The Pomp Podcast - Ed Moncada, Founder & CEO of Blockfolio: The Future of Crypto Governance

Episode Date: February 27, 2019

Ed Moncada is the Founder and CEO of Blockfolio. In this conversation, Ed and Anthony Pompliano discuss how Ed is a big poker player, the real story behind Dash, why he started Blockfolio and how it��s become one of the top apps in the crypto space, and Ed’s views on governance. ----- This show is sponsored by The Grove: thegrove.co/pomp The Grove is a full service creative and design agency that helps new and established companies tell their stories.  The Grove firmly believes that a brand is more than just a logo - it is the entire essence of who a company is.  That's why The Grove works with companies on every aspect of their marketing, from brand identity, to web development and design, to SEO, to specialized graphic design projects. The Grove has helped grow companies like Tiffany and Co, Bloq, AAA, The Red Cross, and the Chamber of Digital Commerce by amplifying their branding and web presence.  Get big results today, and visit thegrove.co/pomp. ----- Join the Off the Chain newsletter. Pomp's daily email analyzes the crypto market for institutional investors. Simply, it’s the best crypto newsletter delivered to your inbox every morning. No frills. No bullsh*t. Just everything you need to know in a 3-minute read. https://offthechain.substack.com/ ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

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. Ed Moncada is the founder and CEO of Blockfolio. In this conversation, we talk about how Ed is a big poker player, why he started Blockfolio, how it's become one of the top apps in the crypto space, and Ed's views on governance. I really enjoyed this conversation, and I hope you enjoy it as well. Before we get started, I want to talk about one of our sponsors, The Grove. The Grove is a full-service creative and design agency who understands that a brand isn't just a logo. It's the entire essence of who a company is. They take a broad and holistic view

of their clients' businesses to ensure the resulting brand experience is a perfect representation of who they are, what they stand for, and why they do what they do. If you're trying to look fresh and fly in the crypto space, you've got to check out thegrove.co backslash Pomp. Again, that's thegrove.co backslash Pomp. Go light up the servers and let them know who we are. If you shoot me a tweet on Twitter right after you've done it, I'll drop you some fire emojis and we'll have some fun. 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. Bang, bang. We've got Ed here. Super excited. Thank you very much for coming, sir. Thanks so much for having me, for inviting me out here to do this. absolutely um all right you got a uh a wild background a lot of people don't know uh about the poker days before uh crypto um maybe just give us a little bit of a history lesson before we jump into all the crypto stuff oh yeah in uh 2001 i got introduced to poker this is actually kind of a wild story so uh nobody plays poker and it's not wild like you gotta have some wild

stories of your professional poker player it's how i get how i was introduced to it is actually pretty funny i i used to be really really good friends with tony shea the ceo of zappos okay and uh you know i'd say he was one of my four or five best friends and we were coming back from a snowboarding trip uh in uh in lake tahoe and he was like hey i think you should uh come play poker with me i think you'd be really good at it and at the time i had a startup that eventually you know folded uh but you know i was living up in the bay area and uh the first few times i would say the first probably like dozen times i went to go play poker tony would call me up and uh he was in san francisco i was in the east bay and uh we'd go play at this small casino called casino san pablo

okay near berkeley and it's not there anymore but anyway that's how i got introduced to poker uh next thing you know i was like fascinated with it i mean we were playing like tiny stakes 100 200 buying games um and i i kind of you know that startup i was working on at the shut down and and i was uh i think at the time i might have been uh mid-20s and uh uh just you know i'd seen that there were professional poker players in the casino and i you know it was like i think maybe i can do this so i started uh uh dedicating myself and studying the game and uh playing tiny little tournaments you know 50 tournaments worked my way up next thing you know it's a couple hundred dollar tournaments next thing you know a few years later it's probably

four years into it uh i was playing you know large tournaments you know five thousand ten thousand dollar buying tournaments going playing at the world series consistently uh and yeah end up becoming a poker professional for from 2001 until uh roughly 2010 okay so let's go to the world series of poker because i think a lot of people have heard that before they've got no clue like this is the the super bowl or the world series of uh poker literally um what does that entail yeah so uh every year in vegas um you have uh you know the best poker players and that is the rio casino now and they they basically host uh you know back then it was like 60 different poker tournaments all sorts of different kinds of poker whether it was omaha no limit texas hold'em

Paul Limit Hold'em, and you would have the best poker players from all around the world show up to Vegas for a period of about a month, maybe a month and a half, and play these tournaments every day and just try to see who's best with different size buy-ins, different style of poker. And anybody who won one of the tournaments would receive what was called a World Series of Poker Bracelet. And that was sort of coveted. it was similar to like, uh, you know, maybe like a Superbowl ring, you know, maybe like, you know, 60 or 70 people a year got one of these. And so I happened to get, you know, really fortunate. Um,

you know, uh, in 2005, I played the 2000 pot limit hold'em event and, uh, and I won the event. So you are the first world series of world series of poker bracelet holder that's ever been on the podcast. Congratulations. Thanks. I mean, it was a lot easier to win them back then these days, you know like the edge has gotten uh you know sucked out of it there's a lot of players uh you know there's so much more information you know tutorial videos on how to play like you know people have really kind of like solved the game so much more than it was back then uh so i feel like uh i feel like i had it a little bit easier that's okay listen you still got the bracelet right that's right well technically i don't i gave it to my dad for father's day that that year that

