303: Jeff John Roberts Tells The Coinbase Origination Story

Jeff John Roberts writes about intellectual property, blockchain and cyber security for Fortune. He has a new book about Coinbase titled Kings of Crypto: One Startup’s Quest to Take Cryptocurrency Out of Silicon Valley and onto Wall Street. In this conversation, we discuss the Coinbase story, Satoshi Square, the various players that helped build the US' largest crypto exchange, and why Coinbase may tokenize their equity rather than go public one day. =============================== Blockset by BRD is your hosted blockchain infrastructure. Blockset enables enterprises and developers around the globe to deliver high-quality blockchain-based applications in a fraction of the time, at a fraction of the cost. Using the services provided by Blockset, businesses can build professional custody solutions, accurate and near real-time portfolio management solutions, auditing platforms, commercial block explorers, and much more: blockset.com =============================== Crypto.com is the only all-in-one platform that allows you to BUY / SELL / STORE / EARN / LOAN / INVEST crypto all from one place. Join over 1 million users currently using the Crypto.com app. Download and earn $50 USD using my code ‘pomp2020’, or use the link http://platinum.crypto.com/r/pomp2020 when you sign up for one of their metal cards today. =============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast. Simply the best podcast out there. Let's kick this thing off.

• 0:11Anthony Pompliano?

  Jeff John Roberts writes about intellectual property, blockchain and cybersecurity for Fortune. He has a new book about Coinbase titled Kings of Crypto: One Startup's Quest to Take Cryptocurrency Out of Silicon Valley and Onto Wall Street. In this conversation, we discuss the Coinbase story, Satoshi Square, the various players that helped build the US's largest crypto exchange, and why Coinbase may tokenize their equity rather than go public one day. I really enjoyed this conversation with Jeff, and I hope you do as well. Before we get into the episode though, I want to quickly talk about our sponsors. The first is Blockset by BRD. They're your hosted blockchain infrastructure company. Think of them similar to Amazon's AWS,

• 0:55Anthony Pompliano?

  but for the crypto and blockchain space. Blockset enables enterprises and developers around the globe to deliver high-quality blockchain-based applications in a fraction of the time at a fraction of the cost. You can use their services provided by Blockset for businesses that can build professional custody solutions, accurate near-real-time portfolio management, auditing platforms, commercial block explorers, and much, much more. Again, Blockset by BRD provides all the infrastructure you need, similar to how Amazon AWS does this in the non-blockchain world. Go check them out at blockset.com today. Again, blockset.com. Our next sponsor is crypto.com. They got a great URL, but they also have an all-in-one platform

• 1:39Anthony Pompliano?

  that allows you to buy, sell, store, earn, loan, or invest crypto, all from one place. That's right, they've got over 1 million users currently using the crypto.com app. You can download it and earn up to $50 using the code in the description of this podcast. So go check them out today, crypto.com. They've been longtime supporters of this podcast, and they've got this all-in-one platform with over a million users on their mobile app. You can go to the App Store, both iOS and Android, type in crypto.com, and download it today. Again, crypto.com. Not only do they have a great URL, but it's where mass adoption is happening. And then lastly, don't forget that I write a daily letter to over 50,000 investors about business, technology and finance. I break down complex topics into easy to understand

• 2:24Anthony Pompliano?

  language while sharing my opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com or just click the link in the description. All right, let's get into this episode with Jeff. I hope you guys enjoy it.

• 2:38Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 3:04Anthony Pompliano?

  All right, guys. Bang, bang. Super excited to have Jeff here. Thanks for doing this, man.

• 3:09Speaker 02

  Pomp, great to be on your show.

• 3:11Anthony Pompliano?

  Absolutely. Let's, um, let's start with your background. Obviously, you've, you've spent a bunch of time covering various industries, but kind of what do you, where'd you grow up and what'd you do before you got to Fortune?

• 3:21Speaker 02

  I grew up in Vancouver, Canada. I used to be a lawyer. My joke was I got tired of being unpopular, so I picked the only profession maybe less popular than lawyers is a journalist. But, uh, no, it's been fun. I've been at Fortune for five years. Also worked at Reuters and I've written for most major publications. I got into crypto. It's a fun story. In 2013, in New York City, in Union Square, there's a thing for a while called Satoshi Square, where, um, it was, it was crazy. It was like crypto anarchists and, you know, old school Bitcoin folks, and then Wall Street traders would meet up and basically sell Bitcoin, like in the open air with stacks of Benjamins. And I went to cover that and, uh, that kind

• 4:04Speaker 02

  of wedded my interest in it. Never since then, I've been covering crypto on and off, you know, of course, like, you know, there's the peaks and the valleys, but I've watched the scene the whole time. And I, um, please say, recently wrote a book about it called Kings of Crypto that tells the history of, of Bitcoin and the crypto industry, but through the vehicle Coinbase, just how they became players. And the big focus is on how Wall Street and Silicon Valley are coming together.

• 4:28Anthony Pompliano?

  Yeah. So what was the impetus for moving from being a lawyer to a journalist? Because I think a lot of people would say there's not tons and tons of people who go from that field to journalism. But what kind of was the interest there?

• 4:41Speaker 02

  Um, I guess I like writing and that's, you know, I like telling stories and writing. And as a lawyer, you do a lot of writing, but it's very, you know, it's, it's kind of joyless. It's like writing extended, you know, car manuals, you know, 30, 60 page fact. No, not a lot of fun. And also, I mean, I think I was working on a, um, I was a law clerk. I was working on a pharmaceutical patent trial. This went on for 10 days and it was just like, it was just like ready to like, you know, shoot myself. It was just so dull. Same thing day in, day out. And then with, um, with, with journalism, you get to talk to everyone. You know, I get to, I've met everyone in crypto. You get to hear their stories. You get to write something new every day, which is, which is a lot of fun and it feels real rewarding.

• 5:21Anthony Pompliano?

  Yeah, that's awesome. And so then how, um, how did you first hear about, uh, the Satoshi circle? Right? Where people were, were doing this. I feel like that's a, uh, kind of an underground type thing that, uh, they weren't exactly running advertisements on television for. So what was, where did that come from?

• 5:38Speaker 02

  Probably Twitter, like everything else in crypto. I just heard about it and then I reached out to a couple of people. And I have to confess how ignorant I was at the time. Um, I, uh, you know, I'd planned to go, uh, I bought a Bitcoin to go there because I thought there'd be people selling stuff like, you know, muffins or T-shirts or something. And, you know, I thought that's what Satoshi Square was. And so I, uh, you know, bought a Bitcoin from Coinbase for like 70 bucks. And I planned to expense it and, uh, you know, I'm happy to say I forgot to. And it's one of those rare times it turned out well because I, uh, you know, so, you know, I don't own any other crypto because I want to keep, you know, impartial as a journalist, but that was a bit of good fortune.

