The Wolf Of All Streets - Is Bitcoin on the Verge of a Massive Breakout? | Crypto Town Hall

Episode Date: September 25, 2024

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Morning everybody, happy Wednesday. Glitching a bit here, so trying to make sure we get everybody up on stage. Can you guys hear me? I'm in the car, unfortunately, so hopefully clear enough. Yeah, a lot of icons are perfect. Trying to get Mario up on stage, obviously, as well. I'm going to guess that we won't have Ran. What do you think, Mario? You think Ran's going to show up today? I don't even know if Mario's there. It's just me.

Well, I know that we got Dan, Dave, Lawyer, Dwayne, and friends. So we're going to have a great discussion today. Obviously, we have the topic here is Bitcoin on the verge of a massive breakout. This would seem like a hyperbolic, like ridiculous title, I think, for the last sort of six months. But I will say that it's starting to feel like it could be happening, right? We've got the rate cut, obviously, last week. We have sort of the halving cycle kicking in for those who believe in it. You know, we're six months, sort of five to, we always have that six to eight month period after the halving that's in for those who believe in it. You know, we're six months, sort of five to, we always have that six to eight month period

after the halving that's slow and boring during the summer, coming into the election cycle as well. And then usually after about 160 days, which is right where we're at now from the halving, we start to see the major price move up. If you're taking a look at the Bitcoin chart, we've potentially put in our first higher low for the first time since 74,000. But

to confirm that higher low, for those who look at charts, we got to get above 65,000 and we're flirting with it just below it at the moment. A lot of reasons to think that things could be ramping up. And I would say another signal just to open kind of the conversation to the panel is that altcoins are actually starting to look bullish, starting to put in bottoms, starting to have breakouts through technical levels. And to me, that's sort of an indication that finally there's a bit of confidence and liquidity might actually be coming in or moving around. And I think some of that being sparked, obviously, as well by the rate cuts last week. Dave, how are you looking at the market right now? Do you think that it's fair to say we have some signals that we could be ramping up?

Yeah, it's funny. I was listening to you and Chris this morning. And, you know, I think that, I think Chris said it well, it feels like a spring coiling. And there's been a lot of, we know the selling pressure that capped this. You know, it probably the last, you know, this 10, 15% rally from the bottom feels like so different than other times, know that you get into this situation i mean the last time i remember we were in the mid 60s back in 21 and forget the fundamentals which are dramatically better today but it's just the the technicals i mean there's still nothing in terms of leverage funding rates are still really low you, there's not a lot of interest. I mean, I was thinking this morning that would be kind of cool to see if we can get a prediction market on the list.

How many people are listening to this show and, you know, banter bubbles and, you know, all the stuff that goes around altcoins now versus if I could buy an option on buying the number of people that are going to be listening in two months. So true. It's the best indicator. It's the best indicator. I mean, you can see, listen, we do a show together, you know, that the traffic is diminished right throughout the last six months. You see sort of this steady decline that follows, I think, price and interest. And I think it's going to ramp up absolutely to your point. Dan, how are you looking at it right now?

I mean, do you think that we could be on the verge of this breakout in the title here? Yeah, morning, fellas, evening on my side. Yeah, I kind of speak to a few friends and they've been telling me through the year that this cycle will play out this way, like an uptick in October. And I was like, nah, bullshit, you can't really predict these things. But a lot of stuff dropped into place that is making me more bullish than I have been all year. And I've been quite bullish all year. The Fed rate cut, the Chinese government, you know, the massive influx of money that they've put forward. Looking at yesterday, if the Swedish Riksbank would cut, they cut 25%, thinking it would

be more like 50%. If Trump gets it, I think just everything is lining up that all of the kind of right indicators are there that things should go up. So I'm thinking about increasing my exposure to be, to take on a little bit more leverage and be a little bit more long. But I think I haven't felt this optimistic since kind of mid-January when the ETF got approved. I totally agree.

I mean, listen, I've been pretty outspoken, and I'm not saying I will or won't be right or that my feelings are particularly meaningful. I'm just another guy. But I was pretty vocal here in March that I thought the top was in and that it was going to be a very, very boring six months or so into the fall. And now, even that aside, I'm starting to get the tingle. You know, just seeing what's happening with the charts and things aligning, as you're saying.

