The Wolf Of All Streets - Nobody’s Trading Bitcoin… That’s the Signal!

Episode Date: July 31, 2026

In this episode, the panel focuses on why Bitcoin may be nearing a market bottom despite ongoing negative headlines. The speakers argue that recent security issues with hardware wallets reinforce the need for trusted custodians and institutional products to drive mainstream adoption, while emphasizing that these incidents don't change Bitcoin's long-term fundamentals. They also discuss the trade-offs between self-custody and institutional custody, why the CLARITY Act could improve investor protections, and how Bitcoin's technology will continue evolving even as adoption grows. Learn more about your ad choices. Visit megaphone.fm/adchoices

Okay, good morning, everyone, and happy Friday. First, before I talk for any length of time, can anyone hear me? So a quick thumbs up will help. I don't see anything. So I said, okay, good. Cool. So before we talk about the topic of boredom and markets and bottoms and stuff that Scott actually covered pretty well in his rant this morning, I want to rant a bit about the cold card hack

because I have been basically, and Jamie, you've witnessed this. a few times. I've taken a lot of shit over the last six months, a lot of shit for defending that most people will want to use intermediaries, particularly those that give them insurance to hold their assets. Now, those intermediaries could either be BlackRock with Ibit or Bitwise with their ETS or Fidelity or now, you know, we have Robin Hood and Charles Schwab joining Coinbase and Cracken, et cetera. But, you know, all of these people, as well, well as strategy, which is another way to effectively own Bitcoin exposure without taking, you know, direct self-custody. And I've been told that not your keys, not your coins,

yada, yada, yada, yada. Now, all I will say is this. There is literally zero chance, zero. So let's make this clear, zero chance that the population at large, the normal people, are going to look at what happened this morning with seed phrases, non-random seed phrases, is generated by their supposedly safe hardware wallet and not be paranoid for years. And this is exactly the point about the UX, U.S.UI of Bitcoin. Asset itself has been pristine, the way the network has adapted to all the problems

that have been thrown itself over the years, whether it's the China ban or now the AI, you know, now the AI conversions from data centers, everything that Bitcoin does in terms of churning out blocks and working has been perfect. But the adoption by use of trusted intermediaries has to be part of gaining mass adoption. This is the hill that I'll die on. This is the hill that Bitcoin, frankly, will either live or die on.

And I am so freaking tired of listening to Bitcoin Maxis because karma is a bitch. And when these things happen, nobody is going to ignore it. I mean, I'm not talking about people that are listening to this space. I'm talking about your wives. I'm talking about your mothers. I'm talking about the people who go, who think today, think Bitcoin and Dogecoin are the same thing. These are the people that need to be won over. And I just find this.

I mean, it's troubling, it's annoying. And by the way, it's incredibly sad. There are a lot of people who lost money who did everything right, according to all the experts they listened to. And that's a real problem. I mean, you know, I'll ping you, Jamie, because you're up here. I don't see anybody else on the, you know, I don't see, you know, we got to get Tony and Paul up as speakers and Ryan, et cetera. But I mean, I'm missing something? Do you think there's even the slightest chance that this isn't going to be seized upon by skeptics as, quote, proof that there's a problem with

Bitcoin that's inherent, which, you know, and do you think that there's even a slight chance that that normal mainstream media isn't going to blow this up and make people afraid? No, I agree 100% with you, Dave. You know, I was listening to the spaces last night. And, you know, it was very sad to hear some, like, one-on-one experiences of people who have lost their life savings of whatever amount they had value in there, right, thinking they were doing it responsibly. But, you know, to your point, and we've heard this through the BIP 110 discussions and now through this self-custody, a lot of people who are tradfai or questioning whether or not this self-custody cold wallet conversation is really a viable option. I think institutions are going to seize this as an opportunity. I think there's going to be a lot of discussions going on from here education-wise, but I think that's going to be. the one thing if you wanted to attack Bitcoin about the narrative is self-custody.

And so this thing's going to open up a big door that I think needs to be discussed and talked about. Yeah, I mean, I'm not that negative on Bitcoin the asset in terms of the number and its use. I'm negative on the notion that people who don't, who aren't sophisticated, that the UIUX is where it's supposed to be. And, you know, when you have a wallet, I mean, it's like, for example, example, would anybody have trusted a bank when the bank robbers could go in and take your money, right, in the West? I mean, it was really hard to get people to use banks until they had men

with guns and they did this and et cetera. And then eventually we ended up with FDIC insurance. Now, the FDIC insurance was needed because it runs on the bank, which was different. But the fact is, people to trust something, you have to be able to prove it. In a world where we have proof, you know, it would be, it's one thing, right? You know, you need to be able to have independent pen tests on everything that you do, a penetration test for those, whatever. And frankly, we're not there yet. You know, it's like, look, I understand, you know, I didn't use cold cards.

So, you know, whatever, but that's not because I was smart. That's because I picked what I was going to pick and I, I've been using it for a while and I don't touch it. But, you know, it, the point here isn't that Bitcoin wallets are, unsafe because generally they are and even in this particular case it's you know it was a bug and people figuring it out and it wasn't total and it wasn't immediate part of the problem of course was that there were some unscrupulous people who effectively defended their own technology much to people's chagrin so that's a different story but my point is is that every time we get these sorts of uh well i'll call them narrative attacks because while real

it's completely defendable and it doesn't change the overall, the overall narrative particularly, but it does create issues. Now, do I think this is going to, you know, plunge us into a new bottom? No, I actually don't. But I do think that those who people have to understand in the Bitcoin community, that Bitcoin needs to have the same safety attached to it

that any other professional asset has attached to it. That's really the issue here. Tony. Hi. Hey, Dave. How you doing? I agree with you 100% as well as what Jamie said. I've been talking a lot about it on the podcast over the years.

