The Pomp Podcast - Brian Estes, Founder of Off the Chain Capital: The Unknown Bitcoin OG

Episode Date: January 15, 2020

Brian Estes is a Bitcoin OG and the Founder of Off the Chain Capital, a crypto fund focused on finding value opportunities across the industry. In this conversation, Brian and Anthony discuss some of their awesome stories from the early days of crypto, investment strategies that have been quite profitable, and opportunities that are likely to present themselves over the coming years. CRYPTO.COM-----Crypto.com is a pioneering payment and cryptocurrency platform that seeks to accelerate the world's transition to cryptocurrency. With the vision of "cryptocurrency in every wallet", the Crypto.com App offers a full range of financial products with competitive pricing, well designed UX and high security. It is the best place to buy, sell and pay with crypto. TAXBIT-----Refund-maximizing, cryptocurrency tax software you can depend on. Visit taxbit.com/invite/pomp and receive 10% off your tax plan today by signing up for a free trial. ETORO-----This episode of Off the Chain is sponsored by eToro, the smartest crypto trading platform, and one of the largest in the world. Join 11 million other traders and create an account at etoro.com and build your crypto portfolio the smart way.

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Brian Estes is a Bitcoin OG and the founder of Off The Chain Capital, a crypto fund focused on finding value opportunities across the industry. Now, you got to give him respect. He found the Off The Chain name earlier than I did, so you know he has to be a genius. In this conversation, Brian told a number of awesome stories from the early days of crypto.

He shared a few of their investment strategies that have been quite profitable. and we had a great conversation around the opportunities that are likely to present themselves over the coming years. This episode was a lot of fun to record and I hope you guys enjoy it too. Now, before we get started though, I want to cover the three advertisers that made this episode possible. The first is Crypto.com. You may have seen their plan B marketing campaign in major cities like LA, Miami, and San Francisco. These guys are absolutely crushing it. Last time I was in San Francisco, I was driving in an Uber. I looked over and I literally saw a sign on a trash can that said, the $22 trillion money printing machine's not going anywhere. And then

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sent you. And you can get 10% off your tax plan today with a free trial. Now, lastly, eToro. Longtime sponsor of eToro. Massive business. Highly underrated. Got started in Israel. They built this big business offering stocks, commodities, traditional currencies, and cryptocurrencies to people all around the world. Last year, leaped across the pond and came to the United States and they got started by offering cryptocurrency trading. Now, I love these guys because they do two things that most other people don't do. They've got social trading and they got copy trading. Social trading is basically the ability to have conversation around your trading activity. You can type in an asset, let's say Bitcoin. You can go to that page and you can see

an entire conversation. It's like having a social network around that asset. You can see people sharing information, charts, predictions, et cetera, all around that one asset and then trade there based on that information. Then they've got copy trading. Let's say that you find somebody on the platform that you think is super smart, maybe a better trader than you, and you want to do what that person is doing. You would give them your money if you could. Well, now you don't have to give them your money. You can simply copy their trades. There's a button, copy trader. When you hit that, eToro will mirror your portfolio to theirs. So if they go ahead and they buy an asset with 5% of their portfolio, your portfolio will buy 5% of that asset. If you go ahead and that

person sells 5%, now your portfolio will sell as well. Think of it as just mirroring whatever that person does or copying their trades. So eToro has got social trading, copy trading. They're here in the US offering cryptocurrencies. So pretty cool stuff. And to me, one of the coolest things about all of this is that eToro is actually larger than Robinhood, right? Robinhood gets a lot of press. They've got an eight plus billion dollar market cap in the private markets or valuation, but eToro is actually larger than they are. Just don't tell anyone. It's a great little secret. I like the company so much that we even invested over at Morgan Creek. So head on over to etoro.com, sign up for an account. Let me know what you think about their social trading and copy trading

features. Again, that's etoro.com, etoro.com. One more time, etoro.com. All right, guys. And don't forget, this is not only a podcast for Off The Chain. I also write a daily newsletter. You can go to offthechain.substack.com. I put my personal analysis, daily news, et cetera, all in that email, shoot it out to about 40,000 investors every day, hopefully providing as much value to you in written format over email as I do with this podcast. Super excited about all of these different sponsors. Go check them out. They make this all possible. Now let's get into this episode and have a little bit of fun today. 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'm here with Brian, who's probably one of the least known important people in crypto i think is a fair way to say that thank you so much for uh for coming to do this yeah thank you for having me for sure you live in uh chicago is that right no we're south of chicago where small town 10 000 people in southern illinois okay so right outside of st louis all right um yeah my wife and i decided to raise our

kids in a small town so not what's the uh what's the reason for that what's the logic um my wife and i grew up in a small town and we figured we turned out all right so we figured that kids you know we we actually looked at um you know i got recruited by goldman when i was younger and um we decided we didn't want to raise the kids in the city so yeah we just wanted to we've come to new york on a day where it's 25 degrees outside so uh you're uh you're a trooper for making this happen but um cool man let's uh let's start with um kind of early on in your life right So what part of the country did you grow up in? So my dad was Air Force, so I grew up everywhere.

So we moved around a lot. I was born in Vacaville, California at Travis Air Force Base. So I lived there until I was six. Moved overseas. We lived in the Azores Islands. Where's that? They're islands off the coast of Portugal. So lived there for a couple of years.

Lodges Air Force Base is there. What was that like? It was actually great. I loved it. So I remember going fishing with my dad one day. And I caught an octopus. And I was like seven years old. And I'm like reeling this thing in.

And, you know, I started crawling and like coming towards me. And my dad ran to the car and got a baseball bat and killed it. Really? Yeah. And then we didn't know what to do with it. It was like a baby octopus. Yeah. And we didn't know what to do with it.

But our next-door neighbors were Portuguese. And we gave it to them, and they ate it for dinner that night. Crazy. And it totally freaked me out. But I remember it was sitting in like a five-gallon bucket of water, you know, and I kept going looking at it and stuff. It was scary, you know, it's not exactly something that would happen in Southern Illinois. No, not at all. All right. So, so you guys are there and then where, uh, where do you go after that? Um, then we moved to Tennessee. I was there for a few years

and then my dad got transferred to Scott Air Force Base, which is in Southern Illinois. Got it. So from sixth grade on, I was, you know, until high school. Yeah. And you know, Southern Illinois. Got it. And then you've lived most of your life in a wheelchair, right yeah yeah let's talk about how uh how that all happened yeah so i was 16 years old um you know i'm six foot four when i was 16 you know 200 pounds you know good athlete well you were six foot four at 16 i was six before it um when i was in eighth grade actually jesus when i was 14 yeah i was an early grower yeah so um you know and so i yeah i went to church that morning went to the mall with a couple of my buddies and we were coming home on a sunday afternoon from the mall

and hit a pothole and popped the front tire in my car, put me into a skid into a telephone pole, and I ended up severing my spinal cord from breaking my back, basically. So I broke two vertebrae in my left leg, left arm, punctured both my lungs. I was in the hospital for like two months. So you're driving home. You told me before that it was on like a country road, right? You had this pothole skidded to it.

