The Pomp Podcast - Joyce Yang, Founder of Global Coin Research: China's Hostile Position Against Bitcoin

Episode Date: April 15, 2019

Joyce Yang is the Founder of Global Coin Research. In this conversation, Joyce and Anthony Pompliano discuss the regulation of crypto in Asia, how China is responding to the interest in Bitcoin, and what U.S. based teams don't understand about the global aspect of the cryptocurrency markets. ----- BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. ----- 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. Joyce Yang is the creator of GlobalCoin Research. In this conversation, we discuss the regulation of crypto in Asia, how China is responding to the interest in Bitcoin, and what US-based teams don't understand about the global aspect of the cryptocurrency markets. I really enjoyed this conversation and Joyce has unique views on the world. I hope you enjoy it nearly as much as I did. As many of you know, crypto investors store their digital assets on exchanges or in cold storage for long-term safekeeping. However, this strategy doesn't help them grow their

investment holdings or build overall wealth. With the new BlockFi interest account, users can now securely store their Bitcoin or Ether at BlockFi and receive 6% annual interest paid monthly in cryptocurrency. 6% is an absurdly high rate. It's the best rate in the industry. I highly suggest you go check out BlockFi.com slash Pomp. Again, that's BlockFi.com slash Pomp to sign up and start earning crypto today. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a

particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys, I'm here with Joyce. We got a lot to cover very quickly. Maybe let's just start with your background and then we can dig in. Sure. Hey, Pomp. Hey, everyone. How's it going? So my name is Joyce Yang. You may or may not have heard of Global Coin Research. We're a paid newsletter primarily focusing on Asia crypto and blockchain. Asia, as you can imagine, is a huge region that has more than 50% of mining activities and 50% of trading volume. and honestly, I think it's more exciting

than what's going on in the States right now. So what we try to do is we provide value in two ways for our readers. For one, we provide information on what's going on in Asia. There's lots of news going on. We filter them out for you by either translating the local news or identifying the most important news for you.

And the second value we add is actually contextualizing what's going on in Asia. That means through podcasts, in-depth analysis, and conversations with actual important folks from different regions. That includes, you know, congressmen from Taiwan. That includes traders from Singapore. So be sure to check out GlobalCoinResearch.com for some newsletters and news of what's going on in Asia. So she can't say this, but I'll say it.

You're one of the experts on crypto in Asia, and you've got the background that fits it. You were born in China, moved to New York when you were like 10. And tell us a little bit about kind of growing up early years in China and then what it was like when you moved to the U.S. Sure, sure. So my family immigrated to the U.S., specifically New York, Queens. If anyone's there from Queens, give me a shout out. I went to school in Bronx Science, which is up in the Bronx,

and went up to Harvard for undergrad. And, you know, I spent half my time in China, and I have a huge passion for what's going on in Asia. And the most recent developments, you know, Internet trends, as well as what's going on there in cryptocurrency. And after Harvard, I spent five years in equity research looking at open source software companies and boring database companies out of the West Coast. Let's talk about that for a second. So growing up in New York, why'd you move to the West Coast? Just job or you always wanted to go there? What drew you there? Definitely the

technology companies there. You know, I think I love learning. This is, you know, what Global research is all about is sharing information sharing what we learn with uh you know with folks who don't may not know about what's going on in certain in-depth areas and we picked you know crypto for this particular platform but in my past career i spent time looking at software companies and you know the changes in sas trends which were super fascinating you were doing equity research at um merrill lynch right and a lot of it you know we were talking before that uh open source software, some of these things that have overlap with crypto, but no direct crypto kind of research. Do you think a lot of that helps you today in what you're doing?

Oh, yeah, for sure. I mean, I think crypto and blockchain is an extension of what current databases cannot do. And I see folks who are essentially entering the space from previously in the software space. Yep. One person who I really admire actually is this guy named Diogo. I forget his last name right now. It's okay.

Diogo from this custody solution called Anchorage. Uh-huh. And they recently raised about, I think, over north of $50 million from A16Z and other folks on creating a custody solution. And Diogo, Monica, that's his last name, Diogo used to work at Docker, and I followed Docker closely when I was in equity research. And, you know, Docker used to really preach this idea of containerization, you know, which really helped speed software development and accelerate, you know, and kind of empower developers with these tools for software development. And he's now in this crypto space.

