David Bleznak, Founder & CEO of Totle: Simplifying Decentralized Exchanges

David Bleznak is the founder and CEO of Detroit based Totle. In this live recording, Bleznak and Anthony Pompliano discuss tokenization of assets, the current regulatory environment, future financing mechanisms, and fundraising in today's bear market. This episode of Off the Chain was recorded at CUT by Wolfgang Puck. Totle’s B2B platform provides crypto-to-crypto exchange at the best prices. Similar to using Kayak for finding the best flights, Totle’s platform aggregates access to leading decentralized exchanges (DEXs) and optimally routes traders to the best venue. With Totle, users always safely control their private keys. Visit Totle.com to learn more. For investment information visit Totle.com/invest. ----- Join the Off the Chain newsletter. Pomp's daily email analyzes the crypto market for institutional investors. Simply, it’s the best crypto newsletter delivered to your inbox every morning. No frills. No bullsh*t. Just everything you need to know in a 3-minute read. https://offthechain.substack.com/ ----- 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.

• 0:13Anthony Pompliano?

  David Belznek is the founder and CEO of Detroit-based Totle. In this live recording, we discuss tokenization of assets, the current regulatory environment, future financing mechanisms, and fundraising in today's bear market. For more information, you can go to Total's website at www totle.com. That's T-O-T-L-E.com. I hope you enjoy this conversation nearly as much as I did. 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

• 0:54Anthony Pompliano?

  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.

• 1:08Anthony Pompliano?

  Alright guys, we've got David here. We are recording live at Cut by Wolfgang Puck. If you have not been to one of these, you should come. Tons of fun. David, thank you for coming.

• 1:18Speaker 01

  Thanks for having me, Pomp.

• 1:20Anthony Pompliano?

  Alright, we got a lot to cover, so let's start first with your background and then we can figure out how you got into crypto.

• 1:26Speaker 01

  Yeah, so I grew up in Southeast Michigan. I went to the University of Michigan and graduated 2012. Went straight to Chicago for a year, really learned the real estate industry.

• 1:40Speaker 01

  Worked for a development company there, mostly focused on retail. And then I brought that, brought that skillset back to my family's office in Detroit area, and we worked on a lot of turnaround deals until around 16, 16, 17, when I got an interest in crypto.

• 1:58Anthony Pompliano?

  If you went to Michigan, I'm assuming that you're not a big Ohio State fan?

• 2:02Speaker 01

  No, not, not, not really.

• 2:04Anthony Pompliano?

  All right, we won't go there. So when you got into crypto, when's the first time you ever heard about Bitcoin blockchain crypto?

• 2:11Speaker 01

  2013 is when I first heard about it. I wasn't as active as I, as I am now in the space. But I bought three Bitcoin and put them in a safe.

• 2:23Speaker 01

  Held on to them and it wasn't really until Ethereum came about until I started really getting much more involved with the programmability of that blockchain and the, the opportunities that come from that.

• 2:34Anthony Pompliano?

  Got it. And what was your initial reaction when you first came across crypto? Did you think everyone was crazy?

• 2:40Speaker 01

  No, I mean, I think I was skeptical, just like most people. I didn't really understand what the value was or why we needed it. Or, you know, why would even someone pay for a Bitcoin? I think I had the same similar reactions that most people have when they first hear about the tech.

• 2:55Anthony Pompliano?

  Got it. And then maybe talk a little bit about what you guys are doing now. I know that you guys just made a couple of announcements and then we can get into some of the nuances of it.

• 3:04Speaker 01

  Yeah. So Total is focused on providing exchange functionality for every decentralized financial application in the world. So basically, all of these great entrepreneurs and businesses out there are developing decentralized applications, whether it's DeFi to games, to platforms, and most of them need, or almost all of them need some way for the participants to change one token to another. And that process requires some sort of exchange functionality and Total provides that in one source.

• 3:38Anthony Pompliano?

  All right. So a traditional exchange, pretty self-explanatory, a buyer seller come, they meet, they decide on a price and they exchange whatever the asset is for usually capital or currency.

• 3:50Anthony Pompliano?

  What is the difference between a centralized exchange and a decentralized exchange?

• 3:55Speaker 01

  Yeah, that's a good question. So

• 3:57Anthony Pompliano?

  That's all I do is good questions on this podcast.

• 3:59Speaker 01

  Okay, I'll try to only give you good answers. So basically, in a centralized exchange, which is the model that humans have known for almost all of time, you you come to a centralized exchange and you deposit your assets, right? You give up possession of your assets, the first thing you do. And why do you do that? Because you give it to an administrator. You need someone who's going to keep track of all this stuff and make sure that all the trades you make and all the actions you take on that exchange go through. The problem with that is you're putting your trust in that in that third party, in that administrator.

• 4:31Anthony Pompliano?

  Because they have your assets.

