The Bitcoin v Crypto War with Udi Wertheimer, Crypto Cobain, Alex Gladstein & Allen Farrington - WBD405

Summary

Podcast Summary: The Bitcoin v Crypto War with Udi Wertheimer, Crypto Cobain, Alex Gladstein & Allen Farrington - WBD405

Release Date: October 4, 2021

Introduction

In episode WBD405 of The Peter McCormack Show, host Peter McCormack convenes a panel featuring esteemed guests Udi Wertheimer, Alex Gladstein, Allen Farrington, and Crypto Cobain (Koby). The central theme revolves around the ongoing debate between Bitcoin and alternative cryptocurrencies (altcoins), exploring the dynamics of maximalism, decentralization, regulatory pressures, and the future trajectory of the crypto landscape.

Panel Composition and Purpose

Peter introduces the diverse panel, highlighting the unique perspectives each guest brings:

• Udi Wertheimer: A vocal Bitcoin advocate known for his strong stance against altcoins.
• Alex Gladstein: A human rights activist deeply involved in promoting Bitcoin's role in financial sovereignty.
• Allen Farrington: An investor with a keen interest in the economic and technical aspects of cryptocurrencies.
• Crypto Cobain (Koby): A degenerate trader with technical expertise in crypto projects.

Notable Quote:

Peter McCormack [00:22]: "Bitcoin's war is against fiat, while crypto protocols really face a war between themselves and how the state will regulate them."

Bitcoin Maximalism vs. Constructive Dialogue

Peter expresses his evolving stance on Bitcoin maximalism, acknowledging that dismissing all altcoins as scams might be counterproductive. He contemplates whether a more nuanced approach could better educate and attract individuals to Bitcoin without alienating those invested in other cryptocurrencies.

Notable Quote:

Peter McCormack [00:54]: "Arguing regarding the faults with altcoins may be counterproductive. Bitcoin's war is against fiat, while crypto protocols really face a war between themselves and how the state will regulate them."

The Toxicity of Maximalism

Udi Wertheimer addresses the issue of "toxic Bitcoin maximalism," criticizing the practice of labeling altcoins as scams without substantial grounds. He argues that such negativity undermines Bitcoin's credibility and alienates potential investors seeking legitimate opportunities.

Notable Quote:

Udi Wertheimer [07:42]: "The toxicity I'm referring to is specifically about calling things that you don't understand a scam. It just, it makes you look not very smart and it makes you look very unconvincing to people."

Alex Gladstein concurs, emphasizing the importance of fostering a constructive dialogue over shaming other projects. He highlights Allen Farrington's paper, "Only the Strong Survive," as a well-reasoned critique that avoids unnecessary hostility.

Notable Quote:

Alex Gladstein [11:13]: "I think it's a much better place to be teaching people about the different technologies, why they work. But hopefully, if people are making money on their altcoins, I would want them to possibly consider also thinking about investing long term in Bitcoin."

Decentralization: Bitcoin vs. Ethereum and Others

The discussion delves into the degree of decentralization across different cryptocurrencies. Udi criticizes Ethereum's perceived centralization, especially concerning its monetary policy and governance, suggesting that it does not meet the same decentralization standards as Bitcoin.

Notable Quote:

Udi Wertheimer [14:00]: "Ethereum is just an example or anything else. They don't care that it had a pre mine. That's not why they're buying it. They're trying to make an investment."

Allen Farrington elaborates on decentralization, arguing that Bitcoin's robust decentralized structure makes it resilient against state intervention, unlike many altcoins that can be more easily regulated or shut down due to their centralized aspects.

Notable Quote:

Allen Farrington [24:17]: "If someone is coming to this for the sake of argument via Pro Ethereum people who seem perfectly reasonable to them, I agree that it is unlikely to be helpful to that third party who's potentially on the cusp of being interested to immediately shut it down by calling them scammers."

Regulatory Pressures and Stablecoins

The panel examines how regulatory bodies, particularly the SEC, influence the development and operation of crypto projects. Discussions highlight the vulnerabilities of centralized stablecoins like USDC and Tether, which can be easily targeted by regulators compared to decentralized alternatives.

Notable Quote:

Peter McCormack [32:34]: "Stablecoins are a massive weak part in the ecosystem because they require a central issuer. And I think it would be relatively trivial for a government to say to Circle or Tether, I want you to blacklist Tether, USDC or USDT interacting with Uniswap ever."

The Evolution of Fundraising: From ICOs to Pre-Sales

Reflecting on the crypto industry's evolution, Allen Farrington contrasts the Initial Coin Offerings (ICOs) of 2017 with contemporary pre-sales and private fundraisings. He critiques the current model where venture capitalists and large investors can acquire significant portions of tokens at discounted rates before public availability, disadvantaging retail investors.

Notable Quote:

Allen Farrington [95:53]: "What VCs are or what this handful of VCs are doing now is that they now have a kind of a perfect storm where they can realize what would otherwise have been unrealized gains and the way that they actually make their money is purely by skimming what should have otherwise been unrealized gains."

Short-Term Trading vs. Long-Term Investment

Crypto Cobain (Koby) differentiates between short-term trading strategies prevalent in the crypto market and long-term investment philosophies. He suggests that while traders might exploit centralization vectors for quick gains, long-term investors should prioritize Bitcoin for its enduring value and decentralization.

Notable Quote:

Crypto Cobain [51:07]: "If you're thinking, yeah, cool, I want something that's going to be around in 20, 18 years, I want to hedge inflation and I don't want to be eroded by government monetary policy, then you buy Bitcoin."

Case Studies: Uniswap, Solana, and Stablecoins

The panel uses Uniswap and Solana as case studies to illustrate the challenges altcoins face regarding decentralization and regulatory scrutiny. They discuss how Uniswap's evolution from decentralized contracts to a company with centralized elements makes it susceptible to regulatory pressures, contrasted with Bitcoin's inherent resilience.

Notable Quotes:

Peter McCormack [27:04]: "Uniswap as a company can't do nothing about that anymore. They've already put it out into the world. It's stuck."

Allen Farrington [25:30]: "They'll do that for some projects, we'll see with the Gensler regime. But it seems like they're going to try and just pressure these projects to just be a little more compliant with the KYC AML regime."

Ethics of Token-Based Fundraising

The discussion touches on the ethical implications of token-based fundraising, where projects can raise significant capital without demonstrating product-market fit. This model, as opposed to traditional venture capital, allows for rapid capital accumulation but often results in projects that lack sustainable value creation.

Notable Quote:

Allen Farrington [106:48]: "They are the only difference between BTC and everything else: they're the only ones that have a proper, strong enough, Turbadorian economic structure. And all the other things fucking A and all are someone doing that."

Future Trajectories and Conclusion

In wrapping up, the panelists express optimism about Bitcoin's future while acknowledging the complexities and challenges posed by altcoins. They emphasize the need for ongoing education, constructive dialogue, and a focus on Bitcoin's foundational strengths to navigate the evolving crypto ecosystem.

Notable Quotes:

Peter McCormack [123:32]: "In general, I think it's smart to stick with the, like, keep your majority allocation, like Bitcoin, Ethereum, and if you're not going to look at the markets for 10 years, I think there's the only two things that you have confidence will be around after like that time period."

Alex Gladstein [130:18]: "I want to encourage enough people to either come to the podcast and learn about Bitcoin or come to the podcast and learn about why it's a better investment."

Key Takeaways

1. Balanced Approach to Altcoins: While Bitcoin remains the primary focus for long-term investors, dismissing all altcoins as scams may hinder broader adoption and understanding.

2. Decentralization Matters: Bitcoin's superior decentralization offers resilience against regulatory and centralized pressures, unlike many altcoins that remain vulnerable.

3. Regulatory Vulnerabilities: Centralized stablecoins and certain altcoins face significant risks from regulatory actions, potentially impacting their viability.

4. Ethical Fundraising: The shift from ICOs to pre-sales and private fundraisings favors large investors over retail participants, raising ethical concerns about market fairness.

5. Trading vs. Investment: Short-term traders and long-term investors have divergent strategies and priorities within the crypto space, influencing their perception of different projects.

6. Educational Imperative: Constructive dialogue and education are crucial for fostering a deeper understanding of Bitcoin's advantages and the pitfalls of alternative projects.

Conclusion

Episode WBD405 provides a comprehensive exploration of the intricate dynamics between Bitcoin and altcoins. Through thoughtful discourse, the panel underscores the importance of maintaining Bitcoin's foundational strengths while engaging in meaningful conversations about the broader cryptocurrency landscape. Listeners are encouraged to critically assess their investment strategies, prioritize decentralization, and contribute to a more informed and resilient crypto community.

Transcript

[Peter McCormack]

On a long enough timeline, every single social, political, etc pressure is going to be applied to test the strength of these systems and anything that's not strong enough will be erased.

[Koby]

Hello there from Miami. How are you all doing? I've left Nashville.

[Alex Gladstein]

I had such a great time there, Such an amazing city, but it's so.

[Koby]

Cool to be back in Miami. I'm out here for the Human Rights Foundation's Freedom Forum. So I do want to give a big shout out to Alex Gladstein who is also part of today's show. But just a big shout out and thanks to him for inviting me to this incredible event and for everything he does for bitcoin. Anyway, welcome to the what Bitcoin did podcast which is brought to you by Gemini, the only place I am using for buying bitcoin. I'm your host, Peter McCormack and today I've got a massive show. I've got Alan Farrington, Crypto Cobain, Udi Vertheimer, Alex Gladstein all on because we're going to be discussing the role of bitcoin and altcoins.

[Alex Gladstein]

But.

[Koby]

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[Alex Gladstein]

Google or Apple app stores.

[Koby]

Okay, onto the show today. And this is a massive show, a massive selection of guests to work through this topic. So over the last few months I have been considering my personal approach to altcoins, and I've basically come to the conclusion that Bitcoin is instantly dismissing and calling everything that isn't bitcoin a scam is just not useful. Now some people have misinterpreted this as me softening to altcoins, but this absolutely misses the point. I still only hold and care about bitcoin, but I think the approach might be one that is wrong to take and certainly worthy of discussion. You know, for me, bitcoin has won the war for money. No other crypto project can come even close to claiming that. But arguing regarding the faults with altcoins may be counterproductive. Bitcoin's war is against fiat, while crypto protocols really face a war between themselves and how the state will regulate them. So the reason I'm bringing it up, the reason I keep discussing this, is not because I'm becoming a shitcoiner. Some people are saying on YouTube, I'm trying to have a discussion around is this useful? Is there a better way to educate people about bitcoin? Is shouting at them that everything a scam going to put people off bitcoin? If people are making good gains with their altcoins, should we be directing them to bitcoin and can we do that in a better way? Maybe I'm wrong. Some of you listening might be just know, shut up, Pete. They're all shitcoins. We should hate them to death. And maybe you're right. I'm going to be considering this over the next few weeks and talking to various people about it now. Also over the last few weeks, one of the things that's inspired this is Udi has been going really hard on Twitter, pushing a similar sort of thing, wondering if we're losing the war on narrative by just shouting at people all the time. So I wanted to have him on the show to discuss this, but I thought there could be a more valuable way of doing it. So I thought I would just host a panel. So I asked my buddy Crypto Combain to come on the show to bat for the altcoins and get Alex Gladstein and Alan Farrington on to bet for bitcoin and like Udi somewhere in the middle. And I think I'm obviously more on the bitcoin side, but you know, obviously I don't want to keep fighting altcoins. It's getting a bit tiring Now. Alan recently wrote an article, Only the Strong Survive and it was a really in depth and well written piece. I recommend you all go and read and it really helped me form the starting point for this conversation. Now listen, please do reach out to me. I want to hit hear all your ideas. I want to hear if you think I'm right, if I'm wrong, if you're happy with the approach but you think bitcoin has won the war and it's really pointless just to be shouting at people about altcoins all the time. Happy to hear any opinions. You can drop me an email. It's [e-mail] you probably don't want to send me an email trying to convince me that altcoins have a future. I really just don't care about them. I think a lot of them are stupid ideas and some are just technically flawed. And I really am dedicating myself to bitcoin. But feel free to email me. It's hellohotbitcoindid.com and I look forward to hearing from you. Okay, onto the show. Hope you enjoy this one.

[Alex Gladstein]

Right. Hello. Thank you. Welcome, everyone. I think this is the most diverse panel we've ever had in terms of talking about bitcoin and various things. I think getting Alex Gladstein and Kobe on the same podcast is hilarious and really interesting. So listen. Welcome, everyone. Welcome, Alan, great to have you on the podcast for a first time. Actually, Kobe, this is your first time as well, which is great. Try to get you on for a couple of years now and never made it work. Alex, regular guest. Udi, regular guest. Okay, so this has been triggered mainly by Udi. Udi recently has been talking quite a bit about Ethereum and bitcoin and triggering people, but we've also been talking about it in the background and I think I know what he's trying to do. Alan, you wrote a fantastic paper, which I've read and my brother also read and hasn't stopped talking about. Alex, you're advocate of bitcoin and a human rights activist and talk a lot about why bitcoin is so important. Kobe, you are a degenerate trader, but also very technical, which I don't think a lot of people realize. You actually have a. You've talked to me a lot about this stuff, so I thought it'd be good to bring everyone together, talk about this stuff. I'm going to moderate as best as possible for impartiality purposes, but let's be honest, I am a bitcoin maximalist, but recently I've come to the position where I think bitcoin has won the war on money and I can't be bothered to fight and argue people about altcoins anymore. Listeners of my podcast aren't all maximalists. Some invest in all kinds of coins, some just in Ethereum, and they're always writing to me, so I think it's a good subject to cover. So that's my intro done. Udi, I'm going to start with you. Firstly, can you talk to me or just explain what it is you're up to at the moment? You're triggering people. What's this all about?

