Charlie Lee, Founder of Litecoin: Crypto's Decade Long Evolution

Charlie Lee is the founder of Litecoin. In this live conversation, Charlie and Anthony Pompliano discuss the early days of Coinbase, why Charlie originally built Litecoin, how crypto has evolved over the last decade, what the current challenges in the industry are, and where Charlie sees Bitcoin and Litecoin going in the future. ----- Monarch is building the future for those interested in one wallet that consolidates the best services and functionality into one simple and easy to use app, Monarch will empower users to control all aspects of their Financial Kingdom from the palm of their hand. You may have heard the phrase “Not Your Keys, Not Your Crypto”. With Monarch, you own your keys and seed, meaning You own your crypto. With Monarch, you can Store, Receive, Send, Swap, Buy, Sell and earn interest on Crypto, track your portfolio, the news, the market cap and more today! We're constantly adding new services and updates too! Learn more today by visiting MonarchWallet.com/pomp or download the wallet for FREE today from Apple or Google. Visit https://monarchwallet.com/pomp/ to get your free tokens! ----- 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?

  Charlie Lee is the founder of Litecoin. In this conversation, we discuss the early days of Coinbase, why Charlie originally built Litecoin, how crypto has evolved over the last decade, what the current challenges in the industry are, and where Charlie sees Bitcoin and Litecoin going in the future. I really enjoyed this live conversation. I found Charlie to be both intelligent and entertaining, and I hope you enjoy it nearly as much as I did. The decentralized Monarch Wallet is bringing the best of all crypto services to one wallet, the Monarch Wallet. You can buy, sell, swap, and send thousands of cryptocurrencies. You can even earn interest, use their portfolio tracker, keep track of the news, and do much

• 0:55Anthony Pompliano?

  more. All you have to do is go download it today on Apple or Android. Monarch, rule your financial kingdom from the palm of your hand, today.

• 1:04Speaker 01

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

• 1:31Anthony Pompliano?

  We are live at CIS. Thank you for doing this.

• 1:35Speaker 02

  Yeah.

• 1:36Anthony Pompliano?

  What's been going on? How are things going?

• 1:40Speaker 02

  Well, the price is up.

• 1:43Anthony Pompliano?

  People are excited about prices being up.

• 1:45Speaker 02

  Yeah, I'm gonna take full credit for the price going up.

• 1:49Anthony Pompliano?

  All right, we'll get into that, why that happened.

• 1:51Speaker 02

  Well, I get blamed every time the price goes down, so might as well get something out of it.

• 1:56Anthony Pompliano?

  Before we get into what's going on today, let's talk about your background. So a lot of people know you as Charlie Lee, founder of Litecoin and Crypto Bull, if you will, but you had a life before crypto. Maybe let's talk about kind of growing up and then how you got to Google.

• 2:14Speaker 02

  Sure.

• 2:15Speaker 03

  Yeah.

• 2:16Speaker 02

  What do you want to know?

• 2:17Speaker 03

  Where'd you grow up?

• 2:18Speaker 02

  Um, I grew up in Ivory Coast.

• 2:21Speaker 03

  Okay.

• 2:21Speaker 02

  So, West Africa.

• 2:22Speaker 03

  Got it. And came to the US when?

• 2:25Speaker 02

  When I was thirteen.

• 2:26Speaker 03

  Thirteen?

• 2:26Speaker 02

  Came out to, uh, New Jersey, uh, for boarding school.

• 2:30Speaker 03

  Mm-hmm.

• 2:30Speaker 02

  And then went to, uh, MIT for college.

• 2:33Speaker 03

  Got it. What was the, uh, the experience going from West Africa to New Jersey? We could've sent you a lot better places than New Jersey.

• 2:40Speaker 02

  Pretty drastic. I mean Ivory Coast was really hot and New Jersey's really cold. So, um, and then also like boarding school, so living just by myself. And so it's a pretty drastic move here.

• 2:53Speaker 03

  Yeah. And, uh, you did this for high school?

• 2:55Speaker 02

  Yeah.

• 2:55Speaker 03

  Okay, got it. And, uh, before you came to the US, how technologically savvy were you? Were you into computers, not into computers?

• 3:03Speaker 02

  I was. Um, my dad got us a Apple II GS, um, way back when, when I was like ten or something.

• 3:11Speaker 03

  Yeah.

• 3:11Speaker 02

  So, started doing some basic programming. So really got into computing.

• 3:16Speaker 03

  Got it. So you're into computers and obviously not smart because you ended up at MIT.

• 3:21Speaker 03

  What, uh, what'd you study there?

• 3:23Speaker 02

  Uh, computer science. Sure figure, yeah.

• 3:26Speaker 03

  And, uh, and then while you were going to school, what did you think you were gonna end up doing?

• 3:31Speaker 02

  Um.

• 3:31Speaker 03

  Do you have a plan?

• 3:32Speaker 02

  I planned to create the currency that I created.

• 3:38Speaker 03

  Alright, so while you were in, uh, MIT.

• 3:40Speaker 02

  Well, I mean, I was really, I loved computer science and I guess from an early age, I really loved programming. So, um, going to MIT, study computer science, electrical engineering and, yeah. Didn't actually know what I was gonna do afterwards.

• 3:54Speaker 03

  Yep. And you go to Google right out of MIT?

• 3:57Speaker 02

  No, I went to, um, well, I went to Silicon Valley out of MIT. Um, worked for a couple startups before Google.

• 4:04Speaker 03

  Got it. And why leave startups and then go to, at the time, what was another startup, right?

• 4:10Speaker 02

  Yeah. Uh, why go to?

• 4:11Speaker 03

  Cause you jo- you joined when? Google?

• 4:13Speaker 02

  Um, let's see.

• 4:16Speaker 02

  Two thousand and seven, I think.

• 4:20Speaker 03

  Yeah.

• 4:21Speaker 02

  Two thousand and seven.

• 4:22Speaker 03

  Got it. And so why leave kind of the early-stage startup stuff to go to Google?

• 4:28Speaker 02

  Um, well, I mean, Google is such a big name, right? It's a great company, great benefits, just heard lots of great things about it, so.

• 4:37Speaker 03

  Got it. And what were you doing there?

• 4:40Speaker 02

  Um, I worked on a few products, YouTube, mobile, Chrome OS, and also Google Play Games.

• 4:48Speaker 03

  Got it. And in, if I remember correctly, in two thousand and eleven is when you first discovered Bitcoin and crypto? Or what was that first time you you came across it?

• 4:58Speaker 02

  Um, I think it was like a Wired article about Silk Road and how it was exclusively using Bitcoin.

• 5:08Speaker 03

  Hmm.

• 5:08Speaker 02

  Um, after reading that, I just had to figure out what the heck's Bitcoin.

