The Pomp Podcast - Jeremy Gardner, Managing Partner at Ausum Ventures: How We Built the First Crypto Prediction Market

Episode Date: April 12, 2019

Jeremy Gardner is a Co-Founder of Auger, and a Managing Partner at Ausum Ventures. In this episode, Jeremy and Anthony Pompliano discuss the early days of Bitcoin college clubs, how the first prediction market got built, what it was like to be part of the team that built the first STO, and how crypto is going to evolve moving forward. ----- Ethereal Summit returns to New York City this May 10th to 11th to kick off Blockchain Week and offer you a chance to go deep into the heart of crypto, blockchain, and Ethereum. Get up close with outspoken crypto leaders like Mike Novogratz, Joe Lubin, Tushar Jain, Danny Ryan, and yours truly Anthony Pompiliano. Ethereal Summit is where you can get in the mix with the builders of blockchain.  Check out Etherealsummit.com with discount code POMP to get 20% off tickets to come hang with the brightest minds in blockchain at Ethereal Summit New York, May 10th to 11th at Pioneer Works in Brooklyn. ----- 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. Jeremy Gardner is a co-founder of Augur and a managing partner at Awesome Ventures. In this conversation, we discuss the early days of Bitcoin college clubs, how the first prediction market got built, what it was like to be part of the team that built the first STO, and how crypto is going to evolve moving forward. I really enjoyed this conversation. Jeremy's got a ton of crazy stories, and I hope you enjoy it as well. This May 10th and 11th, Ethereal Summit is coming to New York City to kick off Blockchain Week. It offers you a chance to go deep into the

heart of crypto, blockchain, and Ethereum. Come hang out with Mike Novogratz, Joe Lubin, Tushar Jain, Danny Ryan, and yours truly. You get into the mix with the builders of blockchain and Ethereum. It's Les Schiller, all killer. Go to etherealsummit.com and use my discount code POMP to get 20% off tickets. I'll see you there on May 10th and 11th at Pioneer Works in Brooklyn. 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. Jeremy's in the house. What's up, man? It's good to be here. I'm in New York and trying to survive the weather. All right. Jeremy's a legend. CryptoCastle in San Francisco. We'll get into your background in a second, but you recently moved to Miami and you won't shut up about how it's cold and the weather sucks in new york so we're gonna do this and then you can get back down to miami i'm gonna hop on a flight right after this interview uh all right what the hell were you doing before crypto

i'm actually i'm i'm in the midst of writing a memoir right now are you really yeah yeah uh are you writing it or you have like a ghost writer i've got a guy i'm writing it with i've got like 275 pages of unpublished writing lots of blog posts when i got kicked out of college when i was 18 i had like a an anonymous blog that went pretty viral it went and so i like tucker mac style yeah but i mean i'm not not that sort of debauchery more like adolescent ruckus uh just i was a total miscreant growing up and so there are a lot of great stories uh Pre-crypto. I don't even know how much I'm going to get into the crypto component of my life in the book. All right. So what were you doing right before you first discovered Bitcoin?

Can I say this on air? Yeah, you can say whatever you want. It's a free country, man. New York, Miami, you can say whatever you want. You know, I'll leave it at this. You guys can read the book. I was in some fairly illegal activity based in New York and Massachusetts where I was from. I just dropped out of my first college and I was neck deep in illicit activity in a very unfortunate series of events where some bodies washed up in a river led me to go back to college. I ended up at the University of Michigan where I just happened to move in with a Bitcoin enthusiast. Really?

Yeah, but one thing I should mention, and I think it's very interesting for you, is that when I was in college, right before Bitcoin, I developed my own major. It was very uncommon at the first school I went to, and even at Michigan, where the Honors College, which I was a part of, allowed it. It was very uncommon for people to develop their own major. But I developed this multidisciplinary study in political strategy. And this was political studies, microeconomics, mostly game theory, social psychology and military strategy. In fact, I was the very first non-cadet to study

military strategy at the U.S. Military Academy at West Point. And so it's amazing to think how I developed the perfect major for working in crypto. I thought I was going into politics, but it turned out I had developed just the perfect major for what we do because it's all about strategy and it's all about tactical thinking it's always thinking about several steps ahead and i know you have a lot of experience with that and i'm sure your time in the army has probably informed the way you think about crypto and crypto economics and how this whole big macro game is being played for sure when you move in with the bitcoin enthusiast what uh like what happens he's like hey man you ever heard of this internet magic money or well so his name's canard

Hockenhall. And he's from what's the name? Kennard Hockenhall. And he's an African-American young man from the inner city of Detroit, had his house foreclosed upon his family during the Great Recession, became effectively an anarchist as a result, totally lost his faith in banks and government. And he actually started one of the very first Bitcoin exchanges in the United States. It was called Bitbox. He was in, I want to say, I think he was in the first boost class, Adam Draper's Accelerator, and it ended up getting defrauded via wire, and he ended up shutting down the company. And he was sleeping on the couch in my apartment, rebuilding his company back in Michigan where he had been intending and was also converting to Judaism because he had been part of this old Jewish fraternity that we lived with and decided he liked the religion. Great guy, fascinating, but it's all he wanted to talk about.

The other guys in the apartment weren't really interested in being my friend and I didn't know anyone there. And so I started to learn about Bitcoin, had learned about it like two years prior in 2011 because of the Silk Road. I thought that was fascinating, you know, this black market, Amazon.com. But I actually found Bitcoin to be the shitty part of that experience. So I never actually bought any. But revisiting the technology with Canard, I really became endeared. I had been at Occupy Wall Street in 2010 and 2011. and I had gone to school two hours up north of here.

And every weekend I had gone to Zuccotti Park and protested the banks and seen how- Yeah, Zuccotti Park was lit back in the day. It was lit and it was wild. And it showed me, as someone that was studying political strategy and very interested in the whole concept of revolutions and how you drastically disrupt a system,

I thought maybe Occupy could accomplish something and they accomplished nothing because all we did was protest. One, we didn't have demands. But two, how do you just, what do you get a bunch of regulations that are burdensome for the banks? No. It would take me two years to realize, and only upon discovering Bitcoin, was that you have to create a new financial system. And once I realized what Bitcoin could be, in really this kind of frictionless way to transact value, we transitioned to Bitcoin.

It's the concept of the blockchain, but nobody was talking about blockchains back then. We were just talking about Bitcoin and cryptocurrency. Blockchain was not really a term even back then. You know, there was a space between block and chain. And we should discuss how that was one of the greatest marketing ploys ever developed by this industry was shifting from Bitcoin to blockchain. Why? Well, I'll just say I got so excited because I realized it could be more than just Internet money. You know, all value itself could be transacted frictionlessly and trustlessly between anybody anywhere in the world with an Internet connection.

