough guys but they they they had a startup and they decided they had to get into tech crunch and so they they broke into my house while i was sleeping and they came and like opened my bedroom door and they had a video camera and they filmed me and they had star starbucks they got me a starbucks and they filmed me like in bed waking up and boy was i pissed. I mean, I was, I was very pissed. And I remember Wired Magazine wrote, wrote an article about it as if it was like the most hilarious thing in the world. Like it was just, I was thinking

like, I mean, they committed a crime, right? But it was like, so I had, I had no privacy. And so sometimes I had to leave the TechCrunch house and go other places just so I could, you know, get away from it all. Yeah, that's absolutely nuts. If you were to start TechCrunch today and like really go hard into media as an entrepreneur, what would you do differently? Or how do you kind of see the difference well i so i mean i know the answer i'm trying to think of an interesting way of saying it so again when i started tech crunch there was no place for startups they weren't very newsworthy um particularly very young startups got no nothing no news whatsoever until they raised money at least and uh as tech crunch grew we still covered startups but we found

that like big store, like I broke the YouTube getting acquired by Google. I broke it before anyone else. And I had the price that actually put TechCrunch on the map. And then, you know, we started doing Google stories and Facebook stories and big company stories got a lot more traffic. And so you start to gravitate towards the big news. And that's also why CNET and others do that. And so today TechCrunch is largely big company news. Sometimes it's regurgitating press releases and a lot of social justice stuff, some of which is awesome and some of which is just terrible and so i actually think the original idea for tech crunch is still needed and you've seen different companies and products like come into existence over the years to deal with it's

like product time was one if you remember product time which is still going um so i actually think the original thesis is actually still a good one um and i think if somebody wanted to do that i think there would be an audience because there's a there's an ecosystem of young founders who um who need press and and they have interesting stories to tell i would never do it again it was too it was just too difficult it's too much work for not enough money ultimately but um i think in crypto which is the industry i mean now like we desperately need this like the crypto news news ecosystem is not healthy and uh and i think that somebody if they wanted to could do this but not me so do you think that it's a still a written thing where it's

kind of websites mobile um optimize whatever or do you think that there's video audio whatever other mediums make more sense i think video makes a lot of sense i think um video is hard like you know as you know um you know you can talk forever but it's not necessarily interesting you need to edit it you need to produce it you need to have studio you need it's just a lot of work and some people don't want to consume content that way because they it you know creates externalities around you you've got noise and stuff like that um i like reading a good article so i think text is always going to be very important i think obviously videos and audio is hugely important as well yeah it's interesting um and then we started as you've seen you can build a like

you can you can build an empire with you know just doing what you're doing and you're is it your kitchen where are you yeah i'm in my kitchen right now we used to have a office and we basically just took one room and did it there. But I mean, look, there's no one way to do it, right? It's just you have to find interesting content and really love what you do. And I think you'll be successful. I also think the whole idea of venture capital, there's a lot of venture capitalists who are still confused that a pure play media company is going to be a billion dollar company. And I think what we're learning now, just like you figured out, hey, look, the conferences, the webcam like these other revenue sources can be highly profitable for um what they are uh now

we're going to get into this world where like the media companies figure out other ways to monetize than just like hey pay me some advertising and i'll slap a you know banner ad somewhere or whatever um and what i haven't seen yet that i think buzzfeed maybe tried to do this is i'm shocked no one's built a media company and then went and built products and then used their distribution to pipe the products through uh yeah i think buzzfeed tried it but i don't know how successful was I'll tell you one thing ultimately I don't care right I mean I don't think a lot about how to build the next media empire and I think that's why I was successful I truly loved like what I did like the very first few years I I didn't I didn't think about the business Heather did I mean I

talked about the business a little that was all my CEO so I hired a CEO because I'm terrible at managing people she ran the business she turned it into what it was I was just I mean I don't say I'm a talent. It sounds like I'm boasting, but I was literally just a guy who very important call coming. I was literally just a guy who wrote content every day. And I loved meeting founders. I loved meeting new or understanding what their new products were. And, um, that's just what I love doing. And I think obviously you love what you're doing, right? I mean, you like talking to people. So you obviously spent a bunch of time, uh, interviewing founders, hundreds, if not thousands of them. How'd that help you when you got to the investing side of the table?

A lot of people owe me favors, right? I mean, you know, for an entrepreneur, that first press is very important. It's, it can help you hire. It's your parents get to see it, your friends get to see it, like it feels good. It feels more real. And I was often, if not usually the first person to write about a startup and so that generates a lot of camaraderie and goodwill and and so that definitely helped when we launched our venture fund um get into some of the early like really important deals that really helped our first venture fund like hit it out of the park and so um you know it's it's also just doing goodwill like doing nice things for people without any kind of transactional hope for a payoff is actually like really works out well in the end right you

just do what you love you help people and you're going to find a way to be successful from that and and if it's not a transaction like some people are so obviously transactional in the way they deal with people that you know what I mean by that you just sort of end up being turned off by it all just tell people like in a way that is fun to do and it'll all end up working out well yeah it's funny too because i think uh silicon valley uh like literally the physical place uh more so than probably anywhere else uh in the business world understands that and uh i think it's like nabal talks about you know playing long-term games long-term people or whatever the quote is um and it just feels like silicon valley has known this for decades and people know that they're gonna run

into each other again and so people generally try to use that to their advantage so let's just explore that for a minute because i think it's really important so i really i realized once i gone into crypto that that is not how the whole world works so in silicon valley we dealt with a lot of new york people and new york people have their own special way of dealing with people in business and not necessarily negative you just had to be abrupt direct right and you have to adjust to that and new york people adjust to silicon valley people but generally speaking like people find a way in silicon valley to work out their problems without like it getting ugly i don't know if you know benchmark sued uber a few years ago that was like a sea change in silicon valley

like you just didn't see that i mean you saw it very rarely with egregious examples of malfeasance but like what uber did like it was it was it was interesting that benchmark sued them because that reputational issue is important to them when i got into crypto i realized very suddenly that like a lot of players were not in silicon valley or new york they were in europe and they were in asia and like completely different like cultures right and um for anybody who spends a lot of time in asia you realize how different the cultures in asia are but like when you deal with people from china chinese nationals you have to like worry about things in a certain way when you deal with people from singapore who are maybe chinese it's totally different hong kong again totally different and