• 5:13Speaker 03

  What what did you do then in two thousand and eleven? Right? You you hear about this digital currency that's being used to basically buy drugs and, you know, stuff. How do you go learn about it, right? It's not like there's a bunch of media coverage. There's not a bunch of, you know, blog posts and Twitter accounts. What do you do?

• 5:29Speaker 02

  Yeah, so, I mean, obviously read the white paper, right? And then, um, back then, the community was extremely small. Um, it was basically just the Bitcoin Talk forum. So everyone in the Bitcoin space was reading and writing on that forum, BitcoinTalk.org. Um, yeah, I also remember in two thousand and eleven, we had the first Bitcoin conference in New York. And pretty much like the whole community went and met each other in New York. And back then, it was a really small community. I mean, no, everyone's really, um, really into and excited about Bitcoin, but no one had any idea what it will become, just very excited about what what the possibilities are.

• 6:12Speaker 03

  Yep. And you're doing all this while you're at Google. Are you talking about it internally with people? Is it kind of a taboo to talk about this decentralized digital currency? Or what was the relationship between the two?

• 6:23Speaker 02

  Wasn't really talking to anyone about it. Um, I mean, it's still still like fairly new, like you didn't expect anything of it.

• 6:28Speaker 03

  Hmm. Yeah. And then you start Litecoin in what, two thousand and thirteen?

• 6:33Speaker 02

  No, uh, October twenty eleven.

• 6:35Speaker 03

  Oh, you did in twenty eleven. Okay. What was the genesis for why to start it and what were you trying to to build?

• 6:41Speaker 02

  Um, so.

• 6:45Speaker 02

  Back then, I traded Bitcoin locally with people, like meeting up at, meeting a random person at Starbucks or McDonald's. I don't know if anyone's, you guys have done that, but it's a pretty interesting experience.

• 6:59Speaker 02

  Especially when-

• 7:01Speaker 03

  Especially in 2011.

• 7:02Speaker 02

  In 2011, especially when they, they send me a Bitcoin, right? And it takes like an hour to confirm. So every now and then it takes like that long, right? So you're sitting across this other person that you just met and you're not sure if they're trying to scam you or not, waiting for Bitcoin transaction to confirm. So at that point, I realized like it's slow, right? At least for this experience. So before Litecoin came out, there were a few other altcoins. And one of them called Solidcoin had a, like a three-minute block time. And if you actually use like Solidcoin back then compared to Bitcoin, it just feels a lot faster.

• 7:43Speaker 02

  So I know that when Satoshi picked the 10-minute block times, it's a, it's kind of just a guess, right? There's no, it's hard to say what's the optimal time. So for Litecoin, I decided to make it faster.

• 7:59Speaker 03

  Got it. And so for those that don't know, explain the main differences between Bitcoin and Litecoin.

• 8:04Speaker 02

  I mean, the main difference is that it's four times faster. So it's two and a half minutes for block confirmations. And it has four times as many coins and uses a different proof of work. So the key things I wanted to do when I created Litecoin was to just make it faster. And also make it so that it uses a different proof of work algorithm. So it's not competing with Bitcoin for miners. Cause I realized you don't, it's, it's hard to survive if you're competing with Bitcoin for miners. And I created Litecoin mainly just for fun, right? Just to back around with the Bitcoin gold base and- Just launched something that I thought was better than all the other altcoins out there at that time.

• 8:44Speaker 03

  Hmm. And the reason why you were buying Bitcoin in Starbucks and McDonald's was basically because there was no infrastructure at that time.

• 8:51Speaker 02

  Yeah, there was um, Mt. Gox, right?

• 8:55Speaker 03

  Never heard of it.

• 8:56Speaker 02

  Never, what's that?

• 8:57Speaker 03

  Never heard of that one.

• 8:58Speaker 02

  Never heard of it. Um, awesome exchange. Uh, but you had to wire uh, money to uh, a bank in Japan. Or use a money transfer, like a payment processor service that takes a fee. It's kind of really hard to get money into Mt. Gox.

• 9:14Speaker 03

  Hmm.

• 9:15Speaker 02

  Um, so it's easy to just uh, use local Bitcoins and meet someone in person and chat about Bitcoin and buy Bitcoins. There, there weren't really any scammers back then.

• 9:25Speaker 03

  Yeah. Well, a- any like ridiculous experiences when you were meeting up with people or anything that like you're really scared or you now laugh at?

• 9:34Speaker 02

  Um, I mean, I laugh at it because it's just a funny experience, like meeting a random person and like trading real money for fake money, right?

• 9:45Speaker 03

  Well, is it fake money or is it just digital money?

• 9:47Speaker 02

  Digital money. Who knows, right?

• 9:49Speaker 03

  Yeah. And so from like two, two thousand and eleven, see they're warming up, they're waking up. Uh, from two thousand and eleven until let's say kind of sixteen, pre this last bull market. Wha- what are some of the things that really stood out to you as uh, milestones along the way that that helped us get to where we are today?

• 10:10Speaker 02

  Um. Hmm.

• 10:15Speaker 02

  As milestones?

• 10:16Speaker 03

  Um, or just like the big moments that you're like, you know, what I really remember when this happened, you know, it felt like, hey, this was going to become more real than we previously thought it was.

• 10:26Speaker 02

  Funny thing is I remember all the bad moments, like China banning Bitcoin or exchanges getting hacked. Um, but I mean, just slowly over time Bitcoin became just more and more for sure, right? When I first found out about it in two thousand and eleven, it was just like a fun little thing. No one knew where it's gonna go.

• 10:47Speaker 03

  Hmm.

• 10:47Speaker 02

  Um, chances of it succeeding was like close to zero percent, right? So, um, yeah, but today it's like so different.

• 10:58Speaker 03

  So if, when you first learned about it in two thousand and eleven, let's say it was single-digit percentage probability it was going to be successful, where would you put that percentage today?

• 11:08Speaker 02

  Well, it's already successful, right? It depends on where you consider success, right? Will it become? I think like when I first found out about Bitcoin, I really thought it would. It's like the best form of money that even civilization has ever seen. And so I think it will. I believe that it will eventually become like a world reserve currency.

• 11:30Speaker 03

  Do you think that as Bitcoin kind of marches towards that global reserve status? It needs to displace the existing global reserves? Or can it just be another option? Kind of they can coexist as global reserve status?

• 11:46Speaker 02

  I think it will coexist. I don't think, yeah, currency is going anywhere.

• 11:51Speaker 02

  Definitely not in my lifetime. It's my belief. But it's, yeah, it'll coexist fine.

• 11:59Speaker 03

  And how do? You know, if you take Bitcoin as this is the blue chip currency that is most likely to succeed in doing that? How do you view all of these other kind of cryptocurrencies, right? So not the utility tokens, not the other stuff, but the actual digital assets that are trying to serve as a currency? What's there?