• 6:17Anthony Pompliano?

  Yeah. And then, so when you got there, what, what was everyone doing if they weren't selling muffins and T-shirts? Were they just kind of sitting around and, uh, talking about Bitcoin or what was it?

• 6:25Speaker 02

  Yeah, they were, no, there was like Wall Street guys in $5,000 suits coming up with like stacks of hundreds. I'm not kidding, man. Just like buying, you know, from these like dreadlock dudes. And they all had a passion for crypto and they all had like their own wallets. And I mean, these guys were, you know, really knew the tech and really knew the economics of it. How they were determining price, I don't know. I think they were just checking the internet and, you know, yeah, they were buying and selling Bitcoin in the open air. It's kind of cool.

• 6:51Anthony Pompliano?

  And so this is probably what like 2012, 2013, if it was down around 70 bucks, somewhere in that timeframe?

• 6:57Speaker 02

  Yep, good memory, 2013, some point in like, you know, May or the summer. And it was just this corner of Union Square in New York that was, every Monday was called Satoshi Square. I mean, I think similar things popped up elsewhere, but it was kind of cool to, you know, even if I was totally ignorant, it was kind of cool to take it in.

• 7:13Anthony Pompliano?

  Yeah, for sure. And then I guess as part of that, like Coinbase, I think if I remember correctly, 2013 or 2014 was it came around. So really, it's almost like they were doing this out of necessity because there wasn't great US-based infrastructure to go ahead and buy Bitcoin. Is that generally right?

• 7:29Speaker 02

  Yeah, I mean, that's the sort of the thesis I put in the start of my book. Peter Thiel, you know, the famous investor, you know, wrote his book Zero to One, and he talks about open secrets. You know, these things in retrospect are so obvious, like, why don't you start a company to use your phone to hail cars, you know, rather than relying on taxis? Why don't we create a, you know, internet distributed system to rent, you know, spare rooms in our houses, you know? Airbnb, Uber, in retrospect, so obvious. And I know Brian Armstrong's thesis was like, what if we made Bitcoin easy to buy? And there's a lot of obstacles to that, both technical ones, but also cultural. And to this day, I think a lot of the crypto community takes pride in how tech savvy they are. But the reality is, most people just are not that good at that or that interested in it.

• 8:11Speaker 02

  So making it easy is, was critical. I think that's how they did what they did. And both then and now, it's also got a lot of resentment from real, you know, what so-called real crypto people who, you know, people still taunt Coinbase, not, not your coins, not your keys. And I get it, but the reality is, you know, 90% of people on crypto weren't going to get there in the first place unless you make it easy.

• 8:32Anthony Pompliano?

  Yeah, and I guess in those early days of crypto, you know, you've done tons and tons of work. Were you able to actually talk to Brian and Fred and were they made available for the book? Or did you have to kind of do this without their participation?

• 8:47Speaker 02

  No, I was lucky because I mean, since I've covered, so I've covered Coinbase since its inception. And so I, you know, known Brian Armstrong for years and that makes it sort of easier. And then fortunately, they, you know, for one reason or another, they, they decided to play ball. You know, I didn't, you know, this isn't like an, you know, authorized biography. I mean, because I, you know, to put it clearly, you know, a lot of people talk a lot of shit in the book about Coinbase and I relay it. I report what I found, but I was lucky to have access to Brian, to Fred, Olaf Karlsson. We, real character, really knows this crypto. And it was really interesting, like startups, you know, at a certain point, any big company is kind of the same. They're big and bureaucratic and so on, but startups are just the energy and the personalities are really interesting. So it was neat peeling back the curtain of the early days there.

• 9:33Anthony Pompliano?

  Yeah. And so I guess let's talk about that, right? Because I think a lot of people forget, especially people who are coming into crypto now. You've got Brian and Fred as two of the co-founders. Olaf is obviously one of the first employees, or I think he might even been the first employee. These guys have all gone on to kind of run different things that are leaders in their specific niches of the crypto space. And so like, what were those early days like? As you're talking to them and talking to others in the space, like, help us understand what's going on in the early days of Coinbase.

• 10:02Speaker 02

  Yeah, I guess what struck me is how hard these guys worked. I mean, I guess that's just the world of startups, but I mean, they were really like working 18 hours a day. It was Brian, you know, I mean, there's a bit of intrigue at the start because he was a Y Combinator company. And, you know, Sam Altman, you know, the founder of Y Combinator told me that their model is they want co-founders because building a startup is too much work on their own. But when at the outset, I mean, Wired reported this years ago. So a guy named Ben Reeves, sort of, you know, old crypto guy, started blockchain. He and Brian entered Y Combinator as co-founders, but right on the cusp of starting, someone at Y Combinator whispered in Brian's ear, hey, you got to cut this guy loose

• 10:44Speaker 02

  because there was an ideological division because Ben Reeves was like, we can't, you know, have a semi-centralized service. You know, it's got to be, and then, you know, but Brian was like, look, the whole point is making it easy and we're, you know. So basically, he booted his co-founder with the complicity Y combinator at the outset, built it up. But the reality is, you know, he needed someone else. And a few months later, Fred Urson was Goldman Sachs trader who got disillusioned by how technologically stupid Goldman was, moved to the West Coast and just met Brian and read it. And then the two of them just like, you know, busted their ass building it. Olaf Karlsson Wee, who of course now runs Polychain,

• 11:26Speaker 02

  he was a frigging lumberjack. I mean, he's sort of a character. He was working in the state of Washington like as a lumberjack. And he was really into Bitcoin. And he turned up in San Francisco and said, hey, guys, can I work for you? And, you know, that's how they started, real sort of synergy there. They added another engineer named Greg Hamel, and then Charlie Lee, who of course is famous for Litecoin. And that was the original team. And, you know, there's something about when you have people who mesh like that and work hard together. And that's, I think, how they they launched it.

• 11:59Anthony Pompliano?

  Yeah, I guess it's really interesting when you think through not only that small team, but but there's some irony in Brian Armstrong and Fred coming together, given Fred's background from Wall Street, which is that there's definitely a ideological divide like you described, where not only do you get inside of crypto, but but crypto is an ideological divide from the traditional Wall Street, right? And so to see somebody cross over like that so early and go build infrastructure there. Did Fred kind of give any insight into, I'm assuming his former coworkers thought he was crazy and kind of the classical story? Or were they more encouraging and really wanted to see him kind of go for this?

