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Hey everyone, Colin here. We're running a short survey to get better information on who listens to the show, and we're giving away free Blockspace gear if you fill it out.

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If you find value in our shows or listen consistently, you can do me a huge favor and fill out the form. It takes about thirty seconds and helps me and the Blockspace team keep the show running.

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You can find a link to the survey in the show notes. Thanks. Welcome back to Bitcoin Season Two. This is the crossover episode you've all been waiting for.

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I have Blockspace media extended universe character, Wardigort, on the show. Uh, you probably know him for banger tweets such as, quote, "It's incredibly embarrassing that Satoshi did not think of yield."

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Gord is a provocateur, unlikely voice of reason, and you might say he's a release valve for Ethereum wrong think, although it's now probably mainstream think.

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[upbeat music] Gord, welcome to Bitcoin Season Two. Thank you. That was, like, quite a, um, generous interpretation of- I mean-... my persona, I suppose.

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[chuckles] I'm trying to figure out how to describe you to people other than, like, well, he's this, like, internet guy- Troll... uh, who tweets a lot about crypto. I don't know. What do you, what do you say your job is?

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[chuckles] What do you-- How do you describe yourself to people? I don't have a job. Yeah, I don't, I don't tell people I have a job. I don't have a job. So I have a, I have another podcast, but

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I don't know, is that a job some people might do? Yeah, yeah. It's, uh- Okay. All right. Then I'm a podcaster... it's the most noble profession. Yeah. Yeah. A heckler to podcaster arc.

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I think the next, the next trajectory is into venture capital, and then, what, exiting the space altogether. I don't know what the normal lifespan is here, but that's usually how I see it.

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[chuckles] And we all know- But I, I won't be exiting, I won't be exiting the space altogether. Here to stay. [chuckles] It, it's, it's like the, it's like The Godfather.

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You, you just think you're getting out, but it, it, it pulls you back in. Yeah. That's the story of our industry.

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Um, so, so, okay, like a lot of folks who maybe don't know who you are, but, um, I know, like, a lot of Bitcoiners, uh, kind of mentally categorize you as, like, a general crypto guy.

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Maybe they haven't dived in, um, and know that you are a Bitcoiner. Um, so, uh, can you just preface this conversation by giving me a short overview on your views of Bitcoin versus crypto, Bitcoin or crypto broadly?

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Like, what-- How do you- Yeah... try to summarize your, your current state of mind on these topics?

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Yeah, I mean, I don't know that it's anything particularly revelatory, but I've been a long time, uh, I say long time n-not relative to, you know, early devs, but twenty seventeen era, I suppose, uh, Bitcoiner, and then wasn't very into this-- anything at all until twenty twenty to twenty twenty-one again.

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Um, still a Bitcoiner, and then I was trading. I-- It's funny, like, people talk about the DeFi summer era and, like, I guess the inception of last bull cycle, and a lot of people consider themselves traders.

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But it's, like, quite a bizarre, uh, terminology because I don't think yield farming and just dumping, you know, food coins is trading.

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A-and I certainly don't consider myself a trader insofar as looking at charts and having some alpha, you know, or, you know, building positions, like, what, what people typically think of as traders.

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It's like, no, there was free money being handed out, and if you were lucky, which is what I think m-most of us were, if you were lucky, you kind of found yourself in a position where you could trade full-time.

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But again, I am very reluctant to call myself a trader. So yeah, it's, um, really the...

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I know the initial question was how I view Bitcoin versus crypto, but I'll give us just a tad, a little bit more background, which is that

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I was, like, farming and, you know, degening and all this stuff, and I never really paid attention to what any of this stuff was. It wasn't really relevant, right?

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I-in fact, I kinda make this joke that if you were trying to dig into the mechanics or, like, the sustainability of this stuff, you were likely wasting your time.

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Like, it was an impediment to try to figure out how this stuff worked. Uh, so at the time, I was doing all this stuff, and I never really cared how it worked. And then the bear market came around, well,

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nothing else to do, and I started looking into crypto and DeFi, and this was after having already engaged with it.

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So I understood the de-- like, you know, the ge-the general concepts, but I was never really, um, I n- I never really cared if it was sustainable or if it worked. And

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so then I started sort of trolling about this, and that's been the arc since.

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Um, and yeah, so I've been a, a Bitcoiner this whole time, and I'm interested in crypto, um, interested in some of the stuff that has come out of crypto. I maybe view...

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I do personally view Bitcoin and crypto as being, you know, functionally different, and that's okay. It's not to say one is necessarily better or worse, but I do think that crypto is more,

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you know, improvements to the tech stack or fintech or something along these lines.

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Whereas I view Bitcoin as something sort of different, and maybe they compete, but maybe not, and I think it's okay if they don't compete. Um, so yeah, I mean, I have a, uh, try to have...

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It's hard to say this with a straight face that I have an open mind- [chuckles]... with regards to crypto. There's a lot of times I- Well, nobody can see your face, which is the whole point. Yeah, exactly. Okay.

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So yeah, um, yeah, like despite the cynicism you may find

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from my Twitter account or whatever, you know, I do follow this stuff and I find it interesting, but, uh, that's probably where I would stop [chuckles] be-before going into more detail.

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So, so yeah, you, you make this analogy to which I think a lot of people are coming to, that crypto may be more analogous to f- an evolution in fintech.

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Um, and, uh, you have a great tweet, which is the subject of our discussion today on, uh, the, on the revenue meta, which we'll get into in a little bit. But

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I'll, I'll, I'll throw this question right back to you again a little bit.

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Ha- so I in- I interpret you saying you're s- you're kind of agnostic to things that aren't Bitcoin.Um, is there anything that you actually maybe, bigger quotes, "believe in" that's not Bitcoin? Uh, yes.

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I think-- Well, I think you'd have to kinda be naive to say that there aren't things that have worked that aren't Bitcoin. I mean, s-stable coins being probably the most prominent example.

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Um, even NFTs, uh, there was a huge mania, a huge bubble, and I'm not sure they've really come back, but it's, it makes sense to me that there will be digital art in the future. So like this-- There are things that are--

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I, I care about insofar as I think they have some durability or sustainability.

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A lot of this stuff, and I kinda describe it this way, and this is where it starts to get may-maybe a bit cynical, but like a lot of this stuff I just see as kind of back office software, right?

