Jae Kwon, Founder & CEO of Tendermint: Byzantine Fault Tolerance and Environmental Awareness

Jae Kwon is the Founder & CEO of Tendermint. In this conversation, Jae and Anthony Pompliano discuss consensus algorithms, Game of Stakes, nation-state surveillance, climate change, cow farts, life on mars, and liquid-solid states of matter. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

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

• 0:01Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off. Jay Kwon is the founder and CEO of Tendermint. In this conversation, we discuss consensus algorithms, game of stakes, nation-state surveillance, climate change, cow farts, life on Mars, and liquid-solid states of matter. I really enjoyed this conversation, and Jay has very unique views of the world. I hope you enjoy it nearly as much as I did. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by

• 0:42Anthony Pompliano?

  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. Alright guys, bang, bang. I'm here with Jay. We got a lot to cover. We're gonna go super deep on the environment. He's gonna teach me some stuff. I'm gonna argue with him, and you guys are gonna learn. So, thank you so much for coming.

• 1:16Speaker 01

  You're gonna try to make me mad, right?

• 1:18Anthony Pompliano?

  I could try to make you mad about the environment, but I don't know enough about the environment. We could argue like sports or something, and then maybe I could win, but-

• 1:25Speaker 01

  I can't talk about sports.

• 1:26Anthony Pompliano?

  Alright, what's your background?

• 1:29Speaker 01

  Background. Computer science education from Cornell, graduated in 05. I've been in San Francisco for about 12 years, doing development, a lot of open source development. And I wrote the Yelp iPhone app a while back, and that gave me, through the shares in the company, some freedom to explore a variety of projects, like 3D printing at some point.

• 1:57Speaker 01

  Lots of open source projects, played a lot of poker. We could talk about that.

• 2:02Anthony Pompliano?

  Are you any good?

• 2:04Speaker 01

  I'm good, but my problem is I like to play at higher stakes than I should. So that's what I learned about myself.

• 2:12Anthony Pompliano?

  Got it.

• 2:13Speaker 01

  And yeah, that got me to quit. So there's that.

• 2:15Anthony Pompliano?

  You play high stakes, it only matters if you lose a lot.

• 2:18Speaker 01

  Yeah, that's right. It's a lot of fun. It does matter, yeah. But what else? I care a lot about privacy. So the Snowden revelations got me interested into, got me into programming and end encrypted communication systems. I love distributed systems and complex emergent phenomenon. So a lot of my background kind of got me into the Bitcoin space early on in 2013. And I've been working on a proof of state consensus system called Tendermint.

• 2:50Speaker 01

  And now, starting from 2017, a network of blockchains, this vision for an interconnected blockchain network that will solve the scalability problem and a host of other problems for the cryptocurrency space called Cosmos.

• 3:09Anthony Pompliano?

  All right, we got a lot to go over. First, San Francisco, what's up? Why is everybody leaving?

• 3:15Speaker 01

  Why is everyone leaving?

• 3:16Anthony Pompliano?

  You've been there 12 years. Why are you still there?

• 3:19Speaker 01

  Good question. Been busy. I've been kind of meaning to. I want to live in New York and be bi-coastal.

• 3:25Anthony Pompliano?

  You want to leave?

• 3:26Speaker 01

  I kind of want to leave. Yeah.

• 3:28Anthony Pompliano?

  It's becoming cool to leave.

• 3:30Speaker 01

  Uh huh. Yeah. Yeah. I mean, I'm not, not a hipster or anything, but like, yeah, I mean, I have a dog and I walk my dog on the sidewalk in a mission.

• 3:40Anthony Pompliano?

  I was just gonna say, the mission's like Brooklyn, basically.

• 3:43Speaker 01

  Ah, I haven't really lived in Brooklyn, so okay, you tell me.

• 3:46Anthony Pompliano?

  Just trust me.

• 3:47Speaker 01

  Okay. Yeah. I mean, my dog steps into, to human poop, you know?

• 3:51Anthony Pompliano?

  Yeah, it's pretty crazy.

• 3:52Speaker 01

  It's kind of gross.

• 3:53Anthony Pompliano?

  Yeah. And, and then you pay a lot of money to live there. So that doesn't help the fact that, not only is it maybe not the cleanest, but let's go on. All right. Let's talk about Snowden and privacy.

• 4:03Speaker 01

  Okay.

• 4:04Anthony Pompliano?

  And Julian Assange and all that.

• 4:06Speaker 01

  Okay.

• 4:06Anthony Pompliano?

  Nobody's came on and talked about it yet. Why are you so excited about it? Like, what was the fascination with it all?

• 4:14Speaker 01

  Well, I've always had a problem with authority, you know? And so I like, I like to create and be part of voluntary systems that allow me to, you know, dictate my life and, and who sees my information. It's known in revelations were quite revealing about to the extent to which we're being surveilled. And I think that's going to have ramifications eventually down the line where we're going to be living in an authoritarian regime, whether it's through a government or a collection of companies, you know, fascist corporate dictatorships, something like that.

• 4:51Anthony Pompliano?

  Do you think it's the future or you think we're already doing that?

• 4:53Speaker 01

  We're, we're already there and we're trying to create a better future. We'll see.

• 4:57Anthony Pompliano?

  What, what was the biggest thing that like upset you in all the revelations? Was it the participation of companies? Was it just the government's kind of arrogance in it all? Or what was the kind of the, the thing that caught your attention?

• 5:12Speaker 01

  It's like everything we learned about and starting from school, say, like about the greatness of America just all seemed like a lie, you know? Like, it's like we're living in a matrix and we're part of a program that we don't even understand or get to control, you know? I mean, they call it a democracy, but we didn't vote for the system. The money that you use is controlled and issued by corporations, private banks and cartel of them called the Fed, right? And you don't get to decide where the government, where the, our humanity or civilization gets to divert or invest in terms of our resources. Now we're facing a huge environmental problem and look at where we are, you know? I didn't choose this. I don't think my parents chose it. So why are we here?

• 5:56Anthony Pompliano?

  Yeah. What, um, in all of that, do you think the US is better or worse on their surveillance side than other countries? China obviously is like really, really bad, but just take any other country than like the ones that are obviously bad. Where, where do you think US is? Are we high on the list, kind of for middle of the pack? Are we actually doing better?

• 6:19Speaker 01

  I don't know the answer to that, you know, but like one thing that scares me about um this is a story I heard recently about someone in China. And this guy was riding a bicycle, um, crossed the the the street lights without stopping. And a camera took a photo, a picture of his face and then sent him a ticket at home. Like, that's crazy, you know, that everything you're doing is being tracked by AI and analyzed. So, so yeah, China's already there.

• 6:50Anthony Pompliano?

  See, I don't, I I agree that the facial recognition is like weird, right? And that probably makes, well, it definitely makes me uncomfortable. But the repercussion of you broke the rules and got a ticket for it, I'm not so worried about, right? In the sense of if there was a cop there, right, technically they could write the ticket.

• 7:11Speaker 01

  Oh, yeah, the ticket's fine, you know, I don't mind a ticket. Yeah, yeah, charge it out of my credit cards or whatever.

• 7:17Anthony Pompliano?

  That becomes scary is if then because you did that, you can't go in a certain part of the city. Or you can't take out a loan or your kids can't go to a certain school.

• 7:27Speaker 01

  By association, don't know what you're thinking, don't know what you're planning. And so, you know, we're entering the area, uh, era of like pre-crime, you know, and they'll stop uh movements or or insurrections. You know, stopping that sounds okay, but they'll stop other things too.

• 7:44Anthony Pompliano?

  Describe a pre-crime for the people that don't know.

• 7:46Speaker 01

  Uh, okay, so before you commit a crime, uh, some advanced technology that predicts that you will commit the crime. And so before you even do it, um, you're you're locked away essentially. So you prevent it from doing the thing. Yeah.

• 7:59Anthony Pompliano?

  You're on the way to rob the bank. You haven't robbed the bank yet, but you get stopped. And you uh you basically get charged with breaking the law, even though you didn't do it yet.

