Unchained - Arthur Hayes, Former Ethereum Skeptic, on Why the Merge Makes Him Bullish on ETH - Ep. 393

Episode Date: September 6, 2022

Arthur Hayes, cofounder of BitMex, discusses how he’s trading the Merge, the impact of macroeconomic policy in the markets, his career as a writer, and much more.    Show highlights: how crypto is reconfiguring how humans do finance over the internet why Arthur initially thought Ethereum was worthless  how NFTs allow users to trade human culture and will unlock trillions of dollars of value why Ethereum doesn’t even need to be deflationary whether other layer 1s can take some market cap from Ethereum why Arthur thinks that a successful Merge is understated and why this is a valid reason for hedging why he thinks an Ethereum proof of work chain won’t succeed and how Arthur will trade ETHPoW why LDO, Lido’s token, is a riskier bet but has more potential gains how he believes the Shanghai upgrade will impact ETH’s price whether the Merge affects BTC’s narrative as digital gold and whether the inflation hedge theory of Bitcoin still holds why Bitcoin is a measure of USD liquidity and why the Fed rates don’t matter as much as everyone thinks whether hedge funds and institutional investors would want to invest in crypto given the high correlation with traditional markets what Arthur believes the impact of a potential US recession would be on the crypto markets  why he believes the real economy is not relevant to the financial markets whether algorithmic stablecoins are doomed to fail how the credit cycle works and how it repeats again and again Arthur’s method for identifying good projects to invest in how Arthur became such a good writer whether BTC is money and the religious aspect of the Bitcoin culture Thank you to our sponsors! Crypto.com Ava Labs a16z   Arthur: Twitter Medium    Episode Links   Previous Coverage on Unchained: With the Merge, Will Ethereum Take Over Bitcoin’s Title as Digital Gold? Why Kevin Zhou Believes Ethereum Will Have 3 Forks After the Merge Post-Merge, If Lido Becomes Dominant, What Does That Mean for Ethereum? Arthur’s posts discussed during the show: Eth-Flexive Ether, a double digit shitcoin Teach me Daddy (on USD liquidity and Macroeconomics)   Macroeconomics: Adam Cochran on the Fed’s QT Pantera Capital’s newsletter   ETH Trade: Whether Ethereum’s Merge is priced in Gauntlet’s view on the Merge BTC correlation with stocks   ETH Post-Merge Dynamics: Cumberland on the Ethereum dynamics after the merge  Miles Suter on the implications of the Merge The triple point asset Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to Unchained, your no-hype resource for all things Crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto seven years ago, and as the senior editor at Forbes, was the first mainstream media reporter to cover cryptocurrency full-time. This is the September 6th, 2022 episode of Unchained. Get access to even more of my interviews through Bulletin. Subscribe for content you won't find on Unchained, including videos, weekly news roundups, and a private Discord visit laura shinn.b bulletin.com slash subscribe. Whether you're crypto-curious or a C-suite decision maker, you have to check out Web3 with A16Z, the chart-topping technology podcast about the future of the next internet. Listen to Web3 with A16Z on Apple Podcasts, Spotify, or wherever you get your

podcasts. With the crypto.com app, you can buy, earn, and spend crypto in one place. Download and get $25 with the code Laura. Link in the description. Harness the full power of the Avalanche network with Core, your new Web3 command center. Built by Aval Labs, Core is more than just a wallet. It's a non-custodial browser extension, engineered for users to seamlessly and securely experience Web3 like never before. Explore Avalanche DAPs, NFTs, bridges, subnets, and more today. Today's topic is the crypto markets. Here to discuss is Arthur. Hayes, co-founder of Bitmex. Welcome, Arthur. Thanks for having me. A quick note before starting,

my Twitter followers might have seen that this episode was initially supposed to be a conversation between Arthur and Willie Woo. However, Willie Sick. So even though this is what I think of as a topic episode, which is usually conversation between two people on various topics, we are going to do it with a single guest. But for those of you who are familiar with Arthur's blog, I'm sure you're quite well aware that he is expert enough to handle all this alone. So, Arthur, this has been one of the most tumultuous times in crypto history. Not only are the crypto markets just a shade above their all-time highs at the top of the 2017-28 bubble, but we've also seen multiple spectacular implosions and bankruptcies, Tara Luna, three-euro's

capital, Celsius and Voyager. Meanwhile, amidst historic inflation, some say Bitcoin has failed to act as the inflation hedge has touted me. And on top of all that, we're heading into Ethereum's merge, quite possibly the most anticipated upgrade to a blockchain ever. You have been in the space for a very long time, as far as I can tell, at least as early as 2014, if not earlier. So I was just kind of curious for your overall thoughts on this kind of crazy moment in crypto. Years from now, how will we look back on this time? I think that this is no crazier than the Malk-Gox failure in 2014- February, no crazier than, you know, Ethereum and Bitcoin and ICO implosion in early 2018.

You know, it's, this is new technology. We're reconfiguring how humans want to do finance over the internet. It's extremely speculative. It's extremely religious and exciting. And there's haters and that people who love it. There's all this emotion. Then you mix money with it. And so I think these events over the last six months, let's call it 2022, I would say are par for the course for crypto.

All right. So let's just start talking about the merge because this is what everyone's been talking about. In general, I find your trajectory around Ethereum quite interesting because you used to think Ethereum was worthless. So let's just start at that time. What was your thinking about Ethereum initially? So initially when the pre-sale happened, 2014 or 2015, whatever it was, it was probably the first major, you know, ICO of this ecosystem. And I didn't really see value in going out to the market and saying,

hey, give me a bunch of money and I'm not going to fix the price or the supply of what I'm offering. And so it's almost like if we take $100 million, we take $10 million, dollars you as the person who's putting in this money aren't really to me it didn't seem like you're getting anything beneficial so i'm like well why would i want to invest in something like that where's the scarcity how do i how do i know that i'm actually like kidding me need my spares my scarce capital today and i'm going to be better off than somebody who comes in six months from now

and i didn't see that and i wrote about it and i said you know this is this uh complete dog i'm not investing in this uh man of course i was wrong which is fine that's the name of the game when you're talking about financial markets, you're wrong more than you're right. You just hope that you bet on the things that you're right on more than the things that you're wrong on. So, thankfully, I didn't short Ethereum. That would have been not such a good idea.

