The Pomp Podcast - Jennifer Campbell, Co-Founder of Tagomi: Crypto and Automation's Impact on Society

Episode Date: April 25, 2019

Jennifer Campbell is Co-Founder of Tagomi. In this conversation, Jennifer and Anthony Pompliano discuss growing up in Hong Kong and Vancouver, why trade execution in crypto has been so bad to date, what impact automation could have on society, and why Jennifer thinks Andrew Yang and UBI are interesting. ----- 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. Jennifer Campbell is co-founder of Tagomi. In this conversation, we discuss growing up in Hong Kong and Vancouver, why trade execution in crypto has been so bad to date, what impact automation could have on society and why Jennifer thinks Andrew Yang and UBI are interesting. I really enjoyed this conversation and I hope you do as well. 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 i'm here with jennifer uh we got a whole bunch of stuff to talk about uh thank you so much for coming thanks for having me um you didn't grow up in the u.s let's talk about it all right you were born in canada or in hong kong canada all right born in canada but then split time back and forth between canada and hong kong thank you for in hong kong okay uh let's talk about hong kong first um what are like the biggest takeaways from growing up just spending time there

in an eastern world where i think most americans are like i've heard of hong kong i think i know where it is on a map but i don't know anything about it um let's see um you know i'd say i think it's like growing up in any big city right um you sort of um get exposed to people much more quickly and, you know, you see a lot more things really quickly and you sort of think about the world a little bit differently. So I actually grew up with three uncles, all of whom were entrepreneurs. And the three of them raised me together, actually.

And so I know it sounds like a TV show, but it's a... TV show, just three uncles? Three uncles raised, like, this little girl. And, like, had no rules for anything. Wait, really? Yeah. Man, that is... I mean, imagine like three, they were all entrepreneurs, right?

So you can imagine the personality type. Very detail oriented, obviously. They were all sort of bachelors, had their own bachelor pad. And I'd like go hang out, rotated between the three. But, you know, I think by contrast, you know, a lot of my friends in school had this really regimented schedule. Have you ever read The Little Prince? No, what is that? It has just a story about just a little girl in it, you know, had this, her mother has

sort of planned out her life from like age zero to 18. And so that was all my friends, basically. And so I really felt like, you know, I had a lot of agency at a young age that I could do, you know, whatever I wanted in a way that I felt like, you know, a lot of my friends, you know, didn't really have. And they were all sort of on a set path from pretty early on. Um, and so I think, you know, a big reason why I felt so comfortable making this jump, um, you know, was because of the sort of that background.

Um, and so, I don't know, that's one thing. Yeah. And in that environment, um, I think there's a lot of people in the tech world who, uh, these like Montessori schools and all this stuff where like, Hey, we're going to put our kids into these environments. There's like kind of rules, like you can't fight each other, but for the most part, it's, you know, you're allowed to ask questions. you address adults by their first name like it's very uh fluid i think and much less like

hierarchical and the thought process is like that actually produces entrepreneurs creative thinkers etc yeah that was a lot of similarities i grew up in okay um well i guess i experienced both because at school you know it was quite regimented but then at home it was you know whatever i you know whatever i wanted really got it and uh you were going to school in hong kong i went to school to Hong Kong until I was about 12. Um, and then Vancouver for high school. Got it. And was there anything when you came back to North America that was like a really big, like difference in terms of going from high school in Hong Kong to Canada high school? Well, the pace was a lot slower, you know? Really? Yeah. Um, and you know, I, I also just couldn't wait to get out actually. You

You know, I love the city so much because even when I was five or six, you know, I was, you know, I went on the trains everywhere. I could go anywhere I wanted. Whereas when I moved to Vancouver, you know, unless you have a car, you know, you're kind of stuck at home. And so I explored the neighborhood a lot, but there you were kind of just stuck. And so I really loved growing up in a city just because I felt like I could do anything I wanted. it. Um, and it was quite common, you know, to, you know, have, you know, six, seven year olds, you know, be by themselves, you know, take the train, you know? So that was quite common. Look, even here in Manhattan, I see, you know, young kids on the subway and I'm like, there's

zero chance I was growing up. Let my parents let me do that. Cause it's just, if you grow up in the environment, it's much more natural than, you know, I probably would when my parents brought me to New York city as a kid, it's like, everyone's holding hands, right? Like, like don't lose our kid yeah so it's pretty crazy that uh especially in you know hong kong or china you know all these different um countries uh and cities that again i think that it's everyone does it and so it's like a little bit more fun i have such great memories of sort of going to school by myself because it felt like an adventure every day you know um i there was a guy um a german guy um on the bus that i i took every morning from i lived on the small um peninsula um called red hill

peninsula it's near stanley park um and in hong kong um and then we would take the bus out to central which is kind of like the central um it's called central but it's also the central uh part of hong kong where all the uh companies are and you know big businesses are a lot of the banks are there um and he just told me like crazy you know scary stories that you know six seven year olds are not supposed to hear you know about um like the world war ii about politics about um um you know about um you know his family you know that you know all kinds of stuff that was like you know really really interesting and fascinating to me um and so i'm guessing that uh a lot of young kids that grow up in that environment they usually mature much faster right in terms of

they've got a more worldly view right especially if you lived in multiple places uh speak multiple languages right i think there's a lot of science that shows like your brain develops different ways uh and then when you get into um like let's call it post-schooling right so business world whatever you're going to do i think that your view is just very different right like you almost have like much more experience in dealing with you know hey i have to have money to go on the train or on the bus right like that little thing that's interesting there's a lot of kids who never had to think about having enough money for how much it costs right that's funny yeah but you've done that for you know two decades let's say after by the time you graduate college right