So I find that super empowering when there are smart people who are entering the space. Well, smart people and there's overlap between the two things, right? Open source software, just software in general and crypto. Right. He was focusing on security at Docker and now, you know, he's creating a custody solution for making sure that none of our wallets get hacked, which is super important. So, OK, so you're at Merrill, right? You do the equity research, then you head over. You worked at a Chinese bank for a while, and then you eventually start GlobalCoin Research. Maybe talk a little bit about what was the initial thought process or idea as to why to start GlobalCoin and kind of how you got started. Yeah, for sure. So I was working at a Chinese bank, and that was actually with an office in New York.

And the bank was based out of China, a headquarter in Beijing called CICC. If you are local to China, you probably have heard of it. It's the largest investment bank in China. And it's the first investment bank that's formed by Morgan Stanley and China Construction Bank back in the 80s. So when I was working in the bank, I realized a lot of folks in the U.S. don't have an idea of what's going on in Asia and China. And, you know, I was looking at technology companies and Alibaba and Tencent and many institutional investors, you know, portfolio managers would try to learn about what's going on with these companies. But they're so massive and large, but yet there's so much opaqueness because of the culture and the language barrier. And carrying over to crypto, that's even more the case.

And it's increasingly more relevant than anything else because crypto is inherently global. And if we look at the stats here, you know, going back to what I was saying about why I focus on Asia primarily is because we look at the exchanges. You know, Binance is, you know, decentralized, but a lot of employees are based in Asia. CZ lives in Singapore, and Huobi is based out of China, and OKEx is registered in Singapore, or Hong Kong, sorry. So that's the top three exchanges. And if you look at mining, of course, you can think of Bitmain, which we also heard about the news today with all these losses, but they're still based in China. And we look at participation in these networks. Think about EOS.

The top 15 supernodes are from China. Yeah. Well, before we get into the crypto industry in Asia, I want to set the scene because a lot of people, right, a lot of people like me, they're Americans who are on Twitter. They kind of hear some things about China. They hear about companies from China, Korea, Japan, etc. But they don't actually understand the cultural differences or the technology differences. So maybe let's just start with this idea of the cashless societies of Asia. Right. Yeah, for sure. And talk through a little bit about what that means. How do people actually interact with money in Asia and maybe even get into a little bit around Alipay, WeChat Pay, things like that. Yeah, for sure. So I just read the stat, actually, that now in China, only 15 percent of transactions in retail are cash and only 15 percent of retail transactions are in cash in China. In Fiat, yes, in China.

And China is really where we see the leading companies and trends in cashless society. And the leading players there are Alibaba with Alipay and Tencent with WeChat Pay. And those folks, in aggregate, have about, I think, a billion accounts in China alone. And if you just think about the Chinese people overseas, many of them, including myself, I mean, I'm a U.S. citizen, but I still use WeChat. And whenever I go to China, you know, you cannot hail a taxi without using WeChat or Alipay. What is the user experience, right? So most people here think of if they go to pay for something, they're going to take cash out of their pocket or they're going to take a credit card out of their wallet, right? And they're going to swipe or insert the chip.

Right. And just now it's starting to become a little bit more popular with Apple Pay or something like that. But what is the actual user experience? I go to a store that has Alipay, WeChat Pay. I grab some clothes, walk up to the register. What do I do? And how does that transaction actually occur? So I pull out my phone. I pull out this QR code that identifies with my wallet, my digital wallet, and I scan it with this scanning machine that they have. So they have a machine and you literally just take your phone and put it up to the scanning machine and it's able to read who I am. Right. And my wallet. Yes. And the code. And it's super within a second or two, you know, stalls or even, I mean, you could see on the internet

that trends of homeless people looking to accept digital cash with their own QR code hanging on their, you know, on their shirt or their neck. So, it's very prevalent and it's probably the easiest way to transact in China. And so, that is a consumer transacting with a retailer, right? It is the ability to walk up. That peer-to-peer as well. When you go peer-to-peer, is it similar to like a Venmo experience where I can just type in a number, type in a username, send it, or do I need to be in proximity to actually scan, or maybe I can do both? You could do both.

Okay, so I can do either one. Right, and you could send me your QR code or your name or your username, and I will send you my money in an instant. Got it. And so how do the banks look at this stuff today? Do they feel threatened by the technology companies kind of entering into the payment space? Are they trying to work together? Just what's that landscape look like? So I think the banks definitely work with these technology companies.