But yeah, I missed it. I missed the free sale, which is fine. You know, we can't beat everything. And subsequently, I think I wrote a piece called two-digit coin when Ether was around $500 or $600, remember that was in 2018. I got that one, right? It went down to below 100 for a period of time. And then as sort of the defy ecosystem started to have some green shoots,

you know, after the March 2020 meltdown, there was somebody posted on Twitter or I saw an email. I don't remember it where it was. And there was a chart. It showed the complete value of all DAPs built on Ethereum was greater than the value of Ethereum. So one of two things have to be true. Either all these apps, which were down, you know, 95% from the highs of 2017, I guess completely worthless. Or Ethereum is extremely undervalued.

And I took the road of Ethereum is extremely undervalued. And so I went along a lot of it. And very good trade. Covered up a lot of other bad things that I did with my portfolio over the same period of time. But so that's sort of my, you know, rocky road of Ethereum. And, you know, starting in, you know, early 20,000. 2020 and then 2021, you really had this explosion of defy and all these new financial primitives. People actually starting to use these things, you know, hundreds of billions of

dollars of total value locked. And you're starting to see the real value proposition of what Ethereum can do and what it's enabled. It's really, really smart and innovative engineers and financial technologists to build for this new ecosystem. And I've seen you, you know, talk and write about this about how you feel that DeFi or total value locked is a proxy for the value of Ethereum. And I've also seen you talk about how you could value a blockchain or the price of its token by comparing it to the revenues of existing financial services. So I was wondering because in the case of Ethereum, obviously there's more than just DFi.

So I was curious, do you also factor in other things like NFTs or Dow's? Or like in general, how do you think about kind of like other types of activity and their relationship to the price? So I'm extremely bullish on the concepts of the technological concept of NFTs, and I think I've written that it, I think, allows us to trade human culture. Now, obviously, people think some of the human culture that it's currently being traded is extremely vulgar. I have a crypto dickbutt on my Twitter profile and all sorts of JPEGs that are worth hundreds of thousands of dollars. And people like, what is this? Why are these people trading these images that I can copy and paste?

And I don't think they get the point. It's the same as, you know, why you have a luxury watch. A watch is just fine. That's $100 that you have a $100,000 watch, right? It's all the same stuff, in my opinion. And so I think the NFT technological construct is going to unlock trillion the dollars of value in the ways in which we interact socially with each other over the Internet. And we can now trade these things that are representations of communities and culture and whatnot.

But, again, extremely early. NFTs have kind of gone through like half a market cycle of the first one. So obviously most of this stuff is going to go down 99% if not completely worthless. But that's just how it goes. But I do see extreme promise in that. But I don't think the NFTs are really driving throughput. Obviously, you know, OpenC is, open C looks rare. A few other platforms are doing quite well in terms of activity generated.

But they're not at the same level as the total value of all of the financial access. perspective of the period. And then you haven't really even gotten to like the self-send identity and, you know, their name service. Can we replace DNS and all these other things? It's just still extremely early. So I think the financial aspect is very easy to understand, especially for a former financial market professional. I understand trading. I understand markets. You know, you charge a training fee. People come on there. They exchange assets. It's quite easy to understand. Some of this other more meta stuff, I think, it's going to take a little bit longer to be recognized as a big value driver.

the network. Okay, well, I will keep reading your blog post. I'm very interested. Down the line, when you come up with a way to figure out how to add that into the value to see how you do it. All right. Now let's, you know, talk more directly about the merge. One of the premises of your thesis, and in general, kind of the main thesis behind this ultrasound money meme is that after the merge, Ethereum's monetary supply could become deflationary. However, for the last month or so, usage on Ethereum has actually been down. And so actually at current rates of usage, ETH will still be slightly inflationary after the merge. I mean, if that level is maintained. And it was just wondering how you thought about that. Do you think that most likely usage will

increase that this is just sort of a blip? At a macro level, it doesn't matter. Right. Because if we take the Bitcoin example, the Bitcoin inflation rate reduces. It doesn't go to deflation after. At least it hasn't yet. after a having, yet the price still goes up. And now we expect that every having over a period of many years, the price of Bitcoin will appreciate whether or not that continues to hold through. Who knows? But it has in the past, was it three or four times that it's happened previously.

So Ethereum doesn't need to go to inflation. I mean, that's even better if that happens, right, in terms of the pro-cyclical nature of the reflexivity of the price and the usage and the price and the usage. but even just reducing the inflation rate, what is it like 90%, and whatever that number is in terms of the amount of ether that's going to be emitted versus the consumption that's happening versus the application of the blockchain,

it's still a massive reduction, a massive change in the inflation. That's what we care about. We don't care about the absolute target at the end of however many decades or hundreds of years. We care about the change today and what that pertains to the future. And so cool, okay, maybe it's not deflationary. Does it matter if the inflation rate was at X and now it's at, you know, 0.1 of X, that to me still means that at the margin, you're going to have more demand from people who need to spend money on gas than there is supply being emitted naturally through the network.

And also, the merge, you know, won't really do much to improve scaling issues. So that could potentially lead other layer ones to continue to take market share from Ethereum. Do you think that could have a depressive effect on the price of Ether? Or is that not something that you're? I mean, that's just par for the course, right? Everyone knows that ETH doesn't scale, whatever that means, right? If you're the Solana guy, well, it doesn't scale, but then your network goes down. I don't know.

We can talk about one of that another day. But that, that meme hasn't changed. Today or tomorrow, yesterday, like, who cares? That is what it is. Well, we have a one discrete opportunity. We have a proof of work blockchain going to proof of stake, and you have this massive reduction in the amount of ether emitted. And no other blockchain has this setup like this.

And that's why I like this trading opportunity or, you know, this value play for Ether because it's just so idiosyncratic to Ether. And there's only these one-time events. And so who cares if Heath doesn't scale? Unless you're telling me that after the merge, no one's going to use Uniswap, no one's going to use AVE, no one is going to use OpenC, and that the network uses goes down to zero. Who cares if Salonnas advertised TPS is higher?

It was the same advertised TPS before the MERS, the same one after the Merge. So it doesn't matter. Now let's talk about the trades that you've been talking about or kind of your plan going in, which I find it fascinating that you reveal all this publicly. But anyway, in your essay ETH Flexive, you walked through the way the ETH futures contracts are currently trading and then what that means about the market believes, what the market believes about the merge. And your conclusion was that the,

Markets confidence in a successful merch is understated. Walk us through how you reach that conclusion. Well, I take myself, for example, right? I still don't believe it's going to happen. I mean, obviously, I believe in the macro sense that it's going to happen. But if you ask me today, like, is the Etherge 100% going to happen? No. I don't know.