i want it oh awesome he probably loved that yeah he's pretty stoked on it um all right so and then how do you go from professional poker player to crypto um so yeah let me see here so in 2010 uh in 2006 is actually kind of where things changed in poker they passed the uigea law uh which which basically prohibited financial institutions from moving money in the u.s from moving money in and out of the gambling industry, online gambling sites. And it was sort of like overnight, they pulled the rug out of the base of players that were in poker that were there for entertainment. And I started seeing the writing on the wall, like, wow, online poker is going to get tougher. I need to start looking for other things to do. It's funny, I'll circle

back to those laws later that were pretty important in me discovering Bitcoin or understanding it. And so in 2010, you know, I helped start a social gaming company called Unveil Games. We're, you know, intending to build games on social games on Facebook. And around 2011, Facebook kind of changed their newsfeed policies that were very that, you know, adversely hurt. They basically hurt a lot of the small development companies creating games on Facebook. And so we had to shut down in 2012 as a result of this. So in 2012, a friend of mine had launched an online Bitcoin poker site called Seals with Clubs. I might have launched it maybe in 2011, but in 2012, I became aware of it.

And then in early 2013, after seeing him post a bunch of social media comments about it, I reached out to him. I'm like, hey, let me put a Bitcoin on your Bitcoin poker site. Let me try out one of these Bitcoin things. and, uh, and see what I can do with it on your site. And, uh, they were fairly easy games because at that time, very few people were aware of, of Bitcoin. And, uh, I think a lot of the players that were on his site were these guys that were like really early in investors in Bitcoin and had a bunch of Bitcoin to blow because they were pretty soft, pretty easy games. So I got on there

in, I believe it was like, you know, Q1 of 2013, uh, three, put it one Bitcoin on the site. I bought it off him for about, I think it might've been like $90 at the time. It might've been March or April of 2013. And, uh, three months later at, uh, 150 Bitcoins. And, uh, you know, it was like worth 15 grand at the time probably. And I decided, I was like, all right, well, I'm going to cash out like you know two-thirds of this and 48 hours later it hit my bank account and you know remember i was talking about the uigea laws i made it difficult to move money in and out again on the gambling sites well there's sort of this like shadow uh uh kind of like um shadow industry that was moving money out of online gambling sites after those laws came into place

And it would prior, prior to me discovering Bitcoin, like I'd kind of seen this environment where it would like take up to two weeks to cash out of an online poker site because it was like, you know, illegal to do in the United States. And when I cashed out with Bitcoin and sent to my Coinbase and like literally 48 hours later, it hit my Chase account. You know, I wasn't getting some funky check from the Middle East or something from some LLC. That was when the aha moment happened. And I was like, wait, what did I just touch? Like this like nascent technology that nobody's ever heard of just circumvented like U.S. government efforts to control their money. And that was, you know, where I realized like I should really kind of start looking into this and kind of, you know, did what I think a lot of people do when they first really start to understand like the, you know, significance that Bitcoin kind of brings. And I spent the next three months just studying everything I could about, like, you know, blockchain technology, you know, kind of understanding, you know, the two big questions I had about Bitcoin at that time, you know, when I kind of realized, I was like, are governments going to be able to shut this down, right?

And is there a base, like a floor of demand that exists for this thing? And those were the kind of the two things I was thinking about. And when I realized like it's given its decentralized nature, you know, I was familiar with like, you know, torrent networks and realizing you can shut those down. And I was like, OK, well, it's going to take, you know, global collusion of governments to like shut Bitcoin down. And then I started reading articles about how in I think it was Argentina at that time in 2013, some people were selling condos for Bitcoin because they'd made it illegal to sell condos for US dollars. and uh and and i realized wow like to us this is super risky we might lose like 50 on this but like there are countries all over the world right now where this is like a haven where this is going to protect them from like you know their irresponsible governments or their corrupt governments that are

going to like drive the value of their dollar down to zero or something right and then i was like oh wow this is really interesting now i really want to i really want because it's almost like a venn diagram right um or one of these like things where you've got uh you need some sort of stability right you need some sort of uh non-censorability or uh uh the inability to seize it um but then you also need access to it right so like the example that i always use is like there's actually a lot of venezuelans who wish that they could hold u.s dollars it's either really hard it's really dangerous or they are precluded through regulations or fear right from getting those u.s dollars so what's the next best thing well maybe the euro right but again really hard really

dangerous but whatever and so what can they access in a very easy way um and also has some better stability than what they have as their native currency right and when you kind of look where's the overlap of all those things bitcoin ends up being one of the most accessible least seizable you know more stable currencies available to these people and i think that's why we're seeing the adoption yeah i mean like you know least usable is interesting too i mean it's like bitcoin's like having you know swiss bank account in your pocket it's interesting you know there's so many interesting things i mean like i'm still like a student of it like i'm still like every day i feel like i'm like learning something new about like crypto or bitcoin where i'm just

like oh my god this blows my mind like i can't i didn't you know i'm like so i'm so all in in on for so many years now and i feel like i'm still like learning new things that are happening that are that are like really interesting to me about you know the crypto space but for sure so how do you go from uh you know bitcoin the online poker to uh dash and maybe talk a little bit about kind of what you guys did there yes dash was uh you know the 2000 the environment in 2013 2014 you know these there was you know to kind of like paint a little picture about it back then i mean there's probably like 200 cryptocurrencies at the time is so much smaller than it is today and and back then a lot of these projects like they would kind of announce themselves on bitcoin

