#596 Jonathan Gheller Explains Bitcoin As The Best Central Bank

Jonathan Gheller is an entrepreneur and investor. He previously founded multiple startups, including companies that were acquired by Facebook and Google. In this conversation, we discuss growing up in Venezuela, economic inequality, Silicon Valley tech companies, bitcoin, fixing the money, automated central bank, importance of censorship resistance, and the ideas of predictability and independence. ======================= Let’s talk about Okcoin - one of the most popular licensed exchanges. Okcoin is the first to bring new cryptos to market, offering some of the lowest fees in the industry, an easy to use app, and Earn feature--you got to check out their brand new, beautifully designed app! And as of today, they also became the first US exchange to list NEAR. It’s easier than ever to sign up, buy and trade crypto in just 2 minutes on Okcoin with credit & debit cards or just link your bank account to the best new crypto assets. So get started, and go to okcoin.com/pomp ======================= NEAR, now listed on Okcoin.com, is an open-source platform that accelerates the development of decentralized applications overcoming high fees and slow speeds with its fast, scalable, low-cost, and climate-neutral blockchain protocol. This is why NEAR was recently awarded the Climate Neutral Product Label from South Pole. One transaction on NEAR consumes about 1300x less carbon than a similar transaction on other chains. Learn why NEAR is the infrastructure for innovation at NEAR.org (N-E-A-R [dot] O-R-G) today. ======================= Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC.

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

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Jonathan Geller is an entrepreneur and investor. He previously founded multiple startups, including companies that were acquired by Facebook and Google. In this conversation, we discuss growing up in Venezuela, economic inequality, Silicon Valley tech companies, Bitcoin, fixing the money, automated central banks, importance of censorship resistance, and the ideas of predictability and independence. I really enjoyed this conversation with Jonathan, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is OKCoin, one of the most popular licensed exchanges.

• 0:47Anthony Pompliano?

  OKCoin is the first to bring new cryptos to market, offering some of the lowest fees in the industry, an easy-to-use app, and an earn feature where you got to check out their brand-new, beautifully-designed app. And as of today, they also became the first US exchange to list NEAR. It's easier than ever to sign up, buy, and trade crypto in just two minutes on OKCoin with credit and debit cards, or just link your bank account to the best new crypto assets. So to get started, go to okcoin.com/pomp. Again, okcoin.com/pomp. Next up is NEAR, which is now listed on okcoin.com. NEAR is an open-source platform that accelerates the development of decentralized applications, overcoming high fees and slow speeds with

• 1:31Anthony Pompliano?

  its fast, scalable, low-cost, and climate-neutral blockchain protocol. This is why NEAR was recently awarded the climate-neutral product label from South Pole. One transaction on NEAR consumes about 1,300x less carbon than a similar transaction on other chains. Learn why NEAR is the infrastructure for innovation at near.org, N-E-A-R dot O-R-G, today, near.org. Last but not least are my friends over at Revolut. Revolut is a finance app in the US and the UK that saves you the simplest way to access crypto. You can sign up today at revolut.com/pomp, and when you make three card transactions, you'll get $15, which you can then exchange. Change for Bitcoin or any of the other tokens that Revolut supports.

• 2:13Anthony Pompliano?

  As usual, when you move your money from fiat to crypto, your capital is at risk. But don't forget that Revolut is a massive business in Europe and it has now come to the United States. Their assets in their crypto products has more than doubled in the last 12 months. Go check them out at revolut.com/pomp. Revolut.com/pomp and let me know what you think. All right, let's get into this episode with Jonathan. I hope you guys enjoyed this one.

• 2:41Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:09Anthony Pompliano?

  All right, guys. Bang, bang. I have a very special guest today. My friend Jonathan is here. How are you?

• 3:16Speaker 02

  Doing great.

• 3:18Anthony Pompliano?

  All right, I want to start with your childhood and growing up because you have a very unique experience. I think feeds into a lot of your worldview, but before we do that, I'm going to tell a story that I don't know if you remember this or not. We worked at Facebook together. You were the last boss that I had at Facebook before I left. And there was a meeting. The details don't necessarily matter as much, but we were all in a meeting with some of the higher ups at Facebook. And there were some suggestions floating around as to things that we could do on Facebook to get more people to pay attention to the executives at Facebook. And one of the ideas was to put an interstitial over the page.

• 4:01Anthony Pompliano?

  And a lot of people at Facebook were like, oh, that's a great idea. Like, you know, we can basically like, that's how we get people's attention. And it was very much like a data-driven, okay, there's going to be a certain number of people who see this, that click, that then, you know, opt into this action, whatever. All normal conversations for kind of Silicon Valley firm. And all of a sudden, I don't know how we do the meeting, you're like, uh, excuse me.

• 4:25Anthony Pompliano?

  So I'm not from the United States and let me explain to you what used to happen in television. It's like the dictator of our country would come on and be like, now interrupting this programming. And like, this is the thing. And your point wasn't so much like the social media CEOs or dictators. It was more of just like, hey, there's multiple cultures that use these platforms. Like we have to be sensitive to the way that this could be received. And I always think about that because I think you probably better than anybody I know, understands Silicon Valley, you've built companies, sold companies, worked at many of these tech companies, et cetera. But you also very much understand like the world outside the United States and have been able to like mesh that together.

• 5:03Speaker 02

  People got really angry in that meeting, if you remember. It was very tense. I do remember that. And I, and I left and one of those very important executives in that meeting. And I remember some other guys from the team, you know, kind of higher up in the hierarchy than me saying, I've never seen this guy this angry, ever, you know, in 10 years of a company, ever. And I was like, holy crap. Yeah, I do remember that.

• 5:29Anthony Pompliano?

  Yeah, I do remember them getting mad. I was gonna leave that part out, but yeah.

• 5:33Speaker 02

  Well, tense, you know, there was a very tense meeting, yeah.

• 5:36Anthony Pompliano?

  Well, I think that there's a, there's always some hint of truth in everything, right? Of just like, yeah, like that might not have been a good idea and thankfully we didn't do it. So like, okay.

• 5:46Speaker 02

  That's a tough job you have there. I remember you had a tough kind of intersection of a lot of things at Facebook. You had to deal with a lot of people.

• 5:53Anthony Pompliano?

  I was very unprepared for that. I was a 25, 26 year old kid and I was asked to basically interface with these people on a pretty periodic basis, but also then to interact with other executives. And, you know, it's like a minnow getting thrown in with the sharks and you're like, oh, okay.

• 6:12Speaker 02

  Yeah. And I think, I think what happens, one of the reasons that job is hard is because if you, if you're, before that you were doing that, if you were starting companies or just generally hustling, you have an output mentality. You're like, how the, how do I get stuff out? How do they get your podcast out and your product out and your feature out? And you're outcome oriented. At a large company, you have to be input oriented. You have to go like, so what do you want VP of X? What do you want VP of Y? And you're like, well, if I phrase it like so. Are we all in agreement and can we take that to the higher ups? And, and you were, I remember in a role that had a lot of that. That was very painful. That was very painful.

• 6:53Anthony Pompliano?

  I, I always, to this day, say, uh, it was nine, it was, uh, no, three months, give or take, in this specific role.

• 7:02Speaker 02

  Yes.

• 7:03Anthony Pompliano?

  And, uh, I got into the role because basically some of the executives were like, hey, we think that this guy would be good at this because he had done some other stuff.

• 7:12Speaker 02

  Yeah.

• 7:12Anthony Pompliano?

  They went to, uh, my boss's boss at the time.

• 7:15Speaker 02

  I remember.

• 7:16Anthony Pompliano?

  Hey, can we talk to him about doing this? And they were like, no, and like, we're just still gonna talk to him.

• 7:20Speaker 02

  Yes.

• 7:21Anthony Pompliano?

  So, wasn't much choice.

• 7:23Speaker 02

  Yeah.

• 7:23Anthony Pompliano?

  Did it. It was awesome. You know, got to interface with all these people.

• 7:26Speaker 02

  Really good people. That team had amazing people.

• 7:29Anthony Pompliano?

  I learned more than I've ever learned. And in a 90 day period, I learned, I still to this day believe I learned more in that role than anything else. But I was very unprepared for that role.

• 7:37Speaker 02

  Yeah. But it was good people to work with. They were, they were hardcore, good, talented, you know.

• 7:43Anthony Pompliano?

  To this day, I will still, I think that this is probably true. There's nobody better than that team in terms of, uh, and we're talking about some of the earliest Facebook employees that have, you know, risen up through the ranks and still are in charge today. The combination of product, analytics, growth, like, like everything together.