Tech's hard. I have faith that these guys can pull it off. But as somebody who, you know, has run a tech company, stuff's always late. stuff doesn't work. And so I'm fully prepared for, you know, it happens and then, oh, something fucked up that didn't really anticipate. And we could be talking about, you know, a massive rollback of these changes. I literally cannot give you a probability on that happening. Now, obviously, people are much smarter than me say, no, no, no, it's fine. They don't know. They don't know the testing, blah, blah, blah. But if you've been around in this space for as long as I

have, you get a bit jaded because everyone's always talking about what they're going to do. We'll do it and show me, prove it to me that you did it. And then it worked. And then I'll believe you. And I think that's where we, and I think that's where a lot of people are in the ecosystems. Like, show me that it works. And then I'll, then I'll be really okay with, you know, probably going even longer than I thought I was going to. Went into it. And so I think that's where you get the hedging from people who have Eve.

It's like, okay, I have this discreet event. I know that it's, it'll happen on around this September-ish timeframe. And it's either going to work or it's not. going to work. So why don't I guess hedge away that, you know, maybe a few months of that time period, see what happens. Worst case scenario doesn't work. Okay, I've completely hedged myself. And so then I can like uncover my hedge once things, the dust settles and then reevaluate my position. Best case scenario, oh, boom, goes swimmingly, just buy back my hedge. Okay, I lost 10, 20%, but that's better than like being down 50%. Right? So the risk.

reward for a lot of people who, you know, can't have 100% confidence in this very technologically difficult event, it makes sense to hedge it. And that's why I believe you see the curve on the futures contracts, the features contracts trade below the spot price because there's a lot of pressure from people who are long-eaths saying, I just want to hedge this time period. When it's over, you know, good or bad, then I can, you know, know, know, know what to do with my position. So in early August, you gave some price predictions for Ether based on what the Fed did and how successful the merge was. Can you walk us through how you came up with those different scenarios and also talk about how roughly a month later your projections have changed, if at all? So, yeah, I mean, I guess at the end of the day, there's the macro liquidity dollar issue, right?

And I think that's represented by Bitcoin, because Bitcoin is just pure crypto money. and it's a mirror image of the U.S. dollar financial system. We want to do something different. We think it's better. Maybe it is, maybe it isn't. And so it's a reaction to this system. And so obviously it's going to be very tied to liquidity considerations of that. So you have essentially the Federal Reserve holds all the cards.

They either can turn it on or turn it off in terms of U.S. dollar liquidity. And right now it's off. And so the question is, are they going to turn it on? And very soon or not? So that's a binary outcome. We know when we know, you know,

Powell will get up there and tell us, you know, we've achieved our targets and we're going to make money easier or not. Right. So that's, and then you also have the Ethereum merge. Is either going to happen successfully or it's not. So you have,

you know, two outcomes for possible possibilities. And so you kind of just have to think through what each one of those represents in terms of your idea of what a price is and then put a handicap probability on, on those. And then you get your expected value. If your expected value is larger than the current spot price, then you go long.

And if it's not, then you either do nothing or you are short. And so I want to approach it from that perspective because I can't sit here and say that I'm going to be right on my calls. If I look through all the calls I've ever made with my portfolio, I've been wrong more than I've been right. But I guess I have to bet correctly on the ones that I'm right about. So your ultimate call was that by March 31st, Eath would have a price of $20. $2,800. Can you talk us a little bit through your thinking around why that is? I mean, that was just, I don't have the math in front of me. That was just purely, you know, take 25% probability of each outcome. I had an expectation of a price and I had a

rationale behind it. And then I just plugged in the math and then out came that number. Okay. Yeah. We'll just link to it in the show notes. I mean, I find it fascinating because I think so much of the crypto world just is looking kind of narrowly at what's happening in crypto. There are obviously certain players in crypto who have that more macro perspective, but I liked how this analysis sort of combined the two. One thing that is looking like it's going to cause a little bit of chaos in Ethereum, or maybe not, I don't know what your opinion is, is that the Ethereum proof of work chain, it looks like will continue. You know, who knows how kind of robust it will be. But I wanted to hear your take on that. How will that affect events as they play out around the merge?

I don't think, again, this is all predicated on, the reason why Ethereum is valuable is because people use it, right? And the majority of people who use Ethereum are not very technologically savvy. So if I come to you and I said, hey, there's Eith proof of work and there's Eith proof of steak, which one do you want to use? Like, I don't know. What does that even mean? I guess when I use Ethereum, right?

I just want to, like, go on my menomask and, like, go on you to swap and buy some coins, right? They don't, they're not, there's this thing of, like, what's going on in the, the details of like, you know, how consensus has arrived at and security consideration. They don't get a fuck about that. I guess I want to do what I want to do. I want to use this new ecosystem. And it's pretty cool that I can just go on my browser and go out of MetaMask and do stuff.

So to the extent that, you know, from what I've observed, and maybe you can correct me if my wrong, the majority of the service providers or the major DAPs and Infuriium are all following the proof of stake merge. they're not following the proof of work. Some of the major stable coins, like I think Tether and USC have come out and said, we're not following the proof of work. So you have some of the major assets, some of the major services that the average user interacts with are not going to be supporting these other chains?

So where are the users going to come from? Are they going to, like, go and configure their metamast so that they can get on the proper chain and find a proper node provider who's like up to date with the proof of work chain and like go through this whole process. Maybe they're going to try to set up their own node or like, just like it just gets really, really complicated, really,

really fast. And what you get to the conclusion of is they will have no users. Now they may have a bit of people wanting to trade it like me because it's interesting. And, you know, if it has a value above zero, it's just free money.

But how are you to convince the average person who's currently using Ethereum, why they should be using the, you know, Ethereum proof of work chain. And I think, you know, you could have a similar sort of analysis of

like Bitcoin Cash and some of these other go back to the forks. So like all the different Bitcoin forts that happened back when we were talking with the block size debate. It was at 2017. How many of those have actually done very well in the price performance versus the asset they were supposed to supplant Bitcoin from that period onward? And the answer is none of them because the users don't care. I mean, we care because, you know, we're in this.

This is what we do for a living and we're, there's all these tribes on social media and like people are slinging mud at each other and all that kind of stuff. But the person who is using it, the person who gives value to these networks, couldn't give a fuck about proof of stake or proof of work. Because when you use Ethereum, so if METAMS has Ethereum as a proof of stake, that's the Ethereum that they're using. And so how will you be trading the proof of work coins that you get? If I get some proof of work coins, I will try to sell them out at a very opportune time.