And you've just been thinking about it much longer. So it just fascinates me, I think, going back and forth between different countries and then also the kind of independence that's thrust on you and just humans kind of like rise to the challenge a little bit. And you just become normal, right? Because like I'm sure in high school, did you feel like you were just like so much more independent than all of your friends or it wasn't that obvious? Maybe a little bit to start. But I think my group of friends specifically were all quite independent. but maybe you know more broadly out of the class perhaps we're a little bit more independent all right so graduated high school end up going to Harvard and then you end up at USV Union Square

Ventures right why go there what was that experience like I mean that was just sort of the biggest blessing in the world I love being there you know just the people first of all the partners are just the most kind, genuine people, you know, you would ever meet. There's lots of people with very sharp elbows in the venture business. And it's hard to find people like them, I think. So I think it's a very special group of people, first of all. And then second, you know, I had applied to a couple places outside of USC when I graduated from college, but I just found that it was all, you know, it was sort of cold calling businesses, kind of scouring the world um for for a deal and that really wasn't really what i was looking for

and usv actually you know they were quite the opposite you know they thought that was um you know don't don't waste your time on that you know um you know they spent a lot of time it was almost you know fred wilson calls it an mba you know um sort of learn whatever you want learn about the venture business learn about different industries um you know and any entrepreneur you want to connect to you know they'll connect you and it was a great place to grow up really and um and so you know it was it was a great blessing to be there and while other firms are doing let's call outbound deal flow sourcing uh usb is more focused on what comes inbound and through their network or they just had other people doing the outbound sourcing

um well they know so um they they say they're like thesis driven so really what that means is like they have some view about how the world's going to change right um and then they decide okay well if the world's going to move towards this direction like what are the companies going to look like um what's going to do really well that's kind of unexpected uh given current business models and then they kind of go find that company right so if you think social networks going to go be going to be a thing um you know and you have a view on that well you know you go out and go find all the social network companies versus having companies inbound and then evaluating okay i think this is a good company i don't think this is a good company that's what it means to be thesis

driven right you sort of think about how the world's going to change um and then go find that company that you might think or should you think should exist um that isn't here yet got it and so uh while you're at usv uh they're obviously big proponents of crypto oh yeah absolutely uh just a little bit um and uh they've made a number of investments in the space they've talked a ton about you know both what they're seeing happen but also whether they think the world is kind of going and how some of this will uh will go were you spending most of your time on crypto or were you kind of all over the place what was that i spent most of my time on crypto um and that was sort of my personal interest yeah but it was also a lot of what the firm was looking at at the time

but it was um it was sort of the best place to be if you were interested in crypto um just because you had so much agency um you know the the brand of the firm uh the entrepreneurs you could get connected with um and also the people they had already invested in you know um had you know know there was so much to learn from there so and what attracted you personally to it well i think first of all um i just thought it was a revolution that's the biggest understatement in the world that we've had on this podcast uh and you know i just thought it was i thought it was very exciting um but i think separate from that like i i just really thought um you know i was you know trading

a bunch on all the exchanges. And, you know, a part of it was also, you know, I thought there was, a part of it was also just because there was so much, you know, arbitrage between all the exchanges and statistical arbitrage between all the exchanges. You know, that's why I was like trading all day on all these exchanges. And, you know, that's part of the reason I started Togomi is just because I thought, you know, trade execution could be done so much better. So you were actually trading while at USV, you're doing all kinds of statistical arbitrage, et cetera.

A little bit. Yeah. Um, and I, but also, you know, I had spent so much, spent so much time talking to people about, you know, the space and Bitcoin that when people got interested, I was sort of the go-to person to ask like, Hey, how do you put, you know, $10 million in Bitcoin? And I said, um, well you can't, uh, not immediately. Right. But you could spread it out over the course of a month.

You could, you know, um, but really there weren't great solutions. Right. I sent a bunch to the exchanges. I sent some to the OTC desks. Um, but a lot of these, at least more sophisticated investors were expecting a lot more. Of course. Um, and, um, you know, I had spent a bunch of time with Greg Tussar. So my, uh, partner that I started this company with, um, he was previously the head of

electronic trading at Goldman. Um, and, but we really was sort of an entrepreneur at heart. So he, um, early on in his career, he started a company also trading firm. Um, and that got, um, he sold that company and then it got bought by Goldman, which is how he ended up there. So, you know, Greg is really an entrepreneur at heart as well. But, you know, I said to Greg, like, these are sort of textbook solutions. You do a lot better in this space.

And I was kind of seeking his expertise because I was kind of looking for a company in this space. And I looked at a whole bunch of them, but really never found, you know, a great solution, I thought. And then ultimately we thought, you know, actually, you know, why don't we start this company together? Got it. and so let's talk about trade execution right i think it's a term that people hear all the time uh the majority of people i think actually don't understand what that means right so it's like hey i've heard it i'm familiar with it i don't want to admit to anybody i don't know what that is right um so maybe let's talk just what is it and then what are the challenges around trade

execution in crypto today right so i always just think about like how good is the price you get right that's one way to think about the most simplest form of trade execution right I'm going to go buy a Bitcoin on an exchange. I'm just going to buy one Bitcoin. And the price today says, you know, $5,112. Is that actually what it's worth? Or is there overpriced or underpriced of what the actual value is? Exactly. So that's at the most completely oversimplified, but, you know, at its core, right? Like, did you get the best price you could have? But I think it's probably easier to think about, you know, back in the day, if you had, you know, brokers on the floor, buy and selling, you probably really care who your broker is, right? Because you think, you know, the guy who, you know, makes a better deal is going to get you a better price, is going to help you, you know, buy and sell a lot better. But when you think of computers, you don't think about that. But that it's still absolutely true. And having a better trade execution system makes a massive difference.