[Udi Wertheimer]

Me triggering people is not new, but I guess the current topic is new. It's. Look, I guess it's a good opportunity actually to talk about it because the people, when they read tweets, it's very easy to take them out of context and misunderstand. Here's what I'm not saying. And actually it's kind of ridiculous that I have to clarify that, but here's what I'm not saying. I'm not saying that you should buy Ethereum, I'm not even saying that I like Ethereum. The fact that I have to clarify that is absolutely ridiculous because anyone who knows me for over a week sees me as an Ethereum hater. Most of the people triggered by me are because they consider me an Ethereum hater. So it's kind of funny. Anyways, what I am trying to say is I do think that Bitcoin is the most important invention or discovery of all time, or at least a lot of time. And I think we're doing a very bad job at convincing people at it recently. I think the arguments that we're making are really bad and they're basically four, five, six year old arguments that don't match the current reality anymore. So the thing is, if someone is undecided about whether or not they want to invest in Bitcoin and then we tell them the reason they should invest in Bitcoin is because proof of stake is bad, we're not realizing this, but we're making a very bad argument that's going to convince them to not listen to us. That's kind of my point. My point is, and I've been talking a lot about toxic Bitcoin maximalism and I've been saying a lot that toxicity is bad. But the reason I'm saying that is not because I think people should be nice to each other. I'm not being particularly nice to anyone and I don't think people need to be nice if they don't want to. But the toxicity I'm referring to is specifically about calling things that you don't understand a scam. It just, it makes you look not very smart and it makes you look very unconvincing to people. So if people already give you the time of day and they're like saying, okay, I'm going to listen to this person about whether or not I should be interested in Bitcoin and then you say something like Ethereum had a pre mine, so it's bad, you lost the argument. Because the person who's interested in maybe buying Ethereum, they know that Ethereum had a pre mine and they don't care. Like an investor who bought Amazon stocks yesterday. They know that Amazon had a cap table of founders and seed investors and they know that they got a pre mine of Amazon Stock and it's 20 years later, they don't care. That's not why they're buying Amazon. So. And similarly, for people who consider allocating into Ethereum or anything else, Ethereum is just an example or anything else. They don't care about the pre mine. That's not. They're not seeing it as a replacement for bitcoin. They're not seeing it as hard money for the world, which is how a lot of bitcoins try to promote bitcoin. They're not saying that those things as comparers to that and they don't care that it had a premium. It doesn't matter. They're trying to make an investment. So whatever we think about that, we can think, oh, the pre mine is bad for reasons abc. That may be true. But if your goal is to convince those people who are just seeking to generate a return on their investments, then you're making a bad argument. It's going to make them not listen to you anymore. That's my point.

[Alex Gladstein]

Well, I think it's a good point.

[Udi Wertheimer]

Also I think we need to kick out all the toxic maximus.

[Alex Gladstein]

I think it's a good point and that's why I found Alan's paper super interesting. I think it's not a good idea to be scaring people off by acting like dicks and I think it's a much better place to be teaching people about the different technologies, why they work. But hopefully if people are making money on their altcoins, I would want them to possibly consider also thinking about investing long term in bitcoin. I think it's far better to have a constructive dialogue than yell at people. And actually the reason I liked Alan's paper, I'm going to quote you Alan from it because there's something that really stood out in it for me. Bear with me, I've just got it here. It was where you made the point regarding Ethereum. You actually referred to what the permissionless nature of Ethereum based applications collapse this barrier to entry, et cetera, et cetera. And you said this is an admirable achievement. It's easy to see why this combination of features enormously benefits consumers, et cetera, et cetera. The point being I'm is the paper wasn't just there to criticize Ethereum for its technical structure or proof of stake. You actually gave it credit where credit was due and just made more economic and technical arguments. How much do you want to talk about that Alan? Because this is the first time you've been on the podcast and your position with this.

[Alan Farrington]

I'll talk about it for as long as you want. I guess it's. It depends how much you think I'm going to disagree with UDI and how much of a debate we're going to end up having because I mean I don't disagree with anything that you said so far. I actually doubt I will. I think our. To the extent we even have a difference, it's probably just a difference of perspective. I mean I said this on Twitter the other day and it's not meant as an insult in any way. It's not like I have the right perspective and UDI doesn't. We just naturally, given our roles and our interests, we think about this stuff differently. And I think picking up on the, I don't know, you didn't exactly quote it, but the part of the paper that you're referring to, Peter, I think that fits very nice. I'd actually like to hear what UDI thinks about this because I think it fits very nicely with his introductory comments in that if somebody is coming to this for the sake of argument via Pro Ethereum people who seem perfectly reasonable to them, I agree that it is unlikely to be helpful to that third party who's potentially on the cusp of being interested to immediately shut it down by calling them scammers. I would much prefer to invest the time educating them. Why? To go back to Udi's point, the pre mine was a bad idea but rather than just it sucks because of the pre mine because they don't know what that means. I don't know if Udi UDI debate go what do you disagree with Dance?

[Udi Wertheimer]

So I think first of all, the article, like Alan's article, I read most of it. It's, it's, you know, unlike a lot of the discourse on Twitter, it's actually making actual arguments and I thought they were, you know, well reasoned and they didn't go to the length of calling other people scammers, which is great. So in that, in that regard fight was much better than most of the discourse on Twitter. For sure. It was a good read. The thing is I. It's more than just like, yeah, you can, you can go into like why the pre money is bad. Maybe that's what we should start talking about. I think it's not bad is kind of what I'm saying. I think not only that, it's like it happened and I think it doesn't matter at this point and some people made the choice like, you know, if you're going to look at the pre mine in the setting of 2015, where the decision actually mattered, you had to choose if you're going to invest in the Ethereum presale or not, then I can see the reason in saying Well, I believe back in 2015 that in order for those things to succeed, they need to be well distributed from the start. Ethereum isn't, so I'm not going to invest in it. That's a reasonable argument. It turned out to be wrong, by the way. But it was a reasonable argument back then. But now in 2021, it's just not a reasonable argument anymore. It just doesn't matter. So it does matter, for one thing, which is like, if you're going to say Ethereum tries to be Bitcoin, then you can say it can't be bitcoin because it will never have the distribution of Bitcoin. And that is true. However, setting that as a moral framework is, in my opinion, incorrect. 1. There's nothing morally immoral about it. It's a choice. They decided to design something else which is not bitcoin. So just because it is not bitcoin and never will be bitcoin doesn't make it wrong, it just makes it something else. And if we're going to tell people you shouldn't buy ETH because it's something else just because it's not Bitcoin, I think that's a bad argument. Of course it's not bitcoin.

[Alex Gladstein]

Yeah. Let me bring Alex in now because, Alex, you approach this whole subject from a point of human rights. You and I have lots of interviews and discussions and debates. I'm joining you at the Oslo Freedom Forum to discuss discuss Bitcoin being used in more challenging parts of the world. Hard money and the importance of bitcoin is. You look at it a different lens than maybe other people. So your point of view on this is super helpful.

[F]

Yeah, maybe. And obviously I think I'm going to. We're going to have some disagreements here, but I just wanted to throw this out here. I just think generally crypto, the word doesn't really mean anything. I think that the crypto revolution is failing. I think that anything where the fourth largest asset is Cardano and that's representative of the industry, is failing. I think toxic maximalism is helpful for Bitcoin and I think that proof of stake is the existing system and it's what Satoshi wanted to get us out from. And my perspectives are very different from a day trader who's trying to make money in the short term, meaning trying to put money, dollars or pounds into an asset and then withdraw more dollars and pounds later. We're trying to, like, get out of the system entirely. So I just. I think I have a different perspective. There's and then finally, one of the reasons I'm so critical of non bitcoin projects is not necessarily because I have any sort of animosity towards them. It's that I think a lot of the creators of those projects are like acting in some way fraudulently by claiming that their project is decentralized, when in reality the US government's just going to come get them at some point. Like, Gary Gensler has been talking about dyno. Literally, he says dyno decentralized in name only. And the long armor of the state is coming. And if you're not actually decentralized, like if you're uniswap and you've got to have a cheap legal officer, I'm sorry, like the government's going to come and get you. This doesn't mean I'm rooting for the government to come and get you. It means I'm acknowledging that the government's going to come and get you. And that's why Satoshi disappeared. So those are some just like things I want to throw out there that should hopefully stir the pot a little.

[Alex Gladstein]

Okay, before we get into stirring the pot, I'm just going to let Kobe come in. Kobe, We've known each other for a couple of years now. Long time. I've wanted to get you on the pond and talk to you. You. I think a lot of people know you as like your Twitter personality, but don't realize you actually have a very technical background. You understand the technical side of various crypto projects a lot better than I think people realize. I wanted you to join this conversation because, just because of your background, understanding you're one of the longest people who's been in the crypto space and just thought you'd bring a different perspective into this.

[Peter McCormack]

Yeah, I like that. You started the podcast with we've got the most diverse panel we've ever had. And like if you kind of squint, everyone looks exactly the same. Like Gladstein ain't got a beard, but otherwise we're just interchangeable. There's maybe a slight variation on accent. I like that.

[Alan Farrington]

That's cool.

[Alex Gladstein]

Do you know what? As the words came out of my rat mouth, I was thinking, yeah, that's not what I meant. I meant diverse into like. I know what you're saying. I meant diverse in terms of we've got from human rights activists down to degen traders. That's what I meant. But obviously we're all white middle class males probably within about 10 years of each other.

[Peter McCormack]

Yeah. And I got to say Alan, you've got a lovely voice. I could listen to you talk for ages, mate. You should do an audiobook version of your paper because the paper's very dense and I struggled through it. I did read it, but I struggled through it.

[Alan Farrington]

Guy has done it. And actually, Guy and I have talked about this, that I far prefer his voice. But sure, I'll do one for you. We can talk about that later.

[Peter McCormack]

I'll send you an NFT in exchange or something. Yeah, I mean, I guess my perspective is not super exciting on these debates. I think they're all, like, sort of very philosophical and not super actionable. And ultimately, what a bunch of people are saying to each other on Twitter does not really matter in the grand scheme of things, like whether someone's being a bit mean and calling someone a scammer on Twitter really only matters to the person that's saying it. And, like, the seven people that see it and on, like, a proper long timeline don't really matter, does it? It does not materially impact the success of. I think it's like, a little bit arrogant to suggest that any of us can say some shit and then bitcoin's a like a wins or loses because of, like, how we behaved on twitter.com on our fake accounts. Like, I don't think it matters that much, but it makes good podcasts. People tune in. So, yeah, I mean, I'm here for it. I'll say some stuff I don't. I don't mean.

[Alex Gladstein]

Well, listen, so let's start at the point of decentralization. So my podcast is an onboarding tool for people to understand about Bitcoin. And as I said, new people are coming in all the time. I get emails every day and they always ask me about bitcoin and altcoins and should they invest in Solana and why don't I have an allocation to eth? I've come to, like, a conclusion. As I said, bitcoin has won the war on money, and that's all I care about. And I consider other crypto projects really just to be things that aren't meaningfully decentralized. And really their innovation is that they are permissionless and that you can essentially swap assets between wallets. And that's kind of interesting, but it's just not something I care about and I'm not going to invest in. Alan, I think you coming in here would be super interesting because you've looked at the innovation that these protocols achieve. I don't think there is a war of bitcoin versus Ethereum anymore. I think it's Bitcoin versus sovereignty currencies. And I think there's a separate war which is coming, which is protocols versus protocols. I've seen NFTs moving between Solana and Ethereum. And so I think there's actually fighting two separate battles now. But you've done a technical and economic analysis of why these protocols may fail. Do you want to give a bit of a TLDR what you think the issue with them is?

[Alan Farrington]

Yeah, sure. It's a little bit tricky because there's. Well, is there like six? Well, one of them is just why we could be wrong. There's five different sections of this which are all kind of different in theme. It probably deserves it. I don't want to waste everybody else's time with it. It kind of deserves its own episode. And I think you're going to get the Big Al who hits dingers to come and talk about it specifically. But I guess to pick something that sort of ties it all together or that the consequences are evident in each of the different areas, I think it's really simple. And I think this is going to make UDI really mad, because this is the kind of thing that you absolutely cannot say to a noob. It will just confuse the shit out of which is that the innovation of Bitcoin, and if you really wanted to sort of, I don't know, annoy different people for different reasons. If you want to call it the underlying blockchain technology. Right. What that innovation achieves is a better and. Or the best way to do money. And how it works requires money. And if you change the innovation to try to achieve something else. I don't mean to be kind of too sweeping about this because I don't think it's sort of a logical necessity. It just seems to have been the case with every attempt. It breaks in some or other way. And I think the most obvious way that it's likely to break, and it seems to have broken is something that Alex alluded to before, is that it becomes impossible to credibly claim it's decentralized. And then depending on what the individual project is, you get into other issues of possibly the credibility of the marketing. So this would be the point about whether or not it's a scam and whether or not the people promoting it are being honest, which I don't really want to take a view on completely holistically, but I understand where those issues come from. Right. And then the other point that Alex mentioned too is that if it isn't sufficiently decentralized and people are perfectly free to disagree with this. But my argument would be none of them beside bitcoin are they kind of have a catch 22 in that either they won't succeed organically, in which case, who cares, or they will, in which case they'll be shut down and therefore they won't. That's probably a good point to leave it at. I think all of that though follows and then we take that in a bunch of different directions. But I think it all follows from blockchains are for money.

[Alex Gladstein]

So do we think these will be shut down? Because my experience from following the SEC investigations is that actually they tend to get a slap on the wrist and a fine which is perfectly affordable because of the amount of money they made. I mean, I can't remember what the AOS fine was. I think it was 20 million. Yeah, something like that. 20, 25 million on something that raised billions in Bitcoin. 125 million.

