The Wolf Of All Streets - How To Survive The Crypto Market | Litecoin Creator Charlie Lee

Episode Date: June 2, 2021

Although Charlie Lee thought he was late to crypto in 2011, he decided to make his own currency for fun - a coin similar to Bitcoin... but lighter. Little did he know his Litecoin cryptocurrency would become one of the most popular coins in the world and remain so a decade later. According to Lee, HODling isn’t about luck - it takes strong conviction in your beliefs to weather the crypto markets. Lee is as strong as it gets, remaining a long-term bull and working towards Litecoin becoming the preferred currency over the long run. In this episode Charlie Lee explores: ・Why Litecoin was created ・Panic selling ・Bull market volatility ・ICOs and dog coins ・Hyperinflation ・Dust wallets ・Peer-to-peer cash ・Bitcoin’s fungibility ・Elon Musk in the markets ・Charlie “selling the top” ・The future Lightning network --- Voyager: This episode is brought to you by Voyager, your new favorite crypto broker. Trade crypto fast and commission-free the easy way. Earn up to 9.5% interest on top coins with no lockups and no limits. Go to https://thewolfofallstreets.link/voyager and download the Voyager app and use code “SCOTT25” to get $25 in free Bitcoin when you create your account. -- Matcha: Matcha is the easiest way to trade in DeFi. Matcha enables you to trade across all the major DEXs so you can be sure you’re getting better prices than going to a centralized exchange or Uniswap. Connect your wallet and start today at https://thewolfofallstreets.link/matcha --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by Blockworks. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworks.co ーーー Join the Wolf Den newsletter: ►►https://www.getrevue.co/profile/TheWolfDen/members

This episode is brought to you by Voyager and Matcha. Stay tuned for more information on both later in this episode. What is up, everybody? I'm Scott Melker, and this is the Wolf of All Streets podcast. Today's guest is the founder and creator of one of the world's most popular cryptocurrencies. Founded in 2011, Litecoin has caught the attention of traders, investors, OGs, and newcomers for its unique set of properties and also its similarities to its cousin, Bitcoin. Having Charlie on today, I hope to better understand what his motivation was for creating Litecoin, where the project fits into the market today, and how he views the space now compared to how he viewed it 10 years ago.

Charlie Lee, thank you so much for taking the time to come on the show. Sure. Thanks for having me. So before we get into the questions, once again, you're listening to the Wolf of Wall Street's podcast where twice a week I talk to your favorite personalities from the worlds of Bitcoin, finance, trading, art, music, sports, and politics. This podcast is powered by Blockworks, the fastest growing media company in the digital asset space. You can check them out at blockworks.co and you can check out everything else I have going on at thewolfofallstreets.io. So now to get into today's episode. For context, it is May 20th. So yesterday, 5've been in this space for so long, I've seen some pretty bad days. Yesterday is definitely a bad day. But I wouldn't say it's

the worst day. Yeah, the COVID crash was was pretty bad. It lasted a bit longer than this. But it rebounded really quickly. So I mean, it's, it was painful, but I think the worst is over. So I mean, in your experience, having gone through it so many times, were there top signals? I mean, you're notorious obviously for being very good at selling the top. So were there top signals here that had you, you know, concerned that potentially we would see a drop like this? I mean, there's people see top signals all the time, right? So the,

the thing is because it's gone up so fast, like so quickly, corrections like this is just normal. It's kind of par for the course for crypto, right? Every time we, in a bull market, it doesn't just go up in a straight line. Everyone knows this, right? There's always like 30%, 40% crashes along the way. It goes up like another 3X

and then does another 30, 40% crash. It's, it's very volatile and that's kind of just expected. The thing that I kind of see with these crashes, what actually happens is you have a lot of panic selling, right? People with weak hands are selling during a crash. They buy high and sell low, which is exactly the opposite of what you want to do. And what happens is these weak hands actually sell into stronger hands, right? Into people who actually, to hodlers who are buying the dip. So that's what happens with these crashes. You shake out the weak hands and then you have stronger hands. And then that's what will take us to the next level, right? So it's kind? So you kind of need these crashes for Bitcoin

or for crypto to go up in price, like to keep going up in price for this forward. Yeah, and you're absolutely right. In this case, all the on-chain metrics show that exactly that happened, that it was retail that was new that had their coins on exchanges that were selling and all the old wallets were buying

and didn't sell or move anything. So I guess it really is par for the course. I guess just this time it was over 50%. And I think there was a narrative of these super cycles and a 50% drop could never happen again and all of those things, institutional floor, right? So I guess this time it is not different, right? Yeah. And everyone says this time it's different. It's not going to be like last time. And then the history repeats itself and the same thing happens. But yeah, it's unfortunate, unfortunate because retail investors, they hear about these coins or they hear about crypto, like Bitcoin, even like Dogecoin at the high, right? And then they, they pile in at the high. And then when it crashes 30, 40%, those are the, unfortunately, those are people that can't handle the crash. They crash they're not used to it they can't they can't huddle through it and they they sell um which is unfortunate because they lose a lot of money that way um yeah but do you think that this time with doge and then shib which was a knockoff on doge and do you think that all these