And there are folks, you know, paying, you know, massive spreads today. They're a lot better than they were a year ago, but still it could be a lot better. And just so we make sure everyone understands, a spread is you're buying the Bitcoin for $5,100, but actually you should be buying it for $5,090. There's a $10 spread in there. Right, so someone buys it for $100 and then they're going to sell it to you for $120. They had a $20 spread there. And so in that, that spread in crypto is going to the exchanges, or is that going to people on the sell side or the buy side? So it depends, right?

exchanges don't really have spread they charge a commission because they're supposed to be matching buyers and sellers when there is a spread it's when you're dealing with a buyer seller directly so if you're going to an OTC desk or if someone's trying to you know sell or buy you help you buy Bitcoin you know they charge the spread because they're marking up you know I bought this for a certain price I'm gonna mark that up and sell it to you and that mark up is the spread well this and so yes to a degree but i guess some of these platforms that are now coming out the etoros the robin hoods etc we can debate whether they're quote-unquote exchanges

they're a broker so they're a larger charger of spread and then maybe even a commission on top right exchanges are a different category they're supposed to be matching buyer and seller um with no spread just a commission yeah because they're supposed to be you know um um you know, they're not supposed to be taking a spread in between, you know, they might charge a commission on top for the service of matching and buying and selling, but they're supposed to be, you know, the fair, you know, adjudicator between all the different participants. And so it wouldn't, you know, it's not fair to, you know, charge spread there. Got it. And so when you guys say, hey, we're going to start a company to solve this problem,

what was kind of the core idea in terms of how do you actually solve the trade execution problem? So at the time, you know, the space was really fragmented. And so if you were trying to buy and sell, say, a million dollars of Bitcoin, you had a couple options, right? You could go to an OTC desk and then, you know, pay up a little bit because they did all the operational work for you. And, you know, that was one option. But or two, you could do this all yourself, right? But what does that mean? You have to sign up for 10 different exchange accounts and then you have to split up your balance sheet between each of these 10 accounts.

And then and then you're like, OK, let me, you know, sign into, you know, you have to have some screen that shows you where the good trades are at each time. And then you have to organize all your trades and then reconcile between all the different exchanges. And then you have to settle across each of the exchanges. And then to get your Bitcoin back, you have to sign into each of those 10 accounts. It's and it's just a complete nightmare. um and so just the description doesn't sound fun right um exactly and you would have to do all that to um to trade across all these exchanges so what tagami does is um make that all go away there's one interface to trade across all the different exchanges um to make sure that you're

getting the best execution you can think of it as best price um when you're buying and selling bitcoin and so for a customer from a psychological standpoint i come to tagami because i want to buy X Bitcoin, for example, and I know that I'm going to get the best price for those Bitcoin that's available currently. Exactly. And Tagomi is going to have a kind of magical way of doing that. I don't even need to understand how they're doing it. One analogy I use is, you know, each of these retail exchanges is like Delta or, you know, American Airlines and we're Expedia or Kayak. And so we sit on top of all these exchanges and, you know, we have a much better view of what the true market price actually is. And so I think that's the psychological understanding of a user. It's

like you've promised them best price, so they come and they use the product. Let's talk about what's going on behind the scenes, right? So what are you guys actually doing when you sit kind of on top of all those different exchanges? Do you ping the different exchanges through an API, get prices, and then execute on only one of them? Do you actually take my purchase of a million dollars and break it across exchanges? Walk me through how that works. Your million dollars is going to be split up into really tiny trades of maybe a couple cents each um so that you're not picked off by by somebody right and then that gets smart routed to each of the different destinations um and then every time we see a good price we um we buy or sell for you um and then um we kind of

gather that all back up for you um and tell you what your the price was and then at the end you'll get actually a report that says um you know we bought you know we bought three dollars at coinbase with about like six dollars at Kraken and like you know eight dollars at Bitstamp and you can see exactly how and when we executed that trade for you. And how does the system decide three dollars at Coinbase versus six dollars at Kraken versus whatever? At the most simple level it you know depends on what your inputs are you know what your parameters are what you're asking us you tell us a little bit about your preferences or you could right if you're much more advanced But at the most simplest form of it, you know, you're asking for the best price.

And so we'll get you the best price based on what we see on each exchange. Got it. And I've been fortunate. I've seen the interface. It's pretty slick. And when you're talking about the preferences, you're saying things like time is really important to me right now. So therefore, I'm willing to be a little less stingy on price. Right. Get me in the market versus, hey, price is the most important thing. But I don't need to own my million dollars worth of Bitcoin today. I can do it over the next 48 hours. Right. So get me the best price over 48 hours. Right. When you see people coming on board today, most of these are institutional folks. They're retail.