• 4:32Speaker 01

  Yeah, they they take possession, whether, you know, it's legal, or whether they, you know, some some jurisdiction says that they need to take your assets, whatever it may be, they have possession, which is worth a lot. So, in our opinion, the only real way to trade crypto assets is through decentralized exchanges. And this takes out the need for that administrative party, that third party. And so without a middleman, you can trade directly with with your peers, using decentralized exchanges and smart contracts.

• 5:04Anthony Pompliano?

  So, I get in a centralized world where I take my assets, I put it on the exchange, right? Or I deposit it, and there's an administrator that basically has control or custody of those assets. And then when I make trades, they're helping to facilitate that. In a decentralized world, where do my assets sit before I make the trade?

• 5:25Speaker 01

  Yeah, so similarly, if you're using a centralized exchange before you even approach the exchange or begin to participate, you need to deposit them from somewhere. And when you're doing that, it's usually from your possession, from your what they call wallet, right? Well, in a decentralized exchange, you actually visit the exchange with your wallet. So you actually, in, for example, if it's a total, which is a venue where you can you can do these exchanges of assets, you can go right to the website on your browser, right? And if you have a software wallet hooked up on your browser like MetaMask, you can begin trading directly from your possession.

• 6:01Anthony Pompliano?

  Got it. And then how does the decentralized exchange match buy sell orders compared to maybe a centralized exchange?

• 6:10Speaker 01

  Yeah, so that is the key right there, and that's where a lot of research and development is going

• 6:15Anthony Pompliano?

  Okay.

• 6:15Speaker 01

  in the space. This concept of party matching, right? So you need a way in a decentralized exchange to take a buyer and take a seller. And since you don't have that administrative third party, there needs to be some protocol or some mechanism for people to follow in order to be introduced to each other and negotiate pricing and settle the trade. So all of that's coded in decentralized exchanges. And the great thing about that is that people can choose how they implement this. So you have all sorts of different choices. You have AirSwap, you have Bancor, you have Kyber, you have order book solutions like Ether Delta, Radar Relay. So however you feel decentralized exchange is executed the best, you freely can choose what protocol to utilize.

• 6:59Speaker 01

  And in total, we hide all of that. You can use all of those venues in one tool.

• 7:05Anthony Pompliano?

  And so really, what you're doing is you're bundling every single one of those protocols or many of those protocols you just described into a single interface, and that interface is where the value is to the end user?

• 7:17Speaker 01

  That's correct. And what we've really found is that it's not so much the interface, it's the access. So now we've been selling the tech without forcing people to come and use our interface. So wallets and portfolio management softwares, they all want to plug in our exchange functionality.

• 7:35Anthony Pompliano?

  Got it. So let's switch gears a little bit. I want to talk about what's actually traded on these exchanges, right? In the kind of traditional centralized world, let's call it the incumbent financial system, you've got stocks, you've got currencies, you've got bonds, right? There's all kind of the traditional assets. In the crypto world, what I'll call the incumbent crypto world, centralized exchanges like the Gemini's coinbases, they've been fairly slow to add all kinds of assets. They've tried to stick to, you know, large caps, and now we're starting to see them leak into some of the little bit smaller ones. Where do we end up? Let's work kind of backwards from the future, right? So where does this end up?

• 8:16Anthony Pompliano?

  Is it that I can go and trade every, all the currencies, the tokenized stocks, the collectibles, like every digital asset in one single exchange? Or do we get a fragmented world where maybe all the crypto collectibles are traded on a single exchange, and then all the tokenized stocks are traded on another exchange, and you get that fragmentation?

• 8:35Speaker 01

  Yeah, I, um, that's a really great way to frame it. I think that the, that you do get some fragmentation.

• 8:42Anthony Pompliano?

  Okay.

• 8:43Speaker 01

  I think you bifurcate the security style, financial, those type of instruments and the new asset class.

• 8:50Anthony Pompliano?

  Okay.

• 8:50Speaker 01

  And the reason that I believe that so much is that, uh, the, the laws today don't, do not allow you to trade other assets and securities in the same, uh, mechanism. So it's already somewhat bifurcated in a way.

• 9:07Anthony Pompliano?

  You're saying you can't trade a known security, I'll say like a tokenized stock. Somebody who as the issuer says, this is a security, I'm going to treat like a security, an exchange.

• 9:16Speaker 01

  Commodities and stocks, it's very difficult to have one platform and all of them mixed in from a regulatory perspective.

• 9:21Anthony Pompliano?

  Got it.

• 9:21Speaker 01

  So, once you bifurcate those, and when I say bifurcate, you have the, the securities, the financial instruments, and then you have, uh, these utility tokens, the tokens that represent what? And that's really what the conversation is. Um, and we believe in this new asset class, maybe not so much as it's been formulated by, uh, the entrance to the space in 2017, but we're, we're big believers in tokens and utility tokens. We don't think that the highest and best use or, um, really what these tokens represent has fully been, been discovered.

• 9:54Anthony Pompliano?

  All right. So this is going to be fun because I disagree, but I want you to convince me to believe what you believe. My whole position on this is utility tokens are definitely incentives, right? I, I think we agree on that. We've had a digital incentives for a long time, streaks, points, badges, et cetera. This is a new, potentially more valuable or powerful type of incentive. But how is a user going to manage 10, 20, 100 different utility tokens across all the different platforms they use? Or maybe that's not the world you see in the future.