But the marketing ploy. So if you rewind, when did you first get involved in the industry? So the first time I ever heard about it was in 2014 working at Facebook. And I turned to an engineer who literally was like, this is dumb and never thought about it, didn't Google it, literally was the laziest person on the planet. it uh and also probably the dumbest because i should have obviously well it looks stupid at first yeah and i'm not technical and so i turned to the person that i you know one of the people i respected the most and asked them what do you think well yeah i said it was dumb okay and you're lucky enough to have engineers in your life until i was at michigan like up until i until i was like

22 years old i didn't know any computer scientists i didn't know any developers i went to liberal art school. I'm from a small farm town in Massachusetts. Like there's nobody in my life besides for buying drugs off the internet that would be interested in Bitcoin. I didn't know libertarians. I'm from the most liberal city in America. Like there was no reason for me to take Bitcoin seriously. But then I had this kid that had a very poignant life experience and who I was forced to hang out with that got me into it. But it probably wouldn't have happened otherwise because Bitcoin is it is it's very hard to understand concept i mean i always thought gold was stupid so i didn't even have that touchstone uh but going to the marketing ploy i mean in 2014 and this is why i asked in

2014 mount gox imploded charlie shrem who you just had this on the show went to jail and And most publications pretty much either said or intimated that Bitcoin was dead. And it effectively was. I mean, nobody could get banked. Banks that had been exploring creating cryptocurrency exchanges, exploring the technology, just you weren't allowed to utter the word Bitcoin in a lot of big banks. And the world kind of forgot about the tech. And so what we did was there was a handful of people who will go unnamed that engaged some of the top crisis PR firms in the world. So what do we do?

We got this technology. We're heavily invested in it. We think it's the future, but it's become toxic. And you can't blame the media and most people from thinking Bitcoin was stupid and that it was dead. I mean, its only association was with black markets, frauds, and hacks. I mean, there was nothing really redeeming about Bitcoin at that point in time except its potential. And so what they said was, well, what is the innovation in Bitcoin? We started talking about this idea of this distributed ledger, the blockchain, if you will.

And we started talking about blockchain technology. Forget Bitcoin. It's just this, it is this new paradigm for transacting value that the internet and the world has never had before. And by doing that, we created a word that could be uttered at banks, that could be uttered at Fortune 500 companies by heads of state or members of parliament. We created a new phrasing that made this technology acceptable even when Bitcoin wasn't. And so, you know, the Bitcoiners were like, how dare they say blockchain's not Bitcoin?

And I was like, fuck, yes, that's that's amazing that these guys are talking about it. When banks started talking about blockchain technology in 2014 and moreover in 2015, they single handedly saved this industry by legitimizing this underlying innovation that was a part of Bitcoin. The blockchain, they legitimize Bitcoin unknowingly. I truly think this industry could have been squashed back then if the banks had just not dabbled in blockchain technology, not talked about it, not done these proof of concept trials, not said blockchain is not Bitcoin. But because they did, Bitcoin was able to really revitalize itself. Companies and industry were able to get funding. And a lot of those companies that were doing blockchain, not Bitcoin initiatives, are now doing Bitcoin initiatives again. And so, you know, there are a lot of heroes in the story of Bitcoin.

But the banks play a really tremendous role that few individuals are willing to recognize. because they legitimize blockchain tech, which is a big part of what Bitcoin is. Do you think any of the bank executives hold Bitcoin? Oh, for sure. I think it's like a 0% chance that they don't. No, no, no, no. I mean, I think it's beyond the realm of doubt

that many bank executives do. Now, some don't. Jamie Dimon probably doesn't, but his daughter does. That's just as good in my mind. That speaks loads to the technology. But I mean, look, I've got into crypto because I wasn't an anarchist. I wasn't a libertarian, but I thought Bitcoin and blockchain technology could make the world better. And I believed it could help disintermediate the banks, who I had a much bigger problem with than the government.

So you'll love this because it fits right into your story. One of my theories is that the reason why 25 to 35-year-olds are so pro-crypto is that that age group, that 10-year gap, is just old enough when the global financial crisis hits to be cognizant of what's going on. They see the housing market just exploded. They see people losing money, losing their wealth, all this stuff, but they don't have enough wealth to actually be affected themselves. So they see their parents being affected, their friends' parents, other people that they know, and it's the ability to see it happen, not be hurt by it, and also then realize all of those large financial institutions that your and my parents probably grew up

thinking were bulletproof those things aren't anything near what you guys thought they were right and so now 25 to 35 year olds are hitting the stride of hey we've accessed this new technology we actually don't believe that those banks are fully solvent right um and you actually don't see that many like 15 to 20 year olds in my experience the 15 to 20 year olds are not nearly as excited about this as the 25 to 35 year olds they want fortnite z bucks and it's crazy that's because you you got it right but you miss you miss something that's really important for me for millennials so millennials cut off at 25 pretty much you know they're old enough to remember dial up internet a world without mobile phones yep uh but not really a world before that for

the most part and i mean i mean the the later the older ones can remember a world without the web barely uh but what we have all lived through this unifying experience starts before the great recession um it starts with 9-11 and 9-11 i was in eighth grade yes 9-11 is the essential moment for millennials because what it represented was a shift in how we think about privacy in the world in which Orwell's 1985 actually started to become a reality. And you know what? In 2019, it is 1985. It's just later than he predicted.

We live in this growingly Orwellian world. And so since 2001, we've seen our rights taken away. We've seen our privacy taken away. We've seen the growth of oligopolistic internet companies that kind of harvest all of our data. And we don't like it Humans have an inherent desire towards some form of privacy Not total privacy, some form of privacy

And then we had the Great Recession And all of a sudden we saw how the banks just fuck us They don't care They are money-making, capitalistic enterprises That really just don't give a shit about the individual And because of that, you have millennials who now have grown up in a world where privacy is an afterthought or the government doesn't care about the individual. Not that they ever have, but you can actually see that now, especially with like agencies like ICE, which has become more of an issue these days. And then you see and then you see the financial system implode and you and you see it get rebuilt in a way that only benefits the companies that cause the implosion.

And so, yeah, why not believe in something that has only a slight chance of success? Today, it's much greater. I'd say the success of cryptocurrency in 50% of blockchain technology is great over 50%. I think that Bitcoin's potential as the global reserve currency is over 50%. I'm close to that. I'm not there yet. So before we get into a whole bunch of things that you believe, some that I think are very well documented, some that are controversial, and then some that I think the majority agrees

with you on, let's go through, you leave Michigan. How do we get from Michigan to Crypto Castle in San Francisco? What happens? It's a very short timeframe, but you have to just go back to Michigan. so canard uh who's shout out canard we need to get canard on the podcast you should get canard on that so i can make that happen but uh what happened was that canard had started two years prior i believe the michigan bitcoin club okay and he's like we're restarting it he's like i've got this guy from my former fraternity danny block he's this really hilarious pothead uh from ohio

that was going to lead the Michigan Bitcoin Club. And he's like, you should join and be a part of it. And I was like, I've got nothing better to do. So I was like, okay, I'll go. And at the very first Michigan Bitcoin Club meetup, a reporter shows up from USA Today, and she wants to talk to us about Bitcoin and our club. And I don't really have much to offer because I'm fairly new.