Where do you see most of the interest for the product? It's it's a mix, but it's usually someone trading in size. Right. So it's less about who they are, whether they're a high net worth individual or in a hedge fund. It's more about how much they're trading. But actually, you know, there's a lot of people who want to sign up. You know, we haven't accepted them yet just because we're focused on the client who's trading in size. But folks who only want to trade like $10K or $25K, they'll say, you know, I want to use 2Garmy just because it's a better experience, you know. And so at some point, we'll let those folks onto that platform as well. But it's really folks who are trading in size who would experience a lot of illiquidity cost if they were trading on any other platform or on a single platform.

And so it's usually a hedge fund, the RIA, you know, lots of, you know, high worth individuals too, who, you know, buying a million, 10 million, sometimes even more, or, you know, or sometimes, you know, they're just buying, you know, 10K as well. Got it. And so how does the infrastructure that you guys have built compared to the traditional kind of trade execution, right? Obviously, the team's got some experience doing this at some of the, you know, the best places in the world.

Are you able to replicate one-to-one what the traditional world has in this crypto world? Are there some challenges still with the infrastructure and the technology? Where would you put us at? I think it's mostly similar with some nuances. Bitcoin trades very differently than typical equity markets. But also just the exchanges and infrastructure in this space is generally a lot less mature. And so it requires a lot more. There's a lot more bandages on the infrastructure. Right. You need to be a lot more careful about when an exchange adapter goes down, making sure you reroute trades to somewhere else. You know, there's a lot more care around around that. So but in general, you know, it's the same high level ideas. Got it. And really what you guys are ultimately doing kind of a generalized way is you're using technology and automation to be smarter than humans. Right. To some degree. Right. And not in like the negative connotation, but the idea that me as a single individual, if I wanted to purchase a million dollars worth of Bitcoin, I could go get a bunch of computer screens or different tabs, you know, and I could do a lot of what you're doing.

it'd be super inefficient i would definitely make mistakes right or not get best price uh it would be hard to make a bunch of manual three six five you know eight dollar purchases up to a million dollars um and then also i wouldn't get all the reporting yeah right so i could do it it's just not ideal what you guys then do is you use technology to automate that absolutely yeah before we started recording we were talking about like this may be a theme across a lot of different industries where automation technologists have a significant advantage. Um, and it's going to have a material impact on society. Right. So tell me a little bit more kind of, uh, how you've thought about that. And I think you've got some just unique ideas

there. Yeah. Sort of switching gears a little bit. Um, you know, before, before we started recording, we were talking about, um, automation in the world generally. And, um, I think it's going to keep going, you know, growing exponentially. Right. So, you know, we're going to see um more things being automated away more jobs being automated away and um at the end state i think it'll be there will be a new aristocracy um where either you understand um this new technological revolution um and you own some technological asset that um siphons you up into this new aristocracy um or your job is sort of automated away and you become part of sort of the um lower class um and i think there's going to be i think it'll take some time to get there

um but that's sort of the end state as i see it yep because really what you're talking about you're talking about this great divide right where the technologies have a significant advantage in society right a whole bunch of different ways uh you know the industrial industrial revolution absolutely people who understand that hey there's going to be wealth creation there's going to be opportunity all this stuff the technology or the innovation is going to drive this if you are associated with that you participate or you create that you benefit right if you don't you kind of get left behind a little bit exactly um let's talk about the people who do not have those skills today uh do you think it's more of let's try to help those people get skills right

so let's teach them how to code let's teach them uh different things around technology or data science or um you know how to participate yeah or do you think it is you we may not be able to get everyone educated enough to actually participate i think it depends who you are right so with young people today we should absolutely put more resources into making sure they're learning the right things um and certainly some topics are much more important than others especially computer science um things like that but you know if you're you know like 50 or 60 and you know i i think there's a lot of people thinking that we could re-educate um this sort of class of people who have um you know been doing their jobs um you know for 40 50 years um

that's very hard um and i think um you know we have to help them in other ways um i think that's you know very very difficult um and then they may not be affected right like in the sense of let's say that the i don't know what life expectancy today is but probably like around late 70s right let's call it kind of 75 to 80 if you're 60 that means that pretty much based on the average life expectancy in the next 20 years this would have to happen for it to have an impact on your life yeah we may see elements of it we may see the beginnings of it but the odds that 20 years from now there's this massive divide where if you don't understand this technology you know you're screwed so i actually think it'll get there a lot faster okay i don't think the aristocracy will be

apparent until a much later stage okay but you will feel the effects of this you know like uh you know automation much much earlier right like we're already experiencing it now right i think that's why there's well that's why there's so much populism right like before this we were talking about sort of trump and aoc and um you know uh we were talking a little bit about andrew yang um you know i i think a lot of these are sort of symptoms of this um of what's already currently happening, right? And, you know, there's the opioid crisis. All are sort of symptoms of automation, which, you know, it's already underway. So I don't think it's, you know, 20 years away. I think, yeah. Well, the great divide from an economic inequality standpoint

probably is, I think you're saying it's delayed, even though the automation hits faster than 20 years, right? 20 years or whatever the number is, is when it becomes so apparent that you can't ignore it exactly I think you'll start experiencing the inequality much sooner than that and people will have a hard time finding jobs for example you know that will be a lot sooner but seeing like seeing that you know the aristocracy part you know I think that's you know much later maybe 20 30 years yeah and the part that's really interesting to me so uh when I pitch crypto and bitcoin etc to all these institutional investors I talk about automation right now basically say look you need digitally native assets right for the digital world you need