• 8:04Speaker 02

  Yep.

• 8:05Anthony Pompliano?

  You could give them any problem in technology and they got a shot.

• 8:07Speaker 02

  They're amazing. Very resilient, really hardworking. It's good people, but yes.

• 8:12Anthony Pompliano?

  All right.

• 8:12Speaker 02

  You're not there anymore.

• 8:13Anthony Pompliano?

  Yeah, that's fine. Well.

• 8:14Speaker 02

  We're okay. We're both out.

• 8:15Anthony Pompliano?

  I learned. It's fine. But there was many walk-in talks that we did where each other was like, hey, listen, all right, so here's the deal.

• 8:21Speaker 02

  Many, many.

• 8:21Anthony Pompliano?

  And we took, I remember talking about.

• 8:23Speaker 02

  Yeah. I was learning as well with you, to be honest. I don't know what I was doing. Yeah.

• 8:28Anthony Pompliano?

  You grew up in Venezuela, which, uh, I think, uh, with some of the background knowledge of being able to say that in that meeting of like, hey, let's, let's maybe cool it a little bit here. Uh, what was that like?

• 8:41Speaker 02

  It's interesting. I grew up middle class in Venezuela and that's actually very comfortable to some degree. You know, my, both my parents worked at a kind of state owned companies. My dad worked at the oil state company, state owned company. You know, called Pedebeza. Pedebeza was a top 10 company by market cap for a while. My mom worked at the kind of the Alcoa, like the, you know, steel state owned company. It was a good, comfortable life, but it's also a, you know, very unequal society and a very unstable society. And I got mugged growing up several times. My mom got mugged growing up several times, kind of get out of the car and the car goes.

• 9:27Speaker 02

  My dad got mugged several times, you know, would negotiate with guys like, take, take the shoes, don't take the watch or whatever. Just like, don't, don't leave me hanging. But my brother got what's called express kidnapped. You know, like for a couple of hours. Well, they, they grab you coming out of like, um, I didn't coming out of, this isn't even where we lived. It was like a coming out of, I don't know, Mountain View in California, a really nice neighborhood at eight P M. on a Tuesday from like, imagine CBS. And they're like, we're getting in your car. And he was kidnapped for a couple of hours. And my brother, my brother was very effective persuading them that we have no money. I don't know what you're gonna take. And, and my brother remembers distinctively, the thing that shocked him the most is that by all material accounts,

• 10:12Speaker 02

  those guys were better off than him. It was like, your, your car is better, your shoes are better, your jeans are better, your what, your glasses, everything's better.

• 10:19Speaker 02

  You guys are the cool kids. And he's like, let's take my debit card and just take whatever. It won't, it won't be much. And they were very disappointed. I got mugged by police once, growing up. Growing up, I was in a red light and they got in the car and they're like, drive. And, and, and, and I remember my mom used to own a small shop where she sold, um, after she left the, the state company, she sold lottery tickets. And I had the money for the price. And I'm like, you cannot touch that. That's my mom's and that's someone else's. You know, these guys are police. They're like, we won't, we won't take. And they were so angry at me because I had, I remember twenty bolivares, which is like nothing in my wallet. And they're like, I can't believe that's enough. And we get, we ran out. So it was a lot of crime and a lot of insecurity.

• 11:04Anthony Pompliano?

  At least there's honor among the thieves.

• 11:06Speaker 02

  There is. Oh, they can be very kind. Yeah. And then, and then there was a lot of political turmoil. And then kind of financial turmoil, right? Now, when I grew, when I was born, the exchange rate was four, four point three. So four point three bolivares for one US dollar.

• 11:24Anthony Pompliano?

  Okay.

• 11:25Speaker 02

  By the time I was like eight or nine, I can recall, what I could remember this was sixteen.

• 11:29Anthony Pompliano?

  So Forex, basically.

• 11:30Speaker 02

  Right. By the time I left college, it was a thousand.

• 11:35Speaker 02

  Right now, so I kind of lost track here, but I think I want to say that because they debased the currency twice and changed names with this kind of.

• 11:45Anthony Pompliano?

  And basically, when you're talking about the base, not just like printed more, like literally they took zeros off the end of the currency.

• 11:51Speaker 02

  But that's right. They rename it.

• 11:52Anthony Pompliano?

  So like it was a million bolivar or whatever. And now it says a thousand.

• 11:56Speaker 02

  Right. And so.

• 11:56Anthony Pompliano?

  You're like, where'd the zeros go?

• 11:58Speaker 02

  And they had this kind of over, we were talking before about over, having overconfidence and like the perils of overconfidence, right? These guys will call the debased bolivar, the bolivar fuerte, the strong bolivar.

• 12:08Anthony Pompliano?

  That's why the stronger has less zeros, right?

• 12:11Speaker 02

  Right? So I want to say that on the bolivar that I grew up on.

• 12:16Anthony Pompliano?

  The weak, the weak one.

• 12:18Speaker 02

  The weak one.

• 12:20Speaker 02

  This guy.

• 12:23Speaker 02

  Right now, I think the exchange rate would be three billion.

• 12:27Anthony Pompliano?

  Wait, what?

• 12:27Speaker 02

  Three billion. I think it's thirty thousand, but then three billion on, you know, on the weak, on the weak one. Yeah.

• 12:34Anthony Pompliano?

  Yes. So before they took all the zeros off, it literally went from four to three billion.

• 12:40Speaker 02

  Well, it never really showed the ticket three billion because it was debased.

• 12:44Anthony Pompliano?

  Yeah, yeah, yeah.

• 12:44Speaker 02

  But, but yes, if you, if you anchor on that bolivar, if you anchor on that bolivar and go all the way to today, it's three billion. So there's a lot of change, right?

• 12:53Anthony Pompliano?

  To give people who just to like hammer the point home, if you wanted to buy one dollar as a kid, you needed four of the local currency.

• 13:01Speaker 02

  That's right.

• 13:02Anthony Pompliano?

  And you would get one dollar in exchange. You go to the bank, hey, here's four, give me one. Now you'd have to show up with three billion.

• 13:07Speaker 02

  That's right.

• 13:08Anthony Pompliano?

  And so. And they literally would be like, you'd be like, how do I carry that?

• 13:11Speaker 02

  That's right. That's right. That's right. And, and, and now in, this happens in Venezuela. I haven't been there in a while, but it happens in Venezuela. You can see this in Colombia as well, in the frontier, in the border. Even the newer bolivares, which also have been debased and kind of weakened a ton. They're used for.

• 13:27Anthony Pompliano?

  Like art?

• 13:28Speaker 02

  Yeah, art and crafts.

• 13:29Anthony Pompliano?

  Yeah.

• 13:29Speaker 02

  So they'll do like a, they'll do like a purse made out of the bolivares. So they'll make a little plane or they're worthless, right?

• 13:37Anthony Pompliano?

  Growing up in that environment, do people know? Like, do they realize it? Or is it just like, oh, that's how it is everywhere?

• 13:45Speaker 02

  That's a good question. I'm, I'm not sure to what extent things are being realized. I, I, I do think people realize inflation is kind of, it can be seen. And I remember having conversations as a kid and in the streets where, you know, because you see inflation's inflation in two ways, right? One way is things get more expensive. The other way is that products get refactored to maintain the price, but be less. Less quantity, less quality, whatever it may be. So I remember a chocolate that we liked growing up that kind of kept the price for a long time. It just got tiny, right? From this to this. So it, you know, and people know, right? And they know it doesn't kind of.

• 14:27Anthony Pompliano?

  The price is the same. What you get is different.

• 14:29Speaker 02

  Right. So you can also do that, right? And a lot, that, that happened a ton, right? And we kept getting, you know, you know, the bags of chips with like less and less.

• 14:39Anthony Pompliano?

  The loaf of bread just becomes one slice.

• 14:41Speaker 02

  And so, so all of that keeps happening. So people are aware and people are aware of the kind of purchasing power. That, that's something very real. What I don't think people realize fully is that, is how inflation is an indirect tax on the poor. That's a piece that I'm not sure is visible. Because what happens is that if you live in a country that is highly inflationary and you're able to save in a strong currency.

• 15:09Speaker 02

  For local expenditures, inflation is actually.