[F]

Much more likely they get pressured to change quite like a little bit. Like if you look At Uniswap version 1, 2, 3, much more likely is that over time the VCs who invested in it and who helped make the company run kind of twist the arm of the people making it so that the code that they release is like more in line with what the regulators want. It's probably not going to be something where they come in and shut it down, although they'll do that for some projects, we'll see with the Gensler regime. But it seems like they're going to try and just pressure these projects to just be a little more compliant with the KYC AML regime. I mean, look at Binance, right? Look what happened to Bitmex. So I think they're going to try and take both decent, quote unquote decentralized and also centralized projects and just try to pressure them so that, so that they're compliant with the state. And that's the big test that all these projects are going to face in the coming years.

[Peter McCormack]

I do think that is. Right. I think that. I think that is basically true. Right. And I think Uniswap is a good example because when you say Uniswap, you can be talking about a bunch of things. You know, you can have Uniswap as a company which has got employees and a chief legal officer, as you mentioned, but you can also have Uniswap V2, which are contracts that are deployed on Ethereum and they're out there, they can't be changed anymore. Then You've got the Uniswap front end which is owned and ran by the Uniswap company. But you could also have other front ends that are run by other people that Uniswap are not in control of, that interact with the contracts that are on Ethereum that Uniswap the company can no longer change. So sure, Gary comes along, Big G comes along and he puts a bunch of pressure onto the VCs on Paradigm or on whoever is behind Uniswap. I don't really remember. I think it's Paradigm. Paradigm and the Uniswap General Council will be like, look, we don't like what you're doing. And maybe Uniswap V4 then is completely permissioned or maybe they changed their front end to have KYC requirements. I think one inch in the last couple of days added like a weird thing on their front end where if you're on a vpn, it actually blocks you going onto the site now. And I'm sure that will happen. Like you see that already in motion in a lot of places. But contracts that are deployed ON Ethereum, Uniswap v2 with front end that spun up by whoever, those can't be changed. Uniswap can't do nothing about that anymore. They've already put it out into the world. It's stuck.

[F]

Right. So I think the question is just going to be the platform that has the most users and network effect. Like that's where the government's going to focus on. And we can also look at dai. I think DAI is a really interesting example as well of state capture or attempt on state capture of a quote unquote decentralized protocol where as of today most of dai, as far as I understand, is backed by usdc. So I mean, I think this is the way the government comes after these projects and not necessarily like, you know, putting them all in prison tomorrow.

[Peter McCormack]

Yeah, I think, I think stablecoins is.

[Udi Wertheimer]

A good two approaches. The two approaches, and it seems like there's the Gladstone approach and there's the Cobie approach that are very different and I think we need to talk about the difference between them because none of them is invalid. The approach that Alex is talking about, and I feel that I'm pretty close to that one too, is that you need to be as reliable and as sustainable as you can be and not depend on anyone else and not allow any form of single point of failure. And that's what Bitcoin is. And I think that's very important to have I think if we don't have that, we're going to have problems. I think we need that. And it's great that bitcoin exists and we don't want to take risk with that. We want to keep it at the same thing. But also there's another approach for censorship, resistance, which is just, you know what, we're going to shoot all of our cannons at those people and it's just going to be hard for them to handle all of it. So they're going to take some of it down, but it's going to be difficult for them to take all of it down. And once they take something down, we just pop it up again with a different name. We take it, we fork it, we changed a bit. Maybe we keep the founders a bit more anonymous so that they're safer and we just keep doing it again and again and again. And then maybe for the specific particular project, that project might be a risk, existential risk maybe. But for the bigger picture, we might be able to just keep doing this. Now I don't know if it works, it might fail. Like some people say, no, it's not going to work. SEC is going to take all of them down. It's possible. So far they haven't though. And you give examples of something like Binance or Ripple. Well, Binance and Ripple have done extremely well and they're still around. So are they going to have to take some concessions? Probably. They're not going to be like bitcoin, that's for sure. But they did gain some ground. If you look at where we were five years ago, SEC just had more power over those things and now it has less power. That's a fact. I don't know what happens. I think both approaches are interesting to explore. I don't think one of them is immoral.

[F]

I want to be careful to separate out like doing well and earning a lot of money and then being decentralized. Like I think that Binance and Ripple, yes, have delivered enormous returns, especially to the creators. And we can't deny that the best performing coins are like Solana, Dogecoin. It's not bitcoin. Right. Like recently, at least historically, Bitcoin is the best performing since its inception, but. But not recently. And I think that's an important distinction. And you can have that distinction. You can understand that bitcoin is not going to generate the best return in dollars for an investor in the next six to 12 months. But you can understand that it has really important qualities which may make it the best investment for the next 10 years and then we're trying to sort out what happens in the next few years. And with regard to some of these other projects, if you just look at Stablecoins, which we maybe want to focus on for a second, I mean the overwhelming volume on these things is with Tether and USDC globally and those are both state captured, they have blacklists, they can be censored, et cetera. So we haven't seen the decentralized stablecoin take off. Now you guys know the numbers better than me. But also still Uniswap. It's incredibly impressive what they've achieved, but still not comparable to the centralized alternatives in Daily, right? So I don't know, that's kind of where we are, right?

[Peter McCormack]

I think it's important to look at decentralization as a spectrum, right? Where you've got Binance, which is not decentralized at all because it is a company, although no one seems to know where it's headquartered. So maybe it's a little bit more decentralized than like Apple, but it's just obfurcation or whatever. And then you've got Bitcoin on the other end, probably the most, you know, decentralized project in existence. And then like somewhere in the middle you'll have Ethereum, which is more decentralized than a centralized company and less decentralized than Bitcoin. And then you have Uniswap, let's say Uniswap V2, where the contracts are deployed on Ethereum, it inherits Ethereum's decentralization. The contracts are not owned by anyone, they can't be modified anymore. Uniswap as a company, which is very similar in decentralization to Binance, is not the same level of decentralization as Uniswap V2, which, which inherits its decentralization from Ethereum. And then you can argue is Ethereum decentralized enough to withstand social political attacks and blah blah, blah. And I think there's a bunch of nuance there. A bunch of people will say yes, a bunch of people will say no. I probably lean on the no side currently, but I think over time probably it's fine.

[F]

And just on that, do you think that the proof of stake thing is the Ethereum folks bowing to kind of environmental pressure or do you not really buy that?

[Peter McCormack]

No, I don't think it's bound to environmental pressure. Like it was on the roadmap, like way, way, way before anyone really cared about the environment stuff. They've just been very slow to deliver if they delivered it two years ago, no one would have even been talking about NFTs ruining the environment, would they? So I don't think so. But I think it's important to recognize that spectrum of decentralization when you talk about these things, because you get projects that spin up where they do own the rights to the contract, right? There are people that you can apply pressure to that you can threaten to. You can say, turn that off or you go to jail. And those people are probably going to turn it off in that situation. They're going to go on the run or they're going to turn it off. Most people are going to turn it off. And then there's projects where there's not really a person you can apply pressure to anymore. You can say to Uniswap, you've got to close your company. But Uniswap's deployed contracts that they don't control anymore will continue to exist on Ethereum. And that's why I think the philosophical arguments about the stuff and how you talk about on Twitter don't matter too much. Because I agree that Big Gary is going to come for people. And I agree that on a long enough timeline, every single social, political, etc. Pressure is going to be applied to test the strength of these systems and anything that's not strong enough will be erased. I think stablecoins are a massive weak part in the ecosystem because they require a central issuer. And I think it would be relatively trivial for a government to say to Circle or Tether. I want you to blacklist Tether, USDC or USDT interacting with Uniswap ever. And that is a thing, that is a piece of pressure they can apply. But it's applying it to Circle, it's applying it to the stablecoin issuers. I don't even know if it's circle. That's quite bad, isn't it? It's applying it to the stablecoin issuers rather than to uniswap. You've got to figure out where is the centralization in the system, where can regulators or political actors or whatever apply pressure? I think stablecoins are like a massive weak spine that.

[Alex Gladstein]

So that's a very interesting point, Alex, where you refer to kind of state capture. How do we compare that to say, how we have now ofac blacklisted Bitcoin addresses. So if somebody was to make a mistake and dealing with a blacklisted address and that was publicly available and you can find out who that person is and potentially face criminal charges, we've seen what's happened recently with Virgil Griffith, what he did over in North Korea, and he's probably facing a long jail sentence. Obviously, the state capture is different because there's not a centralized point where you can blacklist and address and force it to not be able to be used, which is my belief you can do with tether and usdc. This is more of a threat that if you interact with a address that you could face charges. How do we feel about that?

[F]

Well, let me give a real world example. I was on the phone yesterday with people from State Department, from ofac, from Treasury. We're talking about Cuba. Biden administration wants to figure out ostensibly how to get money to Cubans from America from their families. Now, obviously the easiest way would be to lift to the restrictions that Trump put on, which basically ended all of these like 400 plus Western Union brick and mortar shops inside Cuba. Like, the restrictions Trump passed closed them all. So, you know, Cubans have been really not able to get money to their family very easily since then. And that's why people have been using Bitcoin, which is like exploded on the island. So much so that the Cuban dictatorship came out with a statement publicly like three weeks ago, instructing the central bank to acknowledge and regulate Bitcoin. That is just like, unbelievable that that is happening. There are like hundreds of thousands of Cubans using bitcoin, right? So it was interesting because in these conversations you have like, big tech companies and they're like, they need to get permission from the US Government to go in. And that would be the same with strike, with usdc, with, with, with any kind of like, company that has a legal officer, right? They would be worried about going into Cuba. They would need permission from ofac, they would need a license. So it's really, at the end of the day, it comes down to like, you know, is your team worried or not? Like, like, if Dai is, you know, is the, is the maker Dao Co. Going to be like, is Anderson Horowitz gonna be like, worried about, like, people using its stuff in a particular country or jurisdiction? And that, to me, as a human rights advocate, is kind of what separates Bitcoin from the other stuff. Like, I'm on this call listening to the government argue with these companies. It's useless. I mean, they're just, it's word salad. They're not achieving anything. Meanwhile, bitcoin is out there empowering people every day. And that's, that's why I'm in this.

[Alex Gladstein]

Thing, you know, Alan, can we just talk a Little bit about the part of your paper where you referred to the centralization of Ethereum. And the reason I asked this is because we talk about whether something's meaningfully decentralized. I think we can agree you cannot switch off Bitcoin. It's just impossible. Now, you can regulate it, you can ban it, but you can't stop somebody running a node and you can't stop the network. Now, there's no single point of failure, I believe, within there. But with regards to Ethereum, last night I was out with somebody who works for Amazon and one of his jobs is to keep, essentially to keep Ethereum running and to keep it up. And he was talking about some of the challenges, but he wasn't like, he's a bitcoiner. He wasn't highly critical of Ethereum, but he just said, one of my jobs is to just keep it running. I have to keep it running. We had downtime recently and I was involved in what happened with that. You talked about the fact in your paper that Ethereum is centralized enough that if people were threatened at the right point, like, switch this service off or you face jail. I'm paraphrasing what you said because I can't remember exactly, but can you just talk about that bit? Because that would imply to me that Ethereum isn't meaningfully decentralized.

[Alan Farrington]

Yeah, I think you're right, though, to make the clarification. And Kobe made this point very well earlier. There definitely is a spectrum of decentralization. I think you have to be honest about that. I don't mean to speak for udi, but I imagine that his complaint would be of toxic maximalists, that they also pretend there is no spectrum of decentralization as Bitcoin and then everything else is completely centralized or whatever. So that is important to clarify and to be honest about. But I think I said right at the beginning, like half an hour ago or so, that I would deem Ethereum to be not decentralized enough. And I think Alex's comments just now reflect that perfectly. It shows you exactly what it is not decentralized enough to achieve, if that's the kind of thing that you care about achieving. And actually, you were quoting me, quoting Pomp. I just pulled it up in front of me who says all this stuff, that this is a quote when he's speaking to Jack Mallers and his podcast, all the stuff that claims to be decentralized. I just asked the founders if the government came and said you had to go to jail if you didn't shut it down, Would you shut it down? Oh, you could? Then it's not decentralized. And obviously he's being a bit trite there, but I think that is basically a good test to keep in mind. And I'll admit, by the way, that I'm even on this call, I doubt I'm the foremost technical expert about how decentralized or not Ethereum is, but I mean, when we were doing the research for this, some of the data that we're pulling up quite easily and actually your Amazon friends comment, I think, or not even his comment, his entire job sort of validates this. It is really difficult to make. If you assume enough malice on the part of the state, then it's quite clear to me that it's not sufficiently decentralized. And I think that's probably my preferred framing. Not shouting about whether or not it's decentralized and also not completely putting it down on that basis, but just being honest about how decentralized it is and why that even matters in the first place. So I think this is. Alex mentioned this before. UDI's tweeted about this a lot, although usually in a kind of a trolley way. The problem is, I think certainly to my mind, probably to udi's mind as well, it's not the fact of how decentralized it is, it's whether or not people are being honest in their communication, particularly to retail investors or just anybody, I guess, who is new to all of this and to whom it doesn't mean anything. And if they were to imply, oh, it's like bitcoin, but it's different in this way, that's obviously dishonest because it doesn't have any of the nuance that we're trying to convey just now.

[Alex Gladstein]

So, Udi, on that point, then, do you think this really comes down to framing? And bitcoin is completely unique compared to all these other crypto projects. And we should really separate. There is bitcoin and then there's this quote unquote, crypto industry. And therefore the crypto industry really is. We should really be considering these as companies, because if it isn't meaningfully decentralized and it's going to be state captured, it's going to be regulated, then it really should be considered more like a company. And that's how we should be framing it. And then if these are companies, then at least if we consider them like companies, at least we can recognize, well, what is the innovation here? What is it these crypto projects do that offer some kind of Innovation. Maybe Uniswap is a better way of trading. Maybe there's something better there. But then also when I say that and I ask this question, I think if these are state captured, is there any real innovation? Because scaling is an issue. Should they really just be operating on an Oracle database?

