The Pomp Podcast - Jesse Powell, Co-Founder & CEO of Kraken: How to Maintain your Principles in Crypto

Episode Date: June 19, 2019

Jesse Powell is the Co-Founder and CEO of Kraken Exchange. In this conversation, Jesse and Anthony Pompliano discuss the founding story of Kraken, what it means to build a company based on principles and ethos, the current regulatory environment, and why the work being done in Wyoming is compelling. -----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. Jesse Powell is the co-founder and CEO of Kraken Exchange. In this conversation, we discuss the founding story of Kraken, what it means to build a company based on principles and ethos, the current regulatory environment, and why the work being done in Wyoming is compelling. I really enjoyed this conversation, and I hope you do as well. All right, guys. Bang, bang. Super excited to have Jesse here with us. He is one of the most successful entrepreneurs in the cryptocurrency industry and been around for a long time. So I appreciate you taking time out of your day to come on and do this, Jesse. Absolutely. Thanks for having me. For sure. You've been around a long time. And I would say a large majority of the people who are here today in the cryptocurrency industry paying attention have not been around as long as you. So maybe you can give us a background on yourself and how you got into crypto. And then we

can start talking about some of those early days before we get to crack in and kind of what's going on today. Sure. Yeah. So I've been in the space since early 2011. Prior to getting into crypto, had a company selling virtual items and currencies for online games like world of warcraft gold diablo swords runescape gold maple story you know we did like 20 different games and um you know so i've sort of been in one way or another in the virtual goods uh virtual currency space for geez almost 20 years now uh so what attracted me to bitcoin i just happened to randomly read about it. Uh, what attracted me to it was that, um, it solved a bunch of problems that we were having in that business, in the virtual goods business, which was, um, mostly related to credit

cards and, and access to credit cards, um, and international payments. So, uh, in, in the digital goods business, uh, you have all kinds of problems with fraud and, uh, you obviously have customers all over the world. So for us, Bitcoin solved the problem of chargebacks. Obviously, you don't have chargebacks in Bitcoin. That was a huge problem with accepting credit cards and PayPal that people would regularly attempt to charge back or they'd be using stolen credit cards to purchase virtual goods. And we never had a proof of delivery. We never had a receipt with a signature from the post office that said somebody definitely received something to the billing address on their credit card. So that was solved by Bitcoin. We had tons of items that we were selling that

were like a dollar that we pay 35 cents to, to the processor. So, you know, it was eating up our margins on those items. We had a lot of clients that were international who didn't have credit cards or PayPal didn't service their country. We had a lot of kids in the United States. You know, when people think about the unbanked, um, they're usually thinking about like rural India or Africa, but you know, like most of the people under the age of 18 in the United States are unbanked. And, um, that was a big segment of our clients who, uh, you know, they'd have to borrow their parents' credit card or we'd have kids like mailing us an envelope full of cash and like pennies and quarters and stuff. And by the time it would get to us, like half the

money would be gone because it had fallen out of the envelope. And then we had suppliers who were actually selling us the items in China, in Eastern Europe, who needed their local currency. And in China specifically, each person, I'm not sure if this is still the case today, but at the time, could only convert 50,000 US dollars into Chinese Yuan every year. And we were buying at a minimum like $100,000 a week. from China. So that meant every week we need two new people to do this trade in China. So as you can imagine, there are just all kinds of like logistical issues and risks that that introduced. And so Bitcoin like solved all of these issues that we were having. And, you know,

we already knew that people were valuing virtual currency because we were in this business with the games and uh you know world of warcraft gold was actually worth something kids were using world of warcraft gold at school to you know to buy brownies from each other or whatever you know to to do like real life trades and um there have been other attempts at virtual currencies uh you know independent ones before um like e-gold for example but obviously that was shut down because it was centralized and um you know i think this is like kind of the same reason why world of warcraft gold would not ever be um uh a major global currency and that's mostly because um the world of warcraft developers blizzard controls the accounts and they're the ultimate

authority and they can just ban your account for for any reason at any time and you have no recourse so um so bitcoin being this completely independent thing completely decentralized not being controlled by anybody um to me gave it a shot at being a real thing and uh so that was super interesting just from all the business benefits of it but then all of the the philosophical and social implications of this global currency that is not controlled by any government um that was also extremely appealing to me. And so I was just trading crypto in the early days and did some mining. A friend of mine from the high school days of playing Magic the Gathering, Roger Veer, also happened to be into Bitcoin and messaged me just like two weeks after I found out about it.