• 8:08Speaker 01

  Yeah, and so, right, I don't want to live in that world. You know what the US is good at? Um, I don't know if the US is is is as like, if they have as much technology in terms of, you know, tracking people. But um, they're very good at parallel reconstruction. So, you know, they have, they have a different set of skills, I think.

• 8:27Anthony Pompliano?

  How good is the encryption technology right now? You think that it's actually protected?

• 8:32Speaker 01

  I'm not, I'm not, I'm not the best cryptographers. I can't really answer that. But I see that there are new vulnerabilities being discovered all the time. I think the name of the game nowadays is trying to infiltrate algorithms or like devices. One of the things I hear about is compromising the random number generator that's inside our devices. Right? So that's an easy way to compromise cryptography without dealing with compromising the algorithm itself.

• 9:02Speaker 01

  Yeah.

• 9:03Anthony Pompliano?

  It's, it's pretty crazy that we're sitting here talking about like how good is end to end encryption in the, in the context of like a surveillance state? And the richest man in the world literally has pictures floating around.

• 9:16Speaker 01

  Who's that? Bezos?

• 9:17Anthony Pompliano?

  Yeah, just like the fact that he's got more money than God, right? And can hire every cryptographer in the world. He can get all as much security as he wants, but

• 9:29Anthony Pompliano?

  pictures still get out, right? Things he's doing that he probably didn't want people to know about still get out and.

• 9:35Speaker 01

  I like that. I like that it got out, you know, and that he couldn't control it.

• 9:39Anthony Pompliano?

  Well, and look, I don't know all the details of it, right? I don't know if it was actually somebody hacked his phone or, you know, the piece at the pictures. And then they kind of got socially engineered, right? In terms of somebody eventually got the photos because of that. But it's just this idea that like, no matter how good the tech is, there's always a nefarious actor who potentially can beat it, right? And then there's also the human component, right? You see all like the SIM swapping in crypto, for example. People put, you know, multiple layers of security on their mobile phone accounts. And they, you know, they literally put in notes in there that say, no matter what, even if I come in, do not give a SIM card out to anybody. And they still give it out because it all gets socially engineered, right? And it has nothing to do with the technology systems.

• 10:22Anthony Pompliano?

  Has to do with the fact that there's still a human there as a failure point, right?

• 10:25Speaker 01

  Yeah, I agree.

• 10:27Anthony Pompliano?

  Which is pretty crazy. All right. So talk to me about Tinderment. What is this consensus algorithm? We have one. We have Bitcoin. We have, why do we need another one?

• 10:35Speaker 01

  It's great. And I'm not, I'm not gonna knock Bitcoin. I love Bitcoin, you know? Proof of work was like a necessary step for people to understand the need for a widely distributed BFD consensus system, right?

• 10:52Speaker 01

  But what, what? The problem is, is that the security of the system is really expensive in terms of energy expenditure. And what the Bitcoin maximalists or proof of work maximalists will say is that it's useful work because it's there to secure the system. But the response to that is, well, it's wasteful if there are alternatives that can do better without spending that much energy. Then even though it's useful, it's clearly wasteful.

• 11:21Anthony Pompliano?

  So your argument is, I'm going to go to the extreme side and say, if there was full feature parity or security parity, right, both systems were completely secure and there was the same cost in terms of, in order to have a secure system, you as an actor within that system had some sort of cost associated with your participation. You're saying that having a proof of work system in that case is wasteful compared to a proof of stake system or some other consensus model. My understanding, and again, you're a thousand times smarter than me, is that the proof of stake and other consensus algorithms

• 12:01Anthony Pompliano?

  are either not at parity on the security side or on the different criteria, or they're not as proven, right?

• 12:10Speaker 01

  Proof of stake is not as proven.

• 12:12Anthony Pompliano?

  Okay.

• 12:13Speaker 01

  Even Tendermint, I have to admit, it's an experiment. We haven't had the system work, you know, and when you deploy something in a social context, like really anything could happen, so who knows. But, and I wouldn't say that there's parity in security, but I like the way he phrased it. It's about the cost of launching an attack, right? And there's definitely a cost that can be proven about what would happen to an attacker who forced, say, a Tendermint blockchain. You know, it's like, when there is a double spend attack on a Tendermint chain, it means that there's a way to punish at least one third of the stakeholders. What that means is, it's kind of as if, if you launch a 51% attack

• 12:58Speaker 01

  on Bitcoin, their mining hardware explodes and it's gone. You know, that's quite the expense in terms of launching an attack. Whereas in today, with proof of work, the only cost there is, is the ongoing electricity costs for like an hour or however many hours. So potentially, proof of stake based on classical BFT algorithms like Tendermint can be more secure than proof of work.

• 13:22Anthony Pompliano?

  So walk me through the tenderman algorithm in layman's terms, right? So for a dummy like me, explain how the consensus algorithm is different.

• 13:31Speaker 01

  Okay. All right. I'm not going to go into like how the algorithm works because I've tried that. And it's just like, so I have to admit consensus systems is very difficult even to explain. But the gist of it is you have a set of actors and they can have different voting power relative to each other. But they all have public, private keys and they're signing messages in a gossip protocol. And there's a round robin

• 13:59Speaker 01

  set of rounds where they need to come to consensus ultimately. It's a two face commit algorithm, which means there's one phase where they vote. And then a second phase where based on what they saw of everyone vote, they vote again. And if there's more than two thirds voting in favor of a block in the second phase, then that's a commit. That's proof that everyone will

• 14:20Speaker 01

  that everyone who is honest will eventually arrive at the same conclusion.

• 14:24Anthony Pompliano?

  And so really what you're doing is why the two phases? Is it, it just gets to a deeper level of clarity or kind of a more agreeable state?

• 14:36Speaker 01

  There's just, there's just no way to, to really make this work with just one phase. And to try to explain that, I think I tried once, couldn't quite, quite do it. Why? Yeah.

• 14:47Anthony Pompliano?

  All right. So you have the tenderman consensus algorithm. You built that or started working on it, what, like 2014?

• 14:52Speaker 01

  Yeah, 2014. So I, I started working on trying to solve the nothing at stake and proof of stake problem in 2013. And I saw bit shares in NXT and the theoretical limitations or the holes, you know? I couldn't figure out and prove, it was pretty clear that you could not prove that there is a guaranteed cost to launching attack.

• 15:15Speaker 01

  So I tried to find a better solution. I couldn't. So I put that down and tried to create a cryptocurrency exchange to compete with Cryptsy. Worked on that for six months, understood the regulations around like statewide, you know, and international regulations around securities and all that.

• 15:32Speaker 01

  And then when I was about to launch it, I chanced upon some papers that described all the academic approaches to Byzantine fault tolerant consensus algorithms. And I found this one 1988 paper by Dwork, Lynch and Stockmare, and it had all the components that convinced me that proof of state could absolutely be solved. So I dropped everything and started working on that. So Tendermint, yeah, has been going on since 2014.

• 16:01Anthony Pompliano?

  Byzantine fault tolerant systems. I think a lot of people hear that phrase and they repeat that phrase because they think it sounds smart. I just sounded smart saying it and I felt good about myself. What does it mean?

• 16:13Speaker 01

  Okay, Byzantine just means arbitrary behavior. Like when you run a program, you're supposed to run that program. But when you do something else, then that's Byzantine behavior. Collusion is also a subset of Byzantine behavior if you're deviating from what you're supposed to do. And even just crashing and not participating is also Byzantine behavior. And that's, that's called a crash fault, for example, in consensus literature.

• 16:42Speaker 01

  So it's not possible to create like a consensus system like Bitcoin or Tendermint that can tolerate,

• 16:52Speaker 01

  you know, 99.9% of Byzantine actors. But it is possible to create one that can tolerate a fraction in Bitcoin that's 49%, say. And in Tendermint, that's 33%. And, you know, why those are different, it gets into technical details, but the idea is that in Tendermint, you can tolerate up to 33% of the voting power trying to attack the system or deviate from the original protocol or just crashing. And the blockchain will still work fine.

• 17:25Anthony Pompliano?

  And then you took Tendermint consensus algorithm and you've applied it and talk about Cosmos and what the heck that is.