talk uh was the form that everybody was using to find out about like the new coins that were launching and uh and you know these teams were tiny it wasn't like it is today we're like you know hey we're gonna raise 30 million dollars you know and have an ico or whatever or saft no uh back then it was like you know the communities would freak out if the the core development team was saying that they were going to take three percent of the tokens that were eventually going to be minted and uh if you if you did that you know your community would be up in arms but so it was like usually small group you know maybe like half a dozen or a dozen guys that were working on these things and uh dash back then was called dark coin and and so i was

you know scouring bitcoin talk kind of looking for new use cases of blockchains um and you know I was seeing like a lot of different forks with like some kind of technical, uh, you know, advancement, you know, might be a faster Bitcoin. And then, uh, I saw one called dark coin and, uh, you know, it was the first anonymous cryptocurrency. And they were, I think back then they were using coin join technology. And, and I thought it was really interesting. And I was, you know, I'd heard rumors about a bit license in early 2014. That's the New York regulation and i was like wow you know this is really gonna like you know piss off a lot of the early you know libertarian adopters of bitcoin and i was like i think i think this like anon

cryptocurrency is going to be something that people gravitate towards you know and it kind of resonated with me like the whole privacy thing um and uh and so i i got a few friends there's like five of us actually one of them was a main event world series bracelet winner huck seed he's one of my best friends and we uh i got him and a few three other guys and we bought a bunch of dark coin and uh then we started thinking like you know what should we do to make this to to kind of help advance this this this cryptocurrency and to kind of make it worth more and at the time i knew uh i had a loose acquaintance acquaintanceship with john carlo over a bit one of the founders of bitfinex and they were the largest cryptocurrency exchange

and Planet at the time, having only ever listed Bitcoin and Litecoin since they had launched. And I approached him and told him, I was like, look, I think these Anon cryptocurrencies are going to have a future. And DarkCoin is an interesting one. And so we sold him on the idea and they ended up listing it in summer of 2014. And then after that, that was a very interesting experience on his own like kind of getting that done and then after that uh i approached uh evan on bitcoin talk and i said listen i think uh i'd like to help you do things with your protocol kind of advance it and uh because of what i'd done like you know we we got dark coin listed on bitfinex without like you know any relationship with the dark coin core

developers and uh and then i approached them and because what i'd done they were i guess they took me seriously and i started helping them behind the scenes a lot and eventually you know they were trying to get a lot of developers to come help build out their protocol kind of build out the infrastructure maybe mobile wallets and things and we eventually thought it was a decent idea to start up a foundation the dark coin foundation and evan asked me to be one of the founding board members kind of being a representative of the investors and and then i brought over a friend of mine, Harold Boo, to, you know, structure the entity. And he ended up being a board member as well. You know, it was like a legal representative and, uh, and that's how it got started. And so

then behind the scenes, I was, you know, I guess at a board level at that point, I was helping, helping DarkCoin, um, any way that I could. I mean, that was, you know, very, very interesting. It was kind of, it really was the wild west back then. Um, you know, I helped out on the board level with everything from you know pushing the rebrand from dark coin to dash uh to uh one crazy story that nobody knows that very few people know about is we uh we acquired a coin called dash coin uh because um when we uh when when we were looking to rebrand from dark coin to dash and this kind of this kind of started because uh dark coin had come up with this new functionality called instant x and you know instant transactions in 2014 were really

interesting bitcoin was already suffering from like you know real latency on the transfers and uh and i was like wow this is a feature that might make dark coin go mainstream but i felt like there was you know the real cap on its upside by being so associated with the brand dark and we realized you know spoken speaking with at the board level with the other the board members we realized like dash is a really great name uh you know short for digital cash it kind of sort of like has this implicit connotation of speed and uh and so we went and we wanted to rebrand to that and we realized that's like literally a few months prior a debit card company had uh applied for the trademark for that a dash debit card and it's in the financial space right we're like oh man we

can't like we didn't have any rights to it we weren't using it by the time they had applied for it uh we weren't using the the the name the mark and uh uh we're just trying to we're stumped we're like how do we how can we rebrand to dash and one day i was on coin market cap and i typed in dash and it auto filled dash coin right and then i noticed that there was this token that was this coin that was it was the market cap was fifteen thousand dollars it was a dead coin basically right and they had launched this thing maybe like a year and a half prior which was early enough that it had, you know, it was a global protocol and that, that there were some rights, IP rights that it was entitled to. And so we reached out to the core dev of Dashcoin who happened to,

through Bitcoin talk, who happened to respond back to us. And, uh, uh, and we kind of did it like we had, I had a friend do it. So they didn't know it was coming from Darkcoin and this guy wouldn't demand a bunch of money. And so we basically kind of worked with him to see if he was open, open to selling us Dashcoin, you know, and, and, and we basically decided that, you know, we pay him a set amount. I don't remember how much it was. It was a small amount to get control of, uh, the GitHub repository. And then we broadcast through Bitcoin talk, you know, that we were going to put out a, uh, uh, buy wall, uh, on one of the exchanges where it was traded. And anybody who held Dashcoin could sell their Dashcoin at a certain price.