• 10:32Speaker 01

  Yeah, so with total, you don't have to manage all these things because we exchange them right to the asset that you want. So that's one solution. Um, the other part of it too, is that I do believe it is incentives. But again, it's, it's capturing value in a way that we have not really understood it. I'll give you a couple of examples and I can walk through. I go on Facebook and I like your photo.

• 10:54Anthony Pompliano?

  You won't like mine, but you'll like somebody's.

• 10:56Speaker 01

  Okay, I like, I like a photo. Whoever's photo that is, right? I've just built their social equity, their social proof. Okay? But in order for them to monetize that, they have to go find a company, right? That wants to market to the people who view their page, take that product, stand in front of the camera, go, "Hi, I'm here," and then have that company pay them for how many times? It makes no sense. It's like, he's not really... So if there was a way to capture that value, right? And immediately have you, uh, or have me like this, this photo and have that person immediately take that social equity and buy a cup of coffee at Starbucks within seconds without having to go through all the friction and, uh, paying Chase 2% twice to convert the value.

• 11:40Speaker 01

  Well, then you're going to unlock a lot of opportunity that we can't even see or comprehend quite yet as a, as a race or as a...

• 11:47Anthony Pompliano?

  It's funny you talk about this because I forget the, uh, what was the company? CloutScore? Right? I don't know if you remember that, where basically they tried to take all, some, you know, some formula and say, "How many followers you have? How much engagement you have? Who are those followers, etc.?" And they basically assigned a score to it. And they said, you know, "You've got 70 is your score as clout and mine is 50," right? And you've got more clout than I have on social, etc. And so really, a lot of these ideas on the utility tokens, we've seen before in terms of the directional, um, idea. Now, the argument I think you're making is the utility token itself actually provides a much more powerful way to monetize and incentivize people to do things?

• 12:29Speaker 01

  Correct. It's, it's powerful incentives and it's also powerful val- capturing of value that we could not put into any instrument before. This is a new instrument that now represents value we could not as a, as a, as people could understand. So this is, this is completely new. There's a new asset class here for sure, in my opinion.

• 12:47Anthony Pompliano?

  Would it be fair to say that many of these utility tokens, so the example I always think of is like AWS credits with Amazon, right? They use it both as a way to pay, so to get access to computing power, to their network, etc. But they also use it as an incentive where they say, hey, I'll give you $15,000 worth of AWS credits. When you start your company, you start using AWS, switching cost is really high. Now they got you in their ecosystem and they start doing it. It's not based on blockchain, it's not cryptographically secure, but a lot of the mechanisms and the underlying logic that goes into how they use that AWS credit is similar to utility token?

• 13:27Speaker 01

  Yes, I would say that airline miles would represent the same thing. Reward system, reputation, all sorts of, I mean, there's guys outside of crypto that talk about this stuff. This isn't like, you know, incentives aren't this like mind blowing thing that crypto created. Bill Gross even talks about it. He says pay per click was first, the real revolution is pay per action. You know, and he doesn't really talk about crypto all the time. This is, this is a way to program isms, to program incentives. That's what this technology does.

• 14:00Anthony Pompliano?

  Do you think the incumbent companies will, who have these incentive based programs, right? So the AWSs, the airlines, etc. Does it make sense for them to tokenize or put those systems on a blockchain? Do they get advantages out of that? Or do you think that they've got what works? They're using it, they'll continue down that path and it's new things, new incentives that people create that will actually go on the blockchain?

• 14:23Speaker 01

  No, I think, I think eventually they do go on the blockchain. I think that the, the incentive structure, as you just went through that, you know, why, how, why they have these points and stuff. It benefits the, the organization. Having the points doesn't benefit the, the user. It keeps them in the ecosystem. It, you know, it benefits them. By allowing, by putting on a blockchain, that benefits the user. Now it allows them, it unlocks that value, removes the value from depending on American Airlines to administrate that value for them. Now they can take that value to Iran and, you know, buy a piece of clothing with an airline mile for the US. But they don't have to tell American Airlines that they're doing that.

• 15:04Anthony Pompliano?

  Yep. So does this lead to this world of gamification and incentives that?

• 15:12Anthony Pompliano?

  We could say that this like social credit scoring that China is thinking about, right? Where basically all of your actions get assigned some kind of score, positive or negative, kind of like an Uber type rating. And if you fall below a certain threshold, you lose, you know, quote unquote, access or rights to things. And if you are deemed a good citizen, right? You get access to certain things. Is that?