• 17:33Speaker 01

  Okay, um, do you remember the Bitcoin sidechain's paper?

• 17:38Anthony Pompliano?

  I do not, no.

• 17:39Speaker 01

  Okay, what it is, um, okay, well.

• 17:43Anthony Pompliano?

  Definitely don't remember.

• 17:44Speaker 01

  Okay, okay, so, hmm, cryptocurrency has a scaling problem, I would say. There's the Lightning Network, I love the Lightning Network and the work that's been put in there. But there's also some issues with it, there's capital lockup costs. And it's also not a generic or general solution to all kinds of blockchains, especially not like Ethereum smart contracts, right? So the general, um, an easy way to solve the scalability problem will be to have many parallel blockchains that are running all at the same time. Then the question is, how do you coordinate between all those blockchains? If you have a thousand blockchains, and we already do, right?

• 18:29Speaker 01

  But what that means is in order to use one blockchain, like blockchain A, you need to get tokens there. If you want to use blockchain B, you need to get B tokens. So if you have A tokens, but you want to use B, you have to go to an exchange, you can do an atomic swap. All right, it would be better if we can just have the same token, somehow transfer it to the other blockchain and use the logic that's on that other blockchain, right? And this is, you can do this through two-way pegging. And Cosmos Network is about connecting all these blockchains together in a hub-and-spoke-like fashion, all powered by classical BFT consensus algorithms like Tendermint, such that.

• 19:11Anthony Pompliano?

  BFT is the Byzantine fault tolerance.

• 19:12Speaker 01

  Yeah, Byzantine fault tolerance, thank you, yeah.

• 19:14Anthony Pompliano?

  I'm making progress over here.

• 19:15Speaker 01

  I done it. And so, yeah, the Cosmos hub just launched. It's a multi-asset proof-of-state blockchain powered by Tendermint. And its job is to connect to many other Tendermint-powered blockchains, such that you can transfer, quote-unquote, tokens through two-way pegging. And so this is how we're going to solve the scalability and interoperability problem, and how we're going to create a new foundation for a scalable token economy.

• 19:45Anthony Pompliano?

  Got it. Two-way peg, explain that a little bit.

• 19:48Speaker 01

  Okay, let's see. So I can try two approaches to explain this.

• 19:54Anthony Pompliano?

  Okay.

• 19:55Speaker 01

  One is, say, this is from the Bitcoin sidechains paper. If you, you can move your tokens, your Bitcoins, to a multi-sig address. And that multi-sig address could be controlled by signers on another blockchain, say. So that's a sidechain, and it can have its own logic. It could be UTXO chain or an EVM chain. And so anyone can move their Bitcoins to there by transferring your Bitcoins to a multi-sig address. You can do whatever you want on that chain, and then you, or whoever you gave those coins to, can withdraw, right? So that's, that's the idea of a two-way peg in Bitcoin.

• 20:37Speaker 01

  We also see this in the banking world with NOSTRO accounting. So banks between banks, the way banks hold accounts within each other, is also kind of a two-way peg, I would say.

• 20:51Anthony Pompliano?

  Got it. And a lot of people like this Cosmos project. Like, there's people really pumped that they are, you guys launched this. What to the detractors, what's the detractors' argument? Like, the people who are, seem to be in the minority, at least in terms of, you know, public sentiment, why don't they like it?

• 21:13Speaker 01

  Okay, I mean, there's a whole slew of reasons why people don't like it. But like, there are proof-of-work maximalists who don't like the fact that we're creating a proof-of-state system. There's like Bitcoin maximalists, or any coin maximalists, that just don't like the fact that we're in another chain, right? And there are people who are creating competing systems, say. You know, I mean, in some sense, there are competing systems who just try to knock us down because we're the first.

• 21:38Anthony Pompliano?

  And can you, in the steady state, is the belief that you could make every chain interoperable with each other?

• 21:47Speaker 01

  Uh, just about, yes.

• 21:49Anthony Pompliano?

  But the proof of work chains could not participate?

• 21:52Speaker 01

  Um, it's harder. It's a more, it's a bit more difficult. Yeah. So the beauty of Tendermint and, and you know, classical BFT algorithms is that, uh, it's very easy to prove to a light client, like your phone, that something really happened on that blockchain. This was the block hash that was committed. Um, and it's very quick because all you need to do is wait for a set of signatures to be created by the consensus set or the validator set. And then, uh, uh, and then you, as long as you know, the original validator set, you can, you can quickly verify it by verifying the signatures. In proof of work, it's, it's more difficult because you have to first wait for additional confirmation blocks to

• 22:32Speaker 01

  come. Um, and then there's also issues around eclipse attacks and so on. Um, so it just turns out, you know, that Tendermint and BFT systems that, uh, that are like Tendermint are better for, uh, cross-chain communication because, um, light client proofs is essentially how cross-chain communication is done in Cosmos.

• 22:54Anthony Pompliano?

  Where does this, uh, game of stakes come in? I, I heard about this, uh, do you guys, do you guys create this or some guys created it on top of, of the project?

• 23:02Speaker 01

  Um, yeah, we, we, uh, we administrated the game of stakes program.

• 23:06Anthony Pompliano?

  That was a very political answer.

• 23:10Anthony Pompliano?

  Fine. I'll let you get away with it. There's PR people in the room.

• 23:12Speaker 01

  All right.

• 23:13Anthony Pompliano?

  Uh, but it, so explain what it is and then we talk about why you guys did it.

• 23:19Speaker 01

  We like to be, we like to be safe, you know, safety first is, uh, is our, not our mantra, you know, but, uh, we say that quite a lot, a lot, like Tendermint is safety first. Um, and, uh, before we launch a blockchain, we want to, uh, be sure that everything is kind of ready, right? So we wanted to, uh, first, uh, get the validators going, the validator community in terms of, uh, getting them used to the process of launching this chain. And we also wanted to Test for for the economic model to make sure. But it's not just going to crash and burn as soon as you launch it, which would be like a PR disaster. Right? So we tried to incentivize all kinds of attacks.

• 24:03Speaker 01

  And what we found was there was a cartel that formed. Bitfish had a whole bunch of people sign up as validators when they when they signed up for the game mistakes program. And we found that the community was able to identify them and and kind of fork them out because they were trying to be malicious.

• 24:25Anthony Pompliano?

  So really what you're essentially doing is you're incentivizing people to trust no one and everyone kind of check everyone else.

• 24:32Speaker 01

  The the community should should trust. Well, they certainly shouldn't trust any central point, you know, like even don't trust me. Don't trust our company. Don't trust the the foundation.

• 24:42Anthony Pompliano?

  Forget calling it game mistakes. You should have just called it paranoia.

• 24:45Speaker 01

  Paranoid.

• 24:48Speaker 01

  Yeah, I mean, we're we're aren't you paranoid, you know?

• 24:51Anthony Pompliano?

  Well, I'm not using it as a bad thing. No, right? I mean, look, the whole idea of not trusting anyone, right? Trust no one but verifying everything, I think it has a lot of validity to it.

• 25:00Speaker 01

  It can go a little too far. Yeah.

• 25:02Anthony Pompliano?

  Does game mistakes go too far?

• 25:04Speaker 01

  No, I don't. I don't think it went too far, you know, and maybe it could have been pushed a little too far, but.

• 25:08Anthony Pompliano?

  For the people that are playing, like, how much economic benefit is there for them? They they win like 20 bucks or?

• 25:15Speaker 01

  There were there were 50 winners, so they they got they got tokens that they can validate. I forget the exact amount, but it wasn't insignificant. And they also get to say that they participated and won. So, yeah.

• 25:28Anthony Pompliano?

  Were they doing it for the notoriety or for the money?

• 25:31Speaker 01

  For both.

• 25:31Anthony Pompliano?

  For both? Yeah, that's fair. All right, let's talk about the environment.

• 25:35Speaker 01

  Okay.

• 25:35Anthony Pompliano?

  What? How does crypto and blockchain solve the environmental problems? Or what are the environmental problems?

• 25:43Speaker 01

  Okay, the environmental problems. Okay, I mean, there's a whole lot, right?