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And like the future of this is not very customer-facing. Uh, most people likely will not know that they are utilizing crypto rails.

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And so it's kinda like, I, I don't know, may-maybe this is an analogy most people don't want to hear, but it's, uh, do I believe in TCP/IP? Well, I mean, yes, I believe it, it works.

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I believe it is the foundation of our internet, right? [chuckles] Like email protocol, like of course it... But it's not something that I'm,

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you know, out there championing every day, nor, nor do I think that most of the world is or, or nor do they care about it. So I guess that was where I would draw the delineation.

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Now, is there money to be made, of course, like in this transition to some, uh, you know, new back office software or middle office software? Maybe, yes. I mean, the, it, it's f- it's objectively true.

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Um, is this sustainable? I'm not sure.

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But I guess i-in terms of belief, like I do believe there are some-- there's value proposition in, in a number of these things, but for me right now, it's, uh, there's a difference between something being valuable and like investable, and I do think we're kind of moving in an-- we're, we're, um, moving in a direction where there was valuable stuff built or created potentially that may not really be investable anymore, and now going forward, what will be investable will be investable more or less with the same models or, uh, y-yeah, kind of, um, frameworks that we use with traditional assets, right?

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Like does it make money? Is it a valuable business? Um, so yeah, I mean, I don't know how much that answers your question, but I h- I hope that at least it does. It does, and it's a, it's a great transition into...

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So you have this tweet, um, I'll probably link it in the show description for anyone who wants to read. Um, [clears throat] and I won't read the whole thing, but you say--

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You start out by saying, "This is why, paradoxically..." Well, so you quote Tweet Udi first of all, which is

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its whole, a whole thing, where you say, um, [chuckles] where Udi says, "None of the biggest- Udi has sharp takes. He's very good with takes. [chuckles] Yeah, yeah.

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Udi says, "None of the biggest crypto success stories in the last couple years are open source."

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And then you say, "This is why, paradoxically, I'm almost sympathetic to people who cannot wrap their minds around the revenue meta." And, um, you go on to talk about this kind of almost decade-long

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belief, maybe delusion in crypto, of building open source software and value accrual and kind of hand-waving away that these things do kinda need to make money.

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And, um, so I'd invite you to actually, to the listener who maybe got this far, didn't read your tweets, maybe doesn't even get on Twitter, try to explain what you're talking about here.

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Maybe some historical context would also help. Yeah. Let me think of w-where to start. So,

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well, I guess I can kind of break down the fat protocol thesis, my understanding of it, and then there's actually some kind of interesting tidbits about how you interpreted this, um, initially. So

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I think in, uh, uh, I, I don't know exactly when this was, twenty sixteen, twenty seventeen, right near the inception of these smart contract platforms specifically, and then that, that, that part is important for what it's worth.

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There was this paper called The Fat Protocol Thesis. It's actually quite a short paper. It's, it doesn't take long to read. It's a blog post by this guy, um, I think Joel Monegro, who was at,

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uh, Union Square Ventures at the time. I think he's at Placeholder now. Anyways, I'm murky on these details, but, uh, but this is the essence of it. Like, this is the very reductive essence of it.

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It was that as the internet was built, uh, there were all these underlying protocols that we ended up using, TCP/IP, like email protocol, like all, all, all of these, you know, sort of foundational, um, sets of rules, and that I'll come back to that point because I think it's quite important, sets of rules that everybody kind of agreed upon, and it was mutually beneficial for, um, Amazon and Microsoft and all of these companies to agree upon, um, you know, a, a structure for this, you know, burgeoning internet.

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And so the argument that Joel Monegro makes with The Fat Protocol Thesis was none of the value ended up being captured at this, you know, infrastructure layer.

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Conversely, as we progress forward in crypto, uh, because it's f-fundamentally a financial tool, because we have encoded, um, a value system,

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uh, a true, you know, uh, dollar, uh, that's not the right word, but be- [chuckles] because it's crypto in this case. But because we've a-applied an actual, you know, value, um, encoded into the protocol,

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the protocol will inter-- end up, uh, capturing the vast majority as we have effectively financialized this underlying infrastructure.

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And so this was the initial argument, and, um, you know, whether implicitly or explicitly, this did kinda permeate through crypto, and what we saw for the first, you know, five, ten years was people building out this underlying infrastructure.

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And the assumption, like, so again, this is where it kinda gets a bit subjective, and, like, this goes to more, like, the argument I'm making versus the ob-objective, um, you know, description of what this was.

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TheProgress we've seen in the past five, ten years has been, you know, people building out this underlying infrastructure and kind of what I consider to be hacking on tokens.

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And the assumption, right, of following this fat protocol thesis is that these, these tokens will capture the value. Just definitionally it's encoded, and therefore that will be what is valuable.

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And as opposed to, like I was saying before, the, you know, underlying infrastructure of the Internet, which wasn't really owned by anyone, right?

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There was no way to own TCP/IP, there's no way to own the underlying, you know, email, uh, you know, network. So that was the essence of it, and I do think that this had far-reaching implications.

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There were other people who wrote about these ideas as well, for what it's worth. This-- I, I use this as kind of like the go-to, um, you know, m- moniker.

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But i- in reality, like this-- a lot of, you know, investors and builders were buying into this notion. And, um, yeah, so, uh, I think, you know,

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my argument was, we have all the infrastructure now, and I'm now, you know, I've become increasingly convinced that what ends up making the money is actually the applications built atop it.

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So that's, uh, a long and then short kind of final answer, but maybe you can probe some more, um, if, if, if you want. Yeah. And maybe you're describing, maybe this is again a tired term, but the fat app thesis.

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But, uh, you know, uh, I wanna go back to something you started with, which is, um, when you say it c-- there were different ways of viewing the fat protocol thesis. I'm kinda curious what you mean by that- Yeah. Okay.

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So this is- Or could you expand on that? Yeah, yeah. It is actually, it's actually kind of interesting. So I read this paper, uh, uh, granted, I didn't read this right when it came out.

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I probably read this in like twenty-twenty, twenty-twentyone time. Uh, but then I went back and listened to a podcast with Joel Monegro, and it's kind of interesting.

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His claim, which is also why this gets all murky, and maybe my claim that the fat protocol thesis is wrong, is in itself wrong, but not because it's wrong. Maybe it's just not the right model.

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Maybe it's just like not the right model to-- fat protocol versus fat. Maybe this is all just kind of like a, a, a distraction or not the, the best model to view this stuff.