korea totally different and so i had to learn very quickly that people do business differently And you have to watch yourself because long-term reputations didn't matter as much, especially in, like, 18 when we first started getting involved in this in 2017. And it's really a problem in crypto because I think a lot of people have almost like a Napoleon complex. I don't know how to put it, but, like, crypto was so hot in 2017, and it's become so mundane since then. And people like you and I believe it will become very, very hot again. but in the meantime i think people with these very large egos aren't making any money and they act in a certain way uh it's just been disappointing to me um so yeah and i think also you see this uh in finance right etc it's just like uh it's a very binary game kind of

zero sum i win you yeah and and uh i think also venture investing in general like people who understand how it works realize it doesn't have to be zero sum right yes maybe you lose it it's not zero sum yeah it's not zero sum yeah yeah and so i think that like just the asset and the way that the investing is done definitely helps uh but on top of that also uh if you think of silicon valley like there is a scarcity of great companies right and so everyone is going to when they see great companies at whatever stack of the um of the process they're going to i would not say i'd say there's a surplus of capital okay yeah yeah so either way it's either surplus of capital or scarcity of companies but there's a mismatch between the capital available and the number

of companies that that they should probably get that cash yeah right and that's not that's probably not necessarily uh as true in the finance world uh maybe there's individual deals but there's definitely a very different mindset without a doubt well and and the funny thing is you eventually gravitate to people you like doing businesses so you for example um uh by the way who's our sponsor today? Is it BlockFi? Both amazing companies. Yeah. Mike is obviously an expert in all things, media and revenue. But BlockFi, a great company. You have been, you're an investor in and you've been like from the beginning, right?

Pretty early. Yeah. Yeah. Your fund has put like a big bet on BlockFi over multiple rounds and, and you introduced them to me and we invested because of you. Um, and it wasn't you, for example, trying to resell your shares to me at triple the price that you bought them, which is a situation I recently came across with some Asian investors, uh, with a different company that I won't mention called Darabit. And, uh, it was just a wonderful, and I also, I assume you didn't get a kickback from BlockFi as part of that, which another company we just looked at, it turned out somebody else

was getting the person introduced to us was getting a kickback. Like all that stuff is just very alien and ugly to me. You simply liked the company. You thought I could add value. You thought it would be a good investment for us. You put us together. We made the investment, and we love the company. And as far as I know, you got nothing out of that, I hope, except BlockFi was, again, even more appreciative to you. And I've never heard a company gush over someone the way they gushed over you when we first talked to them. Well, they're incredibly kind, but I think that your point about, it's this weird thing where you're lining up incentives, right? Like I knew that we were super bullish on the company. We were literally making a very big investment. I knew that they were looking specifically for certain types of help that we said, look, we can help in one area, but there's other people who are much better than we are. Let's go get those people. You happen to be one of those people who brought very specific value to what they needed. And when you line that up, I think the point around, you know, one, you get to see a deal you didn't previously see or didn't spend much time on. Right. And you like it. So you're going to do the deal. They look and they say, hey, look, we've got this great investor being added to our cap table. And for us, it's one of these things where like, if you're not involved in the deal, like I would argue that the deals upside potential is not as high as it is with you in the deal. Right. You want people around the table who you know can help because those people will make everyone make more money. And also not fair weather friends

because too many people are fair weather friends. And you see this in crypto as well. We're like, when everything's hot, everybody's your best friend. But companies, they really need their investors when times are bad. And if you stick through a company when times are bad, they remember that and they tell other people.

And I'm not saying as far as I know, BlockFi hasn't had a bad time yet. But when they do, you'll be there for them. and i'll be there for them and and they'll remember that so couldn't agree more uh speaking of crypto stuff like i know that you have uh i think you still have it pinned to the top of your twitter account buying bitcoin in 2014 which was not necessarily a popular thing to do remember the first time you ever came across bitcoin or kind of what drove you to uh to bitcoin when was the first time you bought bitcoin uh i think in early 60s i heard about it in 14 when

at Facebook and I did nothing. I didn't even Google it. And then I think the first time I bought it was either end of 15 or beginning of 16. So I had heard about it earlier and obviously should have bought. In Silicon Valley, it was just known, right? It was known what it was, but no one really had gotten their arms around it or treated it very seriously. I say no one, some people had, but not me. Coinbase, I think Coinbase was launched around then. I'm not sure. yeah i think it was like 13 or 14 and and it obviously silicon valley startup and so i think people started to understand it more and and i'm i'm pretty sure the first crypto i bought was on coinbase so i started an account and um and so it wasn't like some and it was more just like

hey let's see what this is right then hey i'm going to go all in so i bought some and then i forgot about it and uh i mean i literally like probably didn't log into coinbase for years um except i had set up like an auto buy or something i forgot what it was anyway when i finally logged in in like 17 i was looking at it again i was like holy shit like this is like this is some incredible like amount of money right compared to what i first put in and so that was fun and uh and i did that with a couple like i bought monero i was doing dark web research and um i forgot why it wasn't to buy guns or have someone killed but i i bought monero to like buy something on the dark web and i never bought anything and the monero like i bought i don't

know it was like a few hundred dollars of monero and at some point i looked in 2017 it was like 150 000 of monero i had in a wallet but like the only trace of it i had was a printed out like key so you know that ended up in our fund too but yeah it was more just serendipity than anything else so yeah and i guess at what point did you realize like hey this isn't just uh buy a couple of tokens and like i came back a couple years later and it's this huge thing and more so like there is a legitimate investment thesis that we can go build a fund around uh and deploy capital in kind of a sustainable repeatable process you want the truth or you want like the really awesome answer that sounds make me look smart so i want the truth the truth is i went on a date with a person who

is currently my fiancee and she had a startup that was doing it was heavy into crypto and and this is in like uh early 2017 and she was planning an ico and she's talking about these icos and i had heard of them but i wasn't fully aware of like exactly what was going on and um and i'm like it sounds like a pyramid scheme to me and she's like no no like there's actual companies being built And so I invested in a couple of ICOs after that. And as you know, in 2017, you couldn't, I mean, it would be hard to not make money on ICOs in 2017. So, you know, I quickly made a lot of money on those ICOs. And, and I said, Oh, I think I want to like, do this more full time. so um i had a discussion with my partner at the venture fund and he was less interested in crypto so i decided at that point to break away from the venture fund let him continue to run that and i would focus entirely on crypto and and then you know i i knew the person i knew in crypto