So it scares me that it's sort of consensus that we get this October that you discussed, but it does feel right. I think. Ox ox go ahead but um go ahead so uh well first of all uh hey scott hey uncle dave you're in a minute um so uh i agree like fully with what you're saying um what Dan just said. I think that Dave actually said maybe the most poignant things, which are that the fundamentals are definitely the best that they've been since mid to late

21. And unlike 21, 22, there's definitely a complete lacking of leverage in the market, which is further indicative of how much better the fundamentals really are, because we're seeing this, you know, measurable, you know, you know, positivity in terms of technicals, that is completely atypical, given that there's so little leverage in the market, when at least you look at the last five years, What I think is most, I don't know, like, I don't, this is my hypothesis that I think that you guys are talking about October. I would say yes, like from a technical basis, October, you would think would be the time when we run. And I think that that's right. With the exception of, I think that in general, like sure, the Dow and, you know, stock market public equities are at like an all time high continuously. But I do think that people in general are still pretty scared right now from a, you know, socio political environment perspective. So I would, my hypothesis would be like, sure, we should run in October based on, you know, technical fundamentals, but probably won't happen till after the election, just because people aren't willing to, sure, we should run in October based on, you know, technicals and fundamentals, but probably won't happen until after the election just because people aren't willing to, like, move on those technicals and fundamentals, you know, during this crazy time, you know?

Yeah, another month of chop shouldn't surprise anyone after all of this. Right, right. And even though on a technical basis, it should run now, I just feel like that will shift a few weeks back because people aren't going to deploy large capital to what they conceive as a risk asset. I would say public equity is more of a risk asset than Bitcoin, personally, and I know most of you guys agree. But yeah, I think that people just want to wait. It doesn't matter who wins in November. It's like whoever it is, people are still just scared that they don't know who it will be, right? To your point it black rock literally just put out an entire report and is now on a road show robbie mitch nick was on tv

saying that bitcoin is a risk off asset and wrote an entire report now it should not be viewed as a risk on asset how it's uncorrelated where it belongs in your portfolio so that's and dude you're mike my god holy crap you're super right scott and like hopefully blackrock doing that will push people in the right direction faster but like i still wouldn't be surprised if we that people waited for a month ran you tried to unmute and it sounded like you're on a spaceship uh bitcoin on the verge of a massive breakout can we finally have conversations about bullishness here and actually meet it with our titles?

Well, I don't know. Like for me, I look at the altcoins and then I looked at total three and total three is broken out on the, on the weekly, which is big. Like that's like, it's a weekly breakout on total three. Like, you know, it's not, it's not like a short-term breakout. Now we're talking like big timeframe, trend reversal. Yeah, this is the one. Yeah.

That's what I've been saying. I mean, altcoins look like across the board. You sit there for six months and you try to pick one or two here that have a good chart, but when they all start to have good charts at the same time, and to your point, total three for those who don't know it, that's the market cap of crypto without Bitcoin and Ethereum. If you're charting that, it looks like it's breaking out.

And that's still 50% down just from the 2021 highs. And that's without accounting for all the extra supply of new coins since then. So, so much room to run, right? I think so. I think it's going to be. You look at some of the altcoins that have run. You've got Sui, that have run like you've got like suey which is doubled you've got phantom which is doubled you've got uh uh cetus which

is doubled like some of them are doubled but some of them haven't moved like tokens like are we it hasn't moved tokens like injected haven't moved so i think there's like i think because the market's not convinced there's a massive catch-up play that will happen at some point um but again i think the real fun the real fun will start when bitcoin breaks the all-time high and it just feels like this time it kind of has the right momentum to do it i i don't know like it just feels like double rate cut in place elections coming up around the corner um i just it just feels like like everything's falling into place. I don't know What's all-time high again like 74 74 74 74 ish. Yeah, and that's I mean, that's a that's a as much as it doesn't feel Like it. I mean, that's a a day or two of real Bitcoin action away, right?