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But when, when he was talking about it, what he was saying was like, "Look, um, there's Bitcoin, and then Coinbase is an application built atop it."

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And right there, that's a little bit of a [clears throat] I'm not sure that really maps one-to-one with TCP/IP and Apple or Amazon or like one of these Internet native companies.

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From my perspective, Coinbase isn't built atop Bitcoin in the same way that the streaming service we're using right now is built atop Internet protocols, right? Like, it is an application.

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And so in this context, this is what's-- why it's a little bit interesting, is like Bitcoin is bigger than Coinbase. Bitcoin is bigger than any of the applications built atop it.

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But I wouldn't consider Coinbase to be built atop Bitcoin any more than it is built atop TCP/IP. You see what I'm saying?

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Like it's, uh, and in fact, I would argue it's much more built atop TCP/IP than it is Bitcoin [chuckles]. So that's where at the time it sounded, I think, um, kind of interesting.

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There's another point too why I find this makes it like super murky, and then you go down this rabbit hole, and it's extremely hard to parse what's going on.

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I, I heard this podcast with him a couple years after, and I think it was around when Uniswap had just been released. And what he was saying was that

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Ethereum is kind of the, the protocol, and then Uniswap would be the application built atop it. Well, Uniswap, the protocol is actually another protocol, right? It's actually another protocol built atop Ethereum.

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The application part of Uniswap is actually functionally right now their front end. Now they have the ability to turn on this fee switch, which we'll ever-- we'll see if that ever happens.

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But the point is, is like, it's like inception levels of protocols on top of protocols, and then it's like, well, then what are you talking about, right?

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Because the way that I initially interpreted this was, you got Ethereum, and then you got Uniswap built atop it.

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Whether or not it's the app part of Uniswap or the protocol Uniswap, protocol part of Uniswap, it doesn't matter. That's the application on top of Ethereum.

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But when he then went back and described this, I was like, "I, I have no idea what's going on." And it all became kind of murky, so it may just not- Yeah... be that useful.

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Um, it's funny because [chuckles] it, it, you know, it sounds like he also himself is a little bit confused.

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Um, a lot of these narratives seem to be kind of, uh, thrown out there, and then they take a life of their own, and even the creators get swept up into them, and they evolve- Yeah... as they go.

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And for what it's worth, like I, I should qualify this by saying that maybe, maybe I'll, I'll try to find that podcast, okay? And link it so that you can go and listen because I just...

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Uh, and I could be misinterpreting this, but again, it, it's now to the point for me at the very least that I don't find... Like may- maybe here's another way to say this.

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I'm not certain that the fat app thesis is the best way to look at this, but I do feel more confident that the fa- fat protocol thesis isn't the best way to look at this.

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[chuckles] Unless you think, unless you view it from the perspective that Bitcoin itself is the protocol to which- Yeah [laughs]... like it, yeah, he was totally right. Right, exactly. The value is occurring to Bitcoin.

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That's what's happening. So. Right. Right. And, and that is another reason why like if, if Bitcoin was the only blockchain, this could be functionally true, right? And all the apps built atop it

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could, could never, you know, capture the value in, in the same way that Bitcoin the coin captured the value. Um, but yeah, that's not, that's not the case.

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And indeed, in, in fact, if you say that, you know, Coinbase is a, is a application built atop Bitcoin, I mean, they could exist without Bitcoin.

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I mean, it's a, it's a big part of their rev, like trading Bitcoin, buying Bitcoin, but like they're building on Ethereum, right?

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So I would say bases or Coinbase is more built atop Ethereum than it is Bitcoin, at least for the time being, right? So that is why I like it, it's all like quite, uh, [chuckles]

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it just like spirals into I have no idea what's going on. Okay.

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So you, so in this, in this post, you sort of kind of outlaid your viewYou know, what happened was we had a whole generation, really you could say multiple generations of developers, investors, builders buy into this, and it

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created a ton of activity, flurry, dreams, hopes, capital into the crypto space for what? And, um, you kind of describe, you, you kind of,

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you know, identify maybe like twenty sixty, twenty sixteen to twenty twenty-three, there was this narrative, and it is, uh, really been in a slow decline since then as tokens become, uh, the, the nihilism of tokens is laid bare.

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And, um, there was this view that, oh, we're all working on public goods, and somehow, like we'll just by being close to the giant spigot- Yes... the pipeline of public good money, th-the wealth will happen.

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Um, [clears throat] uh,

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and you actually, to get to a specific question on this, you say, quote, "A lot of God-forsaken analogies were drawn to early open source software investments out-outside of crypto like Red Hat, MongoDB, GitLab.

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The strategy there, to be very clear, was to write open source software and then sell it like a SaaS or custom Linux, um, database solution." So, um, if you're able to, why is that not true in crypto?

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Or is that actually what we should be doing in crypto? Yeah, I mean- Why does that model not work?

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Well, I, I put that in there because that's oftentimes the retort is like, oh, well, you know, Benchmark was early in Red Hat.

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And when Benchmark invested in Red Hat, which built a bunch of, you know, like custom Linux integrations for big companies and, right, like helped set up a lot of this infrastructure for, for e-every company in the world now uses the Internet, right?

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In some capacity. Um, they were buying equity, like pure equity in Red Hat, right?

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And so like the, the difference that I see and, and why it gets kind of muddied, and I am somewhat sympathetic toward the notion that a lot of this is because of regulatory constraints, right?

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Like launching these things as pure play securities, launching these things as equities in, you know, XYZ protocol or application, right?

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Like it was cumbersome and there was a lo- a real threat of, you know, going to jail or whatever it was that you were afraid of. Um, but the way-- So I think there's a couple things.

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Um, so I, I put that in there for what it's worth as kind of like a jumping to make sure that I covered my bases and like that's not exactly how this played out, right? 'Cause that's oftentimes the retort I get.

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Um, the other thing which you have to understand about DeFi protocol, like I'll, I'll, I'll-- we'll talk about DeFi protocols right now for a second.

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A lot of the, the, the structure of these is functionally kind of peer-to-peer. There's no intermediary. Or the, the smart contract facili-- like acts as the intermediary.

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And so Uniswap, for example, is a pool of liquidity providers and then people interacting with those, and right now all the fees, right, go to those liquidity providers.

