The Wolf Of All Streets - Bullish On Crypto And AI With Raoul Pal, Bill Barhydt, Mark Yusko, Mike McGlone

Episode Date: April 19, 2023

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I just wanted to test everyone's patience for that incredible elevator music that we started with there. So I hope you guys enjoyed that. As usual, we're starting to bring our guests up onto stage hopefully you guys can all hear me the sound is good uh mike mcglone i see you there as a listener and your dms there should be an invite for you to join if you're listening we have a few more uh people coming on and and others that were joining potentially anthony Scaramucci around 1130. And as you know, it's always somewhat fluid here. Although I personally am not a huge fan of attempting to moderate spaces that have 400 speakers who are all screaming over each other.

So I think my core competency generally is having a conversation with two or three people and letting them have the opportunity to talk. So that's what we're going to really try to do today. Focus, obviously, on Raul. Raul, how are you, buddy? You there? Always good. Can you hear me? Yeah, you sound great. Hey, good to see you. Good to see you. Good to hear from you, my friend. How are you? I'm doing well. I'm doing well. Glad to. I was kind of away for a few days. And, you know, if you leave for four days now, the AI is already taken over by the time you get home. It's ludicrous. It's ludicrous. You can't keep up. It's just impossible. Yes. We're going to start there in about two seconds. So, listen, just to set the room, everybody, this is our weekly Tuesday Spaces.

We do this 11 a.m. As I've kind of discussed, I've considered doing this more often, but we're really trying to favor quality over quantity. And the guests have really, truly been incredible. And I know people have valued these conversations. Next week, I have a feeling it'll be a sort of an opposite vibe conversation. I have Jeff Booth, so we'll be talking more heavily, I think, about Bitcoin next week. Everybody, please hit that little arrow button up at the top. Share this space, get more people in. And also, of course, this will be available for

playback here on Twitter, but also on Spotify, Apple Music, everywhere that we have my podcast. But without further ado, I want to be respectful of everyone's time. So let's get started. Raoul, listen, I just sort of already hinted at it with that joke about AI. You've been on a bit of a tweet storm. I know that you just tried auto GPT. I've seen quite a few things. You and I have had a lot of conversations about exponential technological growth. This is insane. Yes. So, you know, the speed at which it's happening is surprising, even those at the epicenter of AI itself. So people like Ahmad Mostak is a good friend of mine.

Even he is like, I asked him to predict where might we be in five years. He goes, I have no idea where we're going to be by the end of the year because things that he thought were going to take a year to develop happened in a month don't forget chat gpt went from zero to 100 million users in five weeks literally nothing on earth has ever happened like this before so we kind of get our heads around that and our heads around mid-journey and its incredible development in terms of the kind of photorealistic art.

Then we know that text-to-video is coming and that's going to come at scale as well. And that's going to happen in the next month or so. And then on top of it, we launch all this kind of agent-based auto GPT, which basically is creating your own intern, but skilled intern to be able to do pretty much anything. Now it's early stage, but it got announced last week. And already by the weekend, there were about six major projects built using

it. I don't even know who these people are building this stuff and how they can do it at such speed, but it's crazy. And that's the first iteration of that. So if we think of it as its GPT-3 moment, where the hell are these agents in a year's time? These are basically autonomous AIs that conduct tasks for you and can work together to create complex tasks. So let's say, I mean, I asked it to write me a newsletter based around the recent developments in AI, but also brand it the exponential age, create a branding for it, and then create it into a PDF. Now, I didn't know how to do the prompts. It was my first time. But I got quite a long way along that with it, with only two prompts. And I'm like, oh, oh my god what does this even

mean so it it means that the replacement of knowledge workers and the enhancement of knowledge at scale knowledge doesn't become a scarcity expertise doesn't become a scarcity it becomes an abundance thing um nobody's really ready for that but when we're talking about exponential age technologies you know we've already seen um you and i scott been all over this is crypto and how fast that was that was the fastest adoption of any technology and we probably haven't even had the chat gpt moment there yet but then coming hot on the heels is i think the apple announcement that comes at their whatever their big mega show is. I think that's going to be their new headset.

Plus this new nerf technologies that I've just been tweeting about, which is basically 3D renditionings of spaces, which allows you to create photorealistic metaverse experiences. OK, they've been working on that for a long time. So that's coming. On top of it, we've got the rise of the robots and that's the self-driving cars. And within the next couple of years, we're going to see a plethora of self-driving cars around as, you know, whether it's Google, whether it's Tesla and a bunch of others start scaling that out so that's basically robots combined with ai and so on and so forth i mean it keeps going and keeps going i mean i even looked at this when i when elon bought twitter i said he's no interest in in a social media platform that's all the front what he's actually buying is one of the best sources of human interaction for training ai and he's basically announced that x.day ai is is that it's the ability to get natural human conversation both in long form

because that's the new long form tweets plus the kind of new sub stack ideas that are coming plus short form plus video plus audio um that's a very powerful data set and i'm sure he'll close off the apis to twitter so then he gets the data set now why does he want that well x.ai is just part of a bigger plan which is he also obviously owns dojo which is this massive supercomputer to create ai processing for for the self-driving cars for tesla But in addition, he's building the Optimus robot. So you've got robots and you've got all the humans in the world interacting on Twitter and you've got the cars. It's like, okay, this is moving very, very fast.