And, um, we kind of just fueled each other in, in getting further down the rabbit hole with Bitcoin. Um, and then like the, the Mount Gox situation happened in June of 2011, like the first public hack. Um, and we were both in Japan to help out with that situation. And that's kind of, I came away from that kind of thing. Okay. There, there needs to be more than one exchange and somebody has got to do this the right

way. So I want to go back real quick to two things you said. One is, you're obviously already engaged in digital goods or digital assets. Out of the things that you saw, other than Bitcoin, what were the most popular items? These were all like skins and weaponry, etc. for games? Or was there other types of assets that people were buying and selling at the time? Yeah. Back then, um, it wasn't really skins like skins, skins came to be more popular later on, but, um, uh, back then it was just like items like functional items, like just very powerful equipment, you know, like the best sort in the game or, uh, whatever. And some games you could, you could buy land. So like an ultimate online, or you could have like a castle that, um, took up like a finite piece of land and you could sell that for a few thousand dollars potentially. So it was like rare items, powerful items, limited edition kind of stuff.

Got it. And then the other thing you mentioned was the first Mt. Gox incident. I think when people hear the terminology or the name Mt. Gox, today they think of the hack in 2014 that was kind of the downfall of the exchange. But you were talking about an event that happened in 2011. and maybe describe, you know, what occurred then, uh, and what the impact was on the overall market. Yeah. So, you know, I don't, um, know the whole truth probably, but what it seems like happened with the story that, that I know, um, was that, uh, somebody basically hacked like an admin account on Mount Gox and this admin account had the ability to arbitrarily assign balances to,

to people and um it assigned a user a balance of like a zillion bitcoin and um or a zillion dollars and that user basically like uh i guess it was like a zillion bitcoin because they dumped it they dumped the bitcoin and drove the price to like a penny per coin or something like that and then um there were these withdrawal limits based on like the dollar value of bitcoin so it was like you could only withdraw like a thousand dollars a day worth of bitcoin or something but because the price of bitcoin was like a penny you could withdraw you know whatever like a hundred thousand bitcoin so um the hacker like did that and apparently was able to steal at least according to mark like four thousand bitcoin which at the time was like not that big

of a deal you know like should have been easily covered by by the exchange's balance you know this is probably like i don't remember exactly it's probably like 40 40 000 or something at the time you know so no one was thinking like this is this is the end of gox you know this is just like okay like go to your couch and like dig this change out to cover this uh so um so roger veer was out there he was actually living in japan at the time like just a few blocks away from the gox office so um he showed up there and uh basically found it like there were like two people working in the whole company and one person had just started the day before so i mean basically it was like a one-man operation uh with mark and um roger called me up and asked me if i can come out

and help them out and i'm like hell yeah fortunately the the virtual goods business by this time was was pretty much running itself i mean i'd been doing it for like 10 years so i wasn't needed day to day so i was on the next plane to tokyo and um spent about a week and a half out there just working with them on on all the operational stuff trying to hire people i wrote the press release uh that came out um just whatever i could do to be of service while mark focused on the tech and getting the site back online and um but just came away from that thinking that the whole ecosystem had shut down during this week and a half when Gox was offline and nobody knew what the price of Bitcoin was.

Merchants couldn't accept Bitcoin anymore because they couldn't convert it to fiat. There were just all these issues caused by the lack of exchange availability and price discovery during this time. so you know i i thought i don't know if um if gox is going to be the one to to really bring crypto to the mainstream and uh so i talked to to our old cto who um he's now my co-founder and cto um from the virtual goods business about the possibility of starting an exchange and um we'd been doing some mining together and some other things and uh he was on board with the idea and and that's when we got started on Kraken. Got it. And so when you guys start Kraken,

I know today that when people think of the exchange, it's very kind of ethos and principles driven. I'm assuming if that is where you guys are today, you know, years later, that's where you started. Maybe talk a little bit about those ethos and principles and kind of why you chose to down that path when maybe uh some of the other paths might have have led to greater adoption faster or maybe even more profitability yeah well you know we we both walked away from from a very lucrative business uh to do this and um we could have just kept on doing that we did this because we were passionate about it and um and we felt like it was really um something good that we could do for the world to to help bring crypto into the mainstream and make it more available

to people and to kind of bridge uh that gap between the the legacy system and and the new world that was coming um so you know i think today still um we carry that ethos with us it's still what keeps us motivated um we we think about these things you know with every decision that we make And it's why you haven't seen us list a ton of garbage coins. We're not interested in selling out our users just to make a quick buck. It's why you've seen us move at a slower pace than some others. We've been engaged with the regulators all along the way. We're really trying to build a system that can serve most people,