[Udi Wertheimer]

Right. So first off, I think there's a lot of hubris in just flat out announcing that those things are going to be destroyed by the state at some point. We don't know that they might. I think it's, I think it's very possible. I think that there's no doubt people like Gensler would want to shut it down. I'm not sure they succeed. I'm not sure they have the political capital. I'm not sure. Like, so far they failed pretty miserably. It's been, you know, it's been many years and they didn't. Now, I'm not saying they wouldn't, we just don't know. So proclaiming Ethereum is not decentralized enough. I can see the logic for why that might be true, but it's not a fact. And if it's not a fact, and people who are saying that it is are not liars. They have an opinion and they state their opinion. And maybe their opinion is wrong, but that's not false marketing. That's. That's what they truly believe. And I find that, of course there are a lot of, you know, you'll find, you'll find in the Ethereum community and the Bitcoin community and whatever community you want, you'll find people are being dishonest. They exist everywhere. But I think most people, they truly believe what they say. They're not lying, they're not scamming anyone, they're just saying what they think. So that for that point now, however, I mean, you know, there's a piece by Pitt, Pete Tereso today on Forbes about this topic. Exactly. I read it. I thought it was very good. Pete obviously believes, like I kind of do as well, that there is a lot of merit in focusing only on Bitcoin and not the other things, and that it makes sense to separate them as different things. And I think that is the way to look at it, because they are two separate things. However, on the point of why we should even be talking about this, you know, it's actually a good point. A lot of people have been telling me this, like, why does this matter? Like, whatever, we're talking about this on Twitter, we talk about this on this podcast, like, it doesn't change Anything. It's not going to affect the trajectory of Bitcoin. And I fully agree. I think bitcoin is going to do well in the future, and I don't think that whatever we do is going to change that significantly. It will to some degree, but it might affect timelines, it might affect things like that, but it. It's not going to change the trajectory of history. In my personal opinion, however, those people that we call bitcoiners or bitcoin maximalists, a lot of them are my friends. I consider them friends. Some of them don't consider me a friend anymore, but I consider them friends. I think they're hurting themselves with this position. I was attending a hackathon Jeremy Rubin threw together in Austin, I believe it was a month or two ago. And the idea of the hackathon was, let's open our minds, let's look at what things are happening on other ecosystems and maybe we can learn something from it. And I gave a panel on that hackathon and the attendees were all bitcoin developers. And I wanted to talk about Uniswap. Just I had a point to make about Uniswap. So before mentioning it, I asked, who in the audience knows what Uniswap is? Or do I need to explain it? Or do you guys know? And turned out of close to 100 people, maybe two even knew what it was or what the concept of an automated market maker was. Now that is an issue. That is a cultural issue. It shouldn't be the case. Even if you think that Ethereum is bad and you think it's not going to, you know, it's not going to survive, I kind of disagree. But even if you think that it's not going to survive, that's fine. But that's not a reason to shut yourself down and not learn about any of those things. There are important things happening and we've created this culture where it's literally considered immoral to talk about Uniswap, just to mention it. And that's ridiculous. That's absolutely ridiculous. That's hurtful not to Bitcoin. Bitcoin will be fine. It's hurtful to us as a community and it's just not the way to go about things.

[F]

Push back there. Yeah, that's a lot. Great stuff. Udi, let me go one by one on the first thing you said. Ethereum. I mean, if we're talking about Ethereum decentralization, we have to talk about the monetary policy, we have to talk about the hard forks. I mean, nobody knows how much ETH is going to be minted in 2023, 2024? A small group of people will decide. And I think it's really dishonest actually to not mention that. And that's why I think it's centralized. So, you know, that's my point, my perspective. Second thing is on innovation.

[Udi Wertheimer]

But it is mentioned. Everyone, everyone knows it.

[F]

I had to go dig and interview ETH engineers to find out like how much ETH they thought would be minted in the next. Like, nobody knows. Like literally nobody knows.

[Udi Wertheimer]

Whose job is it to mention it to you? Like people talk about it all the time. Who's the, who's, who's the, who's the, you know, the dishonest actor who's not. Who's supposed to represent those facts and.

[F]

Is anyone who's saying it's decentralized when, when clearly a small group of people is going to determine the monetary policy and not the public. So I mean, are you talking anyway.

[Peter McCormack]

Do you mean because they can EIP and like, you know, there's an EIP 1559. So that economic activity on chain impacts the future.

[F]

Yeah, it's a hard fork.

[Peter McCormack]

Inflation, right?

[F]

Yeah, it's a hard fork. And the people, the users don't get to decide, they just get hard forked out. I mean, I don't, you know, this to me is quite clear. But again, we can debate and then just to, I'll do a couple other things and we keep going on the innovation. Why are we all here? The innovation is to escape regulation. Bitcoin is money beyond regulation. NFTs are trading art beyond regulation. Uniswap is trading assets beyond regulation. ETH is supposed to be, you know, running contracts beyond regulation. So it's all about can you evade regulation or not. So I do think that's, that's, that's the important thing with regard to, you know, crypto and being nice to people and this idea of are these toxic people bad for bitcoin? I agree with you, udi. Bitcoin's going to be fine. Like bitcoin is going to, I think, complete its mission over time. It's the people that aren't going to be fine, right? The people that are going to miss this project, the people who've been gaslit for a decade by the mainstream media about bitcoin who've been told not to buy bitcoin because it's dangerous, because it's scary.

[Alan Farrington]

They've.

[F]

Those people, a lot of people have really lost a huge opportunity, especially in the emerging Markets because of what their government and the media have told them to stay away from Bitcoin. When it comes to these crypto projects, I think it's the opposite. I think we need to be more outspoken. Otherwise, what happens is that Ripple is in Bloomberg today and you have smart people who don't know a lot about the space thinking that Bhutan is going to adopt Ripple as their currency. Like, that's who fucking Bloomberg today. Okay? And you have Carnegie Mellon, a very prestigious institution, by the way, which is a very important institution in America, taking all this money from Hodgkinson, you know, and. And promoting Cardano. Like, like this is what happens when we don't speak out, okay? People get scammed. Okay? So I think it's actually the opposite. We should be talking more about these things because it's. Bitcoin's going to be fine. People need our help. And look, if you've got all the time in the world and you're a talented trader, you're going to be fine. Like, you're going to clean up in the coming years as we go through these different kinds of crypto bull markets. But, like, the average person is going to be confused. They're not going to go. They're not going to know what's going on. And, you know, it's not like the average person bought a bunch of Solana last Thanksgiving. They bought it in the last couple months. Like, the people who created Solana made the most money. So I just. These are the things on my mind.

[Alex Gladstein]

Well, so that's a really interesting point because if you listen to Charles Hodgkinson's interview on Lex Friedman, I think everyone can agree he's a complete dishonest prick when he talks about Bitcoin. And his job there is to convince the listeners of Lex's show, and perhaps Lex, that Cardano is something they should consider. And what's really interesting is I moderate all the comments on my YouTube because there's so many scammers. And when I talk about scammers, it's like, join my telegram group. If you go on any Vice video at the moment, you can see what we're dealing with. I have to delete hundreds a day. But in there, what we also have is there is a consistent shilling from people saying, but you need to consider Cardano. Why aren't you considering Hex? And it's always the same projects. So I'm going to throw this over to Kobi. How much do people actually care? Look, you mix in the trading community, there's a lot of people out there trading. And the way I explained it recently to somebody, I don't buy anything apart from bitcoin, but I almost feel like I'm sat in a conference room in Vegas with Alex Gladstein discussing human rights and through the window I'm seeing all my friends on the roulette table and having fun. And whilst I know they're gambling, I see all this fun they're having and feel like I'm not part of it. What is it like amongst the trading community? Do they generally, in the background, are they all still holders of Bitcoin or do they just not give a shit about any of this and they're just, they're just aping in and not caring?

[Peter McCormack]

Yeah, I mean, I think the time, the, like the timescale they care about is short. Right? Because like, if you're thinking, if you're coming from a perspective of what is going to be around in 15 to 20 years, then the only thing that you can reliably do is buy Bitcoin.

[Koby]

Right.

[Peter McCormack]

But I think in the trading community they're not thinking like, oh, how can I allocate for the next 20 years? They're thinking, how can I allocate for the next 20 minutes or the next 20 days or whatever. And if you're willing to pay a lot more attention, then the centralization vectors in other projects which increase the newer the project is and over time ideally get erased. Those centralization vectors, you can pay more attention to them. Right? So there are centralization vectors in Ethereum like Infura and Amazon, runs 20% of ETH nodes or whatever. And Ethereum's development community has a much more flexible attitude to Ethereum. They're much more willing to change things, whereas Bitcoin they don't. And it's very difficult to change anything. It takes a long time to make significant upgrades to Bitcoin. So I think the trading community just is willing to pay a lot more attention. And that's why when Gary Gensler starts doing stuff, it's very interesting for market participants because those centralization vectors are exploitable in certain circumstances. So if you're thinking, yeah, cool, I want something that's going to be around in 20, 18 years, I want to hedge inflation and I don't want to be eroded by government monetary policy, then you buy Bitcoin. If you're willing to pay attention to the news and you potentially want to outpace Bitcoin, you want to perform better than Bitcoin, then you can buy other things and you make sure you move as appropriately when you think certain things can get exploited. If Gary's coming for stuff, he doesn't do it in that one day, everything's turned off. He's been very vocal about what he's trying to do as part of the SEC enforcement strategy to dissuade people, launching stuff and put a bit of fear into the hearts of market participants and stuff. So I don't think they really care because a lot of people that are trading and speculating, they're not in regimes where they have dictators and they don't have access to a form of money that is stable for multiple weeks. And I think they can be a little bit more optimistic in the future. They can say, well, what happens if the centralization vectors in Ethereum are erased over time? What happens if, as the project matures, they go, right, this central plan is of money. We never do that again. We completely erase that. We reject all those proposals. What if. And people start using DigitalOcean as well as AWS? Is DigitalOcean still things that are still around? And then, well, if you're optimistic about it and you look at it that way, buying those things now probably has a decent upside. And then of course, maybe they missed out on the entire bull run. Things with smaller market caps are easier to move. So if you add $10 million to a $10 million buy to something that's only worth $20 million, you increase the market cap by a ton. So if you add $10 million to Bitcoin, it doesn't do anything. And they're looking to sort of make money rather than just hedge inflation as an investment. So I don't think they really care. One thing I have noticed in like, sophisticated, like trading communities is they don't want to hoard things that they think is like retail vapor because you never know when the light's going to go out. Right? I've spoken about Cardano a ton. I get a lot of hate for my comments on Charles. I actually kind of like Charles sometimes. Like he's grown on me. I don't think he gives a fuck anymore. I kind of like that. But, you know, I've been very. I've spoke a lot about him negatively in the past and about Cardano negatively in the past. And in the sophisticated trading communities, you see a lot of people that don't hold those assets because they don't really understand why it can justify its valuation. They don't understand what makes it that popular. And they don't want to just. They don't want it to, whatever it is, if they don't understand it, to disappear one day. I do see in the sophisticated trading community a lot of people buying Solana, early thesis around FTX and like mirroring bnb, blah blah, blah, blah, blah. But I think they're just a lot more optimistic about the future. And if you go back through my tweets, like to 2015, 16, you'll find loads of stuff that's like super cringed. I mean, that's all my tweets, actually. But you'll find stuff that's like, that's all of us. I said stuff about Ethereum like it's like centralized garbage. It's only fucking function. Am I allowed to swear on it? I've done it, it's too late. The only function of Ethereum is, you know, like a legal fundraising platform. And then I think I was shilling Bitcoin and Monero as their only two viable options at the same time. And if you did took that from an economic perspective, you did terribly. The reason I changed my mind is when practically it started to change. People started building things on Ethereum that weren't just like, you can fundraise for a flying car or you can blah, blah, blah, blah. When Eastland, now aave started materializing and synthetics and chainlink and all these things started to be built, it was for me a realization that, okay, right, there is something happening here that is important and is like, is building stuff that I always kind of imagined to exist in crypto. I didn't know whether it was on Bitcoin, on Ethereum, honestly, I don't really care. If I see similar innovation happen, like similar progress happening on Bitcoin, I'll pay more attention there too. It's just in crypto you don't need to predict the future and you don't need to, in my opinion, have these philosophical arguments about what's going to happen so far in the future, because you can just watch and see what is actually happening and then use that data and extrapolate based on that. You got to buy Ethereum at $80. If you just looked at what was happening in DeFi in 2019, 2020, that was basically the same as buying it on day one anyway.

[Alan Farrington]

So this is really interesting, actually. This is an excellent point of teasing out differences in perspective. So what I'm about to say in no way means any disrespect to Koby, because I think actually professional, I'm going.

[Peter McCormack]

To take it as disrespectful anyway. I'm going to be offended for most carefully.