Maybe that's as soon as they come out, maybe it's not. I don't know. It depends on the hash rate where they're trading on different exchanges. is. It's such an interesting trading opportunity and just making sure that you're all set up and ready to go and looking at the derivatives and spot and there's going to be mispricings everywhere, assuming that this happens. So maybe you're closer to it than I am. I don't know if one of these mining consort have gotten together to really put forward a credible proof of work split. That's going to be traded and the blockchain is actually going to work so we can actually send different coins

one of the different centralized exchanges. And obviously the centralized spot exchange are going to have to support this thing. Whether or not they have the same appetite to do that today versus back in 2017, I don't know. Yeah. You know, now that I think I should have checked the facts on this before, because I thought that there was a centralized exchange that said they would. Oh, yeah, it was polo. Polo. They have a, but it's an I, it's an IOU.

It's not a, if it doesn't happen, then your IUs is worthless because they actually are going to have this. new lock your Ethereum, you get to split it into this IOU token. But if the IOU token, if APOW, whatever that is, whoever launched it, never happens, then that IU token is a worthless. So you know, great, you've had a trading opportunity between now and September or the 15th or whatever it is. But post that, who knows? Okay. One thing that I find fascinating is that Kevin Joe made so much noise about this because he traded the Dowel classic, or I think, Ethereum Classic, I should call it, coins, I think, to his benefit back in the day. But my take is that, like, that works because it was a surprise. And so I was kind of like, why was he signaling what he

was going to do? But anyway, maybe I'm wrong. Maybe by making noise about it, he got more people interested. But anyway, one other thing that I saw that you wrote about, which was fascinating, was you talked about how LDO was another way to kind of bet on the merge. And you talked about how it was like a riskier but still attractive bet. And I wanted you to talk a little bit about that. Like, what's your thesis there and why is it riskier? So they're the number one validator. People stake their ether into this pool and they stand to benefit. That's their only business is doing this, right? So if the merge doesn't happen or it's corrupted or it doesn't work, then their business models completely. So whereas Ethereum, if Ethereum Merse doesn't work, there's, Ethereum right now

works. Like, it works just fine. I mean, I'm sure some people will say it doesn't work just fine, but the apps are used, people use them, the blockchain exists, network operates. So, okay, they could have real bad and it doesn't work. They can always go back to what they were doing before. But that LVO doesn't have a business model other than please give us your E if that we can validate on this new proof of stake instance of Ethereum. That's why it's extremely risky because there is no fallback option. If this doesn't work, then there's no value there. And you've probably heard about how Lido is potentially essentializing force on Ethereum after the merge to the point where in effect, like let's say there's some huge, huge percentage

of people that not only stake, but want to get liquidity out of their stake tokens. And there's this perception that there will be sort of a winner take all liquid sticking provider. And many people expect that that will be Lido. And because Lido has on-chain governance, but Ethereum doesn't some people are worried that LIDA will effectively be a centralizing force and sort of kind of almost be like having on-chain governance just amongst the LDO token holders. So it's curious for your thoughts on that. Like is that something you're worried about or concerned about? Not really. It's kind of a free market.

Someone can obviously spin up a new value or service charge of lower fee and offer more incentives, whatever those are. Maybe it's governance tokens of their own making a creation. and spirit trading volume away. I'm not trading volume, but locked ethereum or mind share or whatever. So I don't really think, maybe there's a period of time where they have a lot of influence, but I think the amount of different ways in which people can change the game, with to me point two,

there's going to be competition in this validator space because it is a very lucrative business if you can get it right. Similar to how we all freaked out about, you know, one minor having 51% of the network, you know, back, back in the day with some of the Chinese miners and, you know, those fears came, they passed. You're still here. So I think maybe that's a wall of worry that people just quiet over. So you don't think Lido will be like 80% of liquid-staking derivatives or anything like that? It could. I think it could. What I'm saying is that that situation is not going to persist forever.

Okay. Yeah. We'll have to see how that plays out. That's something that I'm definitely watching. So one other issue is that after the merge, the Shanghai upgrade, which will occur like maybe six months or a year after the merch, will begin to allow stakers to withdraw. And I wondered how you expect that to affect the price of EF. I have no idea. I think it's too far in the future to understand what the price implications are. And more than I don't think it really matters for today in terms of what you're going to do. If you're taking a more short-term view on this merge, like the price impact over the next three to six months, months, all this supply supposedly unlocking in six months, like you have to assume that they're

actually going to do it on time, right? Which is a big assumption, given that, you know, everything's always delayed. So I, six months, maybe, if they do it, I think we'll get cross-step resume may come to it if we have some confidence that is actually going to happen in that time frame. So it seems like you're very bullish on Ethereum. At least so far, I haven't heard you say anything where you're looking at any kind of risk or, sorry, not that you're not looking at the risk, but you don't seem to see that there's like any big risk here. And it sort of feels like, at least at this moment, maybe I just haven't found what it is, but it almost feels like you feel like it's the leader and there isn't really anything that will sort of undercut it.

My bullishness is predicated on the supply, demand, and balance. There's lots of bad things that are going on, that could be bad for the price of Ethereum. But for the simple fact is, under the current usage, even though it's down, the supply is going to go down by 90% of what's emitted. Therefore, if uses continues even at these levels, the inflation rate drops a lot. Therefore, the price goes up. It's as simplistic as I want to frame it. And that's what gives me confidence because I don't have to care about all this other stuff.

unless I believe that usage of Ethereum is going to go down, you know, drop off a cliff, go down 95%. At the same time, the merge is happening. And what about for usage that shifts to layer two? Do you feel that's additive still to Ethereum's price, or will that take away from it? I don't know. I'm just looking at the change from T minus one to T plus one. And you tell me that's down, you tell me that change is 90%. Okay, well, I don't care if it's inflationary, deflationary, that's a big change.

in the structure of the market. Now, obviously, all these other things are going to be very pertinent, six, 12, 18 months down the line, right? But from a discrete change today, this is massive. And it allows me to be a lot more confident in the face of a lot of the negative things like USR liquidity. You know, that calls, you know, looking more or more like, I'm going to be wrong on the short term on the Fed pivoting.

We'll see what the liquidity situation looks like. So absent this very unique structural change in the supply demand and balance, I would not be doing any trades in Ethereum over and above just holding the position that I already hold because I would think that the liquidity considerations of the dollar is going to overwhelm all of that. Okay. So we'll talk about that a little bit later. And in fact, I also want to ask you some questions about Bitcoin. But first, a quick word from the sponsors who make the show possible. Join over 10 million people using crypto.com, the easiest place to buy, earn, and spend over 150 cryptocurrencies. Spend your crypto anywhere using the crypto.com visa card.

