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- [00:00]
Michael
There's something very curious about Russia being out there, but then public about it as it relates to digital assets and bitcoin. We know that it's been rumored they've been mining for a while. You know, the countries that have precarious views or situations within global commerce have had to look at, you know, bitcoin as a apolitical money to transfer value. And I just can't help but feel like they know where the market's going. I think they have a deep understanding of where we're going is into a more. More multipolar world and that they're going to want assets like gold and bitcoin within their domiciled regimes.
- [00:38]
Liam
It all comes down to computers communicating.
- [00:42]
Michael
The information superhighway can be a confusing mix of on ramps and off ramps. Bitcoin is worthless. Artificial gold, is it still rat poison? Probably rat poison squared.
- [00:55]
Host
We need to get into the world
- [00:57]
Liam
of, okay, this actually foundational technology.
- [01:01]
Michael
What the Internet of money does is it creates a single network which can do a micro transaction to a giga transaction. The Internet is going to be one of the major forces for reducing the roll of government. The one thing that's missing that will soon be developed is a reliable e cash.
- [01:28]
Host
All righty, gentlemen, welcome back to final settlement. Today is Monday, July 13, 11:46am Eastern Standard Time. And we've got another big, massive, huge list to get through. Liam, Michael, how are we doing, boys?
- [01:45]
Michael
You ninja launched. I was looking at doing some prep and we're live but glad to be back. It's exciting. Jackson was a little upset that more people like this show than the last trade. So appreciate you guys leaving comments. Maybe for this week, outside of liking it and subscribing, you should let us know what segments you like because, you know, we're going heavier in AI. We have a big list on AI but if you want us to move away from AI and talk more digital assets, bitcoin, or you just want to hear more banter, let us know what you like, what you don't like so we can make this the perfect show.
- [02:15]
Host
Yes, let us know. I would say the comments were, you know, it wasn't a clear decisive winner. I think there's fans of each show for different reasons, which makes sense. And you know, I don't want to disparage Jackson on the show. He's a great host at the last trade. But with that being said, we've got a lot to get into. Like I said, big list. We've got a whole slew of AI Topics to talk through the latest on the Clarity Act. But I think we're going to start with some big news in the what we love to talk about, tokenization, real world assets, the digital asset space and the banks really, you know, this is something we've been talking about on the show for over a year. The banks continuing to push forward with their initiatives in the digital asset space. Seeing the writing on the wall, whether you want to say it's optimism around Clarity act and the regulatory front, I think that's a part of it. I think it's also just the broader administration support whether or not Clarity passes or not. But these banks and really traditional enterprises as well continue to push forward with their plans in this space which is very different as we just as we've discussed than than prior bear markets where projects get shelled, they get thrown in the dumpster, never to be seen again. This is really quite the opposite in the sense that these things are still moving forward. So the first one I want to pull up here, this was a headline. BlackRock, Goldman Sachs and JP Morgan joined the UK tokenization task force, 54 firms. So yet another consortium we talked about, the stablecoin open standard last week which was announced, which was, I want to say like 200 names in a consortium that was working on a stablecoin sort of standard. This is 54 farms including Blackrock, Goldman Sachs, HX, SBC, JP Morgan, Morgan Stanley, UBS have joined a UK government backed task force to develop live tokenization use cases initially focused on tokenized repo. Another thing we've talked a lot about, the group will work, will work over the next year with a Treasury report estimating tokenized markets could add up to 33 billion in annual economic output and 14 billion in tax revenue by 2035. What do we got on this, gentlemen? Before I go to the next one,
- [04:31]
Michael
maybe just highlight the top of the next one because I think they really are similar themes and just a full sprint and I don't think the market's woken up to like what's happening.
- [04:40]
Host
Yeah, the next one was Swift launches blockchain ledger for tokenized deposit pilot with 17 banks. So swift sort of the legacy payments network of the globe effectively is, I'd say within the past six to 12 months they've turned just like all these banks and other enterprises that instead of just being out competed and basically disrupted by these things that they have to do something with digital assets and these new rails. So this is launching a blockchain based shared ledger for an initial live pilot of Cross Border Payments using tokenized deposits involving 17 banks. And some of the banks mentioned here are Citi, hsbc, ubs, bnb, Paribas, Standard Chartered Wealth Auto, bny, dbs, MUFG bank, among other global lenders. What do you got Mike?
- [05:30]
Michael
So I think there's, if I can remember these, there's like three core components and this is gonna be a little different take than I think you guys would expect or most people would expect. And the major one is that most people I was thinking about as we put this list together, we're paying so close attention to all this industry that most people just aren't. So this stuff goes by the wayside. And it's crazy because while we're in a bear market, it's an insane sprint across the world to either tokenize equities, any type of equity, private public securities as it relates to debt and then on the dollar side, all out Sprint and war really when it comes to tokenized deposits which are, you know, FDIC or bank insured deposits that are rehypothecated versus stablecoins that are backed one to one by different areas of the market, those are generally like fintechs and technology companies versus banks. And I think why that matters is ultimately this notion of like the future's here but it's not evenly distributed like this is happening no matter what. And I still think people, probably the vast majority and some listening, but the rest of the market look at like you know, tokenized digital assets is like maybe it's 30 years from now and it's, it's here, it's just how long is it going to take and why bring that up working through. The third point is all of this will back into being insanely bullish for Bitcoin because at the end of the day these assets don't, they're there, there will be some efficiencies, they'll probably open up some markets on the private side that others didn't. But the reality is this is this is that lipstick on a peg, it's just opening up the exact same schemes and the risks that are inherent in the system. And it's just, you know, adding velocity, more efficiency, but it's still puts the user at risk. But the thing that I think's the most interesting is it reminds me of like Uber Door Dash or any of the wars we've seen when there's net new technologies. Everyone's competing with everyone, generally speaking in a free market. And so right now the user, the individual, just like in the Uber Lift wars gets to win, whether it's AI and the inference subsidies in the competition there or when it comes to stable coins and tokenized deposits or equities, in the short run, the user gets to win because of the market forces on competition. Now, long term, I think it ends up where the Uber, you know, you'll own nothing and be happy. In Airbnb, it's similar here that, you know, we probably end up in this very crazy Panopticon style world. Private, public CBDCs, equities that can rug you at any point because you don't own them. And I think that's the important lens, and that's probably why somebody's listening to this and getting value, is that there's a short way to play this, to optimize, maybe even build business around it. But at the end of the day, whether it's AI and managing your different levels of the stack, whether it's your data or the hardware or it's your money, you can participate in these things, but you have to know that they're fragile and you have to know where the value will accrue and be safe. And that's obviously in Bitcoin cold storage. So that's kind of like how I'm thinking about this is there's an insane thing happening right now. Most people are asleep at it. There's gonna be a lot of competition that users benefit. Long term, users won't benefit. And so in that cross of the chasm phase, as an individual or business owner, you want to be able to manage that accordingly.