It's unreasonable to expect mom and pop and the average Joe and Jane to manage seed phrases. They're going to go, especially with the Tradfifirms offering ETFs, they're going to go that direction. It's going to be much easier for them. And look, I've even told people of an older age who are like, hey, I want to get exposure to Bitcoin and things along those lines. I'm like, do you have an investment account with BlackRock or Fidelity? they now offer it. And they were like, yeah, I do. And they're like, I'll just do that because they don't want to handle the complexity because there's a lot of friction to be able to set up seed phrase wallets. And then you have to worry about where do you put those seed phrases? And

even if you have a hardware device, where do you put that device? It's just so complicated. And to your point, Dave, we're not there yet. Maybe, you know, the U.S. will improve. And then you'll get more people in the mainstream to go that direction. But right now, If I'm Black Rock Fidelity in these stratify folks, I'm smiling because my product where I have built a brand and trust can solve this and I'm sure they're going to use it as a marketing tool. I'm sure they will. But it's not just them. I mean, you know, it's like we talk about all, it's one of the reasons that I get so, I'm so angry at the stupidity I'm seeing on the Clarity Act. I mean, there are people out there on the Clarity Act making just absolutely dumbass statements, you know, mostly.

the Democrats. And look, I don't care. I mean, I wish it was. There's no reason this should be even partisan. They've made it partisan because Trump's family made a lot of money on crypto. But, you know, they make comments like, well, you know, we don't want to normalize this. But one of the things, and Senator Loemis has said this, that is a very big deal. And this kind of points this out, is that only until we change the laws, exchanges cannot, cannot protect customer assets as if they are, you know, in the event of a bankruptcy of said exchange. So that, of course, is massively helpful to monster firms with trillions in AUM and massive balance sheets because their likelihood of a bankruptcy is really small.

So that's why people might trust it, but it doesn't have to be that. I mean, places like, you know, Coinbase, which use professional custody, et cetera, and others, I think you're pretty safe, but if something really bad happened, you don't have the same luxury that you have, if you put your money in, you know, whatever, Charles Schwab or, or, you know, with equities because they are, they are at their, assets are segregated. And so that's the other big point. Anyway, Paul. Yeah. And a lot of people are mentioning how, yeah, it's hard to manage seed phrases where do I put a seed phrase and whatnot. And that's kind of the issue with self-custody. Realize, I think this specific exploit, I just want to get really precise, this specific exploit

is not specific to self-custody. It happened to be specific to a specific hardware wallet, but a random number generation is needed across the board in order to support and to store Bitcoin and all the other cryptos. I'm not a Bitcoin maxi like you. I'm much closer to a self-custody maxi. I think that self-custody does have to become a lot easier, much more mature, where these kind of exploits go away, because especially in this day and age of AI, we can look for these exploits pretty quickly and make sure they're not in the code.

So whether or not we had access to the AI to be able to look for these exploits is kind one of the open questions because so much of it is guardrailed. But, you know, realize that, yes, even custodial services, you know, maybe there's institutional grade that, you know, is less likely to have this issue, but even custodial services could have the same issue. They could be using hardware walls that have the exploit. That's true. I want to throw, like, I don't want to throw this right at self-custody and throw self-custody over the bus. I want to be very clear, though, but here's the difference, Paul. So I've spent most, A lot of people, listeners know, I spent way too much time because I'm way older than I want to admit to at this point.

You know, working between, you know, almost a decade at Morgan Stanley, more than a decade at Solomon Brothers through Citigroup. And then at 2 Sigma, which became a massive size institution by the time I was done. In all the cases, there is no way that a system as important as custodial seed phrase generation before it got deployed into production. would ever, ever get deployed without multiple penetration tests and all sorts of things. And random hardware wallet providers just don't have that discipline because the discipline comes from having your job and all the people's working around you, your job and all the money being part of it. It just gets that level of attention that is unbelievable.

And plus, they insure it and they have the balance sheet to handle it. So it's not about, my point is here, I mean, look, random number generation is tricky. And anyone who's ever programmed understands that. But my point is, is this. There's actually no pen test for random number generation, just so you know. No, I don't say, you pen test it. Well, you said you pen test it. You said you pen test it.

Well, you can. No, you generate a random number. You don't know whether or not it's random. That's right. So you can't pen test it. You have to code review test it. That's really all you can do. You can, but the point is, the,

The point that I'm trying to make is that custody, the reason banks existed in the first place, there are two, no one stored stuff in their mattresses because they don't want men with men with guns coming into, you know, into their houses, right? You know, and that's still an issue with self-custody, by the way. People used banks because for a large part because it was easier to defend wealth in a vault with men with their own guns, you know, from all the other depositors paying. for it for the process. You know, now I'm not saying we live in the Wild West, but honestly, with AI and the internet, I'd say that in terms of security, we sort of are, right? I mean, and so, you know, it's harder.

That doesn't mean it's impossible. I agree with you. I think that this solution, this technology, this will be solved. And it is better today than it used to be. I mean, hell. I mean, there was, I don't know if people remember when I'm not going to name the manufacturer, but one of the manufacturers had a very clever hack was they put they they they someone sold hardware wallets under a brand name and made it look like the brand name via actually was on

amazon that where they knew the seed phrase and so you know so it so it basically people got stuff stolen because they bought it you know from the wrong you know from the wrong seller right now i don't know that that's happening it's been policed already i mean although i would tell people never ever buy, if you're going to buy ledger, buy from ledger, if you're going to buy Trezer, buy from Trezer, et cetera. But there's all sorts of these vectors. The problem is, is every single time anyone ever sends Bitcoin, there's always that little bit of fear that it's not going to get where it's going to go because maybe you type something wrong, you did something wrong. This is just, this adds to that. And people have long memories, right, Paul?

I mean, actually have very short memories. I would say they do because if anything, all of the exploits that have occurred in the past and the cause of those exploits have been long forgotten and people then do the exact same thing, which is storing and using centralized services, which have been exploited over and over. And most of the people that enter the space, every cycle have no clue about those exploits from about four years ago. They have no recollection. They don't know about FTX. They don't know about, you know, like, hell, Mount Gawks is like decades ago. That's an entire lifetime ago. The new generation of people that come into crypto every cycle have no, not just no memory. It just didn't even, it's never crossed their path.

Yeah, I'm not sure I agree with that. And so it hasn't done, well, you can, this is something you can't like do a double-blind placebo-controlled study on whether or not people actually remember or don't remember, you know, so, but let's face it. Like, we encounter a lot of new users, a lot of old users, a lot of new, but, you know, they kind of, they overlap, but they don't look up, they overlap that era, but they may have never done that research to find out, oh yeah, these are, you know, a lot of exploits that did happen. So I don't know that people have that long term of memory. Humans are notorious for having a very short-term memory.