But we speak to her, and partway through the interview, She mentions that there are Bitcoin clubs at MIT and Stanford. And at that moment, I see an organizing opportunity. I had worked for the governor of Massachusetts that past summer and that fall when I dropped out of school doing some of that illicit stuff. I was also helping running the campaign of the woman who's now attorney general of Massachusetts. And the irony of that is not lost on me. No, I worked at that.

It's funny. You know, people really just hate how I talk about privilege and being white, like on Twitter and the libertarians and anarchists just bash me and I get unfollows every time I talk about it. I worked at the Massachusetts Commission Against Discrimination, and I just saw how radically different people that are not white, straight males are treated. and i realized that i was gone going to spend my life at first illicitly but then in a much more socially beneficial way through what i'm doing now um by taking advantage of the privilege i have and recognizing it and and not shying away from the privilege that i have so it was a really instructive uh experience and it definitely taught me how to avoid getting in trouble with the police Once again, story of another day.

Regardless, I got really dismayed by the bureaucracy in government and the total inefficiencies. And I but I did learn how to organize politically. And so I saw this organizing experience or opportunity at Michigan with these MIT and Sanford clubs. And so I asked for the journalists to put me in touch with them. I just thought something might happen. And so I'm going to name drop right now because it's so funny who is on those calls. So the head of the MIT Bitcoin clubs were Dan Elitzer, who's now does ventures at the Ideal Lab.

It was Ryan Selkis, who now runs Smisari Crypto here in New York. From Stanford, it was Andy Bromberg, who's now the president of CoinList, and Ryan Breslow, who started Bolt. I mean, it was just a rock star cast of my first real call in crypto. And I get on the call that same night because the Stanford and MIT guys had already had something planned. And they're all talking about their respective successes and failures as clubs, offering to share resources with one another. And the MIT guys are talking about their potential $100 Bitcoin drop and the first college conference. and there seemed to be a lot of opportunity uh ryan and andy who have gone on to become two of

my best friends we dropped out of school at the same time together were very smug and don't want to tell us about anything they were doing but you know i i felt like we could do something with these groups at the end of the call i suggested hey why don't we create an organization out of this and everyone's like sure go ahead we don't have time for that but we'll be a part of it kind of but i used their names and i created what was called the college cryptocurrency network i got on every bitcoin group uh every channel every social media and i just spoke to people i'm like hey if you're a college student you're interested in bitcoin come start a chapter of this organization and i don't know what happened i think i think it was probably gox imploding that

brought attention to Bitcoin to so many young people. But within three months, we had incorporated and had 100 chapters in 20 plus countries on every habitable continent. I mean, it was just an extraordinary success. I was asked to speak at conferences. And then through what would become the Blockchain Education Network, as it is known now, I met Joey Krug, who is this brilliant an 18-year-old computer scientist. He wanted to start a point-of-sale system for crypto, and we decided to build it together. I mean, he was just super smart.

I was like, you and I, Wozniak Jobs, let's do something. Let's do this. Who was Steve Jobs in that scenario? You know, honestly, Joey's so enigmatic, he can do anything. He was obviously the programmer, but he's brilliant. You know, he now runs a hundred million dollar hedge fund, you know, the youngest person in the world to ever do that. I mean, crazy. I mean, he is he I got so lucky meeting him. And so he was actually from a small town in Illinois.

And so I plan to spend the summer working on the nonprofit that summer. So I was like, hey, just like come to Michigan and spend a few weeks here and work on the company. I got him to some crypto conferences in Chicago. go. And we just spent a bunch of time together and we developed a real kind of brotherhood. And then we decided we started to get traction around the end of the summer. The nonprofit was doing well as well. We had raised, you know, a couple hundred thousand dollars from a few crypto companies. And so Joey and I decided to take the leap of faith. Well, not exactly. Joey decided to take a leave of absence from Pomona where he was in school, I, given my incredibly

turbulent academic career, getting kicked out, dropping out, you know, going from a horrible student to pretty much straight A's in college, I really didn't want to drop out of school. I had one year left. I was going into my senior year and I was supposed to take one class each semester and then work on my senior thesis so I could focus on my non-profit and my startup and then and so I was like Joey I don't know I'm down to work on this from school but like I don't know if I really want to drop out and focus on this full-time like my parents will hate me and then what happened was I got a call from uh the dean of the honors college and she's like can you come in and I'm like I don't think I did anything wrong for once so I go into the office and it

turns out that they had run an audit of my transcript and I had too many out-of-state credits. So I had more than enough credits to graduate if I had gotten them in the state of Michigan. But because I hadn't gotten my credits in the state of Michigan and all my AP credits, they didn't count. I had maxed out my credit limit from out-of-state and all of a sudden, in order for me to graduate on time, I would have had to take like eight classes each semester or been in college for like a whole extra semester after the following year in addition to taking, being neck deep in courses. And the dean of the Honors College for the first time in her career

told me to drop out of school. She's like, I've never done this before, but I see what you're doing with your nonprofit. I see what you're doing with your startup. And if you ever need to come back here, you can. And that's all I needed. You know, it was a very quick conversation. It felt like destiny.

I knew that Bitcoin, blockchain technology, maybe had, this is the summer of 2014, maybe had a 10% chance of succeeding. But I knew, I knew just down in my gut that if it did succeed and I stayed in school and left behind the nonprofit, left behind the startup, I would regret it for the rest of my life. And that's what I told my parents. And I was like, look, if in two years this hasn't worked out, I'll find my way, find a way to pay my way back into school and I'll go back to school and I'll finish. But I got to go do this Bitcoin thing. And so I ended up dropping out like two weeks before the semester started. Summer of 2014. OK.

And so Joey and I dropped out of school and then we're like, wait, we don't have any money. We really had nothing. like i had some money in the stock market but like i was like oh i don't really want i don't want to sell that uh and then we got contacted by a startup that was going to be based in la that had raised some angel money they're like and i've been talking to them because they wanted to do marketing through my non-profit they're like why don't you come join us as contractors and joey and i were like well we need money and it provides housing and so we moved out to la and uh it was is just the most disastrous uh scenario you could imagine joey just came out to me when i got to the

house and he was like i don't know what we got ourselves into i mean it was it was bad the the the ceo who will go unnamed who had just lost his mind was office med just had a child out of wedlock nobody really knew what they were doing the company had no direction and it was uh it was the most stressful two months three months of my life i mean the whole auger experience was but that that initial period where we dropped out of school moved to california i was like i could be in college i had a great girlfriend back at michigan like it was the first real girlfriend i'd ever had i was like everything was going well for me at michigan and now i've just dropped out to do this bitcoin shit that's probably gonna fail what am i doing here uh but so how do you

get from la to san francisco so joey and i are you know we're we're pitching this point of sale startup that takes credit cards and bitcoin payments there was the the switch to the uh chip and dip system from swipe uh that beginning in 2015 so joey and i are like we'll create this new startup that implements a chip reader and also takes crypto payments we created actually the first Bluetooth low energy BIP for Bitcoin payments and actually even did sound-based transactions for Bitcoin, which is very cool. But then, so this company is trying to figure out what it's doing. It's a total disaster.