You know, if you think about the leading conglomerates in China in technology, it's Alibaba and Tencent. And they all have their own financial arm where they want to work closely with the banks to accelerate this movement of cashless adoption. And, you know, I think it's fascinating because when we wrote a post on Tether back in the day when there was so much backlash about Tether not having enough reserves to back up its coin, we also identified this trend in WeChat where, you know, back in 10 years ago or 20 years ago when WeChat first started and WeChat payments started happening, there was no reserves backing those WeChat digital money. You know, the yuan was really just, you know, an IOU, but, you know, there was no actual money being transacted. And soon, 10 years later now, we're seeing actually the government regulating and requiring these reserves to be set up to make sure that every dollar that we're transacting on WeChat is transacted, is also in reserves with the WeChat company or Tencent company. Got it. So there was actually issues or questions around like fractional reserve banking and this idea that whipping electronic, you know, bits around the Internet may not actually line up with the cash right in the banks. Right. Right. Sounds a lot like crypto.

Exactly. Exactly. There's so much experiments that we could draw parallels to between China and the U.S. You know, as you've described this, it really does feel like maybe China and the greater Asia region has been dealing with digital currencies, right? They're not blockchain based, they're not cryptographically secure as we think of like crypto, but they are digital currencies, digital money. And so there's a lot of the user behavior that's been learned or habitual, habitualized over time that have trained people to do this, right? Yes, I agree. Habitually, I think, if you look at the kind of the rise of the technology conglomerates in China in the last 15 years, they came later than Facebook. You know, Alibaba is the largest IPO, I think, in NASDAQ. But it came much later than a lot of the technology waves that we saw in Silicon Valley.

But people were very quick to adopt, and they make the product very easy to use. So even, you know, 90-year-olds, you know, just older people who are usually not familiar with technology are able to use, you know, just like the way Apple is designed for everyone to use across the world. So I think product design-wise, they really have gotten that right. Got it. And then let's talk a little bit about just the kind of capital controls and things that go on in China and other countries. One thing that I think most Westerners are catching on to that maybe haven't paid attention to the regulation and the financial markets there is it's really hard to move money in and out of the country. Right. And so maybe just talk a little bit about kind of what the logic there is, why governments do that, because that has a big contribution, I think, to some of the interests that the individual citizens have in crypto as well. For sure, for sure. And I think, you know, Bitcoin and cryptocurrency is really attractive to Chinese people, and especially in China, for speculation reasons, you know, potentially to make a quick buck. And the alternative to use Bitcoin is to avoid capital controls, right, to take the money outside of the country.

And partially that's driven by the fact that the Chinese people do not believe in the Chinese government and they do not believe that the fiat yuan will be able to stay afloat and be pegged. I think the yuan was taken away from its peg, I think, just a few years ago. And so to many folks who grew up in China, they see a lot of volatility and they also see a lot of the shadow banking in China, you know, with illegal lending activities and also just lots of, you know, unreported, underreported financial activities that are actually not, that may be increasingly leading to a crisis in itself. So this is why people are looking to take their money out and actually put in the dollar or put it into alternative stable currency. But I think ultimately, the issue, and there was a great article that just was written by Hasu, this researcher, who talked about Bitcoin is a great hedge to the cashless society, which I totally agree. But at the same time, I think because, for example, already we see that 85% of Chinese population are used to doing digital transactions on WeChat and Alipay, they don't really have an incentive to use Bitcoin. Bitcoin, I think, has a great attractive reason for one, speculation. And that is primarily because China is very unequal in income.

There's a lot of income inequality. And so, when people heard about cryptocurrency initially, they wanted to make a quick buck. Right. And they, you know, people in the age between, you know, teenagers to grannies were looking to buy cryptocurrency and then to later sell to the greater full. But, you know, I think before there was a speculation of Bitcoin, there was always speculation around, you know, Chinese A-share market, which is the mainland stock market, which is really rigged also because of the kind of the very early unsophisticated establishment of the kind of institutional market. You know, if you compare the institutional market or the stock market to the U.S., to that of China, China has about 80 percent retail participation in these markets versus in the U.S. It's primarily the reverse where 80 percent of the participants are institutionals.

Got it. So my argument there is that I think people are, you know, for one, people turn to cryptocurrencies for speculation, but there's alternative ways to speculate as well. And then the second thing that I think that Bitcoin is actually was used for, which is to avoid capital controls, can also be, you know, went around with other types of alternative ways, right? Because before Bitcoin, there was also other ways that people got money out of the country. Absolutely. There was Hong Kong that you could use, you know, as, you know, create different entities and set up different kind of establishments to really route your money in that way. For sure. Well, and I guess one of the things is that the government is trying to not only control the people, they're trying to control the money and the flow of money, but they're also trying to control information.