things were even a bigger sort of retail bubble than we've seen in the past i mean i know 2017 was basically purely retail speculation so but i mean it was a little crazy this time with the meme coins and tiktok and you know just how much retail now has access it was definitely crazier than 2017 but if you remember 2017 was pretty crazy too like it was bitcoin was all over the news all over cnbc um there's like thousands of icos like everyone's piling into into all these icos um which is no different than like she and all these uh dog tokens this time around right so it's just retail piling into something they don't understand. So it's pretty similar. Do you think that these moves shake the narrative in any way, the institutional narrative? Do you

think that, or an ETF coming, the things that we would expect, do you think that seeing this 50% in a week type drop would make them more disinterested? A little bit, but people like Michael Saylor, they have pretty strong hands, right? They believe in Bitcoin, in the promise of Bitcoin, that it's a better store of value than anything else in the world, gold included. So I don't think in the long term it hurts that narrative. The problem

is for something like an ETF, I think the regulators might be concerned about the volatility of Bitcoin and that may delay the ETF launch, which is unfortunate. But yeah, we just have to be more, Bitcoin needs to grow to become more stable and not not as crazy as this over time it will be so you think that uh as prices increase and as we get more awareness and perhaps more regulation that we lose some of the volatility uh yeah especially if Bitcoin if when it grows bigger right the market cap of Bitcoin is um whatever five, $10 trillion, then it will be less volatile. Kind of remove some of the excitement for traders, right? Yeah.

I mean, for traders, volatility is good, right? You make money off of volatility. Yeah. So we're, I touched on in the intro, obviously Litecoin, you know, has been one of the top names in the space since you created it. I'm curious to go back to why at that point you made the decision to do that, having seen what Bitcoin was and what did you think needed to be improved? Yeah, so this is in 2011, almost 10 years ago.

Yeah, crazy. October of 2011. Back then, there were about a dozen altcoins so lycon is not actually the the second or the first altcoin um but it's one of the only ones um still exist like still running since 2011 um it i created it just for fun it was a project that i kind of just yeah it was it wasn't supposed to be, I didn't expect it to, to actually become what it is today. And one of the kind of thing, the reason why I created it is because all these other altcoins in existence back then were, were launched, were not launched

fairly. So there were a lot of, all of them had pre-mines just to enrich the founders. So I decided to launch something that is very similar to Bitcoin, except for a few tweaks, make it so that it can be CPU mined at that time and launch it fairly. So no pre-mines. The launch was announced ahead of time. So everyone knew about it before it launched. Software was launched before the the network went live so people can test out their um their computer to mine litecoin at the at the

beginning um what else the the launch date was voted on by the community the launch time so because everyone's in a different time zone so it's kind of impossible to launch at a time that's perfect for everyone so i put a poll in on beat bitcoin talk let people vote on what's the best time i think i'm launched like at really late for me but that's fine um and then what what else yeah so people can have their um have litecoin um the the miner running and then at launch they just had to change the configuration we start the miner and. And then at launch, they just had to change the configuration. We start the miner and it'll be mining on the main net as opposed to the test net.

So that was, yeah, I tried to make it as fair as possible. And I think that's one of the reasons why I succeeded where all the other coins failed is because people supported Litecoin knowing that it's not unfairly enriching one person or a group of people.

I myself had to mine and buy coins off an exchange just like anyone else. That's crazy. So it's really early 2011. What got you into Bitcoin in the first place and passionate enough because it was so small and nascent at that time to really see that, hey, man, this is the future. This is what I want to do. I got in in 2016. At that point, it was pretty big and pretty obvious, right? So it really was no risk at that point of what you did. It's just incredible to me that people had that passion that early. Yeah. When I when I, excuse me, when I when I got in, when I found out about Bitcoin, I pretty much knew right away this was going to be huge.

I have experience with gold and silver, knowing that it's like good money compared to fiat currencies. So I saw the need for something better than fiat currencies and Bitcoin kind of filled that. It's a better form of currency. It's actually a better form of gold. It's very similar to the properties of gold, but it's better because it's digital. You can transfer it to anyone, anywhere around the world quickly and cheaply. And yeah, so I got hooked right away. Yeah. So I mean, I didn't put all my money into it, but I invested into it knowing that it's going to become huge. I mean, it actually exceeded my expectation. I remember telling people back then when Bitcoin was about $10, that it's going to hit $5,000 in the next 10 years.

Right. That was my prediction. It would hit $5,000, which is pretty crazy. Like going- Insane from 10 bucks. Yeah. Yeah. So people didn't believe me, but it exceeded it, right?

It's almost 10 times more than that. So it's pretty crazy. Yeah. So people didn't believe me, but it exceeded it, right? It's almost 10 times more than that. So it's pretty crazy. 200 or a thousand or 5,000 or most of the people do you think who are that early even you know still holding those coins you think they long since have sold them i would say most people sold them like if if you do an investment and went up 10x you're like i hit i hit the lottery i better like i should sell or sell most of it and take in the profit um it's actually pretty hard to to huddle through all of it right it's it's not people everyone like thinks oh if i got in that in 2011 i would be like a millionaire now it's not it's not easy to actually have that conviction um because it it crashed a lot right it went it went from when i first bought my Bitcoin from my current actually at $30

in the next like two, three months, it dropped to $2. So it had like a 90% crash and that's huge, right? That's crazy. So to be able to like huddle through that and not like think that Bitcoin is going to zero is tough. Most people would just quit and leave the space. So it went from 30 to two, and then went to like 100 and dropped to 50, went to like 280, and then dropped to 100, went to 1000, dropped to 200. And you seem after that you seem like, it just it goes up a lot, but then drops a lot too. So it's definitely shakes you out.