who had you know the most interesting things going on was with brad garlinghouse at ripple and so we had discussions about how i could create a fund um a hedge fund and he he basically made it happen. Ripple didn't invest, they couldn't, for tax reasons, mostly, but he helped make it happen. And I'll be eternally grateful to him for that. So it's really because of a girl, I guess is when I got really into crypto. So I love it. And so when you go and talk to Brad, he's the CEO of Ripple at the time. Yeah, one of your guests, you've had a you strategically put a box of toilet paper behind his head when you had him on your podcast. Are you gonna photoshop something in we talked about this already god damn it mike oh and off air but

off air i just wanted to make sure on air because like if you're a real fan like if you're a super fan of pop you know that was one of the like really cool moments was when you strategically purposely placed toilet paper behind the ceo of ripple's head on your podcast it was brilliant marketing is absolutely spectacular all i will say is that is not true i'll leave it at that But you got it on there. Good job. No, so when you go talk to him, and you specifically said hedge fund, but you guys do trading and you also do venture-like investments, or is it all more liquid trading? So we're a hedge fund, and that's a structure.

And the difference between a hedge fund and a venture fund is a venture fund gets a pile of money and then spends it over four or five years, right? You guys are a venture fund, right? We are. And then you raise new funds every few years. um a hedge fund takes a pile of money and and by the way when you with a venture fund when you have wins you then give the money back to to investors you don't reinvest it um with a hedge fund you get a pile of money and you invest it over and over and over again until investors say hey i'd like to get my money back or part of it back so it's more of a perpetual thing and you get paid out

every year that's a great thing in a bear market like i learned from a venture fund you start a venture fund in seven to ten years you get back a lot of money with a hedge fund every year you get back a lot of money unless you start a hedge fund the first week of 2018 and and you're basically buying bitcoin at you know not 20 000 but i think 14 000 and you're buying you know eth at a thousand you know you're going to see some losses that year and with a hedge fund the problem with losses is it's very hard to recover from them so we lost 42 percent of our fund in 2018 but the market was down 90% in 2018. So we did okay. Like we fought the market the whole way and we eeked out enough gains, mostly in deals we did to do much better than the market. Even that, you have to make that

42% back before you can ever take profits. And the market still hasn't totally recovered from the highs of 2018. So all the hedge funds that started that year are in deep trouble. Some of them have gone under, some of them are actually have gone under, but they haven't officially. we were lucky enough that we had made uh we had done better than the market so that we raised uh uh so original funds like 100 million we raised another 30 million dollars in december of 2018 from our lps and um and because they trusted us they liked us and we had done well compared to the market and these are xrp holders so we had done spectacularly well against xrp so they loved us and still love us i hope um that money in 2018 we then bought bitcoin at like 3500 i mean

we had to buy something with it. We got a bunch of XRP as a contribution. We bought Bitcoin and then we just sat on that. So that ended up working out really well. So we had like a spectacular year last year, but we were very, very lucky because if we didn't have LPs that supported us, we would be, I don't think we'd be dead,

but we wouldn't be making any money. So, yeah. And at the, I think like end of Q3, beginning of Q4, I wrote a couple of times about this whole idea of like the high watermark in the hedge fund world. And I've actually been surprised how many hedge funds have survived. right so you got you basically explained like yeah there's two things you can do either you

can trade your way out of it right and that's really really difficult to do especially when it's you know double digit losses uh or two you can raise new capital and so i think that the raising new capital uh that isn't subject to the very hard mark um yeah but more people have done it that's right that new capital has its own high watermark so it's not it doesn't go yeah it's in fact every time you raise new capital it's like you're raising a new mini fund yeah go ahead yeah and so i think i was just surprised uh in a positive way uh how many people were either able to raise new capital or trade their way out of it which i think is overall you know net positive for uh for the industry but uh there was a point there in 2018 where people were down you know i mean i

saw lp statements that people were down you know more than the market right they're down literally 99 98 well it's yeah which is kind of the most you can lose right like you can't lose 101 of your fund and so being down 99 is um i mean it's almost epic like it's it's like if you're gonna do it do it right um yeah because you basically what is it you have to a hundred x your fund to get back to the high watermark it yeah yeah well you've turned a million dollars into your turn uh what is it a million dollars into ten thousand dollars is that right and uh if you've lost 99 of the fund well 100 000 turns into 1 000 that's math we can do and then you basically have 99 yeah yeah which it's difficult so even in crypto that's hard to do it's it's uh it's hard to do yeah so obviously

a big piece of the crypto industry is crypto regulation uh i think it was back in 2018 uh there was there was a moment where i saw you fire off a tweet and i said look i don't know mike super super well at the time but i said i know he's mad because you basically were like look like i can't invest in the u.s if everything's so far i'm so pissed yeah yeah i could just tell i knew i knew that there was uh that that tweet came with like smoke coming out of your ears as you sent it um and now we're seeing conversations about uh jay clayton potentially not being sec commissioner for uh for longer he's going to get a kind of a promotion to uh to go be the u.s district attorney uh for the southern district of new york potentially is that a promotion

is it a promotion i i don't know uh there are articles i read positioned as a promotion but that's a good point like maybe that's just corporate you know yeah um but kind of how do you look at the regulatory front today where ICOs seem to kind of have dissipated in the U.S.? Maybe we're seeing it more internationally, but just how do you look at the regulatory front? Well, I think the U.S. Look, I'm older, right? I remember the internet. And the internet was invented by America and spread first in America, and nobody messed around with it legally. And it grew like crazy. And now it drives the whole economy. These companies that were created in the 90s right google amazon etc um crypto is different like crypto i'm not exactly

sure where crypto was invented it doesn't matter like nobody knows but wherever that was it was invented on the internet and the u.s has done like it sometimes it ignores it and sometimes it throws up roadblocks but what it really needs to do is just get out of the way and like it did with the internet and it it absolutely hasn't and so you know there's so much innovation that wants to come in crypto in the u.s and so many of these entrepreneurs leave the u.s or don't move here from wherever they live and it's it's just i feel bad for the u.s right i feel bad because i'm an american i want our country to succeed and i believe crypto is the future i believe bitcoin is money and money is bitcoin period and why would we not want to you know i know why we don't want