digitally native assets, the old technologies of paper or electronic QSIPs are incompatible with the machines and algorithms of today. So we need just digitally native assets. It's a computer file, double spend problem. So we need digitally native accounting, which is triple entry accounting. And then we need digitally native contracts that govern all of these transactions, right? So it's just assets, accounting and contracts for the digital world. They really get that, right? Like to them, it is inevitable that automation is coming, right? So you get a very wide range, everything from, you know, analysts who are right out of school all the way up to, you know, 60, 70 year old CIOs and board members all understand this stuff's coming. So I don't

think it's like a, a huge surprise to people. I think timeline is a big question, right? Hey, is this two years away, five years away, 20 years away. And then the other piece is who gets automated away first. So I've had really interesting discussions about, I think most people are like, oh, we're just going to use robotics and automation and like the factory workers gone, Right. We see some of that. Right. You know, if you look at like a Tesla factory, for example, there's definitely robotics and automation that's going on there that have replaced workers. But there's a very strong argument that it's actually white collar workers. Right. Things like bankers and stuff that look at Wall Street trading floor. I totally agree. I totally agree. It's not just blue collar workers or white collar workers. It's actually across the spectrum. we're going to see this have a pretty material impact.

Absolutely, yeah. And do you feel like when it comes to, let's say, government and governance, right? So not just the U.S. government, but just governance in general. I think that you're like me in that we're not ready for this stuff, right? There's a lot of stuff that's going to happen that we just have no clue on how to react to, how to govern over. And it feels like that all starts with our politicians, right? Andrew Yang has been blowing up in the crypto community.

And before we're talking about how he just has a very unique view of the world. A lot of it comes from this technology-driven perspective. Tell me more, I think, from your perspective, like forget him as a specific candidate, but just this idea of a technology-first government official, right? Kind of what the pros and cons you see there are. Or, like, why do you think that is attractive today versus kind of what we'll call, like, the politician of yesteryear? So we take a step back a little bit. So when I talk to a lot of people in my network are, you know, usually in the top echelon of society a little bit, right? So, they always say, okay, well, if you're going to tax, you know, Amazon and all these technology companies, why wouldn't you use it to, you know, feel even more, you know, technological development?

Like, why give it to, you know, the poor? Like, and this sounds horrible, but, you know, if they, you know, can't really help themselves, like, you know, it's a really, you know, dire, you know, pessimistic view. It's pretty dark, yeah. Yeah. But also, you know, I think the reason, you know, you should do it is because it's, you know, also ensures that you don't have a revolution. Right. Like if you're a very rich person, like what don't you want to happen? Like a revolution. Right. You don't want to get murdered by people. And that's why I think universal basic income should be interesting to you, you know, even if you're in the sort of very top echelon class. And I think it's easy to pitch it to someone who's, like, experiencing, you know, they find it hard to find a job, right? Like, they relate to it immediately. But it's really hard to pitch someone who, you know, works in the Valley or, you know, has, you know, a lot of money or, you know, who doesn't really experience, you know, what I think a lot of people in the middle of the country are experiencing. So let's talk about UBI for a second, right?

So universal basic income is this idea that every single person is entitled to the right to have a wage, right? That is either they earn or is given to them by a government, right? There's some kind of support that's provided. I think that it's becoming a hot topic because Andrew Yang is saying he's going to give away money, right? He's going to give $1,000 every month to American citizens as part of this UBI program. Highly controversial, UBI in general. Yeah. I think what you're saying is if people revolt because they're hungry, they can't provide for their families, et cetera. If you basically take away the fact that they can't do that or you provide that ability to them, it is much less likely that there is any sort of revolt or revolution.

Right. Right. Do you feel like there's other ways to provide that economic benefit without it being a subsidy from the government, though? And I'll give you an example. So I've had a lot of conversations with friends around this idea, like you get paid for your output, right? So whether it's your ideas, your effort, your time, whatever, you are spending something to receive financial payment back, right, in society. And one of the things that we've never put a ton of value on, but we probably should have, is our data, right? And so there's this whole argument that all of the data you create, whether it's how many steps you take, your heartbeat, what you click on on the internet, what sites you go to, what books you read, whatever it is. That data, if there was some way for you to retain control of it and permission people in and out of it and get paid for their use of it, could you actually create what feels like a UBI situation, right? Because you're not actually doing anything different than you're doing today, but you're getting paid in exchange for that data than just, hey, you're getting a check because you're an American citizen, right? And so, to me, that feels kind of like UBI, but it's also not necessarily coming from the government. It's not a subsidy, right?

There's some value attached to it as well. Yeah, no, I think that's really interesting. I also just think in general, there's a lot of things that are valuable to us as humans and human beings that are not valued in a sort of capitalistic world. And if we can shift that a little bit, you know, if you take care of, you know, your parents or if you take care of, you know, people inside society, things that society really benefit from, but you couldn't get paid for it. If we sort of make that a little bit more value valuable so that you could actually get paid for it, you know, that's very interesting. And this sounds like, you know, it's almost like gamification or like, like it's a lot of like the crypto economics, right? Or kind of incentivization of if you could somehow gamify doing good things that there's a net benefit to society or to other individuals, you're compensated in exchange for that. And yeah, it's pretty interesting.