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headlines, or a C-suite decision maker seeking to understand Web3 as part of your business strategy, Web3 with A16Z is the podcast for you. Tune in each week for leading insights from the top scientists and makers in the space through carefully curated conversations with acclaimed podcast host Sonal Choxi, former showrunner and longtime host of the A16Z podcast, along with frequent guest appearances and hosting by Chris Dixon. Listen to Web 3 with A16Z today on Apple Podcasts, Spotify, or wherever you get your podcasts. Back to my conversation with Arthur. So as you mentioned, the upcoming merch is being called a triple half. having. And many people, you know, make that comparison between how Ethereum will likely go deflationary.

Obviously, Bitcoin will still be slightly inflationary. And I just wondered how you thought this whole narrative around either becoming deflationary or the ultrasound money meme is going to affect Bitcoin's narrative of being digital gold. Well, I think people, in my opinion, don't understand what Ethereum actually is. Ethereum is not money because money has no use. Ethereum has use. You use it to power the applications on its network.

Bitcoin has no use. It's just money. It's like a dollar has no use. It's just money. And that's why it's a good form of money because its value cannot be conflated with actual utility of other stuff. And so because the Ethereum's goal is to be this decentralized compute or this digital existence,

let's say that the deflation gets so severe that it becomes so expensive that nobody uses it. because gas prices are just too high because of the inflation rate. Well, guess what's going to happen? They're going to change the inflation rate because it contradicts the goal of Ethereum being an essentialized computer that people can actually use. The average person can actually use.

And I go back to what happened in 2016 with the Dow incident where you, you know, they've had this and this, this Dow was improperly written or properly written, however you want to characterize that. And they did a rollback to protect some of the value of people. Now, that's not money. When you do something like that, that means that your priority is not being so money. Your priority is allowing the average person to use this network and to feel some sense of security. And that's completely fine because they didn't advertise Ethereum as being the digital gold of the internet.

That's Bitcoin. And so I think people are sort of conflating the two. yes, right now, because of this monetary issuance issue and how it's changing with the merge, it's deflationary, people using it to buy gas, usage in this whole reflexive process. But if that gets too aggressive, if the price goes too high, then it actually is detrimental, in my view, to everyday person being able to use Ethereum and the applications built on top of it. Oh, interesting. Wait, just the price of Ethereum and not gas prices?

You're literally just talking about the price? We got to buy it. You have to spend ether. You have to spend ether to use the application. Like, you want to use this. Imagine if the price of Ethereum was, you know, a million dollars. And you had to spend an obscene amount of money and gas terms, even like, you know, some fraction of an Eve, right, to use an application. That's obviously not good. It's almost like, okay, imagine if you're, if you're Saudi Arabia and oil now is $2 million of the barrel. Yes, that'd be great to sell all this oil, but nobody can buy it. And so people are going to use a different form of energy. So you actually, the cure for high prices is high prices, that's what they say in commodity terms, right?

You actually spur innovation away from the source of energy that you're using if it gets too expensive for people to use. That's not money. That is a commodity. Ethereum is a commodity, it's not money. Right. I mean, yeah, I think it's slightly different because the decimal points go out like 18. 18 places. So, you know, and the gas is still sort of basically priced in US dollars. But one thing I would just want to ask about that was, so essentially what you're saying is that you feel that

Bitcoin's narrative as digital gold is going to hold, even though Ethereum might be more deflationary or more or more scare, or at least the scarcity will be decreasing. Yes, because I think Ethereum is trying to solve a different problem. It's not trying to be money. And to the extent that, And I think the core developers or whatever, the political will of Ethereum displayed this very clearly to us in 2016 when they bailed out everybody after the Dow by doing a hard for. ETC, if you want to say, is the real Ethereum money, right? No one uses it. And that should tell you all you need to know about whether or not Ethereum wants to be money. And it might not be the inflation rate that is what the thing that shows everyone that Ethereum is not money.

There may be some other compromise that they have to make because the goal of we want to be this decentralized computer for everybody in the world conflicts with immutable money. I don't know what that is. But I think we have a one-on-one sample set of what they did when they were confronted with that sort of choice. They made the choice on the side of let's be the power of the decentralized. computer, I believe they continue to have that vision. And so that's why I don't believe there is digital gold or the money of the, you know, cryptosverse. So, but I was curious for your thoughts, even more around Bitcoin's narrative, because this idea that Bitcoin could be an inflation hedge was, you know, a long-held theory that some people now say it's sort of been proved wrong. You know,

obviously Bitcoin actually decreased from its all-time high of 69,000 in November down to about 18,000 in June, the same time we had high inflation. So I wondered what your thoughts were on the inflation hedge theory of Bitcoin. I think everything, it's a cherry picking of timing, right? So if we compare apples to apples, and we say, okay, there's a universe of these risky assets that are supposed to protect our money from inflation. So we go back to Bitcoin 2009, right? And we take Bitcoin and we deflated by the Fed's balance sheet. We take the SEP 500.

We deflated by the Fed's balance sheet. We take the NASDAQ, deflated by the Fed's balance sheet. We take gold, deflated by the Fed's balance sheet. We take, you know, U.S. treasury bonds, whatever. Bitcoin outperforms everything. Over the time period is when it existed, deflated by the increase of the global reserve currency by its central bank the Fed, Bitcoin has beat inflation. Now, okay, take a particular time period and that might not be true, but over the history of the asset, it has. And I guess that just

goes to, you know, if you're trading something like this, timing is everything. So essentially, you feel that like on longer time periods, this will become more evident and that really the macro driver was the main cause for that. Yeah, I mean, it's one of them, but I think that's, that is the thing, If you look at the whole history of Bitcoin and you deflated it by a system that it's trying to replace the dollar, then it's done well. Okay, yeah, it overshod its value and then came down to 75%, but it's still over the entire lifespan of what it's existed has outperformed. Yeah, so basically, yeah, you're sort of zooming out. So, I mean, you've alluded to this theory a few times here about how the Bitcoin price is just a, measure of U.S. liquidity. Can you talk a little bit more about that? Just to unpack that for listeners,

we've been referencing it throughout the episode, but I wanted to make sure people heard it. Everything is in phases where you can't say that something is this representation forever. But over the last, let's call it 18 months, Bitcoin has joked and jived as the equity conditions of the dollar have changed. And then I wrote an essay about this. know, a few weeks ago, putting up my little index. And this is literally just like a compilation of stuff I've read in other places. But at the high level, it's the Fed and different, you know, governmental agencies provide the dollars, the base money of the world for banks to leverage and leverage into the financial economy, stocks, bonds, and whatnot. And so the more credit created

by banks, the more business activity, right? Because business kids can borrow money and they can hire people and we can borrow money in our credit cards and we can get a house and we get a car and all these different things to buy all this stuff because there's just all this credit available. And then things get out of hand like, okay, we got to rein it in. And then they started raining in the credit. And because it's leveraged, the downside is just like, whoa, holy shit. And then you get things crashing and you get three arrows and you get Celsius and you get

You know, all these different things, which are just a derivative of dollar liquidity. Dollars, for less dollars supplied his credit throughout the world and these, you know, liquidity goes to where it's best cater to, just like water. And as they removed, removed that, then everything that depended on the credit collapsed. And obviously, Bitcoin is just supercharged to that because it's really, it's this new system. You know, it's only a decade and a bit old, a bit improved. And so it's going to oscillate very violently with how that goes. Conceptually, and I created this index.