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Whether or not they make money is a bit of a different discussion, but the point is that, uh, there's Uniswap is not extracting from that. They have the ability to turn on this fee switch, but they're currently not.

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And the argument that I would make is that there's actually something somewhat unique about crypto, which is that because we are removing these intermediaries, uh, the investment proposition is some order of magnitude maybe lower than a traditional business where you have a moat, you have defensibility.

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A lot of this code is open source. A lot of it is easily forkable. If it's not forkable, it's easily reverse engineered. Oh, that's working. Let's, you know, try to determine how they made that work.

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Let's go ahead and capture that for ourselves. So this is all great for users in theory, right? Like this compresses the amount of extraction long run because there's permission less shipping.

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You can always disintermediate, you can always, uh, compete for users on lower fees and stuff. But at the same time, like to me, this is not a very compelling investment proposition.

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And I c-- like I could give like an extreme analogy. You know, if I'm a, if I'm a shareholder of Apple, uh, if Apple can sell, like I don't know, I, I just had to get a new iPhone, unfortunately.

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I paid a thousand bucks for it, right? If, but if I'm a shareholder of Apple and

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Apple can charge ten thousand dollars for an iPhone and, and not lose any customers, I mean, if, if almost certainly not the case, but let's say hypothetically, right?

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Of course, I want them to extract as much as possible, and they have a real moat. They have a real defensible moat there. iPhones are, you know, in the hands of hundreds of millions, billions of people around the world.

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Everybody wants an iPhone. If I'm a shareholder, yeah, charge as much as you can. They have whole divisions working to price these things as high as they possibly can to extract as much as possible.

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That's how capitalism works, right? And if they price it too high, a competitor comes in, offers a better solution, and we start buying different phones, right?

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Well, it's harder in crypto when by definition this stuff is less extractive. And so the investment proposition, I'm kind of jumping around between like the apps and infrastructure, but they kind of intermingle a lot.

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It's just not as compelling when you can't, you know, gouge people because that's the entire premise, right? It's much less extractive.

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So I think that going forward, um, and this kind of goes back now to Udi's initial tweet, like with regarding n-none of the popular apps this-- and I don't know if this is entirely true. Um, I guess is Pump open source?

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I think Pump may be open source, but they have, uh... Eh, I don't know.

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Well, they have, uh, Pump- I feel like Pump Lawford's like more of a private company 'cause they just take revenues from all the- Well, they just take all the fees. Exactly. Yeah. Yeah. Exactly.

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So and there's no token yet, right? There, there, they have plans to, but- There will be a token. I think they're clear about that. They've made-- Yeah, yeah. Uh, but they've made seven, eight...

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I think they actually recently just crossed a billion dollars. Hundreds of billions of dollars. No, no, hundreds of millions, but yes. Yeah, almost a billion. Millions. Yes, millions, not billions. [laughs] Yeah.

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And then, and then Hyperliquid, right? Which-They have a little bit of a different model, which is interesting with, with their token, but they're closed source, right?

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And it's like people are realizing that, well, if you want to build a bunch of protocols, right, do that, that's fine, but don't just hack a token on and assume it's going to be valuable.

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Um, make a business, build a defensible moat, make switching costs high for people, d-deliver a good enough product that people are incentivized to stay with you despite competition, and, like, this is a good direction that we're moving in.

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Um, but yeah, that, that was kinda like the essence of it and why I think that he's directionally right, and there's no-- there's nothing wrong with writing something, you know, closed source atop an open source protocol.

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The, the beauty is that we have-- like, we-- customers have choices now, right? Are they great choices all the times? I don't know.

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But, like, that is the, I mean, that is the big unlock, is that you can constantly undercut people by, you know, vibe coding something in your basement and shipping it to main net or whatever and, uh, compete.

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So I, I don't find anything objectionable, and if anything, I think it's... I guess I'll finish with this.

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Like, I think it can-- from my perspective, it's more sort of moral or ethical or correct to build a real business and not necessarily share the profits with your users, um, and closed source it and just make money than to build a protocol and then launch a token that has, you know, a very dubious connection with the actual open source, you know, protocol or whatever it may be.

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[upbeat music] Uh, you, uh, had a couple exchanges which were like, um, I talked to people who, uh-- where you say, like, "I've talked to people who are investing in projects."

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And you or I think Udi maybe als- like chimed in like, "Don't you mean like a company? Like you're investing in a company?" Yeah. And people are like, "No, no, no."

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But now people seem to be reluctantly saying I-- they're coming to this realization that they need to think of these, like investing in companies. I guess like, uh, this is a bit of a curveball question, but, um,

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a lot of this, you know, a lot of what we think about, like a lot of the, the, the cyberpunk visionaries, uh, talked about things which might-- like internet organizations, ways to coordinate on the internet, and the most-- the closest concept we have of that in crypto, which is now kind of bastardized, is the concept of a DAO.

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Yeah. Um, now I know it's been tortured and, like, used mainly as like Ponzi, Ponzi ways to coordinate Ponzi schemes, but, like, is the dream of a DAO dead? Was there anything there?

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Do you-- does this-- did th- did this idea ever interest you, or what are your thoughts on this? Yeah, I mean, okay, so the first thing I would say is that this depends very much on who you're talking to.

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If you talk to VCs, for example, um, they may say this explicitly or sort of imply this, but they proposed that DAOs were functionally companies.

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They just couldn't really call them that, and it was necessary for there to be a DAO, uh, for regulatory reasons to play this rag arm, right? So that's the first thing I would lay out. Um, there's a few things.

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One, and this shouldn't be like such a controversial, you know, idea here, it's not so clear that users of a protocol are necessarily the people who should be making decisions for the direction of a protocol.

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That, uh, uh, that, that's like saying everybody with an iPhone should be on the ground in Cupertino deciding the next design of the iPhone, right?

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Like- They should be doing supply chain work on the ne- on the silicon pro- procurement for the next iPhone. Exactly. Yeah. So that was an idea that was floated.

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Now, I wouldn't say that everybody necessarily agreed with this, but that was an idea that, well, mutual ownership and say in a decentralized protocol was like some, you know, idealistic vision.

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Like, surely that's the way to do it. Um, so that's the first thing. The other thing is, and this kind of piggybacks off that, it's not really

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obvious to me that users of a protocol should definitionally own that protocol.

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Now, that-- this is where I, I'm kind of going against a lot of the first principles thinking in crypto, which is that, oh, we all, you know, collectively own this. But I mean, again, let's use the Apple analogy.