It definitely does more but yeah We we all know that Bitcoin does all its movement in like 10 days a year when you really take a look It is not it is not far off at all Yeah, we all know that Bitcoin does all its movement in like 10 days a year when you really take a look at the chart. So it is not far off at all. I mean, Lawyer, how are you looking at this right now? I mean, look, so I've always been very bullish. You know, I'm sort of stuck in that bull market phase, just waiting for the next one. And I wouldn't get too excited about what's about to happen.

Like, here, put it this way. I think we're going to go very high in the next couple of months, but expect some volatility. Right. So don't I would just be careful of, you know, seeing a move against your thesis and thinking, oh, that's it. Right. Because it's going to it's going to shake you out. But I do think we're very close to sort of this new phase where people are actually excited about crypto again. But you won't get shaken out if you just do spot like, right. Oh, that's why me. I'm only like, if you're,

if you're trying to mess around with leverage, then you're just gambling anyway. I mean, low leverage is fine, but if you're playing with that, you'll get whipped out. What I mean is, is buying a bunch of spot and thinking, and seeing it go down and thinking, Oh, now it's headed down. You can't hold through a 20% drop are you even buying crypto i must say i think i saw a platform the other day that was offering a thousand x leverage i was just like just thinking to myself so like like bitcoin moves a thousand dollars on a thousand x leverage like i mean you

guaranteed to get wiped out like it's almost like out. But Rand, that's all synthetic, right? Like roll bit. It's not real leverage. You put down cash, you get $1,000 next and sure, you get stopped out. But people do it with $100 and you have a $10,000 bet. That's a good cost-benefit analysis. Sure, it moves. That's a guarantee that you're going to get wiped out. I mean, if you're betting on $1,000 leverage, $1,000 leverage, it's a guarantee. But're going to get whacked off. I mean, if you're bidding on $1,000 leverage, $1,000 X leverage, it's a guarantee. It's like playing roulette and putting your money on one single number. Like, sure,

you're going to lose most times, but if you're willing to lose the money and you're really convinced that it's going up the rest of the day, like, sure, do it. But this is roulette with 1,000 numbers instead of 30. Was that a 0.1% move? Yes, yes. 1,000 numbers. No, no, yes, yes. Correct. Correct.

I mean, that's absurd. Yeah, I mean, it's not a good market. Yeah, but then do it with $10 and see if you can make $1,000. Dude, you could trade 1,000x leverage on Tether and get liquidated. Yeah, listen, I haven't done leverage since the Celsius days because, A, I wasn't allowed to use the chain for a year and a bit. And, you know, just like learned my lessons um and yeah i mean i whatever i actually i love trading leverage i did responsibly though but it's i mean it's great fun

tell us more about that what's responsible trading leverage leverage is irrelevant leverage is irrelevant depending on where your stop loss is right if you're going to put your stop loss there anyways if you're using leverage that's appropriate to where your stop loss would be it just eliminates the counterparty risk of having coins on exchange there is a man there's a way to use leverage appropriately right ran i mean good yeah and also you can add to your stack right you can gamble with a little more than you have if you're responsible. If you're going 500x, 1,000x. No, I mean, I'm using 5 or 10x maximum.

Like, the maximum leverage I've ever taken is 10x. And even that, 10x is actually very, very, very, very high. It's high. It's very, very, very high. Like, 10x is a scary leverage. It's great when the market's going with you, but when the market's going against you, very high. Like 10x is a scary leverage. It's great when the market's going with you, but when the market's going against you, it's crazy. The other thing when you're taking that kind of leverage is there is,

what's it called? There is costs, interest costs, holding costs of the position. And people don't realize how quickly those costs actually... If you're taking a 10x leverage position on a million dollars worth of Bitcoin, so you put down $100,000, but you're effectively learning $900,000. And when the market starts running, the costs of holding that leverage start going through the moon. It's crazy.

And that's the part that usually squeezes your art is that you'd end up paying a whole lot of costs that you ordinarily would yeah sideways sideways action if you're not appropriately positioned can just absolutely eat away any profits that you have trading with leverage dwayne since we have you here like can you put all of our bullishness in context of what you're seeing in the macro conversation? Sure. Good morning. So, okay, so there's something to be said about overall bullishness and sentiment in light of going into an easing, basically an easing cycle with the Fed here.