- [08:50]
Host
Yeah, I mean, I agree with all of that. I think like you said, you phrased it as a lot of these things, whether it's real world assets or tokenization, like if you really break them down, like, you know, lipstick on a pig is one way to phrase it, but it is, it's marginal improvements, it's, you know, faster, more efficient databases effectively. And most of the value is going to accrue to the issuers and the banks that join these consortiums and lead these projects. Now, on its face, I think it's easy to say, well, what does this have to do with Bitcoin? Why is it, why is it bullish? But you have to remember that like all of these things wouldn't exist if it weren't for the advent of Bitcoin. If Bitcoin wasn't created and emerged into the world 17 years ago, these new Rails likely don't exist. And so while on the surface it seems like it's either antithetical or at a minimum adjacent to what Bitcoin is and its ultimate value proposal. It's insanely bullish, as you mentioned, because it is normalizing these rails that stemmed from the advent of Bitcoin. And ultimately, while there would be some near term, near to medium term value generated by these efforts and these initiatives, these consortiums, the real value for Bitcoin ultimately is that these things are now normalized. And as we know, once you go down this path of understanding these rails, understanding the efficiencies and ultimately understanding better understanding like what money is, because when you start tokenizing the world, like you said, it doesn't remove the fragility from the actual underlying. I think there's a natural learning or you know, education journey there that yes, there's efficiencies here, yes, it may be democratizes finance to some extent, some extent like Coinbase would like to think, but ultimately you end up realizing those same fragilities and it teaches you about not only money movement, but what is money. And that sends you down the path of ultimately needing to secure your value in something that is truly decentralized, that isn't fragile, that is actually anti fragile and that's how people will end up at Bitcoin from this sort of trajectory.
- [11:06]
Michael
Yeah. Two quick things to add and then I know Liam has some thoughts is one of the big ones that still most people don't recognize is that we call it this event horizon post 2020. The amount of liquidity sloshing, there's just risk embedded everywhere. I think we talked about it last week on the last trade as it relates to most investors can't outperform passive index. And so that only accelerates from here because the amount of liquidity so the privatization or tokenization of assets doesn't solve for its barrier. It's going to be harder in the future increasingly to get returns in real terms that outpace Bitcoin. And so it's because a function of the denominator, the dollar and all these things are their value derives from that. That that's why Bitcoin will be understood. And then the other side of it is all these firms are focused on the things that they know, but they will be forced to embed Bitcoin because the same way they'll be forced to embed gold and digital gold because you'll be looking at those assets and they'll be growing in market cap like gold did the past 24 months. Bitcoin will continue to do its thing and then the firms will realize, well, it's competitive forces to add this other layer and then that's how you normalize it and then obviously how it's custodied in the financial services and then you can actually start to see how those assets reprice in BTC and that's just going to be a long game. But whoever understands the other side, that's what's really crazy about what we're investing in building in is that like you kind of know the end state, you just have to stay aligned and build the products that like bridge that gap 100%.
- [12:40]
Liam
I think that the other thing that I'm honestly curious about and it's just essentially how these large consortiums can continue to have aligned incentives over time. I think the Visa is one of the few consortiums that's actually worked out extremely well and had all of the member participants be fairly aligned with it. But I do think, especially just given how new the technology is and the difference in ultimately values over time, I think that some of this will balkanize over time and the differences in adoption just based on each company's roadmap is going to kind of change how the end state of this ultimately works. And I think that as we continue to see that like that's one of the true value propositions of Bitcoin is just being extremely hard to change by design and the fact that, you know, it's completely, you know, censorship resistant outside money whereas this is going to you know, just essentially be as inside money as it gets.
- [13:44]
Host
Yep, that's well said. Any other thoughts on on these items? There were some related headlines around the tri space but maybe we get to those later. You guys want to jump to the AI stuff?
- [13:55]
Michael
Yeah, I think so. The only maybe other thing to call out and I think it's we talked about it, but just underscoring the fact that it's global in nature, these initiatives are on, you know, almost every continent on the planet Earth. The largest institutions. I think to Liam's point, it will vulcanize part of it. I don't necessarily have firsthand knowledge, but participating in this consortium you've seen how liquidity drives a lot of the innovation and flows. And it's really hard when you're at a cold start as a single entity because that's the thing that a lot of these banks are still reconciling with is they deeply understand that money is going digital but they don't necessarily know like what's the next step from that I. E. Like how do I get my individual client to use it or care about it and then how do I think about it with other firms? Because that's the thing and we've talked about it and this is stuff we've had to learn as we've embedded different products in. ONRA is like the tokenized deposit infrastructure. If I am a bank and I create a tokenized deposit ledger and I offer that to my clients, it's kind of worthless unless there's another corresponding bank that also carries that same ledger, the same tech. So the consortium is very valuable there because if you're embedded in that network, you can send assets of dollars to that other bank and they'll net, settle there with those efficiencies. And so I think that that's where a lot of this is coming from. But it's almost like AI in the sense of not apples to apples, but when you think about inference and routing and how that's becoming this layer in between, how do you find the most efficient way to, you know, get the, the lowest cost tokens for what you need? There's just going to be this, you know, you know, plethora of stable coins, tokenized deposits, nicely tokenized equities and there's going to probably sit in the middle a lot of these. I think there was one that we're going to talk about that got funded that sits at these routing layers. But yeah, to your point, I think it's still early and that's where the consumer gets the benefit because they're gonna want consumers to get on these rails. And so there will be a lot of efficiencies whether you are trading or you're in equities and you want to manage that, you want to lend against them, you want to go into other services. And that's part of like, I think they talk a lot about Coinbase versus like Kraken and some of these like products they're embedding in. Coinbase has a lot of bitcoin that's sitting there with low cost basis. So it's in their best interest to look like a bank because you don't want to sell it and incur the taxable hit. But you need access to those dollars versus like the Robin Hoods of the world are more like pure speculation because you're going in there and you want margin. So it's just, it's still early and it's going to be fascinating to see how it plays out.
- [16:34]
Jesse
If you are one of the few people who still have conviction in bitcoin, you still believe in it as a long term store of Value, a better savings, technology, freedom, money. I want to speak with you if you want to speak with me, of course. But if you want to have a conversation, book some time using the link below. Love to chat with you, hear more about your background, how you got interested in Bitcoin, and if nothing more, just make another connection in the space. It's always fun. It's probably my favorite part of the job. I do like doing the podcast for the most part. I mean, you know, got to deal with Michael, but other than that I really enjoy it and the only thing I enjoy more is getting to speak with people, listen to the show. So book some time, let's catch up, have a conversation. There's a link below to do it. And if you actually want to sign up for on ramp as well, you're more than welcome to use the code. Tlt I'm going to ship you merch personally, I'm going to write you a handwritten note and then you're going to get access to everything from brokerage, dca, earn, custody, inheritance, insurance, you name it. There's more that I can name. Forget more things than we actually do. So yeah, book some time. We'd love to catch up and hope you enjoy the rest of the show.
- [17:39]
Host
Agreed. Nice segue to the AI stuff. I think there's a number of things we want to talk through, but the main thing that caught my eye was this Twitter X article from Satya, CEO and Chairman of Microsoft. Basically hitting on a narrative that I would say is becoming consensus around basically this idea of sovereignty. Whether you're an individual or more specifically a corporate, any business that is leveraging AI tools and the need for not only the use of open source tools, but really owning your data and owning the entire stack. So a lot of what he talks about here is how in this new world he calls it the reverse information paradox, that basically you can't leverage these closed source tools to such a great extent that basically any benefit you are receiving from using the tools is outweighed by basically foregoing the intelligence that you're generating from using the tools by just handing your data over to these companies. So I don't know who wants to take this first, but there's a lot here and then there's a lot of different ways we can go from this.