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Like, just because I own an iPhone does not by definition mean I should own equity in Apple the company, right?

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It's two different groups of people, and you get into all these, like, you know, deep discussions about principal-agent problems and who should be controlling what.

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And, you know, a lot of, a lot of these things I think are-- people are realizing. Um, also DAOs, for what it's worth, a lot of them were extremely dysfunctional, and then a lot of them were used

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kind of as de facto piggy banks for VCs to take ownership of and then dole out grants and favors to their other portfolio companies.

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So it's like this whole notion of, well, we had to do it this way because of, you know, the, the regulatory arbitrage.

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It's like, well, did you have to give, you know, XYZ marketer a two million dollar contract to design the font for your front end? Like, let's take a step back here.

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This isn't some, you know, uh-Building within the community, right? Like collective ownership thing. Like let's, let's take a look at what you guys are doing with th-with this bundle of money.

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So it's one of these things where like if eventually DAOs are just companies, and they act as companies, and everything we've known for thousands of years about h-how humans coordinate and how people delegate, if that ends up being a DAO, then I'm fine with DAOs.

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But I mean, I think it looks a lot like, you know, how shareholders and companies act with S&P five hundred companies and private unicorns. You know what I mean?

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It's not like something so unique as to r-necessitate an entire, uh, acronym unto itself. So you're a very good deconstructionist. Um, it's, it's easy to be a critic, but it's very difficult to deconstruct.

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You have, I think,

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a good resi- uh, kind of tie-in at the end of this post, which is, quote, "The point is, we should be kind to or at least understand people who were deep in the sauce between twenty sixteen and twenty twenty-three."

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I'm talking the devs. You know, th-this joke that it's- Yeah... just all devs selling to devs or whatever. But what do you say to that person who like, they still

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love that dream they were promised, um, and they want to work in crypto, Bitcoin. Is there a path for that person to, uh, continue to work and contribute in this space and make money? Well, I-I think certainly.

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The, the de- the delineation I would make is like, if you want to write open source software, go to Spiral, go to, uh, Chaincode, go and get a job working on protocols. And you know what? Like, there's a non...

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I mean, if you're able to be hired or given a grant, and this applies to crypto writ large, I'm not-- I'm just giving Bitcoin examples here.

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But, you know, there's a non-trivial chance that you could make, uh, an impact on the world by o- providing open source public goods, right?

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But you're gonna be paid for that, and it's not gonna be because you hacked a token onto it. That's fine.

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There's another side of this, which is if you want to be an entrepreneur, if you want to buy into the capitalist vision that I think most of us generally ascribe to, go and build a business, build something sustainable, charge people fees, charge people money to use a product, sell them something.

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That is well within the balance of reason. I don't think anybody's objecting to this. It's the-- It is the middle ground that I have, you know, sort of rejected.

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And again, the common refrain is, "Well, these are regulatory stuff."

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It's like, okay, that's fine, but like clearly now we have opened the door to choose one of these two paths, and I, I, I have n-no personal objection to either, but like let's be clear about what we're doing.

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So I think certainly you can still work on open source. Yeah, um, Ben Carman, right? Like just is-- he just went to, uh, work with- Is it Wizard? Was it Wizards now? Is it, uh, Spiral? Yeah, exactly.

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Um, yeah, it's the two, the two ends of the spectrum here, the private company building- Yeah, well... something, yeah. He's just a friend, a friend of ours, so that's why I say this. But I'm just pointing out- Yeah...

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that, you know, you can s- you can do that. Like it, it, there are pe-people who've been contributing to Linux way before, [chuckles] you know, any of this conversation was around. Like, of course it's possible.

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And you can go to a big company. I mean, uh, every like massive tech company has people who work on, uh, open source stuff for them, right? Like you go get a job at, um, OpenAI working on Linux stuff.

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I don't know if it necessarily that, but you know what I mean, like- Actually, this is, this is a good, this is a good question to interject here, which is, um, one of my critics of, of Bitcoin particularly is that, uh, you don't really have a s- as far as I can see, a similar phenomenon as you have with Linux.

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Microsoft writes big checks, I, I guess big checks for me, you know- Yeah, yeah... to maintaining Linux. They have-- They allocate engineers towards it.

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But you don't really see that, uh, you have like not-for-profit, uh, companies like Chaincode, like OpenSats, like, uh- Yeah... Brink, which fund developers, but you don't really see...

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You know, you see Bitwise allocate a portion of their ETF revenues to- Yeah... but, but you don't see like BlackRock doing this.

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You don't see, um, the other even like just Bitcoin companies, you don't see a lot of that, uh- Yeah... contribution. I, I feel like that should be more of a model. At least I want it to be, 'cause I think,

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uh, instead of there being fifty competent Bitcoin developers, maybe even fewer, like, it, you know...

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I feel like one of my big criticisms is that there's not enough money in the open source development of Bitcoin specifically, uh, even, even given that open source is a, is not a very profitable place to be. Yeah.

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I, I mean, I, I wholeheartedly agree. I think this just kind of comes down to, yeah, I mean, this kind of ties back into the post. It's like you have, you have to follow the incentives on these things. And

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y- I, I guess the counterpoint, this isn't so much a counterpoint, but I guess just the point that I would make is that I don't think that hacking tokens onto these things solved these problems, right?

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Like that would be the, the sort of conclusion that I would draw. So yeah, of course. I mean, and hopefully as Bitcoin grows, we'll see more

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open source development and, you know, I-I'm always like optimistic on this in, in both Bitcoin and crypto as a whole. So but yes, I mean, I, I do agree.

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It's not, it-it's not critically important in the same way that a lot of these companies rely on, you know, networking protocols or the internet to be, you know, maintained and whatnot.

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Um, and I think somebody brought up this point, uh, which is a, a true, a true point, which is that like a lot of these things act more kind of like as common goods as opposed to pure play public goods.

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And in that realm, you know, then we can start understanding these as like how can we monetize versus what shouldn't be monetized, and what should have a token or what very likely should not have a token and...

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But, uh, I, I-I am, I say sympathetic. I mean, I don't know how much, I don't know how much trolling came out in me there, but I, I underst-- I think we should understand why we're at the point we are, right?

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Like, I understand having lived through a lot, reading a lot of this stuff about public goods and DAOs and open source funding, and then I understand why a lot of people are sort of taken aback by this new revenue meta, right?