• 15:14Speaker 02

  Beneficiary in the sense that, you know, if it's like, if the, if, if, if the, if the things get debased, but your, your savings get stronger, you can come back and then buy more. And so your, your, your, you know, purchasing power and your quality of life doesn't get that affected. If you're saving in the local currency, because you can't take money out, or you have a lot of expenses, then it's a pretty clear tax. And I'm not sure people follow that. I think the other thing that happens is that inflation is that amazing indirect tax for governments, because they can divert responsibility. So they can say, look at the chocolate factory. They're making the chocolate smaller. That's not right. Or look at the coffee shop. The coffee

• 15:59Speaker 02

  now is 10 times more expensive. That's not okay. You're exploiting people. And so it's very easy to like divert responsibility for the indirect tax. And so it's very, very popular for governments, right? It's very useful to them.

• 16:13Anthony Pompliano?

  You're talking about Venezuela. You could be talking about the United States.

• 16:17Speaker 02

  Yeah.

• 16:17Anthony Pompliano?

  In terms of inflation affecting the poor, in terms of the diversion, the diversion of blame, in terms of the arguments of exploitation, minimum weight. I mean, all of this stuff is the exact same in the two countries, maybe on a different level of severity, right? But systematically, it's the same thing.

• 16:38Speaker 02

  That's right. I think the other lesson that you get from the US, that it's less apparent in a place like Venezuela, but I think is very important, is that when you, and this kind of graphs are very popular circulating around the internet, right? When you see the lines of inflation, you're like, well, car, you know, flights have gone really cheap, or cars have gone really cheap, but look at education, or look at healthcare. And, and then if you look at those costs, and you look at who's impacting them, you can see how regressive that tax, the inflation is, like, who's actually paying that bill? And it's not being paid equally. It's being paid very unequally. And the poor suffer more, right? Because those are the things that they spend more money. As a percentage of, of income, healthcare is a smaller expense than, than it is for someone who's poor.

• 17:22Speaker 02

  And so if that goes up, you disproportionately hit the poor, the poor population.

• 17:26Anthony Pompliano?

  There's a study that I will try to find again, and I'll put in the show notes for everyone, that looked, I think it was in the UK, so not in the United States, but in an English-speaking kind of developed nation. And it looked at after the 2008 financial crisis, they basically broke down the socioeconomic kind of ladder into 20% bucket. So, top 20%, next 20%, all the way down, right? And what it said was, by their estimation, coming out of the 2008 financial crisis, the bottom 40% of people in their country were experiencing somewhere between 6% to 10% inflation levels. So, when you think about that, the official numbers,

• 18:05Anthony Pompliano?

  2, maybe 2.5%, it's kind of a blend across society. 10% every year? Things are going, I mean, you just can't keep up, right? It's that feeling of everything going up. But I always go back to like, the system is doing exactly what it's designed to do. They want to devalue the currency, so people spend or invest and keep velocity of money going. It's just only that, like, half the population knows that and acts accordingly, right? They buy assets, they do all this. Everyone else is just trying to do their job and eat, right? I mean, there's no understanding of economics, there's no understanding of how money works, there's no understanding of what I should do to protect my wealth, or grow my wealth,

• 18:46Anthony Pompliano?

  or anything. It's 45% of Americans don't even own a single investable asset. And so, it's actually the education gap seems to be what exposes people more than anything, because the system's doing what they designed it to do, right? And that's the scary part.

• 19:02Speaker 02

  That's right. And if you look at, this is true in a place like Venezuela, like in the US, more so there. Imagine you're in Venezuela, and imagine you have excess income that can be turned into savings of $75. How do you turn the equivalent de bolivares to $75? What's a financial system that provides that, to that saving? How do you do that, without being charged $25 in the transaction, or whatever that might be? Same here, right? I mean, it's, part of the problem is that it is hard through the financial system. And even to save, you know, to save lower amounts over long periods of time. It's expensive and the system is geared towards debt where way more than savings.

• 19:47Speaker 02

  And so there's great products to leverage up. There are not that many great products to kind of save up. There's new stuff and a lot of the most kind of cool, interesting stuff in fintech is trying to solve for that. But it's education plus infrastructure.

• 20:02Anthony Pompliano?

  When you think about a theme in the world, you've written about before, like the dissipation of power, like this whole idea that maybe the last 50 years or so, there was the concentration of power. How do we create more efficiency? See it in politics. Venezuela is like the perfect example, as many other countries where consolidation of power leads to bad things. Absolute power corrupts absolutely, all that. But you're also seeing in corporations, right? And I think one of these pieces that you wrote was this whole idea that when you have 100 small two-person companies, you have to negotiate contracts, you have to become transactionally efficient and all this stuff. It actually just makes sense like, why don't we just put all the 100 different companies of two people

• 20:45Anthony Pompliano?

  into a 200-person organization and we'll create top-down hierarchy. And now all of a sudden, we don't need to negotiate every time we need to do a transaction. Like it's just internal and so we can create efficiencies and get this, but it's centralized. It feels like the world is rejecting this a little bit or trying to head in a different direction with this dissipation of power. Like, how do you look at that today?

• 21:05Speaker 02

  Yeah, so I think the one thing that I would say that is interesting to consider for people who are kind of strong advocates of decentralization and diffusion of power and so forth, is kind of what you're saying that centralization is really valuable. Like it has a bunch of things. You were referring to a pretty famous book in kind of the microeconomic literature called The Theory of the Firm. And so this guy goes through like the logic for why firms are created and companies are created, which is kind of what you want to walk us through. And that's, I think, exactly so. So it makes sense to do that, right? Let's just walk that argument four steps ahead and just see how it plays out and why that becomes an issue. You know, well, that now is concentrated, right? So now maybe. They are underserving a subsection of the market. And so you and I get together and we're like, well, we're gonna fight the big company.

• 21:50Speaker 02

  We're gonna serve this kind of small niche. Turns out the company controls kind of distribution channels. Turns out the company can kind of underbid products or overbid on products to kind of get us, get us out of the of the marketplace. And so, so, so now it's hard to compete and hard to serve this kind of subset of the market that that needs serving. And so now, regulation is issued and ensued. And so laws get, get, get, get put together to help us kind of fight. But what turns out is that laws are hard to follow. And so more laws are built to protect the core law. Maybe you, maybe you get a constitution, but then you're like, well, we gotta protect that. So we're gonna put some laws.

• 22:34Speaker 02

  And then you're like, well, you wanna protect those as well. And you put more. And this is, I mean, this is a history of kind of liturgical practices in religions as well, right? Like I'm Jewish and it starts simple and we get a ton, right? And, and, and this idea in Judaism exists of like defense of the law, which is our laws to protect the law.

• 22:52Speaker 02

  And this happens on like the civil society as well. And so you, you, you bring in government to protect the little guy. So they compete with a big guy who became big for arguably good reasons. But then perhaps not so much after a while. And then the laws in itself, they become big and the guys who issue the laws can are nested in. So now you're like at that point where you're describing, where you're like, oh, the, the system is becoming sclerotic. It's like not moving, right? And so, you know, the guys at the Santa Fe Institute has this idea called like the edge of chaos. And they're like, you know, we live in this kind of, in this kind of edge where, you know, people go bankrupt and people die and we suffer. And yet this is where still things happen.

• 23:35Speaker 02

  If it's too, too rigid and too static and too concentrated and centralized, stuff doesn't happen. Change doesn't happen, improvement doesn't happen. If it's too kind of gassy, you know, and kind of, and dispersed, no coordination is possible. It becomes really, really hard. So there's like some place where you wanna be. And so, and so to your point, you know, the US in the last 30 years has been, you know, the single power in the world. That's really unusual, right? Just like, you know, history wise. And I think it's pretty patently obvious to everyone right now that China is a. Real contender and and you look at that incorporation to your point, you see like

• 24:16Speaker 02

  strong concentration of power on subsections of society and commerce and so forth. And so and so sometimes you have to work to kind of concentrate more power because it's kind of too diffuse. And sometimes you have to work to kind of diffuse it to diffuse power. And I think a lot of what I think I think we're called for call on to work on is to diffuse some of this. And I think you can work on a bunch of different verticals, but there's some there's too much concentration and not enough change and innovation and kind of improvement. And we have to, we have to diffuse, I think.

• 24:45Anthony Pompliano?

  It almost feels like moderation is good, right?

• 24:48Speaker 02

  Yeah.

• 24:49Anthony Pompliano?

  Too much decentralization, eh, maybe that doesn't work. Too much centralization, eh, maybe that doesn't work. And there's this like happy medium. But it's not just, okay, everything is halfway centralized, decentralized. It's it's more so there's certain things where decentralization is really, really important. And then there's certain things where centralization is really, really important. And society is trying to figure that out, right?