• 12:39Speaker 02

  No, he was disillusioned because he was, you know, in Goldman and he was a trader, but he had a real, you know, he's got a real talent for software. And obviously, he realized where, you know, this was, I think, when would this be like, yeah, 2012, 2013, where there would have been last to the floor traders and the culture of, you know, those firms is like liars poker. It's, you know, kind of like big athletic dudes who, you know, shout each other down in a pit. Whereas, you know, all the while, you know, the guys who could build algos were, you know, coming in. But, you know, Fred was describing how the Goldman people disdained, you know, the computerized traders, treated them as C I T staff. And, you know, he just saw where the future was going, you know, in his words, but obviously, he's turned out to be right. And so that led him to a

• 13:25Speaker 02

  To leave. And it's funny. So apparently his, you know, his coworkers were like, you know, haha, what's that? Or I don't know if he knew he's gonna do crypto. But when he got into Coinbase, he went to his former manager, the one guy who did get tech and was like, hey, do you want to buy an early chunk of Coinbase for $25,000? And, you know, obviously, that guy's sitting very pretty right now.

• 13:44Anthony Pompliano?

  Yeah. And so there's this famous photo of Brian Armstrong, and I forget where it is, but it's in the early days of Coinbase. He's got a Coinbase shirt on, if I remember correctly. It's basically at like a job fair or some sort of event. And he's literally like handing out T-shirts. And I remember asking somebody about it. And I don't want to say who it is, but they basically were like, yeah, people forget that at one point, Coinbase didn't really take off at first. And there was talk of potentially even like, should they shut it down? Because it actually wasn't working. And then it kind of really took off. And so kind of, how, when you were writing the book, like, how did you think about the various phases of the company? And kind of that, you know, hard work overlaid with just the

• 14:26Anthony Pompliano?

  psychological toll it takes on a founder, working on something that not only is just hard to build a company, but it's also in this industry that kind of sort of existed, but not a lot of people really recognized it, you know, in 2014, and things like that?

• 14:39Speaker 02

  Yeah, that's a great point, Pom. Because I mean, that's startup life, you know, most of them fail. But they were in a whole industry, you know, you didn't even know if the whole industry was going to make it. So that's even more existential. Yeah, I mean, you know, the peaks and valleys of crypto, 2013, it went on, you know, a bit of a run. And, you know, I can't remember what the prices got up to, but then it, you know, collapsed entirely again. I think it's like, that's where it sort of nudged a thousand bucks. You know, in the early, early days, it went from 30 bucks to two. But in the next uptick, I think it was 2013, hit almost 1,000. And then the floor fell out. And yeah, talking there, I mean, they, you know, they had their venture funding by then, so they could ride it out. But I do know, in the first crypto winter in 2014, people confided in me that

• 15:23Speaker 02

  they drew up a plan to, you know, to can 40% of their staff, because they always wanted to keep a two-year runway. And then, you know, just as happens ever so often, then the prices started ticking up again. And they were able to hold on. So it's, you know, it's a series of events like that. And I think it's true to this day, you know, you'll have these, you know, massive frenzies of trading and all the exchanges, you know, make a bunch of money. And then things go really quiet. And, you know, things shut down, things get acquired, people get laid off. But, you know, here we are again.

• 15:54Anthony Pompliano?

  Yeah, another player that that came from Coinbase and now has gone on to do other really impressive things is Adam White. And I know that there's some stories about Adam in the books. Maybe kind of share one or two of the really interesting things that Adam went through while I was working at Coinbase?

• 16:11Speaker 02

  Yeah, I mean, Adam White's one of the good guys in crypto. You know, he's just a, you know, a really stand up dude. I think, you know, sort of has no enemies and worked really hard. Interesting story too. I mean, he was a, you know, a fighter, you know, he's in the fighter pilot in the in the Air Force. And, you know, so he served his country and then went to come back to Harvard Business School, took him to, you know, and he's so humble. He admitted it took him two tries to get in. He got rejected. He, you know, wrote and rewrote his application, got in. And around then, he got into Bitcoin. And it's sort of funny that he, you know, he tried to write about this at Harvard Business School. And they're like, no, no, no, this is fringe, this is flaky. So, and, you know, this is complete self-promotion. I think it's awesome. The, my book's coming out in print. It's

• 16:56Speaker 02

  out in audio right now, but it'll be out in print in December. And the publisher is Harvard Business Review. So this sort of shows how how far things come. But, but, you know, Adam, yeah, he's so, he was basically the sales guy. He, you know, he busts his ass to go and get people to sign up to take, you know, merchants, you know, and his challenge was Fred Erson told him, you know, sign up like, you know, 10 billion dollar companies. And he did, which is amazing. But unfortunately, you know, as as we learned, you know, that never was Bitcoin's game, you know, because remember, there was this time where everyone thought, oh, and people are going to pay with Bitcoin, merchants want Bitcoin. And so you sign all these people up. But, you know, then obviously not much came of that. My favorite story with Adam is later in the game and sort of around, I think,

• 17:38Speaker 02

  2016, around there, when things were taking off, Brian Armstrong Coinbase sent him as an emissary to New York, you know, because he's kind of like watching down. So, you know, he looks the part. He looks like a banker. And he's like, go get some of these like old school, you know, firms on board. So he gets a meeting with Cantor Fitzgerald, which, you know, is sort of as like classic Wall Street as you can get, you know, we're talking like Scotch and three piece suits and Steak houses and you know, so he goes to me, he gets the meeting and he shows up on his own and the CEO of Cantor Fitzgerald comes with like 10 guys. And Adam has no tie on and his title was like general manager and they start mocking him saying like, what's a general manager? You're going to get my coffee and he basically got laughed out of the room, you know?

• 18:22Speaker 02

  And I think that's less a reflection of Adam than it is just the prejudice of Wall Street. Not only against crypto, but against West Coast culture, you know, and that's something I think. You know, the crypto community is reconciling with right now, you know, Silicon Valley and Wall Street are very different places are coming together. But you know, just look at people dress in the valley, look at the dress on Wall Street. And you know, culture is a big part of companies, a big part of industries and that's what we're seeing right now.

• 18:47Anthony Pompliano?

  Yeah, it's really interesting, um, kind of that difference in culture specifically between those two places. You mentioned the dress, but, but I think also when, in kind of the way that companies are built, right? You know, Wall Street, very kind of fundamentally driven, uh, they want to see cash flow and, and, uh, all that fundamental analysis. In Silicon Valley, it's very binary. Hey, we know that, you know, some high percentage of these companies are going out of business, but the ones that make it are going to be incredibly valuable. Uh, and, and I see it in the day to day, right? I mean, literally you will see, uh, kind of the Silicon Valley mindset, but it's overlaid with your building in the financial industry, right? For, for all intents and purposes, and so, uh, there's this undercurrent of the Wall Street way, if you will. Um, and, and in the book, as you're writing it, like, I'm assuming you saw that clash over and over and over again.

• 19:30Anthony Pompliano?

  Uh, and it wasn't just kind of Adam White going into Cantor and, and getting, you know, berated. Um, but, but were there other situations where you kind of saw that come to a head as Coinbase was being built?