that can serve the mainstream and really make crypto less scary and be more appealing to more people. And I think the way to do that, there are obviously many varying approaches out there in the space and all are working to different degrees or serving different niches. But I think somebody really has to engage with the regulator and be that that bridge from from the old system onto the new system and we're working on that you know we've we've got all these banking relationships that are a result of that and you know you have to help people get from fiat into crypto and once they're in crypto they can go anywhere and do whatever they want but you know that's the hard part really is is that first step of getting from fiat to crypto and that takes a tremendous

amount of work and really doing things the right way and um you know it's not just about engaging with the regulator it's also just about like security uh you know we've we occasionally get beaten up for having um inferior ux or or uh annoying security features or whatever you know But it's all part of building this robust service that is built to last and can make people feel comfortable. You know, people are coming from a system where the banks have existed forever. Things that are regular problems in crypto are just table stakes in the traditional banking world.

You know, when you sign up for a bank account, you don't even think about like, okay, what if this bank blows up and loses all my money? And that's not something you ask yourself when you're opening an account with Bank of America. But it is something that is still a question for most crypto exchanges. It's like, okay, if I put my money here, is it going to be safe? Is it going to blow up? I've heard about there's a new exchange getting hacked every month. So, you know, we want to make people feel more comfortable. And I think that's also part of part of the long term plan really is to build just to make it easier for people all around to to get in, you know, you have less excuses to not get in. um and i think that the benefits that crypto will bring to the world um are so huge you know it's it's really what keeps us going in the face of all of this like uh sorry for my language bullshit that we have to deal with in um in serving clients you know in especially in countries like the united states where the regulatory burden is very high and so part of

uh you know i wrote maybe this is i don't know six months ago uh when you guys released your transparency report right which i think is um you know it's pretty uh pretty cool that you guys do and in that report um there's all kinds of things that you share but one of them is around this regulatory burden right and kind of how many um subpoenas or information requests that you guys are getting from regulators, and just kind of how that puts a strain on the business, on your internal resources, and how it can be a distraction. And so, you know, you and I have talked previously about, you are not in the camp of like, I don't want to follow the rules, right? There's a lot of people in the industry who, or maybe not a lot, it's unfair, but just there's a

good amount of people in the industry who they have that bent where they are not going to follow the rules. Whereas with you, you're saying, look, I want to follow the rules. It's just really hard to do that. It's really expensive. It's really time consuming. You know, maybe there is a better way. Can you talk a little bit about how you think of that trade off between, you know, doing the right thing, even though it's a little bit harder and more expensive? Yeah. So, you know, it's yet to be seen whether this strategy is going to be profitable long term. But we don't really see it as an option for us. If our goal was to just maximize profits, we could probably lay off half the company and stop serving the US and just go nuts with the rest of the world and list a million

shit coins like every week but you know the goal really is to to promote cryptocurrency and to bring more people into cryptocurrency and to um and to be that example for the industry you know for regulators and um law enforcement to feel more comfortable like okay we don't need to to take a heavy-handed approach to this because there are good actors here that are are trying to do the right thing and they're helping us catch bad guys and um you know we just don't need to to like make any rash decisions now so um i think it is it's important for somebody to be engaged with the regulator and um you know we're we're in a good position to do that you know that was our approach from the beginning that to build things in in that way and and to be engaged with them to

to work on self regulatory organizations, just to sort of be an example to the rest of the community. And not everyone has to follow our path. And I know that, you know, it doesn't make sense for everyone to, to try to serve the United States market or to try to like, offer regulated products. But, you know, I think that's the way that you get to the mainstream. So, you know, for us we have tried to have a balanced um approach to regulation i think you know you saw us leave new york when the bit license was introduced and uh you know i think the industry still feels like that is a disaster the bit licenses is a disaster and it's a shame for people the people of new york because they've missed out on a lot of great opportunities and their uh their choices are

extremely limited now. Uh, so, you know, it's hard, it's hard to know where does something become, uh, where, where are you protecting consumers and where are you placing sanctions on consumers? Because the people in New York right now feel like they have sanctioned play sanctions placed on them. They don't feel so much like they're protected, you know? And, and so they're having to spend the extra money to actually go set up entities outside of New York to exempt themselves from that protection of New York. So, you know, we're very engaged with law enforcement. We answer a tremendous number of subpoenas