So if you do look at, you know, Bitcoin versus the dollar, there is some momentum here to be, you know, to be talked about. One of the things that I like about Bitcoin right now is that we're seeing a net positive BTC spot inflows on the ETFs as of Monday, right? Which actually is quite positive. If you make a comparison to gold, if we're calling, you know, Bitcoin a risk off asset and we're putting it into that same category, that is very positive because on the gold side, we haven't even seen net positive inflows for the year as of yet.

And we're still getting that, you know, we're still getting that leverage in that burgeoning price. So I think overall, if you look at the six months period, 12 months period, that can prove positive for gold, pardon me, for Bitcoin. One thing on my mind, actually, is the regulatory environment. If the regulatory environment can possibly improve within the next six to 12 months, that'll definitely be a boon to Bitcoin. It's just right now, it's just far too murky. And, you know, we're not really getting specific, you know, specific regulations here. But I think once that occurs and i i do anticipate

that happening soon just with the way that the politics are going on the federal election side so if that can come to as well then yes it should prove positive for bitcoin over the next 6 to 12 months but we'll have to see what occurs alex what do you think well number one i am trying to avoid any kind of predictions here, because the last time I did that, it was at the end of August. And I'm like, Bitcoin's going to be boring for the next few months and hold between like 63 and 70. And that very much did not happen when I was over the fucking place. Yeah, but we are. We are there now, to be fair. Yeah, now we fixed it. So there we go. So that's pretty great. It's funny.

I was watching both Margin Call and The Big Short on the very long flights home from Singapore. Just not for a particular reason, but listening to the discussion of like thousand X leverage plays by people makes me understand why I may have just emotionally felt that in the universe. I'm definitely feeling a lot of pickup on things. I think everything seems to very much still be uniting around a heavy interest and bullishness around Bitcoin and the top-tier alt ones with Ethereum lagging significantly. i don't think he's going anywhere anytime soon but man especially last week in singapore people were just fucking bummed out on eth and thinking that it was just i love it i was there when vitalik was singing and it was like it was just yeah i i normally would be happy to blame that on Vitalik, but it really seems like this is just the continuation of what I've been hearing for months, right?

Like, I think people were expecting a huge breakout from the merge that never happened. People were expecting a huge breakout from the ETFs, which didn't happen. And just fundamentally, it's a very, like, academic-y, big, non-profit, kind of colossal clusterfuck. And it's got a lot of inertia, a lot of momentum, a lot of people building there. But it's a whole bunch of people building on-chain crypto products, right? And I think if you go to a lot of the alt-L1 ecosystems, in particular, something like Solana, Aptos, Swade, like Stacks, you're seeing people building off-chain crypto products and i think

there's going to be a lot more interesting for people um than that and so yeah that's where that's where the momentum is on the coins too as well as on the overall ecosystems and so i think for me it really feels like yeah 2025 is going to be the big born and like that that story is pretty darn well locked in in my mind it's like what the narrative of that cycle is going to be um with one huge caveat to that too which is you know we talk a lot about like bitcoin versus the alts these days right or maybe bitcoin versus ethereum versus the alts i think we're going to continue to see a little more tiering there. I think the groups will be Bitcoin, Ethereum, the tier one alts,

which is, again, Aptis and Solana and the other ton, another couple, maybe five to ten top actual people believe that these are credible real projects, followed by all the other wannabes who are just not having traction after too long or are random ass upstarts that no one's ever heard of and doesn't really trust because you've got other better options out there. I completely agree with you in terms of on-chain, off-chain, but I would posit that people think about it maybe in what is off-chain crypto products, posit that like people think about it maybe in like what is off-chain crypto products but i actually think that if you think about rwas and the different formats that

they come in whether that's uh like permissionless like nfts real estate stuff or whether it's permissioned uh treasury bill you know uh erc20s or what it would be equivalent of years and 20s like block towers doing um which there's literally billions of dollars of people don't seem to think about because they're not listed on coin gecko i would actually say that i think that the largest growth and like this is my hypothesis i would bet significant amount of money on this with anyone um i think that the largest growth that we're going to see in the next 18 months in total crypto market cap on a relative basis will actually be um permissioned uh security token uh like erc20s or something like that um basically like something similar to what republic is doing for like the football teams in the UK and stuff like

that. I would actually bet anyone that within 24 months, assuming that Bitcoin and ETH would stay like the same relative price, I would say that the total market cap of all crypto coins would be more than 50% of that would actually be security tokens. Straight up. I would bet anything up to a hundred K against anyone. I think I take that bet. All right, let's do it. Let's do why there's on chain vaults that Mark Cuban did with the other guy.