Yeah, so I was in a Volkswagen Bug. so a 70 1972 beetle no seat belts in there you know a vw bug yeah yeah so you know being you know a big guy in a little car yeah 10 can you know it got crunched and when you know i was doing 45 miles an hour so i wasn't going that fast and um yeah so that's got it and so like what is that like you're 16 years old right you're playing sports kind of you know i look think back at me at 16 you basically think you're superman right i was a pompous ass when i was 16 yeah i think i think every young athletic kid is right like i've yet to meet one who's not um but then all of a sudden you get this horrific injury is it something where they're like immediately hey

you're paralyzed and uh you're not right away i was paralyzed so i right after the accident i was still in the car and there were like legs up in my face and i was pushing them away and i thought there are my friend's legs and i care because i can't feel them yeah you know and i was like oh those are my legs so i knew right away i was paralyzed and your friend ended up being okay he was fine yeah he was totally fine because i took the pole on my side yep so and so you you go i'm assuming there's a bunch of surgeries physical therapy etc like what is that just mentally having gone from you know the world at your feet to now it's like hey look i i've got to you know i've got this long road ahead to actually recover from this horrific injury yeah so my dad

said one thing that really you know he actually said two things he said the first thing was that you didn't hit your head which is a blessing right it's a good way to look at it yeah right i still got my brain and the other thing is you know you play the cards that you're dealt you know and that's how i live my life you know this is what i was dealt so i'll make the best of it and it really hasn't slowed me down yeah yeah well and the part to me that um is so fascinating when you talk to folks who have been through any kind of major obstacle in life whether it's, um, something that, uh, they had to do from a mental perspective, something that they did from a business perspective, athletically, right. Physically, whatever is, um, a lot of times it

is the mindset, right. That, that completely changes. And when you're the 16 year old kind of pompous athletic kid, right. Uh, it's almost like the physical advantages you have, uh, are good enough. Right. And so you don't have to have, uh, as sharp of a, uh, mental, you know, kind of advantage uh and you see this in some of the most elite athletes in the world right you know it's almost like they get more serious and mentally change as they get older yeah because their body starts to fail them right they can't jump as high run as fast etc um but it's usually not as extreme as you know one day literally just a point in time right you know the whole mindset changes yeah so you know it's like so i was in the hospital two months you know i went from 200

pounds to 140 pounds lost 60 pounds um and then i got back to the gym and started killing it again yeah so i ended up being able to uh walk with a walker with leg braces on i actually walked up and got my diploma when i graduated high school yeah okay how long is that after the injury so this is two years yeah yeah yeah so and it's not really walking because i can't move my legs so my legs were basically i'm like stabilized yeah stabilized and i was just like walking like frankenstein you know just like swinging my legs up yeah so i didn't want to graduate in a wheelchair you know i had somebody here yesterday who um he uh he recently tore his meniscus in his knee right so obviously not nearly as serious but uh he spent the last uh six or eight weeks uh with his leg in

a straight brace uh-huh yeah exactly many people know i blew out my knee uh when i was in college and uh do the same thing yeah and you have to relearn how to use your limb yeah right and so you end up walking around and if you're not careful you can actually hurt other parts of your body because you're overcompensating all stuff yeah but it's pretty cool that you know you say look i'm gonna i'm gonna walk across it yeah right so that's what i did and then i ended up getting a wheelchair basketball scholarship play basketball at university of illinois we gotta talk about that what's going on wheelchair basketball like to me that was such a thing when i was in high school you know yeah and i got a call from because you know i was being recruited

by michigan and oklahoma to play football and i got a call from university of illinois coach wilshire basketball coach and he asked you know if i'd like to play basketball and last time i played competitive basketball was in eighth grade and um when you were six four yeah but hey we had a seventh grader that was six seven really yeah yeah so we don't know what are they putting in the water over there i don't know so could you dunk in eighth grade i did dunk and i got a technical foul yeah i did yeah it was a rebound i dunked it and hung on the rim a little bit and yep yeah i got kicked out of the game actually i uh i remember being in eighth grade there was nobody dunking but we would lower the rims because they had their like the retractable

or movable rims and uh we used to uh put it down um i think like about a six foot seven foot whatever it was and uh and they would watch like the dunk contest and kids would you know do the legs behind the back all this crazy stuff and then we'd get in the games and guys were missing layups exactly yeah you're you're over here dunking in eighth grade so all right so you go to play a wheelchair basketball yeah um we won the national championship really uh four years in a row wow um no it wasn't because of me though yeah i wasn't a very good wheelchair basketball player so um but yeah it was it was you know good to be competitive again yeah yeah how did uh i have no uh um inside knowledge of wheelchair basketball do you dribble or you get two pushes

on your wheelchair and then you have to dribble so it's traveling if you have three pushes really yeah so that's so basically if i pass you the ball you i could push twice and then you have to dribble yeah and uh how do you stop um like like i'm dribbling right all of a sudden you're defender one hand oh god yeah you just basically stop it yeah you dribble with one hand and but use your other hand to stop the chair that's crazy yeah and it's almost like you know like smash derby you know yeah well i would imagine you run into each other oh yeah and you know like you tip over and the legs are flying everywhere and like it's kind of yeah it's a little wild it's five on five yeah it's five on full court yeah full court yeah wow that's crazy

all right so you do that and then uh you graduate graduate yeah you um one of the other things too when i was at university of illinois is that um i was asked to go to cambridge university that represent the university for the economics program okay so i studied at cambridge and london school of economics um as an undergrad what was that over there it was great i mean i me and stephen hawking were like two guys in wheelchairs at cambridge so it wasn't very accessible and yeah It was hard to get around, but it was worth it. Yeah, it was worth the sacrifice to do that. Yeah.

Any, like, one or two memories from there that you're just like, this, like, really tells what it was like? Yeah, so Sir Isaac Newton, actually, was a professor at Cambridge. And so one of the lessons that we learned in the classes that we took was about the history of stock market bubbles and history of bubbles. Because he lost all his money in the Southeast bubble, died penniless. That's one of the lessons that we learned there. We learned about S-curves and stock market bubbles and the history of all that. That's pretty cool. That's one thing I've used throughout my career as an investor.

Yeah. All right. You got University of Illinois, then go Cambridge, come back to Illinois to finish out. Come back to Illinois and graduate and have a bachelor's degree. Do we walk across the— No, not anymore. Rolled across? Yeah, rolled across.

Got that. All right. Get the degree. and then at 22, got to go out into the world, man. Yeah, first job was at McDonald Douglas. Okay. You know, it was just like making $23,000 a year, pricing out contracts with a Harrier jet.

And this was 1990, Gulf War started. There was a recession. Ended up getting laid off because McDonald Douglas was cutting back. And I always wanted to be a stockbroker. So I called around and I got an interview with Shearson Lehman Brothers. Never heard of them. Yeah, I know. So I ended up getting hired there, go through their new broker training program.