• 19:40Speaker 02

  Oh yeah, many times. I mean, you know, they, you know, move, move fast and break things ethos of the valley, you know? That's well and good, but it doesn't work in most industries and you know, we're talking about the country's banking system. You can't play that way. Um, and you know, that affected the sort of the cultural clashes with regulators, but also from an instant infrastructure point of view. You know, I'm, you know, above my pay grade here, but, uh, you know, the tools they used to build it, you know, it's like, um. You know, what's the famous database thing, you know, MongoDB and tools like that that are the kind of go to building blocks for spinning up an app in Silicon Valley just are not strong enough to, you know, withstand like, you know, billions of financial transactions. So, you

• 20:24Speaker 02

  know, the tech stack like in 2017 for Coinbase almost came crumbling down because they built it on Silicon Valley architecture. And, you know, again, you know, Paul, you and, you know, probably your crowd knows this stuff better than me, but the technological infrastructure you need to build something like JP Morgan is got to be really solid and capable of massive throughput. And, you know, Coinbase got burned in late 2017 because her infrastructure almost fell down. And so that's, you know, that's not so much a cultural thing, but it kind of is the the approaches to how you build Silicon Valley, you build fast, you stand up, you pivot, you experiment. But, you know, when you're talking about, you know, Wall Street, you got to build, you know, very deliberately and make it to last.

• 21:08Anthony Pompliano?

  For sure. And I guess it's not only just Silicon Valley versus Wall Street, right? I know another kind of theme of crypto is it's much more global than most industries, right? I've got kind of this mental framework where a lot of companies, especially technology wise, they were built in the United States previously, they would penetrate the US market. And then there was almost like a board meeting. It was like, okay, you know, this year is our global expansion, right? And it would kind of go out globally. Now, these companies are being built on one, not even being based in New York or San Francisco, but also on top of that, they're global on day one, right? They don't kind of have this geographic region by geographic region kind of, you know, rollout plan, if you will. And so kind of, how do you think that plays into Coinbase being based in San Francisco, but the industry being much more decentralized to some degree?

• 21:54Speaker 02

  Yeah, that's a really great question because, you know, you're right. Typically, you know, you build here and then you go market by market. But when you've got, you know, people like CZ who stood up Binance in a few months and, you know, he, you know, he runs circles around Coinbase. And that's not entirely Coinbase's fault, but, you know, so much of the crypto industry's fate is determined by regulation. And, you know, in the US, you know, it's, it's, it's been pretty heavy handed. And so Coinbase had to make a choice to win the US or win the world. But it also made them complacent because I think, you know, there is a bit of an American arrogance. Talk to some sources in The book about even when Coinbase went to China and Asia, you know, they were, you know,

• 22:35Speaker 02

  talking to people who built in Asia, they thought like Brian and Fred were extremely arrogant. They're like, look, you wanna, you know, you wanna compete, come, you know, come, come, come try win in, you know, China and Japan, you know, before you tell us what to do. So that's, I think, really interesting. And then, but the reality now is, you know, Binance, you know, they've done amazing things. But, you know, if you're hopscotching from Malta to Hong Kong to wherever they are now, you know, last I heard, CZ was planning to go to international waters and run the whole thing from a yacht, you know, that's, it's, I think it's cool, but, you know, and if you're gonna operate in the US, you know, as, as much as crypto folks like being cowboys, you can't blow off, you know, the Treasury Department, you can't blow off the IRS.

• 23:19Speaker 02

  So, you know, that could hurt America, you know, from a competitive point of view in the long term, but that's reality that, you know, that startups and crypto companies face, you know, you, you gotta play the game.

• 23:31Anthony Pompliano?

  Do, do you think that that makes an argument that the regulators or the regulations should change or there should be some kind of, maybe even not like a full change, but like a sandbox where innovation can be tried or, or something done from a regulation standpoint that allows for the US to not fall behind from the innovation standpoint? Or do you feel like it's just, hey, they're so true to kind of that way, that's never gonna change and US companies are just gonna have to figure out how to, how to compete with, with their hands kind of tied behind their back in some regard?

• 24:01Speaker 02

  Yeah, I mean, I don't know, I think, you know, you know, you and probably a lot of your audience are closer to those questions than me, but as a reporter watching this, I certainly do feel that the American crypto companies are being hampered. It's improving a bit. I mean, I think the regimes, you know, they're trying to set up a sandbox regime in Wyoming, which sounds great. Brian Brooks, Coinbase's former lawyer, you know, becoming, you know, the, you know, controller of the currency, that's promising. But also I think people underestimate the lobbying clout of, you know, of the banking industry in DC, you know, if they wanna shut something down, they will. So, you know, but fortunately, as much as, you know, I, cause I know I've got a piece in the book about Brian Armstrong going to DC.

• 24:41Speaker 02

  Tried to get him on a lobbying circuit. He hated it, you know, he's like, you know, he told somebody, I think that Democrat senator is an ass and I can't stand any of this because Silicon Valley guys, they want to build. They don't want to do that. But, you know, the, the industry's got to grow up and that's just kind of how American capitalism works for better or worse. So, you know, I think as, as the industry gets more entrenched, their, their lobbying in Washington shops will get better. I mean, that's what Google and Facebook did. Once upon a time, they refused to go to Washington. Now they're there again, for better or worse. You know, that's just how the American game's played.

• 25:12Anthony Pompliano?

  Yeah. So Coinbase was obviously Bitcoin only for a long time, right? And then started to add other assets. Anything that was memorable as people kind of talked about the strategy evolving from Bitcoin only to other assets. And now they're even doing things around staking and custody and kind of moving outside of just help you buy Bitcoin, which sounds like that was the original mission. Kind of any takeaways there?

• 25:37Speaker 02

  Yeah, I mean Coinbase was caught flat footed. I mean, that's part of the reason they got so beat by Binance for a while. And, you know, it's the reason people like Olaf and Fred Ursim, you know, left the company. They want to spread their wings. And there was a period in 2015, 16, where this Bitcoin got so bitter between the block size debate, you know, remember? People wanted to expand it to two megabytes and all that. And so much of the energy was consumed in politics and backstabbing and fighting that. Meanwhile, all that was going on in Bitcoin world. And then what Vitalik was building, you know, it was, it seemed suddenly very positive, you know, it seemed, you know, full of potential. So, you know, Fred wrote a sort of a famous blog post saying, hey, this is the future and he left to pursue it.

• 26:18Speaker 02

  And Coinbase just dragged their feet, adding Ethereum, adding anything. Part of that was from right for regulatory reasons, to be fair, but part of it was inertia. They got complacent. And then it happened again when Binance started adding every token under the sun. You know, they, there was a talk in Coinbase, people were advocating, look, let's split the company in two. You know, we'll have an international holding company that can go play in, you know, in all those markets and do the crazy stuff. An American company, which you probably should have done. And but then part of it was cultural. I mean, Olaf was saying, you know, they had such a good 2017. They're like, oh, what should we do to maximize our tax advantage? Rather than building, you know, they, they lost touch with the pulse of the crypto community. You know, people were like, hey, let's add Dogecoin, which would have been an easy lift. And I'm like, well, we don't know about the, you know, ROI on that.