• 12:19Speaker 02

  I think there will be like a handful of currencies that actually have real value. Right? So I never thought Bitcoin would be the one and only.

• 12:30Speaker 02

  And as far as how many will actually have real value, it's, I don't know. But I just think there will be a few. It won't be like a thousand currencies all have value. It'll be Bitcoin will be the major one and there'll be a few other ones.

• 12:42Speaker 03

  Yep. And then most of the ones that I think you and I would say have the high probability of being successful today are not backed by governments. But more and more, I think central banks are starting to look at, should they participate? Should they issue their own kind of tokenized fiat currencies? How do you think that plays out? Does that actually impact anything that's happening in the decentralized digital world? Or is that kind of separate and just again, it coexists?

• 13:08Speaker 02

  I think it will be good. I mean, it will be different, right? So if it's backed by a government, it's not decentralized, it's not. It's not really sound money, so it's, it'll be useful. It'll be useful if you have a government-backed digital currency that you can easily swap between that and Bitcoin. You can store your, as a store of value, you would put your money in a decentralized cryptocurrency, but for usage, maybe a government-backed, stable coin would work just fine.

• 13:39Speaker 03

  And it feels to me like for the use cases, there's a need for different currencies. But what we see today is the things that, let's say, you know, go to any country in the world, you want to walk across a border with a currency. Bitcoin may not be the best thing, right? Just given the price volatility. If all you want to do is preserve the, you know, the wealth that you have for a short duration period of time, it's probably not the best.

• 14:04Speaker 02

  Well, but this is just the current situation, right? I believe over time Bitcoin will become more stable, will be less volatile.

• 14:15Speaker 03

  So I agree with you on that. I guess my question is, because it's going to take time to get there, right? There's kind of a maturation of the technology, the adoption and the technology. Does that leave the window open for large corporations or governments to step in with alternative options? And if they kind of wake up and realize that there's value here and they go ahead and they issue that stuff, can it take some of the wind out of the sails of Bitcoin? Or do you think that this is, you know, so inevitable and so unstoppable that no matter what those guys do, it's not going to matter?

• 14:48Speaker 02

  I think it's pretty unstoppable. I do, I do believe that it's, it's, you can't easily, like, government-backed currency can't compete with Bitcoin.

• 14:59Speaker 03

  Yep. Yeah. Got it. All right, so let's switch. Before we got up here, I asked everyone what they wanted to talk about, and they wanted to talk about trading.

• 15:09Speaker 03

  So Charlie Lee may be the greatest trader in all of crypto, is a constant thing that was in the responses. Talk about 2017, the bull market, kind of what you were thinking. And then obviously, when you sold all the Litecoin, I think everyone just looks at that as like the sentinel moment of, you know, at or near the top.

• 15:30Speaker 02

  Yeah, so I've I've been in this space for like eight years now. I've seen like many bulls in bear market, right, like three or four. So I've seen, when I first got in, the Bitcoin price was thirty dollars. It's cheap, but then when I bought it, it crashed to like two within the next year, right? So that's like an over ninety percent, ninety percent drop in price.

• 15:54Speaker 02

  And a lot of people thought Bitcoin was dead, right? Drop from thirty to two dollars, so it must be dead.

• 15:59Speaker 03

  Two is much closer to zero, by the way, than three thousand, right? Just just for everyone keeping track.

• 16:04Speaker 02

  Well, it's all it's all relative, right?

• 16:06Speaker 03

  Of course.

• 16:06Speaker 02

  So we currently we drop like eighty percent or whatever.

• 16:09Speaker 03

  Yep.

• 16:10Speaker 02

  Numbers, so.

• 16:13Speaker 02

  But the thing I saw was that the fundamentals of Bitcoin didn't change. If anything, it got better over that one year period. And the same thing for what happened last year, right? The price of all cryptocurrencies dropped eighty to ninety percent. But for, I would say, just like the strong ones, right? The fundamentals didn't change. Anything were getting better. We have like back coming out. We have potentially ETFs getting approved. It's just getting more and more mainstream. So the price does what the price does, right? It gets pumped up to a really high and then it will drop back down. It'll just, it's trying to figure out the reason why it's so volatile is because no one really knows the future, right? And for a company, the the future is within a certain range.

• 16:58Speaker 02

  So the price doesn't fluctuate that much. But for like Bitcoin, the future Bitcoin, it could become the world reserve currency or it can be dead in a few years, right? So the future, the the difference is so high, so that's why it's so volatile. Like an exchange gets hacked, Bitcoin price like takes a dump because people think that you can't secure the coins well, it's not going to succeed, it's going to go to zero.

• 17:20Speaker 03

  And it also feels to me like the emotions that you're describing with positive and negative news play out a lot more in crypto than they would in other markets because it's mostly retail driven and humans, right? There's not tons of algorithms kind of running this stuff yet.

• 17:37Speaker 02

  Yeah.

• 17:37Speaker 03

  And so price is very, you know, is correlated very highly to human sentiment.

• 17:43Speaker 02

  Yeah.

• 17:43Speaker 03

  You think that's correct?

• 17:44Speaker 02

  Definitely, like, for example, this current recent rise, like.

• 17:49Speaker 02

  It's hard to say what happened, right?

• 17:51Speaker 03

  We thought that you bought the bottom, too.

• 17:54Speaker 02

  No. Like, there was the April Fools' article about Bitcoin ETFs getting approved. I think that sparked something, right? It got... I also saw a Chinese tweet saying that believing that that was true. So potentially, there was something lost in translation. And if people started buying because of that fake news, it could potentially cause some stop orders to trigger. And then a lot of people got in because seeing the price going up. So it could potentially be just triggered by fake news.

• 18:25Speaker 03

  Yeah. Don't tell people that fake news made them money. That'll really mess up American politics.

• 18:31Speaker 02

  Yeah.

• 18:32Speaker 03

  So let's talk about how you see the future unfolding. We talked a little bit about the currencies. But I think that in 2017, we saw this new funding mechanism for early-stage technology and projects with the ICOs. That's drastically been reduced in terms of both the regulatory environment and I think investors' appetite for a lot of that stuff. Do we see that come back at some point in the future? Maybe does it come back, but it looks a little different? How do you think this plays out?

• 18:59Speaker 02

  I mean, we do see a push for STOs, so securities tokens. I think ICOs are a neat idea, but what happened was just... was kind of unfortunate because a lot of people lost a lot of money. I mean, there's a reason why VC fundings and securities require accredited investors. You need a certain level of expertise in investing or enough money to invest before the ICOs. And it's to protect people. Right? You don't want to get scammed by the company promising some stuff and everyone, mom and pop, spending money into it and then get scammed.

• 19:42Speaker 02

  So we saw that with ICOs, and there's a reason why they're not legal. So I think there will be more regulations to kind of make this space safer and also allow the...