This was late 1990. And I'm really excited to do that. And then the Gulf War started in January of 91, and they canceled the training program. Really? Yeah, so I was out there too. But the branch manager at Shearson used to own a brokerage firm with a guy who ran A.G. Edwards & Sons in St. Louis. So he referred me over there, and I went to go talk to Charlie. and um so i'm 22 i go into the interview you're 22 all right you're 22 at 16 you're in a wheelchair

you win four national championships in college and then in the span of it sounds like a couple of months you lose two jobs yeah basically yeah and all right so i go talk to charlie and i'm going to the interview and we we sit at his desk and he goes how old are you and i'm like 22 and and he goes i don't have very good luck with 22 year olds and he just shut up like he didn't say another word for an hour and so i started talking and going through my business plan and how you know i was bringing clients stage the other words and build my business and i just kept talking and talking finally told me to shut up and then he said um you know why don't you go down to the home office take a test interview with our vice chairman and um donna scasey and

you know see where that goes so i went down there interviewed with her and um she asked me during the interview it's really weird she goes pick something out in this room and sell it to me and i was thinking to myself like what does this have to do with being a stockbroker because i thought being a stockbroker was like managing money for people right but it was a sales job you know and and that's when i first learned that being a stockbroker was a sales job yeah what'd you pick you remember it was a pencil yeah yeah it was a pitch yeah the pitch was that it was a brand new number two pencil with a you know red eraser on it never been used you know shiny yellow coat of campaign on it yeah it was like you know i was pitching that pencil hard she's

like now i got the best pencil in the world yeah she was happy with that yeah uh all right so you end up getting the job got the job and uh and kind of what what was that experience like and and i know you learned a lot of lessons there and stuff so maybe kind of share some of those as well yeah so um as a new broker um you know we were you know you got this opportunity to be broker of the day and when you're broker of the day you take in the walk-in clients or people that call in so this is like you want to be broker of the day the older guys didn't but when you're a new guy with no clients yeah you want to be over every day every yeah every day yeah and um so i had this elderly lady come in she was in her late 70s name was um mrs smith i read it yeah and um she ended

up being one of my best clients and she came in she said she came from her lawyer's office and They just set up a trust for her, and she was a widow, and she wanted to get everything re-registered into the trust name so that when she passed away, her beneficiaries could have easy access to the money. And she asked me to go to the bank with her and clear out her safe deposit box. And I thought that was kind of weird, but I was like, yeah, I'll go do that. And so we go over to Boatman's Bank and helping her clear out her safe deposit box and get back to the branch, and we're booking in the securities with the cashier.

and i noticed that she had a lot of walmart certificates in there and and the way that systems work back then you had to wait till the next day till everything batched to see how much she actually had so i asked her to come back the next day and we'll meet and review everything so she comes back and we pull up the account and she had like almost two million dollars with a walmart stock and in addition to other things this is in 1991 1991 yeah wow and i asked her to tell me the story. Like, you know, how'd you get involved with Walmart? And she said her sister in 1974 went to work for Walmart and she said it was a good company. And so she ended up investing $11,000 in Walmart. And it kind of hit me like, well, you invested 11,000 and 17 years later in

1991, it's worth almost 2 million. And after she left the office, I pulled up a value line report just to kind of see what Walmart did over that period. And I noticed on the chart that there were four periods where walmart dropped 50 or more during that 17 year period so there were four times where she lost half of her money but since she was collecting the stock certificates and putting them in her safe deposit box she wasn't you know she wasn't checking the price every day she wasn't actually getting brokerage statements you know because everything was in her safe deposit box so there were probably times where she lost like it went from a million dollars to a half a million dollars and she didn't know and she didn't care and and that's really where it hit me that you

know to be a successful investor you have to focus on the long term you know you can't let daily price fluctuations and you know movements and so you have to you know let time smooth out the volatility you know because everything's volatile but if you add enough time to it it smooths all that out and i think successful investors you know could apply that you know that lesson yeah well especially in bitcoin and crypto yeah and we were talking beforehand like um another data point here is uh we think it's fidelity we we can't all uh do it but when uh josh brown from a result came over uh he came on the podcast um he said that there was a study done um that supposedly has been scrubbed from the internet and that study was they looked at all their clients

said who had the best performing portfolios over long periods of time um and they measured it you know by appreciation of value etc uh and the two that had the best performance were people who lost their passwords or had died right that's exactly right so it's this idea that like actually um if you pay attention to the headlines uh you will succumb to fear and greed and human bias right it is emotion it is why uh psychological um you know analysis of markets is so accurate and i think that what we're seeing one is uh obviously a um very kind of uh uh rapid rise of the machines trading right right they don't have those uh those human emotions um but also two is uh no matter what the asset class is no matter what the market is like there's some core kind of best practices

not even rules but just best practices that help people navigate these markets and that's one of them right it's just like yeah look having very very long time horizons is super helpful when you're investing in the right thing right right yeah um how do you think how that compares today to crypto so i mean i i see it all the time you know people getting up at like three in the morning to check their coin cap you know just like you know yeah i do the same thing you know but i i have enough discipline now over 30 years to just let it go you know you know and i i've traded myself probably out a half of my bitcoin over the past six years really yeah you know even though i know that lesson you know but i'm to the point now i'm not selling anymore you know you know so

yeah and so what other lessons did you learn when you're kind of a you know young 20s stock broker and and i'm sure that there's all kinds of fascinating things that you did yeah so another one was um so i really didn't know what i was doing right when you're 22 you know so you think you do you think i knew i did it so um i went to talk to leo who was the oldest broker in the office okay so he was almost 80 years old wow been in the business for 60 years same company age he had to start in 1887 so he didn't start way back then but wow it's probably you know 1940s or whatever when he started 60s you got to respect somebody who's 80 and still showing up to the office he worked there till he was 105 yeah he died at the office really yeah yeah i must have

loved it yeah he loved it because of what that i guess that's a 85 years yeah right yeah damn all right so you go to talk to him i go talk to leo i was like leo i'm new you know it's my first week here um can you tell me you know you've been here for 60 years you must know something and he didn't say anything he he slid a piece of paper across the desk to me and i looked at it and it was a value line report on berkshire hathaway and he goes just put all your clients in this and i looked at it was four thousand five hundred dollars a share four thousand five hundred dollars a share in 1991 berkshire hathaway okay and i was like i was like you're crazy like no one's to buy a four thousand dollar stock you know like who buy because i didn't know the difference

between price and value yep i didn't know how to value a company you know i just saw the price you know the price was four thousand five hundred and today brookshire hathaway is what three hundred and forty thousand or something crazy you know 30 years later and um and that's you know one of the lessons i learned too is that you have to know the difference between price and value you know Like people today look at Bitcoin and they look at the price at $8,000. They don't know what the value is. What's the value of Bitcoin? And that's what you have to figure out.

If the value is something more than $8,000, you want to buy it. If it's something less, then you probably want to sell it. Yeah. And I guess really part of that is not only, one, a lesson on Berkshire Hathaway, right, but also just more systematically the price and value. Did you learn that by asking questions to them? Did you kind of walk away? It ain't Berkshire Hathaway.

I was like, no, I mean, I'm not buying a $4,000 stock. So how did you end up learning the difference between price and value? Just over time. Yeah, over time, you know, being in the business for, you know, 20 years as an institutional equity broker. And, you know, you just kind of figure it out, you know, and looking back over my life, you know. Like I should have bought Berkshire Hathaway at $4,500, you know. Yeah, hindsight's 20-20, right? And I think that people feel the same way 30 years from now when they look at Bitcoin.

I think 30 years from now, people will be like, man, I should have bought it at $8,000, you know, and it's whatever it is in the future. Of course. What was the first time you ever heard about Bitcoin or crypto? So it was 2013. I was an investment manager managing $350 million for a small number of endowments and foundations in the St. Louis area. Had a nice, easy life, you know, raising the kids, you know, and saw Tyler and Cameron Winklevoss on CNBC talking about it.