from all over the world. We are actively engaged with regulators all over the world and helping them to understand how crypto works, helping them to shape new regulation. so that is a tremendous amount of work and it's just something that somebody has to do if we're going to keep moving things along and you know unfortunately I don't think the regulators have moved as fast as we would have hoped you know especially in the United States things have been very slow and I think that that has that uncertainty well it's better to have some

uncertainty than to have something really terrible like the bit license but that uncertainty I think has helped back the industry quite a bit from, from developing. And you see a lot of, a lot of the bigger traditional financial services firms are just waiting in the sidelines, I think for, for that clarity to, to feel like they can jump in. Got it. And so you mentioned, uh, New York, the bit license, uh, and kind of regular regulatory certainty. Uh, and I know one area that you've, uh, specifically taken an interest in, um, is Wyoming. And, uh, it seems like they have quite a number of initiatives underway. Obviously, uh, folks like Caitlin Long and others are really kind of pushing the pace of innovation there, uh, on the regulatory front, maybe talk a little bit

about just kind of, you know, what you find interesting there. Uh, what, if anything you guys are doing there, um, and, and more of your thoughts around my Wyoming. Yeah. So Wyoming has some really great pro-crypto legislation out there and um it's really it's not just pro-crypto it's it's pro-consumer as well um it makes it explicitly legal to operate a crypto company there it makes it explicitly clear that you don't need a money transmitter license to to provide crypto services there it makes it clear that as a developer of open source software you are not liable for what people do with your software. Um, so there's all kinds of great stuff in there that, um, you know, I, I hope that we'll see replicated in other States and at the federal

level. Um, you know, something that, that we're most interested in there is, uh, a new kind of financial institution that basically will, um, well sort of, sort of give us the powers of, of a bank there, um, a full reserve bank. Uh, so, you know, this is something that New York actually misses out on the new york uh legislation actually enables fractional reserve banking and fractional reserve um custody of things uh including securities so uh this is something that wyoming doesn't allow explicitly and so i think consumers are actually better protected in wyoming um and so there's i think wyoming is going to be a great place for consumers to locate themselves and for businesses to locate themselves because the law there is

actually very favorable to both sides. It protects the consumer sufficiently, and I think it gives the businesses the freedom to offer the products that they want to offer. So I think we're going to see a lot more cool stuff happening in Wyoming. There is a hackathon and a conference there in september um right before crypto springs so um hopefully we get a lot of people out there for that uh so i think we're going to start to see just a lot of cool stuff coming out of wyoming and we're already starting to see some other states um copy some of the stuff that wyoming has done which is great absolutely yeah it's pretty impressive to uh to watch not only kind of i think the quality of the work that's being done there but also just the speed at which it's

getting done it seems like every week or every other week something new is getting passed and and just a lot of progress being made which is a pretty cool to watch um speaking of it's it's really amazing how fast they're moving there and and they clearly uh have their residents interest in mind you know it's not like a crazy political uh horse trading operation you know where you've got to woo somebody and you've got to like donate to their campaign and all this stuff you know to to like get things done that are just good for people um they're out in front of it and it's awesome i've never seen government work like this before these guys are great absolutely um speaking of kind of progress uh you guys have um started to or continue to um increase uh the

offerings that you guys provide so maybe you can talk a little bit of outside just the core exchange business uh some of the futures trading the otc uh etc that you guys have moved into over the years yeah so um so spot trading was our core product um we we have we've had margin trading since the very early days as well uh which might be the only margin trading available to the u.s right now um we uh acquired crypto facilities um last year which gave us futures trading outside of the united states so in just about everywhere else in the world you can trade crypto futures um we do have otc we've had that for quite a while um the business has been growing really strongly. And we have CryptoWatch, which is a multi-exchange, multi-market

portfolio manager and trading interface and charting platform. So you can, for all the top markets, you can pretty much see all your data there and manage your portfolio and make trades to one interface got it and how do you view kind of the the future evolution of the product right um i i think that uh you guys have been um prudent in the pace at which you've added new assets obviously as you add other features or other ways for people to uh interface with with the company um you know you guys are again are uh some of the more thoughtful and responsible folks there what's kind of on the horizon in terms of other things that you may go into on the future or things that you're looking at yeah so i mean staking is pretty hot these days there are a lot

