The Pomp Podcast - #867 Educating Congress on Bitcoin w/ Rep. Ro Khanna

Starting point is 00:00:00 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. Now let's kick this thing off. Ro Khanna is the California representative for the 17th District. He's also the author of a brand new book called Dignity in a Digital Age. In this conversation, we talk about Bitcoin, politics, and how he sees technology like Bitcoin and cryptocurrencies positively impacting his constituents. I really enjoyed this conversation with Ro, and I hope that you enjoy it as well. Before we get into this episode, though, I want to quickly talk about our sponsors. This episode is brought to you by FTX.US. FTX.US is the safe, regulated way to buy and sell Bitcoin

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Starting point is 00:03:50 I think we've got Ro here. Ro, how are you? I'm doing well. Thank you for having me on. You got a big following. I am. I'm super excited about this. We got a lot to to get through. So I figured maybe a great place to start is Bitcoin and politicians. There's lots of folks who their main question is just like, what are the politicians think? And that's a loaded question because there's, you know, multiple sides to the aisle. There are various causes or specific aspects that people care about. But just give us your kind of general sense of Bitcoin and how you're thinking about it today. Well, first of all, in American politics, Abraham Lincoln said public sentiment is everything. And here's the reality. There are over 40 million people now who own Bitcoin or crypto Bitcoin, obviously being the biggest one.

Starting point is 00:04:42 And so it's something that politicians can't ignore. I mean, there are young staffers in everyone's district who have wallets who are on the exchanges or who have non-custodial wallets. And this is something that even if they don't know it, their staff is saying, hey, this is happening. It's happening in everyone's district. So I think it's the opinion is changing from a concern and a reflexive opposition to now something more akin to, OK, this is happening. We have to learn about it. And then you have people like me and Ron Wyden on the Democratic side and others on the Republican side to say, actually, you know, there's nothing to be afraid of. this is a good thing. This means that we are democratizing access to finance. This means more people are getting to participate in creation of value and that we should be for

Starting point is 00:05:40 blockchain and we should be for Bitcoin. Got it. And so when you start to think about this, we've seen a number of I'll call them events over the last maybe year and a half, two years where there was legislation put forward. And sometimes it came from politicians themselves. Sometimes it came from regulators. But there was kind of a drill that was run in the crypto community. And I think that they've kind of began to realize the seriousness of this and the importance of the companies, the individuals, the leaders participating in the political process. How much does that have an impact? So when one of these legislative bills are up for vote, and you or your colleagues hear from your constituents, like, just talk a little bit

Starting point is 00:06:21 as to kind of the process of which that goes into forming the opinion, the votes that you take, etc. It has a big impact. This is a community that is creating a lot of jobs. I mean, it's creating a lot of jobs, certainly in Silicon Valley. It's creating jobs in places like Miami and across the country. And it is a community that is creating economic value. And it's a community, like I said, that is creating a lot of excitement among a lot of diverse communities. I mean, the black community and Latino community are disproportionately represented in owning crypto. So when we hear from the larger community that there are things that Congress may be doing that are unhelpful or that would squelch innovation, then we listen.

Starting point is 00:07:09 It doesn't mean that we always agree, but we listen. Let me tell you, on the infrastructure bill, I would not have known if it weren't from hearing from many, many of my constituents and many people that there was a provision that was overbroad and that was actually going to negatively affect those engaged in mining with nothing to do with selling crypto or that was actually going to affect people who are just for software coders. And so that, to me, was helpful. And it allowed me to have a conversation with Senator Wyden and others saying, look, we have to fix this. So political engagement, participation makes an enormous difference, particularly in an area where many members of Congress don't have that much knowledge. One of the things I've said is I went in. I don't trade or own more than 10 bucks of crypto, but I opened up a wallet. I actually went on Coinbase to see what is all this about. I said, well, what is MetaMask and what does it mean to have a wallet that can have Ethereum? Partly, I just think more members of Congress should just do some of this so they get the experience of what it's like.