• 25:46Anthony Pompliano?

  Are there?

• 25:47Speaker 01

  Yes, yes. Climate change is a huge one, based on the amount of greenhouse gases and carbon dioxide that are in the air, right?

• 25:55Anthony Pompliano?

  Where do those come from?

• 25:57Speaker 01

  Mostly, uh, mostly fuel, right? Gasoline and coal.

• 26:01Anthony Pompliano?

  Mm-hmm.

• 26:01Speaker 01

  Right? And then now from the destruction of the ecosystem, you know, and just the ecosystem is producing it too.

• 26:08Anthony Pompliano?

  So, uh, I don't claim to be well-educated on the environmental, uh, front, but, uh, I have heard, and then I've also heard the opposite, that, uh, a lot of the CO2 that is emitted into the air and causes a lot of the global warming and climate change, um, comes from cow farts.

• 26:26Speaker 01

  Hmm. Methane. Yeah.

• 26:27Anthony Pompliano?

  Methane, right?

• 26:28Speaker 01

  Methane is a huge deal.

• 26:29Anthony Pompliano?

  That's like a real thing.

• 26:30Speaker 01

  It is a real thing, but I don't think, I'm not sure, but I don't think that's, uh, uh, much compared to, you know, um, uh, overall, the rest of the carbon dioxide that we're emitting. If you calculate like how many barrels of oil we're, we're pumping out into the atmosphere, it's, it's disgusting, cause, cause eventually we have to figure out a way to either stop doing that, but not only stop doing that, but figure out a way to put that back into the soil, you know? And it's really daunting. It's on the scale of like everyone trying to build like a Great Wall of China or something. It's a monumental task that I don't see happening until we, we get our shit together very soon.

• 27:05Anthony Pompliano?

  All right. Last question about the climate change. Uh, it's like not cool to call it global warming anymore? It's like now, now the terminology is climate change?

• 27:14Speaker 01

  Uh.

• 27:15Anthony Pompliano?

  Is that a thing or is that, is that just my perception incorrect?

• 27:18Speaker 01

  Maybe. I mean, cause like, uh, part of the problem is that it, it shifts global weather patterns. So some places are colder. I think the Midwest, for example, was like flooding and there's like winter storms going on when, when there shouldn't be. So climate change makes more sense, but overall it's certainly about global warming. Although, uh, yeah, just climate change too, uh, it, it affects agriculture. So we're gonna see some food shortages pretty soon.

• 27:41Anthony Pompliano?

  You think so?

• 27:41Speaker 01

  Oh yeah. We're already seeing, uh, some of that from the US, but I believe, uh, within say 10 years, it's gonna be affecting us and it will be on our minds.

• 27:50Anthony Pompliano?

  In, like, describe more about the food shortages.

• 27:55Speaker 01

  Well, with climate change comes, you know, the unpredictability of climate, like the crops aren't used to the crazy weather patterns where like droughts are worse and floods are worse and so on. So we're going to see food shortages.

• 28:13Anthony Pompliano?

  What about like indoor farming? Does that solve?

• 28:15Speaker 01

  If you're farming?

• 28:16Anthony Pompliano?

  Indoor farming, vertical farming. Again, those are big words, not really big words, but they make me sound and feel smarter. So I'm gonna throw those out there at you.

• 28:26Speaker 01

  All right, man, you do you. Dude, I think that, I think, I think it might help. But I mean, if you're talking about like a hydroponic setup where you have like light bulbs and everything, you know, I don't really see that helping out. It's just probably gonna make things worse. I think it might help, but that's a lot of indoor farming, you know, we don't have the infrastructure for that.

• 28:47Anthony Pompliano?

  It'd be hard to replicate the entire US food system indoors, you know, vertical farming.

• 28:50Speaker 01

  Vertical farming, yeah, yeah.

• 28:52Anthony Pompliano?

  All right. And then what about?

• 28:54Speaker 01

  I do think people should go out and live and figure out how to, how to produce food for themselves. I think that'll help out a lot, you know, and ensure our survival at least.

• 29:04Anthony Pompliano?

  Well, I'm glad you brought that up because I'm gonna take it a step further. Do you know about Ted Turner with the bison?

• 29:10Speaker 01

  Tell me about it.

• 29:11Anthony Pompliano?

  So Ted Turner is the, he's the founder of what CNN, a bunch of other stuff, rich dude. And he's one of the largest landowners in the United States. And he has been a big believer in, I'm pretty sure that he's a big believer in food shortage being on the horizon. He has been that way for like literally decades. And the reason why he owns so much land is he made a very concentrated effort to try to prevent the, I think it was the extinction in North America of bison.

• 29:42Speaker 01

  Great.

• 29:42Anthony Pompliano?

  And like, I guess breeds them, right? I don't remember all the details, but he's like super into that. So he's not just trying to figure out how do you make food for yourself, but how do I feed people in general?

• 29:53Speaker 01

  Yeah, it sounds like he's trying to terraform the earth when it's needed.

• 29:57Anthony Pompliano?

  He's billionaire. So, you know, he's got a lot of money to play around and do things that he thinks are good for the world, I guess. But.

• 30:02Speaker 01

  You know, like, that's kind of, yeah, the way we do farming now, we. Uh, right. There's, there's all this private land. Animals can't run there anymore. But, um, there was a TED Talk, I forget by who, who was saying, you know, one of the best ways we can increase carbon capture on soil is to ensure that there's, you know, wildlife and plants

• 30:24Speaker 01

  in the, um, in the grasslands. The best way to do that apparently is to actually have bison or cows or bulls, whatever, um, uh, you know, like urinate on the ground and, and stomp, you know, things and make sure things rot properly. So, yeah, um, going back to the basics of creating new, uh, that ecosystem, I think is super important.

• 30:43Anthony Pompliano?

  Oh, you mean letting nature do the natural things that they do would be a good thing?

• 30:47Speaker 01

  The thing, the thing that's been doing forever. Yeah. Um, and you know what? The cool thing is I think we can incentivize this and, and, uh, if you take a, a, get a project called Regen, for example.

• 30:58Anthony Pompliano?

  Regen?

• 30:59Speaker 01

  Yeah, Regen. It's about measuring, uh, carbon, uh, in the soil and, uh, and ultimately about incentivizing the improvement of that soil. So I think the first thing we want and we need to do in order to improve anything is to measure and to observe and to see what's going on. And then with the blockchain, uh, we could create, uh, uh, an incentivization system. You know, imagine if in the future,

• 31:26Speaker 01

  with enough knowledge and, um, information about what's going on and, uh, understanding of the solutions needed, I think people would want to support, say, a fiat, not a fiat, but a, a stable coin that perhaps might incentivize the creation of that infrastructure to make it happen. You know, so I think education goes a long way, uh, as well as measuring. Yeah.

• 31:49Anthony Pompliano?

  What about the oceans?

• 31:51Speaker 01

  I don't know.

• 31:52Anthony Pompliano?

  What's going on with the oceans?

• 31:53Speaker 01

  Oh, well, I know there's over, too much overfishing, you know?

• 31:56Anthony Pompliano?

  Too overfishing, meaning that we're catching too much fish and taking them out of the ecosystem? And the oceans are suffering because of it?

• 32:02Speaker 01

  Oh, yeah, yeah. I think recently, I don't remember the exact numbers, but like within a span of just a few decades, almost like within our parents' lifetimes, we've what destroyed ninety something percent of the of the fish population. Yeah. And then people say, yeah, ninety something percent.

• 32:20Anthony Pompliano?

  It's a lot of sushi.

• 32:21Speaker 01

  It's a lot of sushi. Yeah, exactly. There's also issues around like pollution, right? So we don't do a good job figuring out how to manage pollution. There's plastics going into the ocean all the time.

• 32:34Anthony Pompliano?

  I was gonna say, you see the whale that they found like all the tens of pounds of of plastic in his stomach.

• 32:41Speaker 01

  Yeah.

• 32:42Anthony Pompliano?

  It's pretty crazy.

• 32:43Speaker 01

  It is. Yeah. I don't know. That makes me sad.

• 32:47Anthony Pompliano?