Like we don't read history, right? We don't, not enough people like you do. You're great about this, right? But most people don't. And so we don't learn from the mistakes of the past. Yeah, I mean, generally speaking, that's true. But it's kind of an interesting, it's a really interesting point you make. Look, the reason we have cycles.

I'm not talking about four-year cycle. The reason we have people, the reason we had a hedge fund blow up last week was because the supposedly brilliant genius did exactly the same thing that pretty much every hedge fund that's blown up throughout history has done, i.e. pyramid up and increased their leverage as assets were going higher, increasing their risk, thinking that they were, you know, and not understanding what can happen when liquidity gets sucked out of the market, right? I mean, we saw that happening and people were, before we found out that there was a big $20 billion hedge fund.

We were seeing these stories coming out of Korea, people losing all their life savings. And yet I did this experiment. This was funny, actually. I was talking to someone who's in the market who considers themselves a trader. And I said, do you realize that, and this was a couple days ago, I said, it's still true. I said, you realize that the Korean market over the last 12 months is that way outperformed NASDAQ, even after all this. They said, how could that be? Everyone's gone bankrupt.

And then he went back and looked and saw that. Even after all the falls, it was up 80% in 12 months. And NASDAX was up like 20 or a little bit less. So it was like two days ago. And that's the point. So you look at all these people losing money because, as you say, they forget. And it happens all the time. And that's why, you know, when markets start going up, they go parabolic.

Why? Because people are taking even more and more leverage. And then, of course, when they unparabarib- then they go do the backside of the parabolic move, but are still up, they're done. That's why, you know, we always talk about it. And in Bitcoin, it's like, don't use leverage for as a holding for something that is such a high volatility asset. I mean, the same is true with sand disk, you know, with any of these things that are highly volatile. So we've had that in the last two weeks also.

But there, you have the example that proves your point, which is people don't remember. They make the same mistake again, right? Nope, I hear you exactly. So where do we go from here? Interesting question. Yeah, I mean, look, I think this two shall pass. I think that, you know, it's it's another black eye. I'll be curious to see what the idiots, you know, what the idiots in Congress say about this. And I say this because someone's going to make the statement.

You can take it to the bank. You're going to get someone who's against clarity and against crypto. They say, look, people lost all their money. And of course, ignoring the fact that if you have a clarity act, then firms would be able to guarantee and segregate customer assets, which they can't do today. You know, Elizabeth Warren. It's going to be a cell phone, but no one's going to point it out. It's going to drive me crazy. You know, Elizabeth Warren and her team are already putting together their strategy around this.

I'm sure they are. And they're literally the, it is exact proof of why they're wrong, right? But they're going to try to spin it because, of course, they do. and there's a lot of ignorant people out there. And it just, as I said, it annoys me that people could be so ignorant and listen to, you know, evil. And there's no other word for it. You can't spin it in any other way. But so be it.

Anyway, I'm going to try to control myself now. I guess I got myself worked up this morning. Jamie, I see your hand up. Yeah, just a follow up. I think the conversation is interesting. Paul makes some good points. I mean, I think overall, there's a portion of value that's, beneficial to have outside the financial rails.

At the same time, there's also a portion of value that's beneficial to access within institutions. You know, I mean, where this goes from here is I hope that the maxi views on either side are, you know, a little bit more nuanced and understanding that all of these retirement goals that are very unique, depending on what your needs are, your region, your age. And the conversation gets back to allocation sizes and diversification is not, you know, a bad thing and risk management and whatnot. Because all of us have different ideas of what we want our life to be. And there's not one fits all size for how you do it.

So that's where I hope the discussions go from here. And I'm certainly going to try to foster those in the spaces and the conversations that we have. Yeah, I mean, I think that's right. I mean, I think that, look, and we're very my eye. topic here. I'm sitting here in northern in southern New Jersey, right? You know, and, you know, we sit in the United States and we have access. We're banked, you know, I have bank accounts, I have brokerage accounts, I can do that. I have stuff spread over lots of different things, but I do have some Bitcoin and self-cutts. They always have. And honestly, I think a lot of people

are like that. They diversify, you know, they don't want to trust a counterparty risk. because in Bitcoin you have to, even with Ibit, you have counterparty risk to some degree. It's probably less or with Bitwise or Fidelity's ETFs. But, you know, the truth is that, you know, I'm seeing all these points that, you know, Ibit is better than cold storage. Well, understand, with any ETF, two things are true. You are paying a fee. It's a small fee, but you're paying a fee.

So you're paying a fee for that security. And the other thing is you're inside the financial system, meaning, that if the government decides to ban Bitcoin, the way they ban gold. Now, I personally think that's highly, highly unlikely. But if they do, then you have a problem. Now, that's in the U.S. If you're outside the U.S., there are many jurisdictions where having money outside of the system has enormous value, enormous value.

And understanding that value is something that it's very hard for someone sitting in the comfort and safety of the United States to understand. But, you know, you talk to Venezuelans, right? And I have, right, you know, friends who, you know, will tell you that they want that there's a certain amount of money outside the system. Hell, talk to Italians. There's a reason cash is used so much in Italy, right? You know, and so there are a lot of jurisdictions all throughout the world where that value,

that sovereignty, the difficulty, I'll call it censorship resistant, not censorship proof, has value to people. And so that's not going to go away either. So there's going to be those needs, right? And it's just, it's really important to keep in mind that it's both. And I always like to mention Bitcoin the asset versus Bitcoin the technology. Bitcoin, the asset, this doesn't really have a huge effect on. If anything, it just changes the modality of how people will use it.

Bitcoin, the technology, I think all of these things, every time they happen, ends up with major improvements in the way that people can handle it because people are smart and they figure out better ways to do it. And that's been the history. I mean, I assume you agree with that, Paul. Yes and no. I don't think I separate Bitcoin, the asset from Bitcoin, the technology, because without the technology, that asset is meaningless and has no novel impact on the financial system. We could have always made a 21 million coin with a central server that's how much.

held by a coin base and whatnot, and that wouldn't be interesting. It's the fact that it can be sent autonomously censorship resistant by somebody that makes the asset interesting. So the two are one to me. Yeah, let me phrase it differently because I 100% agree with what you just said. Bitcoin the asset versus the specific technologies that people use to interface with the technology of Bitcoin. In other words, Bitcoin itself is a technology.

cold card, ledger, treasor, or any of the various things that are built around it. Lightning are all technologies that are built up around it. For sure, yes. You're going to need some kind of technology to interface with Bitcoin, but that's pretty much true of any of any dollars or fiat, any financial instrument right now. No one's really handing gold across each other for some type of, well, not nobody. I hang around with enough anarchists and libertarians where, yes, people are physically moving gold between each other. But you're right. You're going to need some kind of technology.