• 25:11Speaker 02

  Yeah, I can imagine, you know, I can imagine if you think of yourself in different times of history, being kind of consistent in values and principles, and at some point yelling, you know, break the kingdom, you know, you know, and some other time of of history saying, let's bring the kingdoms together and let's consolidate. And I think you probably are remaining principled, you know, by doing things that seem very opposite. I do feel that we're at a point where a lot of like, let's break the kingdoms feels important to me, right?

• 25:44Anthony Pompliano?

  I tend to agree.

• 25:45Speaker 02

  Yeah.

• 25:47Anthony Pompliano?

  Bitcoin is interesting because it's doing some of this.

• 25:52Speaker 02

  Yeah.

• 25:53Anthony Pompliano?

  Very unique way. Still an untold story or kind of an unfinished story, but we'll see what happens. You are should be like a poster boy for having sympathy for what Bitcoin's trying to accomplish. Come from Venezuela, hyperinflation, there's concentration of political power. You've seen kind of this play out through your lifetime across many different verticals. How do you think about the asset itself? And I'm cheating because I know that you think it's important, but just like, like, what is the framework you use to evaluate it, given that you could use so many different frameworks?

• 26:23Speaker 02

  Yeah.

• 26:26Speaker 02

  Well, I'll say this, perhaps on some historical context. And so I remember the first time I heard about it was by a colleague, which actually was actually ex-Facebook and joined my startup before we joined Facebook. And, you know, like a bright, strong libertarian. And it was like, this thing is the future. And I remember thinking, you know, the typical concerns around kind of government regulation and, you know, and the laws that provide coinage and all this type of stuff and getting really concerned. But, you know, I also remember, I remember growing up in Venezuela, one of my professors is a guy called Leopoldo Lopez, who's become an important member of the opposition. He's now in Spain and went through hell on earth on some of the governments prisons. And I remember in a class that I

• 27:09Speaker 02

  had with him, he was like, the importance of an independent Fed, or the equivalent of the Fed.

• 27:16Anthony Pompliano?

  Really?

• 27:17Speaker 02

  The importance of an independent Fed. And a lot of the kind of traditional economics have argued for this. I've argued for like, the Fed should aim to control inflation, to have an inflation target, which should be independent of the fiscal policy. So one thing is how much money we're going to spend as a government to achieve the government goals, and that should remain independent of the Fed goal, which should be to manage inflation. That's really hard for it to happen, right?

• 27:46Anthony Pompliano?

  Independence.

• 27:47Speaker 02

  The independence. But it's important. We recognize that we need predictable monetary policy to, for the agents to act in the best interest of themselves and the economy. If the monetary policy is unpredictable, then it's very hard to plan inventories, it's very hard to control import exports, it's very hard to price things. And so I think just from a practical standpoint, before a lot of the kind of cyberpunk libertarian philosophy that gets out behind Bitcoin that may become possible, I think the idea of like, same predictable monetary policy is, I think, is a non-controversial position among many economists.

• 28:30Anthony Pompliano?

  Basically, what you're arguing is, if you take Widely accepted, kind of consensus view, traditional economic viewpoints like predictability, like independence of the Fed or central bank or whatever, and you apply it to the lens of Bitcoin, there's checks.

• 28:49Speaker 02

  That gets you 30% there.

• 28:50Anthony Pompliano?

  Yeah.

• 28:50Speaker 02

  That gets you a third there, maybe.

• 28:52Anthony Pompliano?

  Yeah. So monetary policy is transparent, programmatic. Programmatic and predictability are just two different words that mean, you know, pretty much the same thing.

• 28:59Speaker 02

  Yeah. Programmable is just like the, uh, a strong incarnation of predictability, right?

• 29:04Anthony Pompliano?

  Yes.

• 29:04Speaker 02

  It becomes highly predictable.

• 29:06Anthony Pompliano?

  Independent.

• 29:06Speaker 02

  Yeah.

• 29:07Anthony Pompliano?

  Decentralized. Those are, again, you know, two different words for two different industries, but basically, you know, uh, rely on each other or, or are kind of related to each other.

• 29:16Speaker 02

  That's right.

• 29:17Anthony Pompliano?

  And then if that gets you 30%, what's the rest?

• 29:19Speaker 02

  Yeah, so, so I think the, the, the, the, the rest is that you realize how hard it is to accomplish that. And, and you realize that, uh, the monetary policy of a nation is really powerful, that it can be used, uh, as a diplomatic tool in other nations, that it can be used as a domestic policy tool, eh, to, you know, gen- to pass a bunch of money to a bunch of people or whatever that might be, in, in a way that is not organic, organic. So that one piece is you realize that there's a bunch of incentives in that system that go against that, um, ideal and that push against that. That, that's one piece. Then the other piece, eh, that, that is important is that, eh, and I, and I, I grew up and to

• 30:03Speaker 02

  a large degree, I remain kind of very, kind of liberal, kind of almost to the left in, in many issues. But I think one thing that Hayek, eh, and kind of the father of kind of libertarian economics has right is that price convey information, right? Eh, price is the way we discover truth in the market.

• 30:24Anthony Pompliano?

  Mm-hmm.

• 30:24Speaker 02

  And so if, if you tinker with prices because of foreign or domestic policy objectives, eh, you're not just, you know, eh, indirectly taxing the wrong people, you're not also making it also hard, you actually screwed up the market mechanism.

• 30:42Speaker 02

  And I've seen, I've seen in practice efforts to subvert the market mechanism for like a top down mechanism and it does not work. It's really, really, really bad. This is, uh, this is not only the history of Russia, but you can just see it, whatever this happens, it's just top down. It's, it's just pretty hard. And so, so I think those, those, that is like the other third, which is like prices are really, really important and the incentive structure is against it. And I think that all kind of checks. I think the last piece is the piece that you realize that eh, this thing is not, cannot be censored, cannot be controlled. So it means that no one can grab power over it.

• 31:25Speaker 02

  And so going back to the other point is that when you look at this concentration of power, what Bitcoin has is it has the property of diffusion of power. No one has to be in control and that's a notion that is very scary and very, um, it's not clear if that's going to work or not. I mean, we've tried full concentration of power. That doesn't quite work. Well, we tried kind of market plus governments and it works better, but it has a bunch of issues. But this idea that we can effectively take something that we want it to be predictable and that we force it to be predictable and it cannot be controlled by anyone else. It's insane. And so I think once you see that and you see that as possible, it's really a, a different world and, and you see examples of all of that.

• 32:05Speaker 02

  I mean, I, there's a bunch of news, uh, on the news right now on kind of miners being the platform and kind of

• 32:12Anthony Pompliano?

  China.

• 32:13Speaker 02

  In China, uh, I don't see anyone coordinating the migration of that, those machines somewhere else and yet.

• 32:21Anthony Pompliano?

  It's happening.

• 32:21Speaker 02

  It's happening. They're being migrated and you know, the hash power has dropped dramatically. Is the network threatened or unsecured? And so I think the magic here is that we've come up with a way of effectively diffuse power without becoming chaotic, but the opposite. There's no concentration of power and we get full predictability. I think when you see all of that, you're like, well, to your point, it still has to play out, but you're like, this is a worth the experiment, if nothing else.

• 32:51Anthony Pompliano?

  It almost feels like when you strip away sentiment, right? And you kind of say, shut Twitter off, stop looking at the US dollar exchange price, shut the television off. Like just look at the actual fundamental structure.

• 33:04Speaker 02

  Stop refreshing the app.

• 33:05Anthony Pompliano?

  Yeah, like, like all these things, right? Just like, like timeout for a second.

• 33:08Speaker 02

  Yeah.

• 33:08Anthony Pompliano?

  And you just look at it from a pure structure standpoint.

• 33:12Anthony Pompliano?

  It's gotta be one of the most beautifully designed, kind of valuable things at that viewpoint of technology in a long time. Like, maybe the internet, right, is probably like the other big one where you're like, okay, like, there's kind of like this distributed system that where people all kind of work together. Information can flow back and forth and, um, yeah, there's some centralization here or there that actually makes it work and whatever. But when you look at this, you're like, I can't really think of that many other things that if this becomes what it has the promise to become, will be more important, right? And value has kind of all kinds of, you know, subjective type things that you can apply, like, is it priced in bull if you are dollars, right? But just,

• 33:54Anthony Pompliano?

  it's almost like it was perfectly designed. And the word perfect, I think, is scary because nothing's really perfect. But it does check a lot of these boxes. And so it's maybe the best that we've seen so far out of all the monetary policy.