to like be in the forefront of this it threatens the dollar it's confusing and the sec you know is always trying to protect people from you know schemes but we need to let innovation blossom and we don't want that just to happen in china and singapore and etc um because ultimately it's bad for the u.s so yeah i was mad i'm still mad and i think that we need to get somebody in in there that at the very least provides regulations that are understandable so we can work through them as opposed to this great fucking unknown which means nobody does anything in crypto in the u.s anymore and you know that worries me so yeah and it feels like uh the proposed solution from what most people consider have common sense just say hey look tell us what the rules are like

you're saying it's the problem right now is like the rules are being written retroactively through enforcement and not instead saying hey here's the rules if entrepreneurs know the rules they'll go play by the rules and you know for the good actors it's just like oh i did this thing now you're going to come after me because but i also have like a letter from a lawyer that says that this was legal and you just get in this weird weird doesn't matter yeah yeah you can hire you can hire scadden arts and like try to work it all out in in telegram's case and it doesn't work out um i don't know like if you like i have somebody who does my taxes for me and he does a lot of tech people's taxes and the crypto stuff is like he's very very good at what he does but he's even

he was making educated guesses on how i should pay taxes on my own crypto gains um over the years and like what's up with that like you know there's just there's not even clarity at that level and so yeah i mean i i i hope at some point soon we get our act together um and you know recent news suggests we might have a hope of that so uh going outside the u.s where else have you guys spent a lot of time i know you guys uh in asia but are there specific cities or countries that uh that are interesting yeah i mean i mean singapore is like the meeting place in asia it's sort of the silicon valley of crypto in asia and so singapore is the easy place to go because everybody likes going to singapore um it's uh for those of you haven't been it's somewhere you definitely want

to go you know at least once as an american i value freedom personal freedom singapore doesn't have that and so i was expecting a kind of a disneyland-esque police state and that is kind what it is but it's pretty pleasant like if you just want a nice place to live that's safe it's a great place to be um and it's interesting as an american to have my some of my views challenged by just visiting seeing how great it is um but singapore is a place where a lot of people meet we spent a lot of time in japan and hong kong korea and china as well um and those different places countries or cities become more interesting at different times but singapore is definitely sort of the place to go if you want to have a taste of crypto in asia do you see like different

types of companies or projects uh in asia versus the united states or do you think that kind of all of the variations you get are being built in both geographies i think if you ask most crypto investors what they really think they will tell you that most of the real science being done in crypto is in the u.s with caveats there is stuff in israel that's being done that's amazing um and there is actual science being done in asia um but the u.s i think is still the leader in terms of where the actual work is being done um but a lot of these companies aren't based in the u.s they have employees here for example so yeah and is that a function of uh the capital mostly being in the u.s or do you think that that's just literally like

silicon valley has this institutional knowledge they've got the muscle memory and so people want to build companies in the u.s because there's where they've seen the most successful company come from i don't know i'm not sure i can give an answer to that i mean i mean i could imagine all kinds of prejudices as well coming into like subconsciously i i don't know why and there's definitely good stuff being done around the world um and uh it just might be that we have a you know we have a big tech you know infrastructure here for people to spring from but china does as well um and uh it's just a little different there for people so yeah uh and so going outside of crypto uh obviously the uh political landscape is just pure chaos at the moment um we've got an autonomous

zone in like six or seven blocks of seattle uh which i think you're actually from uh seattle right or from washington i'm near seattle now yeah it yeah that's fun okay uh and then we've got uh my favorite thing you've tweeted a while is uh please don't take the presidential debates from us because they would be oh god i you used to be a marine right uh army yeah did you oh so like marines are no i won't get into that but like does the army guy in you just want to like like break up chaz or chop and like just create order from chaos or like how do you view that do you laugh at it this is gonna sound crazy but uh i i am a big believer in life that people self-select into the communities they want to live and so if people literally want to go live

in a place where there's no police they do you know self-policing or whatever and whatever kind of autonomous zone they have police yeah there was a video of a guy of people being maced like it's literally like it's abusing you know it's the mafia yeah yeah it's the mafia it's literally what happens when you when you have an organized mafia but yeah yeah when you have a power vacuum what happens like the i think they were calling the one guy the warlord but like you know the mafia this different names for people but like somebody takes over and is in control yeah um so like i'm actually the belief like let people do whatever they want maybe don't do in the downtown seattle like that seems kind of ridiculous um where that's like kind of taxpayers have paid

for it whatever uh but if people want to go do that stuff like i'm sure there's other weird places in america that aren't on the front page of every news no you can do that well look i mean the only problem i have with it really is that people who own or live there who didn't elect to become part of it were just subsumed into it that's a problem otherwise i just found it kind of entertaining right i mean it was it was uh it's the best marketing campaign someone could run for having police right like like that's the way i think about it it's like yeah i i get the whole like people want to defund the police but the the argument that i've heard actually uh to me that seems more compelling and and people freak out when when they hear this about the explanation

but it's like no actually they should get more funding and you should require rather than like six weeks of training to become a police officer like make them train for two years treat it like the navy seals you literally have to be the top one percent of one percent to get through this program and then you get to you know you have the uh pleasure of serving as a navy seal well same thing with the police and also take that additional you know year and a half or more of training and don't just treat you know teach them how to shoot guns like teach them how to do social worker stuff or you know all these other things that uh it's bad because like the police are killing people that is a problem right yeah we have to we have to ask ourselves like how much

of it is like police officers are bad people and how much of it is like we've put them in a bad position in terms of the way that we train them I actually or does the environment turn them into like you've actually been in combat too right yep I mean my knowledge of combat is based on video games and movies so I have no idea but like being in an environment can change you after a while right for sure and I mean and so you know being on like being a police like I remember to take it away from the police I remember what reading some like article written by a fireman in san francisco a couple years ago and his job was basically to um uh basically try to resuscitate drug addicts who'd overdosed right i mean that's it he wasn't they weren't putting out any fires

all night was spent trying to like you know revive these people who were dying on the streets and you know his his main goal was to not like to to wear enough protective gear that he wouldn't get like accidentally stabbed with a needle right and obvious problems around that but they how desensitized you get to human suffering when you're when you're doing that and so i assume police you know get desensitized to certain things after a while and and and that's why in their mind planting drugs which you see more and more videos that is a perfectly reasonable thing to do because they know that person's deep down is a bad person so they're helping society by doing it and and i don't know if more training helps that or not i i have no idea what helps that um so yeah and i