Right. Right. And we've seen, I think, China now twice, we've seen these examples where somebody has gone and put a message on the Ethereum blockchain, right? And kind of the immutable ledger. And I think one was around the sexual harassment or sexual assault case. Right. They didn't want to be silenced, so they actually attached a message to a transaction. It gets put on record, and the Chinese government can't stop that information from being publicly presented.

The other one was around, I think, a pharmaceutical company and something to do with like some nefarious activity or something. But you've got overarching messages. Look, this isn't just about the free flow of money or value. It's also about the free flow of information. Right. In countries where Westerners don't understand that. Right. I grew up in the United States and the idea that you don't have freedom of speech is hard to fathom.

Right. And in these countries, it's actually the norm. It is the default. Right. Maybe talk a little bit about how blockchain itself is being thought about, and then we can really jump into more of the details of Bitcoin and cryptocurrencies and how that's being looked at in each country. Yeah, for sure. And so, you know, going back to what you said about the Chinese government being very stringent about controlling information, that's their, I would say, one of the top priorities now under this new regime under Xi Jinping. um and you see that from the activities that you know the cyberspace administration of china

is doing they're requesting all the activity logs from tencent and alibaba so they're requesting all messaging activity from the two largest players in the market yes wow right is that being handed over it is of course they have to wow you know whilst they're facing with shutdown and you know um and that's something you know that's something we haven't seen before even though those two companies have been existing for about 10 to 15, 20 years. And now the Chinese government realizes that these companies cannot control the information as precisely as the way they want to. They want to really take these companies as their sole propaganda machines

and pushing through their own messages. And they are no longer tolerating any kind of mistakes or execution problems that's happening in these companies. So now I really think that the Chinese government is taking this information to control it to a whole new level. Well, there's two parts to it, right? Because one, it sounds like – I didn't know that WeChat, Alibaba, they're all turning over information to the government, right? I mean, that would be completely ridiculous in the United States if everyone's content was being turned over. We already have issues where them making requests about a single user's messaging is kind of people are up in arms about. Imagine if the entire user base, right?

Yeah, yeah. But I would argue that in China, the priorities of what matters to a citizen is, you know, is income stability. And then secondary to that is privacy and information protection. You know, I think privacy is something that is very not very much an important aspect to most Chinese people because they know that they are being monitored in China. Right. If you kind of look at the history of what China has done to folks who have spoken out, right, it's very obvious that, you know, you are being watched and they have all these increasingly more monitoring tools that they're equipping themselves with in the central party to make sure that you will not be able to or that you'll be discouraged from speaking out. Which I think, honestly, as a Chinese citizen, those things I take as putting myself in the shoe of a Chinese citizen, I think I take those things as secondary to my happiness of, you know, being able to eat good food and just have a good job. And those are the important things to a regular person, honestly.

What's up with this social credit score thing? Yeah. Or maybe you tell us what is going on there. What is it and how real is this or how kind of immediate is the implementation of this? I think the implementation is being tested out. But so this quick background for folks who are not familiar with the social credit system. For many, if you've seen the episodes of Black Mirror on Netflix, there is an episode of a girl who gets rated by every one of her person that she interacts with. You know, you have a you get a rating of five out of, you know, out of five stars.

You know, how was my interaction with Pomp today? I would say it's a five, of course. Ten out of five. Ten out of five, definitely. And so, you know, and you're essentially, what you recognize, what you're being recognized from the outside is this rating that others give you. And the Chinese government is essentially implementing that from an institutional point of view where, you know, if you aren't able to pay your debt on time, they will give you a poor score. So it's essentially a credit score. I would say it's just a credit score.

It's like an Uber score, right? Yeah, it's like if you added all those scores together. Yeah, it's just not the writers giving the information. It sounds like there's some automated scoring. There's some feedback scoring. Right, it's probably an opaque system where there are a lot of things in there. It's in black box and then you come out with the score. And maybe you don't know this, but is it like a number?

Like, hey, you're ranked one out of ten? Or is it like a letter grade? I think it's a number grade, but I'm not sure of the details. But honestly, I think it's not something that is very drastic or particularly dramatic to any individual citizen who's there. They probably just take it as part of this, you know, increasing identity online. And then you need this almost. You know, I think actually it's more efficient that way. It's like gamification for life.