• 34:08Speaker 02

  Well, I think, so I would agree. I think it's a thing of beauty, right? From like a technological standpoint, from a societal standpoint. So it's amazing. But I think, I think in, I think you're right also in the kind of description of making, thinking it's perfect insofar as it's very narrow. Like it does one thing, doesn't do more. And it's, here's a clear, meaning transparent, predictable, permissionless, not censorable monetary policy. Which is what I think, there's some people who don't agree with this and some guys in the New York Times will go and write about the importance of like active monetary policy and

• 34:51Speaker 02

  I would tend to disagree. But I think there's a bunch of guys who are far from the crypto punk libertarian world that would say, we need predictable monetary policy. We need bands in which we can operate, some flexibility maybe, but some are predictable. And this Bitcoin achieves this specific goal. So to that sense, it's just very well tailored for a very specific thing. And so maybe we will find something better. But I think part of it, what makes it amazing is that it's not actually trying to do too much. It's just really important.

• 35:22Anthony Pompliano?

  How important is it that we just saw kind of the exact opposite over the last 12, you know, 18 months or whatever with basically completely unpredictable monetary policy, emergency interest rate cuts, trillions of dollars of quantitative easing, like it almost feels like we basically over the last decade or so have seen Bitcoin gain adoption slowly but surely and kind of chugging along, technology continued to work, individuals were really kind of attracted to it. Then you start to get a couple of financial institutions that were, this is interesting. And then COVID hits, you get literally just mass chaos, complete uncertainty, the most

• 36:02Anthony Pompliano?

  extreme version of the usage of a malleable, kind of unpredictable monetary policy. And then oh, there's this other thing like just keeps doing what it does. And so now it's like this black and white comparison of, hey, here's the extreme of one world and then here's like the other extreme essentially. And it seems like that really opened a lot of people's eyes. So like, maybe I can't even describe why, but like this is interesting because this other thing is chaos.

• 36:26Speaker 02

  Yeah. Well, that's, I think, I think there's one side of the argument that I would, that that's against that or in front of that, which is that I think that maybe the Bitcoin community tends to, I think, understate the power of the US dollar. The United States is an insanely powerful country. It has insanely strong economy. So I think kind of the US, the token, or your government token, I think it's, it'll stay here for a very, very long time. I think the US has advantages that China doesn't have. It's an open country that accepts immigration, that takes talent, that speaks a language that people can learn. Chinese is hard to learn. I think we have some disadvantages kind of military wise. We have like a long,

• 37:10Speaker 02

  old platform that needs to be upgraded to fight more wars and so forth. But the US is very powerful. So I think the, so, so what that means is that like companies that can make A string of mistakes and that they're still there because kind of the core business is so powerful. And you see that in technology all the time. The US can kind of screw up many things from now to the immediate future and remain, I believe, particularly as it pertains to strength of the US dollar. But I do think that when you look at, like if you, when you look at what the dollar can buy, and when you look at kind of the purchasing power, particularly domestically, right? And I think, I think you, I think you're right.

• 37:54Speaker 02

  I think people are seeing, maybe this is not the store of value that I thought it was. Maybe it's been kind of compromised. And I think, as I said, I think it's a larger theme where the US was the only country, the US was the only dollar. That lasted about 30 years. That's gone. I don't see the euro being particularly strengthened in that regard. As I said, the Chinese currency is tied up with a bunch of like closeness in the Chinese economy. So, so I think people are looking for like stable predictable store of value. And I think they can, can fill that, that role. That's in the US. If you're outside of the US, if you're El Salvador, if you're in Venezuela, then, then they, because the US dollar is used as a kind of diplomat, diplomatic, kind of nonviolent intervention tool. Then I think the diversification out of that kind of may prove to be important for them.

• 38:38Speaker 02

  And then the question is like going back to the US, how, how, again, what, what's, what will remain for a very long time? And hopefully forever, like a strong economy and an open society that takes on talent and so forth. How does that connect with like the store of value? I mean, the US has gold in hornox and they're proud of it. I don't, I don't see them complaining about it, even though it has been kind of made illegal in a bunch of transactions in the US. I don't see why the US cannot be open about this in the future. But I think it's not, I do think it opens their eyes, but I think, I think the US dollar will be okay.

• 39:14Anthony Pompliano?

  Talk more about El Salvador and kind of when you heard that news, just given that South and Central America, I think you understand to some degree, just having grown up.

• 39:24Anthony Pompliano?

  And then Bitcoin and technology, I think you understand pretty well as well. And so you put those two things together. Most people are evaluating this from the the American perspective, right? I look at them like, oh, this is amazing. They're gonna go give Bitcoin to everybody. How do you think of it? Is it a dangerous thing? Is it a positive thing? Is it like a wait and see and like there's action that needs to be behind the words or like just like? What? How do you evaluate something like?

• 39:49Speaker 02

  I'm not sure, to be honest, because I think part of the challenge for me is that.

• 39:56Speaker 02

  I don't know how to judge the actions of a president that has a bunch of power and control of Congress. When they do something around this, I think it's not positive for society. But I I don't have an argument against any of this, like a well thought of argument. But I I I hope that Bitcoin gets in the hands of as many people as possible before. You know, governments start to get involved, just because I think the power of what it can be will be stronger, the more kind of distributed and the more in the hands of more people. And so I kind of get a little bit nervous.

• 40:37Speaker 02

  But but I do think that if I want to be optimistic, I think the idea of a government thinking through the future and how they can participate in it and how can they kind of do lipfrogging, I think is important. So I'll give you an example.

• 40:52Speaker 02

  In many developing nations, there there never was a kind of phone infrastructure the way they had in the US or Europe. Cellular phones effectively live frog bad into into where it is today. That was important. It was important to invest in those towers and not invest in kind of cables under the ground because it allowed those economies to like get the iPhone and get Android and get apps and and and kind of really move forward. And so I I do some of these financial institutions and services and kind of economy in these economies are are are old and inefficient and expensive and unfair. And so what's what is interesting for me is that if if the financial kind of system.

• 41:34Speaker 02

  Of these countries can leapfrog by adopting this technology. I think that's really, really important. That's one. So I think lightning becomes really interesting part of that story for me. So that's one. And then the other piece is that I think, I, I, I think it's important if these countries can get early in a store of value that has some space for appreciation. If that, then if that's what happens, then I'll be excited for them to see, take a little bit of risk that is not kind of country threatening in any, in any important way. But they have the ability to take risks that maybe the US doesn't have and that they can benefit from that. That, that will be exciting, exciting for me as well.

• 42:06Anthony Pompliano?

  Yeah, it feels like um.

• 42:10Anthony Pompliano?

  Most of the folks that I've talked to from South and Central America, there's this like cautious optimism, right? Hey, I see how this could be beneficial if it works out, right?

• 42:20Anthony Pompliano?

  Any country in that entire region, there's always this belief that you continue to rise in power. And then when you get the power, it's kind of like, what do you do with it? Right? And probably more so maybe the African continent, but more so than anywhere else in the world. South and Central America has seen the negative sides of what can happen with consolidated power. And it feels like when something like this occurs, there's an argument of like, oh, this could be used in a negative way, right? And that, and we'll see kind of if that's true or not. But also then there's this argument of like the Trojan horse. Like it doesn't matter if you're a good guy or a bad guy, if you go and you help all of your citizens get Bitcoin, like you can't control it, right?

• 43:02Anthony Pompliano?

  And so like to some degree, uh, there's a diffusion of power, right? Just because you're literally using a freedom technology and you're giving it to everyone.

• 43:09Speaker 02

  Yeah.

• 43:11Anthony Pompliano?

  But this brings us back to this piece that you wrote of kind of this diffusion of power where you talk about the idea of like, there's basically three reasons why somebody ascends to power. And it's, they think that they can organize resources in society better. There's a self affirmation, uh, or they basically benefit from the perks of being powerful. And in it. You essentially lay out, and I forget who this argument comes from, but it's like, if you don't do the things that everyday people do, very quickly, you almost lose touch with the everyday people.

• 43:41Speaker 02

  Right.

• 43:42Anthony Pompliano?

  And so I think the examples that are used are like, you know, if you don't make your own coffee, if you don't, you know, drive your own car, like all this stuff.

• 43:49Speaker 02

  Yeah.

• 43:49Anthony Pompliano?

  For no other reason than just you don't do it. It's kind of hard to relate to people who do that on a daily basis.