Which has got to be like, i would imagine for you i always argue about this that people always say the ogs are so lucky like you touched on it right if i had just known about it but there's no luck involved if you still are holding any of that i mean it's just insane to think of having hands that strong yeah a lot of people who actually are lucky are the ones that bought bitcoin or just happened to own a lot of Bitcoins in the beginning and forgot about it. Forgot about it. Right. The dust wallet. For like five years. And then they're like, wait, Bitcoin? I might have something to dig up, dig up their own wallet and found like a few thousand Bitcoins in it. Those are the people that are lucky because if they had followed it, they wouldn't have been

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I mean, we all hear the stories of the, you know, the billion dollar pizzas, but, you know, do you ever look back and go, man, if I had just not, you know, the billion dollar pizzas. But, you know, if do you ever look back and go, man, if I had just not, you know, bought this graphic design, this image or something from somebody? Yeah, I mean, there's always it's always the case, right? Basically, anything, because the price right now is so much higher than before. So anything, anything you spent Bitcoin on is, is totally not worth it. I mean, I've bought stuff

for Bitcoin through various merchants that set the Bitcoin or whatever, buying Amazon gift certificates. If you look back on it, you just regret everything. But in the end, you can't really look back and then pick everything you do. No, I think most people in the community who are later kind of have the same feeling about Doge. I mean, if I'd held all the Doge that I once traded through those hilarious cycles, I would have had like $50 million in Doge or something. Yeah, yeah.

I mean, at one point I had quite a bit of Doge to play around with. I actually sent them all to something called Doge Party. It's a counterparty fork. That went to $0, unfortunately. So all my Doge is locked up into a counterparty burn address or Doge Party burn address. Wow, that's pretty crazy.

So speaking of people buying things with Bitcoin, obviously the big news of the last few months has been you can and then you can't buy a Tesla with Bitcoin. Do you think anyone in their right mind was going to actually buy a Tesla with Bitcoin? I would, I would. Oh, so there you go. You're the first person I said would do it. Everybody else is like, I wouldn't pay the end, the end goal is Bitcoin is money, right? So you, you all your, it's, it's where you keep your money. And then if all you have is Bitcoin, then you have to spend it to buy stuff, right? So, and people are, it's a bit too risky right now to put everything into Bitcoin. But as it goes, as it grows bigger and stabilizes, it becomes like

the best form of money. And that's where you put most of your wealth in. So you do still believe in the peer-to-peer cash narrative of Bitcoin. So a lot of people, obviously, you started with it being the white paper and having that narrative. But I think seemingly the majority of people are now onto the digital gold narrative that you talked about and sort of say, maybe a stable coins are better for transacting. And you know, there's better currencies than Bitcoin, but you still believe that it would be the ideal peer to peer cash in that perfect world. It is I think people are kind of confused about what it means to be peer to peer cash, right? So if you think about it, Bitcoin is, Bitcoin layer one is like gold, right? But Bitcoin layer two is like cash. So fiat currency or paper money used to be

redeemable for gold. So the reason why paper money was invented is because it's easier to use, right? It's a layer two on top of gold. So you can always redeem it for gold if you want to. Just like right now, Lightning Network is layer two. You can always redeem it for on-chain Bitcoin if you want to. But if you stay in the Lightning Network layer, then you can easily transact between peers fast, quick, low fees,

similar to what people do with paper currency, right? You can redeem for gold if you want to, that was back then. And then otherwise you just transfer these paper currencies that are backed by gold and everyone agrees that this is what the amount of gold that stayed on the paper. The best thing about Bitcoin layer two is you can't break the, unlike gold and paper currency, you can't break that bond. you can't break the unlike gold and paper currency you can't break that bond you can't break that link right what happened with the U.S. government deciding that the paper currency is no longer backed by gold then they just broke the link but with with lightning network you can't do that so that's a better form of kind of money than what we have

today and that that is what fulfills Satoshi's vision, right? Layer two is where everything is cheaper, it's faster, it's even more private, and it works better as cash. And layer one is restore value. It's similar to gold. I thought Craig Wright fulfilled Satoshi's vision. No. I mean, that's what he said. It's called BOSB. There's a lot of people who actually he said. It's called BSV.

There's a lot of people who actually think that. There are quite a few. It's pretty unbelievable. I mean, you were that early. I've never even asked anyone this because it always seems such a meme question. Do you have any idea who Satoshi is or was? I have no idea. Unfortunately, when I found out about Bitcoin, Satoshi already left the scene.