And we had attorneys involved and everything. And we acquired one open source project, acquired another open source project. And then we took that evidence of that and successfully contested the trademark application by this financial institution trying to launch this Dash debit card. And then we negotiated a coexist agreement with them where they had the debit card space for the term Dash. and we had the rest of the world. And that was, you know, like I said, it was like the wild west back then. Like we were just like, how do we move things forward? Like, what do we do? And so this, this is one of the things that I was like, I kind of helped put together the team and kind of spearheaded that effort to acquire Dashcoin. And it was, you know, that was a lot of, that was a

lot of fun. It was like, you know, I feel like you could have been a lot more creative back then. And then talk a little bit about the Dash Foundation governance, like how you guys really kind of stepped into what I think, you know, definitely you would argue was a very unique experiment in governance and how, you know, maybe a glimpse into the future almost. Yeah. So Dash's governance. So we, there was one of the, one of the, remember there was five of us that got heavily invested in DarkCoin. And one of them was a friend of mine out of England named Richard. And he held a, of our group, he held like the lion's share of the position. He held like 85% of the position. and one like we started thinking about how do we what can we do to help build out the infrastructure dash dark coin at that time needed like mobile wallets needed to get listed on exchanges there's all this kind of stuff that it needed to advance uh uh the ecosystem that that wasn't really going to make a profit right and so we were like how do we how do we kind of advance things and so originally we were going to start an incubator that was dark coin only

projects kind of like what consensus did with ethereum and we were going to call it protoculture right and richard like i said who who held the majority position in our group was like you know like this isn't fair it's basically me paying for all these projects that aren't going to make any money and all these other token holders are going to benefit from that you know and so there's this like sort of like a disproportionate kind of like you know risk reward going on and he and I would get together at the time he was in LA for you know for that year he and I would get together every couple of weeks and one time we met up in Pasadena and he says to me he's like hey I've got this interesting idea he's like I think if you take a portion of the mining rewards percentage

of it like you can you can turn it into a fund and then like we can figure out a way to like use these funds and everybody is essentially paying for the build out of the infrastructure right and so at that launch we realized like well maybe we can get like you know the token holders to vote on use of those funds and sort of like you know leverage wisdom of the crowds you know actually in hindsight dark went back then i didn't have that many people following but uh so the crowd was still pretty small but so we were i proposed it to evan in december of 2014 the sort of idea of redirecting the mining rewards to to uh fund um businesses or people that propose businesses to build out the infrastructure and evan loved the idea and he he was like oh we can get the

masternodes because you know it's a masternode network to you know people evidence a thousand that they own a thousand tokens to vote on these things and so i mean look there's to their credit like this like richard and i just sort of spawned this idea uh but they just took it and ran with it and the guys at dash they like they ran fast too evan and fernando who's on also on the board of directors of dash foundation dark coin foundation uh evan and fernando worked and they they released a white paper i believe in like march of 2015 called decentralized governance by blockchain um and then by august of 2015 they had this voting platform and a forum where you could propose um any project that would advance the the dark coin or dash ecosystem and uh and they decided

they were going to redirect 10 of the mining rewards towards this and they'd launched it and And in hindsight, it was amazing that this protocol was already listed on Bitfinex, the biggest exchange in the world. It was amazing that we were willing to take the leap on this experiment because nobody had ever done anything like this prior. And we had a lot of discussion behind the scenes of like, do we really want to give the keys to the card to the token holders? you know what if they just vote us off a cliff right and uh and and you know richard of our group held a lot of masternodes and evan held a lot of masternodes and they held a big enough percentage between the both of them that they were that they were comfortable um uh you know we had confidence that any bad ideas we would be able to kind of like you know vote them down

Right. And so people back then, when we launched that platform, to some degree, they were correct. They accused us of being centralized in the voting. Right. But in hindsight, looking back on it, like if that wasn't the case, we might, we probably would have never taken this risk, this leap of faith in doing this. Right. We sort of had like a backstop. We knew like any bad idea we could vote down. And so, and then the first month it launched in August of 2015, it might have been September 2015, I think the monthly budget was like $13,000. It was really modest. I mean, they worked eight months to build this thing. They had a $13,000 monthly budget. They voted, I believe they voted on having another developer work on advancing the protocol with them, right? And then next month, a little bit more money, you know, because the way the governance treasury system works at Dash is that, you know, it's a function of the price of the token. And so if the price of the token goes up the next month, you know, you have more funds to kind of like put towards projects.

So it sort of created this feedback loop, you know, people would propose projects that might make some material advancement in the ecosystem. those projects get funded the markets respond the price goes up you get more money for the next month now you can have even more projects that get funded and uh how do you think that the ecosystem fund performed so far like what like if you had to give yourself a grade right a plus b minus where do you think it falls in i would say it's like an a minus a minus well how like walk through how you think about it yeah so so august 2015 or september 2015 13 000 monthly budget right the price of dash if i remember correctly was like the volume was atrophying prior prior to launching this platform uh you know the price was near its lows i think it was might have been like

two dollars at at the time maybe even less than dollar fifty and uh and we were really worried about the protocol right and then they launched the governance treasury platform and it's sort of like uh uh it was sort of like this this honey in the pot that started bringing developers to be like take notice be like hey i can propose a project and maybe it'll get funded and i can do interesting stuff in blockchain funded by somebody else to advance this protocol that i'm passionate about yep right four months into it i believe it might have been uh january of 2016 is when i started noticing the volume of dash kind of like picking up price started picking up a little bit real developers started showing up, making proposals. It wasn't like, you know,

hokey proposals trying to get a few thousand dollars. The budget was getting, it was increasing in January of 2018. Right. The monthly budget, the monthly budget was $9 million. So it went from a $13,000 a month in the monthly budget to a $9 million a month budget at the peak of the market. Right. And what it, what I realized is like that feedback loop was real in a bull market. It kept like, you know, and, and, and they were able to, you know, get exchange listings, able to like have, you know, marketing, real marketing campaigns that were coming out of it. And I think a lot of people were wondering how Dash was like, you know, had so much prominence, uh, in the space. And it was really this, this engine, uh, that, that kind of pushed it was like the governance