• 43:55Speaker 02

  Right. The thing, the thing to realize, at least for me, is there's this famous Lord Acton, you know, power corrupts and absolute power corrupts, absolutely, quote. I think that's very true. And I think, I think it's very important to stay vigilant to that. I think that's where I've, I've moved to in that journey to some extent where I'm like, I'm just generally suspicious of power. And generally suspicious. And, and generally kind of feel a sense of kind of compassion to some degree with people who hold a lot of power. You see people who hold a lot of power in big corporations, technology and otherwise, always in impossible situations, right? Like almost you, almost they don't want the power. And, and you see, for example, Jack Dorsey at, at, at Twitter advocating for this blue sky project that effectively,

• 44:40Speaker 02

  and, and you see, it takes power out of him and you see him on the, on the interviews that has, or whatever the subpoenas that has been asked to, to, to attend to in Congress, effectively saying, should we have? I mean, sure, I, I, should you have that much power? Should I have that much power? And I think before that meant chaos. And I think now that it means kind of at the edge of chaos. It's kind of crazy, but, but it works. Kind of the machines, the mining machines will go where they need to go. The big ones will go where they need to go. The exchanges will do what they have to do. The nodes will do what they have to do. The individuals will be sovereign and they'll make their own calls. So, so I think there's something to that, right? Where, yeah, where probably the, probably the problem is power.

• 45:24Speaker 02

  And we now have a kind of anti-power or delusion of power, delusion of power kind of technology that it's, that's now available.

• 45:31Anthony Pompliano?

  Jack is so fascinating because I'm pretty sure he explicitly says, around all the deplatforming, shutting accounts, all stuff. He's like, I don't want to be the one doing this, right? Or, or like we, we, like we basically, we, this is not something we signed up for.

• 45:46Speaker 02

  Yeah.

• 45:46Anthony Pompliano?

  Right? We have to do the best we can to do what we can in the meantime. But the blue sky thing is kind of like, hey, how do we give the power, you know, elsewhere? What's fascinating to me is for every one person like that. There's a hundred that they want the power.

• 46:04Speaker 02

  Yeah.

• 46:04Anthony Pompliano?

  And they're actively working to get the power. And so it really, it begs the question, like, will it take technologists building the technology to diffuse power regardless of what the incumbents think? Or do we get to some point where people start to say, ah, you know, maybe I don't need the power? Like, like, it feels to me that Jack kind of raising his hand and saying, you know, we have to find a better way without us being the ones making these decisions. That's going to be a very unique, you know, kind of path. Most of the times, it's going to just be more of technology taking the power regardless of what the incumbents think.

• 46:37Speaker 02

  We'll see. I think, I think it's like, if I had to guess, it's like, think about Jack in a meeting, in a content moderation meeting. Like, I can't imagine anyone enjoying that meeting. Right? Do you imagine that being pleasurable? I don't know if Mark from Facebook is doing this, or, you know, Susan in YouTube. I, I, I don't imagine this being fun. I imagine this being really, really painful.

• 47:02Anthony Pompliano?

  And everyone knowing it's impossible.

• 47:04Speaker 02

  It's an impossible task.

• 47:06Anthony Pompliano?

  Yeah.

• 47:06Speaker 02

  And it's unclear why it's been, for all the shit that these guys are getting, I mean, I'm on the side of Facebook on all of this. It's like, why are they being asked to do this? Like, I think a modern civil, like, a modern society would have, like, API interface between the courts and Facebook. And I would go and say, I think this is harassment. And then we have, eh, we have.

• 47:31Anthony Pompliano?

  We have content court.

• 47:32Speaker 02

  We have, we have, we have laws for this. We have amendments for this. We have the civil, we, we have, we have laws that we have decided in a democratic environment that decide if that is harassment or not, and if it's punishable by law or not. And so I will click, and then some guy in court, it'll be a computer go like, okay, now, now, now we'll go to court and they'll be, we'll see, you see your day in court, and they'll be judged, and we'll decide. I'm not sure why this is the hands of these guys.

• 47:57Anthony Pompliano?

  Jonathan, why did you tweet this?

• 47:59Speaker 02

  Right?

• 47:59Anthony Pompliano?

  Okay, how did you feel when you got it?

• 48:01Speaker 02

  I mean, if it's worth, if it's worth discussing, and it needs to be solved by a third party, then we have courts for this. And then maybe we need to hire more people in court. And we have, and then content moderation shouldn't happen in a Deloitte factory in, in Pakistan. I mean, maybe it should happen in, in our local courts. Like, my point is that, I don't think they want this. The government doesn't want to take it.

• 48:22Anthony Pompliano?

  Everyone wants to point fingers at each other.

• 48:24Speaker 02

  Which is the point that I'm making, then maybe they should have a project to develop an API interface into the courts and all these guys. I don't think the government wants to do that. I don't think they want to staff that up. I don't think they're capable of doing it. I don't think they want to deal with the consequences. And so I think Mark and all these guys rightfully so are saying, I think it's you. You need to tell us. I wasn't democratically elected, right?

• 48:44Anthony Pompliano?

  Yeah, what are the rules and then we can apply?

• 48:47Speaker 02

  I can decide to kick someone out on my own terms, but if you're asking me to kick someone and you're complaining that I didn't do it, then then then maybe you should, you know, maybe, maybe, maybe it's on you.

• 48:56Anthony Pompliano?

  Do you worry, do you worry, Sarno, do you worry that when we get into that world, there is the nation state or the court system now choosing who gets silenced, who doesn't?

• 49:07Speaker 02

  It's, well, I think, I think that's right. I think it's impossible. I think the nation state-

• 49:12Anthony Pompliano?

  That's just as bad as asking Mark or Jack.

• 49:14Speaker 02

  I think the nation state model, it's not compatible with this. You know, I think I almost imagine the world like the medieval times, but, but we have like the Amazon kingdom and we have the Facebook kingdom and it spans across, you know, geographies. And so, so I don't think the nation state is like the right tuning for this. I think Jack is right in saying maybe, maybe, maybe something like Bluesky, maybe, maybe no one owns it.

• 49:37Anthony Pompliano?

  Yeah, maybe you kind of choose your own adventure.

• 49:39Speaker 02

  Maybe you choose your own adventure and it's on you. And I think we just trust people to make the right decisions. And again, maybe there are courts and courts can, but this is not so centralized. So, so I don't know. I think going back to the initial point, I would imagine, I don't know him and you know, I don't, I wouldn't presume that I know him by tweets, but I would imagine he doesn't like going to content moderation meetings. I would imagine that's a pain. And I would imagine he recognized Congress asking questions about bets they made among each other and like showing at times complete ignorance of technology, which is scary as he is a steward of that company, that he says, now we have a technology where a way of not concentrating power in this way.

• 50:22Speaker 02

  So I don't think people like power, even they want to have it at the end.

• 50:26Anthony Pompliano?

  And it also brings up like, is it so much that power gets eliminated or the power basically gets given to something that can't abuse the power, right? So Bitcoin being kind of the quintessential example of like, if you take the power from those that have it today and you make Bitcoin more valuable and that becomes the global store of value, let's say. You didn't really destroy power, right? What you did was you just shifted it. But you shifted it to an inanimate object that basically is programmatic. It's transparent. It's somewhat democratic in terms of things could change if everyone agrees or a large majority of people agree. But it's still powerful.

• 51:03Speaker 02

  Right. I think the way to think about it is, and I think people sometimes, I think, I think a weak vector of attack to Bitcoin is when people say, oh, you told me Bitcoin is gonna, you know, make some sort of like egalitarian financial world. But see, the rich keep getting richer. Oh, the rich are continue to gonna get rich. Of course, I mean, if you have money and you convert it and you buy the right asset and appreciate it. So Bitcoin is not gonna make the poor rich magically in some, or none of these technologies. But I do think it eliminates power in the sense that, again, very narrowly, like if you are the chairman of the Fed in the US and you are taking a bunch of considerations to decide what you're gonna do with your monetary policy with the interest rates.

• 51:48Speaker 02

  And some of them are in the benefit of some people, some of them are in the benefits of some other people today, or intergenerationally, maybe good for us and horrible for our kids.

• 52:01Speaker 02

  To the extent that Bitcoin becomes like a true store of value, the way the US it is in some guys, in some cases, in the kind of balance sheets of central banks in other nations. That's gone.

• 52:13Speaker 02

  That's gone. It's the monetary policy for Bitcoin is predictable and nonchangeable. And so that little piece of power, I mean, not fully, as I said, I believe the US dollar will continue to be very strong, but you've taken some of that out. So, and who has that power? Really, we gave the power to an algorithm.

• 52:29Speaker 02

  So the algorithm is really powerful right now.

• 52:31Anthony Pompliano?

  And so when you think about that, it's this weird world where you're basically giving power. Like, I always go back to just like, the robot overlords are here and we love them.

• 52:40Speaker 02

  Yeah.

• 52:42Anthony Pompliano?