- [18:58]
Liam
Yeah, I'm happy to go. So I completely agree with what he's saying. I think that the open models for 90 plus percent of the time are getting good enough to use specific tokens. There are some right now that are at the frontier that continue to when you have really complex use cases that will accrue a lot of the economic value. But everything that he kind of outlined here with respect to having the choice which is essentially routing context making, essentially going between open source versus additional frontier models, making sure that you have resilient models so that you're not just sitting around all day as you wait for specific, you know, like usage to come back online. You know, the loop of self reinforcing is all going to become more and more important because you know, at the same time there are a lot of folks out there who are continuing to seed all information to the frontier labs. There's going to only be more and more data out there that companies need to proprietary or to control and use for post training too as these models become more and more capable and can fit on smaller and smaller devices too. So thought this was really interesting and kind of similar to the not your iPad and or if it's not your model, it's not your IP is a lot of the same thing that us as bitcoiners have been talking about for a long time of, you know, if you don't have proprietary control over your keys, like it's not actually your bitcoin.
- [20:33]
Michael
Yeah, there, there's a lot here. I think a lot of these leaders with multitrillion dollar valuations, whether they're private or public, you have to take everything they say with a grain of salt because you have to look at like what are the incentives. One of the things that came to mind, and I don't necessarily believe it's part of this article, but there's something in there is Microsoft owns Azure. They have a huge warehouse of data centers and if you're thinking about privately owning your data compute, you're going to use that. And so there's just that angle there. They also work with an insane amount of enterprises when you think about Microsoft Office Suite. And so that is a huge opportunity to effectively like change, manage in a way that you can control versus those firms just leaving suite and going over to you know, anthropic or OpenAI. I think one of the biggest things that I've come to the conclusion after just like doing more research on a lot of this is we are so early. I know it's hard. We got to figure out a better way to say we're early. But like when you think about this notion of tokens and how do we utilize it. Chamath had this reference and I don't remember what exactly the numbers were but it was like their spend is compounding every month but their actual productivity is like basically flat so they're using more tokens because once you get to a certain like equilibrium of token usage you need a bunch more to like actually affect more change the angle I think of from like a pure individual managing just your intelligence whether it's a business or personal is and it's not perfect but it's like for all of us I'm pretty sure we're not great at using a physical map and it's because we grew up or even like spelling when you think about like Grammarly and you know autocorrect or a map and and Google Maps or Apple Maps versus your like even point of reference when it comes to like locations and just knowing where you're at. I'm just horrible. I've been horrible because I don't pay attention because I haven't needed to pay attention. And I think that there's a huge component to this and how you leverage AIs what you're giving away where your business could potentially be kneecapped because effectively if you need that to exist as a business now you're at the whims of whatever they decide to charge. The other thing is one of the big layers of subsidization. I believe that's a word the subsidies is really the thing that you called out lamb is the reinforcement training because they don't talk about it but I'm fairly certain like there's obviously the lock in and customer acquisition costs and you want to bring them over. But we've seen that people you know will move over to chat GPT based on like new models. I think that'll slow down after you get more memory. We're seeing these you know harnesses effectively have better memory so they're able to like go back into older chats and just provide more context. But the main point is if all of the data that they're trained on has already been taken from the web you ultimately need more of the training that's already being, that's being used today for these net new models to like compound on it. And I think that's a huge aspect like if you're going to get to this AGI ASI which you might already be there or on our way there. But the point is that you need that compounding recursive nature of how people are using these things and how they continue to and then how they are at the frontier creating all these different ways that they're able to Effectively like ask the questions. And so I think that's a big aspect to all of this is they talk about subsidies in the general marketplace of like competing businesses. But I think another aspect is really they're all on the same plan or playing the same game of subsidizing so they can get as much data within their walls.
- [24:19]
Host
Yeah, really well said. And then related. Another Microsoft centered headline was they're allocating two and a half billion dollars to build out the Microsoft Frontier Company AI engineering that amplifies and protects your intelligence. So this says today we're introducing Microsoft Frontier Co. A new operating business focused on delivering frontier transformation through AI for our customers around the world. It says companies need to establish an intelligence platform so their unique iq, their proprietary data expertise, workflows and decision making processes compounds over time from within using their choice of models to build AI solutions and workflows. So this is very much related to what Satya is writing about in terms of owning and building out your own data stack to be able to have that sovereignty and not be reliant on third parties effectively. So you guys have any thoughts on this one?
- [25:15]
Michael
Yeah, there's a few. One of them is you'll hear a lot this notion of forward deployed engineers or forward deployed engineering and you're going to see more and more of it. And it ties back to a theme I was talking to you guys privately about. It was Tyler Cowan had a pod on the Darkash podcast, the most recent one. I think there's others but it was really the title of it's the number one bottleneck to AI progress is humans. And it really outlines that as much as we talk about the insane amount of change, there's just this reality of the diffusion into the general public. How you think about most people don't use these tools, they're using it as Google like applications is going to take just an insane amount of time because humans in change, we just naturally want to stay with the status quo and so these organizations are realizing it. Microsoft invested 2.5 billion into this. That's effectively what this article is about. I believe last week Amazon did a billion. There's, you know, OpenAI's worked on some stuff in the private equity space, but I think this is just going to be a big gap in opportunity where you're going to have these organizations go and embed themselves in other companies to help them really effectively use these solutions. I do think that that's always going to be kind of like conflicted with their existing model token usage, what their brains naturally know as large bureaucratic organizations like Microsoft. And I do think that's really where either early writers from an investment thesis and going from the ground up or net new companies that do this change management that just come in and think fundamentally different on how you can rebuild. Because it's just like you know, you think about a company trying to build in Bitcoin or digital assets and and you go to Fidelity, you're going to maybe have certain things that you all agree on but then the execution and implementation is going to be fundamentally different because you actually have different incentives. And so I think a lot of these firms will naturally do it but the real winners and there's going to be a lot of huge winners in the services area because if really humans at the end of the day as much as the bots and the droids will get better. You still need individuals to contextualize, you still need them to sell to these organizations and you need them to really get buy in within the people to like let me show you how to do something that it feels like you're adding value versus the current sentiment is like this is going to get rid of your job. Because if you go in like that most people are going to be unwilling to change. And if you don't have buying then you're effectively like dead in the water.
- [27:39]
Liam
100%. Completely agree with that. I think that right now most of the frontier models are using an elephant gun to kill a mouse for what 95% of the people actually use AI for. And it's really just the flow or deployed engineers being able to ask the right questions too and be curious. And that's like why we spend a lot of time on these podcasts ask trying to educate folks and listening to and reading as much as we can out there because it really allows you to really ask the right questions because AI can pretty much do anything right now for you whenever you ask it the right questions and give it the right context. Like it's, it's really amazing how you can essentially like built a routing system this morning between open and frontier models just for me to use as a proprietary layer or for me to use personally. And so I think that allow having people who can come in and show how other enterprises have actually used these same types of products and workflows and skills and how it can be replicated for unique organizations is going to be more and more valuable.