I actually thought, I mean, it's kind of funny. When I found out about Bitcoin, I just thought I was late to it. Because a few months before I found out about Bitcoin, the price was less than a dollar. So I found out about Bitcoin at the high. I mean, that's what happens to everyone, basically. When people start talking about it, you start reading about it, it's when the price is peaking for that period. So yeah, I thought I was late. And Satoshi already left, so I wasn't able to talk to him.

Would have been cool, though. Yeah, that would have been incredible. So you touched on the fact that when you started Litecoin, there were already like 10 altcoins, right? Yeah. So many. Now we have like 10,000, right? And you also touched on the fact that when there were 10, they're not here. Litecoin is,

Bitcoin is, and then we've obviously know the ones that grew from there. So how many of these 10,000, which will probably be 11,000 by next month and 12,000 next month, how many of these can possibly survive and what happens to know what happens to to the market if if they don't i think a lot of these coins will survive i mean it's hard to kill off a decentralized cryptocurrency or even like a centralized one um they just hang around uh so but only like a handful of them will actually be worth something of value, right? Only a handful of them will actually be used as money. And I'm obviously hoping that Litecoin will be one of them, but I know for sure that Bitcoin will be, right?

So the market will kind of just, it will sort itself out over time. And it has, right? The stronger currencies rise to the top and the weaker ones just disappear over time. So do you think that they just sort of become a little playground for traders and go back and forth, but never have utility or any innovation? I mean, it's effectively what Doge is, right? Yeah.

I mean, to be fair, most coins don't have any utility today. In the first place. They're all very speculative, right? Yeah. I mean, to be fair, most coins don't have any utility today. In the first place. They're all very speculative. Even a lot of the top coins, they don't even function as what they promised. But people are speculating on the future value, the future utility of the coin. And that's what happens in the market. We'll figure things out.

Right. But now, I mean, besides all the coins, obviously, we also now have an incredible amount of competitive and really useful and powerful blockchains, right? I mean, and we always hear, obviously, we know Ethereum, but all the Ethereum killers, do you think that there's a place for all of these? Do you think that they'll silo off into their very specific purposes, and then, you know, perhaps will be interoperable through things like Cosmos? Or do you think that it will really be a king of the hill, one man take all sort of situation? I don't think it will be a one man take all. I mean, a lot of Bitcoin maximalists think that Bitcoin will eventually kill everything. That's not going to happen. There's always going to be a lot of currencies around

fighting for the top spot. But in the end, I think a lot of these will be connected, like the Cosmo or something else. I think the end game is people will store their value in Bitcoin or crypto and not really care about what network the money is actually flowing through. Just like I've used this example many times, just like when you swipe your credit card, you don't really know which bank gets contacted, who has to approve what for the money to go from the merchant and then get money to go from you to the merchant. This whole process is just opaque to you. And I think for crypto, eventually that same thing would happen. Like you pay with crypto,

it could go through a network, it could be on chain, it could be something else. It could be Larry three, whatever it is. All that matters is that money goes from you to the merchant and you get the service or the product that you bought for. So much like you don't think about how your cell phone works anymore and you don't think about how your email or the internet works, it's just the underlying tech works and you don't think about it. I mean, how far are we from a future where blockchain is that underlying technology of many of the things that we use on a day-to-day

basis? It's hard to say. I think it's still quite a ways away, but that's why there's still a lot of growth potential. I think we'll get there eventually. The price will rise. The network will get bigger. The market cap will become huge. But by then, everything will be, people will be using Bitcoin, blockchain, crypto

without even knowing it. When you originally got into it, you talked about the fact that obviously you understood that it was better money. And it was 2011 after 2008 and nine and 10. So there was obviously this grand awakening, I think at least as to how insane central bank policy was. But that's ramped up by many multiples in the last year.

Do you think that that is partially driving this renewed interest in Bitcoin? Do you think that your average person is starting to understand? Or do you think that most people are still in the dark about their money? I mean, I agree. It's definitely ramped up. The Fed has printed so much, like trillions of dollars last year. But I think that's inevitable.

I think fiat currency always has a limited lifetime lifespan. I think over the history of our existence, no fiat currency has lasted more than 200 or so years. And we're kind of um yeah i think u.s dollar will eventually hit uh hyperinflation and yeah we'll go to zero but it might not be in our lifetime but it's going to happen and bitcoin obviously is going to uh take over in my opinion when that happens um in terms of people being more aware of that i think i definitely think more people are becoming more aware of that um but still like more than 90 people are in are in

the dark it's still like just a small pocket of people that are aware of this um but yeah it will take time for people to become aware of it i think it's because, we're still used to it as a society, as like, well, like I was born into this fiat system, right? I don't know any better. And this generation, yeah, everyone's just used to fiat currency. So it will take like a generation or two for kind of the mindset to change, right? Nowadays people, the babies today

will be born into a world where Bitcoin exists. And when they grow up, they will learn about Bitcoin and cryptocurrencies, and they will see and understand the difference and realize the potential of it. So it would be hard to teach an old dog a new trick. So if you look at people like Warren Buffett, they're never going to learn. So it will take a generation or two before um everyone starts to realize the potential but the toxicity of that generation about it is pretty astounding yeah because they that's what got them rich right that's what they know and understand so they're going to fight for it against bitcoin um with everything they have. So, yeah. Do you think that that's