But is the technology to interface with it something that's different from necessarily the asset? I mean, Bitcoin is the first asset where it has its own built-in technology to transfer it. Like, we've never had this before, right? The asset, the value of the asset, the units of the asset have always been separate from the technology to transfer it. In gold and shells, the technology to transfer, it's lower your hands and the air between you and the person you hand it to. And then we put wrappers around it, and every single wrapper around it has always been custodial. And so that ability to transfer built into it, absolutely built into the asset, and you cannot separate those two, is the unique value proposition of Bitcoin.

And if you lose that, or you minimize that, and you bring that utility closer and closer to zero, then the value of the asset itself also starts to be lost. Because that's why and I got excited about it in the first place. Why should we be excited about Bitcoin if it doesn't have that ability and if it's not being used? Yeah, I agree. I'm not phrasing what my thesis well because I don't, I effectively agree with everything you just said. I mean, one of the points that I've made constantly, and I, look, I was in the SEC's office in 2018 making this point, right? which is that the problem with securities laws as it applies to crypto assets, including Bitcoin.

And by the way, back in 2018, everyone in the SEC saw it was an electronic market. They said, well, our job is to regulate electronic markets. And I kind of had to point out to them, well, yeah, except for all your regulations, make assumptions about the way those assets worked. And the point that it's a bearer asset with its own technology for being able to do transfers is it meant that their entire infrastructure of rules were non-applicable. The thing that, well, you have to have a transfer agent. Well, no, you don't.

You know, literally in the code, you don't. Yet the SEC rules said you have to have that. So what do you do? You know, what's a certified custodian? You know, it's like, there are lots of different reasons. And we went through a bunch of them. And people talked about them for years since then. But you're right.

I mean, you're absolutely right. It's just that the fact that you can, the way I always try to phrase it to people is Bitcoin has its technology that you can, you, gives the user of it optionality to keep it to themselves in self custody and stay outside of the system and be able to transfer to anyone anywhere in the world whenever they want. That's optionality. Those who don't need that or want to do that don't have to. They can, they can delegate, you know, their custodianship to somebody else that's professional for a fee to keep. keep them sleeping better at night, so don't have to worry about their own security hygiene. At what point do you think, though, that as more people opt under the easier, you know, custodial option, right?

Optionality is a keyword that you said. What's the cutoff where, you know, 90%, 95%, 99%, what percentage people that opt into that option of custodial service, thereby makes the people that wanted to opt in for self-custody effectively lose that advantage. Because then you can't transact with anybody. I think it's impossible. It's sort of like, I'll use an example, Paul. Here's a very example, cash.

So five years ago, and if you go to England, even today, it's almost impossible to use cash, right? Five years ago, people were, you ever use credit cards? And then you got, and then a funny thing happened as Venmo and Zell and stuff got easier, more and more people started using that. And guess what? You start seeing a resurgence. And now I'm finding my use of cash has probably gone back to the levels that it was in the 90s over the last year or so because there are so many merchants and so many people who are

doing business that want to use cash. They're effectively saying, now, is it an opt out? know because cash is still part of it. You still have to go to your bank and say, please, please, can I withdraw my own money from my bank? And there are all sorts of horror stories about that. But for the most part, for small money, you can do it. I don't think there's even the slightest chance that Bitcoin custodians will,

you know, exchanges, et cetera, will stop you from being able to withdraw Bitcoin. I think that the biggest self-limiting factor with I bit and the ETFs is you can't. I do think that. I mean, yeah, the ETFs, you can. can't. You can't, but you can on Coinbase or Cracken or Schwab or Robin Hood, etc. Well, A, are you part of a smaller bubble of, you know, you've admitted that even though you're such a trad-you-look-like a Tradify guy, but, you know, you've still got that libertarian principle inside, and maybe that's your small bubble of people as well that want

to transact in cash. But as well, remember, cash predated all of the digital payment methods like credit cards. And so it had at least an infrastructure that was already built out. Bitcoin when crypto didn't. And so it's trying to build that out. It's trying to build it out. But now it's hitting this headwall of, well, people are opting into the custodial services because they're being recommended by podcasts like this saying, oh, well, you know, it's safer, it's easier.

Don't even try. Don't even bother. Well, I don't think it with self-custody. There's multiple stuff. I think that markets are always, people, humans, we all like to think in terms of step functions and binaries. We think in terms of as it being either or. And it isn't an either or.

There's a spectrum. There will be people who want to use cash. You will find poker games. And I apologize, I haven't played any of the Bitcoin poker games yet. But there are people who say, oh, I can move stats back and forth because that's better. Right. And that's fine. Right.

You know, there are going to be people who want to use Bitcoin. It is because it makes sense for a lot of reasons, except for the problem that Bitcoin has for being used, and it's a simple one. is most of the people who own it believe it's 95% plus undervalued, so why the hell would you spend it? Particularly if you worry about it if it is on the books and you worry about the tax implications. So I think that's still a bigger blockage to using Bitcoin than any of this.

I do think, however, that insured intermediaries for custody is at least for your main account. I mean, let's say whatever percentage of your wealth, very few people keep a large percentage of their wealth. wealth and cash. But lots of people use it. And they use a trusted intermediary to hold it. I would not be remotely surprised to see that become the dominant model in Bitcoin as things move on unless the UIUX and the security of using it yourself becomes as good as the way we use iPhones for credit cards, et cetera, et cetera. But it will get better, right?

Fair enough. That's sort of a thought. It will get better. That's our focus. let's move the industry forward to that. Agreed. Agreed. Agreed. So, I mean, as far as, as far as everything else goes, it is fascinating. I mean, William, you're up here.

I don't know if you're behind the mic, but I find it strange that the Bitcoin and Ethereum ratio is basically almost stayed exactly. I mean, they've been almost perfectly correlated this week. I mean, Ethereum had a nice little run towards 0.03 and it's been at 0.029 and change now all week and today with bitcoin theoretically falling because of this exploit that's a very bitcoiny thing ethereum has moved exactly with it i mean do you make anything of this or you think it's just the summer there's options and you know we're still so we're stuck in a range and not much is happening are you there i guess william went wait got away from his

mike and i expect you to be called on by the teacher no no sorry sorry david i i heard you i had some technical difficulties. I'm not sure again. Last year, it was August that we saw the rally up until the end of August. I think the whole space, the narrative is very messed up right now.