Yeah, there's never been anything like it. And now it seems like even the fast things that took years take days. I read that AutoGBT was only conceived two and a half weeks ago. Yeah. The idea. So what we're seeing here, and people are going to have to get used to this, and it's going to be very, very unnerving, and we're all feeling it. It's like, I cannot keep up with this, is we kind of began to get to grips with Metcalfe's law.

So that is these kind of exponential adoptions. We've seen it in crypto. We've seen it in the internet. We've seen it in mobile phones. All great. This, however, what's going on in AI is actually AI and all of these technologies together is creating something called Reed's law,

which is Metcalfe's law squared. And I've gone through and checked, and I don't think there's any example of this in humanity. And we're going to have to deal with this at scale globally in a ridiculous period of time. Yeah, I guess the next question becomes what's left for us, right? And I'm not a fear monger who believes that AI is coming for our jobs. I think that this just increases the individual human productivity by many, many multiples. But this is sort of, and I joke about travel agents being replaced, obviously, by the internet and kayak and Expedia and such, but it feels like we're just going to have thousands of jobs that are travel agents. And it's going to be next month or six months.

Yeah, or next week at this rate. I mean, yes, yes, it's very disruptive to the labor force. As I've said to people who are arguing about sticky inflation, this is like a nuclear bomb of deflation that's just hit the world. I think it's the biggest advancement of any technology since probably the splitting of the atom in its massiveness of importance. It is fundamentally a change in society, how we work, how economies run. And that is all underway.

I mean, I've been talking about this and writing about this for the last two or three years saying this is all coming. And then I didn't realize how fast this was going to happen and what it was actually going to feel like. But it's like, you know, we're all in the media business as well as investing in a whole bunch of other things. I mean, Scott, you've been in the music business. Well, that's completely changed. You write newsletters. That's completely changed. You create content. That's completely changed the investing world. Well, that's going to completely change. I mean, what's left? I mean, everything, everything is going to change. Yeah, I don't have the answer for that. And I'm, I feel like I'm so far behind it. Even now, I'm like having meetings in the coming weeks with people who are master prompters and understand this stuff better than me, because I do feel like it's either you learn how to prompt these and get

the most out of it, or you will literally be left behind i'm not saying that there won't be uh things for us all to do but even from the first iteration of chat gpt i was using it to help edit my newsletter i immediately saw at least the value there but like you just said you could literally have it conceive of name brand and write your newsletter i'm not going to do that but if you don't somebody's going to do it. And then Scott's going to be walking around LA looking for another job. This is the issue we're facing. I mean, it's very real

because there's some 24-year-old who's figuring out how to do this who's coming after your work. Really crazy. Mark, I see you have your hand up. By the way, for the other guests who we do have up here and we will be adding more just feel free to jump in whenever you want you don't need to be polite mark no i just want to ask a question so i the the question is quality i i don't i don't

see it um do you guys have thoughts on or raloul, do you have thoughts on the quality? Yeah, this tool is fast and it does things fast, but at least my experience is the quality is mediocre at best. Yeah, I'd argue differently, Mark. Hello, by the way. I haven't spoken to you in a while. Hope you're well. I'd argue opposite. I mean, we've used it a lot.

I've spent a lot of time playing around with it. We use it a lot at Real Vision of a whole different things. And it's the quality of the prompts that gives the quality of the output. The output is literally extraordinary. I've used it whether it's for personal issues. I've used it for business planning, business strategy. I've used it for guide and assistance. It's more powerful than I think we yet understand. I think there was a, you know, when you see the interviews with, let's say Sam Altman and Lex Fridman, or you see the one that the CEO of Microsoft did on 60 Minutes, all of these guys are like, we don't even know what we

invented here. And we're seeing it learn itself in ways we didn't understand, which is what we saw with Go. So this is not a fixed state thing, because it's an exponential in how it learns as well, that whatever we think of it today is not where it is tomorrow. So I think it's very dangerous to underestimate the power of this and the quality statement today, because the quality statement today was different than it was yesterday and it was two months ago.

So I would just keep a very open mind to what you think quality is versus the quality of the inputs and how to leverage this more powerfully. I mean, don't forget this auto GPT was built on top of chat GPT, and that's leveraging the same toolkit, but also the internet as well. So that's become even more powerful than we possibly imagined. Yeah, Raul, I was going to ask you specifically about that. Obviously, one of the criticisms of chat GPT is that it's using a data set that's 2021 and before.

Does AutoGPT now leverage real-time data? I haven't even had a chance to look into that. And also, just really quickly to Mark, I can tell you that the quality argument is so two weeks ago. I know that sounds nuts, but it improves literally with your ability to prompt, like you said, and just with the evolution of ChatGPT4, it's really crazy. But go ahead. But how much of your newsletter has been generated by the tool? None of it is generated by the tool, but I'm a simpleton.