• 15:34Speaker 01

  This doesn't, yeah, this doesn't scare me. This is great because really, to be honest, you, there should be multiple scoring systems. Why do we have one credit score? That makes no sense. Why is it that there's one authority that says what everybody's credit is? It's like ridiculous. You should be able to go to another network and say, look, this network screwed up. They don't have my credit right. And over time, it'll be proven. If you're on five networks and your credit sucks, your credit sucks. If you're on, you know, five networks and four of them say you're 100% and one says you're a D, one, you know, one screwed up. So it's, it's, it's, it's more about opening and allowing free markets to decide all of these things. I, you know, my personal belief is that free markets and you could privatize

• 16:18Speaker 01

  every government organization and it would operate better.

• 16:22Anthony Pompliano?

  Let's dig into this. You think that you can privatize every government organization?

• 16:27Speaker 01

  Mm hmm. Every government organization, every government service.

• 16:30Anthony Pompliano?

  What would be the hardest one to privatize?

• 16:32Speaker 01

  Probably healthcare.

• 16:34Anthony Pompliano?

  Okay, why?

• 16:35Speaker 01

  I just think it's such a, there's a, there's a social aspect to it that's not economic that gets tied into that. I mean, there's a, there's more than one of those, but I'm using healthcare as that example. I'll give you a good example. We just took public transportation and we privatized it as a people.

• 16:54Anthony Pompliano?

  How?

• 16:54Speaker 01

  Because Uber and the Uberization, whether it's Uber itself as a company, forget that. I'm using Uber as an adjective here.

• 17:01Anthony Pompliano?

  We're investors in Lyft over here. We only talk about Lyft. I don't know what that other one is.

• 17:08Speaker 01

  Ride sharing, uh, what's, what's the word now that they use there was, I was just in Texas and they, they had an abbreviation for it where I stood. I don't know what it is anymore. And so the ride sharing applications.

• 17:19Anthony Pompliano?

  All right.

• 17:20Speaker 01

  So my point is, is that that created an economy for transportation that didn't exist prior. And it completely unlocked value in areas of this country that did not have transportation for people, um, you know, to move around. I'm from Detroit. This is a great example. We had no transportation for people, the suburbs who grew up in the suburbs, right? So this is a generation after all of the issues we've had, didn't want to go back down to the city because there was no transportation to take them there.

• 17:51Anthony Pompliano?

  You're gonna love this. So my father, who doesn't listen to podcasts, I think he literally learned what a podcast was about a month and a half ago, uh, said to me one time, he goes, what, what, what did you just do on your phone while the car came? And I explained it to him and he said, I'll never use that. And this is like probably two years ago. And I said, why not? And he goes, I'm not waiting 20 minutes for that thing to come pick me up.

• 18:12Speaker 01

  That's how I feel when people are like, I'm not waiting an hour for that transaction to be confirmed. It's like, you're gonna wait a week to get the check from the bank? Like, what is wrong with you?

• 18:21Anthony Pompliano?

  Well, the, the spoiler to the story is, he uses Uber all the time now.

• 18:24Speaker 01

  Yeah, I'm not surprised.

• 18:26Anthony Pompliano?

  We're trying to get him on the Lyft train, but he's still, he's still on Uber. That's fine.

• 18:30Speaker 01

  It's because you have more Lyft currency, you know?

• 18:32Anthony Pompliano?

  So let's talk about, uh, regulation on a global basis for these decentralized exchanges, right? So with the decentralized exchange, what you do is you remove a lot of, I think, the, um, the aspects that are highly regulated in traditional markets, but there's still going to be some level of regulation. How do you think about multiple jurisdictions that are trying to all look at a decentralized exchange and, and figure out just what are the rules?

• 18:57Speaker 01

  Yeah, I mean, I think it's a really big issue because it creates a lot of friction. You know, there's the the interoperability is tough enough for the blockchains. The interoperability of the jurisdiction is even worse. And so I I think that there needs to be, especially in the US, this hands-off approach. Obviously, that's my personal opinion, but I I see pragmatically, realistically, I see a lot of people moving to these island nations. And I don't know how much in the long run that really makes a difference. Eventually, you have to serve US customers. That's what the law is based on. So maybe it's good. Maybe it's good for testing in these markets. Maybe that's how we make we make progress. I mean, look at Facebook's testing a stablecoin in India.

• 19:41Speaker 01

  So maybe it's not so bad that there that we're the innovations coming offshore in order for us to figure that out.

• 19:48Anthony Pompliano?

  I'm highly biased because I work there. If Facebook launches a stablecoin in India, it may be one of the most impactful applications of technology in our lifetime. True or false?

• 19:59Speaker 01

  False.

• 19:59Anthony Pompliano?

  Why?

• 20:00Speaker 01

  Because they're not innovating or you said applications?

• 20:05Anthony Pompliano?

  Yeah, basically, if they do that, it could it has the chance to disrupt a lot of the monetary issues in India. And it would be one of the first times that a large technology company went right head to head with a government-backed currency and said, let the people choose between a government-controlled option and a non-government-controlled option.

• 20:26Speaker 01

  It will be it will be very interesting to see. I definitely think it'll be a big move. And I also think that it really have to do with regulation more than the tech, though. I mean, I think right right now, India has banned crypto, right? Or banned ICOs?

• 20:41Anthony Pompliano?