At the time, it was $100. And, you know, I didn't know anything about Bitcoin. I just kind of, I thought it was kind of a scam. I thought these guys were doing a pump and dump, you know, talking about Bitcoin on CNBC. You know, they own 1%. They're trying to pump up the price. And so I kind of put it on my watch list because I'm a value investor.

And so I watched it go from $100. it and then congress held hearings in 2013 and that pumped up the price to like 400 and then irs came out with guidance and called it a called a property and that's how they're in tax it and then it shot up to like 800 and then got it to 1200 the mount gox got hacked and then it crashed down to 300 and that's when i kind of took a dive into it why i figured out i'm a value investor i figured the suckers were washed out if it was at 1200 it's at 300 today there's probably some value opportunity there and i wanted to figure out where the opportunity was what'd you do to go figure that out um i read the satoshi nakamoto white paper i mean that's that's a good place to start

i go what is bitcoin and that was one of the things that popped up and as soon as i read that it like clicked like um when i was in high school i used to code um and like fortran and pascal and cobalt and all those ancient languages and you know there's some young kid listening right now like what the hell is he talking about so i had this you know kind of like computer science background when i was in high school and then i had a financial background you know being a stockbroker and it kind of all came together and when i read that and i saw as clear as day how we're going to rebuild the financial system that we have today on blockchain technology and i told my wife i was like you know i need to get involved with this and um it was kind of weird

but you know i couldn't sleep for like a week you know i'd lay in bed and she could feel the heat radiating off my body and she would yell at me like like just go to sleep you know yeah i can't you know and so um so i i told her you know i want to do this and um i go the best way i think is become a vc like a venture capitalist in the space and help build and she was like what's a vc i was like i don't know that's what everyone else does when they want to build things and so i kind of tried to figure out what a venture capitalist is and she goes how much does that pay and i was like i don't think it pays anything i think we're like writing checks all day you know and this is the other way the money's going out not coming in so she was kind of nervous about that and um

she wrote down on a piece of paper and you know a number and she goes put this in the check-in account and go do what you want and um so that's what i did that's a pretty good partner in life yeah so we've been dating since high school uh-huh so yeah it's um yeah she's been a great wife so 27 years now i've been married wow yeah and so i um put that in the checking account sold my practice to wells fargo and became a vc in blockchain and just kind of like and i didn't know what what to do like i felt like a new broker again yeah right so what'd you do when when you're like okay shit i'm here so this probably sounds kind of desperate but um i went into like go meet vcs right and figure out like how to do it and so i called some up and they went meet with

me and so i i know i looked on charity buzz you ever heard of charity but what's that charity buzz is a website where people donate items or meetings and then you buy them and that money goes to their favorite charity okay that's a pretty good idea yeah so i when i was looking flipping through charity buzz i noticed there were a lot of vcs offering meetings ah yeah so i spent about ten thousand dollars on charity buzz to get like six or seven meetings with vcs yeah yeah so i met with some great vcs yeah first of all i don't don't say names but uh i wonder who's on there right there's a bunch of people probably going to look they know who they are yeah and two is uh how do you set your price for something like that it's auction it's an auction it's like it was auction

okay all right yeah yeah so they don't get to set the price it's whatever the market yeah yeah it's it's an auction format okay so yeah so you all right so you go and you meet with them and what's that conversation like do they take it seriously or are they like oh this is raising money for charity and so they just like want to screw around no no they're very serious yeah yeah no it's you know very good meetings yeah so what'd you learn from them so um i learned what a vc did you know like you know how to get involved and you know depending who you ask some of them probably have bad definitions yeah so some of them weren't very good vcs and you know they told me their life stories and some of them were you know the top vcs in the nation and you know i learned a lot

from that and um one of the things i learned i was meeting with um one of the vcs at a16z andrewson horowitz um and you know we were talking and i wanted to get into coinbase and i knew they just did the seed round and the a round and um i asked her like can you get me into coinbase you know and she's like well why do you want to buy coinbase when you go buy bitcoin and i was like well because it's a company and being from a traditional finance background i thought the best way to you know make investments with companies and she goes no no no you're all wrong she goes all the partners at a16z are in dreeson you know we're buying bitcoin you know coinbase we have to buy coinbase because that's we're mandated to build equity in companies um

but she told me the partners were you know investing in bitcoin directly and i thought she was trying to make me feel better you know because i couldn't get in and so eventually i wiggled my way into the b round at coinbase and um but yeah looking back i mean she was right you know bitcoin did a lot better than coinbase yeah so well this has done great well i think but i think that from the series a probably but i think the seed round coinbase has appreciated more or no so i got into the it's either the b or the c right they went from a to c round okay but so i guess that's the b round yeah they call it the c yeah so it was a 480 million dollar valuation when i got in yeah and um so today we're sitting at just under eight thousand dollar bitcoin or so

Yeah. So, and Bitcoin was 400. Yeah. When, so Bitcoin went from 400 to 8,000 and Coinbase went from $16 to it's about $200 today. Got it. So, but so Bitcoin did better. Yeah. Yeah. Got it. And so you make the initial investment in Coinbase and you've continued to do, you know, a bunch of stuff with them. Kind of, how did you think about that company and why were you so bullish on kind of what their prospects were it reminded me of ag edwards and sons so it's a brokerage model you know they're making you know at the time it was one percent commissions on buying and selling you know and that's how we made money at ag edwards you know we charge commissions to buy and sell things so it seemed like a natural model so and as i dove deeper into coinbase

when you're a broker it's either the agency model or principal model and i couldn't ever get the answer from quite a bit i think they're doing both yeah explain the difference for this all right so on a agency model you're making a commission you're being the agent for the client okay so you charge a commission on a principal model um you're making money in the spread so if a stock sells for 16 and this is back in the olden days when stocks trade for 8th and 16th if there was a spread of six and a half cents or 12 cents then you would make that spread the difference between the bid yeah so basically i'm willing to buy it at 13 you're willing to sell it at you know 13 50 or whatever whatever basically uh we both execute the transaction and we're happy because that's

what we were willing to do but that difference between the bid and the ask is the 50 cent difference the broker makes the brokerage firm makes yeah which they and i was an institutional equity broker for you know 14 years and that's how we made money we made the money on the between the bid and the ask and so when i looked deeper into coinbase not only were they making the one percent but i and like i said i can never get the answer but it looked like they were making money on the spread too and that's a great model where you're double dipping like that yeah yeah got it okay so you did coinbase and then what else did you see out there that you got excited about so i tried investing in 21co so i because interest yeah yeah bellagio and um so actually talked to