  Yeah. I mean, I think it killed the the big one that like was a big story, right? I think it killed the whale and that and it had a lot to do with the plastic or whatever.

• 32:55Speaker 01

  Isn't there like a whole island like the size of Texas? I don't think it's like a contiguous plastic island.

• 33:01Anthony Pompliano?

  Yeah.

• 33:01Speaker 01

  Yeah, but but.

• 33:02Anthony Pompliano?

  It all kind of gets together.

• 33:03Speaker 01

  Yeah.

• 33:04Anthony Pompliano?

  Yeah. I mean, we we definitely don't know nearly enough about the ocean, or I think everyone agrees on that. So this is where I'm just more experienced than you at sitting here and talking into this microphone that I'm going to show you that I just expertly walked you from CO2 and global warming to the oceans, because now we're going to talk about seaweed.

• 33:26Speaker 01

  Seaweed.

• 33:27Anthony Pompliano?

  You know anything about seaweed?

• 33:28Speaker 01

  I I've I've I know what it tastes like.

• 33:31Anthony Pompliano?

  Yeah, okay.

• 33:31Speaker 01

  It's great. And if you feed it to cows, I hear it's good.

• 33:33Anthony Pompliano?

  So, ah, you know something about seaweed with the cows. All right. So what is this true that there's a certain strain of seaweed that if you put it in cow feed, it can actually drastically reduce the CO2?

• 33:45Speaker 01

  I haven't tested myself, but it's probably true. Why would anyone lie about that, right? Red seaweed or something like that?

• 33:51Anthony Pompliano?

  Yeah.

• 33:52Speaker 01

  It will reduce methane emissions from cows. Yeah.

• 33:54Anthony Pompliano?

  The only reason I know this is because somebody tried to get me to invest in their seaweed farm, which sounds like, you know, we're like go farm, but it's in the ocean.

• 34:02Speaker 01

  It's in the ocean.

• 34:03Anthony Pompliano?

  Because you have to you have to make the seaweed.

• 34:05Speaker 01

  I wonder if you can make a seaweed farm like right in Manhattan.

• 34:08Anthony Pompliano?

  So, all right, now we're really getting off off topic here, but it's interesting to me. What I wanted them to do was to create like a vertical farming type situation, but do it for seaweed. So it's more like a aquaponic vertical farm and you could grow the seaweed in like a local swimming pool. You could grow it in a factory or a warehouse, wherever, because part of growing the seaweed offshore, right, to some degree is the transportation costs. There's not a lot of cows at the beach. So you gotta get the seaweed somewhere to get it processed and get it into the feed. And so I always thought that like, man, if vertical farming is going to be a thing and the seaweed thing's real, I'm sure you can make a lot of money by creating some kind of vertical farming seaweed.

• 34:54Speaker 01

  Yeah, or we just put a tax on cows.

• 34:57Anthony Pompliano?

  Why? You eat meat?

• 34:59Speaker 01

  It's easier. Yeah, I still eat beef. I have to admit. Yeah.

• 35:02Anthony Pompliano?

  Chicken?

• 35:03Speaker 01

  I eat chicken, yes.

• 35:04Anthony Pompliano?

  All meat?

• 35:05Speaker 01

  Uh, almost all meat.

• 35:07Anthony Pompliano?

  If we tax, why do you want to put a tax on?

• 35:09Speaker 01

  Well, then, um, then it would get me to eat less. You know, I do, I have to admit, sometimes I have some impulse control issues where I'm like, you know, I just, I just want to eat that thing.

• 35:22Speaker 01

  Yeah, I admit, and everyone, I think, has this issue. And but if, if we, if we make it more expensive, I mean, cows, cow meat wasn't all that accessible to everyone, you know?

• 35:33Anthony Pompliano?

  Yeah.

• 35:33Speaker 01

  It's, it's not inconceivable to think that it might become more expensive.

• 35:37Anthony Pompliano?

  What about the fake meat, like, uh, Impossible meats and all these?

• 35:40Speaker 01

  Have you tried the Impossible burger?

• 35:42Anthony Pompliano?

  I've tried it.

• 35:42Speaker 01

  It's okay. It's all right. But like, I'm not, I just don't know if it has like the right nutritional profile, right? So I don't want to eat it every day.

• 35:51Anthony Pompliano?

  I'll defend them in the sense that going into it, I thought it was going to be really bad. It was actually better than I thought, but it still didn't taste like, you know, a McDonald's burger, right? Which, which might not be meat either.

• 36:03Speaker 01

  Yeah, I don't know what that is. It's more like a sponge. But like, um, oh, are they going to sue me now? No, right? Hey.

• 36:11Anthony Pompliano?

  Watch out.

• 36:11Speaker 01

  It depends on who cooks that Impossible burger meat. So you just have to find a restaurant that can actually do it well, because apparently you need like a, like a different kind of oven for it.

• 36:20Anthony Pompliano?

  You know why, uh, soda, like Coca-Cola, tastes better at McDonald's than other places?

• 36:26Speaker 01

  I have noticed that, but I don't know why.

• 36:29Anthony Pompliano?

  Because they follow the recipe exactly. Now the people dilute it, right? They put like too much water and stuff in the syrup because most restaurants make it on the spot. And so like maybe meats the same way where the Impossible Burger, then when they send it to you, if you don't follow the directions, it doesn't taste as good.

• 36:44Speaker 01

  Yeah, yeah, most people don't have to write oven for it. So it comes out with like not medium rare, right? It'll come out to be too overcooked.

• 36:52Anthony Pompliano?

  That makes sense. All right. So how does blockchain solve this stuff?

• 36:56Speaker 01

  How do you go from topic to topic like that? That's amazing.

• 36:59Anthony Pompliano?

  That's just how my brain works.

• 37:00Speaker 01

  Yeah. Do you have like a mind map in your head where you can see the next?

• 37:03Anthony Pompliano?

  Well, I wanted to talk about seaweed and I got you to talk about that.

• 37:05Speaker 01

  Okay, sorry. What's the next topic?

• 37:08Anthony Pompliano?

  Talk about blockchain crypto. How does that solve the environmental stuff?

• 37:11Speaker 01

  Okay, so I think, you know, the ICO bubble that we saw showed that there's, there's, it can solve at least the incentivization problem of incentivizing new approaches to solutions to problems, right?

• 37:27Anthony Pompliano?

  Okay.

• 37:27Speaker 01

  I mean, we tried to do fundraising for a project to create like a blockchain platform a while back and approached a lot of blockchain VCs for it and they didn't get it. But what we found is that the public does, the ones that were tracking a project have capital and were willing to fund it. And so when we conducted the fundraiser in 2017 for Cosmos, it was, it was quite a surprise and shock to see that just how much demand there was.

• 37:54Anthony Pompliano?

  How much did you guys raise?

• 37:56Speaker 01

  We put a cap on it. So we said, we wanted to raise $10 million. And we said, if there's enough demand within the first six hours, we'll cap it at 17. And then we closed that in 29 minutes. And this is at the time.

• 38:10Anthony Pompliano?

  Time out, time out. Really $17 million in 29 minutes?

• 38:13Speaker 01

  Yeah, yeah, yeah.

• 38:14Anthony Pompliano?

  It's almost a million dollars a minute. I'm not a mathematician, but it's.

• 38:18Speaker 01

  Yeah, yeah. And, and, and people in California at least had to wake up at 6:00 AM. So they're also punctual people.

• 38:26Anthony Pompliano?

  How did people came from California?

• 38:27Speaker 01

  I don't really know. Yeah. And at the time, it was like the most amount of like eat the raise for a project. And since then, we've had larger amounts. But, you know, by the way, yeah, I do think that like raising a billion dollars or whatever for a project is kind of insane. I'm glad the SEC is putting stuff to that.

• 38:47Anthony Pompliano?

  A lot of project, a lot of founders don't realize that. Everyone knows that if you don't have enough money, right? You kind of starve the company and it can fail. But you also can die of overeating to some degree. If you raise too much money, somebody once told me, they're like, look, no matter how much money a founder raises, they spend in 18 months. Right?

• 39:07Speaker 01

  Eighteen months, yeah.