  They've gone back and forth. The India is interesting because they actually took the path of the the fight to which I think is the most intelligent way. You don't go head on with crypto and say, we're going to ban ownership of it. We're going to ban ICOs. All they said was to the legacy folks, the people who actually listen to the rules and and think that whatever the regulators say is, you know, the gospel. They said, you cannot work with any crypto companies. And so if you think of like, from my perspective, the single point of failure for crypto is still the dependence on the legacy financial system. Which is what they went right after.

• 21:19Speaker 01

  How is that different than the US?

• 21:21Anthony Pompliano?

  It's not. If you, if you, how would you, if you're the US government, how would you, and you felt threatened by crypto, Bitcoin, different blockchain applications, what would you do to try to stop or stall the adoption and growth?

• 21:33Speaker 01

  Build a wall?

• 21:37Anthony Pompliano?

  After you built the wall, what would you do?

• 21:39Speaker 01

  That's the only way to really keep crypto up because like it comes through with all the censors. There's no other way to really keep it up.

• 21:45Anthony Pompliano?

  The caravan of crypto enthusiasts?

• 21:49Speaker 01

  No, I mean,

• 21:52Speaker 01

  I, what would I do?

• 21:53Anthony Pompliano?

  By the way, I just, I just imagined all the characters from Twitter, like in a caravan. And that's really scary.

• 21:59Anthony Pompliano?

  All right. So what, what would you do though for real?

• 22:01Speaker 01

  I mean, I, I mean, it's all, it's an internet infrastructure play. China's trying to do this. Every, you know, governments, I think, I mean, Russia's tried to, to block Telegram. So blocking cryptographic applications is not new. But I, I would say if the, if the, I mean, I can't believe the US government, whatever, that would be crazy to me that they would try to destroy or try to block it completely. It seemed, that seems pretty un-American to me.

• 22:29Anthony Pompliano?

  I've tweeted this before, so I think he's comfortable with me saying he said it. Zuko, who's working on Zcash, told me once, he said, look, a lot of people are worried about the privacy coins. And they think the government's going to say, you know, why do you need a privacy coin? If you don't have anything to hide type argument. And he explained to me that, uh, which I didn't know was when encryption first came on the scene, there was this huge debate where the government basically said, why do you need encrypted communications and data? If you've got nothing to hide. And so there was this huge fight between the government and people working on encryption. And eventually there was this hearing in front of legislators, et cetera. And he's like, how funny is it that today encryption is seen as a best practice? Right? If you actually are communicating in a non-encrypted way, it's actually a bad thing.

• 23:11Speaker 01

  Right.

• 23:12Anthony Pompliano?

  And so his belief is, look, the privacy features on tokens today will actually, every single token will have them at some point in the future. Governments will get comfortable with this stuff, et cetera. That's a pretty big leap, given where we are today, but there is some precedent with other types of encryption or privacy technology that had happened.

• 23:31Speaker 01

  Yeah, I mean, my personal belief on the thing in terms of viewing the KYC and all of that, I think that that's needed for going from your fiat currency to your crypto. Once you're in crypto and you're in the ecosystem, going from crypto to crypto doesn't seem like that's really needed. But I do think that there is a, I don't believe in like no, you know, complete anarch, or no regulation. I just think that there, it needs to be done in a way that's going to allow innovation in this country, specifically.

• 24:02Anthony Pompliano?

  If regulators get it wrong, do people leave?

• 24:07Speaker 01

  Yes, I think that people do leave. And I'm not sure, I'm not sure how it plays out. If, you know, I'm not really sure.

• 24:17Anthony Pompliano?

  I think they leave in droves. I really do. I mean, it, there's a lot of people I talk to in this industry, and they do not live in the United States. They have no plans to live in the United States. And some of it is, well, I'll put under like the quality of life, right? They just want to live somewhere else. They think it's better, warmer weather, you know, whatever their kind of reasoning is. But then there's a lot of people who just say, look, I'm just going to sidestep completely all of the regulatory issues by living somewhere else.

• 24:43Speaker 01

  Yeah, it doesn't, again, though, once you serve US customers, it's, you know, that's, that's the thing. Once you serve US customers, you have to play by US rules. What we've done at Total is we've decided we're not going to play in any securities. So we don't deal with securities. You can't buy any securities through our software. We are completely associated on what's noted as virtual commodities.

• 25:06Anthony Pompliano?

  Got it. What's the most interesting virtual commodity you've seen?

• 25:10Speaker 01

  That's a, that's a good one. What's the most interesting?

• 25:12Anthony Pompliano?

  Man, you said that twice. I'm on fire today.

• 25:14Speaker 01

  Caught me. Most interesting virtual commodity. Bitcoin?

• 25:20Anthony Pompliano?

  I was just gonna say that's the right answer. Good job. What's the second most?

• 25:25Speaker 01

  All right. I mean, I would say a theorem to make it interesting. We'll go with a token.

• 25:30Speaker 01

  You know what? I really believe in BAT. I think BAT is going to be one of these that really makes it.

• 25:34Anthony Pompliano?