- [28:42]
Michael
Yeah, yeah. I mean there's, there's, there's so much here, we'll probably pick it up on other pods or figure out private session sessions to do this. But like we had an all hands last week and we set up a lot of different things. Whether it's like an internal database for everyone to have visibility into stuff we're working on current analytics but then also what are the Everyone has been in their different silos or teams working on different projects and other parts of the team don't necessarily know a It's like valuable for them to have a 360 view into just the data so they can work better. When you think about like operations is a great example knowing like what sales and clients are saying. But then even further and I think even more importantly or just as important is I think about this like the 4 minute mile aspect where humans we don't feel like we can do things or we're just again the status quo, the change until you see somebody else do it and then everyone else it feels very natural. And so the idea is to make it normalized and also even kind of like competitive forces of oh well they're doing this and I can do this or I can like think of it. And we've seen this across the board. The stuff Liam and the team have been putting together really has changed in call it 30, 60, 90 plus days. Because once you see it, if you have the right people within your organization, they're executing that 10 to 100x and then it continues to compound. And I just can't help but think that's how these new winners are going to come about is you really need people that are intelligent but you need even more importantly people with agency. Because people with agency will just ask the right questions and they'll figure things out versus historically at Microsoft with its 200,000 plus people, like how many people have really had to have any kind of domain or expertise outside of their current domain discipline that's very like siloed and that's just going to cause a reckoning. But to the Tyler Cowan point, that's where the bottleneck comes in. It's going to take a while but if you get the right leader in an organization that can find the right other people to come in and then it gets embedded into the culture, I think that's ultimately how we're going to see the net new winners in whatever area of the market, whether it's digital assets, AI, physical plumbing, it doesn't matter if people are using this. And that's when things get deadly. If you have a plumber that knows how to use AI now you can build one of the largest Organizations because you can scale that in a way that never was before, been able to be done before, largely because a lot of it is distribution. And now if you can figure out the way to distribute your goods and services, where historically you had to have a whole engineering team, a whole SEO team, like all that is at the time at your fingertips, that just changes everything
- [31:12]
Host
100%. The ability to do more with less will benefit the early adopters of these tools, I would say. The other big headline around AI from last week, outside of a bunch of new models that were released was this headline that Apple is suing OpenAI alleging trade secret theft says scheme was at every level. So the iPhone maker alleges that the AI lab took Apple's intellectual property in order to develop its own consumer hardware. This is known that OpenAI has been working on a phone, um, and they've also hired, I believe the number was around 400 employees have come from Apple over the past, you know, 12 to 24 months or something like that. Maybe it's a longer timeframe than that, but they've effectively poached a lot of talent from Apple. And what it sounds like from this lawsuit is that they were basically telling these people in the interviews and in their sort of transition process to take certain things from Apple and so what are your guys thoughts on this? I mean, I guess it's not entirely surprising given sort of Sam Altman, who we suspect him to be. This is a guy who created worldcoin and put orbs all around the world to scan your eyeballs. It's not entirely surprising, at least to me, that OpenAI would be conducting this sort of scheme over the past few years.
- [32:34]
Michael
Yeah, there's a lot here. I think at the base level, I think that, you know, there's all's fair in love and war in the sense that this is like Silicon Valley 101. It's really. Do you get caught? Are you willing to take the licks if you do get caught? How it can set you back? Because if you look back, this happened very similarly with Travis Kalanick and Levandowski I think was his last name they took from Google. He basically took the whole drive, a whole like hard drive on. There wasn't reinforcement learning, it was something related to vision. But ultimately for the computation around driverless cars. And they went and had a huge lawsuit with Google and Uber and they lost. I think Levandowski went to jail. It's actually funny enough now it's all come back. He was only there for a while. He's Working with Travis on some of their Adam stuff. But I do think that set back Uber significantly because they took a back seat into the driver listing and Waymo continued. And so in this, to Brian's point, it's pretty egregious stuff. Like they took a lot of proprietary data, they trained, you know, people when they were leaving on their exit interviews. And then I think either this article, another one, there was a Chinese individual that was leading this and they talk a lot about the similar framing into how in China it's just a natural thing where you'll let Apple go in there, but then you're going to take a lot of those learnings and implement it across other hardware. So a lot of this is just kind of, I think part of the course when you're thinking about multi trillion dollar sectors of the economy. But to Brian's point, it's still not the best look for OpenAI that seems to be mired in almost every controversial deal. And even this weekend I think him and Elon Musk were going back and forth. So it feels like more like noise in the sense of anything because like they got away with it. They're going to have their hardware. If they get hit pretty hard, they may not end up with their hardware. But OpenAI feels like such a crazy business in that like I think they just relinquished or cut their browser. They were working on a browser, which is kind of funny because they close their browser and then like a couple months ago they shut down whatever their visual picture generation. Yeah, Sora. Because they're just doing everything. And the browser was curious because like you see where Perplexity has a browser and then similar with, I think Perplexity is the main one, but there is like something natural around. Like you probably want this intelligence embedded into your browser anyway. So that's one thing that seems curious that they got rid of, but they just feel like to be. They're everywhere and it's going to be just interesting to see how they play out long term, the company as a whole.
- [35:08]
Liam
Yeah, I think the one thing that's interesting too is that these guys seem better than anthropic, despite them taking this and even those former allegations that like OpenAI essentially like killed that one guy who like left the organization.
- [35:24]
Michael
Yeah, like allegedly. I mean, don't kid. Allegedly.
- [35:30]
Liam
Yeah, exactly. I said allegedly,
- [35:33]
Host
saying the opposite.
- [35:37]
Liam
But anyways, I think that, yeah, to
- [35:39]
Michael
your point, I'm just trying to watch out for you. I don't want like next week you're not on the show and I mean
- [35:44]
Liam
you know who to call then. But yeah, the. I think that as you talked about Sora and the browser shutting down, it's just becoming more and more clear to me that just companies can't do everything, especially when they're trying to create AGI asi. And there will be a lot of verticals that win just by you know, having specialized go to market distinct operating knowledge around different verticals, regulatory arbitrages and really distinct knowledges of, of different markets. But yeah, I think that as of right now the fact that these are the good guys is pretty wild to see.
- [36:27]
Host
Yeah. Also I guess in light of Altman being in favor of the government taking a stake in his company, it seems like whether it's the sort of regulatory arbitrage idea that's been floated around or just like literal government stakes, it's like they want to become, and maybe they already are too big to fail in a certain sense. So that a lot of this stuff just goes by the wayside and becomes a non issue because these are quasi government owned entities. But another headline in this. Yeah, go ahead.
- [37:00]
Michael
I was just gonna say that. I mean that's really, if you got a chance to listen to that Leopold episode, like that's either where we're already at or where we will end up being because of the, I guess you can call it existential crisis of owning AGI ASI from a nation state perspective that these firms are so far ahead, anthropic and OpenAI that like they are too big to fail and they can do no harm in the sense that they'll get a slap and then maybe they'll get more of their equity taken but they're not going to go under, I don't think. I mean famous last words. I just don't think they are because forget about all the data. And like capex, the humans are the real again, going back to humans are the bottleneck. Like they have the researchers and the researchers are the things that are the most important because you need the tacit knowledge to be able to go and play with these algorithms and continue to run new trials to extend frontier intelligence. And if you disband that that'd be like the worst thing from you know, accelerating where we're all. I think it's in. It's obvious now that that's where we're chasing like it, you know, you see the CapEx spend, you see the free cash flow getting through, you see the government conversations like we're going to race for this. I know it sounds crazy, but once you listen, enough of this like, and you see the way these tools are working, like that's where we're going. It's the notion of like we will sooner than later have the ability for somebody to have like 50 million, was the quote, like 50 million of the Nobel Prize winner. Like smartest people on the planet Earth being able to go and, and look at any pro problem or project and, and solve it within, you know, minutes or hours. What is that? What is that value? You can't put a price on it. And that's really where these guys are playing at.
- [38:50]
Liam
Yeah. I think the downside is they just get absorbed into the Department of Defense or something like that.