That's the problem. There's lots of noise in the space. You know, I want to tell you a joke. Did you hear this happen? I saw this today. 28 banks move real tokenized money across borders. Apparently, those banks are very excited because they settled $1 million in 80 seconds through a shared ledger via BIS. And we're supposed to get excited about this 17 years after Bitcoin got started.

I mean, this tells you where the banks are. Yeah, well, I mean, this is a joke. I mean, it, look, the entire financial system is your, the world will move, move to tokenized assets because of two real driving forces. One is multi, being multi currency natively, which is a real problem for global assets and creates enormous frictional cost for people. to trade cross-border right now. I mean, which, of course, means lots of profits for the banks, and they love that.

You know, I was talking with a friend who, you know, made his first fortune in FX. And, you know, foreign exchange, which has really tight spreads, everyone thinks of how great it is. It's an unbelievable source of just frictional cost into the economy that banks and trading firms make. And so they have no incentive to change that, but it's going to get changed, right? you know, it's like these sorts of things will happen. The other is, as you say, is speed. Banks make a lot of money on float. They do really well by not having to pay interest while assets are in flight. And so while 80 seconds sounds slow to you and I, 80 seconds is a massive speed up compared to what we know, the days that the batch, the current batch system takes. So yeah, we're early on a lot of this stuff. We really are. I mean,

and that's all you're really saying is you're saying we are early. But, you know, there are certain things that are inevitable. And this is, and the things that we're talking about are inevitable. It's a question of when does it get there. And it always takes a lot longer to overcome that inertia and overcome the vested interest of people who are holding on to what they're holding on to. Right. And that's a, that's a large part of this whole idiocy on the clarity act. and what you're seeing is you're seeing banks, some parts of the banks are saying, listen, we know it's inevitable,

so we may as well get on with it and give ourselves an advantage in it. And there are other people in the bank saying, wait a minute, maybe we can hold it back and we can make more money. That's really the interesting part. And so that's why you see the same bank making different statements that seemingly contradict each other every day.

And we are seeing that, right? I mean, Jamie, I'm sure you've heard that in your space of people whining about the banks saying, oh, how they're fighting it. And then we see, other statements where they're not. And I'm telling you, that's why it's coming from. Yeah, yeah. I think every day, you know, we're trying to figure out what's going on. I think I heard Carlo in the earlier space with Finance Daily saying that the latest,

that there was some additional adjustments made to the language and then for reconsiderations. And his outlook as far as a percentage was that he's leaning more likely than not, that it will get resolved. So I think we're all kind of waiting to see what happens with it for sure. I mean, yeah, I mean, Carlo and I are very sympathico on our read of the thing. I mean, you know, I see Novograts in Novo talking about how there will be a compromise, et cetera. I mean, look, honestly, this, today's news is a pretty important reason that can be,

that could be a kick for it. But this is political. And politics are just such a dirty game that I don't want to handicap it. I just know that a world where there is no, where it's the Wild West is not good. A world where you have to worry that in three years you could have a completely different regulatory environment is one that chills innovation. Right. I mean, but the one thing that I will say, and I can't believe I'm the only one who's saying this is anybody else get mad or annoyed when people call. it the Bitcoin Clarity Act. I don't think clarity has a damn thing to do with Bitcoin, really.

I think it's to do with pretty much everything other than Bitcoin in the world of crypto. I mean, is there anybody who thinks, I mean, it might very well help Bitcoin's price, but that would be it only because it will allow, there are probably some investors that are on the sideline that view it all is the same. And so, yeah, maybe. But I don't really think it has a whole lot to do with Bitcoin, do you? No, not at all. I think, I think there's, The significant thing is some of the areas of defy, obviously, like, you know, what are they? You know, like, even with like Circle today, I think you saw the, the, the, the announcement that they were given the, officially the charter, right?

Like, how does that expand and allow them at greater access and give them, they're not officially banks, but moving toward the direction of, like, institutional inclusion, right? and how stable coins are going to change likely how transactions and across global access. You know, I see this whole thing as a reworking of the financial rails, the financial system, replacing Swift, you know, the near-instant settlement aspect of being able to reuse of capital. Like, we're actually like probably going to look back and really be amazed about what we saw as of transformation, you know, sort of like, where Tom Lee, you know, I know he can be kind of hyperbolic and is framing, but where gold was transformed within Wall Street in some of the different tools, derivatives and whatnot. So I'm really excited, I think about where these are the headaches of retinkering and

configuring the engine that runs this whole financial system. Yeah, I tend to agree. I mean, I think gold is an interesting example because you would talk to people in the World Gold Council or Gata, and they will tell you that the derivatives and that ETS were helpful, but the derivatives that sprung up around it allowed them to manipulate and suppress the price of gold for years. But the funny part about crypto is why that is a ridiculous comparison is because crypto, since 2017, has had 5x the volume in derivatives and it's had in spot, meaning that crypto's already always had these derivatives. And the derivatives have

accentuated volatility on both sides, all sorts of effects. I mean, you know, yes, Bitmex wound down, but the perpetual swap is an amazing invention that has done a lot of different things. And so, yeah, in crypto, I don't really see that way. But what I do see is many of the market structure innovations will ultimately end up in traditional finance. And, you know, if you believe that that Ethereum's role in that is going to be a big role, then I understand why, you know, why William, you know, constantly says it's undervalued, right? Because it is going to trans, whether it's Ethereum or Solano or some player to be named later, the financial system is going to be transformed.

And the utilities that are relied are going to have value. The question is how much? It really is that simple. And those are hard things to model. You know, Bitcoin, look, all I could say is this. If you do any piece of analysis on any asset and you start comparing it to the amount of monetary expansion and deficit spending that has happened over the last 25 years, it is a very rare asset class that is outperformed. So if you normalize everything to the amount of money printed, you find everything gone up. So house prices, if you look, have actually underperformed M2.