I generally use it just to make sure that I don't have grammatical errors to edit and make myself sound a bit smarter, but I'm still not comfortable yet uh releasing that okay so yes i agree with you on that regard ral how much how much of your content so i mean you talk about how great the tool is but i don't i i don't have much uh evidence of quality output that i've received i've received some crappy stuff but so we use ai for video editing um so uh descript allows us to put in a crate to auto create transcript instantaneously transcripts not 100 perfect with that transcript we can then just go through the transcript look at chunks of the video we want to take out to create a shortcut it creates that edits the video and does it or we can

take bits of speech out or you can put its own speech in we've also used it for creating content we've been experimenting internally with creating content in my voice and other people's voices um original content and it can do that pretty well um we're already seeing it for newsletters so we have newsletters that um the editing first pass or the structure of a newsletter is written by ai and we've only been using it for a month um so the marketing team have been using it the content team have been using it the products and engineering team are building on it and using it. So it's kind of coming at us from every angle, but everybody's new to it.

We're all trying to learn how to get the most out of it. I'm seeing other people writing entire newsletters written by AI. And you're seeing a lot of posts on Twitter now that are completely AI written, these kind of long-form posts um and they're they're pretty decent and again these are people who are not experts in doing this either so yeah i'm all right well you went from you went from great downgraded to pretty decent so if i keep asking you questions maybe we'll get to what i think which is not very good i don't know i've been testing it mark and I will say some of it is really, really excellent.

It's just that I haven't figured out how to work it into my flow yet, right? And like, I think that, and I'm assuming that Raul, it's probably similar. The thing I struggle with is that I still want to read it and check it first, right? And have the original idea, but there are plenty of people

who have just put it out into the wild to do its own thing. I think the craziest part is how fast it's iterating on itself. And so like what we say today might be completely different in a week. I mean, auto GPT, literally it's been like three weeks and I have a friend

who just booked an entire vacation using auto GPT to test it with a full schedule, with childcare for his kids. It downloaded things to his computer like apps that it needed to be able to continue the process without him doing any of it. I mean, it's pretty absurd. Yeah, I totally agree. Bill, I saw you had had your hand up there. I don't know if you had a comment.

Yeah. Good morning, everyone. I've just been thinking about this for, I don't know, like decades. I mean, I had the first machine learning classes I had 30 years ago at Stanford. basic ideas of deep learning, generative models, you know, reinforcement learning, all the concepts that we've been building on for 30 years. I mean, it's largely a function of Moore's law playing itself out, right? And so I think, partially to both Mark's point and Rul's point, I think that we're in an exponential learning phase right now, and you're basically

dealing with an infant that is learning at an exponential rate. And that infant is basically the sum total of everything happening in AI right now. And I think Raul made the point that

the expert in AI is saying he doesn't know what's going to happen in a year. And I think the reason is that we intuitively understand, and a lot of people don't, that I don't know. Did everyone lose Bill there? I did. If you guys could hear Bill, give a thumbs up if you can. I'm sorry. Did you lose me? For a second, but it seems you're back. Sorry. I was just saying, we tend to think about exponential technologies at decade scale.

Now, because every developer on the planet is going to start using these tools, we're going to see them at sub-month scale, which we've never experienced as a human species before. And so I think Mark's point is fair, but at the same time, we've never seen an infant grow up in days as opposed to years. And I think that's what we're about to experience here. And we don't necessarily know the implications of that. But I can tell you, we're not going to be having the discussion in a year of is the quality here? Great. It's going to be how is your organization becoming exponential, because you're able to take advantage of these tools and what they can do for you? Who are you replacing? How are you measuring productivity? The KPIs that we're going to be

contemplating around this are going to be emerging over the next few weeks and months. And I'm telling you, every company on the planet is thinking about it. I just came back from A360, which is Peter Diamandis' event. And half the event was reworked to basically help organizations become exponential thinking, AI-centered organizations. And everyone is completely focused on how to integrate these tools into their organization right now. Now, we may find that… Yeah, but Bill… Go ahead. Let me just ask you another

quick question. So I think your analogy is so spot on that it's an infant and we're treating it like an adult, right? Which is the new thing. We all want to be our kids' friends. But I think that the challenge I see is this tool, one, it uses old data, two, and that will improve. It doesn't produce any insight. It actually imagines facts, right? It makes stuff up when it gets stumped. And it doesn't sound natural because it's processing language using rules, and that's not what humans do. So I just struggle with whether it is going to actually become intelligent. I actually don't think it's intelligent i think it is artificial but i don't i don't know i'm i'm a skeptic at this point of this particular tool being so overwhelming because i i hear people talk about oh i used it but then when i ask people okay show me something you produced with it there ain't a lot yeah uh i i have a slightly different well i have a different experience and you know get back to bro but my my experience is right now is every developer that I know is generating code at a significantly accelerated rate, quality code.

42% of all GitHub code is now on a daily, weekly basis is now generated by AR. That's right. That's right. That's right. And so the point is that, you know, you have every developer in the world, not only developing code, but also integrating now via these APIs that do give you access to real-time decisioning. They give you access to live financial data,

live travel data. I lost Bill again there. I don't know if that's how everyone would just be. Sorry. Twitter doesn't shut the phone off. That's the problem. Twitter doesn't shut the phone off. That's the problem.