• 19:58Speaker 02

  The benefits of tokens, right, of ICOs.

• 20:01Speaker 03

  Hmm. It feels to me like a lot of the protections that are in place today are the best that we've had previously, but really education, right? Having some kind of education bar where you can't invest unless you take a test or you've got some base level of knowledge. Would be better served protecting people than, you know, hey, Charlie, you're rich. And so if you're rich, you must be smart. Go do whatever you want.

• 20:26Speaker 02

  Yeah.

• 20:26Speaker 03

  Right. It's I always joke and say that I know a lot of really rich dumb people. So we'll see. All right. And then how does that play into the IEOs that we're seeing now? It feels like we're talking about the alphabet, right? Like every, there's all these different combination of letters, but that initial exchange offerings that we're now starting to see. What's your take on that?

• 20:48Speaker 02

  Honestly, I don't know too much about it. It seems just like a ICO to me. I mean, is it any different than other ICOs, except that the exchange has vetted the company? And, and said that this is not a scam. I guess it's, I guess it's just that.

• 21:05Speaker 03

  It's like an exchange sanctioned ICO.

• 21:08Speaker 02

  Yeah.

• 21:08Speaker 03

  Right. Essentially. Yeah, I got it. Okay. And then going to the STOs. Lots of hype, right? Lots of people talking about this, this idea that, hey, we're going to take real assets, whether they're actually true securities or traditional assets. And we're going to tokenize or digitize them. It sounds like you believe that will happen short term, long term. How does it play out?

• 21:32Speaker 02

  It depends on the government regulations.

• 21:34Speaker 03

  Okay.

• 21:35Speaker 02

  Right. I guess certain countries are more open to it. And yeah, it really depends on the, on the government, how they start.

• 21:44Speaker 03

  Are there things you're worried about with the regulations? Or you think it's just they haven't really given clear guidance?

• 21:51Speaker 02

  They haven't given clear guidance. And to be honest, I'm not really into this space. So I'm kind of focused on the crypto, the currency aspect of it.

• 22:01Speaker 03

  And do you feel like the STOs will interact with the cryptocurrency? So like Bitcoin, Litecoin, other cryptocurrencies will be the currency of choice for that, that world? Or do you feel like people are trying to just digitize assets and then still use the fiat currencies? Like, like how much overlap do we see between cryptocurrencies, utility tokens, security tokens? Versus their more siloed aspects of the industry?

• 22:28Speaker 02

  Well, I mean, the thing I see is that the tokens would be easily like exchangeable or swappable with the cryptocurrencies we have right now, right? So that's the benefit of same for like government backed cryptocurrencies, right? Once you're in this digital space, then it makes it very efficient to move things around.

• 22:50Speaker 03

  Got it. What are you worried about moving forward? Like, if you had to pick one or two things that keep you up at night in terms of the industry growing?

• 23:06Speaker 02

  I can talk about like what I think, like what we need to solve, right?

• 23:09Speaker 03

  Okay.

• 23:10Speaker 02

  So.

• 23:11Speaker 03

  So these aren't things that you're necessarily worried about. They're things that you believe are important problems that need to be solved for us to keep moving forward.

• 23:17Speaker 02

  Yeah.

• 23:20Speaker 02

  So we need to make it easier for people to store their own currencies, right? Their own cryptos. So instead of like, right now, like 90% probably people store their cryptocurrencies on exchanges or hosted wallet, just because it's so hard to do it themselves. So the exchanges or hosted wallet is actually a better job than individuals to store their own coins. We're seeing like a lot of sales of like the Ledger and Treasure hardware wallets, but they're still not like easy to use, right? So I think we really need to make that easy to use. Usability is very important. It's something that we've been working on for many years, but it's just something we need to kind of solve or make it a lot better.

• 24:03Speaker 03

  Do you think that is a technical problem? It's a like user experience problem? Where do you think the like the big obstacle there lies, right? Because if people have been working on it for years and we don't have something that you and I can say with confidence is a like a perfect solution, what's holding us back there?

• 24:21Speaker 02

  The problem is it's a security and usability, I feel like is always a compromise.

• 24:28Speaker 02

  Something that's really secure is just hard to use. So like, for example, you can, the best, one of the best ways to secure your coins is like put in a paper wallet, put it in a bank safe or split it using some kind of Shamir secret or something like that where you split it and make it safe. But that's just really hard to use, right? You can't use it every day if your money is locked away in the bank safe. The easiest way to use cryptocurrency is having a mobile wallet where the money is. It's like hosted, right? Like, for example, the Coinbase mobile wallet is extremely easy to use. But then you're trusting Coinbase. Right? So it's it's definitely a challenge to find the right balance between security and ease of use.

• 25:12Speaker 03

  Gotcha. You mentioned Coinbase and you were there in the very early days. Tell us a little bit about what that experience was like. And, you know, why did you join Coinbase out of everything you could have done coming out of Google? Why that company?

• 25:27Speaker 02

  Yeah, so 2013, I joined Coinbase. I, at that time, I wasn't really looking for another company. I mean, Google is such a great company, good benefits, good pay.

• 25:40Speaker 03

  Good food.

• 25:41Speaker 02

  Good food. And then I went to Coinbase, they paid me half as much. I had to travel like an hour commute to San Francisco and work like twice as hard.

• 25:54Speaker 03

  Charlie, this doesn't sound like a good deal.

• 25:57Speaker 02

  Well, it was a good deal. I mean, I decided to do that because I was passionate about Bitcoin. So what I, the reason why I joined Coinbase is I realized that in order for for cryptocurrencies to succeed, it has to be easy to use, right? So and easy to kind of get in to the system, to get into the ecosystem. So buying Bitcoin at that, even at that time, was just hard, right? Especially for for US, people in the US.

• 26:26Speaker 02

  You have to, like, in 2011, you had to wire money to Japan. But in 2013, there's still some exchanges, but it's still like out of the country and it's not going into your bank account. So Coinbase started doing, letting people buy Bitcoins with their bank account. You connect your bank account, they do an ACH pool of the money, and then they give you Bitcoins a few days later when they got the money. So it just makes buying Bitcoin and getting into it very easy. And I wanted to, I feel like that was very important. So I joined Coinbase to kind of make that happen.

• 26:57Speaker 03

  Got it. You got tired of meeting people in Starbucks, so you decided to build a solution for it?

• 27:02Speaker 02

  Something like that, yeah.

• 27:04Speaker 03

  Okay, and so how long were you there for?

• 27:06Speaker 02

  Four years, almost four years, yeah.

• 27:08Speaker 03

  Where, like, what was the vision early in terms of can Coinbase?

• 27:15Speaker 03

  Solve all the problems? Was it just we want to help people buy Bitcoin? Was there a belief that eventually you could add other assets? What was those conversations like then compared to what the company is doing today?