  Basic Attention Token.

• 25:35Speaker 01

  That makes it out of cri- like, they have this platform and it's, I use Brave.

• 25:40Anthony Pompliano?

  Explain, especially Canada.

• 25:43Speaker 01

  Brave is an alternative to Chrome. It's a browser and it's focused on privacy. It also has a native cryptocurrency, Basic Attention Token, BAT, and it, that would reward users, reward venues for their attention and venues reward users for their attention and vice versa. You can pay them using the BAT token. It's an ecosystem. It's an economy based on this token. I think that it's going to actually take hold with people who are new to the space, who have not really used crypto before. I, I think the product stands first and that's similar how we're doing it at Total and our ethos, but they focused on this browser. They've disrupted

• 26:23Speaker 01

  the browser space, right? And now the crypto aspect, the incentive, okay, to, to bring the thing full circle is built in inherently into the model. And so that, just by focusing on a problem that people are having and developing a product that improves their life, right? And then using crypto as a way to run that economy. I mean, they're doing it right. That's, that's kind of how I feel about it.

• 26:46Anthony Pompliano?

  It's interesting because whenever there's new technology, you can do one of two things with it, right? You can either use it to build something the world's never seen before, do something new with it, or you can use it to improve the old world. And I think a lot of people in crypto are focused on building that new world, things we've never seen before and they're all excited. What that team did was they actually improved an old world, right? They went to, they built a browser. We've got plenty of browser options, but they incorporated new elements or, or kind of new shiny advantageous elements that make the old browser world much more interesting to a lot of people who are interested in this world.

• 27:21Speaker 01

  Yeah. I mean, that was, that was all on purpose too. You know, the purposely wanted to disrupt Firefox. That's, that's what's happening. And I think, I mean, that's creative destruction at its finest.

• 27:32Anthony Pompliano?

  Absolutely. What's your biggest worry in the crypto industry?

• 27:36Speaker 01

  I think it goes back to our last conversation. My number one worry is the US doesn't get it right. And that's really my fear. The second, I think, from the technical side, my fear is that the tribalism in the space really continues, and we end up with a much longer battle than is needed to take down the real enemy.

• 27:58Anthony Pompliano?

  What is the most likely way that the US gets it wrong? Is it around regulation and like the security stuff, or is there something else?

• 28:06Speaker 01

  No, I think they get in their own way. I think it's the same, it's not like a new story here. You know, they end up in this situation, and their buddies want the licenses, and there's no way for them to make it fair. You can't, this technology, you can't get your hands around, right? That's what they're so used to. They're getting their hands around, making it okay. Okay, Goldman, you have this rule, everyone has this rule, okay, and it's good. You can't do that with this. You can't grab this. This has its own life.

• 28:35Anthony Pompliano?

  I hope no one from Goldman's here, but they got their own troubles, man. The 1MDB stuff is pretty wild.

• 28:42Speaker 01

  Yeah, and my other biggest concern is going back to the tribalism and the fragmentation of the market is the scaling for these blockchains. I mean, we just had a delay today. You saw that.

• 28:53Anthony Pompliano?

  Do you want to talk about it?

• 28:54Speaker 01

  I mean, I didn't, I was busy all day, so I just saw a tweet that we won't have this upgrade.

• 28:59Anthony Pompliano?

  So the Ethereum update that everyone was, we could say lightly excited about, didn't happen, which in hindsight is like the most crypto thing of all time, right? Like, literally, let's all get excited about it's gonna happen, it's gonna happen, it's gonna happen, it's gonna save this, you know, it's gonna make it more scalable, and it doesn't even get launched. It's not even that way it didn't work, it just doesn't get launched.

• 29:22Speaker 01

  Yeah, I mean, this is the thing. This is the fact that we're in this era where this organization, right, Ethereum, they're making all these decisions on the fly. There's no, you know, there's no history for this stuff.

• 29:36Anthony Pompliano?

  Do you think that is a disadvantage for most of these utility tokens and all, like, alt networks slash coins? And this is actually one of the areas where Bitcoin, because of the slow development, and because of the kind of more methodical process, actually has an advantage? Or do you think it's just, those two things aren't really that correlated, and people are making mistakes?

• 29:57Speaker 01

  Yeah, I don't think that when you say mistakes, what do you mean by making mistakes?

• 30:00Anthony Pompliano?

  Well, some would argue that there wasn't enough planning, there wasn't enough kind of methodical approach to implementing this. And if there had been perfect execution of it, we would have had it implemented today.

• 30:12Speaker 01

  Yeah, I think that there's truth to that. But I think that what you're talking about, these delays, this all the disorganization, or whatever you want to call it, it's a product of the fact that these types of organizations or models that come from crypto are not like the old models, right? We're human. And there's a human element to the growth of these organizations. It there needs to be consensus, true consensus from the group to change the protocols. We have new communities forking and happening. And, you know, like, it just, it's not the same as as a traditional model in terms of how they evolve and how they develop.

• 30:51Anthony Pompliano?