think also part of it is um in many cases the police will explain away the behavior in their head whether they're right or wrong um part of what i think uh i said this to somebody recently and i think they were a little taken back that like this is the mentality but like for example uh a lot of military members across all of the branches of the military when they're at war there's a saying that literally says i would rather be judged by 12 than carried by six which essentially is hey look i'm not gonna die because then basically that is the judge and executioner right yeah i think the same thing uh some of that mentality per uh is pervasive in the um in the police but what we have to remember is like i don't care what somebody does like you

as a police officer can't be the judge and executioner like if you kill somebody that is a finite thing. They don't ever get their like day in court. And when you lose that part of the social fabric or like the social contract of like innocent until proven guilty and kind of all of those things that I think Americans kind of hang our hats on. Well, no one reasonable is going to disagree with anything you're saying. And I think most of America feels that way. Like we can actually think police are sometimes way too brutal. And we can also think that a lot of this protesting and looting is absolutely ridiculous and has lost the plot, right? You can think two things at once like you want to fix a problem but you don't want to tear down western civilization

to solve that problem and um i don't know i don't know how to fix it yeah it's uh look i agree with everything you're saying there's people way smarter than you and i who hopefully uh will uh will come up with the solutions but i think that people are starting to uh to understand i'm not sure like i think part of the country wants a perpetual revolution like they profit from it and they don't want anything fixed and and look i'm a libertarian i'm not i think republicans and democrats are almost equally like ridiculous but these cities have been under democrat control for decades if they wanted something changed they could have changed it at any time including now and yet you don't see a lot of actual change so i'm not sure they want

i think that they i think they being some in the political class you know want this to be perpetual And on the other side, I think Chas was probably like one of the greatest political assets for Trump that he had. I mean, the longer that went on, the more ridiculousness around it, the better for him, which is why I think you're seeing it just being disbanded now is my understanding. But I'm not sure our politicians want to fix anything in this country. I think they're all like getting their peace. I think they're all peeing in the flowerbed. And at some point, the flowers die. And I'm not sure anybody's trying to save the flowers anymore.

Do you think that, I'll call it the Silicon Valley ticket, who the people are probably don't matter nearly as much, but run through your favorite, you know, kind of best known, most memorable people in Silicon Valley. If they got together and said, hey, look, we're going to put not only a presidential candidate forward, but literally an entire government. So we're going to pick president, vice president, you know, all the way down a cabinet, like here is who you are going to vote all on one single ticket. and you know that going into it and these are people who are entrepreneurs they've solved problems they know how to allocate capital blah blah blah all the way down the line do you think that that has uh receptivity in kind of uh the non-tech world in america i don't i think it's a pointless question i i believe i voted for obama and i believe obama was going to bring this country together and it did not he did not bring this country together and some people think he tried i think he i think evidence shows that he he gave up on that

I think a lot of – I didn't vote for Trump, but I think a lot of people who did thought that he was going to be a certain way, and he hasn't been. Like he just hasn't been – even the things he promised, he hasn't been able to get done. I'm not sure any politician can survive the political machine. So I think we need to rethink the whole way politics works in America. The power of the federal government is immense and unimaginable. by... Our founders cannot imagine the power of the federal government, the power of even the court system

and the activism of the courts. We shouldn't care who the president is, right? And I'm not sure that we should be hoping the Supreme Court is going to solve every problem that Congress can't get their act together and work out. And so I don't know how to

solve it with a group of different people being in power. I'm just not sure that there are perfect people in this. And that's why... you know do you often think about getting a place out of the u.s like i it sounds dramatic but like i i i own a house outside of the u.s and i'm you know i have plans to go there if things get bad enough here yeah um do you feel like the response to the pandemic was uh whether actually happened or the perception of like hey the federal government's going to turn to the states and

the state governments you solve this problem and we kind of saw a lot of the state governments get exposed for having just as poor leadership and effectiveness as the federal government? Look, I think in February, it was pretty obvious we should have told people to wear masks. And instead, the government was telling me people the opposite, right? I mean, masks seem to be not the silver bullet, but darn close. If everybody wears masks, I think you really crushed the spread of the virus. And literally, we lied to the American people and told them they were ineffective simply because we didn't want people to rush out and get all the masks and it turns out that like any mask a bandana actually provides you more protection than you could have

imagined and so no i don't think we handled it properly and i think now it's just politics people on the right don't want to wear masks like why and people on the left like it's just so no and i don't think the federal government is really set up to handle these kinds of problems i think you know they talk about the police don't prevent crime i mean they prevent crime by their existence but they come in afterwards and clean up the mess right and so you know people who are second amendment advocates like myself say you know you you need to protect yourself because when the you know when seconds count you know the police are minutes away and and the federal government also isn't good at preventing this kind of stuff like they're good at it like the

federal government's good at big monolithic responses to things after they've happened to try to stop it but they're not good at like this upcoming problem and how do you deal with it part of the problem is it's just a big organization right it's hard to get pieces moving turning a battleship the other problem is if you do nothing you're probably better off politically than if you do something and it's wrong and so i'm just not sure there's a there's a solution uh other than maybe don't lie to us so yeah and the second amendment thing i think uh what blew me away was just gun sales went through the roof right i mean i've got all my liberal friends have asked have they done with you there are people you know who support every leftist cause imaginable

who have privately asked me for gun advice at least five of them and i've helped them get the right weapons um and i've also told them like if you can't find a way to take a class and use it safely like you know you're probably worse off right because they're so frightened of these things that they're probably going to end up hurting themselves or not knowing what to do with them but yeah no it's sorry i interrupted you no i i think that's dead on my buddy uh literally said that he went to the gun store and the line was legitimately out the door and he said i love seeing minorities and women do it too i love i love seeing minorities like because a lot of the original gun laws in the last century were put in place to stop blacks from getting guns i mean

that's my understanding right and so i think minorities being well armed is is wonderful as long as they're responsible gun owners um so where uh where would you go outside the uh the u.s if uh if it came to that any where would you go uh so i would say there's probably three places off the top of my head one is uh bulgaria just given the fact that uh we both spent a lot of time in bulgaria yeah so for those that don't know both my fiance and mike's fiance are uh well polina's bulgarian uh natalie is bulgarian but she spent 20 years or like 15 years there yeah i lived there for a long time um so that's one singapore would be another one that would be uh just against singapore uh i've been two or three times now i think you know you can't bring your guns you

can't bring your weapons there yeah i haven't looked at uh singapore in any kind of real material way or the third place i would go uh is italy see i see you more in mexico like central mexico setting up there like an autonomous zone of your own uh i really do i i think that you Mike, that's what we call a cartel. I do not want to run a cartel. I didn't want to use that word, but I think, you know, you could do well. I mean, look, if you look around the world, right, like a country. There's no perfect place. Like America on paper is the place. And that's why people, that's another thing.