• 39:08Anthony Pompliano?

  So if they raise a million dollars, they make it last, you know, 12 to 18 months. If they raise $250 million, they blow it through in 12 to 18 months. And if you look like 2017, right, was kind of when all the craziness happened. There's a lot of projects that raised a lot of money, you know, tens of millions of dollars that are running out of money now. We're about 18 months later, right? And so it's pretty interesting to see that phenomenon play out with teams that raised 15, 20, 50 million dollars. And, you know, they have nothing to show for it.

• 39:38Speaker 01

  Well, what do they do with it? Like, I think we're maybe spending money too slowly, so maybe we should accelerate that. But yeah.

• 39:45Anthony Pompliano?

  Let's talk about VCs when you went to go pitch them. I'm fascinated by the idea that you went to go pitch quote unquote professional investors who are all contrarian, obviously. And.

• 39:54Speaker 01

  No, they're not. No, they're momentum seekers, right?

• 39:58Anthony Pompliano?

  Of course.

• 39:59Speaker 01

  They seek patterns, yeah.

• 39:59Anthony Pompliano?

  And instead, the crowd obviously was very interested in what you guys were doing. But the venture capitalists were just not confident enough to put capital to work. What do you think their big concerns were? Or like, why do you think they they had kind of a shyness in terms of investing?

• 40:20Speaker 01

  Well.

• 40:22Speaker 01

  They knew about Bitcoin.

• 40:24Anthony Pompliano?

  Okay.

• 40:24Speaker 01

  But they didn't understand why proof of stake mattered.

• 40:27Anthony Pompliano?

  Okay.

• 40:29Speaker 01

  Yeah. Whereas the people who were tracking a project were excited about the proof of stake aspect. I just think in general, I mean, there are contrarian VCs and those who are on the bleeding edge. But you know, if you can be bleeding edge like that, maybe it's just more fun to be participating and building it. Right? So maybe that's, that's the reason.

• 40:48Anthony Pompliano?

  Can you tell me a great story about a venture capitalist that did something stupid during the fundraise process, but don't use their name? Do you have any good stories about things that? You're smiling right now. People can't see you, so I know you have great stories.

• 41:05Speaker 01

  Did something stupid.

• 41:06Anthony Pompliano?

  No names.

• 41:07Speaker 01

  No, no.

• 41:07Anthony Pompliano?

  Just like when you were sitting there, you're just like, this is surreal. The fact that I'm here pitching a company that is highly technical and, and has all this prospect that should fit into somebody's thesis.

• 41:21Speaker 01

  Sorry, blanking. Let's move on.

• 41:26Anthony Pompliano?

  You're lying, but it's okay. All right. So when you raised the money, no equity, right? It was just a traditional ICO in terms of non-dedutive capital or how did it work?

• 41:35Speaker 01

  Well, we never called it an ICO. It's called a fundraiser. And, and it was structured as a donation modeled after the Ethereum foundations.

• 41:43Anthony Pompliano?

  Okay. How does that work as donation?

• 41:47Speaker 01

  Well, we explicitly say it's a donation and that we'll create the software, but that, you know, you don't have rights or anything or claims. And we'll recommend, recommend a Genesis distribution and so on, but that it's really up to the community to, to take the software and do something with it. Which is what happened. We had a distributed launch. They, neither the foundation nor the software company, Tenement, ran validators. And yet the blockchain launched with 67 validators and has a hundred or so.

• 42:17Anthony Pompliano?

  Wow. And do you know who the validators are, some of them, like in terms of, are they individuals? Are they organizations?

• 42:25Speaker 01

  A lot of them are organizations. They're software companies or crypto hedge funds or exchange exchanges who just want to expand their business and individuals too. Yes. We're finding that they want to, they want to identify themselves. I thought there would be like anonymous validators, but not so much. It's because of the delegation system where stakeholders can delegate to validators and you want to delegate to those who are trustworthy. Turns out everyone kind of ends up wanting to declare who they are. It's interesting.

• 43:00Anthony Pompliano?

  Do you think that a lot of the blockchain and crypto work that's being done today can have an impact on some of the privacy stuff?

• 43:08Speaker 01

  Um, yeah.

• 43:10Anthony Pompliano?

  You think so? The reason why I'm asking is, uh, take proof of work, take Bitcoin for example, right? There is a pseudonymous aspect of it, right? So there's a wallet address. I don't know that you, right? As a human own that wallet address, but I know somebody owns the wallet address and has a identifier, right? In terms of the wallet address itself and I can watch what goes in and out of that wallet address. And so that pseudonymous aspect isn't very private. It's actually completely transparent. And if you were to ask, let's say law enforcement, for example, they would love for criminals to use digital currencies like Bitcoin compared to hard cash, right?

• 43:53Anthony Pompliano?

  How do we in our heads kind of balance that, right? Because I agree, like things like decentralized systems are probably more secure in many cases. But then something like financial surveillance, maybe it's easier with Bitcoin. Right, compared to cash, but maybe it's less easy than the traditional financial system, for example.

• 44:16Speaker 01

  You know, I, so I see need for anonymization. People need privacy for, for, you know, certain transactions. They're not always breaking the law, but they don't want people to know everything that they're up to, especially like businesses who want to make a transaction, but don't want the whole world to know what exactly they're doing, right? Because they have a competitive edge there. I think the Cosmos network and, and architecture, or the network that it's building out, may hold some answers here. So, for example, the Cosmos hub itself, it's a multi-asset proof-of-stake system with many tokens that can be on there eventually. But it's, it's like you mentioned, pseudonymous.

• 45:00Speaker 01

  All the accounts, everything is public and transparent. You just don't necessarily know who it is. But when you have blockchains that provide additional privacy features connect to it, then I think the, the conversation will evolve toward gateways, right? So it may be that initially, I'm just going to draw a scenario, maybe this isn't what's going to happen, but there might be blockchains, for example, Zcash-like chains, or other BLS crypto-based chains, or zero-knowledge chains, that provide privacy and that they explicitly provide, that's why they exist, and they connected to Cosmos hub. And maybe we'll see a lot of people use it.

• 45:45Speaker 01

  But eventually, when people see that, when people can tell that that blockchain is being used towards evil, say, maybe something bad is happening, then there's going to be demand to, to figure out a way to, to put a throttle on that, for example. Or it may be that regulators say, these gateways are the ones that need to be regulated. So they might have rules about whether you're allowed to put money into those privacy zones, say. So I think that's maybe where the conversation will end.

• 46:16Anthony Pompliano?

  This is interesting. What's the future look like Cosmos and Tendermint? What are you guys working on right now?

• 46:22Speaker 01

  Right now, we're working on IBC. So there's the Cosmos SDK, which is a blockchain framework written in Go that allows you to very easily create a production-level blockchain in Go that also is powered by Tendermint. You don't have to use the Cosmos SDK. There are other frameworks like like Lotion is one in JavaScript that also ties into Tendermint.

• 46:50Speaker 01

  When we were developing the IBC spec now, so IBC will soon be an implemented module in the SDK. So people who are building on the Cosmos SDK now will be able to connect to Cosmos very easily when that's released in a matter of months.

• 47:06Anthony Pompliano?

  What's IBC stand for?

• 47:08Speaker 01

  Interblockchain communication. It's kind of like TCP/IP for packets. So I would say, here's the analogy that I like to draw. Tendermint is like an operating system like Windows or OSX, except what it does is it allows distributed replication of a computer. Some blockchain to me is just to replicate a computer.

• 47:32Speaker 01

  IBC is like TCP/IP between distributed computers. Cosmos is like the world wide web.

• 47:38Anthony Pompliano?

  Got it. Before we finish up, I have rapid-fire questions. You don't have to answer quickly.

• 47:44Speaker 01

  Okay.

• 47:45Anthony Pompliano?

  Most important company in crypto?

• 47:49Anthony Pompliano?

  Can't say yourself.

• 47:50Speaker 01

  Can't say myself. Most important company in crypto?

• 48:01Anthony Pompliano?

  You're just coming in here talking about cow farts and all this other stuff, and I just thumped you with the most important company in crypto?