  And, you know, you let the algorithms do everything from tell you what content to consume, what direction to drive down the streets, right, to what search results, to where to eat.

• 52:55Anthony Pompliano?

  So what happens with the monetary policy?

• 52:57Speaker 02

  I find that argument to be completely kind of non-threatening to me. I mean, I think we are made to be bionic from the get-go.

• 53:06Anthony Pompliano?

  But.

• 53:06Speaker 02

  We also have.

• 53:07Anthony Pompliano?

  Okay, explain that.

• 53:08Speaker 02

  But what I mean by that is that we came up with tools very quickly. At some point, we start, we stopped, you know, scraping the earth with our nails and we invented a shovel. And without the shovel, a bunch of stuff would have been impossible. So it is an inorganic extension of our body for all sense and purposes. Right? You could not function without the clothing and the heating and the cameras. And these are like true inorganic extensions in our bodies. So I mean, bionic in the sense that I don't think we're fully our biological matter. I think we are all these things that we, you know, Steve Jobs has this kind of beautiful like computer is the bicycle of the mind.

• 53:47Speaker 02

  It really is like your mind works differently and gets wired differently and moves faster and to different places through the technology. So I'm, I don't see why it's a bad thing to depend on the cellphone to give me the weather. And I don't see why it's a bad thing if we agreed, as we said before, or not everyone agrees. But many of us agrees that monetary policy should be independence from fiscal policy and predictable. That we make it so by using computers. I don't find that threatening at all.

• 54:12Anthony Pompliano?

  I don't think it's a bad thing.

• 54:13Speaker 02

  Yeah.

• 54:14Anthony Pompliano?

  What I think is fascinating is as we do more and more of this across our life, do we basically take power from humans and continue to give to algorithms? It's actually probably a pretty good thing. Like, imagine, um, somebody recently told me that they're, they have a father who's older. I don't know how old he is, uh, and he still looks at MapQuest before he goes on a trip.

• 54:36Speaker 02

  Yeah.

• 54:36Anthony Pompliano?

  And he tries to memorize all the turns.

• 54:37Speaker 02

  Yeah.

• 54:38Anthony Pompliano?

  And they're, they get in the car with them like, hey.

• 54:39Speaker 02

  Yeah, is that better?

• 54:40Anthony Pompliano?

  You can use the GPS, right? And he's like, no, no, no, like, I got it.

• 54:44Speaker 02

  Yeah.

• 54:44Anthony Pompliano?

  And so, pretty, you know, uncontroversial to say like, no, using the GPS would be better.

• 54:52Anthony Pompliano?

  But as we do that more and more, people just have to get comfortable with the fact that like the algorithms have the power, but if they're decentralized and no one controls them. Cause I think that's the problem right now is when you think of like big tech, right? Like, let's take the argument that against the technology companies.

• 55:05Speaker 02

  Yeah.

• 55:05Anthony Pompliano?

  It's not so much that the technology has power. It's that somebody controls the technology.

• 55:11Speaker 02

  Yeah.

• 55:11Anthony Pompliano?

  Facebook was completely decentralized and nobody controlled it. How many people would really be mad at Facebook?

• 55:18Speaker 02

  Eh.

• 55:18Anthony Pompliano?

  Yeah. I think a much, much less amount of people are mad if it's decentralized.

• 55:23Speaker 02

  Useful that Mark is a human and has a face and you can point at it.

• 55:27Anthony Pompliano?

  Bad guy.

• 55:27Speaker 02

  Yeah, it's very easy.

• 55:29Anthony Pompliano?

  Right? And.

• 55:30Speaker 02

  Very unfair also, I think.

• 55:32Anthony Pompliano?

  And I think that when you take that out of the equation, like in a situation with Bitcoin, there's nobody to point to.

• 55:40Speaker 02

  I think that's true. I think the other piece, so related to the pointing, which is right, there's no one to point to. But I think the other reason is that it affects, I think what follows from that, I guess is it upends our model for responsibilities and liabilities. So here's an example that I used to hear before that I think is interesting. You know, algorithms are getting more into healthcare, right? And if you think of it from like a machine vision standpoint, reading a two dimensional, black and white image is not, you know, it's not harder than having a car drive itself. Just to put it that way, right? And, and so, and so you tell people and you're like, well, the best human radiologist or whatever

• 56:21Speaker 02

  it is analyzing the image will make, you know, 10% mistakes, 90% accurate. And then let's assume the machine is like 97% accurate, 3% will make mistakes.

• 56:33Anthony Pompliano?

  So machine is better than humans.

• 56:34Speaker 02

  Right. If the human makes a mistake, who's responsible? The human. It's very simple and there's, we have legal code that supports like ways to manage this and ethical conduct and moral rules and so forth to deal with this. He'll say sorry, it'll be a bunch of stuff that will happen, right? And emotional and so forth.

• 56:52Anthony Pompliano?

  Or gaslight us, but yeah.

• 56:54Speaker 02

  Yeah. Yeah. Now there is the algorithm making a mistake. Who's responsible? I have, even not having who to blame is problematic from like an emotional standpoint. Now is it the creator of the algorithms to blame? Who, who, will he lose a medical practice? Like, will he be judged for my practice? It's very hard from like our models to figure out who to adjudicate responsibility now.

• 57:17Speaker 02

  Unlike Google Maps, but you can imagine Google being a nefarious actor, rerouting you from what it seems to be, you know, a low traffic kind of green path outside of the highway to kidnap you and take your car. They don't seem to be motivated. They don't seem to care too much about you and me, right? To go and do that. But you could imagine that. The same way you could imagine that for healthcare. Bitcoin is pretty dumb from a computational standpoint. It's not gonna reassess, you know, it adjusts. I mean, you could not predict potentially like the hashing power, but it's being used at some point, but it's like a one, you know, one derivation from

• 57:59Speaker 02

  the kind of core algorithm that kind of it's mining at a certain rate on certain blocks on certain time. And that's not, so it's actually, actually almost dumb. Meaning I find the monetary policy of Bitcoin to be way less threatening. Imagine being a macroeconomist or a macro hedge fund manager and you're waiting for Mr. Powell or whoever is the Fed guy. Have you seen these guys reading T Ls?

• 58:23Anthony Pompliano?

  The conference room or the conferences. Yeah, yeah.

• 58:25Speaker 02

  Have you seen the like the?

• 58:26Anthony Pompliano?

  What tie? What color tie? Did he say the word dovish or not? It's hysterical. It's astrology for grown men.

• 58:32Speaker 02

  It's sad. It's astrology for grown men. That's exactly right. So you're gonna tell me that that's more reassuring than a dumb algorithm that I told you in advance what's gonna do and it's telling you predictively what's gonna do on something where you want something extremely predictable. So I would argue that, I mean, the machines are coming. It has a bunch of implications that are serious and we should be concerned about them. I think people should look at Google Maps and see what we, how much we trust them and how insignificant we are, each of us, to Google. Like they don't gain anything, you know, doing anything to us.

• 59:04Anthony Pompliano?

  They appreciate us opening the app, but that's pretty much.

• 59:06Speaker 02

  That's pretty much it, right?

• 59:07Anthony Pompliano?

  Please click on our ads.

• 59:08Speaker 02

  But to the extent where algorithms can become kind of making this more important decisions for us, to your right. The fact that it's not controlled, that it's open, that it's inspectable. That's the other thing. You can see the code for Bitcoin. You can see it running. And the fact that it's not controlled by anyone is actually pretty powerful. You're right.

• 59:23Anthony Pompliano?

  You could also argue that, go back to the algorithm that is analyzing the 2D image. And with a 3% error rate, if it was open source, it probably would be improved over time.

• 59:34Speaker 02

  A hundred percent.

• 59:35Anthony Pompliano?

  Right? Just get more and more eyes on it, right?

• 59:38Speaker 02

  A hundred percent.

• 59:38Anthony Pompliano?

  And then all of a sudden you put a couple of million of dollars as the reward.

• 59:42Speaker 02

  Right? Right? And I think the other point is that. It it has a path to learning and improving that may be close to a human. I mean, you look at a lot of the stuff that has happened with DeepMind and the Go games. The puzzling thing is the path that they take to win. And that's kind of partly how they win, because the guy looks at it and go like, I don't, I don't know what strategy you're following. But they found this kind of, you see this also on, I don't know if you, this company called 3D Metal. It's also Venezuelan guy, by the way. And and you see that they they kind of programmatically build pieces that have to, you know, perform a function in a machine. And they end up looking kind of alien. They're not what you would imagine.