- [38:55]
Host
Department of War, Yeah. All right, next headline. This was from DoorDash. How we learned to trust our AI code reviewer at DoorDash. Who wants to take this one? I didn't have a chance to read through this, but I mean it sounds like it relates to what we were talking about earlier in terms of internalizing these tools, getting to a point where you can move faster, do things more efficiently. But what were the main takeaways here?
- [39:22]
Michael
This is all. Liam, I've never seen this.
- [39:24]
Liam
I just thought it was funny one, because this is essentially DoorDash, the AI lab company, but essentially all companies that are trying to operate on the frontier and actually do anything innovative will have to have their own proprietary models where they have specific data and evals that they're looking at in order to be able to self train their own models. And as newer and newer open source models come out, they can update how their existing evals work and port over that existing context to the new models for two reasons. Not just because it's open source and free, but also because the benchmarks are going to be better for a lot of their specific company tasks. Because unfortunately a lot of the work that we still do today is pretty repetitive, especially at really large organizations. And so I just thought it was interesting and just a way of how pretty much even all non AI companies are going to have to move as well.
- [40:23]
Host
So such thing as a non AI company said another way you have to leverage the tools if you want to remain competitive. Makes total sense. This was another headline which was pretty interesting from last week. The Fed task force that share Kevin Warsh's embrace of AI. So Kevin Warsh, the new Fed chair who came in a few weeks ago, has talked a lot about AI. I think he's a productivity miracle believer. I think he's drank that Kool Aid to some extent, or at least is POSITING or positioning himself to believe that he's created a task force to basically, I don't really know, I don't really know what the point of this task force is, but advise the central bank on areas he wants to see policy and institutional change. And so Marc Andreessen was named to this task force, an economist by the name of Charles Jones and Xbox CEO Asha Sharma. Thoughts on this task force? The Fed this idea of the productivity miracle and how the government is going to help us realize the benefits of such miracle.
- [41:29]
Michael
Yeah, I don't have a lot here outside of like technocracy is the thing that came to mind when I saw specifically Merk and Dreesen and then economic task force. So when you think about intelligence meets money, because I think that was part of either this article or another one was related to economic forecast using artificial intelligence. So this goes back to just pure kind of Keynesian economics of how do I manipulate inputs and outputs and then discern, you know, the end state when that's not natural, how economies form. It comes around scarcity and incentives from the individuals. And that's really just the whole. I think where this POD in businesses will end up either very big or will turn into nothing and be crazy is that everyone's just missing the notion of scarcity and that you need monetary value to coordinate economic activity. And if the current way they're coordinating economic activity is broken, which we've seen, and then all these downstream things are happening that don't make sense and people don't understand why they don't make sense, you're going to have to go back to this notion of, well, where scarcity live and then what are people chasing? So yeah, I this makes sense. They're setting it up. It also makes sense that it's going to destroy a lot of value and there's going to be probably a lot more infringement on civil liberties before it gets any better.
- [42:41]
Liam
Yeah, I thought it was interesting too, because war obviously said that the data is wrong and we need to update how we're looking at data too. And so you can obviously see a world where there's token costs that are included in CPI and they manipulate it in order to allow say this token doing more with less. Just like how you need a smaller apartment nowadays in order to go into the CPI housing cost and like the fact that, you know, iPhone costs are falling because that you can do more and more with them. So I just thought it was fairly interesting with that too.
- [43:17]
Jesse
So what we're looking at here is a chart of Bitcoin's drawdowns, 10% below, 20% below 30, 40, 50% below all time highs and what those returns have been one, two and three years later if you bought the dip. So with bitcoin trading down over 50% at this point, now is a great time to be buying. If you think that this will hold up historically and I'm doubling down, now's a great time for me to continue to allocate. These are cheap sats and if you feel the same way on Ramp Finance is live, you can Sign up in 10 minutes and you can start buying Bitcoin immediately. And so if you do so, use the code paper on signup and we will deposit 50,000 sats into your account after you make your first bitcoin purchase on the platform. Again, that is code paper. All right, back to the show.
- [44:04]
Host
Agreed. A couple other quick hits. Grok 4.5 came out last week along with OpenAI's latest Sol model. There was this article I don't know who added this but talking a bit about the new models and then also the headline Political risk and threat analysis expertise are hot tickets in Silicon Valley as Trump and AI shake the world order.
- [44:25]
Michael
Yeah so I mean we don't have to go deep on it unless anybody has anything but yeah last week was a big week on the model release. I think Fables continued to extend their trial that's been reported or like different theories on are they extending it because I don't even know how true because this thing, this person a lot of followers but they were referencing insider knowledge about they're continuing to extend it because they're feeling the heat around revenue monetization. People may leave from the you know, higher tiers who have access to like Fable within certain bandlets but then the OpenAI released all their models and then Grok and Gro I just started playing with it or I I got it I haven't played with it yet but I'm interested to see because supposedly it's really crushed it especially on the coding stuff. So that's just really promising and extends into that AGI ASI aspect of like this stuff's just continue to accelerate and the free market is really causing it because you have these firms competing. You can imagine if there was only one firm you'd have less reason to continue to push this stuff. The article you posted I thought was super fascinating because the way I read it this is where frame of reference matters is like bringing in your local bitcoiner to your to your business and the Reason why is because, like, from the bitcoin aspect, you're always kind of looking at things from a geopolitical objective view. How do you think about, you know, adoption of Bitcoin digital assets, you know, the markets, inflation, et cetera, et cetera. And this article by Newcomer was just referencing how in Silicon Valley, firms are increasingly looking to bring in individuals that have a more dynamic view, multidisciplinary view of the world. When it comes to you think about Trump and tariffs and AI and, you know, export controls and memory, just anything you can go down, including the monetary policy, inflation, fed funds rate. And so I just thought about this is stuff that we've naturally monitored because for whatever reason, that's always been in the bitcoin circles and that's ultimately going to be incredibly important, independent of Trump. It's not really Trump. It's that we're going into this chaotic world because of the broken money and all the other things we talk about. And so it's becoming increasingly important for large firms to have somebody that has that lens and then also has that kind of stature within the organization to help implement changes or at least plan for the future when historically it wasn't there.
- [46:51]
Host
Yeah, that is super interesting. Leave unless you had anything in there. I was going to go to a few deals we can run through. Terra wolf signs a $19 billion lease with Anthropic for AI Infrastructure Campus. This is just another sort of headline in a series of headlines over the past 12 to 24 months of Bitcoin miners really pivoting into the AI space and leveraging their infrastructure to either sell or partner or rent out their infrastructure to these hyperscalers and AI companies. Anything on this, you guys?
- [47:30]
Michael
I think this is super cool and I get fomo, even though I don't have any kind of, you know, inclination for energy production, I find it interesting. And then physical production of, like, data centers. But I think it's really cool because I just remember being in Texas post Chexit when China did the mining ban and the amount of hash that came over to Texas, and then really the gold rush that happened around just different services across the board. Figuring out, you think about very early, it was Steve Barber and Upstream and then the Giga Energy guys, you know, starting out of like a college door room, really building out a lot of these modular data sets, and they were this, like, canary in the coal mine of where cheap power is. And then how do you build infrastructure that we talked about on a few other pods before this, that doesn't necessarily need to be at the same level of expertise or excellence that you would need with like AWS given the way it's constructed. And so you're seeing this whole notion of it's maybe better be lucky than right that a lot of these firms have been able to pivot on this AI boom. And it's just really cool. And I think the biggest thing relates to Bitcoin Bitcoin infrastructure is I think this is where a lot of companies in general, as long as you stay alive, whether it's payment routing, think about just routing when it comes to inference and the different agents specifically that or custody, whatever it might be that you're right. It's just what's the time scale? And then when does the market realize it? And the market realized it really quickly when it came to power. And then obviously the need for more power in the United States and cheaper power. Yeah.