more proof of stake coins um so we're working on a staking solution to allow people to stake with kraken so um that should be coming very soon with support for a few coins and we'll expand the serves from there. We're looking into other types of derivatives that we can offer. So that might be options, maybe other types of forward contracts. And we're also looking into just other financial services that we can provide. So, you know, I mentioned there's a sort of banking license in in wyoming that will be available soon so we're looking into that um there may be some options for us to to offer banking services in other countries as well um and then other other types of uh assets traditional assets so could we do forex could we do stocks could we do other

commodities um you know there are there are many gold tokens now so like that's something we're looking at. So I think that, you know, there's a very broad range of financial services that we can get into. We have a pretty large client base all over the world. So, you know, we'd love to just offer them more services in one place and give them greater capital efficiency. You know, I think the more they can do in one place and more they can leverage their portfolio, the better. uh so you know i think there's kind of the sky's the limit with with what we can do and in financial services i think it'll be a long time before we run out of things to do absolutely well i think part of um you know at least my perception of kraken and the work you guys have

done to date is uh you have started with that that spot exchange uh and you're now backing yourselves into much more of a financial services company but again centered around those ethos and principles uh and kind of that core belief in um helping people gain exposure to cryptocurrency uh and you know as you do that um there are uh incentives along the way that maybe can pull you from that mission right there's like kind of like this mission drift if you will uh but if you're able to figure out ways to find products that align with the mission and you can do it in a responsible way i think makes complete sense to kind of push forward there yeah you know actually we have a lot of clients who never traded anything before crypto and who have started trading crypto

and then have gotten interested in trading other things so i think that it's it's kind of a natural progression for them just to uh to get into more asset classes you know maybe they're maybe 99 of their net worth is in bitcoin and they feel like they should have some exposure to stocks or something else you know so i think that um there there are all these synergies and having um a broader asset selection for people got it and so look you you are um you know one of the first people in the grand scheme of things uh to be involved in the uh the bitcoin and cryptocurrency industry uh going all the way back to about 2011 give us a grade or kind of your view on from the first days that you kind of got into this to today have we met the expectations you

had have we exceeded those expectations like where are we compared to um you know where you originally thought we could get uh in those early days yeah well i'm i'm i guess a bit over eight years in now um i thought we'd be further along you know honestly i thought we would all be riding around in self-driving teslas that were paying each other to drive around them or move out of the way on the freeway and uh you know it'd be like this uh crypto utopia by now um but I guess things move a lot more slowly in real life than I imagined that they would. But I guess that's, you know, it's the case for everything, not people in the world that still don't have smartphones. So, you know, I guess it's going to be a 20 plus year story for crypto before we really start to see like, you know, majority penetration.

so you know i i think we could be further along um i think you know like i said earlier that the regulatory piece is something that's been holding us back um and it's not just at the regulator level it's it's kind of trickles down as well to the banks and because the banks are uncertain about the regulators position the banks aren't banking crypto companies and that creates a lot of friction as well you see um you know there's just a case in the news recently about a crypto company that was having serious banking problems not able to get a legit bank account and so they used this very shady uh third-party payment processor who ended up like having being under investigation by numerous countries apparently and having a bunch of money confiscated

by governments so um you know it's kind of this like in some areas it is driven driven some people into these like back alley deals to get stuff done you know when if it were appropriately regulated it could just be done totally out in the open and be frictionless but you know some people are still like forced into to doing like really crazy things to to get crypto so um you know i think that's been that's been holding us back um you know we like japan as an example we actually invested a lot of time into shaping the regulation there and um there was like after years of working on this a changing of the guard there like months before this regulation was going to go into effect and the new guys that came in had very different ideas about how to do things and

didn't have all of the background and backstory and you know all of the the thinking that went into the original document and just changed things up at the last minute and you know that kind of threw a wrench into things there. And then you saw numerous Japanese exchanges get hacked shortly following the introduction of the license and the regulator then just tighten the screws even more each time. So, you know, I think these kinds of things happening in the space are obviously terrible and you know the regulators react to them and things just get worse and and where things get worse people tend to look for the easier path you know and they and they might go to sketchier options that are more convenient to them so anyway i think i'm kind of getting off

topic here, but I think we could be a lot further along if things had gone differently with regulation, if we had had more clarity, if we had had better regulation, if we had had regulators that understood the real risks versus the perceived risks and understood what they can actually control versus what they can't control. And I think it's still going to be a while there. you know i think regulators are still getting their head around what what can they actually control and what is just futile you know to to attempt to control and you know one thing that came up recently was the um the sec settlement with ether delta which is a dex and

you know i think that's one example of like where things are going probably that um that regulators will go after whatever they can um they're looking for the weak link they're looking for the point of centralization and you know i don't know if we're going to have a dex i think the idea of a dex is awesome and great and we should keep pursuing it but um you know i see most of the dexes out there today like another e-gold there is a central point of failure and until we have a Bitcoin, you know, or the Bitcoin, uh, of DEXs, they're going to keep getting harassed by, by regulators and, and somebody on the team is going to be a central point of, uh, failure or compromise or, or whatever, you know?