Balaji. He said there was about a half a million dollars worth of stock left that Andreessen didn't take. And he asked me if I wanted it. I was like, sure, yeah, I'd love that. And he took it to their board and they said no. So they're like, who's Brian? We don't know him. And so I got shut out of that, which turned out to be nice because they ended up getting bought out by Coinbase. and so i actually looked at digital currency group because i i knew barry from second market i used to buy facebook stock through him when it was a private company and so i knew he started this you know digital currency group which was involved in crypto and i found one of the co-founders who needed money for private schools for his kids and he was willing to sell me some

dcg so i bought some you know dcg stock from him so this is an important thing right a lot of people I think, um, definitely unaccredited investors don't know this world exists. And then even accredited investors, the most part don't know that this world exists where basically, uh, you can invest in the fundraising rounds. So, uh, Hey, the company's raising X dollars at Y valuation. And here's what I'm going to do with the capital. Bunch of people look at the deal. Some do it, some don't. Everyone kind of thinks of those as traditional fundraising rounds, either alongside those rounds or in between those rounds, there are employees, founders, sometimes even investors etc that uh want liquidity but there's no public market to go

sell them into there's no acquisition or anything like that those secondary market transactions can one be super valuable right because uh it helps them get that liquidity that they need whether it's for uh hey we've got to liquidate our fund or i want to put my kids in private school or i just want to go buy my house right you know whatever it is get married yeah get married whatever it is uh there's that but also um there's the ability for folks like you if you're sitting there and you're like hey i want equity in this business but there's no ability to do that oh i found somebody who has some that wants to sell it to me and then you can kind of facilitate those secondary transactions it sounds like you've done that quite a bit whether it was with facebook

that's how i got into coinbase too like i got you know i was told no on the b round in coinbase and so this sounds desperate i know listen there's no desperation right it's what's required then yeah it's what's required so i started contacting like cold calling and you know dm and coinbase employees i mean i know but you know so and what was the response like was there any good responses um i ended up um getting in touch with her name was kristen new employee at coinbase and um she gave me a call and you know she's new so she let me stock and i told her you know just let me know if you hear of anyone and appreciate it next day i get an email from olaf and um so you know he put me in touch with

olaf was the first employee the first employee at coinbase and so olaf put me in touch with people that were looking to sell and uh that's how i got in so i ended up buying from a group of employees at coinbase yeah but but it speaks to um kind of persistence right it's like hey look you go knock on the front door and they say no right then you kind of knock a second time no yeah right all right well look i'm either gonna kick the door in right i'm going in the back door so you know i'm getting in the house somehow exactly and i was even thinking about i should just go work for him because i wanted equity so much i was willing to you know if i can't buy it i was gonna go out there and work and i love it yeah and so um you and olaf uh that wasn't the

only time you guys hung out no no we became friends yep yeah and so kind of talk a little bit about uh kind of your guys relationship moving forward yeah so it moved forward um so he ended up starting polychain capital and um i had the opportunity to be a general partner there and you know help build that and you know and it's just you know it's been a great relationship and what was the thought process behind starting polychain so when he told me the idea i told him you know it was the best idea i've ever heard in my life i've looked at thousands of business models over my lifetime as a professional investor and and this one's the best one i've ever and it's still the best you know cryptocurrency hedge fund building in this space with the you know with the

macro view that looking out in the next 30 years if you could do it like olaf's doing it which is you know the best way of doing it where you focus on the long term and you're you're building you know this new technology and helping develop it early stage you know that's the best way to help the ecosystem and so i'm just blessed to be a part of that you know as a general partner and you know and i was also the first check in the fund as a limited partner yeah and so um the thought process there being it's a macro bet on an industry that is super small today right super small today and end up being really big in the future yeah and i don't have the technical skills anymore to do that um so when i'm out you know meeting with the team out there um i feel like

an idiot you know yeah i i have the experience with the financial background and all that you know but yeah i mean those guys are super smart yeah i mean you know it's yeah they really know what they're doing and you know i'm proud of them yeah for sure um and then you guys have done a lot of other stuff right so um you ended up buying bitcoin at some point right and tell a little bit about uh you are one of the few that sold in uh december of uh 17 how uh what was kind of the uh that the um the reason for doing that yeah so we had like two pots of bitcoin so one is my my personal pot so i started buying that at like 400 it went up to 650 and then you know went down to 178 you know so at one point i was down 60 on my investment and this is when it was

really early right and you know i was like you know i'm either early or i'm wrong and so i doubled down on my sometimes those are the same thing right yeah right so i doubled down on my research and i figured i was early um so i ended up you know buying more and um and then at the same time 2016 i had friends and family who wanted to get involved and we figured we would start this fund for them um called off the chain capital it's a great name yeah so we started off the chain capital in 2016 just allow friends and family to come in so we got to talk about where did you get the name from my wife came up with it no way yeah yeah she's the hip hopper in the in the family okay all right so this is why i'm the nerd this is my big uh this is my big uh

i'm shocked at how many people don't get the double entendre of off the chain yeah so i didn't get it either so she had a chain and right and and so like there's all these crypto businesses that have the word chain or bid or whatever in the names block right all that stuff but as a kid we used to always say like oh that's off the chain yeah right and it was like a kind of you know kids today use all kinds of words dope and you know stuff but that was just a phrase that we used and so uh the first time that i was like oh off the chain like that's off the chain you know the whole double meaning yeah i remember being like this is gonna be so obvious to people nobody ever says anything about it and i don't know if it's because they're all coming in from

so crypto uh specific yeah right but like my friends are like dude are you kidding me you started something called off the chain yeah but they're not thinking about crypto they're thinking about it in terms of the saying so the fact that she came out that that makes me like her already yeah so um yeah so she came up and like i said she had to explain it to me what it meant because i had never heard of off the chain before yeah you know so i'm a social neophyte so i kind of live in my little hole yeah um so so anyways um so we started off the chain capital um put about half a million dollars from friends and family it you know spiked up to like 10 million dollars in december 2017 um and i was getting nervous because you know i was hearing

bitcoin advertised on the radio and a lot of people were talking about it but what the key was that um i was at a bitcoin meetup and this elder elder lady lady came up to me she was late 70s probably and um she wanted to buy some bitcoin and she was talking to me about how to get involved with bitcoin and um i was like yeah you know it's probably not the right time you know it's kind of high right now and she goes well i want to sell my ge stock and buy bitcoin and at the time ge was on an all-time low and being a value investor i knew that was the wrong move for her you know i was like well i'll you know sell you some of my bitcoin for your ge just kind of joking not that we you know did that but yeah but when i got home that night i was like you know it's it's the wrong

time right now you know older you know investors are wanting to sell their ge stock which is the all-time low to buy bitcoin was the all-time high you know that's just emotion getting involved well But it goes back to your story about Walmart, right? Yeah. Is somebody knows what the price of GE stock is and, you know, they want to get rid of it, right? Right, yeah. It's kind of the feeling of – You can't take the pain anymore of GE, right?

Yeah. Yeah. Okay. And so you go home and you just – So I go home and, yeah, I thought about it for a few days. And I decided, you know, it's best just to – let's liquidate the portfolio. So we sold 80% of the assets, returned the money to the LPs, and then the shell of – They're probably pretty happy.

Yeah, they were all happy, yeah. Yeah. So we gave them the choice of either taking cash or taking the crypto. About half of them took the cash. Half of them took the crypto. Really? So we just sent the crypto out to them. And then they wrote it down.

Like I wrote mine down. I didn't sell my personal Bitcoin. I just wrote it up, wrote it down. It's funny because the longer that people are around, the stronger the hands get. They are, yeah. Right? I just saw the stat in 2018, or 2019, I think it was at the end, 10 million Bitcoin haven't moved in a year. I saw that, too.