Yeah, it's efficient, right? Because if you combine Airbnb. The fact that I just connected gamification of life to what the Chinese government is doing is ridiculous. because I think the concerns that a lot of people have are very serious and grave in the sense of if this was a score that would help you, you know, get faster service at a restaurant or get access to certain government services like that actually may be pretty interesting application of scoring technology, et cetera. Yeah.

I think people's fear, though, is the opposite. Like they're going to say you can't live in certain areas. You actually have less rights than somebody else. Like, do you think that the everyday citizen in China is worried about what seems the Westerners are worried about or they don't they're completely, you know, agnostic, I guess, to the idea that this could be used for nefarious purposes? So I think the Chinese citizen always relies on the government to make sure that they have a stable life and that there there's no kind of civil unrest. So, you know, and, you know, this has been taken pretty far for the Chinese government as a ruler to do that. Because if you look at Xinjiang and there's lots of civil unrest there and they're putting so many police members out in Xinjiang and you could just see police everywhere, like on every corner of the street. So, I think a regular citizen just finds it to be the government's job to make sure that they have a safe, regular life where they can just go to work and carry on with their lives without any kind of civil unrest.

And this is what the government cares about the most as well, because they're managing over a billion people. Wild. Wild. Which I think really makes, which I think I have another case for why it's harder for Bitcoin to succeed because China has successfully centralized over a billion people. And that's over the course of centuries, right? If you look at chain dynasty, that's when there was like a bunch of warring states and a chain dynasty really aggregated and was able to consolidate all the warring states into one country. And that's happened since like the 1600s. Are they going to be able to centralize Bitcoin?

they're not going to be able to centralize Bitcoin, but they're basically kicking Bitcoin out. All right. So let's go really deep. What the hell is going on with Bitcoin in China? Because you get all the rumors about the centralization of mining in China. The Chinese government controls Bitcoin. The Chinese government bans it one day. They accept the next day. One city likes it. One city doesn't. Just what is going on with Bitcoin in China? Yeah, for sure. So like I mentioned before, Bitcoin is primarily used for speculation and then also for avoiding capital controls or escaping capital controls, right?

So I think, and I had this really interesting conversation with Leo Weiss, who is the Bitcoin, the head of the Bitcoin Association of Hong Kong. And we did a podcast as well, where he, I think, is super insightful about what's going on there as well, since he's actually local to Hong Kong.

And he says that what China is trying to do is create this narrative of Bitcoin, where they're saying that Bitcoin is something that we can control and Bitcoin is something that we can manage. And these rules that they've been kind of setting out, you know, banning ICOs and then most recently banning a lot,

like forcing all this different, you know, technology or any kind of entities to disclose their involvement with any crypto or blockchain companies are all ways for them to make sure that they tell their citizens that we know what's going on. We could control what's going on.

You know, and I think, you know, they see all this OTC or over-the-counter transactions happening in WeChat. That's been happening over the course of the last five years, but they haven't done anything about it. Interesting. And that, to me, tells me that these arguments for Bitcoin, which is decentralization, privacy, private transactions, and the last speculation,

hasn't been able to cause enough of a stir for the government to worry about it. So, to me, it seems like the government honestly doesn't really care that much. they actually don't are not worried that bitcoin will disrupt the society that they are in now do you think that the chinese government has set up mining facilities and is mining bitcoin themselves uh or bitcoin cash and do you and the second question is do you think that they've bought crypto themselves i think they probably like folks probably buy it for fun you know as like Not the individual governments, like the Chinese, the CCP has a CCP bought Bitcoin and put on a balance sheet. Or do you think that the CCP has invested in building mining facilities and done it?

Or do you think that's more rumors and probably unlikely that it's occurred? It's very unlikely that it's occurred, I think, because if you look at BitMing, right, back then when last few years when BitMing was creating these mining pools for over 50 percent of mining, essentially from these aggregate pools, China didn't do anything about it. Like, they could have had the chance to really dominate Bitcoin if they wanted to, honestly. And just even when there were exchanges that were setting up shop there. You know, Binance, CZ and He Yi, who is also the co-founder of Binance, came from OKEx. And OKEx was set up shop in China. And it's still there. And it's still, you know, very relatively close to where China is because it's Hong Kong, where it's headquartered.