I put the little Bloomberg thing on my Twitter. I think some people created a trading view. But yeah, that's the overarching theory. And I think it's fit quite well with the peaks and bottoms recently since sort of like early 2021 to today-ish in terms of how Bitcoin is bonded as dollars became more or less available in the global economy. And I don't think that's going to change anytime soon. So I think that's the thing that I'm focused on and not the rate of which the Fed does the Fed

funds rate because as I've done more research and talked to more people and learned a bit more about how U.S. money markets works, it's almost like a smokescreen. This whole quarter point here, 75 basis points there. It doesn't matter. It's just for show. It all matters. Are there more dollars available to be leveraged by the financial economy or are there not? And track that.

And literally you can forget everything else about economics. It doesn't matter. You might as well not even look at earnings. Who cares? It doesn't matter. That's all it matters. I find that absolutely incredible. And yeah, I just love how, like, I feel like the whole first half of the episode was me,

you know, asking all these questions about the merge and you're just like, it, like, none of this matters. It's just like this one change that's the important thing. And so I love how you've simplified this down as well, even for Bitcoin, which is interesting. But one thing I want to ask was so, you know, if we're going to, like, you know, it seems like the crypto world would like to get more institutional money in or just in general, more mainstream people into crypto. But, you know, as we've seen the correlation between Bitcoin and the stock market is very high. So why would either, you know, hedge funds or everyday investors, why would they add Bitcoin to their portfolio if it, you know, seems to act so similarly to NASDAQ? And do you think that these will ever decouple at any point? I'm sure there will.

There's a couple. There's always changes. Do I know why? I don't know. But why do institutional investors want to trade this or large money managers? Because it goes up a lot. And right? And so they're all trend followers.

So if they see like some kid who just bought a Ferrari because, you know, he or she put a little bit of money in Bitcoin and it went up or there's some coin or Shiba or Doge corn or whatever it is, right? So look at me over here, like slaving a wage trying to make 5% on my portfolio. Maybe I should add a little bit of that. Get some of that juice. And I guess this trend followers. That's all they are. And so like when we talk about like institutional money managers, there's highly paid FOMO advertisers. They're just aggregators of money.

I don't think they are any smarter than anybody else. They're just plugged in a particular way of raising money. And they have their own sort of objectives that they need to hit. And one of them is, if people are doing something and it's going well or has gone well, and I'm not doing it, then I'm at risk of my job versus if nobody else is doing it, I'm not going to risk my job if I'm wrong investing in this thing. And so on the upside, there's career risk of not being technologically innovating. and investing in these new things.

And on the downside, there's career risk of believing in it and sticking with your guns and staying and nursing these losses. And so, you know, the institutional investor, whatever you want to call it, they'll come in at the top, buy at the top, and they'll sell at the bottom every single time. It's just how their incentives are structured as money managers. This is hilarious. I mean, I guess, like, yeah, I find it funny because you,

used to be an investment banker. I don't know if you would put yourself in that category, but you feel like, at least for crypto, they're just sort of following. Absolutely, because there's nothing, it's not in their best interest to be early. Because if they're early, if they're early and they lose money, they lose their job. If they're late and they lose money or they're, you know, coincident, then who cares? Everyone else lost money too. You can't blame me. Okay. And are you worried at all about a recession in the U.S. and how that might affect the price of Bitcoin and ether? No, because the real economy, whether it's the U.S., China, Europe, you know, Russia, Africa, whatever, is it relevant to the financial economy, unfortunately, in more respects, right?

Because the financial economy cares about the supply of dollars, and that's a political decision made by the Treasury, the Fed, and, you know, the elite politicians in the U.S. of what the policy is going to be around the amount of credit of dollars expended to the world. And at a very high level, the politicians in not just America, the most advanced economies don't actually want recessions and are perfectly happy to print more money to cover up the structural flaws and how we've arranged things globally in the real economy such that a real pain is put off to the next administration.

And so there is the, there is the, the, okay, well, things are going bad, hand up more money, stimulus, print more money, get the stock market to go higher, let me get elected, or let me keep my unelected position, whatever, it doesn't really matter. And then when the things are felt, five, 10 years, I'm not involved. Like, I'm not around, but let me just get elected. And so I think that's the impetus in around the world. And so, and the easiest thing, and every single time, it's print money.

Governments know how to do one thing very well. they have a very powerful thing called the money printer, and they will use it every single time to avoid having to do things that are difficult, like actually sell to the population, like why we need to change things like energy policy or why, you know, we made these assumptions about population growth

and, you know, dependent to a working age population, like we need to change our assumption. Those are hard decisions, not very popularly, though, much easier to print the money. Something I also found fascinating in your role, writing is that you wrote that you believe central bank tightening is tightening up liquidity is the indirect cause of the terra-luna collapse. We don't have to go into all that. I feel like you, you know, kind of have explained this theory. But it was curious whether or not you thought an

algorithmic stable coin would ever work or if you think that type of stablecoin is forever doomed. Anything's possible. The track record has been 100% to the failure rate due to the fact that an algorithmic stablecoin is the same thing as a government if you have money, except the algorithmic stable coin doesn't have an army with a guy's guns who can enforce the usage of their currency. And so that is the problem. How do you get demand for the currency when there is nothing behind it? Now, obviously, Doquan's innovation, if you want to call it that, was that's offer a really, really, really high interest rate. And then people are going to just plow into this thing. And that's how we're going to generate that excess demand.

And maybe somehow in the future we'll have some intrinsic demand for our currency that will paper over this issue of what happens when the peg goes, breaks on the downside. He tried and he failed. And that's just that. So you, you know, speaking of kind of all of these recent collapses, you've also written about how 3AC collapsed and took down a lot of other players in crypto with it. And I was just wondering, as you, you know, watch this whole thing play out, what are your main takeaways for the crypto space? in particular, I think, for crypto lenders. We're all human. We all make the same mistakes, different flavors. The whole credit collapse, I was reading a book by Russell Napier.