Right? So you're talking about almost 50% of all Bitcoin ever created haven't moved in a year. Right. Pretty compelling. Yeah. Because I think we're at 18 million have been mined. So, you know, you got lost, stolen, destroyed, whatever in there. The float's really not that big if you think about it.

Yeah. Why do you say that? Well, you got the strong hands that aren't selling. You got the million or so that's, you know, Satoshi's, right? That's not moving. Yep. You have, you know, I think estimates are like 10%, maybe up to 15%. The keys are lost, you know?

So the studies I've seen, there's probably the floats around 6 million Bitcoin out of the 18 million that actually trades. So, you know, that's really not that much. Yeah. It's crazy, man. This is, uh, to me, I just think back and I say, you know, 20 years from now, when people look back at this thing they're either gonna be like these were the biggest idiots in the world right like look at all these millions of people who are idiots or they're gonna be like man we

missed what's probably gonna go down as you know one of the most disruptive things in finance right you know so being a value investor people look at me like how can you be a value investor and be involved in bitcoin and when you look at um value you look at today's value but with bitcoin you look at the future value, right? What's the future value? And so there are ways to determine what the future values ought to be. So, and this was the hardest thing for me to get my hands on at the very beginning. It took me two years to figure this out. Like, what will Bitcoin be worth in the future? And there's ways to determine that. So Tom Lee at Fundstrat came out with a great model. It's based on Metcalfe's law. So if you take, if you square the number of users, multiply

that times the transactional value that's going through the Bitcoin blockchain. Between 2014 and 2017, there was a 94% correlation to that model and the price of Bitcoin. And then from December 2017 to today, the R squared, the correlation is only 59%. So it dropped. And what happened in December 2017 was the ability to short Bitcoin. And so what that means to me is that someone has their thumb on the price of bitcoin today keeping the price down because of the shorts that are out there um that regression model says that the fair price of bitcoin today is fifty one thousand dollars and it's at eight thousand so if those shorts close out then i would think that bitcoin will do you think do you think okay so this is important it's one of the things that um

when people say to me you know uh what's happened before it's gonna happen again kind of history repeat itself one of the big changes that makes me think and kind of pause for a second is the shorts right the ability for uh the derivatives and to go short etc what stops there being persistent short pressure i think there will be short pressure but they won't be as strong yeah i think that the longs are much stronger than the shorts right now no yeah today the longs are stronger than shorts but i think the shorts will eventually panic once bitcoin hits an all-time high again because then they'll want to close out because then it's breaking out it's breaking out to new highs and when it once it hits 20 then it's at 50 like in a very short time

period yeah so and and to me it's um you know when you look at the short pressure it's really not that much uh but it's there that's right and so it's interesting to see um you know i go to look at the stock to flows the metcast law you know all these different things um that to me is the big thing is when you get this having uh you know what happens and do those models break or not because of the introduction of the short yeah the stock to flow model is another great one 95 correlation crazy you know so that's a good one um there's a bitcoin to gold one too it has a 99 correlation really so in 2012 it took one tenth of an ounce of gold to buy one bitcoin okay today it takes six ounces of gold to buy a Bitcoin. And what that model says with a 99% correlation

is that after the next halving, it's going to take about 85 ounces of gold to buy one Bitcoin. Really? And that has a 99%. How do they determine that? It's a formula that I found. I'm not smart enough to come up with a formula, but yeah, but I have it. So got it. Yeah. All right. So you guys have also invested in bankruptcy claims. Maybe tell us a little bit about kind of that strategy, how you came across it and how that works okay so like i said the fund was you know 80 liquidated in december 2017 kind of sat there as a shell with you know my money and my son had a little bit of money in it you know it was we didn't do any there was no trading at all last summer i discovered some opportunities and bankruptcy proceedings that allow us to get access to

bitcoin for almost free okay so um the way the claim works is that um there's this custodian that had bitcoin they went bankrupt um each claim comes with about 784 dollars of cash and then 0.15 bitcoin and 0.15 bitcoin cash so if i if i had one bitcoin on this uh with this custodian um for every one bitcoin i had i now am owed 784 dollars in cash right plus 1.15 bitcoin 0.15 bitcoin cash right okay so it's about two thousand dollars in value and i have a claim basically it's saying uh i will get this in the future at some point when the trustee when the bankruptcy trustee distributes the assets that's what you're gonna get okay okay um so and the question is when will that happen and that's what happened sometime in the next one to three years

probably um so we're buying those claims you know from people who need to sell them because they have life events you know they're getting married or having a baby or need a house or they wrecked a car they needed a car so they're like four sellers so we're bidding on this fortress bids on these um you know we're we pay anywhere from seven hundred dollars to nine hundred dollars a claim and so we're getting like two thousand dollars of value and that's a and so when these claims get paid out we're paying let's say eight hundred dollars and we're getting seven hundred and eighty four dollars of cash we're getting the bitcoin and bitcoin cash for almost free And so those are the type of value investments that we're making in off-the-chain capital.

Yeah. And something like that, what's the risk, right? So it's great. You put out $700, $900. You get a piece of paper that says you're owed $784 in cash and then some Bitcoin, Bitcoin cash. What's the downside? That they just don't pay out? Yeah, there's a couple of downsides. So there's one lawsuit that still needs to be settled at the coin labs. And if that gets paid out, then that's probably another. It's going to reduce the cash by $62.

So we may not get $784. It's going to be something less than that. Another risk is that if Bitcoin goes up a lot and the trustee decides to sell the Bitcoin and it goes up further, then we're stuck with cash instead of Bitcoin. So there's some upside cap potential. The trustee said they're not going to sell any more Bitcoin. That's what they all say. Yeah, exactly, yeah. But there's no guarantee that they won't.

How does the trustee in these bankruptcy-type situations know when to liquidate or disperse? Is it just once ever all of the lawsuits are settled? Yep, there's one more lawsuit. Got it, so once that's done. Once that's done, then they're free to distribute. Interesting. What other value opportunities do you see in the market? Right. So another thing that we do is we provide a liquidity pool for employees at blockchain companies.

So, you know, there are a number of blockchain companies that are three to five years old now. You have employees that work there. Ninety nine percent of their net worth is tied up in their company stock. Right. And, you know, and they have life events. You know, they're like you said, married, divorced, babies, need a new home, wrecked a car, you know, whatever it is. And so they need liquidity to help, you know, diversify their portfolio, but also just pay expenses. And so, you know, we provide, you know, a liquidity pool. We offer, you know, to buy stock from employees at these companies. And we generally get like a 20% to 30% discount from the last round because it's an illiquid investment.