Let's do it. No, I don't commit those. No. Oh, come on. I said, I said, I said, I said i said i think and i'm gonna i'm gonna run you through what my thinking on it is um let's go i think and i might be biased to this because of the specific example you gave was with the teams right the problem was if if the industry goes heavily on the securitized things right um there's two things you want to do there number one is then you are explicitly making securities which will probably cause

more of a crackdown even if the um uh what do you call it even if like it's you know a more friendly regulatory regime in the u.s but alex alex think about this for one second and then continue like republic is actually the most regulated crypto company in this country they have the largest collection of total licenses that is like more than coinbase more than gemini like literally more than anyone else and i can actually list them for you because i consult for them and the sports teams are just the things that they've launched so far. They have not announced the other things that have actually closed in the point. Yes, so Securitize is also very licensed, but in terms of the total, like having a banking license, plus Reg CF, plus Reg D, plus Reg A, plus Reg A+,

in terms of the total collection of licenses that allows them to do specific things, this is all public information. You can check yourself online. But they haven't got their SPBD and virtual asset, and that's what's required for security takings. No, they do have their virtual asset, actually. That's why they were able to launch the Watford stuff. So basically, the Watford deal, you were able to be an American retail investor.

So unaccredited, you were able to be an accredited U.S. investor. You were able to be any type of international investor, and you were able to be accredited U.S. investor. You're able to be any type of international investor. And you're able to be U.S. institutional. Yeah, you need the SPBD to get the green light. At the moment, you'd be- They did it, Simon. Check online. They have the license.

They have for years. There's only one special purpose broker deal issued. They haven't launched it. They haven't issued it. Then how did Republic do this legally? They did. It's done. one special purpose broker dealer issued. They haven't launched it. They haven't issued a second one yet. Then how did Republic do this legally? They did. It's done.

It's playing on a gray zone. No, it's not. It is. It is. You have to have a special purpose broker dealer in order to have full authorization from the SEC to launch a securities token. But Securitize and others like Republic, because Securitize has the time. You're just wrong. Fly to New York and meet with the SEC in their a securities token, but Securitize and others like Republic, because Securitize has the-

You're just wrong. Fly to New York and meet with the SEC in their office with me. You're wrong. I already have, thank you. I applied for one of them and they said you have to have an S- All right. Well, then I'll ask Ken Wynn today and he'll tweet that you're literally lying. I'm not lying.

I'm just saying you can have a broker-dealer with virtual asset permission, but the SEC has said if you want to enter this market with the security token fully, and they may be not enforcing at the moment, or they may decide that you can file for the exemptions, but you have to have the special purpose broker dealer and they've only okay non-american how about i just have republic tweet today and make a public statement or press release all right so let's just wait for the facts okay um yeah but how do you guys really feel about this yeah so i was gonna say i don't think it's uh particularly relevant to the audience but i would love no i don't think it's a good thing actually i i don't think it's particularly relevant to the audience, but I would love. No, I don't think it's a good thing, actually. I agree with you. It's not relevant here. And when I said relative growth, what I meant is like Bitcoin and Ether, total crypto market cap without security tokens could double in the next year. Right.

And still, I would posit that in the next 24 months, the total value of all crypto market cap might be greater than 40 or 50 percent security token i like really do believe that for a few reasons like there's things in the pipeline that are already like actually signed and in process at republic that i obviously can't disclose but like they're very very very large spvs that are basically i I would call them like VC secondaries to some degree, um, for some of the biggest names that, you know, I, I literally can't say, but you literally know who they are. Um, and yeah, like that stuff is, I would call in the same category as the, you know, sports team security tokens, et cetera. I don't see how that whole thing doesn't just end up ending in misery for a lot of people on