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Like, and it's sort of hilarious to even phrase it like that. But I, I, I understand why we have culminated here. I guess one more kick at the horse is, uh, so who, who do you think created this delusion?

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You know, you des- you describe it, you can originate it back to maybe a blog post or two, some early discourse in the mid-twenty tens, but like...

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And there's this like, you know, well, i- if we look back on it, it was just devs selling to devs, but Gort, no dev never sold me no token.

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It was the VCs and the threaders who, who told me to go buy the hot token of the season. Is th- was this actually a venture, [chuckles] a venture created, uh, problem?

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I mean, it's one of those things where to me it's like I don't blame anybody. It's, like, it's-- that sounds kind of ironic given my general persona, that I don't blame anybody in particular. It's sort of like, uh,

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well, this is a crude analogy here, but it's like when people talk about the deep state in the United States. I don't think there's some Illuminati figure pulling the strings, right?

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That's like, "Yeah, I gotta dose this water with fluoride," and you got a chem trail people here, right? I'm not, like, conspiratorial like that. But I do think that there are just strong, powerful

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incentives, and they can sort of line up.

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And so what I've seen in crypto is you have VCs who have incentive to buy into this narrative, this notion, and prop up these public goods and DAOs and, you know, um, change the world ideals. Like, it benefits them.

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They have the incentive to do this. Devs also have the incentive to push a, you know, idealized vision of an open internet and transacting peer-to-peer and disintermediating the, you know, parasitic incumbents, right?

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Um, and then you have the threaders and the traders who are also incentivized. So it's funny, like as critical as I am sometimes with specific

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VCs or projects or whatever, I-- it's like everybody was kind of maximizing their own utility, and this thing was novel enough that you could sort of claim that we don't know how this is going to play out, right?

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Like, oh, well, this could be quite different this time around. And yeah, I mean, what, capitalism wins, I guess, is what we, uh [chuckles] what, what we all have realized. So that, that would be... Yeah. I,

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I don't, you know, harbor any ill will. I mean, I think things could have gone differently, but I don't necessarily harbor ill will.

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But I, I, I will say, like, I do think I have personally seen a real transition, you know, and I have seen a paradigm shift.

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And there's a lot of things we can pinpoint, meme coins and, you know, degen, like the, the degree to which we've embraced degeneracy this cycle. Like, all of this is a result of kind of being sold these

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idealistic visions and narratives that ju- at least haven't played out the way a lot of people envisioned, right? And those are the people I'm, quote unquote, "sympathetic to," but

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I, I think that's where we find ourselves. Let's, let's go to some non-sequitur questions. Um, the hot new topic is the boomer, boomerification, tradfiification of Bitcoin, crypto broadly.

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Um, are stock tickers the new tokens? Uh, yeah. I mean, I-- It does feel like an alt season. I'm not trading this, and I'm not, um... Yeah, I mean, the whole treasury company thing, I mean, I see what they're doing.

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I'm not petrified the way some people are that this is gonna be the next Terra Luna, but I also, I-- some of this won't end well, right?

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Like, I think that, that we can say with some degree of certainty that like- It's, it's a cyclical business. It's crypto. Like, obviously- Right... obviously some people are gonna hurt in five to ten years. Yeah.

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But I mean, I don't have any, um, I don't have any objection to it. I think what Michael Saylor realized was pretty, pretty savvy. Um, we'll see how it all turns out. But yeah, it, it--

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I, I, I don't have, like, any deep insight that you haven't already heard on this, but, uh, it's interesting- Yeah... right? And it makes sense.

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It als- I guess the thing I would say is like it makes sense that, well, like, you can just print shares, right?

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It's not entirely dissimilar from, oh, you can print these tokens and then either turn them into dollars or Bitcoin, right? Like, this was always...

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People forget, uh, like Post and I were joking about this, like people forget how in, like starting in twenty sixteen through, you know...

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This, this, like, phrase kind of went away, but people would just say, "Oh, they're just stealing your Bitcoin." Like, everyone's out to steal your Bitcoin, you know?

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And I guess it still kind of goes around in the Bitcoin circles, but it's not--

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It wasn't really like that, I wouldn't say, so much last cycle because I think people believed a lot more in the stuff they [chuckles] were holding.

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Um, but originally, right, like, a lot of the early criticism of Ethereum was like, "Oh, man, they're all out to steal your Bitcoin," right? You give them Bitcoin for this Eth thing, right?

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So, um, it's not, like, so dissimilar from some of the same, uh, you know, catchphrases we've had before. You can print, you know, company shares out of thin air and then buy Bitcoin with them and...

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Well, we'll see how long this kind of arbitrage, uh, will play out.

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It does seem, I guess intuitively it seems like the, theYou don't wanna be the last one to do this because I'm assuming your terms and just like debt and like these shares and how they're tranched and convertible, I, I don't think you wanna be the last one doing this.

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But I mean, Udi is like, "Man, this is, this is gonna go on for a while." And I was like, "All right. I'll take your word for it." I'm not really game winning here, but- I agree. I'm like, I agree.

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I was talking with him, you know, just the other day about this on the side, um, you know, 'cause he's like, "Why aren't you in this-- You know, why are you not in this trade? You, Charlie, you..." You know, the crypto,

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uh, listener. I'm like, I... It's not like I don't believe in it. It's just that I, uh, for me, I don't really get that visceral excitement logging into Charles Schwab- Right...

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to buy my, the, whatever the crypto trade is. So- Yeah. Well, I think also, um,

252
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yeah, so I think also one thing that is being under-discussed is that these are being done in private first and foremost, and I just assume, I have like a general rule, which is like if I don't, if I don't understand my edge, then I'm assuming that somebody else has a pretty big edge.

253
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And when it comes to these pipes and private deals and these, you know, inceptions of these companies, like I don't want to be the one buying late, right?

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And so I'm not getting offered these, you know, [chuckles] sicko deals, so I'm just like, "Yeah, hmm, you guys have fun. I hope it works for a while, but I'm not-- I don't think I have an edge here."

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It feels a lot like early token deals. [chuckles] Yeah, it does. It does. It does. But I mean, that's also like Tradfi in general, so how is that any different than- Yeah. No, no, I-... other trade?