You don't see millions of refugees fleeing the United States, right? Even in the worst of times, people flee their countries to come here. And so it is a little bit ridiculous of me to talk about like leaving the U.S., but I'm a little bit worried. And so I think – What would drive you leaving? Would it be a safety thing or is it more of just like a headache thing where regulation or taxes or something like that? Taxes are – people don't talk about the tax situation, but the U.S. is the only – effectively the only country in the world where you're taxed on worldwide income. And so you don't see a lot of Americans living in Singapore or Dubai for the tax benefits because they still pay U.S. taxes, right?

But you see lots of, like, other nationalities living in these countries. And so that's a real pain in the butt. But I don't see myself, like, giving up U.S. citizenship. Like, I don't mind paying taxes, but that is an issue that you cannot get away from that. But I just think ultimately I would just want to be somewhere safe and civilized. Like, I could, you know, raise a family. and that's that's there's lots of places for that um yeah i generally think of it as like there's an overlap between a place that is um fairly safe mostly common sense regulation

government etc and also a place where they just leave you alone right mexico is right for you though like it's not safe but you can make it safe with your own paramilitary organization i seriously think i see you as a as a warlord in mexico like doing quite well for yourself so Yeah, I want nothing to do with that. Literally nothing to do with that. What types of things in crypto are you guys excited about that either you're looking for companies in the space or you guys have recently invested in that you think is exciting? you love bitcoin i'll tell you that um it's so funny everybody assumes i'm a big xrp shill and we love we love ripple and we love what xrp is doing but um but you know we own vastly more bitcoin than any other asset and we always have in our fund uh bitcoin is the alpha and the omega the beginning and the end and there's lots of other interesting things happening but they haven't

proven themselves yet um so layer one tokens are not hot right now we've invested in a bunch of them um algorand is one we still have high hopes for uh as well as lots of others but you know everybody's right now is focused on defy and i think defy is interesting but it has a lot of flaws and a lot of people are very nervous about putting any real money into defy um because it's not it just isn't secure it's not stable like it needs to mature also the rates the sort of margin farming going on right now is outlandish and is not sustainable and so we're very shy gun shy around getting involved in that kind of fad as well um but there are coins out there that really do like really serve a purpose and i still think there's a lot of innovation

happening around that um an example is uh in korea we invested in terra now we invested in terra in like 2018 i don't know if you know them um but they're uh they're uh they're a a stable coin in korea and they're expanding to other countries that's used for e-commerce and so if you go to an e-commerce site in korea and you pay with their stable coin you actually end up getting like a five or ten percent discount and stable coins that don't have to be a hundred percent backed by currency they do in the u.s you have to have a dollar for every you know dollar stable coin issue but in other countries that isn't necessarily the case so you get seniority and you get growth in the rate the bigger your economy of usage of this coin goes the more seniority or

inflation you get they can actually use some of that inflation to pay back e-commerce sites the e-commerce sites get paid one-to-one and so it's this virtuous cycle more and more people use terra and korea to pay for stuff because of the discount and then it creates a bigger economy which gives more money for them to give back to the e-commerce site it's a beautiful system and it's worked out really well and uh and that's an example of like just a wonderful like invention of a coin that can work anywhere in the world that doesn't require one-to-one backing of the stable coin and so we see stuff like that and we you know the venture capitalist to me comes out You asked me earlier about the, you know, do we do venture or do we do trading? I didn't really answer, but I'm a venture capitalist. And so I like doing venture deals. I like groups of people, entrepreneurs, starting companies, going from zero to one. I like investing in that, the long shot where one in 10 pays off.

but half of our team is purely trading and they're, you know, and they trade every day and they do a really good job. They do exotic derivative stuff. They're buying, they're selling, they're shorting, they're longing. It's just, you know, they, I, I understand more of what they do than I let on, but I mean, right now, I'm not that ignorant of it, but like they are experts and I let them run. And they, you know, they've outperformed Bitcoin by like 30% last year. And that was fantastic. And Bitcoin had a good year.

So we do a little bit of both, but I, My heart is always in the venture to do startups and the entrepreneurs starting something new. That's what I love. Yeah. And it feels to me like there's the combination of those two things, right? So like you're one of the only funds I know that kind of says, look, we're going to almost be like 50-50. We're going to do a bunch of trading and look at the liquid stuff, but we're also going

to do- There are other funds. There are other funds. There's other ones that do it, but like the ones that I've seen, and maybe I just haven't seen others like you, but a lot of them have like a hedge fund or a liquid fund, and then they'll do like a sidecar or they'll somehow like carve out into a separate fund the illiquid stuff but it sounds like you guys are doing everything all in one fund we're doing those two things we there's some stuff we we don't do but those are the two things we do and i think that it's uh it's

good for us right now yeah yeah the other thing you talked about was a d5 and uh the one thing for me is like i was telling one of my partners that it feels like people are building technology they're not yet building products there, right? It's a lot of things that it works. And like, if you're somewhat technical or you've got a lot of persistence and kind of self-motivation, you can figure it out.

You can use it. To your point, people are a little scared about putting really big dollars at play there. But if you compare it to a product like a BlockFi or a Robinhood or, you know, these other fintech like true products with slick UXs and things like that, it just feels like there's something very different there.