He was in CLSA research analysts in the late 90s in Hong Kong. He was covering Southeast Asia during the financial crisis. And it just struck me how the same thing, that cause this credit collapse of crypto, the same things that cause the Asian financial crisis, the same thing that caused the LDC crisis in the 1980s, the same thing as a cause over lending to Argentina over the money time that it's defaulted to international vendors, the same thing that caused, you know, the Russian debt crisis. It's all the same thing. At the beginning, there's value, and credit is allocated to that value. You make good loans. And then as people see

that it's successful, they give you more money and you run out of credible stuff to invest in, but you have to ship the money out the door. Otherwise, you don't get paid as the intermediary. And so, well, you know, and it's the same story every single time. And you get the lending standards get less and less and less and less and less. Same thing happened as upbram, right? Lending against houses, you know, it's a decent business. Lending against every single house. You know, people with like income that don't match the house or the buying, maybe not so good. But it always started with a good business. I mean, they got up to be a bad business because there's just too much money chasing the past, amazing returns to the opportunities that are available today.

And that's the lesson. We'll never learn it. And we'll do it again. When you say we're going to do it again, you feel at some point in crypto, there's going to be like another big blowup down the line. Because some people were saying things. As credit, at the end of the day, like, if I can earn 3% on a government bond, in domestic fiat currency terms, but I can earn 20% lending to this newfangled technological thing. Could be the railroad, could have been the telegraphs, could have been radios.

These all happened back in, you know, late 19th century, early 20th century. Could be three euros in the super cycle. Could be, you know, crypto lending. This like, you know, smoke screen over these centralized entities that we're trying to say, overall to centralize and blah, blah, blah, right? It's the same stuff. people want the higher rate of return that's offered in the domestic bonds, especially if inflation is higher than these bonds.

And they're like, okay, I got to do something. I can't get stupid money in the bank and lose money in real terms. Look at this new technology over here. And we've been conditioned as, you know, everyone's like, oh, yeah, where's the new technology? The technology is going to make all the money. We've got to be in the new technology. So let's lend to the new technology. And at a certain point, the lending stand.

do not represent what the actual value is, and then we come down. And it's a cycle. And hopefully the trend line is up into the right in a much slower fashion than you probably would want. And then we have extreme observations around the trend line. So pretty much this whole conversation, we've really talked about Bitcoin and Ethereum. And I think I've read in your blog post that you kind of really are betting on those. But are there any other either blockchains or other technologies that you find interesting, that you are also, you know, either betting on or just keeping an eye on? I mean, you know, on our routine basis, I like not to plug this particular service, but I think you do a good job. Token terminal, I, you know, open it up. I look at, I go to revenues and I go to seven

days. And I look at which protocols are making, are making the most money, which people are actually using, which people actually spend real, real money, right? Maybe it's Bitcoin, E, Stables, whatever, not the actual currency that they've created out of thin air to hand out to people. But who's spending real money to use applications on a network? And then I go down a list and then I like, okay, do I own any of those? Why or why not? Do I not have a position? Or maybe they're not actually a coin.

It's just like a service and they don't, I can't own a coin in that particular thing. Or maybe the tokenomics of a particular ecosystem or project aren't to my liking, but whatever. I want to earn yield, real yield, based on people using these things on this ecosystem that I believe in. So that's kind of where I spend most of my time because I'm not super, super technical. So being able to assess out whether or not some particular new layer one could be the Ethereum killer or not the Ethereum killer, like this is beyond my abilities, focus on things I'm good at. And so earlier, you know, we did touch on NFTs and you talked about how you felt they were valuable because they were. ways of monetizing culture, what are any particular trends in the NFT space where you're kind of, you know, feeling like those are poised to either take off or where you're expecting more growth

in the future? I honestly have no clue, but that's why I particularly just focus on where the places where people congregate to trade these discrete objects, right? And so that's all I care about, because at the end of the day, I don't know. I can't predict where human culture is going to go or whether or not some famous artist is going to take this protocol over that protocol or how they're going to, how you can issue concert tickets in NFT or loyalty programs or all this kind of stuff, right? I don't know. It's not really, I can't really handicap that. It's not really my area of expertise.

But is there a central point where a lot of people go to actually trade these assets and purchase them and experience them? Okay, I want to know where that is. I want to know where can I get in on that game? because then I don't have to predict what the new thing is or is Yuga Lab is going to come out with a new project that's going to be hot. Like, I don't know. I'll buy one of them if it's cool. But being able to like make a real, a concerted business on that and a big bet, that really my forte. That's fascinating because I don't know.

I don't know you super well, but I would have imagined you'd be someone who would be good at predicting that kind of thing. But anyway, so I wanted to ask you about your writing process. I'm a writer, and I'm a fan of your writing, and I always find it really impressive when people who are not professional writers are great writers. And you fit that category. You're an investment banker, turn crypto entrepreneur. And I and many other people in the crypto space just love your blog posts. So I was just wondering, for a bit of personal history, how did you become such a good writer? I mean, I don't really like writing that much, but I had some very good English teachers in high school. And there was one guy I remember, deceased now.

So we had a class on British literature. I think we were studying Shakespeare or whatever it was. And he was famous in the school for having what it was called spot test. So we literally get in the class, we were supposed to read a particular set of pages in the play. And then he would print out a section of that play. and then you would remove certain words from it, and you had to supply the word from the dialogue, and then you'd have to give definitions of particular turns of phrases or whatnot

from a piece of Shakespearean literature. And so, like, you got very pretendic in particular about certain things. Took British literature through him. In high school, we had to write a 3,000-word essay on a poem, I forgot which poem I wrote it on. I took a Russian literature class. From here, I had to write a paper on the Art of Leo Tolstoy, which actually got an A-on, so I was quite surprised.

So, yeah, I think I had good training in high school, and then I just liked to read a lot of stuff. And so I copy what other people were better than me at it. Their style, turn the phrases, different concepts. I guess try to read widely fiction, nonfiction. I love sci-fi, all sorts of different things, a lot of history. And then at the end of the day, I'm trying to write something that I have an idea of an investment concept or a thesis. I have a position on it in my portfolio.