• 27:26Speaker 02

  The belief was always that with an open finance, we can kind of revolutionize finance with cryptocurrencies or Bitcoin specifically. And the first step was just to let people buy, get into Bitcoin easily. And I mean, that's also the other belief was that we wanted to do it the right way, like within the system. So getting all the money transferring licenses, work with regulations, with regulators, and support it and push for

• 28:03Speaker 02

  regulations supporting Bitcoin and just make it easy for people to get in.

• 28:08Speaker 03

  Got it. Yeah, I've been really impressed, I think, with the company's ability to not only add more assets in terms of going through a bear market, but also pushing to other geographies. But I don't think they operate today in Japan, Korea, or China. And so it's pretty shocking to see the size of how big it's gone from when you first started to today without operating in what many would argue are three of the most important jurisdictions in the world.

• 28:34Speaker 02

  I wouldn't be surprised if they move into those jurisdictions. We've, Okkormes had investments from Japan, from Japanese companies or funds. So I wouldn't be surprised if they move into Japan, China, and Korea.

• 28:50Speaker 03

  Don't hold me to it, but I think that they've applied for the licensing in Japan. I just don't think they've received it yet.

• 28:55Speaker 02

  Yeah, I guess they would need the licenses before they can open up.

• 28:59Speaker 03

  For sure. And then coming from that experience, seeing the rise of the Binance's of the world who said, hey, look, we're going to start outside the United States. We're going to take a different regulatory approach. Pros, cons of each one, do you think that, again, there's kind of coexistence? Or do you think that one model eventually trumps all the others?

• 29:17Speaker 02

  I think there'll be this. I think there is room for companies like Binance, exchanges like Binance's to do it.

• 29:27Speaker 02

  Their way, right? There's also a space for companies like Coinbase doing it, the more like following the regulation and sticking by the book way. I think both will succeed and coexist.

• 29:40Speaker 03

  For sure. All right, before I finish up and we'll let everyone ask all their questions, I'll ask a couple of rapid fire questions. You don't have to answer quickly, but what do you think is the most important company in crypto? Can't say Litecoin either.

• 29:56Speaker 02

  Litecoin Foundation?

• 29:58Speaker 02

  Most important company in crypto?

• 30:03Speaker 02

  I still think Coinbase.

• 30:04Speaker 03

  Coinbase? Okay, explain why the most important?

• 30:09Speaker 02

  Just the fact that they're able to bring in so many people into this space, just making it very easy for people to buy, sell and use cryptocurrencies.

• 30:18Speaker 03

  Yeah.

• 30:18Speaker 02

  I think it's, yeah, they've done a lot of good for crypto.

• 30:23Speaker 03

  I think it would be hard for people to argue that they haven't definitely helped onboard, you know, millions of people for sure.

• 30:28Speaker 02

  It's kind of unfortunate that they get hated on by a lot of the core Bitcoin maximalist people.

• 30:35Speaker 02

  It's not black and white, right? They've definitely made mistakes. I think their recent like Nutrino acquisition was pretty dumb.

• 30:43Speaker 03

  Do you think the acquisition was dumb or do you think the way that it was handled?

• 30:47Speaker 02

  I think the

• 30:47Speaker 03

  Like in terms of the personnel?

• 30:49Speaker 02

  Right, so they, they decided to acquire Nutrino. I don't know if they did enough due diligence on them, but then when the, when the news hit that the team they acquired, the people were upset, they doubled down on it and said that we, we did our due diligence and we decided it's still the right thing to do. That was just pretty dumb and they had to backtrack on that. So they didn't, they didn't handle it well.

• 31:16Speaker 03

  Yeah, and I think part of it too is, you know, I spend most of my days talking to founders all day long and they have to make so many high risk and important decisions on a daily basis that they're gonna mess some of them up.

• 31:29Speaker 02

  Sure, for sure, yeah.

• 31:30Speaker 03

  That one just happens to be one that was made in public, right? And so, you know, people will argue whether they were right or not, but, but I think that the blowback was, uh, was probably more painful than it needed to be.

• 31:40Speaker 02

  Yeah, I mean, companies definitely make mistakes a lot of the time.

• 31:44Speaker 03

  Any mistakes that you think that you made in building Litecoin or with Litecoin Foundation? Anything that sticks out to you as, oh, we wish we hadn't done X?

• 31:54Speaker 02

  Um.

• 32:00Speaker 02

  Not that I, nothing comes to my head.

• 32:03Speaker 03

  All right. Except for if you didn't buy the bottom, then uh.

• 32:06Speaker 02

  What's that?

• 32:07Speaker 03

  You didn't buy the bottom, then you regret that?

• 32:10Speaker 02

  No, I didn't. I didn't buy the bottom. Well, I mean, I, I sold because um, because of the, the, my perceived um, conflict of interest or mislamin of interest, right? So I'm, I'm focused on adoption of Litecoin and the price is just definitely distracting. And I'm like, I'm so public, um, I don't want to like, have to second guess why I'm making this tweet. Is it because I want to like bump the price and.

• 32:36Speaker 03

  Yep.

• 32:37Speaker 02

  And make myself more money or is it because it's, it's actually good for Litecoin? So I just wanted to kind of remove those two things.

• 32:43Speaker 03

  How, how bad did it get, right? When in, in 2017, when people were really kind of paying attention to price a lot, bull markets going crazy. I've been on the other side of a lot of, you know, kind of the good and bad of social media. How bad did it get for you in terms of people, you know, being upset about things that you were doing? Or, or, you know, the perception that you were affecting the price?

• 33:08Speaker 02

  Um, it was definitely quite bad, right? So, um.

• 33:14Speaker 02

  Yeah, like I would, I would post something like some good news and potentially it would affect the price. And then people will be saying like, like saying that I'm like.

• 33:22Speaker 03

  You're.

• 33:23Speaker 02

  Inside trading or like bought it before I released this news or I'm pumping it or whatnot. Yeah, it was, it's kind of, it's quite annoying. Um, and. Um, and if I don't say anything, if I don't post about good things about Litecoin and the price is not doing well. People would like complain about why am I not saying anything good about Litecoin? If I say something good about Bitcoin, people would complain. It's just, it's quite annoying. So I started ignoring that. I also decided to kind of sell my Litecoin's. Um, I actually personally did think that it was, it's going to keep going up. Like I didn't think that it was gonna, like that was a peak because everyone thought the price was going to go up. I thought it was going to hit a thousand, so definitely.

• 34:02Speaker 03

  Oh, you thought Litecoin was gonna hit a thousand?

• 34:04Speaker 02

  Yeah.

• 34:04Speaker 03

  Wow. Is what it was probably a hundred, hundred and?

• 34:07Speaker 02

  It was like three hundred.

• 34:09Speaker 03

  Oh, got to three hundred, okay.

• 34:10Speaker 02

  Yeah.

• 34:11Speaker 03

  That, that's crazy.