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And also, like for what it's worth, at least the companies that are buying Bitcoin, they're buying Bitcoin, right? Like I'm quite bullish. Yeah, they're buying Bitcoin. I've-- but I'm quite bullish on Bitcoin.

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So maybe like that's why I-- You know what I mean? Like yeah, it's weird, it, it's weird because like historically it's been like Ponzi schemes to buy other tokens, but like- Exactly...

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now it's a Ponzi scheme to buy my bags. Right. Which, you know- I'm okay with. Yeah... that'll only criticize so much. Right. Right. Yeah. Agreed. Okay. Some other non-sequitur questions. Um, you,

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uh, seemed to have a comparative affinity for Solana over Ethereum the past couple years. I'm not putting words in your mouth saying you like Solana, but like why did it, does it seem to be...

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Why do you seem to be a little, a little more amenable to that ecosystem? Is it 'cause it's like the opposite of the Eth trade the past couple years? Um, are you skating where the puck is going? Is it just more fun?

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What are your actual thoughts? Well, okay, so I should clarify. I mean, I have no bias on Eth versus Sol, the asset. Like to be very clear, I don't have any preference. I don't hold either in size, so it's not the

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v-value proposition to me is not what I'm talking about here. One thing I noticed with Solana is that I th... And, uh, it made a lot of sense to me that this

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kinda played out the way it did because when I was observing DeFi, and then especially the NFT craze and DeFi s-... Late, late DeFi summer, I saw people paying hundred, two hundred dollars to swap a coin on Ethereum.

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And I was sitting there saying, "I don't think this is sustainable," and I, and I also don't think that the reason people are paying a hundred or two hundred dollars is because of the decentralization or the, you know, security.

265
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I, I just don't. Um, does it... Is it more decentralized? Is this more secure? Maybe, but I don't think that's why nine out of ten people are using Ethereum to swap coins.

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When Solana came around, I think it proved s- my thesis, and again, I'm not saying this was particularly revelatory or, you know, I had some like exceptional amount of enlightenment that allowed me to see this.

267
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Well, it, it's not revelatory, but it was... There, there were a handful of people who were early to this, and I shared your views, I think at the time. Yeah.

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And, and what, what I think Solana showed was that people do want cheaper and they do want faster, and there's not this alignment or affinity for a certain utility protocol, right?

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Like everyone's trying to hit hundred Xs here. That's what's going on. That... People are trading.

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If you wanna talk about security, decentralization, like that's when you have a strong claim with Bitcoin to say, you know, "This is the most decentralized. This is the most secure." Outside of that, um, I just didn't...

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Ethereum and Solana are much more similar than Ethereum and Bitcoin, right? Like just functionally. And so I s- kind of saw this and, uh, I don't agree with a lot of the Solana narrative for what it's worth.

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I mean, the Nasdaq on-chain- Me either, yeah. The Nasdaq on-chain thing to me is it's a n-- I guess it's a noble cause. Um, I think... Here's what I will say.

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I think the people working on this genuinely believe in what they're trying to do. I think Toly genuinely believes in what he's trying to do. I'm friends with Max, who was, uh, kind of a defectee of Ethereum to Solana.

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I think he genuinely believes in what he's trying to do. Uh, is Nasdaq gonna be on-chain? I, I'm not betting on that. So... But I think they, they have pushed the bounds.

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And, and also going back to like the very original question here in terms of building products, building businesses, they have been very amenable to that, and I think that the culture is one of come here to make money.

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And the way I see it is like come here and use Solana as your back office software. It provides a sandbox to ship a business. Come... Like pump.fun should inspire people, right?

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They managed to build something that generated a billion dollars in revenue, and their CapEx and OpEx is like twenty bucks a month, right? [chuckles] I mean, I'm being facetious, but that should be inspiring to people.

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Come, like engage in capitalism. So-I do think the culture is right there. The big Nasdaq on chain thing, I'm not sure. Could it be useful for stable coins? Maybe. Um, is it the best way to do stable coins?

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I, I don't know. But it's also one of those things where-- And I think this is, this is another point I'm going schizo about right now, but this is another point. Um, I think one thing that I've had to

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realize as I see this entire industry play out is, uh, you talk to a lot of Bitcoiners and you say like, you know, "What is the best way to do stable coins?"

281
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And they'll say, um, some-- like maybe some would say something like eCash, where Tether runs a mint and you can make it very private. Um, they can rug you at any time, but they can also rug you at any time on Solana.

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They can scratch your name out of their database, they can freeze your funds. But they're taking off on Solana, and they're taking off on Ethereum for that matter.

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So it's one of these things where, uh, maybe they, these things get enough sort of escape velocity where the cost to switch to an eCash mint run by Tether is just not really high enough and-- or sorry, is not, is not good enough, you know, to justify, and maybe it just ends up working elsewhere, and I'm like totally fine with that.

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I mean, I was-- I would like-- I mean, I-- to me it's pretty clear why they're taking off is because there's things to buy that are closer to those chains or with those stable coins. Like the way- Yeah.

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Like yeah, eCash at a technical level probably better. Like you don't need a blockchain to issue a stable coin. Right. It's just the reason that they're on blockchains is because there's things to buy on blockchains.

286
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Right. And, and so like the way you get stable coins on eCash is you make, is you make sure there's things to buy- Right... in those mints, and then you'll get your stables on- Right... in your eCash mint.

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Like put NFTs [chuckles] somehow- Yeah... in eCash. I don't know. Um- A-and I think the same applies like recently this discussion of stocks on chain. Like I don't know that equities need to be traded on blockchains.

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In fact, depending on the actual like ex- way they're exchanged, I think it c-could be very poor idea, uh, given the g- you know, anybody can reorder transactions. That is not great- Yeah...

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for, you know, your mom and pop. I get excited about the ways this can go sideways. I get very kind of- Yeah... giddy imagining the absolute ridiculous degeneracy- Yeah... MSTRX on Solana can get. Yeah. That's hype.

290
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Like this shit can get wild. Yeah. But also, but I think to, to, to that end, uh,

291
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if they just end up on chain and like a lot of people are using them on chain and people around the world are buying them on chain, like who am I to sit here and say, you know, "Stocks shouldn't be on the blockchain."

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You know, the best tech doesn't win. It's like sort of a logical fallacy. Like if it provides the most utility to the most users for whatever reason, then it's the best tech.