• 27:03Speaker 02

  And, you know, so, but that's when they brought Balaji in and he, you know, Balaji's turn of ass and is pretty famous for a variety of reasons in crypto world. And he really injected some energy and was just like, you know, hell bent on adding tokens. And that's, I think, how they managed to get their ass in gear again.

• 27:20Anthony Pompliano?

  Yeah, so maybe talk a little bit more. Balaji came in through the earn.com acquisition and became the CTO. I recently had him on it for an episode and we spent almost zero time talking about Coinbase and spent most of the time talking about all of the, uh, the crazy, powerful ideas he has. But in, in terms of that acquisition, if I remember correctly, that was the first big acquisition that they did where it was, you know, kind of a nine-figure sum attached to it reportedly. Was that specifically for a kind of a change in strategy? Or what was kind of the, the driving force behind, rather than building everything internally to go out and buy a company like that?

• 28:00Speaker 02

  Balaji is a hard figure to report on. I've only met him a couple of times. He's incredibly polarizing and divisive. However, what everyone agrees with is he's a genius. He's one of the sort of smartest people in crypto and in general. So the account of, you know, getting earn.com, you know, some people related to me that it was a dog of a company. And since Andreessen Horowitz had a big stake in that and Coinbase was a way to solve that problem. And a lot of people whispered in my ear that the official price, you know, the nine figures, whatever it was, wasn't actually true, but it was to satisfy Balaji's ego. You know, I, I don't take a position on that. That's what a lot of people whisper in my ear.

• 28:41Speaker 02

  However, Blashe did do the job in really kind of changing up the culture at Coinbase, you know, and it's with the downside was it resulted in a civil war. I mean, he pushed Adam White out, he pushed a lot of people out. You know, as someone called him Coinbase's first brilliant asshole. Other people said he would win Survivor. You know, I don't take a position on Ida Serna Blashe well enough. I do think he's got formidable intelligence, that's for sure. And then ultimately, it became a showdown in Coinbase between Asif Hergie, their, you know, COO and president for a while, who was making the company more corporate. And so, you know, which had to be done. Asif did a lot of good things. He sort of made it to a mature company. But at the same time, the rank and file in Coinbase

• 29:25Speaker 02

  didn't like him because he wasn't a real crypto guy. And they all worship Blashe because Blashe could code, he knew tokens, he knew the scene, he was of it. So, you know, and ultimately, yeah, it came to a head where there's, you know, kind of a big bloody count and Coinbase lost a lot of people. And I think it forced Brian Armstrong to come in and lead because, you know, Brian is not like conflicts. But sometimes if your lieutenants are in a shooting war, you got to step in and do something. And the final straw was, I guess, Asif asked Brian to report to him on product. Brian owns the majority of the company and is a CEO, and that was a bridge too far. And so that's when, you know, he got pushed out. And then Blashe, on his one-year vesting period, was just TP'd out and that was that.

• 30:08Anthony Pompliano?

  Yeah, Asif obviously used to run TD Ameritrade, right? So kind of came from a much more kind of Wall Street type background. And I guess part of this is not even just Coinbase, but the most companies, as they go through what I'll just call growing pains, right? There's positives, negatives, and you're trying to build something that's worth billions and billions of dollars, right? So obviously, it's going to be hard to do. Would you say that most people kind of understand that it was important to have that period where Blashe came in and had an impact? It was important to have the period where Asif came in and had an impact? And like, those moments, although maybe painful at the time, have kind of built Coinbase and the culture it has into today? Or do you feel like there's

• 30:50Anthony Pompliano?

  kind of certain points in the history of Coinbase where those that are left point back and say, hey, we wish we could have skipped over certain periods, or we wouldn't have made certain decisions in the past that we actually ended up making?

• 31:01Speaker 02

  No, I think that's a good way to look at the bigger picture. I mean, I think people in a startup going through something like that think they're the only one that's happened to. But even if you step back and he's like, look, you know, the reality in the valley is a company gets that big that quickly. The executive team is going to turn over two or three times, you know, so you're going to have moments like this. And then you've had the hidden hand of Andreessen the whole way too, you know, I mean, I think Chris Dixon and Fred Wilson of, you know, Union Square Ventures of and Barry Schulman. You know, you got these real smart, you know, veterans who've been kind of, you know, the hidden hand shaping the path. So, you know, I think while it makes good newspaper copy and, you know, salacious book gossip.

• 31:42Speaker 02

  I don't know if it's that different from what goes on at, you know, any tech, successful tech company that scales quickly.

• 31:48Anthony Pompliano?

  Yeah, elaborate a little bit more on the venture capitalists, right? You just rattled off three names that are at firms that have now become very well known. Not only one for just investing in general, but obviously for crypto specifically. How do you think about their impact on Coinbase, right? I'm assuming Coinbase couldn't become Coinbase without them, but, but how involved are they? Or were they, any kind of insight there as to their involvement?

• 32:16Speaker 02

  Yeah, I mean, I think they've had a, you know, a huge hand in guiding it, you know, Mark Andreessen, Chris Dixon, Fred Wilson. They're kind of the rabbis behind the scenes, you know, that doesn't take, you know, I don't mean to diminish credit to Brian and Fred, who, you know, busted their ass to build the company. But it's kind of, you know, symbiotic in the sense that, you know, for the crypto industry, Coinbase is too big to fail. I mean, if Coinbase collapsed, I think, you know, it would set crypto back a decade. So I think, you know, that's why maybe it's got more attention from the VCs than other firms. You know, I'm not saying Coinbase is the best or the only firm. Kraken does good things. Finance has been amazing, you know, you know, even Gemini, there's a lot of good crypto players out there.

• 33:00Speaker 02

  But, you know, they, if you want to put the face of crypto out there, it's Coinbase. And, you know, if Coinbase went south, I think the ripple effects would be disastrous for the industry.

• 33:09Anthony Pompliano?

  Yeah, and when you say go south, is that from a business model standpoint? Is that more of like a custody, security hack type standpoint? Maybe it's both? Like, how do you think about the downside case or the risk that's associated with a company like Coinbase being as big as it is?