But then we stumble upon a white paper for a decentralized prediction market platform. It was Paul Stork's Truthcoin. And I was like, no, this is a great idea. I made a bunch of money on in-trade back in 2012 and 2008 on the presidential elections. I just was really good at betting on the electoral and college outcomes. I made thousands of dollars in high school and college. And then saw in-trade get shut down, and there were no real prediction market platforms. So I saw the need potentially for decentralization.

Now, obviously, at that time, it was the first fad of decentralized all the things. In fact, BitPay even had a sticker that said that. But I thought most decentralized things people were talking about were pretty stupid. Decentralized Reddit, Twitter, Facebook, whatever. It didn't make a lot of sense back then. There was really only Bitcoin and a bunch of crappy altcoins. And so I didn't really get that. But decentralized prediction markets made a lot of sense.

i'm like joey i i think we have to do this and he agreed and and we start talking to the team we're not sure about the guy that's the ceo like we're like i don't think we can keep this guy around but but we we end up deciding you know we can't do this in in in la there's no resources here it's the first place where or the second time i met brock pierce who would become my colleague at blockchain capital uh and you know he's like look i've worked in the world of gambling for a long time and you guys are probably going to go to jail for this stay with the payment stay with the payment system but i i just felt this calling for creating this decentralized global source of truth and forecasting and so i'm like guys like let's go move somewhere where we

can do this let's move to san francisco let's go raise some money and uh maybe get rid of that ceo And we moved out to San Francisco. Our house fell through two days before we were on the drive up. As the guys were driving up to San Francisco, our housing fell through. And I was speaking in Brussels at a conference where I was hanging out with Vitalik for one of the first times and buddying with him because we were the only young guys speaking at the conference. And when I came back, just our housing situation was a nightmare. We found this dingy two-bedroom or three-bedroom apartment out in Daly City in San Francisco. And I dubbed it the Bitcoin basement because it was literally the basement of the house, which would end up flooding like a month in.

I mean, it was roughing it in the most quintessential sense of the term in terms of Silicon Valley startups. I mean, everything that went wrong could, you know, employees quit, you know, we had to get rid of the CEO. And then and then, you know, we started grinding and eventually we raised a tiny bit of money, enough to get a house that would become known as Crypto Castle. You know, I just like alliteration. It was a house overlooking the city and the Petrero Hill neighborhood. We couldn't afford an office space. We couldn't afford to live separately. We were taking $1,000 salaries. But the Crypto Castle seemed like a nice name, especially because we wanted it to be a hub for entrepreneurs and crypto people to hang out because there was no place like that back in 2014 or 2015 at this point. We moved in in January. And so the Crypto Castle was born as a result. And the hardship didn't stop. So when you move into Crypto Castle, what's the general premise? Just you guys are going to live there.

You're going to build the company's office. It's just a hoffice for Augur. That was it. A hoffice? Yeah. I never heard that before. Like a home office? Yeah.

That was it. We couldn't afford anything else and it worked. But there was also no place for the crypto community to kind of get together. And so I added it to Google Maps. I added a Facebook page. I talked about it. Vitalik would stay there when he was in San Francisco. And I think that was the key moment, one of the times that Vitalik was staying. A reporter from some news website that never

really took off came to interview Vitalik about Ethereum and then was so fascinated by our house that she ended up bringing an entire article about the crypto castle. And from then on, It's just been a touchstone for any journalist wanting to coverage crypto and not wanting to have to do the intellectual work required to explain crypto. Just write about the crypto castle. It's much easier to talk about a house full of Bitcoin enthusiasts than it is to talk about crypto itself. And so that led to just an onslaught of press for the past half decade, pretty much. Yeah. And so do like a lineup of folks who paraded through there over the first two years. Pretty much everybody, right? Yeah, I mean, literally anyone that was in town in San Francisco, once it became well known, would ask to stop by. And the community was so small back then. Yeah, anybody came through.

I mean, my favorite moment to this day was like three years ago and Vitalik was saying at the house and Bram Cohen came over, creator of BitTorrent, now Chia Network, and they had this very interesting intellectual conversation and standoff that was just one of the most amusing engagements because they're all, you know, they're both wonderful guys, but both kind of on the spectrum. I think they'd both say that and so the interaction was just so uh just so beautifully nerdy you know they're kind of challenging each other on ideas but there's no there's never any this point of full-fledged debate and I just that they're just totally enamored with the conversation it was it was just fascinating you know we had there was there was another night where we had I don't know Vitalik was there, but two of our other advisors of Augur, Robin Hanson, who's one of the top academics when it comes to prediction markets, Elizabeth Stark, who would go on to found the Lightning Labs. They were there, and we just had this long, late night of conversation.

Everything at the castle, either in San Francisco or Miami, I try to keep spontaneous. I'm known as a partier but i don't like to plan parties i just like to have things happen you know have alcohol flowing just you know have there be a a free flowing dynamic where people can converse without kind of apprehension you know because all right so as you're doing this in san francisco uh how do you end up working at blockchain capital so we pulled off the first successful ico in almost a year uh with with auger and i was at my wits end at that point i i i'd been through so much stress over the past year of my life doing auger that you know i i i wasn't gonna last there were three probably three years two three years left of coding i wasn't a coder

wanted to keep costs low, had a falling out with one of my co-founders and left the project. And, you know, at that point I was, because this is kind of how these ICO dynamics worked, especially back then, they were so rudimentary. I was fully vested, if you will. So the economic incentive wasn't really there. And, you know, I didn't think the team needed me as much back then. In hindsight, that probably wasn't as true. But, you know, Brock, who I had gotten to know on the conference circuit was like come join my firm uh in in san francisco where i was already living as an entrepreneur in residence i had uh kind of humored the idea with the folks over at pantera as well but you know i went and sat down with brad and bart stevens the two brothers who run

blockchain capital now and they kind of quizzed me told me auger was going to get me sent to jail i mean everyone said that back then uh you know they said ethereum was probably gonna fail they were still pretty bitcoin focused but obviously it started at a firm called blockchain capital and you know it seemed like a i had three no two years ago two years prior after i decided i didn't want to work in politics i had been thinking of what are my dream jobs like what do i want to do after college because i don't want to go into politics anymore and i had decided i wanted to become a venture capitalist then i was reading online it's like the only way to become a venture capitalist is to be a investment banker or an experienced entrepreneur turns out not to be true