and treasury system and so uh um so i was you know this was what we hoped you know what kind of happened right and and what was really funny is that remember in the beginning i was saying it sort of felt centralized because a couple of people had all these tokens well richard you know my my business partner you know is a responsible investor and as like the price of dash was going from two dollars to like you know eventually it hit like 1500 i think or some stupid amount like some really really high amount um he was he was divesting himself of the majority of his position he ended up divesting himself of 90 of his position and it really did become a platform that was controlled by the crowd it was no longer like these you know two guys that

that swayed a lot of the vote were able to and that was that was i think what was really was really interesting because you have this sort of uh uh you know uh benevolent like uh you know few that you know they had the best and they were their interests were aligned with everyone else they wanted the price to go up and then you know eventually they they divested themselves recirculated the coins into the ecosystem um and what was really interesting to me about dash is uh came from like the experience at the board level i think at one point after this voting system got up and running originally was to like fund projects uh i think there was a vote it was some trivial vote it was might have been for like when we were rebranding from dark coin to dash

a vote on like which logo to use and we were like why don't we put it to the token holders to decide yep right and that was like sort of like another that was my second aha moment in crypto the first one being when like that money my my my poker bitcoin poker money moved within 48 hours to a big financial institution the second one was when we transferred a vote from the board level to the token holders even though it was a trivial uh proposal um i realized like wow this is really interesting because this is like you know when you're dealing with a an asset that was very valuable and you have a small group of people that control it you're not usually shifting that power from this you know small inner circle to the middle it's usually the opposite they're leveraging

their position to gain more power and more control and gain more wealth for themselves And what started happening over time, like we started kind of like, you know, moving more and more decisions over to the token holders. And that's when I started, I caught a glimpse of like the real power of like these trustless networks when coupled with voting systems. And I started, you know, kind of daydreaming about like, you know, the future. Well, and so how do you go from Dash to Blockfolio? Because as you start kind of thinking about in the future and kind of where this whole industry is going, obviously at some point you say um you know i want to actually go build a company right which became blockfolio what was that transition like

uh so it started i mean dash kind of contributed to it right i mean i was investing in you know many different cryptocurrencies in 2014 and uh uh it was sort of like uh you know i might have had like you know been invested in like 10 or 15 different different projects at that time and like i said the landscape back then was totally different there was only 200 cryptocurrencies and and and back then all the bitcoin uh all the all the portfolio tracking apps back then with the exception maybe two or three were bitcoin only and so we were just found ourselves as we made more and more investments dash being one of them just like having to log in keep updating a spreadsheet i'll log into different exchanges update a spreadsheet it was a very painful

process it's a very painful ritual every morning right and uh my two co-founders and i were just like there's got to be a better way and so we kind of got together and decided to to build blockfolio we wanted to create portfolio tracking app that listed every cryptocurrency on every exchange and and like i said back then there was like you know 200 of them and and these other ones that did uh that tracked more than just bitcoin maybe had like a dozen of the of the cryptocurrencies it just wasn't enough to like solve solve the problem that existed and so uh that's you know uh investing in altcoins like dash i started exploring everything and that eventually led to us creating blockfolio to kind of scratch our own itch that was really the

original intent behind it and so what was the original product was it literally just you could track your portfolio of you know tokens bitcoin or other or was there other elements to the product at that point so yeah we we um let me see here it was we just wanted to what i wanted was like i want to be able to like open up the app see a mirror of all my positions on all different exchanges within a split second to see what my total portfolio balance was yep right and we we um we added you know you know charts alerts news section different things that we thought might be useful and we're like wow we think we can make a business out of this right and uh um that was it and we wanted i think that the thing is we wanted all cryptocurrencies on all exchanges

and be able to you know within a split second to open it see how your stuff is doing and what was a really kind of um you know we didn't we never expected it to kind of grow the way that it did Uh, you know, at least in the beginning, it didn't grow. It was pretty stale for the first couple of years until we launched in 2015 until 2017, it was pretty silent. Right. But you know about this, like this explosion that came in of like interest in, you know, the cryptocurrency space beyond Bitcoin in 2017, we happened to be, you know, the only professional game in town. and uh you know um in january of 2017 i think we had like 8 000 monthly active users and within 12 months we went from 8 000 monthly active users to 2.2 million monthly active users

and we never spent a dollar on paid user acquisition in that time frame um and that was uh that was pretty amazing uh we just got really fortunate to and we i think pretty decent product instincts and built this thing that for that we loved and that turned out that everybody else loved using it as well absolutely and now you have actually evolved the product to things like uh black folio signal maybe talk a little bit about some of the things you've added since uh since you originally got started yeah so uh we what we found is like we had this this really massive user base uh and and and we we noticed that oftentimes the number of people that were following a token on Blockfolio for a lot of projects

was greater than the Twitter followings that they had. And we sort of saw this toxic Twitter environment with all the fake giveaways. I mean, like Vitalik has to change his name to Vitalik, non-giver of ETH, right? And all the phishing scams on Slack. And we're like, wow, there's like, you know, having worked on helping out Dash early on,

And I kind of deeply understood both like the infrastructure building and the community building needs that these protocols had. And I was like, wow, like really, I mean, we can build this sort of communication channel that's one directional. It's a broadcasting channel that allows token teams to let their token holders know exactly what's going on. And so that's how we came up with the idea of Blockfolio Signal. It was like maybe in the summer of 2017. We launched it in April or May of 2018 and with like, you know, a couple of dozen projects piloting the program. You know, Decred was one of the early ones. You know, we ended up getting Zcash, Monero, a few others.