But what is M2? M2 is what you're measuring it by. that means that house prices have gotten cheaper. Well, no, they haven't. Why? Because wages have actually underperform more. And so what you're seeing is, is capital flows and changes. Once people start thinking down this road,

it's very easy to explain to them why an asset like Bitcoin that is digitally, improbably, and verifiably scarce is so important to use as a measuring stick. That thing becomes very easy. But it's funny because it's only recently that you're starting to see that notion of debasement trade go from the professional class down to, you know, people's lives because they're looking at things like house prices. And yet, you know, to me, that that's a big part of that narrative. And I think that narrative shift is going to be what's going to push the next run, the next bull run. I really do.

And I think it's going to come sooner than people think. But, you know, I guess we'll see. Yeah, it always ranges sideways. it's boring and then out of nowhere, boom, Bitcoin does Bitcoin things, right? On the defy side, I saw a post, I think it was with Crypto Town Hall, actually, and another one on Coin Telegraph about Ave that, you know, being responsible for about almost 50% of all the on-chain loans. And like, I think to your point, Dave, like, what crypto serves for the financial system

is more like a beta test of what innovations can do. And then the ones that they like the most, they'll adopt, and then they'll surround with regulations to safeguard it. And then it'll get merged into the Tradfai financial system. So I think they kind of work hand in hand together because you can't do this on, you know, it's perfect to have like as a beta test on a side chain and a small asset class, but you don't want to have major tests on, massive asset classes from a traditional finance standpoint.

So I think it serves its purpose. That's true. Well, look, you know, I look at this stuff very simply. I mean, you know, Jackson, I see you joined. I mean, you talk about, you actually just did a post on the value of money, right? You know, those are the sorts of things that will ultimately matter. And that's the narrative that matters for a lot of this. And, you know, I'm curious.

I mean, you jumped up. I mean, this obviously must mean something to you. Yeah, I mean, I was actually, I'm doing an interview with someone after you guys wrap up, but I'm happy to share my thoughts. I mean, obviously, I'm a big fan or I'm a big believer that the actual inflation numbers are much higher than what they've given us. I'm a huge believer that just pointing out the problems with our current financial system, namely with the dollar and asset that has lost, you know, roughly 99. percent of its value since it was created almost like over 200 years ago. And I just think that's

like the best way to Orange Pill to get people to hold hard assets like Bitcoin, like gold. I think it's a massive issue. And I don't think it's going to be solved anytime soon as I'm sure most of these people in this panel probably agree. Yep. I think it's a great transition. So, you know, it's good to have you up. Is it Ari, are you doing the interview? Yes. Okay. cool so i'm gonna i'll let you guys get to it well thank you dave and good good afternoon or i guess good morning happy friday everybody i hope everyone's having a wonderful week um really appreciate the opportunity to want to say thanks to crypto ten hall for uh being able to jump on here and and do a do do do a good interview um we're talking to a r e trow i believe is how you pronounce it um he can

correct me are a why don't you uh quickly introduce yourself man thanks for joining us today hi um yeah thank you very much um um it's trill by the way he's It's R-A-Tro. I would say to people, it's like someone from Brooklyn saying to throw the ball. So it's like, pro to ball, yeah. So it's tro is the last thing. But I'm a long-time entrepreneur and developer and that sort of a thing. At my current thing since 2018 or so, I've been working on X-Y-O,

which is a crypto project, and we have X-L-1, which is also our main chain for that, which is a deep in Oracle system that we use to be able to access resources on the the crypto realm, should I say, almost like like micro MCP servers to some degree, where you have different people doing different tasks at the little edge nodes and stuff like that. So to me it's a really exciting sovereign project because I'm more, I'd say I'm more of a sovereignist than I am a cryptic if that makes sense. What you get from sovereignty, whether it's technology or in the case of Bitcoin, you know,

Bitcoin is a sovereign digital cash that you can transfer remotely, which has sovereignty. But to me, the goal is actually really sovereignty at the end of the day. And so, you know, I refer to myself as a dataist, but because the sovereignness is probably a term I would use myself as well. And so my goal as a person is just really to build these technologies and to build these things. so that we can have decentralized technologies and concepts that people can use beyond just Bitcoin or the transfer of money, but potentially the transfer of data and the access of data. Controlling your own data is a big thing for me as opposed to having the bank control all your data for you and those sorts of things.

So I guess that's the brief background for me as far as what I'm currently working on and how I got here. Yeah, I appreciate that. really cool. I totally agree. I think, you know, a big reason why most people got into the space, especially in previous years, five, ten years ago was for the reasons that you just mentioned wanting to hold your own assets, not wanting to be reliant on some other entity. But you guys also, you mentioned you guys have a D-Pen. I think D-Pin is a really fascinating space and it hasn't been getting much conversation. But you guys are actually the largest D-Pen in the world. You have

10 million or over 10 million nodes. What I think is really interesting is that you guys say that most of your users, around 80% of them are actually not crypto-native people. These are people that you have brought into the space. Why do you think that your product has been so appealing to non-crypto users? Well, we've gamified it probably more than most people have. We have this app called Coin where a person can go in there and they can call it Geomining. And they collect data from all over the world and they can do different tasks

and those sorts of things and they can get rewarded. So it's a very easy on-ramp. And also, in many cases, the blocking thing for a person with crypto is step one, make a wallet and understand how that works. Step two is, you know, get some crypto from somewhere. Now it's easier. You can go to exchanges or whatever it is. But I remember back in the day where it's like, well, you know, find a friend that has

some eth so you can, you know, give them some cash so you can send some eath to you because it was kind of hard to bootstrap yourself. And so, you know, that's gotten better over time, but still, it's the bear. barrier of entry to get into crypto for many things are, you know, it's really low if you're already a crypto person, but it's high if you're a non-cryptop person. So getting, you know, I always say if I can get my mom to use the project and I'm 56 years old, so my mom is in our 80s, if I can get my mom to actually understand how the UI works and be able to click, click, click, and get it to work, that's probably the bar that we should be shooting for as opposed to,

you know, somebody who's listening on this panel here right now, being able to onboard themselves to the thing. So I think we've really. focused on ease of use and making it simple for a person to do it. And it's a benefit and feature first as opposed to a crypto first approach. And then kind of like tell a person afterwards, oh, by the way, the stuff you've been doing is, you know, it's sovereign and here's the benefits of it and that sort of a thing. So it's also, I think, for many people, it's almost an education system. You're almost exposing them to some of these concepts without them even knowing about it. And then once they understand what's going on, they're like, wow, that's really cool.