Do you see the same thing or are you a little bit more bullish on kind of the user experiences and product side of it well okay i disagree somewhat so first of all there's people like uh vinnie lingham have you ever had vinnie on your show i have not but but but i've talked to him before um his company is civic and i i i don't think i'm saying something i shouldn't say like he has a who i might be then he's working on some stuff that i think fixes a lot of the problems in d5 um but i'll leave it at that in case i don't know what's been announced um and we're not investors in that he's just a friend um i have no financial interest

in what he's doing i'd like to i wish i did um but i think that decentralization is has many many problems and and i i talk about our first closing of our fund um was our very first closing was 50 million dollars in xrp and it it was like literally two seconds to confirm the transaction and we paid tens of cents i think it's 40 cents for the transaction um it blows bitcoin out of the water right it blows anything in the world out of the water other than maybe handing a bag of money to somebody and you can't beat that with bitcoin um and but bitcoin is decentralized and there's reasons why all of the problems with bitcoin are acceptable um and if you know if you don't know what those reasons are listen to your podcast or read the bitcoin standard right

but the problems of DeFi it is the decentralized products there's so many points of failure and so many points of risk and and it's hard and it's messy and it just it's too much friction and so it keeps people away those problems can be fixed and I think people like Vinny are doing it now in the meantime companies like like BlockFi and other companies are doing amazing things helping people in the meantime in the meantime might be 20 years right uh get a lot of the same services in a much safer and easier and quicker way uh and so we support both yeah when it comes to actually moving our money we use companies like block buy because when you're moving tens of millions of dollars you need to know exactly what's going to happen to that money so yeah is it fair to say

that defy uh is there correlations or comparisons to like early internet where things were hard they were slow they were messy all that kind of stuff and then it got over time over time it got uh improved um yeah well it's like homebrew stuff right and it's fun to do and it kind of works sometimes and when it does work you're happy but you know you're dealing with money here and and i think people just want to make sure that um they don't lose their money and so you know it is what it is um we are we're investing in these companies but we are not margin front we are just not we're not getting in that that could end badly um so makes sense last question for you before i do uh the uh the rapid fire at the end uh do you miss traditional venture investing

i do but uh i don't necessarily miss silicon valley silicon valley has become less interesting as a place um over the last couple of years and i think it'll cycle back and i'll be right back there but uh i don't miss the the culture because i think the culture has change but i do always love meeting entrepreneurs and helping them and and i'll always love that yeah that's awesome uh i asked two questions to end each episode first is what is the most important book you've ever read you know it's so funny um the the bitcoin standard has been formative and the author is such a dick right i mean he's just personally he's just he's very intelligent but he's just he's i personally do not love him um

but the bitcoin standard in my current sort of life right now in crypto is is a book that i mean you really need to read the white the satoshi white paper need to read the bitcoin standard if you want to really understand at a basic level why bitcoin is important um longer term i think guns germs and steel i don't know if you've ever read that but that is a book that was formative to me in my younger years and i often go back to it and and how i think about the world and why things are the way they are and i'd recommend everybody read that as well i actually have guns germs and steel my top five i always say uh rich dad poor dad uh thinking girl rich rich is made in babylon and then gun shirts but you told me before we got on that white fragility was the

sold out on amazon i couldn't get my copy you um it's funny you said you say different things off air then i'm just kidding i love it uh last question's more fun aliens believer or non-believer i just read a book called the last human i tweeted about it i i don't i don't know where these books i read i didn't just find it somebody recommended it on twitter or something so i bought it it was super good and the last human yeah and it's a combination of interesting theses so one is there's a guy named ramaz non i'm actually looking at my bookshelf right now he wrote a book called nexus a few years ago and it was a it was a trilogy and it was it was sort of popular and it's a very good book but it's about networked minds and he was sort of you know the idea of

using different technologies to actually network our minds in the way that i think we all understand what that means now the last human is about networked minds but it's also about aliens and what a galaxy might look for and i love the book like i read a lot of non-fiction but i reward myself often with a good fiction book and uh the the math the math says there are aliens out there and and if there aren't you know it's uh well it's probably a hell of a piece of evidence of the existence of god but um yeah i think alien it's tough i mean i i hope in our lifetime we get to meet them right so it would be kind of boring not to right like you spend so much time In the cold and lonely universe, yeah.

Yeah, I'm with you. You could ask me one question to finish up. What's the one question that you have? Do you secretly love XRP? Because again, in our private conversations, you talk about it very bullishly and how much you really have put most of your assets or intend to in it.

And I'm just wondering, you know, what your real view on XRP is, so. Should have never asked you this question. Let's ask you this. Look, you asked yesterday, you asked your audience on Twitter what we're going to talk about, and a lot of the XRP guys came out, and they said they really want to talk about it. And they know my opinion on it. I'm in love with XRP, and I think it serves a very useful and important purpose. I just want you on the record saying what you think about XRP.

I mean, Brad and I basically talked about it, but if you separate XRP and Ripple, Ripple is a software company that wants to build better software for banks. No-brainer. Makes sense. Like a venture capital bet. i'm jealous i didn't invest in ripple in the seed round and make a bunch of money with all the venture capitalists right so like that that makes no sense uh the ripple xrp relationship very weird to me i've been on record a million times and saying like i don't know what that relationship is or was or whatever that's not my job like it is what it is and we are here today

um i think that xrp in oh my god there's a lot of hedging and hemming and hawing No, no, no, hold on. XRP, well, because you know that, look, the XRP army, I nod my respect to them. They don't fuck around. So I'm not going to mince words. But no, I think that XRP as a part of the Ripple product, meaning like they use it inside the product. I understand why they do that. And I see the advantages inside the Ripple ecosystem. What I don't understand, and I think where I choose to not engage on the XRP side, is I don't understand why people are buying it, speculating on future price movements, right? Like, to me, if Ripple is successful, that doesn't mean that XRP has to be successful. And I think that – You're talking about Bitcoin now? You're talking about Bitcoin now when you said speculate? No, of course. Listen, by the way – I mean, none of us know, right? I mean, none of us know.

Absolutely. Listen, by the way, Bitcoin for sure, like I've said a million times, it is the most binary thing you could find. It is either going to be worth millions of dollars a coin or it's going to be worth basically nothing. What do you think could crush – what do you think could hurt Bitcoin the most? What could make it worth nothing? Self-inflicted wound. Like there's some code that's pushed that somehow does something detrimental in a material way. I think that's like the most likely thing that actually takes down. I disagree with that.

Why? What if the US government declared it – like seriously declared it a national security threat and did everything it could to shut it down? They could clearly kill the fiat on-ramps and off-ramps, right? I think that's the biggest danger. I think that China and Russia would love that. They want to get off the US dollar so badly. And I think that what they would look at and say is, wait a second. Interesting.