on one way or the other like either the sports teams do go ahead with it in which case it just plays out with like when the music labels shut down napster and then tried to like revive the napster brand and it was just like super uncool again. Or you have people who can actually do interesting things with those brands. But if you actually want the government to effectively go after crypto, and especially Web3 stuff, piss off the NFL by misusing their trademarks to run scams. And I guarantee you that is the one thing that will actually get the government. So what if, what if, let's just say,

that the NFL at the league level had a deal in place with Republic to allow all teams starting at the end of 2025 to tokenize up to 4% of their teams? I wonder what would happen. Maybe that deal is already in place. Maybe it's not. Sure. As I said, would happen. Maybe that deal is already in place. Maybe it's not. Sure. As I said,

if there's an official deal... Yes, official deal at the league level. Maybe. Maybe not. I can't say. Is this Alpha? Not Alpha. Not Alpha that you could monetize.

Not Alpha that you could monetize, in my opinion. I don't know how. Even if it were true, how would can monetize. I feel like there's some... Not alpha that you can monetize, in my opinion. I don't know how. Even if it were true, how would you monetize it? I'm not going to take your $100,000 bet. Yes, you are. Oh my god, rude. Okay, tell you what. How about if you take the bet,

the $100,000 bet with him, but I take a derivative off of that bet? I love this. $1,000 bet with him, but I take a derivative off of that bet. I love this. 1000x? Scott, while you've opened the casino, he's just letting you know base AI is up. I don't know

if you're looking at the screen, Scott. Yeah, I know, but I think we've got to get some other people on stage too. I'm not sure if it's just them. According to David, it's all good to go, but up to you, man. Oh yeah, that's, that's perfect. And it's good timing for me because I have to be somewhere at 11 and I really

want to talk to, really want to talk to these guys. Base, can you guys hear us? We can. Thanks for having us on. Thanks for having, just let me think. Hold on Scott. Base, thanks for being the first project. Thanks for joining us, Mario. Base, thanks for being the only project to date to have scott on the cap table without having us on the cap table on the table of base though no so the to be a let's be clear so we had pepe coin uh up before i bought a bunch uh and i the reason i did that we had this conversation that we've had over and over and over and over again,

which is about the mischaracterization of certain tokens as meme coins that actually have compelling utility and are not actually meme coins. We had a long conversation with these guys about it. So I bought and own a bunch of Pepe coin, but I actually don't own any based AI. And I wasn't on the cap table of Pepe coin. I bought it literally on the market. Kyle's been recommending us to invest. That's why they're here. That's why they're here,

because I feel like an idiot and I want to discuss it with them. Yeah, and just shout out to Kyle. Kyle Shrestha has been chasing me months and months ago to get involved. I'm not sure where it got lost. So yeah, I kind of take ownership to that. But, yeah, Bass, pleasure to have you guys.

Really, really great being here. And I don't know what the explanation was there, but it sounded like you're a part of the cabal. So, you know, whatever he says is probably a good thing. Is that me or Mario? Because I'm so not. You're me. No, but see, that's what you would say, right?

That is the cabal. I need to ask, you would say, right? That is the cabal. I need to ask, what is the cabal? What is the cabal? Well, see, but that's, you know, asking the question. Well, actually, that ties directly into our premise here. The whole space has shifted towards this kind of meme coin. And while that's been happening, you know, there's all this bast kind of meme coin and while that's been happening you know there's all this this bastion of privacy but it's privacy that's that's shielded kind of the wrong kind

of situation you know it's like it's privacy where it would be nice to know who you know people are but the the inverse of that is is based ai with like we think that ai should have a lot more privacy in it and it doesn't have any right now all of us hand over everything if you guys have seen the terms and conditions in open ai you're we're all handing over absolutely everything to them in a more aggressive way than meta so it's like the the question of meme coins and privacy and ai and privacy is just two huge topics um but you guys are the you know you guys are the masters of all that just just the basics like how just can you can you explain to me how does base ai i remember carl talking about a while ago so i even forgot AI and PepeCoin and privacy and meme coins, how does it all come together?