• 48:06Speaker 01

  Dude, what kind of question is that?

• 48:13Speaker 01

  The Fed.

• 48:14Anthony Pompliano?

  The Fed?

• 48:14Speaker 01

  Yeah, it's a private company, right?

• 48:16Anthony Pompliano?

  It is.

• 48:17Speaker 01

  Yeah. Why? Because they, they're going to, eventually, when cryptocurrencies and this ecosystem gets more and more widespread adoption, they are going to want to figure out a way to limit that because it's taking power away from the, you know, the consortium of banks, essentially.

• 48:40Anthony Pompliano?

  All right. That's actually a really interesting answer. No one's ever said that.

• 48:45Anthony Pompliano?

  Usually people just say like Coinbase or Facebook. What would be the one regulation that you would change or improve if you could?

• 48:55Speaker 01

  You know, I saw, uh, let me think. You know, I think for one, the SEC is doing a pretty good job.

• 49:01Anthony Pompliano?

  Agreed.

• 49:02Speaker 01

  Yeah, they, I'm always impressed by like how much detail they go into and trying to analyze something and trying to create a good framework. So I love that about them. But what can be improved?

• 49:16Speaker 01

  I think, I think better clarity would be nice. Like, right now, there's no incentive for, for companies to go out and reach out to them. It's almost like the lawyers tell you not to because if you're under radar, then you're, I guess, potentially more likely to get some kind of penalizer somehow, right? So, you know, we haven't really had a conversation with the SEC, but I wish we could somehow. Yeah. Maybe there should be some framework for having that conversation.

• 49:43Anthony Pompliano?

  That makes sense. Normally I ask you what their most controversial thought in crypto is, but I want to know what's your most controversial thought in life. What's the one thing you believe that everyone else disagrees with you on?

• 49:59Anthony Pompliano?

  This is my favorite part of the interview is when I ask questions, people sit there and just stare into space and think.

• 50:03Speaker 01

  How much time do I have?

• 50:05Anthony Pompliano?

  Unlimited time.

• 50:06Speaker 01

  Are you sure? Isn't this live or something?

• 50:08Anthony Pompliano?

  No.

• 50:08Speaker 01

  Okay.

• 50:16Anthony Pompliano?

  It's never a good thing when I ask questions. I'm asking, how much time do I have?

• 50:37Speaker 01

  This might not be controversial. It's okay. Okay. I think, so I'm kind of like a... I don't subscribe very much to ideologies anymore, but I used to be libertarian. And I used to be interested in voluntarism and copiumism. What are those? Voluntarism is the idea that that systems should not enforce policies through violence or penalty of jail, say, that, say, for example, through the marketplace

• 51:19Speaker 01

  or through just providing better choices, incentivize people to adopt, you know, doing certain things. Copiumism is kind of like a faux religion started by, I don't know, if you look at the Wikipedia page, it's funny, it says it started by a 19-year-old, something nice and sweet philosopher or something like that. But the idea there is you don't want to enforce intellectual property right laws, but that information should be allowed to be copied for free, you know, without penalty. And I do still subscribe mostly to that. I think in the future, through crypto and blockchains and especially the governance systems

• 52:03Speaker 01

  or decision-making systems that make use of the capital that can be generated from blockchain systems through like inflationary tokens, say, as an example, we will see more alternatives to services offered traditionally by governments or local governments. And that eventually the blockchain movement will make the world more voluntary so that you can choose what kind of system you want to live under. And people will choose this by what kind of tokens they hold in their wallet.

• 52:39Anthony Pompliano?

  I mean, look, Bitcoin is a form of that today, right? If you just look at currencies, there's an inflationary fiat-based currency that's backed by or run by, you know, the monetary policy of the Federal Reserve. There's another one that is a disinflationary, decentralized, algorithmic, you know, whatever currency, right? People have choice between those two things. You could make the argument that money is a service that the government or government entities provides, right? And so if Bitcoin gains mass global adoption, it replaced it, right?

• 53:18Speaker 01

  It's already true.

• 53:19Anthony Pompliano?

  Yeah, and I think that you wouldn't be, if you knew it money, right? Other services all of a sudden don't seem that big of a deal, right? What's the most important book you've ever read?

• 53:32Speaker 01

  I like The Master Switch. That's a pretty good book. It's about, it's about the evolution of the telephone system and the internet.

• 53:43Speaker 01

  But here's, here's another one.

• 53:46Speaker 01

  Principles by Ray Dalio. I really like that book. Yeah, yeah, we're trying to, trying to push that as much as we can. I think, I think people should embrace honesty, transparency, and, and just always try to improve one another.

• 54:01Anthony Pompliano?

  He, he, he's a big, the US dollar's in trouble guy. He's been really pounding the table lately, saying that, you know, no one's paying attention and this thing's going to suffer a lot more than people think. We'll see. What about aliens? You, you believe?

• 54:18Speaker 01

  Oh, okay. This is getting weird now. All right.

• 54:22Anthony Pompliano?

  This is getting weird now. That's the best response to the alien question we've gotten so far.

• 54:26Speaker 01

  All right.

• 54:27Anthony Pompliano?

  I ask everybody the alien question. You know it's special.

• 54:29Speaker 01

  Okay, okay.

• 54:32Speaker 01

  Yeah, I think there are aliens out there and other civilizations. Why? Cause.

• 54:38Speaker 01

  Well, okay. I think at this point, we even know that there's life on Mars, right? So just a fact, life, I think. Did you know that there's like life like way down in the crust of the earth where like you wouldn't imagine life to be so like cells are amazing?

• 54:52Anthony Pompliano?

  Wait, hold on, life on Mars? Explain.

• 54:55Speaker 01

  Ah, recently, there was a lot more evidence, more evidence came out about life on Mars. So what was it? It was like, there's a, it's

• 55:03Anthony Pompliano?

  I thought they found like some kind of like water, yeah, that, yeah, some sort of

• 55:07Speaker 01

  I think it was

• 55:07Anthony Pompliano?

  It was an intelligent life.

• 55:09Speaker 01

  No.

• 55:09Anthony Pompliano?

  It was just some, it was something that they didn't believe had existed on Mars and now discovered.

• 55:14Speaker 01

  Right, right, right, right. So I think, I think the, what is it, Pangaea or something? The theory that, that life is all around in the universe, I think that's about right. Um, I also happen to think we're in a simulation, so I do subscribe to that.

• 55:26Anthony Pompliano?

  Really?

• 55:27Speaker 01

  Yeah, you know, so I, I think, I think about the world in terms of multiverse. And it can be quite weird because, because you're, you're thinking about not only your life now and this track, but also all the possible other, you know, tracks and places that you could be at and, and that they all exist simultaneously, you know? So, um, that, that kind of changes your perception of who you are as an individual, you know? So, um, I don't, I don't think, I think compared to other people, I think less about myself as this being in a body, more so as, um, as a, as a, I don't know, just energy or just this thing that, that also is interconnected to everyone else in the world.

• 56:10Anthony Pompliano?

  Did you see recently, uh, this new, uh, state that was, uh, discovered in terms of when I was in high school, right? I take a lot of science classes, but I remember a couple of things and one of them was there's liquids, solids and gases. There's only three of them. They've now identified, uh, and confirmed a fourth state, which is a liquid solid?

• 56:33Anthony Pompliano?

  So there's now a liquid, there's a solid, there's a gas, and there's a liquid-solid.

• 56:39Speaker 01

  Okay.

• 56:39Anthony Pompliano?

  And it's fascinating to me that in what, you know, fifteen, twenty years, we can go in such incredible breakthroughs in science that drastically changed the way that we think about material, right, like atoms. And there's now, we go from three to four states of being, if you will. And then you look at things on like Mars where, what the heck is there? I don't know, methane, is it water, is it something else? It's all just a bunch of molecules that are grouped together.

• 57:15Speaker 01

  Don't you think maybe like molecules, maybe like subatomic particles themselves might be composed of life? Like, I feel like maybe, maybe like electrons are just some kind of, you know, commodity produced by some company somewhere.

• 57:29Anthony Pompliano?

  It's possible.

• 57:30Speaker 01

  Why are they all the same?