[Alan Farrington]

I will be extra rude in that case. No, I don't know how you can possibly spin this negatively, so go for it in your reply to my reply. But professional traders are to my mind the only obvious exception to what I'm about to say because they have to be short term and I'm not using short term as an insult. This is a point where I'm trying to be clear about the lack of disrespect. It's just an accurate description of how they do their job. Well, a trader can't have a 10 year view because they'll have immediately lose all their money, but everybody else can have a 10 year view. And I think what a lot of bitcoiners get annoyed by around this kind of discussion to my mind doesn't actually even originate from non bitcoin crypto. I think non bitcoin crypto is kind of a vessel for it and that actually it's really come to get extra philosophical. Kobe will love this. It's really coming from the kind of degeneracy of fiat culture as a whole that time preferences are so high that things appeal to people who are not professional traders that really shouldn't. And so I'm saying this, I don't actually know if everybody on this call is even aware of this. I'm saying this as a professional capital allocator with a 10 plus year time horizon and I guess an interest, to be a bit more qualitative about it, an interest in betting on extreme outliers of real capital formation. And so to me it's really disappointing that regular people talk this way and think this way and act this way because to be completely cynical about it, it means that they don't buy into my investment thesis or the thesis of my firm or the people who think similarly to me. And ultimately they don't give us any capital with which to invest. They go and punt around on trading and they lose it all. To Cobie. I think this almost suggests a kind of like a chicken and egg problem in that you need to get bitcoin to get bitcoin. And so actually maybe to build a bridge I'll give it back to Kobi and then he can insult me a whole bunch for being far too long term. I think he's absolutely right that you do in order to break this chicken and egg problem, I mean aside from this is maybe back to UDI's points earlier and just general point in trolling everybody about this, you do need to be more constructive in terms of what you expect bitcoin to achieve. I think to convince people who otherwise don't know anything about it. But to pick up on exactly what Kobi said, you'll need to see similar functionality replicated on bitcoin, I think to convince these kinds of people. So my preference would be that these people don't even exist. But they do exist, so we need to build more on bitcoin to convince them. That would be my take.

[Alex Gladstein]

Just to interject there before you reply, Kobe, on that 10 year time horizon, I think there are some people who may have taken that long term time horizon in believing that bitcoin cash would be the winner. Or even those who've been convinced that Craig Wright is Satoshi and invested in BSV and they've both potentially lost a lot of money if they've picked a long time horizon especially I mean BSV is an absolute shit show now. So I just want to interject that some people have bought into those ideas and they're for maybe on the nuances that we should be toxic around specific ideas and maybe not others. These bitcoin hard forks, I believe all of those we should be absolutely toxic towards and have no time for the people who are selling people on a long term dream that something else is bitcoin when it clearly isn't. So that's just to interject on that.

[Peter McCormack]

Yeah, I think people can always make bad investments on a 10 year timescale. And that's why if you're making 10 year timescale investments, it's good to use data and not pitch your investment thesis to the dream that someone, to a person basically I think, especially in crypto, I think to answer your question, maybe more simply, Peter from before you said do people care? And I think what interesting behavior pattern is in 2013 through to 2017 or so you had people who would trade other stuff to stack bitcoin, right? Like you would use bitcoin as the reserve currency of crypto and you would trade other things temporarily in order to increase your amount of bitcoin overall. Because bitcoin was going to keep going, it's going to work $2 million and you needed to have a certain amount of bitcoin by then. And I think there was a general handshake agreement between all market participants that it was a game of chicken. And back then everything was basically vapor. Stuff was rubbish, it was just all kind of pointless. And I think everyone sort of implicitly understood that as 2017 through to now has happened, I Think there's been a fracture and that is no longer the default behavior of everybody. I think now it's relatively split between people who trade to get more Bitcoin, people trade to get more dollars and people trade to get more Ethereum. And that's never really happened before. You didn't have large percentage of the market trading to get more litecoin or trading to get more peercoin or name coin or feather coin or whatever. Maybe you got one or two of them. But you know, and I think Ethereum has taken a place and I think it's probably the smallest. Right. If you do it by percentage it's probably like 50% trying to do dollars now because we're in the middle of a bull market, maybe 35% doing Bitcoin and the rest doing Ethereum. But it is a substantial percentage of the market trying and it is a change in trend. There's no one doing that for Cardano, there's no one doing that for Ripple. Maybe like sub communities that are have made the same mistake they made with thinking that the 10 year thing with Craig Wright or whatever. But I don't think it's large percents of the market and I think the reason that's happened is because Ethereum has built an ecosystem of stuff. You can trade on Ethereum and you can participate in crypto without interacting with a company kind of if you want. As soon as you've got Ethereum you can stay entirely on chain so it becomes a useful denomination asset. I don't know if that'd be a good idea in the long run. My using data you can just say in bull markets Ethereum outperforms Bitcoin. In bear markets Bitcoin outperforms Ethereum. There's no reason to think that that will change no matter how much Ethereum try and fiddle with the economic policy to make it not the case. But I do think that has started to happen. That is a behavioral change that's happened in the trading community or the sophisticated trading community. Yeah. And maybe it is, maybe it's like a fiat money sort of phenomenon, people just trying to get rich as soon as possible. But you also have to acknowledge that a result of the global, at least Western government economic policies has created a very large wealth divide. And a lot of people, especially during a pandemic where their jobs weren't working or whatever feel that they don't have a path to a sustainable life or at least a lifestyle of a level of accept a level, an acceptable lifestyle that they, you know, there's no path for them to own their home. There's no path for them to do whatever. And that's why you see on Robinhood, people are just becoming options traders and shit. And it's like, like that is the same phenomenon as people with a very short term attitude in crypto. Because if charts are going up, then people are going to flock in. There's like a viral K factor that, that spawns and people are going to participate in that. Unfortunately, if you tell them the chart that's going up is a scam, they're not going to listen to you. And they're probably just going to be, they're going to double down on their investment thesis. Because when you tell people information that they don't want to hear, psychologically often humans go, well, I believe it more now and I think you're wrong. I think you're the scammer for telling me my idea was a scam.

[F]

So can I just, I just want to bridge to Udi here because I think, thank you also Kobi, for sharing your perspective and how it's changed. That's really helpful. And that's, I think the heart of the matter is like how much has changed from the like, let's say, 14 to 17 era and how much remains the same. And I think that's what I want UDI to answer. But like, I have three things here. First of all, what colored me when I entered the space in 1617, and then I, and then I got fooled into thinking it was blockchain, not bitcoin. And then, and then I learned that it was not blockchain. Right. We don't really talk about blockchain anymore. But let's not forget how sinister that was, that social attack on bitcoin. And it convinced every single humanitarian organization, governments worldwide, massive corporations to throw millions of dollars, hundreds of millions of dollars of blockchain projects that ended up doing nothing. You also had ICOs, you had all this other stuff and people got crushed. And I just wonder how much of that we need to pay attention to. Or are we indeed now building the blocks of the metaverse? And now we're not, we're not going back. So that's the one question. The other two pieces to take back from that era, udi, are toxic. Maximalism was essential to defending bitcoin during the block size wars. Maybe you say it's not essential anymore. Fine, we can have that conversation. And the third one about human behavior is if you were an information insider during that era, you killed it. If you weren't you didn't. I believe that's sort of the same today. Maybe it's not. So I'll throw it back to you.

[Alex Gladstein]

I just want to throw something in there because there's a particular tweet this week which both Alex and I took issue with from Chris Dixon, who he's a 16z and it was part of a thread talking about web3. The particular tweet, he said, web3 is the Internet owned by the builders and users orchestrated with tokens. The reason I took particular issue with this is they're an investor, so they have an incentive on this. And one of the things that Jill Coulson said to me four years ago when I very first started the podcast, she said, the investors in tokens now are getting into IPO at the seed stage. They're doing the IPO and seed round exactly the same stage. So somebody like Multicoin can buy $20 million of tokens in Solano from the presale, and that value is now something like 2 billion or something. Ridiculous. Congratulations, Carl Simone. You've made a lot of money there. I think you're a dishonest actor, but congratulations. The point I'm trying to make here is that there is an incentive structure now to create things which have tokens which vastly inflate when they go live without having product market fit. So my understanding of the investors, Silicon Valley investors and funds who invest in projects is that they make a small seed investment and you go through a round A, around B, and you prove product market fit. And if you prove product market fit, then you get to IPO stage and then you see a return, and then you have like, what is it they say, 8 and 10 failure rate. But your two successes pay for everything else. And that incentivizes to invest wisely. The incentive now is to create projects whereby you see massive returns, like ridiculous returns even before product market fit. And it feels like retail is now paying for that because somebody has to lose in these situations. So the retailers are getting the access to invest in projects early on, but they're not getting at the same stage as someone like a multicoin. So they're really paying multicoin before product market fits here. And that to me is like, that's a new way of. That's a new form of venture capital that I find, like, massively dishonest.

[Peter McCormack]

Before you jump in, I have a controversial answer to this, but I'm confused now about the order of operations because there's like three unanswered questions going on.

[Alex Gladstein]

Well, I wanted to throw that in, though, because Alex talked about blockchain, not bitcoin, and how that affected institutions worldwide. I also think that blockchain, not bitcoin, has changed the investment structure. And I think that is also, like, a dishonest approach. But anyone can jump in at any point and answer any minor. Alex, do you want to reply to that first? And then we'll throw it out because.

[F]

Chris, just to reframe for udi, like, I think that's perfect because, like, Chris Dixon comes in here and he says, oh, we're Building the Web 3.0 that the users are going to control. It's nonsense. He's controlling it. And it's so dishonest for him to act like a freedom activist that he cares about decentralization. No, he just cares about making as much money as humanly possible. And that's what's upsetting me. Not that he's like, he can make as much money as. Great, be a capitalist. Wonderful. I'm happy for him. But for him to, like, try to pretend that he cares about decentralization is really a problem for me. And, you know, whatever. He blocked me. But, you know, he's having a good time. But anyway, the point is that fits into the narrative, udi, because it's like, okay, we had this time that we're trying to draw lessons from which ones are applicable lessons and which ones do we need to discard? Like, you know, are we really building the meta? Are we building the metaverse now? Or are we going to lose everything?

[Alex Gladstein]

You know, if you say Oodiverse, I'm going to block you.

[Udi Wertheimer]

Yeah, well, Oodiverse thinks that this is so. Look, it's. First of all, the metaverse thing is a joke, okay? It's a joke. It's. Mark Zuckerberg is trolling the world by saying metaverse and getting people to think that it's a thing. No one knows what it is. Mark Zuckerberg doesn't know what it is. Ethereum people don't know what it is. No one knows what it is. Maybe it becomes a thing, maybe not. Either way, it has nothing to do with this discussion, in my opinion, other than being a joke now. You know, VCs have always. It's like nothing is new here. That's always been what they've been doing. They invest early. And by the way, they do a lot of work to invest early. It's not like just their connections. They do a lot of work to make it happen. They need to do a lot of research and weed a lot of stuff out. But that's what they do. They invest early in things and then they sell it to other people. That's always been their job. It's not new. And they did the same. They also said that green energy is going to change the world and you need to buy electric cars. And other than Tesla, most of those flopped. So I don't understand why suddenly the bitcoin community is so eager to point out that VCs are dishonest. I'm not saying they are, but, like, point out that VCs are dishonest. Like, that's always been their job. It's not new. If you don't want to, you don't have to buy Solana. If you don't want to participate in buying Solana now, you don't have to. I think that of course, someone like multicoin is going to make a huge profit off of Solana. I don't know what the terms were and if they can already sell their coins or not. I don't know. Probably not all of them, but it doesn't matter. People who are gonna buy into this, they know. They know that multicoin was early. They know that other people were early, and they can make the decision, is it worth buying it now or not? I mean, similarly to Apple, you're gonna buy Apple stock now. You know, in the past, the earliest VCs got Apple stock for free, basically, and now they're selling it for trillions of dollars. So what? I mean, buyers on the public market know what they're buying. They know that they had early investors and they can make their choice if they want to buy or not. And do they believe Apple's vision of becoming the world's biggest entertainment company and technology company and everything, or do they not? That's up to them. You know, Apple is saying they're going to do things that a lot of people disagree with, too, that they say they're not going to be able to pull off. Are they going to be bigger than Netflix? Some people say no. That's ridiculous. I don't know. You make a bet if you want. If you don't want, you don't have to make that bet. So, yeah, Solana is saying that it's going to be decentralized. Is it true? Seems like a stretch to me, but it's up to you to decide. They're going to try, and I don't think they're going to. That's the big difference between now and 2017. If you look at something like Eos and you look at something like Solana. You can't ignore the fact that Solana is delivering much more than what Eos did. So there's a difference. It's better than it used to be. Now, is it good enough? That's up to you to decide. If you don't want to, you don't have to. But when, Alex, when you ask, what do we learn from what happened in 2017? Well, the things that happened in 2017 don't happen anymore. You cannot raise money to build a flying cars or the blockchain company anymore. People did learn some lessons. Now you might argue that this will implode too, I don't know. But the things that happened back then, they're not happening now. Some of them do. There is pre sales and there will continue to be pre sales because that's how capital formation work. That will always happen. But that doesn't mean that it's wrong. And we talked a bit about Cardano and Ripple before and maybe Hex and how these people keep leaving comments everywhere and they kind of distort the conversation. Everyone kind of agrees that they are, at least to a certain degree, is kind of vaporware. And shouldn't we fight that? And I mean, like, if you want to fight that, you definitely can. I think that if we're gonna call Ethereum a scam, then it's gonna be very difficult for us to convince anyone that Hex is a scam. This is the main problem. Like, if you think that Hex is bad, and I would agree that Hex is like very dishonest marketing at the very least, if you want to make that point, then the people who you kept telling them that Ethereum is a scam, they're not going to listen to you. The people who you told to not buy Doge early this year, because Elon Musk is going to scam you. And I've seen a lot of bitcoiners literally saying, yeah, Elon Musk is going to scam you out of your 20 cents. So the people who told that to in early 2021 are not going to listen to you now about Hex and about Cardano and about any of this stuff. So I think I don't have a rulebook or playbook for how to approach those things and which one is okay and which isn't. But I can tell you for sure, if you're going to call everything a scam, then people are not going to listen to you. And that's a fact. We See that.