• 33:26Speaker 02

  Well, I mean, I think they're, you know, probably safe by now. I mean, in the final chapter of my book, I talk about a clandestine meeting between Brian Armstrong and JP Morgan's CEO Jamie Dimon. And why I love this so much is, of course, Dimon is Bitcoin's most famous antagonist. You know, he's called it, you know, every name in the book, a fraud and insulted it. And then meanwhile, he's taking this secret meeting with Brian Armstrong, you know, in the, you know, in JP Morgan's Manhattan headquarters. So, you know, I think that's, that sort of shows that Coinbase is here to stay. In terms of moments that could have sunk them, you know, a fatal hack, you know, the industry barely survived Mt. Gox, something that that befell Coinbase.

• 34:08Speaker 02

  Because you got to remember, most American crypto owners, that's what they know crypto as. I mean, I think people come on your show, the people who are running the funds and building it, they're all like, you know, that's child's play. But for most Americans, or, you know, most, a lot of other consumers in the world, that's their touchstone, you know? So if there's a disastrous hack at Coinbase, it would sink them, could still happen, I guess. But I do recount in my book, an early hacking incident. Coinbase, like I say, has never been hacked. That's not true. In their early stage, when there's just five of them, one of their vendors got in and got into the hot wallet and quickly stole $250,000. And after that, Coinbase issued only custom Chromebooks to anyone working with them and tightened their security.

• 34:52Speaker 02

  And then also, forgive me, I can't remember the guy's name, starts with A, you know, he's a very famous figure in crypto, who's, you know, Antopoulos, Anthopoulos, something like that.

• 35:02Anthony Pompliano?

  Andreas Antopoulos.

• 35:04Speaker 02

  Yep, thank you. Yep. They hired him to go and test their cold storage and to do a complete audit of, to make sure every Bitcoin they had was indeed there, you know? Because remember what happened with Mt. Gox? You know, Carpolis was sitting there, he thought he had it, and then when he looked, it wasn't there. So Anthopoulos verified it was there. So I think getting by that, I think getting through the IRS audit. And you know, so I think that's, and then your other existential point was when Silicon Valley Bank gave them the boot, which is very bad because Fed Ursim ill-advisedly put up a PowerPoint explaining how Bitcoin, you know, was could skirt sanctions. He wasn't advising it and you know, he's kind of right, you know, because it's decentralized, but you don't go around, you know,

• 35:47Speaker 02

  making presentations like that and Silicon Valley Bank finally had enough and booted them. And that's a big deal, you know, they, you know, I know it really pissed off Chris Dixon and stuff. And at least they gave him a six month grace period to find another banker, but if that, that could have sunk them too. But I think at this point, you know, Coinbase is, they might lose market share, you know, they might, someone else might come along. But I think they've really kind of become the face of the industry.

• 36:10Anthony Pompliano?

  Yeah. And so you mentioned, uh, Brian and Jamie Dimon meeting. We recently saw on the news that JP Morgan is now banking both Coinbase and Gemini. Is that part, that meeting kind of leading to that? Or was there other conversation that you're aware of as part of, I love the word clandestine that you use?

• 36:29Speaker 02

  Yeah, it's funny because you know, I learned it happened and there everyone's like, you know, I was trying to get, you know, JP Morgan to confirm and then, you know, it's sort of skittish about it and stuff. Yeah, I think because Brian did a East Coast tour, met with Lloyd Blankfein and Goldman Sachs and Jamie Dimon. And I think it was both sort of a, you know, he's, you know, being an evangelical for crypto. But also I think he, you know, wants to learn from these guys who, whatever you think of the traditional finance industry. I mean, Blankfein and Diamond are formidable financial executives. And I think it was a little bit, you know, to come sit at their feet and learn what they have to say. You know, and no doubt that probably was the first step to lay the groundwork for what was reported last week of, you know, JP, JP Morgan taking on Coinbase as a banking customer.

• 37:15Anthony Pompliano?

  Yeah, that's awesome. So let's look forward. Obviously Coinbase today, and I probably should caveat this entire conversation. We have some exposure to Coinbase financially. We're not direct investors in the company, but basically we've invested in somebody who's invested in the company. But where do they go from here, right? In terms of it's an eight plus billion dollar company based on public reports. But do they continue to stay private forever? Do they have aspirations to go public? Do they tokenize the company's equity? I think one time Brian said something about, you know, that would be like the most Coinbase thing to do. Kind of what's the conversation around the company from that standpoint?

• 37:54Speaker 02

  Yeah, well, insiders told me the plan was to go public this year, but you know, like everything else in the pandemic, you know, if life is on hold. You know, but unlike so many other unicorns, I mean, they are, you know, profitable most quarters, so they can. And I think you put your finger on it. The question is not, you know, if or when it's how. And I talked to Fred Ursen recently and, you know, asked him this, like, what's it going to look like? Are you going to do a blockchain token? And he said, yeah, it'd be pretty boring if we just did a conventional NASDAQ IPO. And I think there's so many people, because they are, you know, a lot of people hate Coinbase, but you know, they're, they're the industry leader. They're the standard bearer for the industry. So I think it'd be very brutally disappointing if they just did something boring. So I think it's just how much, you know, how quickly they can get the regulatory ducks in a row.

• 38:38Speaker 02

  And, you know, what I hear in the company is they want to do some hybrid listing of, you know, they'll float some shares like normal, but also put a bunch of those on a token and do, you know, this sort of ICO meets IPO. And I can't wait to see the details and that's what they hope to do. But who knows? I mean, maybe their investors will get impatient and just push them out the door. But I think the crypto world's really hoping for a, you know, a Coinbase token.

• 39:02Anthony Pompliano?

  Yeah. And it's interesting too, because I wonder if there's a, a day where we see a Coinbase equity token trading on Coinbase. Right? Which kind of leads to the question of they historically have listed assets that are not securities. And I think that's, you know, as you mentioned, kind of part of that underwriting process and really kind of trying to stand the right side of the regulators. Does the company eventually end up listing kind of commodities, currencies and securities all in this digital format, all in one location? Or how do you think that kind of plays out based on the conversations you've had?

• 39:36Speaker 02

  Yeah, you're, you're, that's prescient. I mean, I think you're looking into the future and that's what the future is going to be. You know, I think we're going to see Nike and Apple stock and other equities, you know, traded as tokens because it just makes so much sense. It's so much more efficient. It's more secure. Who will be doing that? I don't know. Possibly Coinbase, but we could also see, you know, the big broker, we could see Intercontinental Exchange trying to buy Gem and I or Coinbase. And, you know, see a period where we have, you know, hybrid share listings for a while. But I, I think no doubt, you know, I, you know, I don't know what your guess is. I'd say maybe within 10 years we'll see that.

• 40:10Anthony Pompliano?

  Yeah, look, I, I personally, my personal opinion is that we will see stocks, bonds, currencies and commodities all digitized, right? Kind of the technology layer will be the same and it just generally makes sense. We're kind of seeing this, right? If you take some of the companies we see that are focused on like millennial investing and things like that. They're trying to put various asset classes together on the same platform. That's a little bit different, but, but still directionally getting towards where you could buy Bitcoin, buy a stock or buy something else on one location. It just seems that's the way the future is going to play out, but I don't, I don't know, right?