So you think Bitcoin is so large now that the US government cannot effectively take it down anymore? That's a really interesting thought. Well, what I think they can do is I think that they can heavily discourage, if not cut off, the United States citizens from using it. So they ban ownership, do all that kind of stuff. what I think that was on a global basis, Russia and China both have publicly stated many times that the US dollar system is incredibly detrimental, it's expensive, it's costly to them, all that kind of stuff. Then you look at places like Venezuela, all these places that are sanctioned, they would love nothing more than the US to openly say, we don't like something,

and then they all run and go use it. And then they can basically have the US system of the world, and then you have the non-US system of the world. And I recently saw two data points that I thought were really interesting i don't know how much volume's gone through either one of these so take it for what it is but in venezuela they are using btc pay uh btc pay server whatever it's called uh to allow people to pay with bitcoin for government services so like you want your driver's license normally you can i didn't know that it just came out uh morty ben is the one who highlighted this that i saw him talking about it uh so he he basically positioned it as like the Venezuelan government is acquiring Bitcoin. I don't know if there's enough actual transactions

to make that case, but the fact that they're willing to understand that this is possible and they're willing to actually allow people to pay with Bitcoin to the government, that's interesting. The second thing is, I know for a fact- The way you light up when you talk about Bitcoin, your energy level just went through the roof. I love watching you talk about this. This is what you look for in entrepreneurs is passion about whatever product they're interested it. It's the only piece of technology that I've ever seen that has the addressable market of the world. Everyone. Yeah. Literally, it will touch 7 billion people if it becomes on the uppermost limit of what we think it can become. The other thing that I definitely think

is more likely than not is that you, me, and everybody else is underestimating how big it can get. So if you think of, you know, everyone always compares it to like, oh, the $90 trillion monetary supply, whatever. Murad Mahabdev, he recorded an episode maybe a year and a half ago now. And he came in, he made an argument that Bitcoin's market cap is not comparable just to the global monetary supply at $90 trillion. He thought it was $150 trillion. And how he got there was a lot of the assets that you or I own, we own because we don't want to hold cash because of inflation. So we'll buy a house or whatever all this stuff is. And so instead, just like Uber was a market expanding piece of technology, and it wasn't just against taxis, it ended up like

some people don't own cars. Same thing here where now all of a sudden, maybe I don't put my wealth in store value assets. I can actually put that in quote unquote currency because it's a deflationary type currency. So I think that's interesting. But the other point is there's a number of countries that are now putting national resources towards mining. And so nefarious actors like North Korea are rumored to be doing it, right? And that's how they're driving some revenue. But then if you look at places like, again, Iran, China,

like these different countries, it's just, you're getting to a point now where the world's never had something that is truly not manipulated and not controlled by anybody. And so I fear that the US, every time they've ever seen something like that, they just are like, nope, if you go like deep enough down the stack,

like you can find the point of failure. But if there actually is something that has no point of failure in terms of control or ownership, the countries that embrace it first end up winning, right? It's the countries that fight it. They get screwed, right? Because they end up being the ones without any. So I think that some of the most interesting content we've had in the last hour plus is in the last few minutes you talked about Bitcoin. Like I want more of that. Like I like that you interview people and you're a very good interviewer.

And I've interviewed a lot of people, so I understand what it takes to do that. But it's just fun. listening to you to talk about you're you're a true believer i mean you're like a scientologist who you're you're tom cruise jumping up and down on the couch and i mean that in a positive i mean it's funny but i also mean it like fairly positively like it's you you you believe this crazy stuff and i do too but i will tell you this i think that there are three interesting coin models out there i think there's a lot more like the terror one i talked about but you've got bitcoin which is money i think you and i agree on that and a lot of part of your audience agrees

in that. Ethereum is the worldwide computer, and it's definitely interesting. Now, Ether may or may not end up being that, or somebody else may be that, but I think that's an interesting model as well. The third one is, I don't want to call it a banker coin because the XRP army doesn't like that, but what Ripple is doing can disrupt the banking system in a positive way. It can help them eventually move to a Bitcoin world, I think, in a way that's very important. In the Bitcoin standard you talk a lot about how you get around the issues of this the the how slow the inexpensive the bitcoin network is you do it through banks like he envisions banks well you're going to need i mean yes you can have banks but if they're not if they're issuing artificial like fiat basically

like you know fractional reserve type banking you're kind of back in the old world and so i really think xrp has a chance to become like that that coin that people use to actually move the money around when they need to do stuff fast you need to be somewhat centralized and the the downside of that centralization i think is less than ultimately having very very powerful banks control everything there is to know about to control about bitcoin in the end do we do those two things get mashed together in the sense of uh let's say the u.s uh issues a digital dollar or like jpm coin comes out or whatever do you think that that eats into the potential that uh xrp can have? It definitely could. I mean, there's an argument that XRP competes with Tether more than

Bitcoin, right? And so if you look at how it's being used now, it's these cross-border payments where there's a lot of pain involved. And it's really helped MoneyGram with making these cross-border payments faster and cheaper. So I think there's a long-term play for XRP. We love it, especially these prices. We look at the price of most coins in Bitcoin and sats, right? We don't look at ETH it's 230 bucks or whatever it is right now we look at how many sats it is and we do that the same with xrp and xrp is uh i haven't looked in the last couple hours but it's hovering around you know 2 000 sats that's very very cheap for xrp and so and so we are more bullish on xrp than we otherwise would be and we think over the long run it's part of the ecosystem just believe that but

you're a good sport about this because most bitcoin maximalists cannot stomach and even having a conversation beyond how great bitcoin is and i think that you are somebody that's helping bring this community together instead of helping rip it apart and i think that you're an important asset because of that so i'm glad you do what you do yeah listen i appreciate it i also appreciate you taking the time to do this we'll have to do i've been begging to be on the show since i met you in 2000 and whatever 18 so you finally let me on natalia was on listen i was scared on the show to be honest i was scared that you were hanging out in the chas and i was never going to get you on like you were going to become the mayor of chas i did want to go i could drive over there

i did want to go but ultimately i was just a little bit afraid like i didn't know if you go you have to live stream it you just have to walk around with your phone and just film i think it's over now isn't it over i saw that they're like i don't know either yeah i hope it isn't it's a great marketing uh it's a great marketing uh tool for uh for maybe some uh you know rule of law awesome so much for having me on yeah absolutely thank you so much for doing it we'll do it again in the future all right