[Koby]

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[Alex Gladstein]

Ledger.Com I just want to refer this back over to Alan because he is somebody who allocates capital into projects so and also I just want to refer back to my friend who worked at Amazon last night, I was with last night who keeps Ethereum up. He was very critical of Solana last night. He said Solana will not be able to scale to the level of transactions that Ethereum could. It's fundamentally broken in that sense. And I've also seen some recent reports with regards to Cardano, which is fundamentally flawed as well with regards to its smart contracts and UTXOs. I'm not going to pretend I understand any of this, but that's kind of the point is that when these companies are buying tens of millions of dollars of tokens in a pre mine and they're releasing a project that is fundamentally flawed, it's only somebody like the guy I met last night who can really understand understand how these things work. Can they scale and are they fundamentally broken? And that's why I think potentially like it's slightly dishonest because we will have somebody like the guy from FTX Sam talking about he'll buy everything, all the Solana that's available and the price of Solana shoots up. A lot of people get invested and get involved but if it's fundamentally broken, if it can't scale, it may be flawed and it may be that people will lose money. Which is why I kind of prefer the model of product market fit being hit first. Alan, as somebody who allocates capital, what do you think of this kind of new model of raising money for protocols and projects?

[Alan Farrington]

Yeah, I mean basically I find it very Very worrying. I'm not sure I'd go quite as far as to say that it's implicitly dishonest, even though probably every live version of it that I have come across has been dishonest to some other extent. But I actually want to put this back to Udi because I disagree with something he said, but I basically don't want to put words in his mouth. I want to see what he thinks in my response that I think comparing these, and in particular comparing the role that VCs play in all of this to public markets for equities is not helpful at all. And it obscures a couple of very important differences. And actually I'm glad that Peter. Well, you said it a few times, but actually a couple of people have referred back to product market fit because that's a good way of framing what the main difference is that never before have venture capitalists been able to immediately realize gains which otherwise would have remained unrealized because they're essentially paper gains on something that doesn't even need that. It's not even a question to my mind at least, of whether it does or doesn't have have product market fit. It's utterly bizarre that it doesn't need to have product market fit because it's a live public market from day one and it can be dumped on retail. That has never been the case before for venture capitalists. The venture capitalists that invested in Apple, I don't know the precise dates or numbers off top of my head, but I would imagine that they had to back real capital formation for what, at least 10 years, I'm guessing, before an IPO. And then the people who bought at IPO were predominantly also institutions who understood the information that they were being presented with. And I think the key thing to keep in mind here that I'm actually not sure many people realize this. I'm sure everyone on this call realizes it. But like your listeners, retail investors and all of this, is that the reason I think this is so insidious, what VCs are or what this handful of VCs are doing now is that they now have a kind of a perfect storm where they can realize what would otherwise have been unrealized gains and the way that they actually make their money is purely by skimming what should have otherwise been unrealized gains. I won't name anybody because everybody knows who we're talking about anyway. But the way that they get paid is not by these projects coming to fruition, it's by them having any temporary value that they can then take their management fee off their LPs. So that's fine. In general with regular VC, where you have to form capital and get it to a point where public market investors will believe your thesis. But here, where it's public from day one, I find that very unsettling. So I want Udi to respond to this as he's unmuted himself anyway. But do you at least acknowledge this is different, Udi? If not, I would be awful.

[Udi Wertheimer]

I agree 100% it's different. And I think if you're in tune to what the communities who are investing in those things are talking about, you'll see that this is a major concern. Everyone knows about, everyone's talking about. So it's not like everyone knows that it's at least theoretically possible for VCs to do this shtick where they buy a pre sale and then dump it a week later. It's technically possible. There's nothing, there's no regulator who will tell them no.

[Alex Gladstein]

Well, actually they will.

[Alan Farrington]

Sorry, that's very precisely not what I mean. There's a subtlety here that. So my whole point is that they don't even need to dump it. They will still make money provided it temporarily pumps. They don't need to see it through to any actual realization of value, which isn't. I think that's what's so tricky about this, is that it's more. More like, to my mind, it's more like just a conflict of interest that ought to be more. I know you're saying people are aware of it, but it ought to be discussed about far, far more openly and far more clearly. I think purely for the sake of.

[Udi Wertheimer]

Honesty, I think it is being discussed very clearly in those communities. It is not discussed very clearly in the Bitcoin community, which is not participating whatsoever. So its discussion is pretty shallow. But in the other communities it's discussed very heavily. And the thing is, it's true that you're not going to have regulators to kind of protect the investment on those things, at least for now. But what you do have is the potential, not the necessity of, but the potential for transparency. And what happens in a lot of those communities is that the smaller investors, or the retail investors, so to speak, are demanding transparency as to what the VCs get at, what prices, when can they realize or when can they not realize? And for a lot of these projects, I'm not going to start naming names, but for a lot of these projects the information is open and clear, which it wasn't in 2017, by the way, that's an improvement. That happened because a lot of those retail investors did get hurt pretty badly back then and they learned the lesson. So now they're demanding this information and then they can make their judgment. We talked, we mentioned Solana before. Like, everyone knows what that a lot of people got in early in Solana and everyone knows when they can or cannot realize their gains. And, you know, people can make up of their minds. A lot of people. If you go to how people are talking about Solana, you'll see a lot of people are talking about the VC problem in Solana. That's like the main criticism. It's not like people don't know. So you can make your decision if you want to do that or not. You're making a bet. You're making a bet that Solana is going to be the biggest, whatever smart contract platform. I don't know why. Making a bet that's going to be the biggest in the future. You're going to have to take a risk to make that bet. And maybe you're wrong, maybe you're not. I think that assuming that for sure Solana is going to scam everyone is kind of a stretch. Maybe they will.

[Alex Gladstein]

Can I just throw a couple of things in there? So one thing I wasn't aware of with Solano, and maybe somebody is aware or can confirm this, but my understanding is that someone like Multicoin, they don't have to sell the tokens to pay their LPs, they can actually pay their LPs in the token itself, which is something I wasn't fully aware of. But also, if we want the analogy of public markets, there's certain disclosures that companies have to make. So for example, if Apple is having supply chain issues, they have to make these disclosures. People are fully aware, but I don't feel like with projects like Solano, you get the full information of, of the scaling issues they're having. Coming centrally where people should be actually explaining. We have a massive scaling issue here. If we want to compete with Ethereum, these are the challenges we face. We potentially might not be able to do this, which was what the Amazon Ethereum guy was explaining last night. It is fundamentally flawed. So I'm not sure we always have this information public.

[F]

Peter, I just wanted to give a short little like parable about. About what, what I think is the core, one of the core issues we're discussing here. And that's sort of like ethics, right? So I'll just use one example of a coin that was kind of between the 2017 and, and today Algorand. Okay. So the reason I, I pick Algorand is because they have used a mass, the MIT name to promote the coin, which I find really disturbing and it's, it's really an embarrassment but basically to MIT. But basically what happened is that a bunch of VCs and people like multicoin specifically got in on this pre sale which was, I don't know, a few cents. Okay. In like May, June 2018. Then they did a public, like an auction. Right. And the coin auctioned for about $2. And there was like there was publicly knowledge of an algorithmic lockup where like people couldn't sell their Algorand over time. Therefore like they were stuck with it. Nonsense. The original investors were able to get out by swapping their positions with other people. Right. So you know, I'm okay with the multi coin people as a proxy for all these other investors making as much money as they want. I hope they don't get in trouble. And it's wonderful. Great, go ahead. What I'm not okay with is them going out and saying we're like the leaders of this decentralized world and we're promoting freedom for people. It's complete nonsense. And like that is important for us to stand up and make a statement about I think at least. And at the end of the day, the reason I choose this parable is because it's like really it shows the difference between like crypto and bitcoin. Like in crypto we're not equal. There's a handful of people who have insider information and they get a lot more rich than everybody else. Everybody else still gets rich, but they get a lot more rich in bitcoin. We're all equal when we rise and fall. And that's what gives people pride in bitcoin and that's what gives people hope for a future where things are a little more equal. And I don't know, that was my little parable.

[Udi Wertheimer]

That's great. I mean, I think it's great. It's fantastic. And if people find that value in bitcoin, that's awesome. I also agree with you that multicoin are not the champions of freedom in the world or in the crypto space or in anything. We agree. I mean, it's definitely fine to say that too. I don't think we have any disagreement there at all. The thing is that I think we shouldn't, like, I don't know what happened in Algorand. Right. And maybe that's what happened? I have no idea. But that's in the past and people learn from those bad experiences. And it's possible that some actors are bad actors and they remain around and they keep doing bad things. But the point is that in this unregulated for now environment, the way that people regulate those things is they take the risk sometimes they make mistakes, they learn from the mistakes and next time they're going to demand to do it better. I don't know if that approach is going to work for them or not. But importantly, I don't think they're bad people for trying. I think maybe I'm not talking about the people who are doing bad things, I'm talking about the people who are trying to make it work. I don't think they're bad people. I don't think it's a immoral attempt. And I think it's another approach which it's interesting to say the least. And we'll see what happens. I don't think it's necessarily evil just because some bad apples existed. A lot of bad apples. I would concede that we spoke a.

[Peter McCormack]

Bit about 2017 and what's changed since 2017. Have people learned stuff? Is it better, Is it worse? And then we spoke a bunch about VCs and VCs getting these private deals, buying Solana for less than a penny or whatever. And one thing that has changed dramatically since 2017 is in 2017, and I know they were all bad and they were all scams and I'm not trying to be like an advocate for them, but you had ICOs, right, where all market participants were able to buy on day one effectively at the same price. Yeah. Then the pre sale was invented and blah blah, blah. But in general it was relatively fair for all market participants. There was no multi coin buying ages before everyone else for like pennies on the dollar as regulation, like you know, the dao, the SEC got involved. Projects instead have moved to a model where instead of doing an ico, a public anyone can buy. Here's the entry level price. Like what Ethereum did, right? They did the pre mine and sold all the pre mine for like a penny or whatever instead of everyone getting in on the same price. Now projects do what you described. They do a round with multi coin, they do a round with a 16Z. They do, they launch their coin, they do another round after they've launched the coin with coins from their own treasury at a 50% discount to VCs that are locked up for four years and retail buys way, way Way higher. Because retail does not have the opportunity to buy on day one anymore. You don't see the Ethereum ICO really happening anymore because it's a bad regulatory strategy for someone that wants to launch something to do an ico. Like you're doing a security sale, basically. And that, I think has actually been worse for retail investors because the first opportunity you get to buy is now similar to actual IPO moment, where all the great deals are long gone and you only get to buy high. And this is the reason for the regulated investor law, the accredited investor laws in the us. And I think a lot of that in crypto just makes the VCs rich. It means it's really difficult even if you do all the work to get the opportunity to buy something at a good value. You can do all the research in the world and then still not have access to the deal that you wanted because you're not a vc, you don't have the accredited investor, blah, blah, blah. I think that's actually a step backwards from ICOs in terms of ethics for retail investors. I reckon both of them are bad, but only being able to buy the top is much worse than being able to buy on day one. But if you think about it from the perspective of a project, and again, try and be optimistic, try and imagine a good actor who thinks that Ethereum is shit, Solana is shit. And they've got the way, they think they can build something better and they're like a regular person, they want to contribute and build something in this industry and they think they've got a good idea, how can they go about it today in a way that is fair, or should they not build anything at all? Is that now forbidden? Because Bitcoin exists, so we should not contribute anything new? Because if you, if you were in this position, you want to do something and you want to contribute and build something in crypto, but you need to like hire your friends, you need to hire some people from the market. You need like funds to work on this full time. You have to raise money from somewhere. You can do it alongside getting, having another job if you want, maybe, but it's not reasonable to expect everyone that wants to build something and contribute to like work multiple jobs just to, you know, trying and contribute to the industry. So you have to raise money from somewhere. Is it better to do an ico? Is it better to do a private fundraise? If you're doing a private fundraise, how do you avoid having a massive FDV and retail investors buying the Top. Do you never go public? How do you even reach product market fit if product market fit requires your blockchain to be public and therefore having a unit of account on the blockchain? I totally understand where Alex island are coming from, but I think there's so much nuance. And bitcoin sort of had this immaculate conception where no one knew anything about the industry. It wasn't like bitcoin hadn't bubbled up and had these huge price increases as it has now because it didn't exist. It was brand new. There was this beautiful moment and that only bitcoin could have done and now you can't do. If you try and do what bitcoin did, this fair launch, it doesn't work anymore because you just have massive capital allocators that hoover up all the coins. A fair launch cannot happen anymore. It's like a complete fiction that you can do a fair launch because Alameda and Multicoin will just put their $3 billion into the single sided staking and end up with 30% of the supply anyway. And you just gave it to them for free.

[F]

That was just like a beautiful explanation of how the establishment took the one glimmering hopeful possibility of innovation here and just squeezed it out and figured out how to like reassert its dominance. I just thought that was brilliant.

[Alex Gladstein]

Well, I think you make a really good point there, Kobe. I don't think you can ever do a fair launch like bitcoin again. I think it's very difficult.

[Peter McCormack]

But if you are a government, what do you do now?

[Alex Gladstein]

Well, what I do think you can do is an unfair launch. And what my concern is this flip in the incentive model. Companies like A616Z can invest in projects and see very significant returns on things that will ultimately fail. There's no incentive to find the projects that will work. They don't have to work. They fundamentally see a return whatever because it doesn't have to work. And that to me is like something that.

[Alan Farrington]

Oh, sorry. To answer Kobe's question, what we do now is we try to convince people to build on bitcoin.

[Udi Wertheimer]

And why do you think they're unconvinced?