Anyway. You're getting calls. Yeah. So farmers are going to be making real-time decisioning now. So I get that writing a newsletter may sound a little combination between a Harvard graduate student and a second grader. I don't mind that. But what I see is productivity gains exploding globally over the next few years as a result of this. Go ahead, Tom. Yeah, thanks, guys. Thanks for calling me up. So just a bit of background. So I wrote for a long time for Masari and I do my own independent research. A lot of that is macro focused and crypto focused. And I can tell you every day, you know, I sit down and with a blank

page, try to think about a new and interesting topic to write about. And there's always, you know, three or four that I have going. Leveraging chat GPT, as long as you can build the scaffolding for what you want to write, I've been able to 3 to 5x my output from simple things like, here's the world's reserve currency, and then the projections of where it could be going forward. I try to build that part myself, the background, chat GPT gives me all of it. As long as I'm asking the right questions and plugging in the right data, it can substantially improve what you're looking for. So I think on the research, the writing side, all of these integrations are going to, you know, 10x the researchers who can ask the right questions and know what they're doing and build the right frameworks and really leave a substantial piece of and portion of all of those folks who can't do this

thing behind. To Raul's earlier point about social media, I think we're probably talking to a substantial amount of bots and you don't actually already know it. I was working with a company the other day that essentially trains itself on all of your tweets, all of the content that you want. Say you want tweets about cryptocurrency, DeFi, emerging trends. You plug that in, it scrapes Google News, it scrapes your Twitter feed, writes it in your voice, and every four hours will send out a tweet based on that.

And it keeps training itself until you get the content right. And then you basically don't have to be on Twitter anymore. And this stuff's already happening for Twitter, LinkedIn, and others. So I think we're talking to bots. We don't even know it. And I think the folks who can train these things and ask intelligent questions are really going to be the ones who jump ahead. Go ahead, Mike.

And after your comments, I want to move into how this actually impacts the crypto market. Go ahead, Mike. Oh, hello. Thanks for having me. I think this, to me, fits into the macro that I say, okay, well, there's a lot I don't know about the specific trees of the artificial intelligence, but it's definitely the stage of suddenly from gradually. Because I remember hearing about this when I was an undergrad and we were playing with that on a 486 computer. It just wasn't ready. But to me, this is what corporate

leaders are getting that are typical, like Federal Reserve people don't understand about significant deflationary trends that you mentioned, Jeff Booth nearly nailed in his book, The Price of Tomorrow. I'm glad you're going to have him on soon. To me, that's what people really miss last year and are missing now when I see things like producer price index is dropping at the fastest pace in history since 1948. And we have the Fed still tightening. I just look at this. You just have to assume that the technology is moving so fast. It's so deflationary. If you don't, you're falling behind. And that's a key thing I get at all conferences I go to, from metals

to agriculture to cryptos to energy. It's a deer in the headlights look with what's happened with technology. A guy out in the farm said recently, Mike, I went to this event. John Deere showed me their new technology. It's shocking what they can do now with planting technology. That to me is what's accelerating. And so I look from a macro standpoint with cryptos. This is deflationary trends that people thought were kind of over are reaccelerating. And in the macro, we saw the Fed still tightening.

So that's why I wrote it in. And that's why I like to listen more to the specifics, because to me in the macro, this is the big picture of we're going to see by the time we talk next year, is all this going to tilt towards people? It's going to replace jobs, but it's a transition towards higher productivity, lower prices for everything. Yeah, I'm sure everybody on this panel probably agrees that inflation is pretty much done and we'll be talking about deflation more in the future. But Bill, you said something really interesting. And you were talking about basically the fact that everybody's talking about this in every meeting and that you have to get ahead of it or you're going to be left behind. I said the same thing. And I have to be honest, I remember all of us saying the same thing about

Bitcoin and crypto for the last two or three years. And so I don't know if I'm not saying that that's a point against certainly against AI, but I can certainly remember when MicroStrategy bought Bitcoin and Michael Saylor was hosting 2000 CFOs and every company was going to have to add Bitcoin to their balance sheet or be left behind. So are we getting ahead of ourselves here or is this different or is that all happening for crypto? Raul, I would love your take on that because we've had these conversations so many times.

Yeah, so look, the crypto market, as we know, is driven by two things, the network adoption model, which is what makes it an exponential. And in addition, it's liquidity. So we've gone through the liquidity down cycle. So guess what? Less people are interested in crypto, less people are interested in VC because there's not enough money around all of that stuff. So let's zoom out. I spend a lot of time speaking to the world's biggest institutions. They are all over this space still. Everybody's done their homework, everybody's set up, but they tend to be price followers.

I also, by the business that I set up, Science Magic Studios, we talk to the world's biggest brands. All of the fashion brands, all of the sports companies, a lot of the media business, and the music business is all hyper-focused on this space. They understand that Web3 equals customer loyalty in a new way and that community is their new business model. That is not going away. So as price recovers and liquidity recovers, we will see yet again another phase of acceleration if we think of the previous

acceleration phase we saw the rise of nfts the rise of defi those were the two big things and the rise of layer twos so three big things happened the last cycle what is this cycle going to be well the most likely outcome is going to be the applications cycle so i think we will see a lot of this and then we've got some super cycles I think we will see a lot of this. And then we've got some super cycles on top, which we know a lot of people have talked about, and I've been trying to drive the discussion on stuff like digital ID and how important it's going to be in an AI world.