• 40:45Speaker 02

  Yeah, I mean, technology is inevitable, you know, remember we had the internet and we realized things were going to go digital, you know, and logically it should happen the next year. And some industries that took them 20 years and, you know, but I, I just can't see going backwards. This stuff just makes so much sense, but who's going to do it? I don't know. Will, will Coinbase morph into become the, you know, New York Stock Exchange of the future? Will they get acquired, you know? And then also the other people big in this game is, you know, Facebook with their Libra token. You know, I, I think it's notable that Apple and Amazon are going to start tokenizing stuff too. You know, there's, and the government, central banks, it's, it's kind of a jump ball out there. But I think you're absolutely right. All this is going to happen, but who's going to pull it off first? I don't know.

• 41:26Anthony Pompliano?

  Yeah, in, I think it was 2017, maybe I tweeted and I said, look, you know, within the next 24 months, we're going to get large companies start to issue these tokens. And my guess was actually Tesla and Amazon Tesla having like some sort of energy credit for the the grid, right? So you actually have some incentive mechanism that that's used there. And then Amazon, just from a the idea that a gift card is basically a token, right? I mean, yeah, it's a different technology form factor. And so you can easily see kind of this happening. But I do think that it's happened slower than people have thought, right? It was kind of like in 17, everything looked like it was going to happen, you know, within 24 months. Now it's probably pushed out a little ways.

• 42:07Speaker 02

  Well, I mean, if someone's got to build the interface, the problem with it, I don't want to insult the crypto community, but I think they're so in love with their own technology, their own culture. There's been a lag in building, you know, I mean, even with DeFi stuff, I tried to cover it. And I mean, this theoretically, it's so cool, but I mean, you want me to get it, you know, browser add on and metamask and all the rest of it. And I mean, give me a break, this stuff has got to be, you know, an app. It's got to be as easy to use as any other app on my phone. And that's where I think the big corporates could have a role. I think Amazon, you know, Tesla, yes, given their unique corporate culture could do that. But, you know, I mean, we need those user interfaces and it's just, it seems a lot of crypto sometimes is insiders impressing each other with who can build the most, you know, kind of out there, technically sophisticated products.

• 42:52Speaker 02

  And we've got to remember, you know, most people, the stuff is just too hard. You've got to build it so it's accessible. The UI is so crucial. And, you know, I think, you know, you got to build a plumbing first and that's what's going on. But, you know, who's going to crack the code and make this mainstream accessible? I don't know, could be Coinbase, could be Tesla, could be Amazon, could be Apple, could be Facebook or some incumbent or some startup out there who's going to solve this all. But I can't wait to see what turns out.

• 43:17Anthony Pompliano?

  Yeah, I mean, look, Coinbase Gemini, I think part of what's made those companies so successful, right, is they basically made it look very similar to other brokerage-type products, right? And so if you're if you're used to kind of buying financial assets on a platform, you now can do it here and they make it look and feel very user-friendly. But then you also have things like Cash App, right, that are just, you know, stupid, simple, and they're kind of pulling other people in. I wonder what other trends, I'm kind of going away from Coinbase to finish up, and you've covered, you know, crypto for a while now, and obviously seen everything from the early days to now. What are the other trends that are interesting to you? You mentioned DeFi, but are there other things that just kind of stick out to you or that you're paying attention to?

• 43:56Speaker 02

  Um, just as an aside, you mentioned Cash App, Square, I was talking to a VC recently who just described it as a beast, and Dorsey's interest in crypto and the infrastructure they're building, it's subtle, but I mean, they've got a giant banking network, you know, so they they're ones to watch. That would be really neat if they pushed the crypto ball forward. I could see them doing that for sure. You know, otherwise, I think the thing to watch right now is what comes out of the crisis we've seen with the, you know, attempts to deliver funds, you know, to to businesses, you know, and within the last crisis in 2008, 2009, you know, we saw legislation that enabled the whole fintech industry to take off the PayPals and things like that. So I'm watching to see if the lawmakers are

• 44:40Speaker 02

  smart enough to do something to to facilitate how things are going to change. You know, I think the way we pay is changing, you know, like, I'm Canadian, I'm surprised that the US still doesn't, you know, have contactless payments, you know, Canada's had that for years, you know, everywhere else, Asia's miles ahead, and, you know, it might take this health crisis to get people to stop swiping credit cards, you know, so I'm curious a lot of the innovations in the rest of the world is going to come into America. And I'm always surprised about how cultural payment is, just, you know, people pay very differently in Northern Europe and in Asia and Canada and America. So, you know, and obviously crypto's going to have a role to play in that as well. I'm watching Facebook, you know, closely,

• 45:22Speaker 02

  because I think that that notion of, I know a lot of people hate it because it's centralized, it's not real crypto, that's true, but I think the more people get familiar with this, with tokens, with, you know, fungible wallets, you know, let's just get everyone on a platform and then educate them about, you know, having their own hardware wallet and stuff. So, sorry, that's kind of a stream of consciousness answer, but that's some of the things I'm looking at. And finally, central banks, too, you know, I think You know, are they going to, you know, are we going to see, you know, what's, is China going to pull this off? Can you do it without turning to a surveillance mechanism? I think that's going to be a big story in the next couple of years.

• 45:56Anthony Pompliano?

  So the only thing I'm going to correct you on is, Jack, if you listen to this, is scoffing because he would say he's into Bitcoin, not crypto. But I, other than that, I definitely agree that they specifically have this unique place in the market where they've got the connectivity to kind of the legacy system. And then when you've got the, the leader of the company who is so kind of hell bent on Bitcoin and kind of its future prospects that, you know, you, you just don't see that anywhere else, right?

• 46:23Speaker 02

  Yeah. What if you strapped it to, you know, to Twitter? Why not build in a, a payment network? And as someone in the media drives me crazy that Apple and Google with Chrome and Safari don't build in a crypto token so that you come across one of my articles, there's a paywall. What if there's a little button you could just say, you know, yeah, pay a buck, you know, and use crypto tokens to do that? I mean, the technology, you know, it's just, it's, it's so obviously, you know, that it would be useful to deploy it this way. You know, it's just someone's got to step up and lead. Maybe it's Jack, maybe it's Zuckerberg, you know, maybe it's Brian Armstrong, but, you know, it's going to happen. I, I don't know how soon, but it's going to happen.

• 46:59Anthony Pompliano?

  Yeah. And then I guess what are the areas, everything you mentioned on the trend side is very kind of positive looking. What are the areas where you say, other than the user experience, these are the big obstacles that crypto has to overcome in the next kind of five to 10 years?