I will say that the reason why I like UBI so much is because of the simplicity. Okay, explain that. it's it's very simple you know you give away money there are no rules everybody gets it you know you don't have to figure out if they make too much money you don't have to figure out like who they are you know there's no rules around it right with welfare there's you know a lot of there's lots of rules right like there's you know a case manager like it's really expensive and UBI is just very simple and I think that's sort of a really important feature that is really hard to find in sort of other ideas that people have really talked about. For example,

the selling data thing, you know, it takes a lot of infrastructure to do that. For sure. And so in theory, it's, you know, a great idea. But in terms of practical ideas, you know, I, you know, I think something that's simple is quite valuable. Do you, do you fear that, because I think the knock against UBI, right, is, oh, we're going to disincentivize people from wanting to work. We're We're going to change the way we're going to go from the capitalistic society to a more socialist type society. Right. Do you feel like that has validity? Do you think that maybe it's overstated? Like how do you view that as part of it?

Because I agree that the UBI model is super simple. You breathe, you get money every month. Right. Like very simple to understand. Are there those negative effects that people accuse it of having? So I think it's the opposite. it. I think, so if we think about the welfare system, right. Um, you, you have to make sure people don't earn, if you make too much money, you won't get the welfare. Right. And so you're actually incentivized to stay under a certain income bar, um, to make sure you keep getting

your welfare. Right. So it's actually sort of actually disincentivizes you to keep working. Um, and so in this, in this case, I guess really what ends up happening, because here is something that's really interesting so my girlfriend's from bulgaria and um i've been there uh with her and we recently watched this uh this documentary and people were talking about socialism in the documentary like i missed the years of socialism and it's not because they're looking at it from a macro view yeah they're looking at it on a very micro level of my life was better because there was more wealth right from me as an individual in this country's view socialism brought me more wealth and so that is a better system and it's very interesting how the views change macro and

micro yeah so to be super clear like ubi is like not socialism right socialism is when you centralize the means of production and you know it'll be great for a little while right but then at some point you run out of other people's money you know the famous phrase right um and so you know that doesn't work. Right. But UBI is actually very capitalistic. Um, you know, um, you create more value, you get more, right. Um, and so it's also very libertarian. Um, you know, you do whatever you want with your money. Um, so it's actually completely different than I think the, I'm not saying that UBI is social, socialism. What I'm saying is socialism is something that if you look at it from a macro view versus a micro view, right. People have very different

opinions. And I think that most people, especially in the Western world where, you know, we believe in a capitalistic society would look at socialism say like oh that doesn't work right i mean literally we see fear-mongering with socialism and all stuff um but then you go and you talk to people on the ground and they love it right because because the way that it had an impact on life if you then switch to ubi or any other one of these um different types of i think uh max i would argue against that i probably think like in a specific period of time at the micro level probably people really liked it but then if you change that timeline um to sort of the end period of that you know socialism uh period of socialism probably people you know might have

changed their mind about it oh okay interesting you're saying that yes there was a period of time where they enjoyed it where they're benefiting from it but when it comes to an end right because because it's unsustainable then they realize oh wait this was really bad this was bad in the short term you know that's nice you know i'm getting so much extra right but um it in the long-term it doesn't really work absolutely i think that's a fair way to look at it um let's talk about some more of uh yang's uh we'll call it his agenda just because and again it's less about him specifically it's more just about i think uh his technology first focus right so things like automation uh we were talking that he's gonna try to use holograms to do uh campaigning

so he could literally be in multiple places at one time why have other people not done this stuff yet is it just literally he's a creative thinker and he understands technology do you think there's like incentives within government structure and politics that like disincentivizes people from doing this stuff i think people just probably think it's weird really um some people do um probably right um i don't know but maybe but like i feel like you myself a bunch of people in the technology world we actually doctors right like we think it's really cool we think it's smart um i don't know we'll see what happens like because i guess in sci-fi movies there's always like the leader who like patches in on television right it's like overlooking a big group of people

and is like you know they're in an arena and they're basically like dictating to them which is the negative side of that um but but to me it's like when i saw the hologram thing i was like that's one of the smartest things i've seen presidential candidate talk about doing yeah Right. It's just talk to more people. Yeah, I got it. All right. So let's talk about Bitcoin in a global macro view in the sense of we're talking a lot about how governance works, humans governing other humans. Right. Part of that is they also govern money as it stands today. Bitcoin provides an alternative. Right. There's a algorithm and that algorithm and that computer code governs the monetary policy, governs the monetary schedule, all that stuff. What do we need to see happen for the mass consumer to start to open their eyes and kind of shift more towards a more automated money system or monetary system compared to that human system? I think actually growing distrust in centralized governments. You know, a lot of people talk about, you know, it's better training technology and infrastructure or, you know, it's just more of an education process or I think it's just growing distrust in the government or some other centralized institution.

So it's just a passage of time. Those institutions will continue to. When the use case becomes so much more clear to you because you've sort of experienced a really negative event. um and would you argue that's what we're seeing in like the venezuela's the irans of the world where uh it's become much clearer maybe it's not completely clear to 100 of the population but it's become much clearer that fiat currency with hyperinflation is bad and there's this other alternative um maybe like i'm i just feel like you know it um that's sort of more like a you know two hour long conversation there are a lot of nuances there um but you know i think um that

could be one example got it okay uh what's the one thing in crypto that people are not talking about that you think they should be so i i actually think you know uh bitcoin as a payment system is a as a red herring and um actually if i were coinbase actually um i would give 25 million accounts, right, they're all connected to their banks, I would actually, you know, compete with Venmo, make it really easy to pay each other in between those accounts and compete with a centralized system, which, you know, is a little bit, you know, not, you know, not what they set up to do. They talked a lot about decentralized finance, but I actually think, you know, you know, that'd be pretty interesting. And so your argument is if you have, you already have