And they would, you know, broadcast announcements to their token holders through our app. And so the way it works is, you know, quickly go over it is like we created this personalized feed based on what's in your portfolio. And so anytime somebody broadcasts an announcement, if you happen to hold that token in your portfolio, it would show up in this feed, which is similar to like a Facebook feed or LinkedIn feed. And you could just get the most important announcements that these protocols wanted to update you with. And now it's grown. Like, I think we have close to 350 token teams broadcasting. Wow. Wow. And how many people are using that product versus maybe some of the other, like just the portfolio tracking? What's the disparity?

Oh, I would say probably half an estimation, maybe like 20% of our users, 25%. I mean, it's that are using it, I think maybe on a daily basis, something that's pretty, it's a lot. It feels like it worked out really well. I think. And you guys are also doing some stuff around like user privacy and kind of things that are most likely not the best thing to do for the bottom line, meaning that you're sacrificing revenue or profits for optimizing for that user privacy. maybe talk a little bit about that so yeah so uh um at blockfolio we um early on there were a couple decisions we made and uh one of them is um you know we never we've never asked for any personal identifiable information we don't ask for anybody's name we don't make them put an email we don't you know they're not like linked into facebook accounts uh we don't ask for credit card information uh we don't we want if somebody wants to use in a completely private way that they can right and uh uh you know we we also um you know i think we

we've we've never touched tokens like we don't you know coming up with the massive user base that we had people were like why don't you create like an exchange services and take fees and stuff like that and and i'm sure a lot of people realize like once you start doing sort of like you know taking custody of tokens or start touching them like there's regulatory burden that comes with it Right. And so these are two very key decisions that we made very early on that we were like, we just want to be data and information, let people kind of like keep track of what's happening in their crypto investments. Right. And we were and also like, you know, like Blockfolio's DNA. Like, I mean, I was, you know, like I said, a founding board member of the first, you know, anon cryptocurrency in the space. Like, you know, privacy, you know, was was very important to me.

And, and, and, and so we made some steps, like I said, we could have created an exchange, made probably, we've turned away millions of dollars, you know, I would imagine in revenue that we can make, make in other choices, but we, we wanted to create this really safe platform for people. And I think today we realized that like, it's really paid off because in the last year, we've actually had two federal subpoenas, people like, you know, the Fed coming and asking for portfolio data and then some individual users. and uh how do you guys handle that well our attorneys like responded and based upon like

their request like it was literally an impossibility for us to give them the information that they wanted and we basically kind of explained that to them how like our system was designed how we don't ask for personal identifiable information and both times they dropped uh the subpoenas right so uh and i think i think that kind of reflects like decisions that we made early on and look we're going to cooperate with government agencies like if we can right but we made some decisions early on kind of like you know that that allowed us to like look back on it this is a whole like privacy by design right where essentially what you say is um if we have this information there are a whole host of different ways that it can be used either internally or externally for good and bad and if

we choose today to optimize for the privacy of our users we are understanding that it may make it harder for us to you know do growth hacking and that type of stuff but also it will sidestep the exact issue you just described yeah right where there's a subpoena or or there's an internal employee who's tempted to do something a security breach all this stuff you basically just come it doesn't even matter if it happens around the data because you don't have the data exactly it's Like you can't give away what we don't have. Right. I mean, and so or that, you know, the way it's designed, it's just like an impossibility based on the request. And so and that's the thing. Like, I think I think what's interesting is like people oftentimes think that like, you know, complying with, you know, government requests or government regulation is like at odds with privacy. right and of course and i think and i think we're like well we realize like we want to create

something private but yet totally be compliant about everything and i think like you know getting those subpoenas dropped was i mean i i was pretty happy because i was like wow i mean it's like it worked it worked there's these steps that we're taking and i think it's gonna be interesting i think uh you know as this ecosystem advances do you think you can continue to build a business where portfolio tracking is segmented away from custody and the exchanges, right? So you talked about a lot of people previously have said, Hey, why don't you build an exchange? Why don't you do custody kind of, you know, add on services or go deeper with your relationship with those users? Do you think you can continue to scale without going into that? Or how do you kind of think

about let's say custody and portfolio tracking? Yeah, I don't, I don't, you know, I don't, wanted i wanted to stay away from custody uh you know i felt like it was uh it allows us to kind of operate be more nimble have less regulatory burden right uh but i think i think yes we can i mean i think we're identifying services that we can build and and so you know when we launched blockfolio signal and getting you know this dashboard that 300 plus token teams are broadcasting through we realized that we we shifted blockfolio from being this like portfolio tracking app that connected just speculators with exchange information to be in a network where we're connecting like the major segments of the industry the token teams the speculators exchanges

and we realized through this dashboard like wow we're going to be able to like layer on services beyond just a communication platform for token teams that are going to be very valuable to them right and uh uh you know we're we're identifying like we're talking to the token teams all the the time identifying uh uh you know uh different features that will help them better service their token economies and and and kind of like uh leverage that proximity we're giving we're creating between them and their users um and and and we believe that some of these features will be able to impact their token economies by maybe tens of millions or hundred millions of dollars for all we know and then these are the type of things that we think that we can charge for and

start, you know, like I said, kind of shift Blockfolio from a free to use app to like a real kind of like viable business. And, and so that's kind of like 2019 where we're really focused at Blockfolio is kind of like, you know, these services that we want to build out for, for token projects. Some of them, you know, would be like, you know, polling services, you know, allow them to pull people who actually hold their token. You're essentially creating a communication platform for the tokens and the projects to maybe have higher signal or no pun intended conversations, really get actionable insights out of and almost ensure that those teams have, I'll call it kind of a landing page for communication, right? If they can point people