it's the most nepotistic industry but all of a sudden fast forward two years after deciding there's no way i was ever going to become a venture capitalist because i didn't no one no one had at that point in my life identified my entrepreneurial instincts as such and so i was like oh well i'm screwed. I'm never going to become a VC. Two years later, the offer lands at my door and I'm like, sure, I'll do it. I was willing to do it for free. They offered me some carry on the fund and I was like, that's perfect. I had enough money from the Augur ICO, back pay from salary and such that I felt comfortable. And so I was like, yeah, I'll do it. I'll go be a VC. And it was a great time because that was that was really the depth of the first bear market and i learned a lot

learned a lot about investing i mean the stevens brothers are like uh as legacy vcs as it gets their fathers started investment banking on the west coast they're just total rock stars they know exactly what they're doing and then brock and i are just like soul brothers like we're just crazy wild entrepreneurs and learning how to balance those instincts between professionalism and being outlandish goobers was a really great thing at probably what 24 25 years old so i i that was one of the best experiences i could have had at that point what are some of the companies that you guys invested in while you were there so the companies that where i really helped lead the investment uh there were there were a handful uh bolt which is my of ryan who

i'd known for several years at that point i started this payments company that you know shifting between bitcoin and non-bitcoin but uh they they were getting ready to launch and we invested in them and they're and yeah and they just exploded i mean they are just crushing it right i missed that one i talked to ryan on the phone yeah and uh uh common mistake so there's only two mistakes i ever really make in investing and i repeat them is uh if i lose sight of who the founder is and i start falling in love with the idea rather than the founder yeah uh and then two is uh worrying about the valuation at the early stages valuation would cause hesitation but they're rock stars eric and ryan the two co-founders are just brilliant classic stanford

Silicon Valley startup dropouts. The love of the guys and they're doing amazingly and they've got some interesting stuff up their sleeves in regards to crypto. And then Tyrion, a Wayne Vaughn startup, I met him at the very first consensus, just allowing people to easily hash onto the blockchain, which was at that time really one of the best value propositions

of the blockchain not bitcoin movement those kind of time stamps uh you know i got very close with micah winkle speck from jam uh really just that was a compelling company uh just because micah just will is just such a dynamic entrepreneur and you know i i i learned to a certain extent that i probably am not the best entrepreneur like i am not a builder per se I am a masterful delegator. And so I'm really helpful with entrepreneurs that need to build companies. I'm really helping them delegate, focus on what they need to focus on. I'm much better at helping entrepreneurs build companies rather than building them myself.

At that point, I had built the Blockchain Education Network and Augur. But I was becoming less certain that I was a great CEO, per se. I knew very quickly that I didn't want to scale a company past 100 employees. And that was a very important realization to have because, you know, a lot of entrepreneurs make that mistake. They think they're going to see a company through to an IPO and often they're not the right person to do that. But while there, I started a distributed magazine, which is a 108-page primer on blockchain technology. It comes out twice a year through BTC Media, has a website called distributed.com. and it's my favorite resource to give people

that I've never want to learn about blockchain technology because it's print, you sit down with it, you start from front to finish and at the end you have a sense of what blockchain technology is and what its potential is. And so that was a really great thing that I accomplished while at BCAP

and then also helped them structure the first tokenized security ever. So while at Augur, we created the first utility token, I then want to create the first security token. So walk me through the thought process as to why to do that. How did you guys structure it? What were the results? So it's super funny.

So with Augur, we didn't want to create a token. We didn't want to do an ICO. That was terrifying. We got rid of the word ICO. We called it a crowd sale, token sale. The ICO was just something like an IPO. It sounded horrible. And for almost a year after we created Augur's rep token and after our sale, the term ICO dissipated.

We actually effectively got rid of it. But then it came back with a vengeance. But with Augur, what we did was we realized that in order to have a decentralized consensus or a decentralized oracle, if you will, You had to have a token that was not Ether in order to turn history into our story, a collective recollection of truth. And it was scary. But at that time, I didn't think there would be that many utility tokens. I didn't see that many use cases for utility tokens. And frankly, I still don't.

There are thousands in the world now, but Augur, in my view, its rep token is still the best utility token there is. But what I didn't predict was how many would come after it. Now, how many will remain is yet to be seen. But I think my original estimate at the time that we created the first utility token is that there will probably be a few hundred in the world. I heard Jeremy Allaire on your podcast earlier today saying that he thought there would be thousands of utility tokens. Now, there may, but I don't think they'll have the high financial value. I think they'll have much more of a governance utility more than anything. But that experience should have led me to realize that when we were talking at Blockchain Capital,

a capital about tokenizing our third fund uh that it would lead to more than just tokenized venture funds uh but we did it like i don't know what the guys say but none of us realize what token what tokenizing a security could be no what nobody was talking about we were realizing that a lot of the icos coming out were securities so we're like well we're gonna call the security because we know it's a security but really the whole lot like i i thought the idea of tokenizing assets was interesting but since no one had done it no one was talking about it it's hard to say that we i mean i know as a fact that i didn't predict what would come we thought you know we were we were democratizing venture capital you're creating greater liquidity for lps but i really

don't think that this movement towards the tokenization of all assets, everything that is scarce in the world, that wasn't really on our mind. And I don't want to take credit to suggest it was. But sure enough, just like with utility tokens, it's just been this tsunami that's come since. And, you know, I'd be very inclined to predict that within a few years, you know, tokenized securities tokenized real world assets will be the largest crypto asset class in the world and it is just it's just crazy to think that you know you can you can pioneer these new forms of assets and not even realize what you're doing at the time you just you're just thinking about what you're building and then it just leads to this cascade of innovation and scams

So talking about scams, walk me through how you think some of those early efforts with Augur and the blockchain capital token, like where do we divert from pretty reputable, legitimate projects that are fairly transparent, etc.? How do we divert into what we saw in 2017? Do you think there was kind of industry-wide mistakes that were made? Or do you think that's just natural when these markets go through the boom and bust cycles, you're going to get the scammers and the fraudsters? That is the nature of the free market. When you have a new, innovative, open-source technology that allows anyone to raise and make money, they're going to do it. Like, there is nothing we could have done to prevent it. I mean, I think I wish there were more people like I, you know, people think I'm like this ICO shell and think that I've scammed a bunch of people for their money.

I was frightened. I thought everything I was seeing was crap because keep in mind, we had worked so hard on not creating a token and then realizing that we had to frog. Why did you have to? Because you can't have a decentralized form of consensus on a blockchain if it doesn't involve humans because you can't have internet-based inputs into a smart contract. So in order to say whether the Yankees won the World Series or whether Trump was elected, you have to have a way to validate whether that happened. And that's what Rep Augur's token enabled, was that thousands of people around the world that own that token report on the outcome of events and are incentivized to do that. Is there a world where, let's say that you and I are on the Augur platform, we make a bet that Trump's going to become president, right? You say he is.