[Alan Farrington]

That's a very good question. Well, I mean, I don't know time pronounced. I don't think there is a single answer to that. But I do tend to agree with you, Udi, that there are better and worse ways to convince them.

[Peter McCormack]

Let's say they're convinced, right? Let's say you're building Uniswap on bitcoin or you're building a decentralized lending protocol on bitcoin and your builders are good actors, 25 years old, grown up, working class. Do they launch a token on bitcoin? And if so, how is it different to launching a token?

[F]

I think that the incentive structures are different. I think what I think is going to happen in the next two years is actually going to borrow a lot of innovation from Uniswap and from Contracts for Difference and from stuff in Ethereum. It's just going to come to bitcoin. One of the things I'm most excited about in bitcoin is this idea of stabilized lightning where after taproot you'll be able to have a non custodial lightning wallet at home anywhere in the world. And you'll be able to peg inside the wallet without connecting to the banking system, to fiat money. And that will work with a contract for difference where some of the users are long bitcoin and some are short with dollar exposure. That's going to be revolutionary. And that's one thing that's going to be strictly borrowed from the alternative currency space. So in that, in that regard, that shows that it's like it can be a very helpful sort of scientific experiment type thing. And that's the one thing I've always said is that it's always worthwhile to look at what's happening because we're going to borrow from that, bring it over to bitcoin. But I would say that like people, it's funny to me that people are like, oh no one's building on bitcoin. I can now tip someone on Twitter using lightning. Like, I just think there's like different, different interpretations of what is building on bitcoin. Like to me like nation state adoption, Twitter adopting bitcoin is like way crazier than, than like, like I don't know a lot of the stuff happening on other coins. But maybe that's just my perspective.

[Alex Gladstein]

I did an interview with Greg Carlson from XBTO and his take on this was bitcoin is the best form of money that's ever existed and it necessarily moves very slow. It's a glacier. But we should embrace crypto projects because the people working on those projects are innovating and finding out what people want and that stuff will eventually end up on bitcoin. I've seen arguments back saying this thing that people are doing, there's innovation happening in the crypto space that can never happen on bitcoin. But his idea is that we should embrace this, allow these projects to happen because ultimately they will end up on bitcoin and most people should be considering therefore a bitcoin allocation.

[Peter McCormack]

I think if that happens, then most people will consider a bitcoin allocation. I think most people just use like see stuff happening in practice and then go, that's cool. I'll follow that, hope that trending, that trend continues. And if you see large amounts of TVL and stuff on bitcoin, pegging to dollars and doing interesting stuff, then people will go, cool, that's cool. Now at the moment, a lot of that happens on Ethereum and people just go, well, that thing's cool. I want to be able to do that. I don't think people really care what chain it's on. I don't care. If we never have to use Ethereum again, I'll be like, great. Sounds good. I'm not using Avalanche though. Sorry, Udi, I'm not using Avalanche never. But if it's on bitcoin, that's great as well. I always thought it would be on bitcoin first, I think. I don't know if that was a naive view. I don't know if it was just what I thought because it was the first crypto I ever owned and held and I was full maxi for the first three or four years of my crypto journey, I guess. And when that starts happening, I also thought that all the innovation from other chains, altcoins are just to play like a test net for bitcoin. Everything will be moved back to bitcoin. I haven't seen it really play out in practice and I don't know now if it's actually bullish or bearish. If it did in one hand, it's super cool if people start doing interesting things. And you can use bitcoin for a lot of things that you can't currently use bitcoin for. You can exist a lot more on an on chain only ecosystem. I guess with bitcoin I think that would be great. I'd be a lot more interested personally in bitcoin's day to day then. But at the same time I quite like the idea that bitcoin is just this extremely simple, uncomplicated thing where there's not many things that can go wrong like Ethereum. You got to ask yourself, what's the collective noun of black swans? At any moment it's like there's 17 different things that could collapse on each other and that's fine. That's a risk I accept with Bitcoin. I like the idea that it's simple. It just does its job and I kind of think it's won its category. I think I agree with what Peter said. Bitcoin is this thing. It's like a digital gold. It is the generally accepted inflation hedge for modern people. People that were I guess born after 75 or something. And smart contract chains are always going to compete to be a speculative something else. So they don't really compete with each other.

[F]

But just to add off that and what Udi said earlier, what you're watching live now in emerging markets is a battle between the two things that Udi pointed out. How do you evade regulation? Well, number one, you can build on Bitcoin or you can just have a ton of different projects and hope the government doesn't catch you. Right. So in Nigeria and in a lot of West Africa, a lot of the stablecoin activity is like actually based on stuff like Tron. Right. It's not even on Ethereum anymore. Right, Whatever. It's cheaper, faster. People don't care. As you just said that it's. They don't care what's under the hood, they just don't care. The question is for people like Alan who are thinking five, 10 years ahead is what's more likely that it's going to be on Tron or that people figure out how to make stablecoin not stable coin, but how to make value in native Bitcoin like tenable and scalable. And that's the big question for a lot of people who have that long term time preference. And personally to me it just seems really obvious that like over the coming years in emerging markets like you won't need stable coins on Tron or Tether or whatever, you're just going to have Bitcoin and you'll choose to be able to peg it to whatever you want. And I think that's I guess the main difference in I guess short to medium term philosophy here.

[Udi Wertheimer]

It's a valid view but I think it's assuming that there will be regulatory pushback against stable coins on Tron, which might be true. But so a couple of things there. One, if I'm just a guy who's using USDC on Tron, I don't care, I just use it and if something happens to Tron, I'll stop using Tron. I mean I don't care if I'm an investor and I made a lot of jokes about Tron in the past, but I'm not trying to convince anyone to invest in Tron. But the assumption that necessarily Tron is going to be taken down or Ethereum or whatever it is going to be taken down by the regulators is not a given, it's an option. It might happen. If that happens, then the more decentralized projects will obviously do better, but that might not happen. Also, Bitcoin does not have those solutions right now. And that kind of takes me back to what I'm concerned about. I am with Alan and with Alex on how I believe bitcoin is much more important. It's the vast majority of my portfolio. I think the others are just not very important. And that's why I'm concerned not about Bitcoin itself, but about the bitcoin developer community that in my opinion we're kind of educating them that they should not look at those things and they should not think about those things because it's a scam and it's immoral. And I think that's a problem. Even if you've been a few attempts in the last year or two to do bitcoin defi mostly on things like RSK and stuff like that. And those obviously fund themselves in the same way. They have their own token and they had their own pre sales and there just hardly has been anything else that doesn't have that because again, how are you going to fund it and how are you going to build it and just technically how is it going to come to be? We don't have those answers yet. Maybe in five years time we will. But for now this is what we have to learn from. And I don't think it's immoral to learn from those things. I don't think it's immoral to try to improve on them.

[F]

This is why even liquid is something that a lot of bitcoiners are super skeptical about. They're just like, I don't think so. No thanks. I'm not using your corporate like sidechain. So I would agree that maybe that's a vulnerability. I guess what I'm saying though, udi is I'm not. I don't necessarily see like a resistance into looking into the mechanisms of these other chains in the developer community. I mean I see people looking at Uniswap and saying, oh, we're going to do that on bitcoin and here's how. So I guess it's just a matter of like where we're looking.

[Alex Gladstein]

Sorry, can I just throw in there that.

[Udi Wertheimer]

Yeah, please.

[Alex Gladstein]

Sorry. I just want to throw in there like prior to Bitcoin and Ethereum and the token infrastructure or the token world HTTP, email, bittorrent, Tor, Git, wiki are all essentially decentralized projects that were built without a token. So there is an ability to raise money or bootstrap projects and build things without a token. And my question really, and I want to put to Alan, is that from reading your paper, it's the token that fundamentally breaks many of these projects.

[Alan Farrington]

Yeah, I think so. I mean, this is exactly what I wanted to jump in with just now anyway, that I actually think this is back to. I think it was Kobi originally mentioned this as the question that innovators and try to do this in as good faith as possible. The question that innovators would face in terms of how to raise sufficient money to do anything in the first place. But I think if that's your starting point, it's really unfortunate that these people will look at Bitcoin or could look at Bitcoin and see one of the innovations of Bitcoin as being a way of raising money. And I think that that is just a kind of a really unfortunate misunderstanding of why decentralization matters in terms of how Bitcoin works. It's almost like interpreting the decentralization as conferring an escape from traditional finance. That's how they're looking to tap into it. They don't need to go to a vc, they don't need to get a loan from a bank or whatever. They don't need to use a traditional way of raising capital. They can do it in this decentralized manner. And to my mind, that's just so far from the point, it ends up defeating the point. Yes, there is a new asset with a blockchain. It requires a token, but that new asset is money. And this is right back to the philosophy that we started with at the beginning, that people can disagree with this, by the way, but my take on this is it has to be money. The token in a blockchain does not make any economic or technical sense if it's not money. And what's interesting here is that if you're sort of suffering from this misunderstanding, I don't think you even realize that you're not even thinking yourself about money. You're thinking about security. What you want to do in that case is issue securities. And just to be completely clear, I'm not, I'm not making this distinction as a way of calling for regulation. I don't think securities regulation really has anything to do with this discussion. I'm calling just for clarity of thought. I would prefer for people to know what a security is to know what money is, to know why they're different, to be able to think more clearly about why they would need or want a token maybe, or a security maybe, or just capital to fund a project. And I think if they go through all of this, that will ideally get them also thinking about why they might want to build it on bitcoin, hopefully.

[Udi Wertheimer]

But Alan, when people buy aave, for example, they know that's why they buy for. They know that it's much more close to equity than money. No one is buying AAVE and saying, oh, this is the new replacement of bitcoin as money. And I think I read the paper and I'm listening to what are you saying? I think what you're kind of trying to say is, and correct me if I'm wrong, blockchains are useful to create money. Although all of their inefficiencies, they're the only ways we know how to create digital money, hard money. However, for securities, we don't need blockchains. We could do that without blockchains. And therefore using a blockchain in order to secure inequity is a waste or inefficient. And I kind of agree with that. But even if it's not the most efficient way to do it, why does it matter as long as it works?

[Alan Farrington]

It matters because, to go back to Kobe's original question, which I was trying to answer there, it matters because being clear about this will influence what people decide to build in the first place. So I would prefer that via all this clarity of thought, they arrive at deciding to build on bitcoin. That's why I think it matters.

[Peter McCormack]

Let's say they build on bitcoin, right? So let's say you're a good actor. They're trying to do the thing right. They want to build an amm, they're going to build on bitcoin. It's got to be open source because it's got to be, you know, available for everyone to audit. And you don't want code running in a black box, blah, blah, blah. And then I bad actor Kobe complete scammer go. I'm going to copy your source code. I'm going to add a token on top called COB Token. And then I'm going to incentivize everyone that trades on Kobe swap with COB token. I'm going to give 100% of COPE token supply to everyone that's ever traded on here over the next six months. And then code token holders will get a percentage of the fee that goes Through Cobiswap. The person who made this stuff originally didn't do a token. They tried to do everything right. They built on bitcoin. Me, bad actor, total dick came along, and now my platform's going to win. Because rational economic actors want to do the thing where they make money instead of doing the thing where they don't make money, which is what happened with Sushiswap. Right. And sort of forced Uniswap's hand into launching their token, like, sort of defensively. And the token stuff is a bit triggering or tilting for me because I do think it's. What is the point? They all seem a little bit pointless. Uniswap's a good example. You can just vote to give people money. Apparently you can vote to give, like, student groups money or whatever. You can't do much else.

[Alan Farrington]

Did you not have a proposal about this recently?

[Peter McCormack]

Yeah, I wanted them to give me $20 million to shave my head, but they said no. I wasn't in. My insiders. I tried to get in, but no one would. No one would vote for me. They thought it was facetious. I was being serious, dude. I'd shave it all off. It would go. And I would do it while reading the Uniswap developer documents out. So it would be a big hit for them. But they do seem all a little bit pointless until you realize that if people can clone your work and issue a token, then you need to defensively have your own token. Already a lot of people are just saying, what is the purpose of this token? It's like the purpose is someone else is going to do it if we don't.

[F]

But you've just described perfectly the entire alternative cryptocurrency movement from the beginning. But I do think there's something that happens over time. Look at lightning. It was really hard for people to build on lightning to raise money. They didn't have a token and it looked dead. And I was joking around, retweeting all this stuff from last year. People saying, oh, I remember lightning. Okay, lightning's going to win. Lightning's going to change the world. And it's just slow. It takes. Takes time, but I think it's going to eat everything else. So the question is, yes, you can keep doing what you just described, where you're like, oh, I have kind of this thing like bitcoin, except I'm going to mint my own coin on top and we can all get rich. You can do that to an extent, but, like, eventually there's just diminishing returns and the open network wins. This is something I believe. I mean, Jack Mallers talks a lot about this. Now that's in the realm of money. We don't know what's going to happen in terms of trading and finance. And with regard to trading, art and collectibles, like that's unclear at this point. Maybe Alan has ideas on that. But at least when it comes to money, what we've seen is like that game you've described. It eventually dies and the open network wins, but we don't know what happens in the other industries.

[Peter McCormack]

I mean, I hope that pattern plays out honestly, because I think it gives a lot more legitimacy to industry, which is very easy to mock as an outsider already. So I hope so. But I don't see it playing out very often in crypto so far.

[Alan Farrington]

Kobi, I think that the answer to your concern, I mean, as trite as I'm sure this sounds, it's just education. And it's why, actually, as far as I'm guessing, actually, I'm not even sure how to put this. Just the continued lack of legitimate debate between me and UDI because we actually kind of fundamentally agree on most of this stuff. I think Beer was hoping we were going to yell at each other. I'm not sure.

[Alex Gladstein]

No, I wasn't. No, I wasn't actually.

[Alan Farrington]

No.

[Peter McCormack]

No.