- [49:17]
Host
All right, next deal. Popular open source AI developer tool Ollama raises 65 million grows to nearly 9 million user Olama which founded launched in 23 helps devs run open weight AI models on their PCs, getting them up and running in minutes. It's been praised by developers across country, countless training sites, videos, blogs, social media. Any thoughts on this? Are you guys familiar with this, this company? What are the implications of this raise?
- [49:44]
Michael
Yeah, I think the main reason calling it out is there's going to be increasingly val increased value. We talked about the stablecoin stuff and routing for cost and I think we'll have an article that talks about it with bank interchange movement but similar here where you have like open router Olama this idea that you want to simplify the process into finding the open source tools or models but then that are rated that can map to your hardware that you're running locally and then ultimately being able to route between them for your good your services in a local fashion. And then I, I think the main reason I added it was A this is an area I think we should be paying attention to but B I can't help but see how eventually you'll just start to route stable coins and eventually bitcoin through this because it's always going to go back to where's the value layer and how do you actually manage that? And I don't necessarily know what their business model is today, but you can see a world that if you're able to sit between that and discern what are the right models, how do you like manage because it's an extension from there. I don't know if they do it today. But this idea of a harness that can map the intelligence of what you need based on the amount of tokens and then find based on your local hardware coupled with the Frontier there's going to be a lot of value to derive from that and whoever does that and this feels like this is one of the firms along with there's LM Studio that's actually a lot more user friendly in my mind and I'm not even sure what their capitalization is.
- [51:18]
Liam
Yeah these guys were just on CNBC with the benchmark partner who invested in them as well as the Perplexity CEO who's honestly really smart. So I'd check that out. Yeah, I think that this is a big deal especially once we saw all those articles it came out just a few months ago about the Uber blowing through their absolute token budgets within the first three months of the year. And and it will increasingly be a trend to watch especially for enterprises that want more secure controls and guardrails for how their employees use both Frontier and Open models.
- [51:56]
Michael
Yeah, that that I need to re listen to it. Anybody that's curious about all this, I would go listen to the Perplexity CEO. I think it was the Harry Stebbings podcast. That guy feels like easily one of the smartest people working in this space. There's a couple reasons why I won't go into but the the main thing is like his business from a business model feels like it has like one of the super positions where they're just sitting in between all of the value and they're going to be able to figure out how to monetize it now and into the future because they sit between the user. The questions how do you route at the cheapest cost which adds more value to the users. And then ultimately all the different model providers would love to work with them and provide them lower cost because you want those tokens to be called via their and and then you have the browser like he's just. And and I forget if he was at Anthropic he might have been at OpenAI but that's where you see a lot of the the smartest guys they've seen inside. And this is historic, this is historical like precedent for just innovation where you'll see people at firms, you know, PayPal mafia as an example. They saw the inside workings of like either what excellence looks like or what does the frontier look like and then they go out and build what they think should exist in the world. And yeah this is like a proxy for that because they think of like perplexity sits at that user layer with kind of like research where this sits at the user layer as it relates to inference and then model usage.
- [53:26]
Host
Moving on. I think this dropped right after we recorded last week, otherwise we probably would have mentioned it. But Paradigm is raising its fourth fund, 1.2 billion, to quote back the most ambitious builders at the frontier of technology. I think the takeaway here is that Paradigm has historically been a predominantly crypto and digital assets focused firm and this is basically expanding the aperture across AI, robotics and other frontier technologies. What are your thoughts on this? I mean, obviously a large fund to be raising and I think is pretty logical and makes sense just given what's happened in the digital assets and crypto space. It's much harder, I think to sell not only investors, but yeah, I mean mostly sell investors on the idea of whether it's native tokens. The value accrual stories haven't really played out there and a lot of, as we've talked about, a lot of the value is accruing to the issuers of whether it's, you know, everything happening in tokenization role and assets in these private blockchains that are effectively more efficient databases. I'd say, you know, the one probably caveat or exception to that is what they mentioned here in the fourth paragraph is hyperliquid, which does have a native token and has done relatively well and you know, built out a pretty robust trading platform there. But it makes sense to me that they would be expanding the aperture here outside of purely crypto because I don't know how much there is to invest in at this stage in sort of the broader crypto space if that's going to be your only focus.
- [55:06]
Michael
Yeah, 100%. There's, there's multiple layers. I think when you look at the barbell of bitcoin only or crypto only, there's a realization the founding of early writers and what we've been talking about and I think like Paradigm was onto this a few years ago and people told like said it was crazy that they were focused on AI and robotics. But there's a natural version of in a vacuum at the time it sounded good, Bitcoin only Crypto, you know, for whoever they're selling on the tokens, we obviously know they don't have value. But on the side of commercialization, it's just a misnomer fallacy because specifically like you look at Bitcoin only unless it's very specific, like trade custody, like there's not enough users to generate a venture backed business. And then as you think about commercialization, you're increasingly needing to park other additional assets into that platform or you're just gonna lose your clients, some Morgan Stanley, bank of America, et cetera, et cetera. And the, and the problem with that is most of the bitcoin founders are on the VC side, are like pretty hardcore in knowledge base on that particular subject, which is Bitcoin. But then commercialization it takes is a fundamentally different like you know, hat to put on similar on the crypto side. So the crypto, they got a bunch of stable coins and infrastructure and then there's obviously, you know, the tokens, but we can leave that to the side. But increasingly all of these fintechs and technology companies and banks are coming into the space. And the crypto entrepreneurs that were early didn't necessarily have that hat to put on. And so that's where you've seen a lot of crossover funds from like Craft as an example come in. But then increasingly like the firms, the one that's most relevant I think right now is like Dragonfly, where they have the background in fintech. So they're really getting called on by the reigns and others. And then it's my understanding that those firms are getting called by a lot of fintechs now because they're like, hey, we got like the fintech, you know, we got benchmark, we got first mark on our cap table. But we need somebody that deeply understands the stable coins and that infrastructure to come in. So that always made sense in the past couple years, like similar to what we're doing with early writers on the gold side, stablecoins, AI. But then it makes increasingly more sense that a to attract capital, LP investment capital, they're interested in AI. But even more than that, I think the real angle, I'm not saying this is why they're doing it, but why we are is when it comes to AI, like it goes back to the idea of you're already building an AI company, you're building an Internet company, or you're just building a company that these firms that are going to be the winners are going to have to adopt AI or there's going to be net new AI companies that I think their lens would be are going to insert crypto into that format and be a better AI company. I think in our lens would be that are going to adopt Bitcoin, maybe insert it, maybe leverage it on its balance sheet and that's going to make them a more efficient company. So. And then, you know, obviously robotics are cool, but we don't have a billion to burn, but if we did have a billion, I think we'd be looking at robotics. But it makes complete sense. That's, that's where they're at. It'll be interesting to see if they can play in that world because outside of like Matt Huang who was former Sequoia, I don't necessarily know how many of their individuals on their team that come from that world. Most of their team is pretty hardcore like crypto native. But it's not to say that they can't do that. Another firm that's done this pretty well is like Founders Fund. When you think about they brought on the dude that, that built the first prediction market, what was it? Augur. And you know they're like early in like Polymarket I think Kelsey, they naturally have that like nice lens in between both sides of the table.