• 34:12Speaker 02

  Well, yeah.

• 34:13Speaker 03

  Yeah.

• 34:15Speaker 02

  In hindsight, right?

• 34:17Speaker 03

  Yeah, because I mean, look, the last was like, what last six weeks of 2017, when everything just went vertical?

• 34:23Speaker 02

  Yeah.

• 34:24Speaker 03

  Um, I mean, I remember Litecoin being a hundred dollars, right? And it just really goes from a hundred to three hundred in six, eight weeks is pretty crazy. Um, okay, so, uh, what do you think is the one regulation that you would change or improve if you could? Like, what's the one regulation that sticks out that's just, that makes sense?

• 34:41Speaker 02

  Oh, I definitely have one. So I would like to see, um, being able to spend coins without paying capital gains taxes on them. So like for purchases, right? If you're buying coffee, you don't say, you don't have to figure out like when you got this point zero one Bitcoin or point zero zero, zero one Bitcoin. How much you paid for it and how much is capital gains? That just makes like spending cryptocurrency like impossible.

• 35:05Speaker 03

  Hmm.

• 35:06Speaker 02

  Unless, of course, you don't report taxes on them, which I think most people probably don't because it's just impossible to figure out.

• 35:11Speaker 03

  Hmm. I mean, what you're describing right throughout this entire talk is everything around adoption. There's the technology. There's the kind of narrative or marketing and, um, the psychological aspect. There's the regulation. There's a lot that goes into getting people to use a new currency. Um, that if you just look at it from the surface, doesn't appear to be very complex, but is actually highly difficult to do.

• 35:34Speaker 02

  Yeah, for sure.

• 35:36Speaker 03

  Right. Um, okay. What is, uh, what's the one area of crypto that you think people should be talking about, but they're not? Like something that you're excited about, do you think isn't getting enough attention?

• 35:49Speaker 02

  Hmm.

• 35:54Speaker 02

  One thing I'm kind of working on, I say about these days is fungibility and making Litecoin or cryptocurrency more fungible. I think if you look at like all the good properties of sound money, um, fungibility is the one thing that's missing from, from Bitcoin and Litecoin.

• 36:11Speaker 03

  Hmm.

• 36:12Speaker 02

  Um.

• 36:12Speaker 03

  Explain to people what you mean by fungibility.

• 36:15Speaker 02

  So every basic idea is that every coin, um, is equal to every other coin. So for example, if I, with US dollar, if I go into a store to buy something, I have two twenty dollar bills in my wallet. It doesn't matter which one I use. Right? They're, they're essentially the same. They're fungible. Um, it's not the case with Bitcoin and Litecoin today, right? If you. There's, if you have two outputs to choose from, the wallets chooses for you. So a lot of times you don't even know. But if you have two outputs to choose from, which one to spend, one of them could be, could be linked to some other purchases you made. Or if you bought something off the dark, dark night markets, or if you like gambled with it, the other purchase, other coin might not have that history.

• 36:59Speaker 02

  Or it could be, um, you bought like 10 bitcoins from the exchange and then you're sending point 001 to some, a friend for something and then they saw that, oh, you have 10 bitcoins. It's just revealing some history or some private information that you don't want to reveal. So that makes the coins not fungible.

• 37:17Speaker 03

  And are you interested in this because of the privacy aspects or for some other reason?

• 37:22Speaker 02

  Um, I'm interested in it because I want crypto to be like perfect, sound money, right? So it's something that we don't have right now, uh, fungibility. So fungibility and privacy can go hand in hand. Right? So in order for a coin to be fungible, it has to be private. If it's not private, then you're leaking some information and that information could be used against you for some thing and which makes it not fungible.

• 37:47Speaker 03

  Got it.

• 37:47Speaker 02

  So to get fungibility, you need like privacy.

• 37:50Speaker 03

  Makes sense. Um, what's the most important book you've ever read?

• 37:54Speaker 02

  What's important book? Um.

• 37:59Speaker 02

  Hmm, that's a good question.

• 38:01Speaker 03

  I only ask good questions. Come on.

• 38:05Speaker 02

  Um, Game of Thrones?

• 38:10Speaker 03

  I figured there'd be somebody in the audience that liked that.

• 38:13Speaker 02

  Actually, a Game of Thrones is a really good book.

• 38:16Speaker 03

  Yeah, I, I'll take your word for it. I haven't read it. Um, all right. The only reason why I came up here is to talk to you about aliens. So let's talk about aliens. Uh, believer or non-believer?

• 38:27Speaker 02

  I'm a believer.

• 38:28Speaker 03

  Believer?

• 38:29Speaker 02

  Yeah.

• 38:29Speaker 03

  What, what is your logic for believing aliens if we've never seen or heard of them?

• 38:34Speaker 02

  Um, you're talking about real aliens or illegal immigrants?

• 38:39Speaker 03

  I know you're a professional alien believer. If you want to immediately start the conversation, we're talking about the real aliens or the other ones?

• 38:45Speaker 02

  Um.

• 38:48Speaker 02

  I think that, just given how big the universe or space is, that, I mean, there's this equation, right? I forgot the name of the equation where.

• 38:59Speaker 03

  Somebody hit me with this live on a podcast and I forget the name of it. And I was blown away that somebody was smart enough to figure out the math of.

• 39:06Speaker 02

  Yeah, I mean, it's not, it's like an estimate, right? Given the probability, like, all the probabilities multiplied together. The size of the universe, how many solar systems there are, how many planets per solar system, how many planets that have potential environment that can sustain life? And what are the chances of that life could form? And if you multiply all that together, that probability is pretty high that there are, there's more than one of this happening, right?

• 39:30Speaker 03

  So when I first started asking this question, it was because I was thinking, are there alien pets, right? We always think of aliens as a human-like creature, the way that they're perceived in movies and books. Do you think that there's multi-species life out there? Or do you think it's just one set of aliens?

• 39:50Speaker 02

  I mean, if you think there's more than humans, then there's gonna, there's gotta be more, right? I mean, it's not gonna, like, we have pets, so.

• 39:59Speaker 03

  So that's what I, I generally believe that if there are aliens, which I think there are, then there's probably alien pets as well, but we just never incorporate them.

• 40:09Speaker 02

  We're probably pets to aliens. They're probably like, like, we don't even know them.

• 40:13Speaker 03

  Yeah.

• 40:14Speaker 02

  Just like the ants don't know that we're looking at them, right?

• 40:19Speaker 03

  Well, are you a big simulation guy? You know about this?

• 40:23Speaker 02

  That the whole universe is a simulation?

• 40:25Speaker 03

  Yeah, that we're, that we're living in the simulation.

• 40:27Speaker 02

  No, I don't think so.

• 40:28Speaker 03

  No?

• 40:28Speaker 02

  No.