And the Chinese government doesn't do anything about it. You know, they could potentially really own all of that and really manage and dictate exactly what they want to do with these things. But they don't because I think they realize that it's the ideologies that's embedded within the Chinese citizens doesn't align with this ethos of decentralization and privacy that Bitcoin has been preaching. So I think there's going to be an alternative coin or, you know, the digital version of fiat, the yuan, that comes in and actually, you know, takes over and really improve people's life the way they want to. Do you think that Bitcoin can replace fiat currency in China? Or do you think it'll be really, really hard? It will definitely not be in China, if any. You think China is one of the hardest places for Bitcoin to take over, dominate?

For sure. Yeah. If you think about just the way how China has been controlling or managing its narrative, it's mostly through information. And that's prevalent in Weibo, which is Chinese Twitter, and it's also prevalent on WeChat, where they are monitoring everything that you're doing. And people are seamlessly transacting in this digital realm already with WeChat and Alipay. So why do I need Bitcoin? Only when I need to take money out of China. And if China actually grows to become a, you know, first world, you know, high GDP growth country, like I will feel more comfortable even putting my money in keeping in China. Right. It's mostly the inequality aspect that I find it to me where folks find it very attractive. You know, the poor people want to speculate, make money. The rich people wants to take money out. Yeah. Yeah. Side note, you mentioned Chinese Twitter. I'm trying to go viral on Chinese Twitter.

I got to get an account on there. Yeah, definitely. We'll help you set one up. Yeah, let's do that. But speaking of Chinese Twitter and American Twitter or Western world Twitter, one thing that you've mentioned before that I think is a really interesting concept is this idea of Chinese or just Asian funds and projects trying to kind of go to war to get mindshare in the Western world, right? So kind of this idea that more of them are coming here and stuff. Just talk a little bit about kind of why they're doing this. How are they doing it? Who's doing it successfully, et cetera? Yeah, yeah.

Just to address the Weibo comment real quickly, and I think this is super interesting that most folks don't know, is that there are different messages being made actually on Weibo on the Chinese side versus on what's made on the U.S. side. So, for example, in marketing between Tron in the U.S. side and the China side, you know, very different messages. And even when you interview, when you see interviews of CZ and He Yi on Chinese and English, they're very different content. So I translate those for folks. Wait, why are they different? Because I think people, the interviewers ask different questions. Okay.

And they're actually usually more pinpointed questions and direct questions to CZ and He Yi. And they also, I think, give a lot more access to some of these folks, more so than the U.S. interviewers. So I find that super fascinating. And that's something that people should not ignore because then you always have this information arbitrage that people could take advantage of when you know more than one languages. So people in the U.S. or the Western world may actually be getting better access and know more from the mouth of CZ, Justin Sun, et cetera, because they're interacting with

Western reporters and media in a different way than they are with Asian. Right. Wow. Right. Yeah. I think that you could take a look at some of our translations on our website where we really highlight, you know, here are the things that CZ says in Chinese. He's mentioned this like never in English.

So here's what he said in Chinese. And it's really interesting and useful for folks now that we're in crypto because really what CZ says affects everyone. And then to answer your second question about folks coming from the East in the funds and the projects coming to the West. I don't think they're necessarily coming with antagonistic kind of intentions. You know, if we look at Tron, they're entering the U.S. with a big conference they set up in San Francisco with Kobe Bryant. You know, that unfortunately didn't cost too much to start because we're in a bear market, but there was Kobe Bryant, right? And if you look at funds, you know, we see Hashed, for example, the largest fund in Korea with all their partners now setting their eyes in the U.S. because they recognize that the technology here are second to none.

You know, there won't be as many investments they can make in Korea or anywhere in Asia as a result. So you will see this trend in this ongoing bear market that, you know, funds who are really looking to invest in technology, who are really looking for returns, are coming to the U.S. for it because that's, you know, especially Silicon Valley, I'd say. And then for the projects, you know, the ongoing, they also are flooding here because I think, for one, you know, If you look at Tron, they already dominate China. They have a great marketing machine there. And the next big market is the U.S. You could argue that a lot of the countries in Asia is a big market, but they're definitely not as big as the U.S.