So I think a lot of people out there who are non-crypto people, they don't appreciate what sovereignty is or why these things are interesting or important. And honestly, I think in the age of AI, a lot of people are like, well, everyone's going to AI now. Crypto's dead. It's like, well, I actually think sovereignty is going to be a huge part of AI and how to actually structure AI and have it used data and that sort of thing. So I think the overlap between sovereign technologies like X-Y-O and AI and the definitely AI agents is going to be huge in the future. And I don't think a lot of people have put the two and two together there. Yeah, let's keep talking about AI.

You guys have, or in May you launched what you're calling your AX, XYO AI SDK software development kit. You say this is built for vibe coding. You don't need any technical experience. You don't need any blockchain background. Can you talk a little bit about how this actually works? Yeah. So what happened was, we started actually making our own skills for our own development.

We're like, hey, you know, like to get, we use AI every single day and encoding things for our system. And so we start making skills for it because then, you end up with much more consistency and for it to have knowledge about different things and all that. So internally we were using skills for quite a while. And we're like, hey, if we make these skills of a bit, to developers or people who want to make things with X, it'll be a lot easier for them to make things

because it's easier for us to make things. And so what our goal was, was to put those together when we had the first version of our SDK was to be able to say, well, how, you know, can we make us a one shot successful, take X, Y, oh, and make a simple adapt on it, basically. And so we got that to the point where we could, a person could really, with a little set of skills we had,

they could one shot something and say, I want to make a simple game where, you know, this, this transfers from here to here and, you know, and a person stores this on the chain and so on and so forth. And we got to the point where it was a one shot there. And then over time, we've been refining that SDK to make it so it's easier. And you need less, you know, less of a prompt really to get that one shot to work. But at the end of the day, really the one shot is almost more of a demonstration. What you really want with the AI SDK is to have.

the AI understand the context of the SDKs you're using and the integrations and so on and so forth. In the cases of like Bitcoin or Ethereum, a lot of the models already know that because they learned that during their training and because they all those are obviously huge projects. But for any project that's not that scope, you have to kind of give it that information so it knows where it is because if you, like for example, when we first started using AI with with X by O, our addresses are are the same shape and we use the same elliptical curve for our primary signing right now as Ethereum. And so as soon that AI sees that, it assumes, well, it's just like Ethereum. It assumes kind of like we're an EVM compatible blockchain,

which we're absolutely not. We're a layer of one blockchain. And we store data completely differently than Ethereum does. And there's no smart contracts as such on chain. So it would make these assumptions and just write code that's completely wrong, because it's like, well, I'm going to write this as if it's going to run on Ethereum. And so we realized you have to kind of steer it because in a weird sort of way,

the good knowledge it has about Ethereum contaminates what it assumes about us. And so to correct that steering, you have to make skills and make these skills available for people. And so there's a cool tool called skills.sh. I don't know people here who use AI and Trevor, I familiar with it. And you just go on there and basically attach our skills and pull them in into a repo. And then once you have that, you can basically vibe code your way onto solutions with XYO really easily. So I think most projects out there probably should do that same thing if they haven't already. Obviously, the bigger projects probably have them already.

But it's something which I think is a necessity going forward, not an option. Yeah, I totally agree. I think there's still a lot of questions around. I mean, there's not a lot of questions around whether or not AI is useful. It's absolutely useful, but there's still some concerns about how secure and how safe apps built with AI can actually be. Are you guys worried about this problem at all? How are you focused on keeping these apps that people are building using your AISDK trustworthy, when trust is really kind of the whole thing that you guys are selling right now?

Well, I think there's kind of different layers there, right? And so if you, this is what, again, another reason why I think the sovereign crypto world is important for the future of AI is because for Ethereum or for us or for any of these platforms, we use a protocol. And that protocol basically is locked down. And it's like if it doesn't conform to the protocol, it gets rejected by the system or the block producers and so on and so forth. So that the AI can make bad code. But our results before we had our AI SDK, our results were pretty much like this. the thing would write code and then the code would just not work because it would get rejected by the system right so it's like this is great it rolled a completely invalid transaction to try to put up there and then it gets rejected because the protocol says that's not allowed so the security there still stays at the protocol level where

you know the AI can't make invalid blocks and can't can't you know do invalid things on there I think the hard part though is the layer up where if you make an app or a DAP that has a UI and the UI kind of it says it does one thing, but it does something else under the covers. It's really the social engineering aspect of it there. And I think that's where the risk really comes in for AI in general is people don't know what it's doing. They don't understand the code. They don't understand what's happening behind the scene. So technically, I think using AI to do this is all secure, but who's driving the AI is kind of the question. And are they doing things in a way that you think it's happening?

So if they pop up with things saying, well, approve transfers for this ERC 20 up to a certain amount, and the person's like, sure, okay, now this thing has license to go and spend all your money, which you probably don't want. So figuring out how to make the human interface, and once a human gets in the loop there, safe, that edge is where I think the risk is. It's the integration with the human control where the hacking. or the errors or the, you know, it's probably in most cases not malicious. It's just, you know, the AI trying to accomplish something and making it so that's easy for the user to do something.

Also, I think a big risk is just people don't realize that what I do personally is I just have a laptop that's completely dedicated to using my AI and my coding. I don't have any crypto wallets on there. I have a completely separate wallet or a separate laptop for my crypto stuff. Basically, it's a hardware wallet as a laptop. and then I have a separate hardware wallet. So worst case scenario, my AI on my computer where I'm developing steals my Sopolia ETH and, you know, like my test XYO and test XL1 and stuff like that because it can't get to my other wallets. But I think a lot of people, they have one laptop. So if you, you know, give a browser MCP access or full screen access to a person with your AI, your AI can do a lot.

It can do scary things with your wallet, potentially unintentionally. And a great example that is I've seen many times people, rather than calling a function on a smart contract, like an ERC 20 to transfer something, they'll send funds to the actual contract and it gets black hole there forever. If your AI makes a mistake and does that, it's going to send your, it's going to black, you know, the chance of black holeing your funds is pretty high. And so I think the biggest thing for people to do is not to use AI in the same sandbox as your day-to-day usage of things. Yeah, I really really appreciate that. That's a great answer. Let's talk about some of your partnerships. You guys announced something with Revolut in December, which Americans may not be super familiar with, but it's a massive bank worldwide.