what's happening? I mean, do you think that they see it as a legitimate threat or do you think that they sort of still laugh it off and hope it'll go away? It seemed like for a very long time they were sort of just hoping it would go away and now maybe they can't hope that anymore. I don't know for sure. I think probably just a little bit of both. Some people still think it's going to go away, but it's not going to go away. Yeah, I think we know it's not going to go away. So what's your involvement now with Litecoin? Obviously, everyone knows the famous story of how you sold it kind of right near the top,

but that wasn't to exit your affiliation with it, correct? Yeah, so I've been working on Litecoin pretty much full time since 2017 at the Litecoin base, managing director of the Litecoin Foundation. So working on adoption, pushing for adoption and then development of Litecoin. Yeah, I mean, Litecoin is kind of my baby, right?

So I wanted to succeed. There's not. I just didn't want to be, I didn't feel like I should be, I need to be invested in the coin because that's not what motivates me anyways. So it's not like it really does anything. It's just not having the financial aspect of it makes it more, makes things more clear for me because I just care about the adoption and success of the coin. Sometimes the price of a coin is a distraction. The coin can pump for no reason

and then you feel like you're doing something good but actually you may not be doing anything good. It's just that the market is just pumping everything. So I think not having this conflict is just pumping everything right so i think not having this um this conflict is just better for me it's hard it's hard for people to understand but that's fine well i think that actually makes a lot of sense rationally especially if people understand this market you know people might not understand that if you were jeff bezos and you wouldn't want to have any amazon stock but i think in this market when you see that the price doesn't necessarily determine the value, right?

I mean, we see things that go absolutely nuts that don't even are basically vapor. So it's very hard probably to differentiate the price from your motivation for doing it. Yeah. And the difference between like crypto and regular stock is people like Jeff Bezos, Elon Musk, they're actually, they're paid to increase shareholder value. So their job is to increase the price of the stock and they're, they're compensated with, with the stock to keep their interests aligned, right? Because they have a lot of stock and then they want to work towards

increasing that price, which helps themselves financially. So everything is lying. And that's why that happens in the real world or in the normal stock public company world. But with cryptocurrency, it's different, right? I don't have Litecoin printed to give myself, to incentivize me to pump the price of Litecoin. So it's very different.

I mean, especially for Litecoin, which had a fair launch, there's a lot of other cryptos. They have huge pre-mines. Even Ethereum had a huge pre-mine. Then that's different. Then they have a lot of coins that they can give out to developers to incentivize them to do the work,

to pay them to do the work. But with Bitcoin and Litecoin, and even Dogecoin, it's not the same. And it's hard for people to kind of understand why it's different. So what does the future of Litecoin look like ideally for you? Because I mean, you're working on it full time, basically you said, and I know now your belief in what Bitcoin will be in the future. So where does Litecoin fit in? What I'm working with Litecoin right now is adding fungibility and privacy to it. Fungibility is something that is missing or is not as good in Bitcoin and Litecoin today.

I think in terms of like properties of good sound money, Bitcoin and Litecoin has everything except for fungibility. And by fungibility, I mean every coin is indistinguishable from every other coin. It's kind of the opposite of the hype today about NFTs. NFTs is non-fungible tokens, but for money, you want it to be fungible. Any like $20 bill you spend should be indistinguishable from any other ones.

So you don't care which one you spend. And it's not true today for Bitcoin and Litecoin. If you really look into it, when you're spending coins, you should pick and choose which coin you spend so that it doesn't reveal any private information that you don't want to reveal. So if you got paid $10,000 as a salary or whatever, if you use those coins to buy coffee, then the recipient will see that you have $10,000 as a salary or whatever, if you use those coins to buy coffee, then the recipient will see that you have $10,000 in your bank account worth of whatever Bitcoin.

And that's kind of information that you want to keep private, even if you have nothing to hide. Financial privacy is important. So what I'm working on is getting a technology called MimbleWimble onto Litecoin as extension blocks. So the project is called MWeb, which stands for Mimblewimble extension blocks. And that would add more privacy and more fungibility to Litecoin. And I think that's going to help it become a better form of money.

And that's kind of my goal. That makes perfect sense. So where do the existing privacy coins fit into the equation at this point, do you think? The Moneros, you know? Like the coins like Monero, they're on the opposite kind of spectrum of, it's a trade-off between privacy

and basically, how should I say it, like being supported or being like liquidity, right? Monero is not on many exchanges because they don't like the fact that it's too private. I think privacy is good, but to a certain point, there's a trade-off right so i think balance i'd like to see litecoin kind of uh be more in the middle where exchanges will still support litecoin but you always have the option to move your coins to a to the extension block and be more private and be have more fungibility um we'll see how that plays out um but i do i do like monero though i think they're what they're doing is good. They're sticking to the path of just private by default.