- [58:32]
Host
Moving to a few Tradfi related headlines. I think we mentioned this on the show maybe last week or the week before, but SBI holdings is making several moves into the crypto space. Mike, do you have anything on this headline in particular? Japanese based financial conglomerate SBI holdings has made a series of major crypto investments. Sole investor in Gauntlets 125 million Series C and EDX Market 76. Yeah, that's what we mentioned last week, the EDX Series C. But what do you got here?
- [59:05]
Michael
I think the main reason I put this up there was because at their scale and what they're looking at from a global perspective, like the amount of bets that they're placing, they're really going full in and it's not in just one aspect. They're obviously investing in some of the exchanges and banks, but also into tokenization. They're trying to build this whole portfolio for their existing companies and then as they expand and I thought it tied into a lot of the stuff we talked about early on about like this stuff's happening behind the scenes. It just hasn't really made it readily available to the prices 100%.
- [59:37]
Liam
Yeah, they've definitely been listening to the pod too because they said that one reason why is the changing regulatory landscape in Japan. And I think that is going to be something that as soon as we see genius or clarity past, whether it's this year or sometime after the midterms, you know that's going to be something that we see out of the US banks, fintechs, et cetera, that are going to invest more in AI or bitcoin, stablecoins and tokenization.
- [60:07]
Michael
Yeah, maybe that's, I don't know if this was the order, but we can like loop them in because of how big the list is, is the Kraken lawsuit. And then, and then clarity because that's a great point in the sense of a lot of people hear about, you know, clarity and regulatory climate, but there is just this real reality that nobody from an institutional perspective wants to catch that falling knife and get embedded in this industry until there's real, real clarity. And the Kraken law, I believe they won the lawsuit for $22 million. The whole, the, the summary is that back in the Biden era, Senator Warren put out some kind of notice and this goes back to like the notion of choke point and how some people will try to say it's speculative or that wasn't true. I was like 100% true. And ultimately Kraken's auditor pulled out. Masers USA pulled out from. They were working on, I believe MTLS and a bunch of other stuff and completely like disrupted their business. Didn't give them any reason why stop the audit mid. Mid mid practice. And so the judge awarded them after realizing the damage is $22 million. And I think that's just huge because a Kraken's just always kind of bucked the trend, been willing to go and try to fight and they've made this public. But I think the more important part of this is why the regulatory clarity is so big. You see SBI like once these firms realize that this thing is not leaving, there's the clarity. You can tax it. All the different things that are going to happen from an administrative perspective, wherever you sit in the world, all this plumbing that's getting built out is going to need to be acquired. It's going to, it's going to be turned on, the experiences are going to be easier for individuals and then it's just going to sit in the background like we've been talking about, whether you're just passively buying via an etf, something with on ramp or eventually in your browser. And a lot of these like AI harnesses, the anthropic perplexities open AI of the world, they're just going to probably have native tokens embedded. Because if you have like dollars sitting somewhere on a fintech or some Amazon and you can just move them over, maybe they have their own browser functionality or you can just move them over into whatever model you're using for credits. Why would you do that Versus having to go put in your credit card information and like have to manage it. And you can just see how this the digitization of the dollar is going to be embedded across the Internet.
- [62:26]
Host
Yeah, as you mentioned, Clarity act, it sounds like the next four weeks are going to be pivotal. It needs to go to the Senate. I guess there's revised text. I forget who was quoted last week. Some senator are saying it was on the one yard line. I don't know if I would go that far. Polymarket still has it as at. I guess this is fluctuating pretty heavily today, but was down to 21% and now it's back up to 36. There's not a ton of volume on this market, so I don't put a ton of stock into this. But it sounds like the next four weeks will be pivotal. As I said. What do you guys think? Do you think this gets passed before the midterms? I mean the talking point for a long time has been if it doesn't get passed for the midterms, it's going to be much more difficult to pass it afterwards. I think that bakes in an assumption that, that Republicans will lose seats in the midterms and that there's not enough bipartisan support across the aisle to get it done. Or you know, if Democrats have more power, maybe they just put more angles to stop this. I think the one big thing that has been cited a bunch and particularly in light of what we talked about last week and Trump's disclosures that came out and all of his crypto dealings, that's been the biggest, I think point of contention is the conflict of interest. I mean I would, I would phrase it a bit differently in the sense that if you think Trump is super conflicted and he did all these things that were nefarious, like you would want more regulation. So it's actually kind of the opposite in my mind because you know, if we had Clarity act two or three years ago, maybe he can't launch that meme. Coin and rug. All those people.
- [64:09]
Michael
Yeah, I don't have much outside of this. Feels like a real toss up. I would put it like 50, 50 to be honest, because there's everything you're referencing in the timescale and the certain aspects like the, forgot what they call it, but the, whatever the relationship is with the president, I, the conflicts part of it. But I feel I, I still, if I had a bet would say that there it's greater than 50 that it does get passed simply because of what we've talked about for fix like years now of the geopolitical and administrative value and strategic importance of getting this right. You've Seen Trump recently, for whatever reason, talk about how China is going to win crypto if we don't, like, figure this out. So that's like the reason the machine wants it to be done. That's the thing. But there's not a lot of kind of empirical evidence. I have to, like, bake it on. But if I just had to be a betting man, I would put it at greater than 50.
- [65:03]
Host
Yeah, I think that was a. That was a tweet from this morning from Trump that it was interesting to me in what he said. It was. It was like he basically lumped both crypto and AI together, which I found somewhat interesting in saying, like, he's talking about the Clarity Act. But then the back half of his statement is like talking about AI competition. And, you know, if you're looking at the Clarity act on the. On its surface, it doesn't read like an AI focused bill. But I think given what we've talked about around, sort of the synergies of this grand reordering, AI and crypto have. Have a lot to do with each other in reality. But I would agree with you. I think it's close to a 50, 50. I'm. I'm not really sure whether or not this gets over the line. Another headline I wanted to touch on this was last week. We talked about Russia's largest public bank, Spur bank, getting into crypto. This is their largest private bank, Alpha bank, doing the same. So again, just more of, you know, tradfi, the incumbents getting their arms around these things really globally, across the world. Where do you want to go from here, Mike? We have a few minutes. I think Liam got assassinated by OpenAI, so he dropped off.
- [66:17]
Michael
He might be back. But, yeah, the Russia one we haven't talked about, but there's something very curious about Russia being out there from an innovative perspective, but then public about it as it relates to digital assets and bitcoin. We know that it's been rumored they've been mining for a while. The countries that have precarious views or situations within global commerce have had to look at bitcoin as a political money to transfer value. And I just can't help but feel like they know where the market's going when it comes to, I think the canary. It wasn't even a canary. It was like a butterfly. And the coal mine was the Iran rumors that were coming out around insurance and settling. I think they have a deep understanding of where we're going is into a more. More multipolar world and that they're Even their individuals are going to be storing, they're going to want assets like gold and Bitcoin within their domiciled regimes and their individuals, I think are familiar with it. We talked to a lot of people in the uae. When you think about UAE and a lot of capital, a lot of the high rises and ports that were built was a lot of money that came out of Russia specifically after the Ukraine war. And so they just, I don't know, they feel very sophisticated and they know where these things are going and they're starting to implement it across their banking sector, which is pretty interesting to see.