And so that's another thing that we do. So we buy, you know, stock from employees at these companies. Got it. And how do they find you like in terms of through the network? So I've been in the space for six years now through the relationship at Polychain and Digital Currency Group and just my network. Yeah. So that's how we people know you're willing to buy. We're willing to buy. Yeah. So any blockchain, any employees of blockchain companies out there, if you have a life event, you need to have some liquidity. let us know yeah and it's funny too because um when you're known as bullish around something

naturally those opportunities are attracted to you right people start to realize hey you know there's somebody talking about x i think that this person can help and they kind of run over there it's all friend it's all yeah relationship yeah it's a relationship business for sure what in the last six years what's the biggest things that have changed in the industry um well when bitcoin first started people thought it was gonna be like a cash payment system right and that use case totally failed you know it's you know do you think it failed or we just haven't had enough time for it to well i i think there'll be a cash settlement system on top of bitcoin oh okay so layer two layer three yeah i don't think bitcoin will be well i don't think we'll

use bitcoin to you know for a cash system because you know if you're not if the block size is one megabyte you can't use it as a you know there has to be something built on top of that that will interact with the bitcoin blockchain um so i i we don't know what that is yet you know and you know maybe lightning network or libra or whatever you know even like venmo you know venmo has the opportunity to interact with the you know bitcoin blockchain in the future so you think they'll do it well once ice is on the board of paypal and paypal owns venmo so right i mean i don't think it's out of the question yeah yeah he uh you think he'll ever get credit for kind of all the work he did what do you mean just in terms of like he really seeded silicon valley with hey this thing's

real right just the conversations and the people he eventually convinced etc yeah and to me he's like one of the folks in the industry who just um has never really kind of broken outside of the crypto industry right if you think about whether it's the winkle bosses you know brian armstrong there's a lot of people who uh i think are known as um having done certain work to kind of push this forward but once this to me is still kind of insulated inside of the crypto industry and so it's interesting he sits on the paypal board right you know like like it's not just a crypto only uh thing for him but but um i don't know he just seems like he's in a different place than uh than most uh in conversations yeah i i agree with that yeah yeah so i mean he's a great leader for the

space yeah so we'll see uh what's next for you guys like what else are you guys looking at or excited about yeah so um we're just building you know we're out you know fundraising you know meeting with people and you know just trying to get people involved so and are there any uh investment opportunities you guys looked at over the last couple of years that initially you're like wow this is amazing and then as you dug deeper into it you're like whoa hold on a second that was you know shiny on the outside but i see those all the time all right well like uh maybe don't name one of them but can you can you talk about like why like when you dug into it what was the the issues yeah it just it revolves around trust okay yeah so you know you you talk to

people and they have this great idea they're building this protocol and you get deeper into it and you figure it you know you see it's leveraged up to 100 to 1 or the business model is just too risky or you know there's just you know you find out that you know they're just not they tell you one thing and you find out something different you know so yeah you know and like i said earlier this is a relationship business and you can't trust the people you're working with and i just i don't deal with that so i just kind of walk away you sound like a real venture capitalist now i don't know i mean i so i'm still trying to figure that job out you know i think you're doing just fine what uh speaking of that before we get into rapid fire questions uh what's

the one thing that uh you know now that you would never have guessed when you first started uh doing more of like the venture capital than stock brokerage it's like your big your big lesson learned over the last six years uh no just like the venture investing an adventure um what i know now yeah just like what was the biggest surprise or the biggest lesson you learned that you didn't expect i i think it was from um the partner at a16z that she said just buy bitcoin yeah i mean i should have just put all my money in bitcoin you know instead of doing any of the vc stuff my life would be simple and you know like it's much easier like i don't have to deal with the companies and uh yeah she was right yeah i mean she's a 100 right

i love that um all right you've been around for six years so these rapid fires should be good uh most important company in crypto so i like to look at past and future okay okay so past definitely coinbase okay um just because they've helped give people access to you know kyc aml access to crypto you know in a legal format that allows in the u.s in the u.s that allow people to own it you know and and they did it the right way you know they did you know by following the rules and you know doing it you know doing a great job doing that um looking forward i think backed has the potential of being you know one of the top companies in the space why um from what i know from what they're building today is that you know i think it's not give people the ability

to have even more access through traditional financial means you know because you know our financial systems but with brokerage firms and you know just the traditional finance thing that we've built over the last 50, 60 years. And with BACT being, you know, FinCEN regulated, FINRA regulated, SEC regulated, I think that's going to give the traditional finance people the ability to get exposure to the space with someone they're comfortable with, you know, that's owned by the intercontinental exchange. Okay. What's the one rule or regulation you would change if you could? Definitely the accredited investor rule.

yeah i mean at this point can we just call it a dumb rule yeah so i met with jay clayton two years ago oh did you all right so what was that like so it's kind of a funny story oh man you're smiling all right so so i i get this call out of the blue from the sec saying jay clayton is on me in st louis i'm at the federal reserve bank and he's looking he just got hired by trump and he's looking to you know he's on this educational tour and they asked me to come meet with him And I was like, how do you find out, like, why would you contact me? Like, how do you know who I am? And, you know, I didn't ask that, but I was like, yeah, sure.

You know, it sounds like a privilege. I'll go meet with them. And so I'm heading down to the Federal Reserve Bank in St. Louis. And I started thinking, like, I started freaking myself out a little bit. Like, I'm in crypto, and I'm going to the Fed. Yeah. I'm going to meet with Jake Clayton. With SEC?

Yeah, with SEC. And I started getting nervous, you know. and i i get down there and i'm kind of like you know jittery a little bit and i walk in and there's two security guards and they asked for my wallet and my car keys and i was like oh man yeah i was like weird you know yeah so i give my wallet my car keys and they walk behind a door or like another wall and um and this lady comes up to me and she goes are you brian estes and i look at her and i was like oh who's asking yeah i was like i was like why are you asking that like i was like i'm like who are you and why are you asking me that and um she goes oh our kids went to

grade school together i'm lisa and i'm like i'm like oh yeah lisa you know and we started talking don't do that to me right now lisa and then the guards came back and they had just scanned my wallet and my car keys you know and then they gave them back to me and then they escorted me out to meet with jay clayton and there were a few other people up there too to meet with them and Like I said, he was just on an informational tour. And so I met with him. Thanks, Jay. He's going to shit out of me today.

So he was asking, what can we do at the SEC to make us better? And that's one thing I pointed out to him. I go, it's not fair to have the SEC restrict people from investing in private companies. If you don't have a certain net worth or a certain income. I go, it makes much more sense to base it on knowledge. I go, why don't you guys set up a website? where people could take a test or get educated and then if they pass that test then they could be accredited and he you know you know it's not that hard yeah it's two years ago and he but to

their credit i think that they are trying to move in that direction they're slow right but they're big organization they got a lot of risk lawyers whatever right bureaucratic but i do think that they're trying to move in that direction it's just i think most people wish it was a little bit faster yeah but i i think that's the one thing that needs to be done yeah it should be your knowledge that determines whether or not you're accredited not how big your bank account is what's uh the most controversial thought you have in crypto like what do you what do you believe in everyone else disagrees with you on um i don't like talking about this but i know so you came on a podcast i want to make you talk about it so um i think bitcoin's almost like a black hole

that's why it's sucking so much value that we can't really imagine how high it's going to go. I agree with that. Yeah, I just don't think we can imagine. I look back at people that were mining Bitcoin when it was at like a nickel and ten cents, 8,000 a day. They could never imagine it'd be 8,000, right?