No way it's going to happen. No, you say he is, I say he's not. I wish. He becomes the president. Yeah. Right? The risk factor or the attack vector to Augur would be that the crowd reports he did not become the president. And we worked on this heavily.

This is where my game theory came in, and it was really helpful. We randomized who reported. So you wouldn't want to report on something that you thought wasn't going to happen because you didn't know whether you were going to be the one reporting on that outcome. So because it's totally randomized, who's reporting on each outcome is it's next to impossible to try to game that system. Got it. Very interesting. And so then as you guys did, as you guys released Augur, right, one of the things that I'll play devil's advocate for a minute. One of the things that people will, I think, push back on and say, look, it's great. That's decentralized. It's super interesting, but it's really hard to use.

right yeah in terms of the user experience user interface etc i mean it's better it's gotten much better right but like how do you think about the evolution of the industry with auger in mind right and i asked that as in like this is one of the earliest versions of it was the first app on ethereum we started building on ethereum nine months before it launched because we wrote a white paper on how to build a decentralized prediction market on top of bitcoin and turns out bitcoin's not very good for that and vitalik who is you know the only young speaker on the conference circuit who i knew well at that point was just like and he'll predict your markets he's actually already an advisor to augur before this happened but he suggested why don't you try

building on ethereum and we'll help work with you guys to make sure the code uh works in a way that allows you to build this platform on top of it we're like we'll give it a shot uh and you know that was too early uh and by all measures we should have failed i mean the idea that we were going to build on a blockchain that didn't exist yet that everyone said it was vaporware and was never going to work uh was the craziest thing i've ever heard of i mean like no wonder no one wanted to invest in us before our ico or give us a loan even because no one thought ethereum was going to work out i mean it was you know i mean i guess it raised 18 million which was a huge amount of back then. But, you know, there is not a lot of people that believe that Ethereum would be

successful, let alone Augur. And for all the right reasons, I mean, it was super early. I mean, as a venture capitalist today, I mean, in hindsight, I probably wouldn't have invested in that. I mean, it was such a moonshot. And blockchain technology today, you know, fast forward you know what four years and it's still just in its nascency this technology is so new yeah i get bitcoin's been around for 10 years but blockchain technology like this this layer of innovation that can really be developed upon primarily through ethereum but also through bitcoin and other blockchains um you know we're talking about four years i mean it is as new as comes if you think about the web you had darpanet before it you had almost three decades of

development before it was ripe for building infrastructure and he i mean look if you had talked about uploading videos to the web in 97 you would have been laughed at like you know that and that was four years in that was five years in like we're we're so early on and you just have to acknowledge that and so what's so essential people hate centralization um but what is essential is that you create what i call third layer applications so what's that so so what you have is you have the protocol such as ethereum you have the second layer which is auger then the third layer which is a company such as veil which is a sequoia backed startup that's creating markets on top of Augur, but creates a centralized interface for users. So no MetaMask, ideally no crypto,

you can use credit cards, but you can interface with blockchain technology. Those are the on-ramps, you know, anything without a credit card, anything without just a browser-based interface or application-based interface is not going to succeed today. It's really not. I mean, there's some backend applications, absolutely. But if you're trying to sell products to consumers, This technology is not there yet. It's not because Ethereum is bad. It's not because any Bitcoin has a slow transaction throughput. It's just the fact that the infrastructure and the developments in this technology are not there yet. we're very early uh we are creating a form of value that in all of human history has never existed uh it's it's web-based uh totally decentralized value and that and that is a paradigm that will take time to develop it just doesn't happen overnight and no like like

infinitely scalable blockchain solution is going to fix that there's a lot more to building a sustainable uh crypto economy and blockchain based economy than just like like scalability or speed what do you think about bitcoin as a payment today right so you've you originally got uh incentivized or excited about bitcoin and crypto came in and now you have expanded your view to a lot of utility tokens a lot of blockchains where do you stand with bitcoin so bitcoin is a horrible payment system i i don't know before you go to the negative side what do you what are the good aspects of bitcoin that you still it's amazing i mean it is that it's it in the broadest sense of the term is a frictionless payment system it is peer-to-peer it is just like email you don't

need a bank or you don't need a government um it is it's dynamic micro payments are possible censorship resistant it's totally global it is the most exciting uh and amongst the top five most exciting innovations of the 21st century what are the other ones that you put up there uh i think i think social media despite all of its negatives is incredibly important um i think that the smartphone once again just incredibly important i mean just so game-changing having a supercomputer what are the negative sides of bitcoin the negative sides of bitcoin are very simple it is because it's deflationary it's a volatile asset there because there's no central bank it makes a horrible form of money like yes i get like like white privileged libertarians in

america are like oh it's sound money it's great but guess what if you're 98 99 of the world um or just look at america where the vast majority of americans cannot would not know where to come up with $400 in case of an emergency, volatility in your money is untenable. I think the annualized volatility of gold, which is $7 trillion in market cap, $7.5 trillion in market cap, is 15%. That's too much for an individual that doesn't know where to come up with $400. And then think about the rest of the world. It's just crazy. Volatility does not work for money. people need reliable money more than they need censorship resistant money in the vast majority of circumstances what do you think about the argument though that uh bitcoin was more volatile

in the beginning it's gotten less volatile over time and all we are is on like a 50 to 100 year uh cycle where it will eventually be non-volatile like fiat currencies but it's just going to take time to get there but it's what what's the market cap today 200 billion of crypto yeah a bitcoin oh no bitcoin 60 billion oh really it's that low these days jesus oh my god i don't look at the price uh look 60 billion it needs like even if it reaches the market cap of gold which is seven and a half trillion it's still too volatile that's what i'm i'm telling you now Now, I think my price point for Bitcoin, if it's successful, it's about three times that of gold. I think it's 10 times better than gold, but I think it will be valued at three times gold.

That's $21 trillion. That's $1 million of Bitcoin. It sounds crazy, but I actually believe that. I think that's low. You know, it's hard to imagine. I mean, just given that we're at $4,000 of Bitcoin, you know. It's crazy. It's a crazy thought.

People that look at me, but I give them the math behind it. It makes sense. You know, it's better than gold in every single way, 10 times better in my view. Giving it a 3x premium on gold is not outrageous. But regardless, there could be a point where Bitcoin is non-volatile. But at that point, I think in terms of a pure internet money, we'll have found something better. Now, as a global reserve currency, it could totally fill that niche. And 15% annualized volatility is not horrible.