So I think that we've seen this with almost all technologies. They come in ebbs and flows. that we've seen this with almost all technologies. They come in ebbs and flows. We saw an enormous amount of money in VC going into the Web3 space. There's a lot of people building. Sure, some people run out of runway and that's the normal course of events. But out of the other side,

there's going to be a whole load of developments. We're seeing stuff with zero knowledge proofs. That's another side of the equation we're going to see. So my guess is we look back in three years' time, we oh my god this whole space has moved again you know don't forget every time it kind of rises exponentially in number of users and we got to 300 million users uh at the peak of the last cycle next time around we'll get to a billion users maybe more so um you have to just zoom out, look at that logarithmic chart and realize that the network adoption model keeps playing out over time. So it's not a narrative where, well, suddenly we've had a down cycle and nobody's interested in crypto. That's

simply not the case from almost every conversation I've had. It's just a matter of money, money and business cycle. You know, right now, nobody can make money. It's a tough market out there. And that's normal. You know, we're in a recession or entering a recession. But as ever, we will come out the other side of it. Out of the other side of it is the ongoing digitization of the world. Hey, Scott, maybe one quick point. And I've got a staff meeting.

So I think two things. One, AI is a 50-year phenomenon that's become an overnight rage, right? I can give you a lecture on all of the technologies that had to evolve over 50 years. I don't want to talk about computing. I'm talking specifically about AI research, right? So this has been ongoing for literally 50 years. And in the last five years, of course, we've reached an inflection point in the hockey stick. And we've had smart contracts to enable decentralized finance for less than 10 years. And we're just now figuring out how to get them to scale to a billion users using them, which would enable a 24-7 always-on banking system that we've never had before, which probably is a key to the fourth turning in terms of mitigating next five years. And the change of pace in developer productivity combined with these two phenomenon is going to create a level of productivity and financial engineering, the likes of which we can't even fathom right now. And so I do think it's fun and interesting times, and I do see a significant convergence between the AI and crypto, particularly smart contract programming worlds, coming up very, very quickly. Mark, what do you think? I completely agree i i think that the hype cycle is is was your original

question scott and 100 right this is this is not new it's like it's like it's not like ai was invented this year i mean it's 50 plus years overnight sensation. And it's one, you know, we got one little piece that we're talking about that everybody's so enamored of, which is natural language processing for the first time. But, you know, we had Clippy 30 years ago. Yep. 30 years. My friends were literally memeing Clippy. 30 freaking years ago. It took 30 years.

So, yeah, it it's overnight but 30 years so in terms of the smart contract point the bill's making the the i think i think uh total value locked in defy today is a is 0.2 percent of bank deposits it ain't going to be 0.2 percent forever uh and it's going to go to one then it's going to go to five then it's going to go to eight then it's going to go to 25 i mean ultimately i will make the case i have been making the case that the banking i'm not allowed to use the c word um i used to call cabal and then people said that that's a trigger word um so now i got to call it cabal, and then people said that that's a trigger word. So now I got to call it. They said use cartel.

I'm like, that sounds like a trigger word. So the group, the banking group that's been in control for the last 800 years and has created more wealth for one single family than three quarters of the population of the planet. Let that sink in for a second. The Rothschild clan has more wealth than the bottom three quarters of the planet. So the banking system is going to fight really hard not to be displaced completely by DeFi, but it ultimately will happen because blockchain technology is a superior way of storing and transferring value. But we actually coined a term and tried to service market, and I think we actually are going to get it, called blockchain intelligence,

which is the merger of blockchain and AI. And our venture fund, that's what we focus on. We invest in both sides. So I double tap, triple tap, quadruple tap on what Bill was saying completely. So then let's talk about, and Raul, you're probably the person for this, where do these two meet?

What are the really interesting applications of AI with blockchain? AI with blockchain, I don't really know. AI and blockchain to solve some of the societal issues that AI creates is so important and so urgent, which is digital ID. If we do not, I mean, once text to video happens at scale, we can basically make videos of any politician or any person saying anything to anybody on a individualized basis at scale. And sovereign states that have large supercomputing powers are able to do this.

So we're coming into the US election next year. And that US election is going to be fought with AI on social media, and we are not prepared for it. So there is going to be an acceleration in a need to prove who is human, who is AI, who is kind of regulated AI or accredited AI, and what content is real and what isn't. And if we don't do it ahead of the election, there will be a massive government push to do it after the election. So I think that is really really crucial is identity now how ai itself merges with blockchain technologies i don't know my guess is some of these open networks will tokenize the network so if you think about an open network let's say stability ai um that's open, and it's very different to open AI, which isn't open at all, is how does that data processing get paid for? Well, you can either do it by subscription models, but the issue is society gets left behind as power accumulates to the few who have the largest compute. compute um and so if you tokenize these networks then much like you could tokenize aws which is

if you were to tokenize the ability to um to draw on the compute power then people could participate in the rise of ai on a broad societal scale so therefore as you're getting to replace from jobs from ai you can own a stake in that network i think that's a big deal and something that needs to be looked at and i think people are going to start to do that as well yeah that that makes perfect sense the election side of this is terrifying. It's absolutely. Yeah. And the government, people have not thought this through. We will have, like with crypto, a massive regulatory backlash against all of this. The problem is, like crypto, it's utterly viral. It will be pretty decentralized.