there and say, look, this is where we're going to post updates. This is where we're going to do stuff uh there's a lot of value to the teams there's a lot of value to the uh ecosystem that they're trying to communicate with and then obviously a lot of value to you guys yeah exactly i mean that's that's the thing is like we uh kind of we have this philosophy of blockfolio which is like it's like we we want to be like user first and ecosystem first like put them put them ahead of like our kind of like short-term uh desires right and uh and we've kind of like uh i think really you know held true to that since the beginning of Blockfolio even in that the ICO craze that that that happened in 2017 I mean we we ran three different ads in Blockfolio from

you know June of 2017 to uh February 2018 and and even though we ran three ads we were hit up by probably 200 projects in the space one to like throw money at us to like do these ICO ads and And like, I felt a lot of these were, were, were malintended. Like they're, they're, they're, you know, and I didn't really believe in the projects. And so like, we were trying to protect our users and we, this is not an exaggeration during that timeframe. Like we turned away $20 million plus in ad revenue, ICO ad revenue, um, you know, because we wanted to, to, to put our users first, do what was right for our users, for the ecosystem.

And so kind of like everything we've done at Blockfolio, I think, has been like that. We've taken like slow calculated steps. How do we, you know, connect different parties in the ecosystem? How do we do it for the benefit of the ecosystem? Sort of in a, you know, in a private way, in a fair way. A lot of the ethos that I kind of learned during my time being on the board of directors of Dash Foundation, you know, like it comes over as it reflects in Blockfolio as well. For sure. Before we wrap up, I always do a rapid fire set of questions.

So what do you think is your most controversial thought in crypto? Oh, man. He's taking a sip of coffee there, I think, to prepare for this one. Yeah, the most controversial thought in crypto? Yeah, like what do you believe that a high majority of other people would disagree with you on? Would disagree with me on? Uh, like, uh, man, that's a really tough question. Uh, it depends on the day of the week that you talk to me. Uh, uh, yeah, sorry for taking so long.

I would say, you know, sometimes I wonder, sometimes I worry about Bitcoin. Okay. Why? Because it's 2019 and I still can't buy a slice of pizza with it down the street at my favorite. Do you think that's a problem? There are things I love. Well, is Bitcoin going to be digital money?

I don't know if that's going to be the case. You're not as confident in that. No. But, like I said, Bitcoin is going to be like Switzerland in your pocket. It's found a different purpose in my mind than I originally thought. It's evolved. It's evolved, yeah. And so sometimes I worry.

I know that you're like a crazy Bitcoin maximalist. This is actually part of the reason why I wanted to stay. I'm actually not. i'm not a maximalist right so i am uh i am in the bitcoin is very very very very important and we are probably underestimate we're more likely to be underestimating the impact it will have than overestimating it um but with all that said uh i think that there's a bunch of like decentralized finance stuff that's super interesting i think that you know every stock bond currency commodity is going to be tokenized right all that kind of stuff is uh i think violates the

maximalist uh viewpoint um but but i do think that uh from a currency standpoint bitcoin is far and away the winner and going to dominate yeah i agree i agree with you i think like i actually think the world is going to be completely tokenized in the future i think right now some of my ideas like i think uh data ownership is unlocked by blockchain uh you know there's there's going to be a slow shift over the next 20 years to like people are going to like you know be patroning platforms where they're going to have ownership and control of their data i think blockchain-based voting systems are going to be enormous i think people are going to be you know having their condominium titles on on erc 721 non-fungible tokens that are stored in like

you know custodial uh services that are insured and regulated i mean i think you know to between me and you you that might not be that controversial but if i go hang out with my parents friends and i tell them this they're going to look at me like i'm insane oh yeah for sure you know what's the one regulation that you would change if you could change one or improve it uh regulation uh yeah i would say you know i don't know i'm not not not in the regulation yeah what do you think the most important company in crypto is other than block folio i don't know if we're the most important company maybe one day we can grow to be that but uh uh i i would say um you know you know um some of the pioneering ones that i think you know is is is kind of like

by the by the by the rules by the book that like coinbase like their approach right Right. I mean, they've they've definitely like push things forward. Awareness, you know, starting to kind of like, you know, move beyond just Bitcoin and some of the other cryptocurrencies. But like, I mean, think about I I'm not 100 percent positive about this, but sometimes like if I imagine like what if Coinbase didn't exist in crypto? Sort of like looking at it from that perspective, if this specific company didn't exist, how far back would we be? yeah pretty far i think with coinbase we'd probably be pretty far back uh you know uh more so than other exchanges and i think i think part of it is because they've pushed so much in in the united states and it seems like uh for sure yeah what uh what's the most important book you've ever

read oh um fortune's formula why um i kind of went the whole history of like calculated risk uh you know with like you know the kelly formula like john kelly uh kind of like some of the work that people were doing at, uh, at, uh, at AT&T labs. Um, you know, it kind of, uh, yeah, it was just like learning about, uh, uh, you know, I guess, uh, uh, you know, an approach, like basically realizing that like, you know, the importance of like math and probability and everything. And like, you know, trying to find important, speaking of math and probability, what's the probabilities that aliens aliens exist super high i mean uh over under 70 percent over over 90 yeah yeah my in my opinion i mean like i think uh i think uh i'm a 99.9 i'm way up there with you because i

mean like i mean it's like you know the universe is like infinitely large right and there's this this environment that existed here for like life to spontaneously happen has happened elsewhere aliens do exist right and uh i like it you're like a long bitcoin short alien deniers i'm like a long alien short humans i love it i love it yeah so they totally exist i mean uh yeah i would say i think it's almost a certainty uh you know and i would think uh i think it's everybody thinks of like scary aliens i'm like more of a maybe they're like better than us uh my whole thing is like what if they show up they just want to grab a beer all right right like what they don't have to come what was it

a independence day they're like show up and shoot up the white house and you know doing all the crazy stuff like what if they just want to come hang i mean maybe they're more realistic in their outlook of the universe and they don't like try to create these like fancy things and this illusion like they're not apes right exactly um i end each uh episode letting you ask me one question what uh what one question do you have for me? Oh, man. You're the only person who's thought about it. This is good.