  So I'll take it a step further. I was thinking about this the other day. Can you imagine the reaction from the US government if they went up to somebody and said, shut that off? And the person's response was, I can't?

• 31:01Speaker 01

  Right. Right. Yeah.

• 31:04Anthony Pompliano?

  Like, like if somebody was like, hey, shut off the Bitcoin network. And I can't.

• 31:09Speaker 01

  You think they know that? You think that they can't can't call Mr. Bitcoin CEO and be like, turn it off, bro. It's over?

• 31:16Anthony Pompliano?

  No. So I will. And I said this quite a lot because I really do believe it. The US regulators specifically have done a fantastic job of towing the line. And what I mean by that is, they're aware of this stuff. They're really trying hard to get educated. They're only going after people that are like the obvious scammers, right? So people who are frauds, who who took money and ran, all that kind of stuff. And they've stayed away from like, the heavy handed, we're going to ban ICOs, or we're going to ban this, or you can't do that. And they may retroactively go after people. But I think that they have allowed or encouraged innovation.

• 31:57Speaker 01

  But your opinion is that the fact that ICOs were billions and billions of dollars and now that there is zero, it's because that was natural markets?

• 32:04Anthony Pompliano?

  No, no, no, I don't think that it was all natural, or do I think that it was all good behavior? What I'm saying is, if you asked me, should the regulators ban all of this before it happens, versus should they let it happen and figure it out after the fact? I actually would lean towards the regulators weren't educated enough at the time, and they probably would say this, to just say, we're gonna ban it all. They didn't know what it was. They didn't, they hadn't had enough time to do the work. And so now they're much more educated. They're likely to go back through that kind of damage and say, hey, 40% of you guys, you guys are bad actors. You shouldn't have done that stuff. You're in trouble. The other 50, 60%

• 32:42Speaker 01

  Do you think they really care about the bad actors?

• 32:45Anthony Pompliano?

  Yes, yes.

• 32:46Speaker 01

  I disagree. I think that they come in, and if this is their opportunity to wait just long enough

• 32:52Anthony Pompliano?

  Okay.

• 32:52Speaker 01

  To be the hero.

• 32:53Anthony Pompliano?

  Okay.

• 32:53Speaker 01

  And come in and save mom and pop from crypto, you know, extravaganza Godzilla. And they, over the next 30 years, they get to be looked at as the hero of saving people and regulation is good. So by enforcing that message for people, and by saying that the SEC actually does something, then they, then they, they create a use for themselves in the system.

• 33:21Anthony Pompliano?

  Do you think there's no use?

• 33:22Speaker 01

  There's absolutely no use for, for what they're doing.

• 33:26Anthony Pompliano?

  What would you, so if they went away, this is an interesting thought exercise. If the SEC and other regulators like them went away, how would we ensure any sort of compliance or sanity in the market?

• 33:38Speaker 01

  It's the same way, we talked about all these other privatization, you're gonna have a private rating agency is gonna emerge, and they're gonna say, this is good, this is good, this is good, this is good. And they only get away with lying one time.

• 33:52Anthony Pompliano?

  That's fair. Along these lines, is there the possibility that someone builds a quote unquote decentralized regulatory body and hands it to regulators and says, listen, this is gonna do a better job than you. You should defer to this decentralized organization that no one controls?

• 34:09Speaker 01

  Yeah. And what do you think their response is gonna be?

• 34:11Anthony Pompliano?

  Well, I have an opinion, but what do you think?

• 34:15Speaker 01

  Go fly a kite?

• 34:17Anthony Pompliano?

  All right. Before I wrap up, I always do a rapid fire set of questions. What is the one regulation, if you could wave a magic wand and change or improve, that you would change or improve?

• 34:28Speaker 01

  Taxation.

• 34:30Speaker 01

  Next question.

• 34:31Anthony Pompliano?

  How, how would you change it?

• 34:33Speaker 01

  Remove it.

• 34:34Anthony Pompliano?

  Completely.

• 34:35Speaker 01

  Um, yeah, I mean, if there's no need for a government services and government organizations, then why do you need taxation?

• 34:43Anthony Pompliano?

  You think there's zero need?

• 34:44Speaker 01

  Zero need. Every private organization could pay. You need, uh, private security, you'll, you'll pay on demand.

• 34:50Anthony Pompliano?

  How would you pay for roads that you use that are public property?

• 34:53Speaker 01

  There would be a private organization that would obviously make some money for administrating that process and you would contribute if you wanted to drive your car or you hit some potholes.

• 35:07Anthony Pompliano?

  I'm just imagining like a road filled with a bunch of potholes.

• 35:10Speaker 01

  You could go on the cheaper road. There's a lot more, there's a lot more potholes on that one.

• 35:13Anthony Pompliano?