And so, yes, you can try and regulate google amazon facebook and apple but you can't when you can just spin these things up anywhere and everywhere and the internet is so open you either shut down the internet or you have to deal with this and i think regulation is not easy i mean it's laughable when the italians try to ban GPT. You just use a bloody VPN and you're back on. It's crazy. Then you're going to go to jail for 20 years with no due process if you do that in the United States after the Restrict Act. So careful about the VPNs.

Yeah, I saw that. That's nice. Yeah, that's also insane. I mean i mean listen we're having this entire conversation right now with the backdrop of gary gensler apparently getting eviscerated on the uh floor of congress at the moment by the way for anyone else who might be watching that or following you talk about regulation well obviously i think we all know where regulation on crypto stands which is like a wholesale backlash from the United States government. I tend to agree with you that they're going to try, but we can see how difficult it's been for them to get a handle of what's happening in crypto. Now you look at AI, which is happening a thousand, a hundred thousand times faster.

There's no hope for them. No, there isn't. And, you know, my point about the crypto regulation is we have jurisdictional arbitrage and we will have it in everything. We've had it in genetic sciences. We will have it in AI and we've got it in crypto. And, you know, my view is we saw that tweet out about it yesterday. And I've been tweeting for a while is the UK is stepping up to the plate here. The UK, for example, in crypto, in financial markets, back in the 60s and 70s, as the US shut down capital control, created capital controls around the US dollar, the FX market grew out of London. That's after the dollar had de-pegged from gold.

So it grew out of London, became the largest market the world had ever seen. Then the euro dollar market, the US restricted lending globally. So the UK spanned up the euro-dollar market. It became even bigger than the FX market. And then after that, the US made a mistake, again, being protective over its banks, didn't allow them to have the right regulatory capital for derivative markets.

So London took all of that too. So the entire swaps market, the entire derivative market, which is multiple quadrillions, these markets added together are quadrillions of dollars, all came out of London. And so here the US is doing pretty much the same rulebook that it used in the 70s and 80s. It's trying to restrict capital flows. It's trying to restrict uses of the dollar so it can contain them. Meanwhile, the UK has made it very clear that it will regulate stable coins. Now, stable coins is basically a tokenized euro dollar market. It's going to allow for good regulation of crypto, good regulation of DeFi, the integration with the financial system, the integration with CDDCs germany's moving forward switzerland's moving forward

singapore's moving forwards and so the us is just going to lose it now anybody like me who grew up in the in the financial markets in the uh 90s and 2000s uh the entire financial market space in london and it and it was from the 80s onwards so you So the US was just a kind of a domestic backwater for equity markets. Everything else came out of London for the same reason. No reason that won't happen this time around. So the US needs to be very careful in what it does here because it's going to score an own goal if they continue down this path. You mentioned London and England. I literally am just looking down your Twitter feed right now.

You retweeted something from Brian Armstrong where he said he had a great meeting with the UK economic secretary and city minister. And how sensible the sort of approach to crypto, as you mentioned, has been in the UK, which is not something we were talking about not that long ago. And now we've seen Brian Armstrong come out and say that he would be willing to move Coinbase offshore. I would love any of your thoughts on this. Every major US bank basically headquartered in London in the 90s and 2000s. As soon as we had what was known as Big Bang in London, which is a deregulation of the banking system for the investment banks, they all moved to Londonon en masse and so goldman sachs's biggest office was london merrill's biggest office was london jp morgan morgan stanley everybody was london um and because it's so easy to move coinbase to london because it's english speaking first world jurisdiction rule of law everything you ever need to do is there so it was the same

with the investment banks it was just easy to move people to london so i think it's the same thing there's no reason i interviewed the uh the heads of institution at um coinbase on real vision recently and their ex-bankers themselves are like yeah what who wouldn't move to london apart from the fact that it's a muddy, wet, dark, grey island. Other than that, it's pretty good. Basically, just like the Caymans where you are. Yeah, exactly like the Caymans. Exactly.

Mark, what do you think? I mean, listen, it seems like an empty threat that Coinbase would move offshore because they're publicly listed in the United States, and I would say that their core advantage is being U.S.-based, but it says a lot. that Coinbase would move offshore because they're publicly listed in the United States. And I would say that their core advantage is being U.S.-based, but it says a lot. I don't think it's an empty threat at all. I mean, there are plenty of publicly listed companies that moved their headquarters to some other jurisdiction. You know, there was the whole Irish movement for tax purposes for all the biotech companies.

You know, lots of Jersey and Channel Islands and corporations. There was a whole move to Dubai. You know, Halliburton moved, you know, total tax dodge, total scam from being higher up in the administration. But look, I don't think it's a idle threat. I think that U.S. regulatory body, and it's never good to criticize the agency that oversees you personally, so I probably won't do that here, even to regulate through enforcement. Never has. Hester has been very vociferous on that, writing another dissenting opinion yesterday, prompting a seated, I'm not sure if a congressman or senator, but whoever it was that sponsored, I think it was a congressman, sponsored the bill to, you know, remove the current chair of that three-letter organization. So I think it's real. I think it's real. She said innovation in the United States is kaput, I believe was the quote. I mean, pretty aggressive language from an SEC commissioner. I think she, you know, she's called crypto mom for a reason, right?