• 57:32Anthony Pompliano?

  Well, electrons and different types of molecules, I guess, are similar like pixels on a screen. It was, you know, the way we would think of a simulation, it would just be pixels. You would take those pixels and you'd make up people, things.

• 57:46Speaker 01

  Yeah, I mean, I think the phenomenon of molecules might be, might be like macroeconomic phenomenon of like little tiny creatures. I'm serious. Okay, so that's the one.

• 57:56Anthony Pompliano?

  You're not serious.

• 57:57Speaker 01

  I'm so serious.

• 57:58Anthony Pompliano?

  Really?

• 57:59Speaker 01

  Yeah.

• 58:00Anthony Pompliano?

  What, if you believe that, and you're right, what changes?

• 58:06Speaker 01

  What changes? It means, if, if that were right, you know, look, I'm not saying that's right, I'm just entertaining that thought in my head, I can't get it out of my head.

• 58:14Anthony Pompliano?

  All right.

• 58:14Speaker 01

  But if, if that's right, it would mean that, I don't know, that life is recursive, that, that, that there's a purpose to why we're here, and that the things that we end up doing ultimately also enable and ultimately, you know, make all of this possible, you know? So I feel like, in that sense, maybe life has a purpose.

• 58:35Anthony Pompliano?

  Probably.

• 58:36Speaker 01

  Probably.

• 58:37Anthony Pompliano?

  What do you think a purpose of life is? Somebody asked me this today and I had to answer, so I want to hear your answer, then I'll tell you what I told them.

• 58:42Speaker 01

  There's a purpose of life.

• 58:47Speaker 01

  Well, you know, like I said, I can't get the thought out of my head. I feel like the purpose of life is to to do what we're kind of almost designed to do and such that in the metaverse, everything works to enable even, you know, this coffee cup.

• 59:05Anthony Pompliano?

  Yeah, but you're thinking more like in the macro physical sense, right? Like the way I answered it was, I said, basically just to have fun and be happy, which is more the micro psychological.

• 59:16Speaker 01

  Oh, yeah, I don't have enough of that.

• 59:19Anthony Pompliano?

  Yeah.

• 59:20Speaker 01

  Where I don't think about myself. But, uh, yeah, uh, I'm trying to change that myself.

• 59:25Anthony Pompliano?

  Yeah, just go travel some, you'll be all right.

• 59:26Speaker 01

  Yeah, I don't like, I don't like airplanes.

• 59:28Anthony Pompliano?

  No, why?

• 59:30Speaker 01

  Carbon dioxide.

• 59:31Anthony Pompliano?

  Oh, my God. Yeah, but listen, if they fly to Davos and they talk about saving the world on their planes, it should be okay, right?

• 59:39Speaker 01

  I feel guilty every time I get on a plane.

• 59:41Anthony Pompliano?

  Really?

• 59:41Speaker 01

  Yeah.

• 59:43Anthony Pompliano?

  What about the, uh, DC boom?

• 59:46Speaker 01

  What boom?

• 59:47Anthony Pompliano?

  No, the company boom in San Francisco.

• 59:49Speaker 01

  No.

• 59:50Anthony Pompliano?

  I think it's based in San Francisco.

• 59:51Speaker 01

  What is it?

• 59:51Anthony Pompliano?

  It's a supersonic electric plane.

• 59:53Speaker 01

  Okay.

• 59:54Anthony Pompliano?

  Basically, they're saying that they think that they can make you get on a plane and not feel guilty.

• 1:00:00Speaker 01

  Hmm. Well, I wish, I wish they would also describe all the, all the mining required to get all those, you know, those metals and so on. Like, there's not enough comprehensive, like, that's what you're kind of getting back to what I was saying earlier. We don't have enough information. So everyone's kind of stumbling to dark and touching parts of the elephant and not seeing the whole picture.

• 1:00:19Anthony Pompliano?

  Yeah.

• 1:00:20Speaker 01

  Yeah, I wish, I wish you could fix that.

• 1:00:22Anthony Pompliano?

  All right. Humans aren't really that smart.

• 1:00:24Speaker 01

  Uh, yeah, you know, like, what should we call the next species that evolves from us?

• 1:00:30Anthony Pompliano?

  Uh, I'm not gonna be around. You know a book, uh, have you ever read Guns, Germs and Steel?

• 1:00:34Speaker 01

  Yeah, it was like required reading for me.

• 1:00:36Anthony Pompliano?

  Really?

• 1:00:37Speaker 01

  Yeah.

• 1:00:37Anthony Pompliano?

  Yeah, that one though is when I think of like evolution, I always think of that book and like the whole idea of, yeah, humans are, we're screwed. Like, well, you know, it's, uh, you've seen Boston Dynamics with the robots?

• 1:00:51Speaker 01

  Hmm.

• 1:00:51Anthony Pompliano?

  And like the flips and they can pick stuff up. They're better than us already.

• 1:00:55Speaker 01

  Yeah, I feel like James Cameron is like this, this, this arm of information that went back to the past from the future to warn us about what's coming. And I feel like James Cameron's a prophet, perhaps. And, uh, yeah, that shit is coming.

• 1:01:10Anthony Pompliano?

  I mean, The Matrix, all the things he's done, Black Mirror, it's pretty real.

• 1:01:17Speaker 01

  Yeah, yeah, it's scary.

• 1:01:19Anthony Pompliano?

  All right, before we end, you could ask me one question. What do you want to ask me?

• 1:01:23Speaker 01

  Okay.

• 1:01:27Speaker 01

  Well, someone's already asked you about your purpose in life, right?

• 1:01:30Anthony Pompliano?

  You've asked me about my purpose, just the purpose of humans.

• 1:01:33Speaker 01

  Okay, where would you like to see, uh, let's say, you know, as, as, as, um, as a host in this, in this program? Um, you have influence.

• 1:01:43Anthony Pompliano?

  You just made it sound way more serious than it is, as a host at the program.

• 1:01:47Speaker 01

  Uh huh.

• 1:01:48Anthony Pompliano?

  Can you hear that, listeners? It's a program.

• 1:01:50Speaker 01

  It's a program, yeah. It's a professional operation here. It's quite tidy. You know, you, you have, you have power, you have energy. Where would you like to direct energy towards?

• 1:02:01Anthony Pompliano?

  Uh, I think that people are being really, really, really short-term, uh, or short-sighted when it comes to all this stuff. And, uh, I just pound the table over and over and over again that this stuff is all about automation. And it's the machines and the algorithms are gonna do a lot of the work, but the existing assets are non-compatible. Right? In terms of we can't use kind of the paper or the electronic assets that we currently have today. And so if we can get people to understand that, um, I think it puts us in a much better position. Uh, and the second thing is like, you probably would go on a lot of podcasts or talk to folks and they would just ask you about,

• 1:02:45Anthony Pompliano?

  like, tell about Cosmos, tell about Tendermint, and, you know, like, what do you think about Bitcoin and blockchain? And it's just like, it's like such a one-sided conversation, but obviously you have other interests, you have other, um, things that, that you spend time thinking about or doing. Uh, and so I try to, like, remind people that the individuals are so multifaceted, and I actually think there's more overlap with the work that you do professionally, and like your interest in, let's say, the environmental issues, or the surveillance and security stuff, right? Like, all of that goes into informing. The decisions you make. And so like, let's say you make a decision tomorrow, right? That hurts Cosmos or Tenderin, right?

• 1:03:28Anthony Pompliano?

  If people understand the perspective that you have, like, I think that that is better for you and for them. But most people don't ever like have the confidence or the opportunity to just be authentic. Like, you said some crazy shit today. I appreciate that. Thank you for asking. Like, it's just, it's what you believe or what you think, right? So let people just be themselves and I think the world's a better place. Yeah, more transparency. Yeah, exactly. All right. We're gonna do this again. We're gonna talk about really weird shit next time. I'll be prepared. Hey, everyone. Pop here. If you like this episode of Off the Chain and want to help us take crypto to the top of the Apple,

• 1:04:10Anthony Pompliano?

  Spotify and other podcast charts, please do us a favor and rate, review and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.