Starting point is 00:08:19 Yeah, I think it's a great point. Along that line, it's like, what is your process for getting educated? So there's things that you can do yourself in terms of using the technology, go buy some, move it between wallets, et cetera. But how else do you think about when there's a topic that is obvious that your constituents care about, but you say, hey, listen, this isn't something I'm an expert on. What is that process, and where do you look to get more information or learn? I do a lot of roundtables, and I reach out to industry leaders, and I reach out to academics, people like Chris Brumer, who is a law professor. really understand the technology. And then I also reach out to critics and I try to get all of the information. And then I say, OK, here is my my opinion. But especially in something as it relates

Starting point is 00:09:07 to Bitcoin or as it relates to crypto, you know, you really have to go outside the halls of of Congress to to do that. Now, I have a great chief of Sevgiosava who knew a lot about this and is very immersed in the community. And so that that has helped as well. Yeah. Now talk to me about proof of work, proof of stake. I know that there's a ton of debate. We just saw the European Union obviously voted on and ended up deciding not to ban proof of work. We just had on a member of Space Force who also is a national defense fellow at MIT who was talking about the ideas of a decentralized network is actually a form of a weapon system and could be incredibly impactful for the United States or other countries. How do you just sift through this, right? And

Starting point is 00:09:56 if you have specific views and you say, hey, look, you know, I feel educated enough to have an opinion. Great. If you're kind of still working through it, just like how do you think about kind of filtering proof of work, proof of stake and how the United States should act here? Well, I know I know some of the Bitcoin maximalists that as a matter of prediction, think that it's going to be the proof of work because that's ultimately the most decentralized And no individual has control. And of course, the founder may no longer be alive or no longer be in control. And so I understand that's their perspective. Folks with proof of stake say, well, the proof of work is too time consuming and inefficient. and proof of stake is better. And they raise, of course, the energy concerns, though.

Starting point is 00:10:44 Someone told me that the entire Bitcoin mining takes less than 0.1% of global energy. And a lot of that, frankly, can be done through demand response. And you don't have to be near the energy center to do it. And a lot of it can be clean energy. So I think there's solutions to that. And then I was talking to the founder of Solana, and he said he has a third concept of a different type of proof

Starting point is 00:11:06 that he's introducing. I guess my view of it as a lawmaker is I don't have to take a position for or against one of these. How could I? I mean, even people in the industry don't know. I'm for sort of a pluralistic approach. But what I want to make sure is that we don't sort of demonize proof of work, as some have done, and that the government be recognized that you can have clean mining and you can have solutions to that and then let's see what the market and people want yeah i think i think it's a very nuanced uh perspective of just hey uh allow the free market to determine the winner allow the technologist uh and kind of the uh the end users to determine what ends up having value rather than

Starting point is 00:11:49 the politicians which um is hard right like there is an element of uh when you're in the business of having to take a side or having to have an opinion because there's votes and and various legislation gets put forward, I don't envy you or your colleagues in always having to understand and vote on things. But that's just the nature of the job, it seems. It is the nature of the job, but where you're dealing with such complex technology that's still in its incipient stage, I think we can take a view that we don't know everything and that it would be highly problematic. I mean, I don't say this with any sense of arrogance, but I probably know more about Bitcoin and crypto than 95% of other members of Congress. And I don't feel in any way qualified

Starting point is 00:12:34 to be making a decision about what is going to emerge as dominant between proof of work, proof of stake. So it would be irresponsible for Congress to be so definitive. And I like to make sure that we have a sort of different pluralistic approach. Let's see what emerges and then be honest about what the advantages and disadvantages may be of each approach, and also to refute some of the unfair attacks on the approaches. Yeah, this perspective that you're presenting reminds me a lot of the book that you recently wrote, which is Dignity in a Digital Age, Making Tech Work for All of Us. And this idea that some people adopt technologies and other times we need to bring technology to certain groups, certain types of people, or certain

Starting point is 00:13:20 applications. Talk to me a little bit about some of the large ideas in the book and why, you know, given everything else you have going on and obviously the not busy life that you have, why did you want to write the book? Well, we have $11 trillion in my district and the surrounding areas. It's the most wealth created in human history, Apple, Google, Intel, Yahoo, Cisco, LinkedIn. And I said in the 21st century, our challenge is to decentralize wealth generation. We need a lot of the communities in rural America and the Midwest and black and brown communities to have the opportunity to build wealth, to have digital jobs, to start companies, to participate so they don't have to leave their hometown to succeed. And the book is all about

Starting point is 00:14:02 the decentralization of technology and how do we get more people participating in these 25 million digital jobs. That's why I think as a progressive that we should be celebrating what blockchain and crypto represent. It's all about decentralization away from the power of the banks, away from the power of the biggest tech companies and saying we can actually decentralize the opportunity to participate, to build companies through tokens. We can decentralize who gets to participate in wealth generation because most of the IPOs and investment and technology are closed to a very few set of accredited investors. The crypto is far more open. And we may be able to skip the middleman. We may be able to actually be able to remit money and move money without Western