So PepeCoin is because we just have loved this meme for years. So it's a 2016 project. All of us either own like, I mean, I don't want to, I'm not chilling anything, but all of us own stuff like PepeCash or PepeCards. We've played in the space with this stuff for a while. So then when, exactly, when OpenAI announced that they were being essentially bought by Microsoft, we knew that what was going to happen is the same thing that we saw

happen with Google and DoubleClick and just kind of the internet becomes owned by a few people and the narrative becomes owned by a few people and the narrative becomes owned by a few people so ai is currently on a you know speeding bullet towards that future and so we got together and we're like okay how do we build out a anonymous version with the premise that using encryption with fully homomorphic encryption and things like zk rollups to optimize routing of the data can we improve on the privacy or even make it perfect and you know that's what we spent essentially two years building is this uh privacy protocol orchestration layer that lets you build out llLMs that don't know what they're saying. And I know that sounds weird, but that is privacy.

In AI, you need an LM to be able to answer you and not know what it said. So how does this differentiate from other similar crypto and AI products? What's the tech innovation that's going to be a differentiator here? There's a lot. I mean, I guess the whole space in the AI space, I think that, again, we're seeing a very early misunderstanding of what's here. Obviously, AI is hot. And obviously, crypto is waiting to be hot

or is hot now. So when you combine these two, you get this really unnecessarily frothy speculative market. From a differentiation standpoint, if you drilled into the projects, there's really only a few projects that are building very unique technology. There are many projects that make consistent claims, but it's like you can dig down and see what's different. In our case, it's a once-in-a-lifetime, this will never happen again in the crypto space. Because what's happening here is a meme coin has facilitated the launch of the AI layer. And it's not a meme coin that launched a month ago. It's a meme coin that's been running for seven years. So the community is far past fanatical. That group incubated this AI coin and is now about to burn about 80% of the entire supply to convert it into what are called brains, which are effectively the, you can think about them like subnet possible, but then that actual regular folks with like

an M1 Mac can participate, not people who are using H100s and these bigger GPU racks. So from a differentiation standpoint, it's a meme coin being burned to launch the AI orchestration layer. And the meme coin maintains its utility in that function forever so it's hard-coded into the contract on a theorem and then we use a sequencer on based so based as an l1 it's its own chain it's a 10 second per block chain and it runs an EVM compatible stack but the whole thing we've been building in Rust.

So it's not using something like a Go wrapper or like a classic optimism node sort of thing. So a lot of it is we had to write it, and that's kind of why it's taken years to do it. But we wanted to build something that actually we need to fight for privacy as a space. Wait, base is 10 second block time? Yeah. Oh, okay. Interesting. I thought it was less. We maintain 10 seconds because of, well, I mean, we can get into the technical details, but there's a lot of things that help nodes submit ideas inside of based and so it's like if you look at like llm generation

speed and per token generation if we push the block speed too fast too early we knock out you know regular gpus from participating it doesn't have to do with finality and wait isn't that only like two like 2x faster than ethereum uh it is faster speed in this case is not so ethereum's finality has like stages and so i know but the block but the block time is what 25 seconds 22 seconds no 30 30 well i mean they claim it's 15 but yes technically it's 30 technically it's 30. Technically it's 30. In based AI, it's important to note that what it's orchestrating is not the transaction layer. What it's orchestrating is the payment layer for the separate siloed GPU networks.

And that's valuable because why? Well, there's two categories of value here. One is the meme coin utility side of this, which is that our whole space has angled towards meme coins that are just meme coins for the lulz. And so there's a social experiment there. with its privacy side is unique. So if you're using BitTensor, for example, and you type out a prompt, it's broadcast in plain text to the entire network, which is not going to work. Nobody wants their questions floating through the entire internet in plain, readable text. Except for some questions, right?

Well, I mean, but then that fits into like what is x right there's a there's a venue for making public questions post true true true you know like so we're just trying we're fitting into a vertical here that's that would have been where privacy coins went but i think it's even more important like a privacy coin is has this darker twist to it this has a far more human ethics you know rights question to it and privacy coins obviously like have their own challenges or being delisted it's just kind of they've become persona non grata in the space so based like that all that said who who do you view then as sort of the target audience for this? Who's going to use it?