Everything is private. And that's the most important thing. I think there is definitely room for a coin like that. Yeah, we need that polar end, even if it's not gonna gain mass adoption, obviously. It still obviously has its place. I'm curious to talk about the fungibility of Bitcoin. And we've seen the huge energy debate, of course, brought to the forefront mostly by

Elon Musk of late, but it's been around forever. Do you think that there will ever be potentially a premium on Bitcoin that's mined with renewables or green Bitcoin or something like that, which then again, would kind of eliminate the fungibility, right? Because you'd have the, we've always talked about, you know, different tokens that have been, have been touched by criminals or have been part of money laundering or different. So do you think that we have a world where there's a premium on certain kinds of Bitcoin? I don't think so. And I think that would be bad. I mean, for it to be money, right? You don't want it to, for certain coins to be tainted. I think the whole energy debate is kind of, is very silly. I think the Bitcoin uses energy, but for a good reason, right? People use energy because it helps our lives. It increases our productivity. And Bitcoin definitely does that.

So I think the energy use is worth it. And people should actually be talking about how to incentivize better use of energy, right? People shouldn't waste energy. There's incentivize others to use renewable energy. And that's already happening with Bitcoin mining. I think something like 70% plus of Bitcoin mining uses renewable energy.

So my point of view is people should focus on doing that, right, incentivize renewable energy usage, as opposed to say people shouldn't do use energy for certain things and just tax things appropriately. And that would change behavior. What do you think was underlying Musk's decision to bring that into the forefront? It's not like anything had changed

between the time he decided to allow Tesla to accept Bitcoin and just a couple of months later when all of a sudden, it was taboo in the energy usage, you can't tell me he didn't look into it in the first place. Yeah, I mean, I think he's he got pressure from from his board or from, from whoever, right? It's just he got bored from the government, whatever it is, he wanted to get government subsidy for for whatever credits, and then he wanted to appease those people, something like that.

I would say he got pressured into doing this. And it's unfortunate. I think it is what it is. There's just all this flood out there today about this energy usage. And we'll get past it. But it happens every time, right? When Bitcoin grows.

I mean, it's either energy usage or used by criminals or one of the like three or four narratives that are recycled every single time. Isn't that frustrating for you? Have you seen it for so long? I don't know. It is what it is.

That's my opinion. It's just, yeah, you'll run into it and you'll run into all this fud about Bitcoin is dying or mining death spiral. It just, it's's everything gets recycled every four years um i get used to it i mean how many times has china china theoretically banned yeah yeah it's fine i mean and bitcoin still keeps on going prices keep going higher over time it's fine. I mean, and Bitcoin still keeps on going. Prices keep going higher over time. It's okay. Well, doesn't Bitcoin just keep on going no matter what? Just by the way it's like it literally by its intrinsic properties and how it's designed? I mean, it can't be stopped.

Well, that's not 100% true. I mean, there are there are stuff that potentially could cause issues like quantum computing could cause problems with Bitcoin. But I think we'll be able to handle it when it comes. There's definitely stuff and there potentially could be a bug that could cause problems. I mean, that's why developers are so careful, right? They're so conservative in terms of grace. It's not where Ethereum is making all these crazy changes, even like switching to proof of stake. Bitcoin is being conservative because for money to be good money, to be useful, it has to be reliable first and foremost. So what do you think of what Ethereum is doing? Do you think that there's a potential chance that this goes horribly wrong for them?

There's definitely a chance it will go horribly wrong but because it's more centralized than bitcoin um they can easily undo it right so i don't think it could go horribly wrong and cause ethereum to die i think like even like if you look at like the dow hard fork that didn't even that's not even horribly wrong it's just a lot of people lost lost a lot of money and it's not really it's something that's survivable but they did a hard fork and gave everyone their money back right so even something small like that they're able to undo it so if something does go horribly wrong they'll just undo it and fix it so and but that's not that's not what you want from decentralized money right you don't want you don't want a Bitcoin developers to introduce like bugs and all of a sudden, hey, everyone stop what you're doing.

Don't use Bitcoin to buy stuff for now. Let me, let's take two days offline and let's fix it. That's not, you can't really do that with Bitcoin. But Ethereum, I don't think that's a problem. Yeah. I mean, you touched on quantum computing being a huge threat. How so? And how far away would that potentially be? I'm definitely no expert in quantum computing. I think me either.

There may be like a handful of experts in quantum computing. My guess is it's still many years down the road, maybe like a decade or so before. It's just a pure guess from me, from what I can tell, before it becomes an issue. And basically, the threat is, there are two things, right? One is mining can be made super efficient with quantum computing. So it depends on how bad it is, right? If it's just like a step up, like going from GPUs to ASICs, if everybody is like can produce hashes 10 or 100 times more efficient, then the market will sort itself out. Like everyone will be using the new quantum computing mining they'll produce,

and then the difficulty will go up and everything will be fine. But if it's truly broken, then Bitcoin just needs to change the mining algorithm to something that is quantum safe. And that's not too hard. That likely will require a hard fork, but there's ways to do it without a hard fork, I think. And the other thing that can be broken is the public private key cryptography. If you're able to steal coins from someone's address, that's bad. So before that breaks, Bitcoin has to fix it. I mean, it's possible that that will never be broken, but you can't really say never for cryptography. Things do get broken over time. If that gets broken, then it will be bad.