Okay, so here's what I want to understand. Let's talk about Tron for a second. And I don't care about the technology, the coin, all that stuff. I want to talk about Tron, the marketing machine, right? Justin's son seems to have come out of nowhere, built this massive online following. uh it's very apparent to me here in the west that he has um a western world audience and a eastern world audience um from what you're telling me it sounds like he's probably talking differently to each one of those audiences and it just feels like it's this

massive machine on a global scale where do the eastern projects and companies learn this how do they go about building this like like it's fascinating when you look at it from a pure marketing standpoint of how coming from a piece of the world that we don't even speak their language right in the western world yeah and for them to permeate into the western world culture and communication products how does that happen right right that's a great question and i think you know just thinking about the backdrop of you know the countries between u.s and china and the general population of folks who understand crypto within these countries. China and the folks in Asia generally understand what's going on in Asia as well as the U.S. They have an eye, they keep an

eye up going on what's going on in the U.S. But in the U.S., most people, for example, Twitter is very U.S.-centric, unfortunately. I know there's a lot of folks of you who are coming from different places, but I think crypto Twitter is very U.S.-centric. If you go to Weibo, it's obviously different it's chinese centric and and and the fact that and just kind of knowing that crypto is global and in the past china has always looked to the u.s for technology developments for you know into silicon valley for for these innovations this is happening now and i think tron is able to do that by buying different bittorrent you know by having a legitimate illegitimate company setting up, you know, in the U.S. who could speak on behalf of it makes this branding

better, right? And then once you issue a token based on top of that platform, then everyone gets a share of it, right? And especially if you continue to pump that thing, too. It's basically what it sounds like is the marketing is really understanding American culture, understanding incentives, and really tapping into how to insert yourself into the conversation in a way that you know will resonate in that culture. Yeah, and I think it's hustling, and it's also that they have a lot of money.

Yep. Yeah, having a lot of money will help you a lot through this bear market. And Stelagistron, I think, looking at it from the opposite end, there's a project. I'm a consultant with Tezos. They are setting up four foundations in Asia, one in Hong Kong, one in Korea, one in Japan, one in Southeast Asia. And they have localized all these different communities to build on top of Tezos and to form partnerships with universities there, to work with professors, to build on, you know, OCaml and to kind of foster this innovation. And so that's happening both sides, you know. But I think what I see from the Western projects tend to be more, you know, focused on the long term.

Absolutely. I saw a picture of, I think it was Justin Sun, Kobe Bryant, and it might have been Crypto Ron. And I just remember saying to myself, we went from, like, ETH giveaways on Twitter to this. Like, how did these three people from three so different walks of life all come together at a conference in San Francisco to talk about magic internet money? It was just incredible. Yeah, if you have money and then, you know, we're in a bear market, you can get a crowd very easily. All right, one minute on Bitmain. Recent news came out that they took some pretty heavy losses in Q3.

They probably took the same or greater losses in Q4. What's the general sentiment in Asia around Bitmain and kind of the mining empire they built previously? I think Bitmain, so I'm a tech contributor as well, and I've written extensively about Bitmain before. And I think, you know, in the last year, they really have grown from, you know, 1,500 people to 3,000 employees. And it was just, they're really banking on this bull market to fulfill itself. and take this advantage to IPO. But I think they really missed that opportunity. And the bear market really fell on them.

I think Jihan, there's news of him stepping down, as well as Micree Jang, which is the other co-founder. And I believe that. And I think it's definitely hard on him because he's really built the company from the ground up with Micree. And now they're bad on Bitcoin Cash. That's really funny because I always wonder If the government really cared about Bitcoin, why wouldn't they kind of try to stir Jihan towards focusing on Bitcoin instead of Bitcoin Cash?

Why the huge bet on Bitcoin Cash? To me, it felt like an ego decision. That's an interesting take. I don't know the answer. I think there's a lot of people who would agree with you. I'm sure Jihan will continue to be in this space and we'll hear more about him. Yeah. Yeah. Anybody who's built these large companies very quickly, they've got the skill set, right?

They kind of got lightning in a bottle. Right, right. And so we'll see what they do. It's always ironic because he, I don't know if you heard about him, about his story of how he started BitMing, which was that he was the first translator of Bitcoin, white paper, and he translated it into Chinese. And he really believed in Bitcoin. Right. But the more I thought about it now, the more I'm like, well, if you decided that you supported Bitcoin, then why were you trying to monetize through Bitcoin mining machines and also creating these mining pools, which essentially centralized Bitcoin? Right. Which to me, maybe this is just like a random thought that I had, but happy to hear what you guys have to think. Trust me, there will be people who definitely tweet at both of us and let us know.

All right. So, rabbit fire, three questions. What's the most important company in crypto in Asia? Um, I don't know how to, how to say, um, I don't know how to decide what's important. I would say the companies that have the most money will be the ones who will continue to run. And so that would be Tron. That would be EOS. That would be Binance. Um, wow.