• 40:28Speaker 03

  You, you think that it's just we could be the pets of some other.

• 40:32Speaker 02

  It's possible.

• 40:33Speaker 03

  Species.

• 40:34Speaker 02

  It's fair.

• 40:35Speaker 03

  All right, before, before we take questions, I let everyone ask me one question. What, what one question do you have for me?

• 40:43Speaker 02

  Are we out of the bear market?

• 40:45Speaker 03

  Oh, come on.

• 40:48Speaker 03

  Because I am with you, and whether you meant to or not, you sold the top and I'm hoping you're lying and that you actually bought the bottom. I think it's probably more likely than not that, you know, we've kind of seen the bottom. But as many people in crypto learn, trying to time this stuff is a fool's game. So we'll see how it plays out.

• 41:11Speaker 03

  All right, who has any questions?

• 41:15Speaker 03

  Oh, right here. Just scream it, we'll repeat it.

• 41:19Speaker 02

  There's a microphone over there if you want.

• 41:21Speaker 03

  Oh, there's a line, actually, if you want to get up in front of this microphone in the middle of the aisle.

• 41:30Speaker 04

  Hi, my name is Tamara. Thank you so much. You guys talked a lot about how news and people's perceptions kind of drive the costs of the different coins. If you could design your own ideal news experience for reading about cryptocurrency news, what would that be like for you and why?

• 41:50Speaker 03

  Twitter.

• 41:54Speaker 02

  I mean, that's true, right? Twitter is like the great source of news for cryptocurrency. Twitter has become such a good platform for cryptocurrencies.

• 42:03Speaker 03

  Yeah, it's pretty crazy how so much of the news is reported directly there, right? Like people just, they don't go to reporters, they don't do it, they just have their own audiences, talk directly to people. Yeah. I think the aspects of Twitter are really interesting of like the ability for anyone to put information out there. And then, I mean, look, part of you talking about how aggressive people got in terms of responding to things that you were tweeting about Litecoin, etc. There is an element of like the attrition of ideas on Twitter, right? Where when people say something stupid, they get told very quickly. But that can go in a positive or a negative way. Yeah.

• 42:46Speaker 04

  Thank you very much.

• 42:50Speaker 05

  Hey Charlie, what's up? My name is Adam. We've talked a few times. So, um, I don't think anyone here knows this about you, other than me and a few other people, but you were a wrestler in high school, which is the hardest sport in the world, which probably leads you to make some very risky decisions. One which I like very much is you sponsored the recent UFC event, and you brought on Ben Askren to the Litecoin team. And Ben Askren, if no one knows this, he's an Olympic wrestler, representative of the United States in the Olympics 2008. He's also probably the pound-for-pound best mixed martial arts fighter on the planet right now. For all intents and purposes, he will probably be UFC champion by Christmas.

• 43:35Speaker 05

  So because you have what is probably the future UFC champion as part of the Litecoin Foundation, how do you plan on using that?

• 43:43Speaker 02

  We're going to the moon. It's a funny, funny story. Like Ben Askren, he's really into sound money. So he was, so I got introduced to him and talked to him quite a bit about, about just his belief of sound money. And he's also an amazing wrestler, or MMA fighter. So it's actually really, really cool that he's out there pushing cryptocurrencies and also doing well in UFC. So it'd be cool to see him become champion.

• 44:17Speaker 05

  Well, I'm actually pretty close friends with John and Kim, your bodyguard. I'm also an ex-MMA fighter myself, so I keep up with the sport a lot. And a lot of times I will stream events. And when I was streaming the UFC event that you sponsored, Jones vs. Gustafson, there's a live chat, and there's thousands of people in that live chat. They're all talk nonsense. But for the first time ever, when they announced Litecoin as the official cryptocurrency of UFC, the chat stopped, and everyone just started talking about Litecoin. They've never done that with any other sponsor I've ever seen sponsor a UFC event. But I think that's a really, really good sign, and I just can't wait to see this further and see you sponsor more fighters. I think that's awesome.

• 45:01Speaker 02

  Thanks.

• 45:02Speaker 05

  And who would win in a match between you and Ben Askren?

• 45:05Speaker 02

  Probably Ben Askren.

• 45:07Speaker 05

  Let's tape that and find out.

• 45:11Speaker 02

  That wasn't a, that wasn't a full... I retired from fighting. Just Ben.

• 45:16Speaker 02

  Yeah.

• 45:16Speaker 06

  How you guys doing? So my question relates, I just want your opinion about block size. So Bitcoin, obviously, I remember in 2017, the bull run, the bees were just astronomical. And then you have Bitcoin Cash and Nano, the point of contention for a lot of projects saying this is a real concern. How, I want to know your opinion. Is this something that is going to be a problem, hinder acceptance and growth in the future? Is it something we should be concerned with? Does lightning help it? What are your thoughts?

• 45:54Speaker 02

  Sure. So question about block size, right? So let me talk about a bit about kind of like the reason why this is an issue, right? So decentralization is inefficient. Right? So with, for example, if you're comparing like Bitcoin with Visa, Visa, let's say, has one like computer running everything. They can do like, they can process thousands of millions of transactions a second, but Bitcoin can only do like seven transactions per second. Why is that? It's because like Bitcoin, everything has to be processed by 10,000 computers or ideally more, right? So everything's decentralized and no one has control over it. So it's inefficient. And the reason why we want this inefficiency is because we get

• 46:39Speaker 02

  decentralization, which gives us censorship resistance, right? With Visa, you can go to Visa and say reverse this transaction. And if the government does that, they have to. So they have control. With Bitcoin, you can't do that. So decentralization gives us censorship resistance. The reason why we have like a block size limit, or why it makes sense to limit the block size, is because you don't want, if the block size was infinite, right? You can put anything in the block size, in the block, then you have like, you can put, basically you're using this extremely inefficient database to store anything you want. And every transaction pays the same amount in fees, no matter if it's sending

• 47:21Speaker 02

  like a million dollars or if it's sending $2, right? If you're buying coffee, you're paying X amount of fees, you're sending like $10 million between banks, you're paying the same amount of fees. So. When that happens, it's unfair to, it's, um, if you're using it inefficiently, then you're, you're basically screwing everyone over. So if you, if you look at like a chain like Bitcoin SV or even Bitcoin Cash, if it just grows indefinitely, then you have like cat photos or they're putting like high resolution photos on the blockchain, right? That's just like really dumb because then you, everyone has to hold that, everyone has to process that. It makes it so inefficient, so hard, then you only have a few nodes that can do that. And then before you know it becomes centralized.