So, um, I think we, I think there has to be like another, another Satoshi Nakamoto of, of the DEXs for that to really succeed. Um, otherwise, you know, unfortunately without an act of Congress, you know, without the law changing, um, and I think we do need the law to change in, in many areas, um, the regulators are just going to keep doing what their mandate is. And that is to enforce the existing law. And, um, you know, you, you can't blame a shark in the ocean for biting you, you know, just doing what it's programmed to do. So, you know, I think we have to take these issues to the lawmakers themselves. And I think that's how we're going to get further along. I think we also have to be careful about bad regulation being introduced and

we have to do everything we can to block that. Because there are, you know, there are rent seeking businesses out there that would would try to convince the regulator or to convince the lawmakers that well all DEXs are evil or every market needs to be needs to have market surveillance software that is sold by us or needs to have AML policies that can only be served by our software or whatever you know so there are people out there actively trying to shape the regulation to uh to build a moat around their business or to to further you know promote their business use case so um the people that actually care about this space developing in a positive way that isn't just captured by you know like five big banks you know are the only ones regulated

and allowed to do it um we have to be very careful about the law changing for the worse you know i think it's better to have uncertainty than it is to have a terrible law that basically just makes things worse for consumers. So that's always at the forefront of my mind, and it's something that we're constantly dealing with because there are these incumbent interests and there are these rent-seeking businesses that are trying to have the law shaped for their benefit and not for the consumer's benefit not for crypto's benefit but you know for the benefit of their shareholders um so you know my co-founder and i got into this business uh to to bring crypto to the world not strictly to

benefit our shareholders well i think we can accomplish both um you know the first mission really is is to serve the crypto community and the community that doesn't yet have crypto and um it's it's a real bummer to see people working against that mission for their own business interests but i mean this is this is the nature of business i suppose is that um they lobby for what's in their own interest and they try to to uh use the government to um to give them a moat you know this there's this concept of regulatory capture uh so we just have to be aware of that and it's going to take everybody to keep their eyes on things and to keep an eye on their local government to um to make sure nobody's doing anything done

got it and so as you look out um where do you think the best use of the community's time energy and resources is spent, right? When, um, a lot of times I have people who they direct message me on Twitter, they email me and they say, Hey, I have X or Y skillset. Uh, I'm really excited about the cryptocurrency industry. Uh, I would love to get involved in some way. Where should I begin to look or what areas do you think are interesting? Um, if someone was to ask you that, where would you kind of point them or where do you think those areas of growth are that that would be interesting folks i guess it depends on the skill set the person has but there are a huge number of crypto companies out there that are hiring so i would strongly encourage anyone interested in crypto

who's not already working in crypto to to try to find a job in crypto and use their skills toward you know some project that's that's already ongoing um you know if they feel like they've, they've got an entrepreneurial spirit and they want to just do something on their own. Um, there's just so much, there's so much out there that one could possibly do. Um, you know, I think it would be great to see more outreach in, in the undeveloped world or these countries, um, which are having like massive currency problems. Um, you know, but I, I recognize is also you may need to really have boots on the ground there to be effective.

And you may need to know the culture and the language. I think that there's really interesting stuff happening with on-chain scaling, with cross-chain transactions. I think DEXs are super interesting. So I think there's all this DeFi stuff, this decentralized finance stuff that is really going to be a huge part of the next 10 years. I think we're going to see a lot of things that traditional finance has done on pieces of paper be done in smart contracts.