It's not great either. But it's not great either. And you have to expect it will be treated the same as gold in terms of its volatility. And so it has a long way to go before it's something that people can use every day. What about Ethereum? What about it? What are your current thoughts? ethereum is the best bet for the development of censorship resistant applications i don't care

what anyone else applications yes not money but applications no and ether was never supposed to be money okay uh i mean the the thing that is crazy now it could become that i mean they're they're very easy to quantify arguments that ethereum or ether could i hate when ether is called ethereum so let me call it let me use the right nomenclature but uh ether could become money but that's not its intended use and that's you're saying the ethereum network could be the foundation or the protocol for what we're now calling decentralized finance yep but the non-censorable applications yes that's what you think okay but is it but but what i love about bitcoin and why i'm a bitcoin bull is because it is censorship resistant money and that's it what i what i

hate and i i mean i'm just traumatized by it is you know people trying to tell me that bitcoin can do everything it can't it's great as this censorship resistant form of digital gold this digital store of value but that's what it's great at and there's no indication that it's going to be more than that yeah yes we have lightning network yes we have all these other innovations but fundamentally bitcoin does one thing really well and that's all i care about because as i said if if people realize it's 10 times better than gold and it has you know a 3x premium on gold it's worth a lot of money you know it's very valuable and it's valuable to the world and and to a certain extent it could become this digital global reserve asset but you know i think

we're at the point where innovation transcends just Bitcoin in this space, that we can expect there to be a global digital currency that is blockchain-based, that is truly decentralized, and it's not Bitcoin. I think that's the likely outcome. What do you think about XRP? XRP is the best investment I ever made, probably will be, ever will be. I invested years ago, Uh, I just, as a tiny hedge, it was the, uh, when I, after the Augur ICO, I got back a bit of money and I put all my money into crypto. It was primarily into Bitcoin, into ether. Then I put a little amount in XRP and XRP just, I mean, talk about mooning.

I mean, You know, but it got up to like, I bought it at 0.002 cents or something and it went up to like 350 375 and at that point i was like it's finally i'm going to sell crypto for cash for the first time that was the first time you sold crypto for cash was xrp pretty much you know i had sold small amounts in the past uh but for the that was the first time i cashed out some real money and i don't regret it because i looked at xrp and i was like all right right now it has $111 billion market cap, $333 billion undiluted. I mean, it was something crazy, and yet nobody in the world was using it.

I mean, it was not used. I had bet on XRP because I thought, hey, this bank-friendly cryptocurrency could be a great idea, but fundamentally, just like at a pure fundamentals level, no banks were using it. I mean, at Blockchain Capital, we were an investor in Ripple. I love Ripple. I mean, their software was actually getting implemented in banks across the world. I mean, they were one of the most promising startups in our portfolio. I mean, I was encouraging the Blockchain Capital guys.

I was like, let's buy secondaries. Like, I wanted to buy secondaries. I love Ripple, the company, but XRP, it just wasn't getting adopted in the way that it had been outlined or suggested that it would be. and to this day that remains true um i don't own any um litecoin what do you think about litecoin garbage trash just oh my god i mean talk about just a shit coin like i love charlie lee i remember like at the very first mit bitcoin conference dinner we were we were in the urinals taking a And I'm like, Charlie, what value does Litecoin have over Bitcoin? And he didn't really have an answer.

And I was like, all right, this is exactly what I thought it was. What is one project that nobody knows about or nobody's talking about that they should be? I've got a startup that's about to come out. It's called Union Market or Union Marketplace. The CEO is prodigious. He reminds me of Joey or Vitalik at his age. With even better social skills. I love those guys, but I mean, he's very sociable based here.

We were his first investor. They're about to go live, be announced, and very exciting stuff. Pretty much creating a staking marketplace. And if staking becomes what it is, this is going to be an essential part of that economy. All right. And before we go through the lightning round, you have a new company that is not crypto related. I do. But you're living in Miami.

I am. Tell us about Crypto Castle Miami, and then let's talk about the new startup. Well, Crypto Castle Miami, I mean, I run a social impact fund. When thinking about the socially impactful nature of crypto assets and blockchain technology, I mean, I always knew the United States was not an interesting market. But then I started to travel around the world, and I slowly but surely developed a thesis that Latin America was the ripest market in the world for cryptoasset and blockchain technology adoption.

And so some people may say, well, what about East Asia? Well, you've got WeChat and Alipay and the Chinese hegemony. No, it's not interesting there. Then you look at a place like Africa. They've already got mobile money. I mean, they've already leapfrogged the banking system. And that's not volatile. Once again, they've already got, like, good payment systems.

I mean, it could use some improvement. But Africa, not that interesting. And so I was saying, look, it's Latin America. People are like, you have to go to the Middle East, North Africa. And I was like, okay. So I just went. I just went. I did a Gulf state tour.

Guess what? Financial services adoption, like, whether it's banks or mobile money, anything in the Middle East and Gulf states, 16%. How the hell are you going to get your Bitcoin if you don't have a bank account or any way to digitize your cash? I mean, talk about the unbanked. I mean, they have got nothing there. There is no infrastructure for people getting into crypto. So I am beyond certain that Latin America is going to see massive adoption of the technology faster than anywhere else. We're seeing the beginnings of that in Argentina and Venezuela, even in Brazil, where I just was.

And so I wanted to be close to that. And, you know, I found that Silicon Valley had reached the point of diminishing returns for me. So I wanted to live somewhere close to Latin America. I wanted somewhere that was different from San Francisco and a place that was warm and fun. And I landed on Miami and decided to replicate what I had done with the San Francisco crypto castle, but really get an actual castle this time. So you've got a mansion in Miami with a pool. Looks pretty cool. You've got yachts, jet skis, the whole nine yards.

And people can basically join as a member of the Crypto Castle Network. And come stay whenever, depending on their membership. Yeah, it's a bit of a business. I'm just trying to break even, not pay rent. But that's it. And just trying. But more importantly, you know, Miami is probably the best hub, especially in the winter, for popular culture. And what's important about that is not today, but a couple of years down the line for my portfolio companies and for the industry as a whole, we're going to have to cross the chasm of mainstream adoption and people are going to need to be talking about that. So guess what I'm doing? I'm evangelizing rappers and DJs and artists and Instagram models and government officials from Latin America. Anyone that's interesting that's coming to Miami, they're probably coming through the crypto castle. They're hearing about it. If they're interested in crypto, they're coming. If they're not interested in crypto and I want them to be interested, I can make it happen.

And so it's actually my impact, my ability to move this industry forward is perhaps greater in Miami than it is in San Francisco, simply because I'm the only tech guy there. I'm the only young tech entrepreneur in all of Miami. All right. But explain why you're starting a non-tech company. So why am I starting a non-tech company? Made man. Made man. Yeah.