And that's true, right? You can see it in the sense of, you know, we have a choice. All, all nation states have a choice. And, you know, choose wisely. Although I think it's interesting. Take, for example, China. Banned mining, right? Banned mining.

Anyone pull up the recent hash rate chart? Like over 20% or something. Mike Alfred, you're here. You might have some color on that. But, yeah, it's a lot. Yeah, yeah. So it's more than zero. so it's it's more than zero and but but i thought it was banned so there's there's actual things that you say in

public to curry favor and get votes they're actually things you do in in real life to to make yourself rich you know by handing out favors and then there's you know big decisions that you make or don't make and at least right now the decisions that they are making are pushing us in the direction that that uh hester you know and look i'm i'm a big fan of hyperbole as my wife would remind me all the time um so maybe she's being a little hyperbolic, but, you know, I don't think she's that far off. And I don't think it changes the nature of the innovation being here until people are forced to move, right? I mean, I did a little scouting on my spring break trip as to a, you know, friendly jurisdiction if, perchance, things got really ugly here. If this restrict act

pass passes i'm out i'm totally out right if i could be arrested for having an app on my phone with no due process i'm out yeah that's really terrifying i mean raul do you think that we're literally at the point here where it's over for anybody trying to innovate in crypto in the United States? Or is that, I mean, hyperbolic, as Mark said? I mean, I think that I've said that I think that we are sort of at that inflection point, because if you're going to choose to innovate at this point, why would you even do it here? I don't think it stops crypto or AI or any of this in general. Obviously, it'll just move somewhere else. But why would you even try in the United States now? I think Bill mentioned an expression that is important here, which is

fourth turning. So what you've got is you've got the world accelerating beyond the understanding of a bunch of boomers who run governments in the United States. You know, if you look at the UK, it's younger, not that the UK political system is any good. you look at the UK, it's younger. Not that the UK political system is any good. It's a mess, but it's younger. It's younger across the world, and they are becoming more adaptive. So here we've got a bunch of people saying don't change, and they're turning it into party politics because party politics in the United States is so incredibly divisive right now.

And so they're going to use this for those lines. So we don't know really until we get through this bloody election, how it's going to happen. And then there's the legal processes, whether it's the Ripple case, or it's a bunch of other cases like the Coinbase, Wells Notice, what that all leads to. We don't know. It's hard. It's hard to know but in a globally competitive world people will move around anyway so yeah as you said it doesn't stop anything the US has been the global center of innovation for so long now but we just got we I mean I'm not an American citizen but the US has got the wrong leaders in place and I still yet do not see an emergence of a new set of leaders that we need for this fourth turning, which is the embracing of this change

into this digital future that we're going into whether anybody likes it or not. You know, I always laugh at people who push back and say, well, you know, we don't want this, we don't want electric cars, we don't want this, like, nobody cares what you want. It's happening. Because the capital has, has been allocated into the space, the knowledge is allocated to the space, and the outcome will be change. And there's nothing you can do about it. So either embrace it or you don't. And I think the whole US political system has to go through that whole understanding that you either embrace it or you don't. And not embracing it is going to have very, very dire consequences for economic growth, productivity and prosperity in the United States. Yeah, you're such an idealist, Raoul.

You're saying that the decisions are made based on what's good for us and innovation rather than what's bought and paid for. You're right. EVs are coming, but not because they're superior technology. It's been technology for 120 years. In 1903, the American Electric Vehicle Corporation was the largest car company in America. Then it got shelved for 100 years. But it's who pays for what. But you're right. It's coming. I would say it's 100 years. But it's who pays for what. But you're right,

it's coming. I just, I would say it's a more sinister reason it's coming. But Raul, when I listen to you, you echo exactly sort of my fear and point. You know, we'll get a decision in the ripple case. Maybe we'll get a different political regime. Maybe, maybe, maybe. And I agree with all of that. The problem is, from what we've discussed earlier in this conversation, is that these things are happening at the speed of light. And that's to my point, is that by the time we have any sort of clarity in the United States or any company feels like they can operate without being punished retrospectively for something that they did, won't we already be 10x leaps ahead where we are now? Yes i mean the u.s has got a problem i mean you

know i live in the cayman islands we've got you know a virtual asset set of laws here the uk hong kong singapore switzerland germany the eu's law is coming into play and the eu's pretty you know conservative when it comes to this kind of stuff. They're being relatively sensible. And the US, you'll look around and you'll wonder why, like with the banks, why they've all moved somewhere else. And why the banking was a regional business in the US in the 90s and 2000s. And international banking was done at different centers. It's the same thing.