[Alan Farrington]

Okay. All right. Well, because we yell at each other a lot on Twitter, but it's all trolling that no one else seems to actually understand. And they were really nice to each other in private, but sorry, no, Kobe did. I think the point ultimately is just education. And so this lack of the debate between me and UDI comes from me being very, very sympathetic. And I think it's funny because I would imagine that you're probably prior to this podcast and then I'll be destroyed. People would have, especially if they read that paper. They would have thought that I was a bitcoin maximalist. And I kind of get what they would mean by that. But I am very sympathetic to this view that the tactics also matter in terms of how you get people into bitcoin, which is weird because I think both these things would be true at once. And I imagine that Alex probably feels very strongly about this, that ultimately what we say doesn't really matter to bitcoin's long term success. It would be highly hubristic, like for us to think that we're going to solve it now by deciding what the messaging is going to be. Obviously we're all on board with that, but that doesn't mean we can't help a tiny bit at the border by, for example, putting out the kind of message that would encourage somebody in the position that you just described, Kobi, to build on bitcoin. I think the really annoying thing is you're never going to know who this person is. There's going to be somebody who decided to build on bitcoin because they understood all, all of this. Unless they come on the podcast and they're like, oh, yeah, I remember that time when Al Nudy and Alex and Kobe were all chatting about this like that. That was my inspiration. Unless that happens, you're just never going to know. So I do think there is value in. I'm not even sure how to put it in a way that won't get me canceled. Like not being too toxic, being toxic enough, but not too toxic. Something like that. I know. I can see Alex getting angry.

[F]

You just can't. No, no, you just can't. It's not. You can't just raise easy money to do bitcoin stuff. You have to raise hard money. It takes time. It's tough. But I guess what I'm saying is that over time it's like highly effective and really decimating for the legacy system. I think the question is just. Again, I think we all agree bitcoin's. We can't really change bitcoin's trajectory. It's going to do its thing. I guess what I'm arguing is we can change people's trajectory and we're about to enter a decade. I think between 2021 and 2031, we're going to go from like 200 million Bitcoin users to like, like way over a billion. And the price will react accordingly. Exactly how you think it's going to react. And that's an asset that's open to anyone in the world. And right now the media and governments are gaslighting people about it. And, you know, like, we should just unite around that and help people onto bitcoin and then look if they want to get into this other stuff that takes more information, asymmetry and like, like more time as you described Kobe to like sit there and look like short term, fantastic. But I'd love for more people just to realize that, like, hey, in 10 years we're probably just going to regret we didn't talk more about bitcoin and try to get friends and family involved. And we're upstream against a state and a government and a media apparatus that is desperately trying to get people to not invest in bitcoin.

[Udi Wertheimer]

Funnily enough, if we issued a token that reward people who would take a stand against the government, we will probably do a better job because that's a way to direct resources. And actually the exact thing I describing is happening on Ethereum and on other ecosystems. A lot of it is a joke, but also like, you know, it would encourage the most capable people to do those things for profit. That's why they're Czech's. Capable people.

[F]

Yeah. We've got plenty of people out there who are encouraged by other motives beyond profit. I just, I see it man. It's happening.

[Udi Wertheimer]

We have them. But the question is, do we have the most professional and the most capable people doing the work? That's a capitalistic question, right? That's a question about capitalism.

[Alex Gladstein]

Well, I'll bring it back full circle and why I wanted to host this and I've been discussing this subject recently with people people and it's very interesting to see the mild coercive pressure that comes through say on YouTube comments where it's like oh, Pete's now a shitcoiner or Pete's now shitcoining. Oh, this is a soft introduction to shitcoin. I just want to be very clear. I only hold bitcoin and I only intend to hold bitcoin. But the reason I want to have this discussion and you know Udi and I talked about this on Telegram.

[Peter McCormack]

Pfizer Equity though, aren't you mate?

[Alex Gladstein]

Yeah, Pfizer Coin. But the reason I want to talk about it is that I've wrestled with it idea of toxicity and bring it fully back to an individual level. I have one job in the world which is to provide content that helps people understand bitcoin, educates people about bitcoin and if shouting about other projects actually harms that, then I'm not doing the job in the right way. What I want to do is encourage enough people to either come to the podcast and learn about bitcoin or come to the podcast and learn about why it's a better investment. And I see there's a potential risk by we've got massive growth now and every time we go through a hype cycle it's 10x more people coming in and how do you provide the right level of education. It could just be a bitcoin only podcast. I only ever talk about bitcoin or I can bring people along like yourself, Kobe, Udi, Alex, Alan, have a civilized conversation about what are the flaws when these other others projects and what are the risks and hopefully bring you in and consider bitcoin as at least your primary asset or something you'll have an investment in. But I feel like these conversations are worth having and it is worth diving into the nuance of them, whether or not you're a bitcoin maximus or not. So I just wanted to bring it back full circle and just say, I am Bitcoin only in focus. But I want to make these conversations happen so at least people have all the information because I don't believe they always do. Udi, you said everyone understands how these things work. I don't believe they always do. I don't believe people always understand what they're getting into. Actually, I know they don't because you see the stupid emails I get from people.

[Udi Wertheimer]

Of course not. Yeah. I didn't think everyone understands that. I'm just saying those conversations are happening and if we want to look at them, they're there.

[Alex Gladstein]

All right, well, I think. I think we can close this one out. We've done two hours. It's great. I appreciate all of you coming on. I think it's a very good discussion. I think I'll reverse the order and let anyone have their kind of closing comments. Koby, I'll start with you, mate.

[Peter McCormack]

Alan told me we were playing among us. Is that not happening?

[Alex Gladstein]

What's that?

[Peter McCormack]

I don't know. He said that's what we were doing after we did the thing. We're all playing a game together live or something. Not happening. All right.

[F]

Yeah.

[Alan Farrington]

Peter changed the topic, though.

[Alex Gladstein]

Yeah.

[Alan Farrington]

Bitcoin instead.

[Peter McCormack]

Yeah. I don't really have any closing comments, to be honest. In general, I think it's smart to stick with the, like, keep your majority allocation, like Bitcoin, Ethereum, and if you're not going to look at the markets for 10 years, I think there's the only two things that I have confidence will be around after like that time period. I don't have confidence anything else on the top 10 of coin, CoinGecko or whatever is going to be around. Some of them might be. Some new stuff will be there for sure. If you look at the top 10 on CoinGecko, it's kind of disappointing that that is the, like, representation of where the money is allocated in our industry because it's like, look at it, it's a joke. But. And I agree with tons of stuff Gladstein and Alan have said, to be honest, I actually think I might just take Gladstein's external approach from now on because it's by far the coolest approach to Albie. So you sound way cooler than the rest of us. So I gotta, I'm gonna go with that one. It's like meaningful and I like got some sense of purpose from it. I really liked it. And for people that are like long term allocating into your Cardanos or your Solanas or your Avalanches or Neo or whatever, I don't know what they all are, to be honest. I think you do need to take a hard look and figure out what you own and what are the practicalities about what you own, what is the actual upside in what you own and what are the risks and reallocate some of that to value. I think where I disagree with most people on this podcast is I think there is value in Ethereum as well. And I think there's value in Bitcoin and I think it's a mistake, not that's ridiculous allocation. There's a mistake to not have some allocation in both. And I think there might be some people that hold one of the things I've just named or some other thing that absolutely hit it out of the park and maybe Ethereum goes to number three and this thing goes to number two because that's the industry we're in. Weird stuff happens and they might listen back and said, you told me not to hold fucking whatever. And I was wrong. And fair enough. But in general, I agree with everyone. Thanks for the invitation and yeah, I've enjoyed talking to you all.

[Alex Gladstein]

For a man with no final comments, that was a good summary.

[Peter McCormack]

I felt like I had to say something you put pressure on. I just babbled.

[Alex Gladstein]

Alex, final comments, man.

[F]

Yeah, I mean look in my. And again there's a huge difference in short term dollars made versus like long term enrichment of your own understanding of the world and, and your economic, you and your family's future economic place in the world. But I found tremendous value in trying to understand the flaws in other platforms and I think it's something we should do more of is and also in Bitcoin, but like, like criticism and like real criticism and trying to deep down, dive deep down and understand things about monetary policy and who controls these platforms I think is really important and shouldn't be hid from the public and should be part of the dialogue. And I think you as an individual gain a lot when you, when you start to ask these big questions about well actually who gets to decide the monetary policy of this thing and what would happen if this company turned off all these servers. These are all super valid questions and like we should just continue to ask them all and at the end of the day this was a great conversation. I really enjoyed it. And I think, you know what, what some of us have pointed out here is that there's two ways forward. You can build on bitcoin or you can flee the cops and you just have to see how it's going to work out. And, and I, I, I agree with Udi that it is unlikely that the cops are going to catch everybody, but it's a risky game and they will catch a lot of people. And we haven't seen the full. We have, I would say it would be arrogant to think that we've seen the full, the full might of the state at this point. I would be concerned about that. You just saw what the Chinese government just did. I would, I would be, I would be hesitant to say that we've seen the full force of the state and I'd be worried if I was someone making a dyno project right now, if I didn't have a plan to comply or flee essentially. So that's why I think building on bitcoin is so important, is it's already trojan horsed its way in. Like we already have it in freaking Twitter and it's not going anywhere. So I'm excited about the world ahead and about the next decade and yeah, more dialogue and debate will lead us to a better place.

[Alex Gladstein]

Thanks, Alex. Alan, thanks for coming on. First time having you here.

[Alan Farrington]

No, thank you very much for having me. Yeah. Last words, Let me think. I guess I'd ask people to just make sure they really understand what problems are trying to be solved here and how they can contribute to that. So, I mean, from my sort of personal and professional as well perspective, I think what irritates me about a lot of this, not this conversation, I mean, but the wider conversation around this space is that it gives the impression that the problem with finance and with capital markets is that they're, they're almost not digital enough and they're too analog and that's what we're setting out to fix. And I think that the problem with finance isn't that it's not digital enough. It's that it's far too digital, it's far too short term, it's nowhere near as interested in long term capital formation as it should be. And I think the way that you take on the establishment, if that's, you know, if that's what you want to do, if that's why you're in this space at all, the way that you sort of really achieve decentralization, right, not, not of you Know, some. Some token. Some software project, but of, you know, your life is that you look into. You look more into the single greatest project that has ever existed to do that, which is bitcoin. That's my final word.

[Alex Gladstein]

All right, Udi, follow that up, mate.

[Udi Wertheimer]

Well, what does Oodieverse want to say? Let's see. I think that a lot of people kind of in the last two weeks or so have been looking at what I've been saying, and they're like, oh, what's going on? Is it really trying to convince us to buy shitcoins, or is it really trying to convince us to build on shitcoins? And I. No, absolutely not. I would not recommend any of those activities. I'm actually saying those things because I think that we've been conditioned to not talk about them. And I think that as a bitcoin community who cares about bitcoin, we need to talk about them. And I think that as much as I love cool things like taproot and lightning, and there's been a lot happening around those too, in the last year. There's been a ton that's been happening in the last year outside of the bitcoin ecosystem. A ton. Much more than in previous years. And we should not ignore that. We shouldn't attach immorality to looking at it. And I do think that it's possible that we'll have, and I hope that we'll have this future where everything is built on bitcoin. And I think to get there, we need to start looking now. That's what's happening elsewhere, and start learning from it. And it is okay. It's moral. If I convince a single person listening to this that it doesn't make them a bad person to try out uniswap to see how they can convert it to bitcoin, then I'm happy.

[Alex Gladstein]

Awesome. Well, listen, I appreciate you all coming on. I think it was a wonderfully civilized conversation. Nobody yelled at any point. And I do think these conversations are definitely worth happening. I think there are a lot, lot more helpful, and it helps people understand the nuance of what is going out there. So, yeah, big thanks to you all. Viva bitcoin. I absolutely support bitcoin, and I think it's amazing what we have here. And hopefully this. If success from this conversation would be a few more people having a better allocation to bitcoin, I would be happy with that. So thank you all. Take care. I'm sure I'll see you all soon.

[Koby]

All right, ready? What do you make of that? 1. Did you enjoy that? Okay, honestly, I think this kind of level headed and rational debate is so much more valuable than just shouting on Twitter and calling everything a scam. Don't get me wrong, there's tons of scams in the space, but I just don't believe that everything other than bitcoin is a scam. Some are just stupid or technically flawed. While I think almost all projects are misguided or doomed to fail, I also realize that people are going to get involved, know how much we shout at them and, and you know, perhaps we convince some people and you think that's worth it. Now I think my job here is to provide educational content. So if I'm scaring people off by being a dick about altcoins, then maybe it isn't the right approach. Now some people will make a ton of money from altcoins and I think trying to educate them on the importance of bitcoin is much more useful and hopefully we can encourage these people to roll any profits into bitcoin for the long term and understand why that should be their long term savings. Anyway, I hope you enjoyed this. Some people might get triggered, some people might just say, you know what, that's.

[Alex Gladstein]

A really great show.

[Koby]

Who knows? If you want to discuss it, you can jump into my telegram group and you can drop me an email. It's hello. What bitcoindid.com As I said, please don't write me an email trying to convince me of why the show should cover more shitcoins or why I should invest in them because neither are going to happen. I'm only ever interested in the debate where it's comparing something to bitcoin to help people further understand why bitcoin is the best form of money. Anyway, listen, I hope you enjoyed the show. As I said, you can jump into my telegram group or drop me an email and also if you want to support the show, please just head over to Apple podcast and leave me a review. Five star hopefully. If you think it deserves it, one star. If you think it's a load of either way, go leave me a review. That would be super cool. Anyway, I've got to head off to HRS Freedom Forum. Hope you enjoyed the show and I will see you later in the week.