I don't know, man. I'm not, I'm not, I'm a little slower than everyone else. No, I don't know. I mean, the kind of questions I would ask you would be like, i don't know what what is like your vision of like the crypto future like 20 30 years from now like how do you what do you think is so yeah okay here's a quick question like if you had a if you look at like uh the internet right and like back in 1999 nobody knew that they be able to like you you could like couple uh you know the internet with mobile and and gps and end

up uber and it's going to like change the planet right it's going to reduce a bunch of debt because people don't drunk drive anymore as much or they shouldn't um um what if you know in your daydreams what are some crazy ideas that you've been like wow like blockchain's gonna unlock this that nobody's thought of and it's just going to be like nuts right my core thesis and i say it probably more articulate than the extreme view that i actually hold is every stock bond currency commodity will be digitized and it lays the foundation for an automated world and i think that what you're talking about like the people who originally saw uber like oh you can go take out the taxi industry taxi industries you know x billions of dollars uh that's you know

an okay size market right what they actually ended up doing was they took market share from the taxi industry but also drastically expanded the addressable market right they all these people who you know used to drive their own cars also became uber riders and so i think that's really interesting um we had uh marat on the podcast and he talked about you know the monetary supply globally is like 85 trillion or whatever he thinks it could expand to 150 trillion and steal market share back from other store value assets so our you know real estate etc i think that's a pretty wild idea that i probably have more confidence in than most would want to admit um but the one that i think is really big uh and disrupts even bigger markets than money is this idea of machine

to machine transactions happening all day long every day every single thing you do right what i mean by that um you know there's some really wild things that you can think of uh but they boil down to simple concepts so like pay as you go services right um everything from uh if you're listening to spotify and every minute you listen to you pay a penny right and so over you know the power users pay at some up to some cap the people who don't use it at all this month don't pay anything right so there's some kind of more pro prorata type uh payments um you can see it in terms of taxes right well why don't i just pay for what i use and so if i drive down the road i'll pay you right if i don't drive down the road i don't want to pay for that road yeah right um and so you

know there's a lot of complexities in there and like well what if i don't drive down the road but the fire truck that comes to put the fire out of my house drives down the road should i pay for that you know all that kind of stuff so some of this is like pipe dream stuff today because we just don't know enough um but but i do think that uh this idea of um the internet being a borderless nation and it going to be run by or governed by machines um the digitization of value that will be placed in there i think is really important um and it feels to me like people probably knew the internet was important but didn't know exactly how right that's kind of how i feel about that avenue of all of this it's just like it feels pretty damn important the very

stock bond currency and commodity is digitized right and there's some automation going on how that plays out where will be the you know the quote-unquote killer apps right or killer use cases if i knew the answers we'd be putting all our money there like we're just getting a taste of the automation right now is what you're saying like it's gonna be crazy like it's like stupid stuff right like you know is there a world where um you can walk down the street and that generates data that then you can sell to a pharmaceutical company in an anonymized aggregated fashion and you get paid some currency for that and that currency you can then use at the store as long as you buy healthy food yeah right and all of it is you literally walk down the street

walk into the store grab something and walk out and you don't go anywhere near a cash register blah blah whatever like i have no clue how realistic that is pull out cash to buy your cheeseburger but you know yeah so basically digitize like the healthy perfect example right could you drastically increase the friction for buying unhealthy food but rather than trying to increase the friction what you do is you decrease the friction to buying healthy food and therefore there's a very there's a very black and white difference between when i buy healthy food it's much easier than when i try to buy unhealthy food and so if i want to go through the friction of buying the unhealthy food i can but you'll you'll slowly change people's habits because they'll go

the path of least resistance yeah yeah no i mean like you're getting into like you had some interesting we go for we go for hours on the weird stuff yeah the data the data ownership stuff is like really interesting like and what you're saying about generating income from like from that like like one of that was actually to circle back one of the crazy ideas that i think like data ownership is going to unlock a basic universal income that people generate because of uh the data that they they generate just doing their normal everyday things and being tracked for it i've talked about this a bunch the idea of ubi is uh a little hard for me to wrap my head around in terms of why we would create something like that but the idea that um i rent my time right um as a

human for compensation or i rent my mind for compensation uh i probably will rent my data for compensation in the future and therefore work looks different right and compensation looks different. And so, so I'm on board with you there. Um, listen, it's been fantastic. I really appreciate you, uh, you coming. And, uh, I think that, uh, what you guys are building is pretty interesting and it's obviously growing pretty quickly. So, uh, good luck to you. We're cheering for you and, uh, we'd love to have you back at some point. Yeah. Anthony, thanks so much for the time. It's been, it's been a pleasure. Absolutely. All right, guys, that was an awesome episode. I appreciate you listening and I hope you enjoyed it before we go. I want to

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