But I think we'll have time. We'll be aware of the fact that it's gotten weaker and quantum computing can potentially break that. And then we just have to hard fork a new public key encryption system. But the downside is everyone has to move their coins. So if you don't move your coins, your coins will be in something that's not safe. So Satoshi has to wake up and move his coins

if he wants to keep them. Okay, that would be problematic. I had Michael Saylor on a while ago, actually. And he was touching on the quantum computing thing. And he was like, yeah, I guess it would be an issue for Bitcoin. But it's an issue for everything on such a grand scale that like it's almost laughable to think about bitcoin like people could be firing off each other's nukes and stuff with with quantum computing and we're worrying about the bitcoin network yeah the whole financial industry is based off of um encryption

right everything is protected by encryption and yeah that's broken, then you can hack into Bank of America and steal everyone's money. Yeah, exactly. So do you think there are any other major threats to Bitcoin? Is it regulation? I mean, we already touched on the laughable China bans back and forth, but do you think that there's something

that governments could do to really, really affect the power of Bitcoin? The government can and likely will just be more strict about the on and off ramps, regulating exchanges, KYCing everyone, making sure there's nothing if there is going on, making sure all the money is tracked. I think that's going to be it's going to be more strict over time. And it's unfortunate. It would just make it harder to move money or move Bitcoin. But that's not going to kill Bitcoin. The other thing that governments can do is they can ban Bitcoin, right?

You have India banning Bitcoin, China banning Bitcoin. If all the major governments come out to say Bitcoin is bad and they ban it, then that's going to really hamper adoption, like really bad. But I think we're past that point. I don't think that's going to, I mean, Bitcoin is used by everyone now already. All these VCs have plowed a lot of money into the ecosystem. It will be hard for even for US government to come out to totally ban Bitcoin. So I don't think that's going to happen. We're past the point of no return for Bitcoin. So I don't think that's going to happen. We'll pass a point in return for that. So I'm not very concerned about regulation.

I mean, you have to imagine that we have enough people in power who are exposed to Bitcoin that it's very unlikely that they would allow that to happen. Yeah. You know, I don't think Michael Saylor didn't at least make a call to make sure that he wasn't investing in something potentially illegal when he decided to call it a Bitcoin. But maybe I'm wrong. But it seems like knowing, you know, how everything is a rotating door between government and private business.

I don't think we would see these huge investments unless it was pretty sure that. Yeah. And you're right about the on and off ramps. But I mean, now you are Coinbase. We see Coinbase obviously has gone public. I don't think they would have done that if Bitcoin was going to be regulated away. Yeah, correct. Yeah. Bitcoin is not going away. What do you make of the i think um coinbase definitely is doing a very good a great job um they're i mean i mean it's it's very cool they're they're leading the industry going public

i think the the people are just wondering why coinbase is using like a the um legacy financial system to go public as opposed to going public on the on the blockchain right yes that's interesting that's definitely something i think they've thought about doing that but it's it's it's really tough right um well especially because they're like the most compliant like they're the most compliant company and seeing what's happening with ripple yeah so i think it's it's it's good that they're doing it the traditional way. And eventually they will actually build out a system to help others go public on the blockchain, I think, over time. I think that's their plan. Or I would assume that's something they're looking into.

Yeah, I think it's good. And then it helps increase the valuation of all the companies in the space. Like all of a sudden, every other company is saying, hey, we should go public also. Like their valuation has increased because Coinbase is actually setting like a really high bar,

increasing the valuation over across the space. You touched earlier on non-fungible tokens, NFTs. What do you think of what's happening in that space? Obviously, you've heard of it from the very early days. And I remember sort of talking about NFTs as things like transferring your car title or medical records or any of these tokenizing stocks, but we've really seen it come to the forefront in the collectible sphere. Do you think that that's sustainable? Do you think the NFTs will become a huge thing in the future? I think so a few things. So I've touched on this topic on Twitter a few times. So I see NFTs for the collectible space as just a digital certificate of authenticity, where it's something that cannot,

it's better than a paper one because it can't be copied. But in the end, it's just, it kind of just links to the artwork. So when you're selling your NFT, you're effectively just selling the certificate of authenticity. You're not really selling the artwork

because the artwork is available to anyone, right? So it's a digital artwork, it's available to anyone. So you're just trading COAs basically. And I don't see a lot of value of doing that. There's definitely some value, but the amount of money people are paying for these is kind of ridiculous. I think I always see like the, because it's just so easy for any artists, any other artists to come into this space and just launch their own, like dozens, millions of NFTs. The market will be saturated with these NFTs.

And then, which is already happening and the price will drop. And a lot of people paying like a million dollars for these NFTs, they'll find that there's no resale value. Like if they try to sell it, they're not the original artist selling it. No one's really going to buy it.

There's not going gonna be a huge market of someone buying an nft of um a meme that was a tweet right a tweet right that that um jack dorsey tweet sold for like millions of dollars that's crazy like why would why would i buy someone's tweet it's not even it's a third party um authenticating it right it's a third party's website essential centralized website that says this tweet is being sold in it like why the hell would i buy that tweet for a million dollars yeah so it's basically the same thing we've seen in markets is that you get this initial wave of exuberance and then it all kind of crashes and then we see the important use cases sort of arise from there yeah and then in the end you're selling your brand right so if Paris Hilton sells an NFT it it could sell for a lot because she has a strong brand so people

are buying into her brand but if a random artist even like a good artist um tries to sell their nft um they won't see the same kind of um demand for their nft even if the if the image is arguably even better than whatever paracelton is selling so you're selling your brand basically and that's i mean that that only takes you so far. Yeah, that makes perfect sense. When you have a built-in audience, you can sell them anything. It could be an NFT or it could be a signed dress. Yeah, or it could be used underwear.