What is it like? Who's it being built for? And how can those people participate in the network? Absolutely, everyone. Our goal is to actually make it better. So Mozilla messed up. Now, I'm not trying to like trash open source projects because they're awesome. But Mozilla should have continued to be an amazing browser. And as it just got this bloated, almost lack of funding, but also this mix with Ubuntu,

it really just bogged down Mozilla's potential. We shouldn't have... Everyone thinks that Chrome's good. Chrome sucks. As a piece of software, the fact that it doesn't adapt to LLMs at this point is nuts. So the goal of privacy is that we become SSL. We want to be that little green lock in the corner on Chrome for every model you interact with. So we are building some really interesting stuff,

but in that vertical, there's really technical stuff, and then there's consumer-facing stuff. So we're building something called Based Mask, for example, which is like MetaMask. But what it does is it sits in your browser and then wraps any interactions that you're having with an AI with a Diffie-Hellman key exchange. Which is, it's not perfect, but it's way better than sending plain text prompts back and forth, you know. And it encrypts your conversation with traditional AI. So like based mask, you can go to chatgpt.com. And the first thing it actually does in the background is teach your session ofbt only it's sending encrypted conversations back and forth where you don't have to worry about this stuff being indexed part of the next model becoming a training element because you're actually having this independent encrypted conversation that that all makes perfect sense so uh what what other elements are we missing here like how can

developers you know use this platform and and get involved on that end? Because we talked about who it's being built for, but there might be people who want to build on it. Yeah. So based AI as an orchestration layer is a huge opportunity for anyone trying to explore in the machine learning space who wants to summon a lot of compute power. The openness of the network, we have so many people already ready to provide GPU infrastructure. Even back to people who have leftover Ethereum mining operations,

there's a lot of compute power. The issue is organizing it. And what BitTensor has done in this space is interesting, but it's also annoying in that it's very hard to figure out what BitTensor does. And when you run each one of the sub-tensors, unfortunately, they're controlled by this master root validator set who kind of determine whether or not what you've done is valuable.

Base goes at this from a very different approach. Everyone has the same work because they don't actually know what they're working on. So there's, we're all just working on encrypted data. So there's this really open network participation capability, which makes it way, way easier for people to throw their GPUs into this and be a part of providing compute support. And right now, GPUs are just prohibitively expensive.

It's just so expensive to get access to this compute. So we'll be cheaper by far than Google Cloud or Amazon. Do you guys have staking available? We have staking. You can stake your base. It'll be more interesting when we release Brain Gecko either this week or next week. And Brain Gecko is like Coin Gecko,

but for AI coins across the base ecosystem. So what's Brain Gecko? Can you tell me again? BrainGecko is like CoinGecko, but for AI. So it's focused on AI projects, but it's specifically focused on AI projects that are hosted in the base ecosystem. So from a getting involved standpoint, that'll be a great way to just take a bird's eye view of what's going on and

what's being built. But you know, there's, there's a lot, it's a lot of stuff. Yeah. Well, congrats on you guys,

what you guys have built again, two people I trust greatly have spoken highly of you guys, Kyle and Scott. So I've already hit my head up my team before um, before we started this, uh, back and forth to kind of reach out to you guys and see if we could do something together. Actually, you'll probably hear from the team shortly. Um, you can just hit me up on Twitter as well. We'd love to connect and send me through a DM on my main account, the host account, the

co-host account, but, uh, no, congrats on your success guys. And, uh, you know, we'd love to have you back on the show and, um, and yeah, man, any final quick words before we wrap it up for the audience i i am very excited for people to explore you know what's new like we're not trying to you know shill a coin here this is very very hard based ai is an extremely hard new technology that is exactly like the early days and we we were there you know with the early pepe coin and it was fun we still love command line interfaces we love you know ascii only we like you know no frills design if you go to our website you'll see kind of what i'm talking about but it's one of those things where based, if you want something that is reminiscent of the early crypto and just as

passionate, like we're, we're off, we're on a mission here and we want privacy to be a part of AI. And if you believe that that's important, come check us out. I appreciate it. Thanks a lot,

everyone. We'll see you again tomorrow. Same time as always. I think tomorrow, yeah, tomorrow, Thursday, we'll see everyone tomorrow.

Scott, I can't be there tomorrow.'m flying i'm traveling so i gotta toughen up and do it yourself bro god no everyone thanks a lot see you guys bye