It makes no difference to me. It makes no difference to the market. It makes no difference to same thing it makes no difference to me it makes no difference to the market makes no difference to ai it makes no difference to crypto it just makes difference to u.s citizens um and that's something people have to think about so none of this has changed your premise as an investor things we talked about six months or a year ago none of that so so if you assumed that because the US had capsule controls in the 70s and 80s that the FX market would never flourish and it ended up

being a market that trades 2 quadrillion a day I don't know, I can't remember the numbers but the whole thing does these things do quadrillions of dollars a year without the US at the time being involved is extraordinary. So as an investor, we don't care. I mean, if every hedge fund ends up doing its crypto business in

London, as opposed to New York, makes no difference. They're not going to ban US people owning crypto. They're just trying to stop companies building in the U.S. Fine, they'll just build it somewhere else. You know, the capital markets are not just U.S.-based. They're all over the world. And we're seeing, you know, the Middle East piling capital into this area as well. And they've got a huge positive cash flow right now. And so there's enormous sums of money being pumped in.

So, yeah, I don't think it makes a world of difference to crypto adoption or anything else because people go elsewhere. I mean, you look at French corporations like LVMH, Bernard Arnault, the richest man in the world. Look at his kids. They're all involved in crypto. Look at their brands. They're all using Web3 technologies nfts and other things they're all building metaverse stuff that's out of france so so you know if apple can't do it or don't want to do it fine but other companies will you know spot it's right company to that point a french company is about to become the Apple of Web3, which is Ledger.

Exactly right. It's amazing. Their new device is coming out this month, Mark. Is that right? Yeah. Yeah. It's going to blow people away. And the one that's coming out in the fall is literally going to change the world, which is a big statement.

But it's going to change the world. Can you talk about that a bit? Because I'm actually still stuck on what's coming out this month. It's all about the form factor and the functionality. The short version, and then I got to hop, but the short version is the browser made Web 1. Web 1 existed for many, many years, but it was too hard to enter until the browser, Mark Andreessen, changed the world, Netscape, and then Microsoft took over know with Explorer and now we all use something else but but that changed web one web two was the little thing everybody's holding in their hand right now an iPhone smartphone and uh you know now web three is I think I believe all about the

hardware security module the HSM and uh it could could be the smartphone if if capital i capital f they were to figure out how to do the enclave in a in a secure way i don't think they will i think ledger has the solution and they will incorporate uh the features that we all need to have them in a single device. I don't want to carry two devices. I want one. And so an HSM with a screen and a camera will, I believe be the thing that we all carry around until it's ultimately implanted or, you know, it's in glasses or whatever, but that's,

that's the short version. But, you know, they hired the guy who literally built the iPod. Yeah. Which changed the world i mean that the ipod what didn't invent mp3s didn't invent electronic music not electronic electric music um uh no electronic as opposed to electric but it it changed the way we interacted with music and the way we thought about going from analog to electronic.

And now we're going from electronic to digital and having that digital. And it's what Raul was talking about, right? It's our identity. We won't carry driver's licenses. We won't have marriage licenses. Everything will be tokenized and carried in this digital vault that we all have. And I believe Ledger is going to win that. But that's just because I believe in Paul Romer's law of increasing returns. And Raoul, I know I want to be respectful of your time and you probably have to go in a couple of minutes. But you sort of described this, the fact that the market obviously doesn't care.

Do you take the fact that we just saw price basically go from, you know, 19,000 Bitcoin to over 30,000 Ethereum price rising now? All coin points rising, prices rising. Do you see that sort of as confirmation of that exact ideal? I mean, it seems like we've had literally endless bad news and prices just keep going up yeah because it's driven by liquidity so if you think about this phase this phase in the cycle is driven by liquidity so we've seen the central bank balance sheet expand we've seen chinese m2 expand we've seen a bunch of early signs that the liquidity cycle is turning positive. So crypto has turned positive with it.

And then what usually happens is the next phase of the cycle is when the adoption curve starts accelerating again, as people start building new products. Now, people like Ledger will be in the middle of that as they start to make it easier for people to onboard and use this kind of methodology. Even the Slana phone, whether it's success or not, it's a step in the

right direction of integrating web3 technologies onto phones you know will apple get there all of that it will come over time so that's the phase we're at it doesn't care about recession because its job is to forward look and look at the liquidity that's coming and look at the fact that the output for every recession is cutting rates or increasing the size of the balance sheet which is the debasement of currency which in the end leads to the price rises of assets. And crypto is the king of all assets when it comes to it. So I think it's doing exactly what it should do. The market doesn't care about the US and its fight over various things. You know, Ripple continues to operate around the world and ethereum is not called a security in

any other world so nobody cares it's it's that's the ridiculousness of this whole situation that the u.s thinks it can regulate a decentralized system and it can't there's just simply no way um and so you know i think the market doesn't care, rightly doesn't care, because it doesn't make a difference to the adoption of the technology overall. I have to laugh at what you just said, because in the hearing with Gensler today, I believe it was McHenry asked him like three times point blank if Ethereum was a security and he just pretended he didn't hear him. He refused to give an answer wholesale, which to me is just absolutely mind-blowing. Raul, I know that you've got to go. Mike, I'm sorry we didn't really get to chat here, but I am going to go ahead and end it

because I have another commitment as well. Thank you everybody so much for tuning in. Awesome perspective. It was nice to have a conversation that was focusing largely on the positive and what's possible instead of all of the

negative things that are happening, which seems to be every conversation that we generally have had these days. Raoul, thank you so much. Really, always a pleasure

and an honor. Hope we can do this again very soon. Thanks, my friend. Thanks, everyone. Great to see you all. Great to speak to you. Bye, everyone.

Thank you.