In that case, for sure. Do you think that we will see eventually stocks tokenized? And I'm not talking about on crypto exchanges. I mean, in the actual stock exchange, we'll get rid of clearing houses. We've obviously seen some moves towards that. But this is a superior way to transfer value, right? I mean, on a blockchain, fungible or non-fungible, why do we need these third parties in between

and clearing houses to tell us when a transaction has gone through? I'm actually not sure about that because I do agree. There's definitely value of having a decentralized way of, of moving stock around. But in the end it needs to be regulated, right? So it will be harder for regular regulatory bodies to kind of control that movement. If, if it's decentralized, like they wouldn't want a terrorist group to have to be like trading stocks

for, for nukes, right. Stocks from Apple computers. I never thought about that. Yeah. Yeah. That's not, they wouldn't want that to be used as, as currency for, for Terrascoop. So they want, they would want control over that. So that's not going to really help in that aspect. And also, yeah, I didn't realize decentralized system is inefficient by, by design. Right. So if that's why every thing's stock market is centralized so it's very efficient you

if i move if i trade um if i buy and sell apple stocks it doesn't have to be no one else has to know about it's just an interaction between me and the brokerage right so um when it becomes decentralized and becomes inefficient so i'm not sure that helps if things like if it costs like ten dollars to pay fees to make a trade or even like fifty dollars that's not going to be very good right so right i'm not sure having that kind of stuff decentralized is the solution um maybe as a layer two solution on a blockchain as possible um but we'll see we'll see what happens are there any applications you can think of that blockchain is just, but we'll see what happens. Are there any applications you can think of that blockchain is just absolutely perfect for that it's not being used for?

No, I think the perfect application for blockchain is money. That's what I'm focused on. I think Bitcoin and Litecoin is kind of the best use case of decentralized blockchain. Most other use cases don't really need a blockchain and a centralized solution is perfectly fine. Like even for stuff like Ethereum, for most apps running on Ethereum, it doesn't really take advantage of the decentralization, centralization um the censorship resistance of ethereum right so um if you're trading uh nfts in the end something centralized would be more efficient and people wouldn't really care that much but then be a top shot yeah true right like nba top shot they don't like they claim to be a blockchain but who knows but it's not like you can even like withdraw your, your, your card, your moment to, to your own wallet.

So if they're using like a database in the backend and just saying it's blockchain, it works exactly the same. Yep. Right. Yeah. So that's exactly it. Right. So crypto kitties or NFTs or whatever, it doesn't really need um the decentralized aspect of ethereum so you're paying fees for it you're paying high fees for this that you don't really need i mean those high gas fees absolutely destroyed the lower end nft artists sure i mean there were guys who you know when nfts were starting to get big, you could go mint something for 10 bucks and sell it for 20 and it was fun. But then it became,

you had to, you know, mint something for $200 to sell it for five bucks. It became unsustainable. Yeah. Yeah. And I mean, gas fees have been just exceptionally high throughout the last few months. Do you, are you confident that that's something that they can fix? I'm not sure. I'm not sure what they're doing to, to fix that. I mean, it's kind of the nature of, of decentralized blockchain. If it gets popular, the fees will go up because you're fighting for block space, which is a valuable commodity. Right. And the solution is just to become more centralized.

Right. They're potentially their proof of stake work could reduce the fees. But they're also moving, in my opinion, to a more kind of a more centralized model, which is which is OK. I mean, nothing. It doesn't really need to be fully decentralized. Something like it. So the money we need full decentralization for the monetary aspects. Bitcoin and Litecoin and everything else. Yeah. Money you want, you want sensitive resistance, right? You want, you want money to, to be, to be yours, right? You don't want someone else to have control or dictate how you can spend your money. But anything else, it's not, it's not that big of an issue.

Makes perfect sense. Well, I know we're up against it here with time. Where can everybody follow you and what you're up to after this? I'm always on Twitter, though I haven't been tweeting a lot recently. Twitter handle is at Satoshi Light. Yeah, I mean, every time I tweet, I get like thousands of haters hating on me for selling. It's kind of ridiculous. It's gotten so bad. Yeah, it's gotten pretty bad. I mean mean it's four years ago and the price has already exceeded what i the previous high right so it's already back all because of that it's it's endless hit just because you sold like coin yeah because they think i um betrayed

them or they they think i crashed the market because I sold, the whole market crashed. Yeah, it is what it is. People over time will forget it. You can't win. They never forget anything in my very brief experience, unfortunately. But maybe it'll just become less important to them. Well, thank you, man, so much for taking the time. I really do appreciate it.

And you calling in from space. Yeah. Have a good one. Thank you. Yep really do appreciate it. And you calling in from space. Yeah. Have a good one. Thank you. Yep. Thanks, Scott.