The thing about entrepreneur. What is made man? Well, so the thing about entrepreneurship is that it's about solving a real problem in your life. And my problem is I like to go out at night. I like to have sleepless nights. I don't like to take care of my body as much as I probably should. and you know my skin uh bears uh the brunt of that poor decision making and it just drove drove me nuts that you know i would have a long night wake up next to a girl i was dating i'd go in the shower i'd wash my face i'd have a coffee she'd be in the bathroom for three minutes we'd both be getting ready to go to work she'd look good as new and i would look like a train wreck and people would notice first thing when i walk into a meeting or an office they'd say oh it looks like

you had a long night and i hated that and i was like why don't men have these options so then i would go on tv or do a documentary about crypto and they'd put makeup on my face and in three minutes i looked better i was like whoa this is crazy now like like this feels like something that needs to be done and so i knew for a couple years that this was interesting but then but then I realized that it could be done. You're obviously not selling makeup to men, but you're selling a skincare solution that improves how their face looks immediately. And so I looked at what men are already wearing. They're using SPF, obviously. They're using moisturizer. They're using anti-aging, anti-inflammatories if they have breakouts. And I was like, why don't we create

a five-in-one solution, keep it all natural, and then just have a tint? Women have these tinted moisturizers just have a tint that just evens out their face makes them look better and does all their skincare solutions in one and one of the coolest things that uh we're doing with this is that we're creating an a like a home applicator and a travel applicator and we're taking these uh jewel like cartridges that people can just replace so it's going to be a monthly shipment and it's just going to be cartridges that you plug into the travel applicator the home applicator that makes it super easy to use all your skincare solutions in one in the future we can add more kind of products that have that cartridge and just creating something that's really dynamic you know

it's not taking away from what i'm doing in crypto i've got a fabulous team but it was it was one of those moments as an entrepreneur was like this is a market this is an opportunity this is something i can do right now and so i'm doing it one of the first guys to do a ico and a security token sale is hopefully going to be one of the first guys to do men's skin care. All right, before we wrap up, rapid-fire questions. What's the most important company in crypto? Without a doubt, it's Coinbase. Because while they may not be as big as a company like Binance,

they are incredibly important to the U.S. crypto ecosystem. They are the on-ramp for virtually anyone that wants to buy crypto. And until crypto assets and blockchain technology moves beyond a speculative technology where people want to use crypto for another reason, Coinbase is that company. And we can't shake that. We can't change that. I don't think anyone comes close. I mean, I think Binance is great on the global stage. The fact is, is that Coinbase is in San Francisco and it is the on-ramp for the U.S. economy to get involved in this technology.

And that's not changing anytime soon. So when they misstep, it's bad. But frankly, they've never had a hack. You know, for all the misgivings I may have about Coinbase, I really, truly believe that they are a good company for this industry. And if something truly existential were to happen to them, it would be a really bad moment for this space. That would be bad, for sure. What one regulation would you change or improve if you could? Money transmission laws.

You know, I am a major donor to CoinCenter for this very purpose. The fact is that if you're a fintech startup and doing anything that resembles the transmission of money, you have to get registered in every state in the union. California, I mean, Coinbase still does not have its money transmission license in California and like 15 other states. I mean, it's insane. And so what Coin Center is working on, and I think we'll have to do this in a big, it will have to be part of a big bill, it won't be done on its own, is a federal money transmission charter. It becomes a state's right issue, but at the end of the day, I mean, if you're a fintech startup, your life is a nightmare, and it maintains the oligopoly of financial technology companies. It's hard to be innovative in this space unless you have millions of dollars and years of time to get the proper licensing in every single state. And that's just not fair if we want to see innovation in that sector.

Most important book you've ever read? The Art of War, Sun Tzu. Why? I read it twice a year because, one, it instructed my college major. So it was my inspiration for my college major. But once you realize that you can approach life tactically in every situation, treat every moment like warfare, whether it's work or personal relationships or romance, it doesn't matter. When you can approach everything tactically, start to think several steps ahead, think defensively and offensively with that kind of military mindset, you win more. They're just more successful. And that was so enlightening. So I guess even more essential was the fact that Larry Ellison said that this is the most important book that he's read. It was on the back of the book.

You know, Napoleon Bonaparte, that was one text that he kept in his saddlebag. I mean, it just shows how thinking tactically, it transcends the battlefield. It is something that you apply to your life every single day. And it's so important to think about because you avoid the missteps one would take when they act with their emotions. If you can step back from your emotions and think really with a forward-looking mentality, you'll always be more successful. Are aliens real? I think that aliens, if they don't exist now, they have existed in the history of the universe. But if you look at how humanity has evolved, you know, in 200 years, we've gone from, you know, shitting in the streets and riding horses to landing on the moon and sending putting rovers on Mars and on the constant brink of nuclear apocalypse.

You know, I think it's very likely, and there's a good theorem for this that I forget, that there's a good likelihood that any intelligent enough civilization will necessarily destroy itself. uh and so i think you know if you took a thousand advanced civilizations uh alien or human regardless uh you know the majority of them would destroy themselves and so yes i think they're aliens or there have been aliens uh but but you um i take a cautious approach to extraterrestrials they're gonna come hang out one day i hope so i mean or i'll go hang out with them i'm down I mean, Elon and I can go take a shuttle. I'm ready. All right.

Well, one question you have for me. What is the most important lesson you learned from serving in the military? You can't force people to follow. You can only earn their. you can't force somebody to follow you but you can earn the right to lead them which is very nuanced but uh even in the military where it's very hierarchical and uh there's this sense of like this is my rank and it's higher than yours and so do what i say uh the best leaders in the military do not um try to force followers they instead earn the right to

lead and uh there's a lot of very little things that the military teaches you about how to do that um things as simple as uh you know officers eat last right uh non-commissioned officers each second to last. And what you find is the people who have spent the most time in the classroom and in training, they think that you can force followers. The people who have spent the most time at war understand that you have to earn leadership. And I think that that is a lesson I'm incredibly grateful for. And also one that also applies to non-military situations as well. Virtually everything you learn in the military, you can apply to real life. And this is actually, I love that because what I tell my entrepreneurs is like, look, you can't make

people listen to you, but you can make them respect you. And that, like you said, that nuance is so important because without that understanding, they'll never follow you. They'll never listen to you and you'll never build a great company but if you can be someone that is respected uh then you can accomplish anything i completely agree all right man listen i appreciate you coming this has been a lot of fun i'm coming to miami i can't wait i that you're scaring me but i'm coming uh and we will have to do this again in a couple of months to uh to catch up on everything yes there are always updates to be had and lots more to talk about ethereal summit returns to new york city this may 10th and 11th to kick off blockchain week and offer you a chance to go deep into the

heart of crypto blockchain and ethereum get up close and personal with outspoken crypto leaders like mike novogratz joe lubin tushar jane danny ryan and yours truly ethereal summit is where you can get into the mix with the builders of blockchain and ethereum it's less shiller all killer that's a trademark less shiller all killer and it's way more than just a blockchain conference Check out etherealsummit.com with my discount code POMP to get 20% off tickets to come hang with me and hundreds of the brightest minds in blockchain at Ethereal Summit New York, May 10th and 11th at Pioneer Works in Brooklyn. Less shiller, all killer. Etherealsummit.com. Hey, everyone.

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