And I also, I'm having a conversation with myself through the writing. I'm trying to justify to myself, why do I have this position on? And a lot of times, as they start writing something, I had an idea of something I wanted to write. And I'm like, this argument's weak. And I sell the whole position. I get out of it because I can't even explain it to myself, much less often. out to thousands of readers of why I'm in this particular trade and they're pointing to be out of of it. And so I think it's a very cathartic process of writing. And because I use it as sort of a litmus

test for my own ideas because I'm trying to make money on them, maybe that's why the quality is good. I just love what you said there, but I was curious, wait, did you say that you previously didn't like writing or that you currently still don't like writing? No, no, I as a kid. I wasn't really into English class. Okay, okay. Yeah, because now it seems like you take great pleasure. It's fun. I like it. Yeah, from the humor and all that. Actually, something that you just said reminds me of something that I did want to ask you about, it wasn't in my script, but I think this is a perfect time to ask it. You at the beginning talked about how crypto is quite religious. And Bitcoin maximalism recently has been kind of undergoing a change. You know, there are prominent people who, either previously were known to be Bitcoin maximalists or at least just considered themselves Bitcoins, if not maximalists, who now have publicly kind of renounced maximalism. And it almost

feels like there's like a narrative changing around that. And I wondered, you know, what your take was on that. Some of these people are saying that a lot of the Bitcoin maximalists now, their arguments aren't sound, that they're sort of chanting these different mantras or whatever. and it's just sort of a religious thing, but there's no evidence to back it up. And I was curious for your thoughts on what's been going down with all that. I'm not really follow the consternation of emotion around like, oh, is he a maxi or not? Or like, to me, it doesn't really matter. But the fact that there's people who believe strongly about something and believe strongly about the opposing opinion, to me, is evidence of the thing that we're doing, right?

It's money. It's all fake. It doesn't exist. It's this thing that we're trying to connect the future human productivity today. I'm trying to give you this thing that I call a Bitcoin that has some value. And I want you to do some work for me or give me a real asset or give me a slice of bread or whatever. And same thing with a dollar or any of this other stuff. And so it doesn't exist.

It's completely made up. It's complete myth and fiction. And that's why I think it lends itself to religion. It lends itself to people being super about it. And then they change their mind and they become their prodigal sons and daughters. Maybe they'll come back into the fold later. And so it does feel extremely religious. And you change.

You have the Reformation, right? You have the Enlightenment. You have this change of energy around the different religions. And then you have the orthodoxy who never changes and these schisms. And it's just the same thing. It's all the same. And so you don't feel that any parts of the crypto world are more religious than others, meaning more faith-based rather than evidence-based.

it depends on what you're trying to the ecosystem that you're involved. Bitcoin is pure money. There is no utility as of yet other than being money, right? That's what it is. And so, of course, you're going to have to be very religious about things

because you don't have any other like real thing to back in it. It's not like Ethereum where, okay, there are these applications that are being used. We're lending. We're trading. We're all on this network. We have this value here. Bitcoin is like,

hey, we've got this network. We have this immutable chain of data. Therefore, it's valuable. And that's it. Right. And so I think depending on what you're actually involved in, we'll determine how much religion you want to call it that has to be imbued to give it that value.

And the more you tend towards the thing that's monetary in nature and pure money, it's pure fiction. It's purely a construct of humanity and the way we want to organize themselves socially. And we have these units of account that we use. to confer value amongst themselves. And that's going to be very religious. Yeah, and I wanted to ask about when you keep saying Bitcoin is money, people typically say that that will have sort of like three features,

like store a value unit of account, just, you know, used for exchange. So I was curious, like, where you see Bitcoin fitting that or not quite fitting that yet. Depends on what you're using it for, right? Some people are like, oh, Bitcoin's that useful because I can't go pay for a cup of coffee. okay, can you pay for a couple of coffee with a bar of gold?

Probably not, but if somebody gave you a bar of gold, would you consider a valuable? Yeah, I would. Why? Because everyone else said that's valuable, right? It's the same argument. So it's like, oh, yeah, the dollar is going to explode today because of all this rampant inflation. But you need to pay your taxes than dollars if you're American, right? Yeah, yeah, yeah, yeah.

So it's useful, yeah, right? Yeah, okay, it's useful, right? So it's all context. So I think people, again, it's like religion, you take a context, you extrapolate it to the maximum, maximum, and then you look silly. And I think that's what people do with Bitcoin and the other form of monetary value. I love it. I love it. I just feel like throughout this episode, you've always just gone for the simplest explanation, which I think is what makes you a very clear writer as well and why people like you're writing.

Because I always say, I mean, so as a professional writer, I do have to say, people, generally don't value writing. You know, so many times, like, writers will, you know, try to get a gig and they'll be told, like, things like, oh, we'll pay you for exposure. Well, or we won't pay you, but you'll get exposure or whatever. When I take away has been that people think that typing is writing. And I'm always trying to tell people, no, no, no, no, no. Writing is actually clear thinking. That's what writing actually is. And if you can find somebody who's a very clear thinker, like, that's extremely valuable. So, I just love how you've done that through this episode. And I think that, you know, that explains also why it is that people just love what you write. Yeah, I think it's also a thing of like people, people don't recognize like the power of ideas, right? If you think about the, you know, the total wars that we fought over the 20th century, this Marxism, right? Like, look at the impact Karl Marx has had on world history or Keynes, Keynes in economics and all this crap that we learned in school. It's all these ideas of these dead people who wrote these essays and people last on to them.

And these ideas are still around with us today in religions, ideas of humans on different things that wrote some books. And billions of us believe it or not believe it. And we'll kill each other for it. And so I think at the at scale, our writing is extremely powerful. But the unfortunate part is just like crypto, 99% of all writing is trash. And so, you know, you just assume that everything is trash and you pay accordingly, which is, you know, good or a bad thing. Wow, I love it. Now you've also explained my experience over my writing career. All right, Arthur, it has been such a delight to have you on the show.

Thank you for illuminating everything from Bitcoin to Ethereum to macro stuff to NFTs. It's been super fun. Where can people learn more about you and your work? I have a medium under cryptocurrency. Haste and they can also check out my Twitter. Handel is Crypto Hayes as well and I post links to all my essays and some rambly thoughts that I have about stuff. So to the extent that you're interested, that's where you can find me.

Perfect. It's been a delight having you. Thank you. Thanks so much for joining us today. To learn more about Arthur, check out the show notes for this episode. Every episode of Unchained is also available on YouTube. Go to YouTube.com slash the Unchained podcast to subscribe. Chait is produced by me, Laura Shin, with help from Anthony Yun, Matt Pilchard, Wanda

Ranovich, Pamajumdar, Shashonk, and CLK transcription. Thanks for listening.