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So, no, I'm not convinced r- like that everything's gonna be traded on Solana, but if it ends up there, I'm gonna be like, "Okay, well, that's, it, it's there, so it, it won," you know? Um, yeah. So I, I... Yeah.

294
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The, the stable coins are an interesting introduction into this kinda like real world asset being on chain and whether it should be, I don't know, but it's interesting to observe, I guess.

295
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I do wanna wrap it up, 'cause I can keep firing a million non-sequitur questions at you.

296
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But there was a great thread guy clip from yesterday, you've seen this, where he says he feels like he's a, like he's brilliant because he has seventy-five percent of his portfolio in Bitcoin.

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Now this is a, you know, Zoomer haircut, Twitch streamer- Yeah... guy who is famous for like literally shilling dog to his audience. Yeah, yeah, yeah. But also you gotta love, gotta love him in some way.

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And he's saying that like, uh, uh, it's funny because I see this and I see again, since every, every conversation has Udi in the backdrop, Udi saying, "This is the new, this is the new Bitcoin maximalism." And um, uh,

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I see that. Do you think that we are minting a new generation of Bitcoin maxis? And what do you think the characteristics of the new, uh, I would say the post...

300
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Like Bitcoin maximalism has had a pretty frustrating, narrow cultural personality to it, but it feels like we are now post, post toxic maximalism. Yeah. What's the new maximalism look like, do you think?

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I mean, the thing is, there's this Bitcoin maxi group we've had that we think of when we say Bitcoin maxi.

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The new generation of Bitcoin maxis, from everything that I can tell, the thread guys, there's others, I won't name them, but people who I've seen on Twitter, I mean, even Anselm, right, has been espousing holding Bitcoin.

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Uh, these people become Bitcoin maxis once they've made it, okay? To be very clear. And the, the important part to understand about this is that you are not going to convince...

304
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Yeah, actually, I ha- [chuckles] I'll, I'll say this in an even kind of funnier way. Um, I was talking about to s- to somebody who we know the other day about this.

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Crypto Twitter actually self-selects for people who are unlikely to be Bitcoin maxis, especially at the start.

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In fact, you are more likely to be able to go on the subway in New York and show Bitcoin to people, and have them be interested and wanna buy some and adopt it.

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Now, whether or not they know how to do it technically or they're buying the, uh, ETF or like Coinbase, whatever it may be, but be interested in Bitcoin specifically.

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Crypto Twitter has already self-selected for people who know Bitcoin exists but want a hundred x. Like they do not believe that Bitcoin... I mean, there's like this running joke, right?

309
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Like I just bought a thousand dollars worth of Bitcoin. If Bitcoin goes to, uh-Two, 200K, I'll have two thousand dollars. No one's gonna get rich. This is very, very true, right?

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Like, you are not-- I-it's-- I, I made this, um, analogy o-one time with somebody else.

311
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I was saying like, "This is like going up to somebody playing slots and telling them they should invest in the S&P Five Hundred index," right? It's just n- you're not-- It's not gonna happen.

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You have to make it first, and, uh, making it is different for everybody. But one thing I would say is like, I don't try anymore, right, like to say like, "I think, you know, Bitcoin is this long-term store value.

313
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I think it could still 10X," right?

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Like, I think you and I are sitting here and saying like the risk/reward of allocating outside of Bitcoin is like quite high in the sense that I think Bitcoin could 10X in the next five years.

315
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D-d-do-- I think it has just as good of a chance of 10X'ing as Solana, right? 10X'ing. No, I think it'll a hundred. I, I'm on record, I think it'll 100X over the next couple decades. Okay.

316
00:56:06.052 --> 00:56:18.292
Like, I don't- So there we go, right? I don't think it's that hard to like make that claim. Yeah. W- but, but that makes it even more difficult to say like, "Should I be buying XYZL1 at fifty billion dollars?"

317
00:56:18.332 --> 00:56:29.252
You know, that it's, you know, in, in technical terms, this is like what your cost of capital is, but more just like thinking pragmatically and being able to elucidate this for people who, you know, may not be so in the weeds.

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It's just like, look, w- if I think so-- Bitcoin is just as likely to 10X, like the, the risk/reward there is so much stronger to just buy Bitcoin and hold it.

319
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But I know for a fact that I'm not going to convince somebody with ten thousand dollars that they should go and find a job creating value outside of this.

320
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Like, crypto Twitter, most people on crypto Twitter, that's their job, from what I can tell. Like, they trade. They are c-- They are doing crypto. Like, that is their full-time gig.

321
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So they know Bitcoin exists, and eventually, like Udi makes this point, like they'll f- save some of their wealth in Bitcoin, hopefully, right? But

322
00:57:06.312 --> 00:57:15.632
I think that, you know, thread guy has probably made it, um, answer has probably made it. These people... And again, you define made it. Is it a million dollars? Is it ten million dollars? Whatever it may be.

323
00:57:15.712 --> 00:57:20.462
It's just I know that I am not speaking to a willing audience, right?

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When I say, "Hey, maybe just buy some Bitcoin and hold it," like of course that's going to be, you know, "Why would I do that when I can find a 10X or 100X runner on pump.fun?" Okay, well, there you go, right?

325
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[chuckles] We are not going to... Th-there's no reconciling the-these two factions. So I do think that you're correct, like the thread guys, these guys will continue to espouse Bitcoin and that's fantastic.

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Most of their audience is still looking for those, you know, 100X's, and that... I-it-- 100X's in three days, right? And that's just until they, until they do that, i-it's kind of a, it's a pipe dream.

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[chuckles] Gort, thank you for coming on Bitcoin Season Two. Ah, for sure. Uh- Have fun. Make sure to go follow Gort, Go-@GortyGort. That's not his real name. Uh, and- Mm-hmm.

328
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Uh, he's not actually, doesn't actually look like that profile picture. So, uh, yeah. Gort, thanks so much for coming on. Um- Yes.

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Maybe we will riff at, uh, towards the end of this cycle, if it ever ends, on reflecting on- Oh, this is the super cycle. There's no, there's no end. The super cycle, yeah. This is our last discussion. [chuckles] Yeah.

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Yeah. The, I mean, well, let me know when it happens. Uh- Okay. Maybe we'll reflect on the misadventures and the goofiness that- Yeah... happened this cycle. Okay.

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Um, that, there, there will be a lot more fodder to, uh, to discuss in maybe two or three years. So cheers. Thank you so much and catch you later. Hey, everyone, Colin here.

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