Starting point is 00:14:55 Union fees. So I think the whole thing is democratizing. Obviously, there has to be smart regulation and there has to be the appropriate tax. And we need to make sure that there's compliance and we need to make sure there's not wild speculation. But what I don't understand is people who come at it with a fear of a technology that's fundamentally shifting power away from concentration and empowering individuals. Yeah, I think that's a great way to look at it. Joe, John, what questions do you guys have? Hey, Ro, thanks for joining us. You had a comment recently that I saw that I thought was super interesting around how to fix social media and the disinformation and misinformation that's going on. And I think you said something along the lines

Starting point is 00:15:34 Your first step would be to hire a bunch of philosophy majors or political science majors or really just people that are involved with liberal arts, the thinking process behind that. Why did you say that and what is your thought process for that? You know, when the printing press was established, it took 100 years for that conversation to be constructive. Initially, people were putting out very, very provocative misinformation pamphlets. It was leading to war in Europe. And it was a concentrated effort to build deliberative institutions, the public's fair institutions, a liberal democracy. I think you have all this social media out there and people just say, OK, if we just allow people to talk, that somehow that's going to be peace and mutual understanding. Of course not. If it were that easy, you wouldn't need the humanities. You wouldn't need philosophy. We have to be intentional about how we get people to interact and how we highlight the best types of exchanges and make those exchanges possible.

Starting point is 00:16:34 And that's why I said that we ought to have more liberal arts majors so that these companies aren't just thinking, OK, how do we maximize the amount of time someone spends on my platform? But think about what is their role in being being thoughtful stakeholders of democracy. Gotcha. John, what do you got for us? Roe, what are the steps and how you're thinking about making California's 17th district and pretty much all of California, the United States in general, more crypto friendly? First is overcoming the irrational fear of crypto. I mean, this idea that people, when they think of crypto right now, they think, oh, is it some scheme to hold people in ransom or is it some crime? And that's actually not the case. Or is it some investment spam? Obviously, they're bad cases. That would be like holding up the worst members of Congress and saying that's all Congress. I mean, frankly, some of that may be more representative of our body. But the reality when I think of crypto, I think of people having the ability now to participate in the economy, to participate in wealth generation, to cut out a lot of the middlemen and institutions.

Starting point is 00:17:47 And I think we just need more education around that. And we need more education about how widespread this is and that you're not going to turn back what's happening. It's just going to continue to grow in adoption. And if we can get that information out, then I think this fear, this reflexive fear will die down and we can have thoughtful policy emerge. Gotcha. Ro, when you start to think about so many of the companies inside of your jurisdiction, and some of them are crypto, some of them aren't, how are you thinking about the intersection between economic prosperity, job creation, and this industry? You mentioned earlier that there's been a lot already, but are you hearing from many of the business leaders that they see this as one of the major sectors, or what are you

Starting point is 00:18:39 hearing from them? Yeah, I am. I mean, I met with the founder of Solana this weekend back home, partly because he's Ukrainian American. And I wanted to really hear from him. He has a lot of people in Ukraine and a lot of the crypto community actually have people in Ukraine. And so I just wanted to understand. And you look at his story and his founder, Roger's story. You know, they're the children of immigrants. They came to this country with absolutely nothing. and they've now created this huge company and they're creating hundreds of jobs.

Starting point is 00:19:16 That's the American dream. Now, whatever you think of, whether that, I know different people have different views on crypto and it's almost religious intensity in which one's right or which one's wrong. But my point is a broader point. Step back and look at how much entrepreneurship,

Starting point is 00:19:30 innovation is taking place and look at the background of the people who are doing it. They're often people who come as immigrants or children of immigrants with nothing and they're creating value and they're creating jobs. And that's something we ought to celebrate. When you think about your colleagues bringing what you're hearing on the ground

Starting point is 00:19:48 from people in your district into these political conversations, what are like the one or two things you would love to see the various political factions kind of come together in a bipartisan way and push forward? Are there specific either pieces of legislation or specific efforts that you're like, you know, this feels really important? I think we need to see that the digital asset regulation is different than traditional regulation, right? I mean, the Howey case is a great case. It should be case law. But not all digital assets probably need to be filing 10K and 10Q forms, especially as they become decentralized.

Starting point is 00:20:25 So how do we have a rational digital asset regulation that makes sure that we're being appropriate for the new assets? Second, how can we have some predictable rules? I don't want this industry in Singapore. I don't want it offshore. I want the industry to be in the United States, the wealth generation to be in the United States. How do we make sure that the work is being done here? You know why? Because that's our laws also will better protect privacy and we can also more incentivize clean energy for the use of mining. So let's think about what we can be doing in the United States to be the absolute leader when it comes to crypto. When you think about things like taxation, how does that play into it? Right. We saw recently Senator Lummis put forward a bill talking about kind of de minimis exemption. There's been talk about it previously with other politicians. It feels like, in my mind at least, I always talk about crypto companies, especially in New York City, kind of the financial capital of the world.