and i think you're going to see like the tokenization of all sorts of assets and in once you have you know let's say your house tokenized you may not have a big market for trading your house you know there may not be a lot of people actively wanting to buy and sell your house but once your house is tokenized as long as someone is willing to give you credit for that or take it as collateral in a contract i mean now you can now you can leverage your house to to engage with these defy products you could you could leverage your house for margin trading not that i would recommend that but you know there's all all sorts of things that you can do once more of the world becomes tokenized so i think that's super exciting too um you know i don't know i i think you could

even try to teach a class at your local college or high school or something you know i think that would be a great use of time and a great benefit to a lot of people too um so the space is so broad i mean there's almost anything any any interest um anyone can explore in crypto i think that i think it's a very fair answer um before i wrap up i usually ask a rapid fire set of questions um what do you think is the most important company in crypto other than kraken i would say coin center um or i would say um chain code labs you know and these aren't really companies so i don't know if these count but um i think they're both contributing a lot to uh to the furtherance and development of crypto uh describe both both of those for the people at home who

don't know uh so so coin center is um is a non-profit um basically a think tank that has the task of educating regulators and lawmakers all over the world about how crypto works, what the risks are, how the regulation should be shaped, how the current regulation should be interpreted. So they've got tons of useful articles on the website. Almost any time any regulator takes some sort of action they have commentary on it and it's it's just a tremendous resource to the whole community and i think they've done a great job of preventing some terrible things from happening and and they've also gotten some some great things to happen um, chain code labs. Uh, they are basically, uh, a nonprofit as well that, um, develops Bitcoin

and, uh, they've got some of the, some of the best, um, core Bitcoin developers out there. And, um, you know, they're, they're an independent organization that, that is basically just dedicated to uh the furtherance of of the bitcoin protocol got it and then um what's the one regulation that you would change or improve if you could there are a lot even outside of crypto there are a lot um you know it would probably be something like um you know any any um um any act that is consensual and does not have a victim other than yourself ought to be legal and that would probably uh you know free up prison space by like 80 80 percent um but inside of crypto i would say you know the one thing that's impacting

most people in the united states right now is this uh the accreditation requirement to invest in a startup stage company you know so right now you basically have to be a millionaire to invest in a startup. And, um, I would love to see some change to that so that there's some way for people to qualify themselves into, to being able to invest. So maybe it's some sort of test or, um, or there's some other, you know, maybe there's like just a cap, like maybe you can only invest $5,000 a year or whatever. Um, but there's gotta be some way for people to get exposure to earlier stage companies and projects than being a millionaire. You're allowed to buy lottery tickets. You're allowed to go to Vegas and gamble. But for some reason, you couldn't put $10 into 10

different companies or 10 different tokens that happen to be securities because it's just too risky for you. The government doesn't trust you to make these decisions. So again, back to my comment about sanctions in new york you know this feels like sanctions on poor people you know you could be a college professor teaching economics and you might not be qualified to be to invest in companies so um it's that's insane and that's creating a ton of problems and um and how are you going to control this anyway because now with crypto people can obviously once you get into bitcoin you can you can send your bitcoin anywhere in the world you can do anything you want with it there's no choke point at the bank level so people are going to do this

anyway so i think it's it behooves the regulator to to get in front of this and to to make some adjustments i think um you know or congress uh to make some adjustments that allow people to do what they're going to do anyway but in a safer way and right now they're just kind of forcing everyone onto the black market because there's no legal way for them to invest in the things they want for sure what uh what's the most important book you've ever read this is a good question um someone else asked me this recently and um i said it was the sneetches somebody stole my question the sneetches by dr seuss it's pretty solid why that um it's a great it's a great book for kids it teaches you all about markets and trends and um uh i don't know if you've read it

but basically there's this um there are these creatures called the sneetches and and there develops this fad of like putting a star tattoo on your belly and this guy shows up with this machine to do it and he's charging everyone and then then something like 75 of the snitches have the star and now it's not cool anymore what's cool is not having a star and then he gets to tell you that the the tattoo removal service to go back the other way so i thought that's like a super great story for kids and teaches you about markets and teaches you about trends and um and teaches you about being the service provider in the middle of all that uh so um i think that's a great book i recommend everyone read it that's awesome um aliens believer non-believer

i believe that there is some form of life out there in the universe outside of earth but um you know what it looks like or what level of intelligence it has uh i don't know but it seems like the universe is so vast there's got to be some other form of life out there you think we'll come across it in our lifetime like we'll uh discover communicate you know in some way interact with you mean in the lifetime of like you and me or like of humanity yeah you you and i uh i doubt it i doubt it um but who knows you know technology's moving so quickly i mean and maybe um maybe we get our bodies sort of cryo preserved 30 years from now and and we're shipped off to the other end of the galaxy and you know we wake up thousands of years from now and

meet some aliens um but yeah i don't i don't know could could be a random a random thing you know maybe they're out there watching us and just waiting for the right time to come check us out. You know, in Star Trek, there's this concept of the prime directive and normally they don't even let themselves be known to planets or races