Crypta.com, you also announced that this week. what's driving the mainstream push right now? What is making these companies interested in your business and what you're building? I think the biggest thing is third-party validation of things. A lot of these companies out there, especially with AI again,

not knowing what's happening or whatever it is, having something other than your AI or something other than your own system, verify data, verify actions happen. The way our XL-1, layer one works, is we call it the settlement layer. So basically the idea is that we don't store stuff on chain. We store hashes of stuff on chain.

And so if we go and say, well, we think that this is valid, or we have a pillow that says something is valid, we don't store that entire thing on there. Like on Ethereum, usually you have to store that entire thing on there. And so we can basically validate something, store the fact that it's validated, and then they can go retrieve, it's validated, and show that hash later on.

So for them, it's not replacing something they're already doing is adding additional security or adding additional validation to it or or permanence you know kind of through the sovereignty thing out there but to me providence and permanence really are big parts also with sovereignty so to me that's the big three of what I want to see in technology is providence permanence and sovereignty and many of these companies what they want is they want the provenance and permanence part so proof of where it came from and and you know unchangeable proof of where it came from. So us as a chain, we're an inexpensive way to do that and to provide them a third-party Oracle-type observer that can permify things and have them stay around as a third-party

so they can basically send somebody to our explorer and say, hey, here's a link that proves that this thing happened at that point in time. We can't take it back. Yeah, that's really cool. There's just so many possibilities with this technology. It's hard to imagine what the world's going to look like in a few years. Let's talk about your tokens a little bit. You have two tokens, which you've mentioned briefly. It's XYO and XL1. These have two different purposes. Could you explain what those purposes are and then also explain how they actually interact with the SDK with the people that are building on your network? Sure, sure. So the XYO is our staking token. It's a deflationary token. There's a certain fixed amount and it's shrinking as far as people are.

obviously lose it and they, so they'll get black hole or whatever it is, but there will never be more of those. It's, we use it as a redemption, for example, on coin, and it's a way to pay people for, for functionality on the system, but primarily it's used for staking so and for security. XL1 is the gas for the XL1 main chain and that's an inflationary token, kind of like a Bitcoin where as it's being, as the blockch are being built, the, um, Block rewards are basically generating new XL1 tokens, but at a decreasing rate over time. So there is a theoretical finite amount that will ever exist, but they don't all exist just yet. So it's not quite a deflationary token, but it's eventually a deflationary token, if that makes sense.

And so with XL1, we did that because we needed to have block rewards to pay people to do stuff, and that sort of a thing. So that's really the day-to-day token, person would use if they want to develop on our blockchain is the XL1 token and to pay for gas and to transfer value around stuff on the actual chain. It's a native token that's on there that transfers back and forth. We do have a bridge which bridges it back and forth to Ethereum so you can get a ERC 20 wrapped version of XL1, which is generally what you see on all the exchanges. All right. Appreciate that as well. Last question here is just you've called the SDK you've called this part one and you've even said that you know what's coming is going to

surprise people who've been watching what you guys are building for a while is there anything that you can reveal or share with us today about what's coming and what you guys have planned for the future well the thing that i've been doing um with our SDK is is fast running more gaps and solutions basically that run on xl1 and um it's been evolving it's one of those things where we update our SDK, especially our AI SDK, very regularly, but you don't see how it improves quickly. And we also use AI to write the AI SDK, if that makes sense. It's kind of a self-perpetuating thing. I'm sure the same thing happens at Open AI and Anthropic, where they use the AI to write their AI,

if that makes sense. And so the velocity at which our AI SDK and our ability to actually make solutions, and do things on our chain is, it's growing really fast. It's not a linear growth. And so being able to spin up several projects at the same time, which is what I've been doing this last week or so, I've been making four projects in parallel at the same time with our AISDK that are full-on meaty DAPs, basically, that run on X-L-1.

Granted, I'm using, you know, my $200 a month, Claude, $200 a month, Codex and $200 a month GROC all at the same time. So it does require quite a few tokens if you actually want to make large solutions on there, but still at $600 a month to be able to make four full-stack solutions, basically using our backend is something which I've not seen before my career. And I've been developing software since the late 70s when I was in third grade. I got my TRS 80 Model 1 back then, which kind of dates me. but the velocity of which we see ourselves developing sovereign and solutions for the world using our AI SDK is incredible.

And being able to share my experiences with how I've built those things and letting other people build things just as fast on our platform is something which I look forward to in the very, very nearer future. So I think people will be surprised to see how fast we can basically come up with solutions, which would have taken us six months to a year before and now it takes us six weeks or less, or even three weeks to make the same thing. And so I think people will be surprised how well that's working and also how the world is enjoying that development. I was saying, you know, we have the crypto.com thing. You know, we're on there now. We're integrating into a lot of things as far as our native token.

That's obviously one of the more difficult things in a project like this is, you know, getting an ERC20 listed or integrated into someone's system is pretty easy because everyone knows how to use the ERC 20. But working on the native integrations where they have to use our SDK to be able to transfer money and that sort of thing is more difficult. But we've even seen that being quite easy for a lot of our partners where using our, our SDK to be able to add us to a custody, for example, and those sorts of things has been very rewarding. And it shows that the SDK does its job. I think this is probably a teaser of what's to come from a lot of other companies, too. I mean, AI, outside of, you know, the conversations around it's a bubble. And it's obviously a super revolutionary technology. It's obviously changing

how we do business. It's obviously changing how we build. build apps. And it's just cool to see the early leaders, the early movers in this space, finding success. Ari, thank you so much for joining us today. Do you have any final words you'd like to share real quick before we wrap up here? No, no. Thank you very much for having me on there. If you want to see what we're working on, make sure you follow me or follow our official X-Y-O account and we're posting our stuff on it all the time. As I said, it's only part one and we have a roadmap that's jam packed with cool things to come out. We're one of the very active projects out there.

I think a lot of projects right now have become a little bit more nascent because of the fact that, you know, the market's been what it is, but we're very actively developing stuff there. So definitely follow us. You can see the cool things there. And I continue to be super excited about the space, especially the overlap between AI and the crypto and sovereign world. Yeah, likewise, Ari, great to speak with you. Everyone, please give them a follow. Please please give me a follow as well.

And with that, I'll kick it back, kick it back to Dave. So thanks for letting me jump on and do this guys. Appreciate you. Thanks, guys. Dave, you there? You muted?