Starting point is 00:21:29 They have more regulatory hurdles to jump through, not because of federal level, but because of the state level having the BitLicense and things like that. But every American has, from a taxation standpoint, an asset that they consider to be a currency, whether they're saving in it, spending it, sending it to friends, whatever. but it's not taxed as a currency, it's taxed as property. And so any thoughts there in terms of what could be done or what's likely to be done? Well, I think we have to have fairness. I mean, obviously, if you have a capital appreciation and then it should be taxed that way. But if it's a commodity and being recognized as a commodity or currency, then it should have the same rules as any other commodity or currency. I think right now the problem is that there's no clarity and there isn't a fair playing field. What I would say is let's have predictable rules to have

Starting point is 00:22:18 something. If it's a appreciable investment, tax it as capital gains. If it's a commodity, have the rules of commodity. If it's a currency, have those rules and make them fair so that you aren't singling out crypto in a way that's different than other types of assets. Yeah. And then my last question for you, and then we'll let you go because you got a lot of other stuff to do is, uh, you mentioned that you have $10 or less. What can we do to get that number up? You know, I gotta be careful for a couple of reasons. One, everything I buy and sell gets reported as it should be. And so I don't want anyone ever to say, Oh, you know, Kana's policies are, uh, for crypto because Kana is going to benefit some way, uh, financially

Starting point is 00:23:07 from that. So I've deliberately kept it low and don't want to do that so that people know when I'm advocating for these policies, it's because that's what I believe. That's what I think is actually good. And that's what I think is actually going to create a lot of access for a lot of individuals who've been left out of so much of the wealth generation of the modern stock market uh, in, in modern, uh, company formation. So that's why for me personally, I, I keep it very, very low, uh, so not to be, uh, to have any conflict of interest. Uh, but I definitely think more members of Congress should at least, uh, be on these platforms to understand them. Yeah. That's a fair position to take. Um, where can we send people to find you on the internet?

Starting point is 00:23:51 I know you've been tweeting a lot more, uh, which I've been enjoying or, uh, or find out more about your policies or any of your perspective? Well, at ReproKano or at ReproKano on Twitter. And I love engaging there. I usually, sometimes I even go back and forth with people to the disappointment of my team. But I think it's great to get a robust conversation. And I'll tell you something, the crypto community is pretty strong on social media and that matters. And I just think you should know your own influence and power. There are 40 million plus folks in every state, in every community. This is a constituency that's going to matter to the future of America and American politics. Absolutely. I actually lied. I have one more question for you. This is

Starting point is 00:24:40 my own personal interest. One of our sponsors is Eight Sleep. They've got this thermoregulated mattress that you can make super hot or cold. I turned mine freezing cold and sleep like a baby now, uh, for you, every time I've ever talked to you, you respond almost immediately. Uh, you're doing like 9 million things. And on the ball, what is your sleep schedule? Like how do you actually get all this done? You know, I usually sleep. I was on a red eye this tonight, uh, got in this morning so I can sleep on planes. Uh, but the thing is I do catch up sleep. So if there's a couple of nights, I don't have sleep. I need my seven, eight hours to be fully functional. Uh, eventually. I'm not one of some people. They go on three, four hours sleep like Nancy Pelosi or

Starting point is 00:25:23 something. I'm not one of them. But I can I can go a few days with with less sleep. But, you know, I get energized in politics. It's I get energized from other people. I get energized from conversation. I love my district because you meet all these extraordinary people like you, Bob, and others who are just at the cutting edge of technology and at the cutting edge of what the world is going to look like. And that's, to me, that's exciting. That's a great answer. Sleep on planes and just catch up. That's a strategy I'm going to need to employ. All right. Thank you so much. I appreciate it. You're doing fantastic work. And I know there's tons and tons of people that you've been speaking with. And I think probably the most impressive thing, honestly,

Starting point is 00:26:06 is that you're doing the work, which for those that are your colleagues, I hope that they follow in your footsteps. You're serving as a great role model. Thank you. Thank you. Thank you for having me on. I I've heard so many folks say, have you been on this podcast yet? So, uh, I'm honored to be on that. We just paid all those people. Don't listen. All right. See you later. Take care. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to palmscryptocourse.com. We've developed a curriculum with the top teams across the

Starting point is 00:26:46 industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to palmscryptocourse.com to learn more and I'll meet you guys for the next episode.

The Pomp Podcast - #867 Educating Congress on Bitcoin w/ Rep. Ro Khanna

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