that have not discovered warp drive technology yet. So they're like out there observing and waiting just for some point where they become evolved enough that they want to interact with them. So that could be happening. Yeah. think you're, uh, I think you're onto something. It is likely that there's life and we'll see if

we come across it before, uh, before we see our death. Um, and each podcast with, uh, allowing the guest to ask me one question, any question you have for me? What is your, besides Bitcoin and ether, are there any coins that you are pumped about? No. Um, I am, uh, I'm probably a little weird in that, uh, I am more on the side of a deep conviction and a small number of investments than I am in, uh, kind of look at the potential of all of this stuff. Uh, and the reason why is, um, I think twofold. One, uh, I just happened to have a very deep personal belief in, uh bitcoin what it stands for the value it brings um and kind of the future um you know how kind of the future uh unfolds or evolves um so i think that's one and the second

thing is uh i am probably in the camp where um not everything that is being built uh but a lot of the core functionality of some of these newer tokens are likely to end up on a smaller subset of winners so i don't i'm not even going as far as saying there will only be one winner but let's call it you know 10 or less main chains that a lot of these features end up getting incorporated into and so if you look at the you know two three thousand different coins are out there a lot of it's probably just going to be zeros and worthless uh and then some of it'll be like r&d for those uh eventual winners um i think the big question to me uh what i'm actively spending time on now is if i have deep conviction on bitcoin specifically you know what are the three to five

others that uh i get excited about and think have potential to be you know one of ten let's call it or less that uh that end up being global winners um so i don't have an answer yet but that's something that i'm kind of going through as an exercise now yeah i tend to agree with you on that there's a lot of competition for the same use case and um and in some cases you have the more adoption of the inferior technology so it'll be interesting to see how it ultimately plays out um but yeah i agree there's there's generally like you know not a reason to have like 50 chains all doing the same thing uh only slightly different so yeah i think i think we'll probably you know i tend to agree with you on that that we'll see a fewer number of tokens emerge um at least for

these kind of global use cases and then i think we'll see you know of course all sorts of tokens on top of of these networks yeah and i think you know the other piece for me is um i say that and then i'm always like careful to caveat i actually encourage the experimentation today so i'm not one of these people who's like oh everyone just stop working on everything else and go work on like you know the five chains i think are going to win i actually think it's a uh evolutionary process so like we need thousands of different projects and experiments to go and then we kind of whittle it down over time and and that time period may be 5 10 maybe even 20 years right um but but i tend to come at it from like uh let's encourage the experimentation today let's figure out what works

what doesn't work and then the kind of strongest best value right you can define value in a whole bunch of different ways but kind of utility to the people who want to use it uh will end up not only sustaining but but actually thriving over time yeah absolutely i think we're i think it's great to have all this experimentation and it's cool that it's just this open laboratory and you can see what everyone's working on and i think it's just going the pace of this is just going to increase as more people in the world start to understand crypto and there are more universities offering crypto courses and it it becomes more uh just a part of you know everyone in a computer science programs curriculum you know to to take some crypto classes uh so i think it's just gonna

it's gonna continue to blow up and i think it's it's awesome and um yeah i think i think that the winning coins will just take the best out of out of everything and incorporate that stuff and it'll be better for everybody and um it's just it's amazing at the pace that we're moving with this now like things have really picked up a lot since the early days you know we just had basically like bitcoin and namecoin and um and now you just have thousands of coins and and so many really really smart people in the space um it's just kind of like mind-blowing how many how many smart people um are working on this stuff so it's super cool and like i love going to work every day because just it not only for the crypto drama which is it's always interesting it's like living

inside of a soap opera but just the the technical innovations that keep coming are so interesting and and to think about how they're going to change the world is so interesting so it just seems inevitable at this point that um you know crypto is going to be a big part of our lives for forever i couldn't agree more so we will see how how it all plays out but uh i'm a big fan of what you guys are doing i think uh you guys have been uh just incredibly prudent and uh frankly i am uh quite blown away by how you've been able to keep kind of the ethos and the principles intact as you guys have built a quite large business um so uh so best of luck moving forward and we'll have to appreciate it love the podcast big fan of the podcast too i appreciate that we'll have to do

this again in the future when we can get get some updates hey everyone pop here if you like this episode of off the chain and want to help us take crypto to the top of the apple spotify and other podcast charts please do us a favor and rate review and subscribe to review simply go to the Off The Chain homepage. Scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off The Chain.