• 47:15Speaker 02

  I think they got to build something someone needs. I mean, as a reporter, I mean, you know, these pitches I get like these, you know, I don't mean to, you know, pick on some companies, but like Definity raised a hundred million dollars for World Computer. That's going to change everything, you know? It's like, okay, where is it? And I think it's just a structural model, a traditional startup. You've got to like build, you got to get customers, you got to get revenue, you got to scrape to get to your series A and your series B. The crypto model is flawed because it's like, okay, here's a hundred million dollars, you know, go build it. And guess what? A lot of these people, it's a lot more fun to go and like fly around the world and go to conferences and do stuff like that than to grind, you know? Cause it's, there's not enough pressure to, you know, to build the stuff.

• 47:56Speaker 02

  So I think the, the incentive model within crypto is very flawed, but you know, we'll, we'll see what happens. So I think that's going to be a threat to it. And I think there's, you know, just. You know, they've got to, people have got to start speaking plain English. You know, we know Polka Dot and Definity and all this is really interesting theoretically, and I'm in the world, so I kind of appreciate it. But, you know, they've got to make this stuff relatable to ordinary people.

• 48:19Anthony Pompliano?

  Yeah, that is a great, a great point. Where can, where can people go find the book if, if they want to read more about it?

• 48:26Speaker 02

  Well, thanks for asking, Pomp. Yeah, I mean, you know, it's just if you want to learn about Coinbase and crypto, I think it'll have you covered. But also, you know, it's, it's a great story. I think there's a lot of gossip. I tell it narrative style. So, you know, it'll, it should fly by. If you go to Amazon Audible and Google Kings of Crypto, you can get it. They've got the exclusive rights for that for a few more months. And you can preorder from Harvard Business Review, again, to search Kings of Crypto, and you can order it up that way. So, um, yeah, you know, I hope people do because it's, it's a good story. And there's a lot of gossip in there and about people you might know. So.

• 49:00Anthony Pompliano?

  That's awesome. Before I let you go, I, I was asking everyone two questions, and then you get to ask me one to finish up. What is the most important book you've ever read?

• 49:11Speaker 02

  Uh, my goodness. Can you ask me the second one? And I'll get back to you on that.

• 49:16Anthony Pompliano?

  Second one's not much easier. Aliens, believer or non-believer?

• 49:21Speaker 02

  Uh, that's easy. Non-believer. I love astronomy. I love the stars. No aliens out there.

• 49:25Anthony Pompliano?

  No. Wait, well, you got to explain that. Why no aliens? You're one of, you may be the fifth person ever to say no aliens.

• 49:31Speaker 02

  We would have heard from them.

• 49:33Anthony Pompliano?

  Okay.

• 49:34Speaker 02

  Yeah. Um, uh, let's see. Most important book I've read. Um, and I'm probably supposed to say some business book, but I, I love fiction. So, uh, probably Crime and Punishment. It's just, you know, the best detective story. It's the best piece of Russian literature ever written. And it's just exploring people's motives, souls, you know, life, death, God, atheism. It's all in there. So, uh, you know, if, if you're stuck at home in the pandemic, read Crime and Punishment.

• 49:59Anthony Pompliano?

  So, uh, I have not read that. Uh, but I did read Bill Browder's book. Um, it is, uh, read, um, I'm going to forget the name now. Uh, uh, it is read, uh.

• 50:14Anthony Pompliano?

  I forget. But Bill Browder is the guy who he's an American investor and he went to Russia and a red notice his name and they issue a red notice for him and it's this whole kind of crime and drama book and they end up killing his lawyer and doing all this crazy stuff and I've heard a bunch but I've never read the fiction and so I wonder how accurate the fiction and the nonfiction line up there.

• 50:39Speaker 02

  That sounds really good. I did think of a business book. It's something that's important that I want to read but I listened to it recently, A Shoe Dog by Phil Knight of Nike. Great book. You want to hear a guy struggling to build a company and just the footwear industry more interesting than you can possibly imagine. So if you want a good business book, pick up Shoe Dog. It's an old one but a good one.

• 50:57Anthony Pompliano?

  I always say that he made the right decision not calling it Blue Ribbon, right? So something about Nike just sounds better. What one question do you have for me to wrap this up?

• 51:10Speaker 02

  Okay, how about the future of media? It's grim out there. Who's going to save media? The Atlantic just laid a bunch of people off. BuzzFeed's laying people off. You know, how does the media business fix its business model so we can stay solvent?

• 51:23Anthony Pompliano?

  Yeah, so I think there's two paths that are interesting. I don't know necessarily if these are the magic bullets because I think that there's in the legacy media world, you're going to see some actually get stronger, right? While some fail and that's just the nature of consolidation and things like that. But the two new paths that are really interesting to me, one is kind of the Substack model where you say, look, people are going to subscribe to other people. They're not going to subscribe to the publication itself and so you'll see that kind of continue to get built out. I think you'll continue to see journalists leave and kind of just say, hey, look, I want to write what I want to write and it'd be all kinds of weird stuff, not fitting under one publication, so you know, support me. So we'll see how that plays out. But then the other thing that I'm really interested in is kind

• 52:08Anthony Pompliano?

  of these very small, what I call internet-first media companies, right? And so this is people who are doing this right now are people like Tim Poole or if you look at somebody like David Pakman or you see people like, what's his name? Ben Rubin, right? And all of these people, what they basically have done is they've recreated what it would be a traditional media company that has, you know, tens of, if not hundreds of employees. And it's like them and a staff of four or five, right? Joe Rogan's another example, right? Now Joe's doing video and audio, but it wouldn't be hard to see somebody in Joe Rogan's position, just say, hey, look, we're going to hire one person to, you know, create show notes and transcripts and put that online. And when you start to see that,

• 52:49Anthony Pompliano?

  you start to say like, the media organizations are going to have the same disruption happen that you've seen in every other sector through technology. The big question is just, can they see it coming, right? So like New York Times is kind of a notorious one that, you know, they've adopted some of this stuff and they're benefiting. Obviously Fortune's got their subscription services and they're kind of getting behind some of this. So I think that's really going to ultimately depend like who wins and who doesn't. It's just, you know, who's awake, right? And who's asleep at the wheel. You know, so it'll be interesting to watch, but I also don't think it's going to happen overnight, right? I think a lot of people think like tomorrow, all these media companies are going to fail. I'm like, yeah, maybe, but it's more likely that it's kind of a slow death than it is just, you know, everyone goes out of business all at once.

• 53:31Speaker 02

  Yeah, that's astute. I mean, yeah, technology sort of determines so much and media likes to think it's exempt, but it's, it's going to shape our future. So, all right. Well, Paul, thanks very much. Real pleasure to be on your show.

• 53:41Anthony Pompliano?

  Absolutely. Well, listen, Jeff, I really appreciate it and we'll, we'll talk soon.

• 53:45Speaker 02

  Well, take care.