  All right. If the technology was there and the car was able, like if they're, so here's my whole theory. Actually, this is pretty interesting. So my whole theory with blockchain and crypto is that we're simply tokenizing every stock, bond, currency and commodity in the world. Because what it does is it empowers machine to machine transactions. It empowers like all the automation, et cetera. And so in that world, there is a thing that you could have, and this is completely theoretical. When the car drives down the road, it knows how far you drove down the road. It knows what the price per mile or, or price per foot or whatever is. And it actually pays for the usage of the road rather than how much your income is and we're going to tax you based on it.

• 35:50Speaker 01

  Certainly.

• 35:50Anthony Pompliano?

  It's still a tax. Now you could argue, does that go to a public entity or a private entity?

• 35:54Speaker 01

  Yeah, I'm saying going to a public entity. That's, that's what I was just saying. But yeah, I, I, I would say I would move taxes.

• 36:00Anthony Pompliano?

  I'm blown away you said taxation. That's great. No one's ever said that before.

• 36:04Speaker 01

  It's theft.

• 36:04Anthony Pompliano?

  Oh my God. All right. Uh, if, what's the most important book you've ever read?

• 36:17Anthony Pompliano?

  You were quick on the taxation answer on the book. You got no answer.

• 36:19Speaker 01

  Well, no, to be honest, I don't read a lot of books. I read a lot of articles. I did. I did like the big short.

• 36:25Anthony Pompliano?

  The big short. All right. What's the best article you've read recently?

• 36:28Speaker 01

  That's a good, another good one. I like my favorite.

• 36:30Anthony Pompliano?

  That's three. I'm three for three. Go ahead.

• 36:31Speaker 01

  My favorite channel is the Atlantic. So I like the media, my favorite medium. I like reading their stuff. So if I just say, so I.

• 36:38Anthony Pompliano?

  Somewhere off there. Yeah. Okay. Uh, what's the most important company in crypto?

• 36:42Speaker 01

  Still Coinbase to me.

• 36:43Anthony Pompliano?

  Why?

• 36:45Speaker 01

  Because of the influence they have over the retail user.

• 36:49Anthony Pompliano?

  If Facebook launches something that hits more users, do they be, do they replace Coinbase as the most important company in crypto?

• 36:55Speaker 01

  They compete for sure.

• 36:57Anthony Pompliano?

  Okay, that's fair. Um, so before I end and let you ask me a question, uh, I always ask one non crypto question. Probability that aliens exist.

• 37:08Speaker 01

  99.9%.

• 37:09Anthony Pompliano?

  How do you arrive at 99.9%? And why is it not 100?

• 37:15Speaker 01

  Cause nothing's 100%. That's the only reason.

• 37:18Anthony Pompliano?

  That's not true. It's 100% true that you're sitting next to me right now.

• 37:21Speaker 01

  No, it's not.

• 37:24Anthony Pompliano?

  That's pretty good. All right. So wait, why 99.9?

• 37:27Speaker 01

  It's just because nothing's 100%. I believe in it and nothing's 100%. That's all there is to it.

• 37:32Anthony Pompliano?

  Do you think that there's a shot that you meet an alien before you die?

• 37:38Speaker 01

  I would say, yes, there's a shot. It's, that's a much lower percentage.

• 37:42Anthony Pompliano?

  All right. The reason why I asked that question is because I always think like, if I met one, what would I do?

• 37:46Speaker 01

  Yeah. Now can I ask you a question?

• 37:47Anthony Pompliano?

  Well, hold on. The only thing that I would do if I met an alien is like, you want to go grab a beer? I don't know what else to do.

• 37:52Speaker 01

  I mean, if you can speak to it and it can hear you, then probably, probably what we'll do.

• 37:56Anthony Pompliano?

  All right. What's your one question?

• 37:57Speaker 01

  Are you an alien?

• 37:59Anthony Pompliano?

  No, I'm not an alien. Come on. You got a better question than that.

• 38:01Speaker 01

  That's it. That's my only question.

• 38:03Anthony Pompliano?

  That's your question? So, uh,

• 38:05Speaker 01

  How could I know for sure?

• 38:06Anthony Pompliano?

  So there, there's one person who.

• 38:08Speaker 01

  100%.

• 38:09Anthony Pompliano?

  I, I won't say who it is, but they always describe people that they think are like the outliers as they say, that person's an alien. And, uh, he's in crypto. And the last time he said it, I like pushed him on. I was like, what do you mean he's an alien? And he was like, well, that guy kind of thinks differently, you know, doesn't seem like he came from where we came from. I was like, man, there's a lot of fucking aliens in the world.

• 38:33Speaker 01

  Fair enough.

• 38:33Anthony Pompliano?

  All right, cool. Thank you so much. We are holding people up from dinner, so I appreciate you coming. We'll have to do this again.

• 38:39Speaker 01

  Thank you for having me. We really appreciate it. And everyone, check out Total, T-O-T-L-E dot com.

• 38:44Anthony Pompliano?

  Dot com?

• 38:45Speaker 01

  Dot com.

• 38:46Anthony Pompliano?

  All right, 100%. Appreciate it.

• 38:49Anthony Pompliano?

  Hey, everyone. Pop here. If you liked this episode of Off the Chain and want to help us take crypto to the top of the apple, 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.