Tron, EOS, and Binance. I did not expect any of those three to be on the list. Well, they have a lot of money. Yeah. You know, that's, that's, that's the world running. Money really runs the world. One day Bitcoin will run the world, but we'll stick with money for the moment. I agree with that too.

I agree. Bitcoin outside of China. I agree. All right. Awesome. What is the most important book you've ever read? I'm going to follow CZ and say Sapiens. No, I'm kidding.

CZ's setting a good bar there. You guys check out his books. I actually just recently read this book called Billion Dollar Whales. Oh, it's fantastic. It's great, right? That is a great pick. That's a very good book. Thank you.

Thank you. I think it's fascinating. And it's talking, so Billion Dollar Whales talks about this huge scheme made by essentially a 27-year-old who took a billion dollars from the Malaysian pension fund. Oh, I think he took more than that. Oh, yeah, he took more than that. J-Lo is, it's the 1MDB scandal with Goldman Sachs. A guy, 27-year-old in Malaysia, literally just swiped billions, I think. What's your favorite fact from the movie?

And then I'll tell you mine. Oh, there's so many. The fact that he's in China now. Okay. All right. So that is crazy. They can't find him. He's in China somewhere.

Mine was that he took some of the proceeds from his scheme and he financed the Wolf of Wall Street movie. Oh, right, right, right. Of course. Exactly. I don't think people are like, wait a minute. That's pretty crazy. Oh, yeah.

You guys should definitely read it. It's a global story. And you know, what I drew from that was like, oh, wait. So Jho Low essentially befriended a lot of celebrities in the Valley to gain his recognition from the Saudi money and also from the Malaysians. and it sounds like Tron is also befriending Kobe Bryant

and is releasing all these partnerships with celebrities in the US who are doing the same thing okay anyway that's a very interesting correlation there yeah sorry

that was just a random parallel before I end I always let somebody else ask me a question but we gotta talk about aliens first what are the odds

that they exist oh man what do you think oh like 99.9% yeah like i would be i think there's a greater chance of aliens existing than bitcoin becoming the global reserve currency and i think there's a very high percent chance that bitcoin will become the global reserve currency wow yeah like i like it's just math right in terms of probability how big the

galaxies are right and you kind of go through it uh the likelihood of how much progress we've made already in terms of finding certain conditions where life could exist and could not exist how many planets there are right it's just there's so much we don't know uh and there is such a low probability that we are the only planet in the entire universe that got lucky enough to have life yeah no that makes sense yeah we'll see you didn't answer the question though what do you think i haven't thought too extensively unfortunately but i i see i see your point Over under 50%. She wants to say under so bad.

Under, under. Guys, what do you think? Under. All right, under 50%. Am I the only one who said under? No, there's some people who, Josh Brown, he'll always get memorialized for saying that ghosts are more real than aliens,

which is a ridiculous statement, but shout out Josh Brown. Nice. All right, what one question do you have for me? Well, what's your favorite company right now? My favorite company is Morgan Creek. I got to be more specific. No.

So if you ask the most important company, and I've talked about this a bunch on the podcast, but I think it's probably Facebook. And the reason why I think it's the most important is whether they are successful or not with whatever they release, they are likely to have the highest number of people experience blockchain and crypto immediately. Right. I agree with that. So if they launch to 200 million people in India or the stable coin rumor that's going around. Right. Oh, no, it's definitely going to happen. 200 million people just experienced blockchain and crypto. That's more than all crypto users combined for the last 10 years. Right, right, right. I agree with that totally. And I think that's something similarly that's happening in China as well, where WeChat and Tencent will, Tencent and Alibaba will release some kind of their form of blockchain. And bam, you have a billion point five people. Come on, guys, don't mess it up.

Yeah, that's going to be a war between. I mean, I had this conversation with Lily Liu, who is also a very smart lady based out of California. You know, I think the war in the end is going to be Bitcoin versus Facebook versus China. I'm holding out that Facebook, Alibaba, Tencent, if they just adopt Bitcoin and Jack Dorsey, right, with Twitter, like if they all just start pushing it as the native currency on the Internet, it would be pretty incredible. I think the odds are very unlikely, though. Yes, I agree. Everyone will be pushing for their own coin, unfortunately. And I think Apple is exploring that too.

So that's a great thing, I think, to end with. Awesome. All right. Thank you so much for doing this. We're going to have to do this more regularly because I think you've got pretty interesting insights in Asia and China. Thank you. Thanks, Tom.

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