• 1:00:23Speaker 02

  The the algorithm finds the path of like optimal weight and and cost and whatnot. That is not what you expected. So I find that amazing, right? And they'll find solutions that we're not finding.

• 1:00:34Anthony Pompliano?

  It it's um, I think people have jumped all the conclusions. Maybe it's Facebook where they had like two algorithms supposed to were like talking to each other or something. They're like, oh, shut this down. We don't know what they're saying, like Terminator style, like whatever.

• 1:00:46Speaker 02

  Microsoft had an issue with this, like a bot that went nuts on Twitter.

• 1:00:49Anthony Pompliano?

  Yeah. And and when you kind of see it, you're just like, look, uh, sure, there's risks here, whatever.

• 1:00:56Speaker 02

  Yeah.

• 1:00:57Anthony Pompliano?

  But most of this is pretty simple. And I think your point about like, get rid of all the noise. Just focus what exactly this is. It's a predictable monetary policy, and that's pretty powerful on its own. It doesn't need to have all the bells and whistles and this and this and that. But no, it's just, this is what it does.

• 1:01:11Speaker 02

  Yeah, and I think in the case, it's like, what's sophisticated about Bitcoin is not the monetary policy. It's actually very simple. What's sophisticated is your, is the protections that had put in place. So it's permissionless, that it cannot be censored, and it's very hard to attack. That's what makes it amazing. Actually, the actual monetary policy is what we all want. Very simple, very, very simple.

• 1:01:34Anthony Pompliano?

  Yeah. Before I let you go, because I know we're running out of time here.

• 1:01:39Anthony Pompliano?

  When you think back over your career in technology, what's like the one or two biggest lessons that you've taken away that you think people in the Bitcoin crypto kind of decentralization world could benefit from? Are there specific lessons, whether it's around, you know, building teams, building certain types of technology, servicing user bases? Like, what do you think are like one or two really big lessons that you're like, you know what? If I'm at one of these companies right now, or I'm building one of these projects, here's two things that I think is like pretty applicable across the board.

• 1:02:09Speaker 02

  Let me see.

• 1:02:10Anthony Pompliano?

  Very simple question.

• 1:02:10Speaker 02

  Yeah, yes, yeah. I think one aspect that I feel more confident in saying is that I think when new technologies come, I think a broad mistake in technology businesses is that we tend to try and fill market holes. We see the market and we're like, why don't we have a Uber for dogs? Right? And so in that type of game, you know, dog walkers are important and it has the same type of supply and demand, etc. And that type of kind of thought process, kind of very kind of system-wide to an application, sometimes yield good results for sure, but often it just yield unproductive things.

• 1:02:50Speaker 02

  Because that type of thinking often is the opposite of what like, you know, PJ and YC guys would say, which is build things people want. And so sometimes that market hole is there for a good reason. No one cares. Right? And so particularly when a new technology comes, you know, we start learning, we start learning to do things with like deep learning and some kind of machine learning stuff. A bunch of the applications built around that are built because it can be built, not necessarily because people kind of want any of this. What happens with crypto to some degree is that it allows for a lot of things to be built that were not possible to be built in the past. And, and I don't know if that's avoidable in any meaningful way, but certainly I think a good reflection is to think, well, am I just tinkering with the technology?

• 1:03:34Speaker 02

  Because I think it's cool and because I see the system and I find a hole and I think a plug goes there? Or do I actually have some sort of validation for demand and to understand what the money is coming from? And to understand the customer needs and that type of stuff? I think that's, I think that's one. And the other problem, which I think it's kind of, I think there's many camps around this. But I think one of the problems that I've seen particularly with crypto is things over-financed. Right?

• 1:04:01Speaker 02

  You know, a lot of money is very problematic.

• 1:04:04Anthony Pompliano?

  You and I have talked about this before, is the idea that you can starve a company or a product by not having enough money. But you can also

• 1:04:13Speaker 02

  drown it.

• 1:04:14Anthony Pompliano?

  Suffocate them, right?

• 1:04:15Speaker 02

  Right?

• 1:04:16Anthony Pompliano?

  Literally give them so much money that all of a sudden they don't worry about money. And very quickly, they spend it all.

• 1:04:22Speaker 02

  Yeah, sometimes you have to stop taking money, even if it's being offered to you. And it's very hard, but it's very important. And I think that's true because again, people who would argue against this point would say money's not always available. So you should take it while you can. There's some truth to that. I think the counter argument, which I'm trying to present is that and this is true of corporations and of individuals, is that when you have more money than you know what to do with it, you tend to start making silly decisions. You start not seeing trade offs, trade offs get off, you're skated by money. And so you throw money out of it in the hopes that the trade off would kind of go away, but the trade off is like in the metal of the consumer experience of the product. So you have to go fix for that and not just throw money at it.

• 1:05:02Speaker 02

  Or you may kind of grow too quickly and kind of get the wrong user base. And then there's like the practical implication that if you're a shareholder or like a token holder and have an equity holder of an asset that has been vastly overpriced, then you know, it's like a highway where you just start taking exits, exits, exits out of the highway, right? And you're like, well, now I have to get the tank to make it all the way from Miami to West Palm Beach because I took all the exits out. And that seems sometimes, you know, there's some value in burning the bridges for sure. But, um, but I think it's, I think you, I think you calculate, you're like, okay, it's very far, but, but, but I know the jump that I'm making, I know what it's going to take and you know what I mean? So.

• 1:05:41Anthony Pompliano?

  It almost feels like rationality is the holy grail, right? It's if you can rationally assess what do people actually want? Probably you're gonna build something valuable. You can rationally think through underfunded versus overfunded. Right? You can kind of find that moderation and say, hey, this is what we need. Right? If you can kind of think through all these things, it really just boils down to, and I think one of the things that you do so well is just like the clear thinking. Right? And kind of the rational thought ends up being an advantage when the world is so irrational or people around you are so irrational.

• 1:06:16Speaker 02

  I think also, I think it's an issue of like sticking to first principles, right? Which is what allows you to say, as we were saying before, you know, divide the kingdom in one epoch and then like 200 years later say, you know, unite the kingdom. And you're being principled and you haven't really changed them. I think the same thing happens. I think you can be widely risk-taking and bold in kind of your vision and the product making and what the technology needs to do, or the thing you're trying to achieve in crypto or otherwise, and then be widely conservative on the management of your funds. Until you know what to do with them. And I think you have to be able to like, and it's, and it's not, I don't think that's in conflict. And I think it's a certain perspective, which is the one that I were warned against, that make you think those things are in conflict.

• 1:06:59Speaker 02

  And you're like, well, if I'm super bold, I'll take all the money, then I'm like, well, maybe not, maybe yes, sometimes yes. I mean, if you're Uber and you're competing on the ground, maybe you do that. But even then, maybe you overextend yourself and maybe you shouldn't have gone to Asia. You should have stayed here. Maybe yes, maybe not, you know, who knows? And they own a bunch of Didi and maybe that was a brilliant idea. But my point is that sometimes the correct thing maybe to take all the money in the world, it often is not. And I think in crypto, just because how things are, maybe problematic.

• 1:07:28Anthony Pompliano?

  I tend to think that you're right.

• 1:07:31Anthony Pompliano?

  Where can we send people to find you on the internet or read more of the stuff you write?

• 1:07:36Anthony Pompliano?

  What's your Twitter account?

• 1:07:37Speaker 02

  My Twitter account, yes. Okay. Jgheller. So that's J G H E L L E R.

• 1:07:41Anthony Pompliano?

  All right. And then when you write?

• 1:07:43Speaker 02

  I started a little blog, gheller.co. So G H E L L E R dot co.

• 1:07:50Anthony Pompliano?

  All right. You're not gonna say it so well. It's very, very good. Heavily, heavily underrated. I've tweeted a couple of times.

• 1:07:58Speaker 02

  You have.

• 1:07:58Anthony Pompliano?

  A few of them.

• 1:07:59Speaker 02

  You bring a lot of people.

• 1:08:00Anthony Pompliano?

  Cause I actually find them valuable. So I highly suggest go to gheller, G H E L L E R dot co. And they can read it there.

• 1:08:08Speaker 02

  Yeah.

• 1:08:08Anthony Pompliano?

  All right. And then follow him on Twitter.

• 1:08:10Speaker 02

  Oh, my God.

• 1:08:11Anthony Pompliano?

  Thank you for doing this.

• 1:08:12Speaker 02

  Yeah, that's fun.

• 1:08:12Anthony Pompliano?

  All right. We'll do it again in the future.

• 1:08:14Speaker 02

  Yeah, let's.