the network right in terms of you have users those users today are only interacting with you as the centralized entity right so there's no network there right they're just coming to it's like a store they come buy their bitcoin and they leave right there's no network um but what is the network it could be a massive payment system and compete with you know paypal and demo um and um you know massive businesses um or just become a bank right like does coinbase not allow you to withdraw money from your account into another coinbase account like i guess that would be like the hack right like it's super difficult to do in terms of it's not a good user experience it has to be more like if i want to go send you know if i want to send money to you right now like what do

i do i like go memo you right yeah but they should make it as easy to do that on coinbase um oh yeah oh the user experience would have to be drastically better right but i don't even know if they have the actual functionality like could you withdraw between accounts i don't even know if that exists But the user interface, I think, is it would be essential to improve it. And also, it's also to me, one thing that I think crypto loses a little bit once you get into like the hardcore blockchain world is users do what you tell them to do. Right. And what I mean by that is both by the way you present a product. Right. So like Tagomi, you're coming for best price. Yeah. What do I think when I think of Tagomi? Best price. Right. I'm coming for best price.

right that is the brand promise and the second thing is the way that the interface is set up the user experience right all of these different things guide me to do things now i still have choice right in the sense of i can hit cancel or i can go back or i can go to set you know all this stuff but you're definitely helping me do what you think i should be doing right i think that that gets lost a lot right in crypto and blockchain because it just feels like everyone's focus on the technology right and it's the the design the user experience that brand promise like all of these things that are like more kind of soft skills right um but that's what makes a lot of these products that we use every day like a venmo so valuable right right and it just it

just feels like they're not there in crypto yet right maybe it just takes time i don't know yeah no totally it feels like you know if you want to use email but you have to understand email protocol like you know no one really understands that right but they use email all day right like we're not there yet with um bitcoin but also you know other cryptocurrencies um and we have to get there do you think that's like a five less year type journey or do you think that's actually longer i think five last year i would vote for that you you you uh you have a lot more confidence i think in the automation and uh and the user experience is all the stuff improving that i think most people do but it's probably closer than we think it's an exponential curve right

So it's going to accelerate, accelerate. Right. So you feel a little bit like, you know, but, you know, in two years, in three years, it's going to feel a lot more extreme. Got it. All right. Before I wrap up, rapid fire questions. Most important company in crypto other than Tagomi? Tagomi, obviously. You cannot let me say that. What is the second most important company? um i don't think it's a company i think it's you know uh people working on protocols or um or you can say bitcoin yeah like i was actually just about to say bitcoin i was gonna say like you know if you think about the most um important uh networks in crypto they're not companies uh they're you know it's like bitcoin it's like a protocol i completely agree yeah exactly um so i

wouldn't say a company i would say if you could improve or change one regulation what would it be is it bitcoin regulation no it could be anything okay anything that uh touches kind of crypto okay all right you do ubi yeah all right that's fair um what is your most controversial thought in crypto like what do you believe that you think almost everybody else would disagree with you on i think you know payments is a red herring um and that you know i think coinbase should become go compete with Venmo. Do you think they could win? Well, if they really have 25 million accounts, like I don't have a, you know, you know, we have to look, they don't have a lot of data, but if they really have 25 million, like what the highest cap there is really getting people

to connect with their bank accounts. Right. That's really expensive. For sure. It's really hard to get people to connect to their bank accounts. And they've done that with 25 million accounts. Um, that's really valuable. Right. Um, do you think that the, I think the average person is not gonna be like oh there's um like this new coin let me buy that you know they it's just too long of an education process but what is something they do every day you know payments do you think that the incumbent technology companies like the twitters the facebooks maybe even the googles who have these built-in user bases they are networks right they're already connected not through financial services but information profiles whatever if they entered the fray do you think

they're actually the ones who have the best chance of winning or like facebook you know google they don't have my bank account right so it's just you think that's such a hard thing to get somebody to do yeah i i think so i mean take some time it would just be such a tiny pivot for for coinbase and also you know facebook has a trust issue like no one's going to connect you know their bank account to facebook um see all right so i disagree with you on this i agree with you on a lot of things but i disagree with you on this my guess is that in north america yeah people don't trust facebook right to some degree outside of north america i actually think that facebook may be one of the most trusted companies so i actually you know that sounds like you know that sounds

about right but at the same time they've had that payments thing for years right like paying messenger paying messenger right like no and you can connect your bank account to that right so no one's done that right like there has to be some like reason for you to to get over that hump right um do we think that oh man i'm gonna go find this out activation cost like yeah or do we think that facebook messenger has more than 25 million people's bank accounts attached to it or less I think less. Oh, I think more. I don't know what the answer is.

I have no idea. I'm going to go find out. All right, we'll find out. But that's actually a really good data point, right? Because you're right. They have had it for a long time. It's on a global basis. How many people have done it?

