Success Story with Scott D. Clary

Episode: Lessons - Breaking Away From Institutional Financial Systems

Guest: Miko Matsumura, $500M Crypto VC Fund Partner

Date: October 22, 2025

Episode Overview

This episode dives deep into how blockchain and decentralized finance (DeFi) are challenging traditional, institutional financial systems by introducing alternative frameworks for consent, choice, and accountability. Scott and Miko discuss the philosophical underpinnings of blockchain as well as practical considerations for navigating crypto safely. They tackle issues around risk management, the dangers of over-trusting new systems, and the importance of responsible diversification for newcomers.

Key Discussion Points & Insights

1. Blockchain as a Challenge to Institutions

[00:00–03:38]

• Main Idea:
  Blockchain isn't just a technological innovation—it's an escape from entrenched, institutionalized financial systems, creating alternative systems that can be chosen (or rejected) by participants.

• Freedom of Choice:
  Miko emphasizes blockchain's core offering: the ability for users to "compete for consent," meaning users are not forced to use any system—they can leave if they choose.

  "The thing that it does is it does two things, right? The first thing it does is it competes for consent ... and if you don't like it, you shouldn't come over ... The existence of that gives you the ability to withdraw consent."
  — Miko Matsumura, [01:07]

• Competing Systems and Honesty:
  The presence of an alternative keeps institutional systems “honest” because they must compete for users’ trust, rather than assume it.

  "Even if you don't ever go there, it's still going to keep the system you're in honest, right? Because, you know, because of that competition."
  — Miko Matsumura, [02:45]

• ‘Fork it and Go’ Mindset:
  Miko highlights blockchain’s inherent permissionlessness: anyone unhappy can “fork” (copy and modify) the system and let the market decide which version prevails.

  "Anyone can fork it at any time, and if they don't like anything, they can just change it … if it's better, everyone will go with your version."
  — Miko Matsumura, [03:18]

2. The Adoption Problem: Complexity & Participation

[03:38–04:43]

• Barrier to Entry:
  Scott points out that while technical “insiders” might navigate this space easily, the average person struggles to discern which projects are safe or worthwhile.

• Insider Advantage:
  Miko acknowledges the legitimacy of this struggle, describing it as "Revenge of the nerds," and reiterates the steep learning curve for outsiders.

3. Advice for Newcomers: Curiosity and Caution in Crypto

[04:43–07:44]

• Don’t Rush:
  Miko urges newcomers to take their time—avoid big bets and treat participation as “play” until they understand the system.

  "If I were to give any single advice to people who are new in this area is, I would say, like, don't be in a big hurry … Just see what happens."
  — Miko Matsumura, [04:48]

• Mechanism Discovery:
  He likens blockchain systems to games or even visiting a new country, where you gradually learn the rules and decide if you want to stay.

  "There's this process that's called mechanism discovery. So mechanism discovery is you play, right? You play around ... at first you're a little bit like, I don't know what the deal is here."
  — Miko Matsumura, [05:27]

• Right to Withdraw Consent:
  The power to exit any time is critical, but not all blockchain projects enable this, especially in cases of scams or technical lock-ins.

  "That's why the ability to withdraw consent is so important for any reason at any time, or for no reason at all."
  — Miko Matsumura, [06:39]

4. Risks, Scams, and Freedom to Exit

[07:44–09:48]

• Recent Scams Highlighted:
  Scott brings up recent headline crypto scams, showing the system’s vulnerabilities and the importance of keeping the right to withdraw.

  "You see that in the news every month, right? I think there was just one in South Africa. It was like 3 billion..."
  — Scott D. Clary, [07:44]

• Locked Funds Are the Opposite of Freedom:
  Miko clarifies that the inability to exit when you want is antithetical to blockchain’s promise.

  "If you can deposit but you can't withdraw, that's a problem ... that's the opposite of freedom, right?"
  — Miko Matsumura, [08:20]

5. Personality, Overtrust, and Responsible Risk Management

[08:42–12:40]

• It’s Not Just the System:
  Scott notes many investors’ issues arise from over-trusting systems they don’t fully understand—not just from malicious products.

• Risk Management and Diversification:
  Miko emphasizes that most people lack solid risk management skills. He explains how venture capitalists rely on diversification, and that “play” should be based on expendable amounts.

  "If you watch professional asset managers … one of the key principles is diversification ... The idea becomes that … play has to be based on a losable amount."
  — Miko Matsumura, [09:49 & 10:45]

• The Grand Canyon Money Analogy:
  Don’t put in more than you’re willing to lose—the advice: whatever sum you could throw into the Grand Canyon and walk away from should be your initial crypto investment.

  "Imagine you're at the lip of the Grand Canyon and you're throwing an amount of money into the Grand Canyon, right? Like, so whatever that amount is for you, like that's probably your first kind of bitcoin purchase amount."
  — Miko Matsumura, [10:45]

• Dangers of Influencers:
  Miko warns of blindly following influencers, noting that many are self-interested and potentially predatory.

  "The existence of influencers in crypto is just human weakness. It's been a toxic effect ... So, just blindly following what other people tell you to buy on the Internet is just provably bad."
  — Miko Matsumura, [12:05]

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote & Context | |-----------|----------------------|--------------------------------------------------------------------------------------------------------| | 01:07 | Miko Matsumura | "It competes for consent ... if you don't like it, you shouldn't come over." | | 03:18 | Miko Matsumura | "Anyone can fork it at any time ... if it's better, everyone will go with your version." | | 04:48 | Miko Matsumura | "Don't be in a big hurry … Just see what happens." | | 06:39 | Miko Matsumura | "The ability to withdraw consent is so important for any reason at any time, or for no reason at all." | | 08:20 | Miko Matsumura | "If you can deposit but you can't withdraw, that's a problem ... that's the opposite of freedom." | | 10:45 | Miko Matsumura | "Imagine you're at the lip of the Grand Canyon and you're throwing an amount of money into the Grand Canyon … that's probably your first kind of bitcoin purchase amount." | | 12:05 | Miko Matsumura | "Just blindly following what other people tell you to buy on the Internet is just provably bad." |

Important Segment Timestamps

• [00:00] — Blockchain as a challenge to entrenched financial systems
• [01:07] — Consent as the core value and competition among systems
• [03:18] — Forking blockchain and the freedom to innovate or leave
• [04:48] — Advice for newcomers: don’t rush, treat it as low-risk play
• [06:39] — Importance (and limitations) of the ability to withdraw
• [08:20] — When systems become traps (lack of withdrawal)
• [09:49] — Risk management, diversification, and ‘play’ in investing
• [10:45] — The ‘Grand Canyon money’ rule for beginners
• [12:05] — Dangers of influencers and self-interested advice

Tone & Style

The conversation is accessible, blending philosophical depth with practical, no-nonsense advice. Miko uses vivid analogies and a candid style, while Scott ensures the themes remain relatable, especially for newcomers or non-technical listeners.

Summary Takeaways

• Blockchain and DeFi offer an unprecedented, genuine alternative to traditional financial institutions by providing choice and fostering competition.
• Users should approach crypto participation with curiosity, caution, and a willingness to learn, never risking more than they can afford to lose.
• Responsible diversification is critical; don't overtrust “influencers” or systems—always be ready to withdraw consent.
• The power to exit is as crucial as the freedom to enter any new financial system.

For more on this discussion or to listen to the full conversation, visit Success Story Podcast