And I think in 20 years or 50 years or whatever, 8,000, it's going to suck in so much value that you know we're not gonna know where that so there's two things here uh i always think about the uh bill gates quote right we over estimate what we can do in one year underestimate what we can do in 10 right um definitely that happened with bitcoin uh but two is um if you said to me are we over hyping or under hyping bitcoin what you then have to do is you have to look at the potential and i think most of us get too short-sighted in what it could become it's really hard to imagine right if you think about the internet when it first started

even 10 years in nobody could imagine today walking around with this cell phone you know which i don't use to make very many calls it's right supercomputer my pocket right um and so uh if you think about that if you look at computing power right there's a a photo one of my partners tweeted um that uh i think it's like an ibm mainframe uh that today could hold like six photos uh you know in today's world but they're pushing it into like an 18 wheeler right like like literally pushing a mainframe into this big truck today you have more computing power in your pocket right and it's only you know what maybe 80 years 90 years later like so long time right like one one lifetime basically but still that's incredible and so if you think about something

like bitcoin if it works right if it succeeds that's a big question right yeah but if it works i tend to agree with you that it is uh it's something that we can't fathom yeah and if you think about the basic concept of bitcoin i kind of look at it as dns so you had all these protocols that were developed in the early 90s like hdp and smtp and and dns was one and dns actually has value right the domain name system so back in the early 90s i remember my friends were buying domain names and squatting on them. And I was like, why are you doing that? You know, that seems silly to pay, you know, 25 or 50 bucks for amazon.com or cocahola.com. And that's when there was just a few hundred thousand or a million people using the internet. But when there were billions of

people using the internet, those domain names became valuable, right? Very. You know, how valuable is the amazon.com domain name today? If Amazon forgot to re-register their domain name and someone stole that from him and re-registered it, what would that be worth? What would names on pins? So my son actually did that. His high school forgot to register their domain name, and he registered it in his name when he was in high school when he was 16.

What happened to him? No, he asked me if he should sell it back to the school. And I was like, yeah, if you want to flunk out. But I was like, you probably should just give it back to him. Yeah, yeah, yeah. He goes, well, it's worth something. I was like, yeah, it is worth something, right? Of course.

Yeah. So domain names are kind of like Bitcoin. Yeah. You know, because it's, you know, DNS is open source protocol. Bitcoin is open source protocol. But as more and more people use Bitcoin, since there's a finite supply, when there's, you know, billions of people use it in the future, it's going to be worth more than it is today. Of course. So I look at it, Bitcoin and domain names or DNS all in the same package.

Yeah. what um what's the most important book you've ever read um most important i know you've talked about think and grow rich that really helped me a lot when i was younger yep um that book specifically if you read it in your early 20s or mid-20s i think it's perfect i read it every three years oh really yeah i've read it like you know yeah 10 times i love it yeah i i mean i asked my kids to read it for my christmas present last year yeah we had book club did they do it yeah they did it we we read the book together and and went through chapter by chapter and talked about it and they're my kids are in college and they really enjoyed it i didn't think they would yeah

and my wife read it too for the first time that's awesome and um yeah so and i give it out to people it's gifts so yeah so that that's a great book but the most important book i've read recently it's probably the bitcoin standard yeah i just got that like two weeks ago great job with it yeah yeah so yeah it's a great book it's uh it's one of those books you're reading like damn i gotta go yeah i'm not thinking big enough right exactly uh aliens real i mean the probability is yes i mean yeah you can't so there's probability of life form is 100 you know nearly 100 the question is it is it advanced you know is it human like you know with a conscience you think i i think yeah i mean yeah do they have pets that's how it started man yeah i don't know i mean that's

like what like well think about it right so how many uh we would we look at uh joe the other day we saw eight eight million species in the world and on earth uh there's no stats on how many of those species have pets let me ask you something weird question are there other animals on earth that have pets uh or humans only have pets no they definitely have pets so i'll give you a couple of examples one is uh we've definitely seen things like you know the kangaroo that puts like some other animal in its pouch and like rolls around with it right i haven't seen that is it pretending that it's a kid or a pet like our our human kids kids are pets right yeah um so that's one two is there's been uh situations where some big you know wild uh life type uh cat for example

may raise a dog again does a kid or a cat right um or a pet uh and then what i saw in this other episode was um a friend of mine said well your dog has pets now your dog has got toys right but it takes care of it like a pet right now it's an inanimate object so like does the pet have to be uh conscious intelligent you know all this kind of stuff so it depends really kind of how you define the stuff right without getting too kind of meta aliens have pets then well so here's the thing right if the aliens are advanced because if it's just you know bacteria and stuff like that then you know whatever um but but to me it was more of uh it's a question that could really get to like how advanced how civilized how sophisticated are they right um and again it goes back to you

know we think we're pretty smart but maybe we're the idiots yeah there was something on the news what like just a couple days ago about some radio frequency yesterday high frequency radio waves from 36 billion miles away yeah and or the navy pilots that you know the see the ufos yeah the ufo those little tic tacs that they have on video i mean what are those yeah and look part of it is there are probably scientific explanations for let's say all of it right literally every single thing you and i've ever thought about that could be alien related has an explanation there is still such a big universe out there probability is uh you know yeah the the scary part is uh if they show up here do we do we welcome them i i mean i guess everyone's gonna

be scared but i guess the people usually get invaded doesn't turn out so great for them right all right what one question you have for me to uh finish up what are you doing in 10 years what am i doing in 10 years because you're getting married right yeah i'm getting married um are you i think that there's one core thing in my life well i don't know we'll see about all that uh i don't know how much uh say i have in that um but uh what am i doing in 10 years i think that the safe kind of common thread through everything i've ever done is learning right and whether it was learning from an operator's perspective, from an investing perspective, doing this

in terms of I just get to sit and talk to people all day and learn. I think that that's just something that I really gravitate towards. And it's similar to a question I've got a friend who, he asks every single person he meets, he goes, if money didn't matter, what would you work on? Right?

Right. And some people's answers materially change, right? If you're, especially working an hourly wage job, You're like, hey, look, I would give this up tomorrow if money didn't matter because I would go do something that they feel is more, they're passionate about, meaningful, whatever. Then some people, their answer wouldn't change. They'd say, look, I'd do this for free. Or if money didn't matter, I'd spend all my time doing this. I think that for me, learning is fascinating to me.

I did an episode recently with a nuclear engineer who spent 20 years in the Navy, and now he works on these nuclear power plants. I knew nothing about nuclear power. and i walked away and now i'm like holy shit like that's a you know and you like go down this rabbit hole right and so being able to do that over and over and over again whether it's in conversations or it's reading or whatever um i think is fun the hard part is do you do that from like a professional standpoint is that more of a personal thing you know in what form does it take a hobby or a job right yeah and look and some of those things might be the same thing but it's also like what form factor does it take do you just sit around and just read books all day right like

yeah maybe or do you you know take that learning and apply it somehow i don't know but i think that's just like the the easy answer for me is something around learning new things is uh is exciting what would you do 10 years 10 years from now yeah probably play video games my grandkids so we we never allowed our kids to have video games in the house when they were growing up But the grandkids are definitely getting them. Yeah, the grandkids are a different story, yeah. I love it, man. All right, well, listen,

thank you so much for coming and doing this. You've got some amazing stories. Thank you for having me. I appreciate it. Yeah, I think more people should know you and hopefully some good stuff comes out of this. So I'll have to do it again in the future. Sounds great, thanks.

Hey, everyone, Pop here. If you like this episode of Off The Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. to review simply go to the off the chain homepage scroll down until you see the five blank stars taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts i appreciate you listening and see you next

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