If it's a really small number, they probably will struggle to do it. If it's actually a bigger number, and it's less about it being a big number because they have hundreds of millions of people doing it. It's probably just there's certain countries where they have deep penetration, and that's how everyone, like the network in that country uses it. But I think that would be a really interesting data point to know. um what's the most important book you've ever read uh i couldn't pick one um maybe a bitcoin white paper that's so cliche though um no one's ever said that really yeah i'll say bitcoin white paper all right uh or the prince is that the book you said earlier the little prince the little prince that's also a very very

famous book i've never read it really never heard of it nope uh aliens real not real believe don't believe um probably not you don't believe in aliens all right explain there's only two other people i think that have ever come on and not believed we would have found them by now really no space is so big in terms of uh we're just one universe like there's so many different universes the like just mathematically the probability that we can even be aware of all of the places that aliens could be is so low that like i i just i i'm at like 99 likely they are out there and the odds that we are the only intelligent life form on the only planet where that could happen i don't know maybe yes all your every single one really okay two i think only two

people have not believed uh and then josh brown shout out josh brown because josh brown literally uh hit us with uh ghosts are more likely to be real than aliens um we end each one you can ask me one question um what's your most controversial thought i think that bitcoin has a massively higher probability of becoming a global reserve currency than people give it credit for today yeah uh i would put the odds at is that controversial yes because i think that most people look at it like even like hardcore crypto people yeah if you were like what are the odds right now that bitcoin could become it's like less than 20 percent almost

always like i've asked a bunch of people right and so it's like the people who want to be nice and they don't want to sound controversial we'll say like single digits they probably believe more like 10 15 and then the people who are like comfortable being a little bit more controversial will go as high as like 20 yeah i think we're at least over 50 percent got it in terms of probability and what we've seen is when bitcoin goes up head to head when a fiat currency is failing it's like not even right it's just you just see the movement of funds now there could be other reasons why that happens all the stuff uh but the one thing i always go back to is when fiat currencies fail almost always is because humans lost discipline right so they hyperinflated

their own currency they just made bad decisions an algorithm doesn't do that right now the design could be incorrect right but the design is going to be executed based on what the code tells us to do right and so this idea that like when we started we're talking about automation a lot right one of the things that i talked to institutional investors about is look humans actually trust the algorithms more than they trust humans already right now you you know you go to a city and you get lost you pull up google maps you don't ask them in the street corner right you don't really ask your friends for music anymore you listen to spotify and apple music they would do these recommendations right if you have a question you ask google and siri you don't ask your friend

it's like we trust these algorithms so many other parts of our life eventually we're going to trust an algorithm with money right it but when it comes to finances to your point like to get somebody to connect a bank account really tough right like the trust level has to be so much higher for a financial service with an algorithm versus something that's not financial i think for something for bitcoin to become um like money we actually have to evolve to a system that has the protocol has to have some levers in it that can smooth out business cycles right um there is some benefit to having a centralized system, right? Like you can smooth out business cycles and that's really valuable. Um, it prevents recessions and make sure, you know, people

aren't suffering too much. Um, and you can't do that with Bitcoin, right? Which is why I really think Bitcoin is just a store of value. I think we'll need a different protocol if we're going to do money. Really? You think that, okay, hold on. We can't end yet. You think that Bitcoin is a store of value, but you think that there has to be another digital currency that could be more sophisticated than bitcoin i think bitcoin is pretty simple you know people try to make it way too complicated it's you know it's much much better version of gold it's much better store of value and that's kind of it you know i think you know we'll have to um see a more sophisticated protocol with some different levers in it to um any idea good money any idea what those would be

um i haven't seen anything yet what the levers are yeah like what the levers would be you know to you know you know inflate and deflate like same thing that like the central bank has you know something like that and how do you envision so let's say that that would be true right how do you envision like the government who gets to pull the levers basically that's what's so hard right like that's why nobody trusts anybody right exactly and which is also the brilliance of bitcoin right it's a brilliant bitcoin but i think that's also why it's so hard for it to become like money for a daily use case um because you know there are some benefits to having a centralized system that you don't have in bitcoin quite yet right um and those benefits

do not matter for restorative value that's why bitcoin's so good for that um but it does matter for some of these other applications yeah i i just saw um i record another episode recently and i talked about uh in the last two recessions they've cut interest rates by at least 500 basis points and rates today are you know two and a half percent or so and so if we had another recession basically this op-ed was arguing that tool is no longer in the tool like we can't cut 500 basis points if you only have two and a half unless you're willing to go to negative right yeah and so uh there's this element of like we are in a system where there are those levers right and if the levers are there people are going to pull them for good or bad um but what we're seeing is like

we may not have some levers we've had previously and we may have new levers that we can pull Right. And they were even talking about, like, could there be an intentional not hyperinflation, but like a more inflationary model that would be used to try to recover from some sort of future recession? And I think I just fundamentally disagree that humans are smart enough to do that stuff. Right. Like like coming out of 2017 or 2007, 2008, like I think a lot of people like, oh, look, we had this huge bull market. it, you know, it was great. We like reversed the recession. But I think again, if you go back to your, like, we'll just widen out the timeline. We probably just made the problem worse and kicked the can down the road. Right. So like, yeah, for those 10 years, it was great. Right. But do we actually end up with a bigger problem when it, when it all kind of finally blows up? I don't

know. Right. And I don't, I don't think we know that yet, but, but, but it's really interesting to think about, especially, I don't think I've heard anyone argue Bitcoin could be a store of value and then we can have another digital currency that could be centralized or decentralized and that's money and you basically have a to currency system to some degree right in terms of gold and a daily currency probably that's sort of what's intuitive to me it's hard for me to think about Bitcoin as a payment system but maybe all right I just really disagree we only disagree on two things that's fine I'm gonna bring you back when Bitcoin is the

global, uh, reserve currency and we'll talk about it. Awesome. Thank you so much for doing this. I am a big fan of what you guys are doing at Togomi. I think that, um, you know, you guys have built a fantastic team and, uh, and people are really excited about it. So we'll, we'll have to do this again in the future. Awesome. Sounds good. Hey everyone, Pop here. If you liked 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 time on Off The Chain.