- [67:40]
Host
100%. I found this one kind of interesting. Tomasic. So Tomasic is what's up?
- [67:46]
Michael
Sorry, I was just agreeing. Yeah, I didn't remember if we put it on the list, but this was interesting.
- [67:50]
Host
This was. So Tomasic is Singapore's sovereign wealth fund. Now they've historically been very involved in crypto even prior to their FTX investment in 2022, which according to this headline, has basically soured their intent or desire to get back involved in the space. A good friend of mine actually worked at Temasek a number of years ago and he was super focused on digital assets. So they historically have made a ton of investments in the space but got burned by FTX and haven't come back. So an interesting data point in the sense of while we talk about all of these traffi firms and sort of incumbents getting into the space now, you can't forget about the people who did get burned by certain things because it does take a while to sort of redirect the momentum back into the space after something like that happens. A $275 million impairment on their FTX investment, it's going to be very hard to get buy in, to get back into the space, effectively.
- [68:53]
Michael
Yeah, 100%. And that's where I will maybe pick it up on Last Trade if it ends up as a topic. I thought it was fascinating because it ties into what we talked about two weeks ago, that this volatility, while the downtrend has occurred, it hasn't been as violent downwards. And so there's still so much plumbing and rolling out happening. But the other side of that is that there are firms that were completely kind of blasted post the FTX loss, there's the pensions in, in Canada that were tied into like ftx, Celsius et cetera. And so, yeah, that's really where there is some bullish nature to the structure, the market structure that's happening right now where we Never got to blow off top. But we're not getting the 80% drawdown or the crazy amount of froth. So it allows for a lot. For every Thomas Sick that's deciding to hold off, there's it seems like 10 to 100 other firms that are moving ahead.
- [69:43]
Host
Yeah, exactly. Well, is there anything else you want to cover? We had Coinbase Ventures deal count. We could touch on that. Tether made an announcement they've been very active this year in deal making. Tether invested 20 million in strategic financing round for Mercado Bitcoin to accelerate on chain financial infrastructure in Latin America.
- [70:06]
Michael
Yeah, I think that's just interesting from you know, Tether expanding especially in the markets that are kind of not a historical focus of like tier one banks like Latin America and specifically like the regions that Mercado is in. I think maybe the ones that we and I can just rattle them off enough to pull them all up. But there was two main ones. It was South Korea's largest automaker completes the pilot USD USDT transfer and then there was a Hyundai getting into stables or I think that's. Yeah, that's that. And then the stablecoin routes. There was a report when they looked at the routing versus banks. I think this just ties into more what we talked about at the top of the show that we're not day to day building a stablecoin business but if we were, you can probably come up with a better take and maybe what we will where you see like Sony as an example, get in, get their banking license and then implement stable coins. When you think about like net interest margin, you think about selling different goods and services and how you can play with those numbers. When it comes to capitalization, if you became a bank or stablecoins and managing that from like managing those assets to cross border like if you're a multinational and you're having to pay whether it's you know, individuals or license, not licensing but not mortgage but like loan fees. Like there's a lot of efficiencies that these large multinational conglomerates are starting to see. And so I think that's another angle where you'll see this stuff really proliferate. It's just TBD on what does it look like when it comes down to the interoperability. But yeah, this was the report that they ran. We'll include it in the links. But it was effectively how if you have the right router you can manage liquidity and get cheaper cross border flows than having to use a banks where historically anything that's been implemented, the banks were always still the cheapest, the cheapest way to move capital globally. And now this report showing that via stable coins, large multinationals can actually route capital better globally using stable coins.
- [72:15]
Host
Yeah, makes total sense. There's every reason in the world for every enterprise, every traditional financial firm to adopt these things. There are marginal improvements to be had and if you don't, then you are going to be out competed and disrupted by people that do. Yeah.
- [72:34]
Michael
And then the last one, if you could pull that Spiral deal, because I thought that was super interesting. It's something I've been noodling on. We've been talking about that the deeper you go, Bitcoin can be this never ending rabbit hole. But the reality is we've kind of like plateaued. Given adoption interest, you can go deep down, second, third layers, but the reality is, and I have trouble doing any of that because we're busy, but also we're still trying to figure out how to store value. So, so the amount of users, where will they be? But I think that the AI component on the other side, as you go deeper there, you can't help but see how Bitcoin will completely be the other side of that. Whether it's via energy markets or just inference and agents and how you're going to need the fastest, most interoperable currency, which is the satoshi. And this past week, you know, led by Jack and the team, their open source Goose. So I believe that they put it under, it wasn't an MIT license, it's another one. I think it's the Linux foundation, which is their harness that's been used internally to implement and manage token usage and inference and logic. But then the other side of it is Spiral has historically been the open source arm of Block that was focused on Bitcoin. They brought in Goose's core team with the pretty clear mandate that Spiral now naturally start to focus more on open source AI usage, whether it's via harnesses or models and other things. And I think that's super fascinating because you're effectively tying in these two core, at their core, open source technologies. And that's what we're going to increasingly see. And there's so much fervor and interest on the AI front that if you can have the right team and leadership pull those engineers in and then over time educate them, show them the nature of Bitcoin from a technology perspective, that's how you can kind of trojan horse in getting more Bitcoin adoption into AI. And so I think that's Something we're naturally already starting to go into, whether it's investments or how we talk about AI and bitcoin on this show. But it was cool to see spiral and kind of lead from.
- [74:40]
Host
Yeah, totally agree. This is awesome to see. Should be very interesting area to track in terms of what we've been talking about. The synergies of these things, being able to spin up applications that leverage AI agents that also have a natural sort of inherent tendency to leverage Bitcoin as well. Combining these open source technologies makes total sense.
- [75:04]
Michael
And it's real quick. It's. It's so obvious it hurts. I forgot what is it? It's not. It's not open SDK, but it's whatever. It came out a few months ago, which was effectively like Stripe, but for bitcoin payments where you could just with a line of code, start accepting Bitcoin anywhere specifically like software applications. And you just think about if you're anywhere in the world and you can with a laptop, run a local model or access Frontier Labs and spin up some kind of goods or service, you completely bypass any of the friction that would historically have to be with accepting dollars. Because stable coins are still somewhat frictionless, but they're still clunky. You still need somebody to get on there. Somebody has to have access to that stable coin. Like, I think the tooling will get better, but it's this core idea that if you have a global unit that can't be seized, can't be censored and it will always have better tooling simply because of its open source nature and its interoperability, because of satoshi is a satoshi, that it will win out long term and you'll just naturally see it trend that way because it's a unified, simplified vehicle to accept value than anything else that exists. So we're still early. But I think the natural thing is the plumbing will be built right now and then the price will also appreciate and those things will converge where people are like, I just want more of this. And then you can just naturally turn that into dollars if you don't. But it'll be better tooling to accept value for your services.
- [76:25]
Host
Totally agree. You heard it here first. We're still early. We're going to think about new ways to say that we're still early. We'll. We'll brainstorm on that and we'll have some options next week. But thanks everyone for joining us. Like, subscribe to the pod Rate 5
- [76:38]
Michael
stars and tune in next week. Jesse, if Liam's still around.
- [76:42]
Host
Yeah, we got to go do a liveness check on on the Boy, but thanks Mike.
- [76:46]
Michael
All right, good stuff.
- [76:47]
Host
Later. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show Notes inside your podcast app. Before we finish, a quick reminder that On Ramp Media is for informational and entertainment purposes only and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com contact to schedule a consultation with one of our private client advisors.