• 48:07Speaker 02

  So that's why block size is so important that, um, we kind of had to protect it, right? We can't let it, it's hard to say what's the optimal, uh, block size. So a couple of years ago with the SegWit 2X like debate, I think that few times a block size is, is fine, right? But if not everyone agrees, then we shouldn't do it. So that's why we didn't, um, follow and do the two times increase with a hard fork. Um, it's fine for coins like Bitcoin Cash to experiment with, uh, higher block size. I mean, Litecoin even has four times the effective block size as Bitcoin, right? So it's to a certain point, if you increase it too much, or if you put too much crap into the blockchain, it becomes, um, centralized. And we definitely don't want that, right?

• 48:49Speaker 02

  We don't want, the value of Bitcoin is the fact that it's censorship resistant and immutable. We don't want to, um, hurt that value by making it so you can put anything on a blockchain. But that said, I think the solution is second layer scaling solutions like Lightning Network and other solutions, right? Where you, the base chain is secure, um, and it's decentralized, but you build on top of that and you can really scale pretty well on top of it.

• 49:21Speaker 07

  Hi guys, my name's Cameron. It's a pleasure to be here with you guys. It's an honor actually. I follow you guys on everything pretty much.

• 49:29Speaker 07

  So I run a IT department for a local government in LA. My background's in geographic information science. So, uh, it's a fancy word for maps and data. Um, so, um, my question is, have you came across, uh, what do you guys think about, um, use cases for, you know, local government and bringing in, you know, this term internet of things and IOT and, and, um, and. Bringing in geolocation, geo-blockchain, you know, sensors and technology and kind of any use cases that you're aware of, you know, for government and like local government?

• 50:16Speaker 03

  So it's a difficult question to answer, just because I think the short answer is we don't know. The thing I will say is, to me, what most of this industry is about is just taking old assets, right, kind of analog or electronic world assets and turning them into truly digital assets. So you think of Bitcoin, right? What Coinbase does is essentially let you put, you know, bad money in, right, analog or fiat currency in, and you get out sound money and you get this digital currency. I think that most of crypto, whether it's utility tokens, security tokens, or the cryptocurrencies, follow that similar framework. And it's just upgrading those assets, right? So we'll still have the stocks, bonds, currencies,

• 50:57Speaker 03

  and commodities, just in a digital format. That goes to your point about like when you get to the Internet of Things. I always joke and say, you know, Bitcoin is just money for the machines, right? What I mean by that is the automation, the Internet of Things, all the stuff that I think most people buy into is going to happen. It can't use the old assets, right? You know, if you think of the fiat currencies before Coinbase, you had to wire money to a bank in Japan, right? Then you could wire money to Coinbase and it was a little bit more efficient. We helped move it to this point where, you know, it made it easier to buy stuff, but it still wasn't good enough for, let's say, true automation,

• 51:39Speaker 03

  right? And so I think that when you have digital currencies, stocks, bonds, and commodities, now the machines can really like unleash their potential. And so that's like a framework to think about it. How that actually plays out in reality, I have no clue. In a local government, I definitely don't know. But I think that's the framework I would use to kind of look at that.

• 51:59Speaker 02

  I like to joke that Bitcoin makes it possible for Skynet to happen.

• 52:07Speaker 02

  So before Bitcoin, right, a computer AI cannot survive in the wild because they can't make money. They can't create a bank account, they can't open a bank account, they can't make money. They can't survive, they can't pay for storage, they can't pay for themselves. But with Bitcoin, they can now make money. They don't need to open a bank account, they make money and then they can now buy their upgrades, hardware, whatever, right? So like real, true AI can now actually happen.

• 52:32Speaker 03

  I mean, look, it it it sounds on the fringe, I think, as a thought process. But really what we're talking about here is slowly but surely, humans in general are beginning to trust the machines and algorithms over other humans. Right? And so Bitcoin, to me, whether it's the machines just use it for themselves because they trust the algorithms that they're smart and they get it. To would you rather trust a currency that's backed by, you know, frankly, a bunch of old white guys who go in a room and decide the rate decision next quarter? Or would you rather trust an algorithm that you can actually read the code? I think that 50 years ago, like people trusted the individuals. 50 years from now, it's likely that they're going to trust the the software and the code.

• 53:17Speaker 08

  Totally. Thank you.

• 53:21Speaker 09

  Hey Charlie, I can't find my Litecoin cash. Do you know where it is?

• 53:32Speaker 09

  Does anybody know where my Litecoin cash is?

• 53:36Speaker 02

  Litecoin cash is a scam.

• 53:38Speaker 09

  All right, thanks.

• 53:40Speaker 03

  Wow, you you got dedication to stand in line to ask that.

• 53:46Speaker 08

  Hey, Pom, this is actually more for you. I know you're a big fan of Bitcoin, but I was wondering if you could talk more about your investments thesis on things that are not Bitcoin?

• 53:55Speaker 03

  Yeah, they're ambushing me now. So pretty much, I think of investing, especially from like the professional job standpoint in three ways. One, Bitcoin as a digital currency that's non-correlated asymmetric return. By introducing it into the portfolios of the institutions that we work with, it's likely to. Reduce risk and put them in a good place. The second thing is if you think of the crypto market or the industry as a public and private side. So the public is the liquid crypto, private is equity. The public markets, I basically just give up. I'm not a great trader as this guy. And so I'd say, we're not going to trade, but we will index.

• 54:38Speaker 03

  And was it last year? We came out with this million dollar challenge that over the next decade crypto will outperform the S and P 500. Right? So an index that we have versus the S and P. Again, that's just as much a confidence in crypto as it is an outlook on public equities. And then in the private markets, you know, what a lot of people don't realize is if you had invested in the equity of, I think it's Kraken, Binance, Coinbase, Bitmain. I mean, just go down the line, right? And on the same day that you invested in the seed or series A of those companies, you had bought Bitcoin. Even though Bitcoin is the best performing asset over the last decade, you actually would have made more money in the equity investment than you would have in the appreciation of Bitcoin.

• 55:23Speaker 03

  And so what you get is you get this high volatility, right? And, you know, we talked about it earlier, but the equity investments, not only are they easier for people to understand in the institutional world, but also I think that there's an argument to be made for the financial performance as well. And so we really just focused Bitcoin indexed liquid market and then went on equity in the private markets.

• 55:43Speaker 08

  Wow, thank you so much. One follow up question. Do you have, do you have any investment thesis, I guess, towards like tokens or anything like that? Or maybe stablecoin?

• 55:50Speaker 03

  Uh, no.

• 55:51Speaker 08

  Okay, cool. Thanks.

• 55:55Speaker 10

  Hey guys, I have kind of a similar question pump. So apologies for the ambush.

• 56:00Speaker 03

  You guys are supposed to be asking Charlie questions, not me.

• 56:03Speaker 10

  I'm working with Maker right now and extracting information off the Ethereum blockchain. And I guess as an investment process, like, you know, what's, what's the due diligence like? Because when you dive into these sort of complicated projects, you start to get be skeptical about, you know, some white paper. Saying we're going to do all these crazy things. And then when you look at the underlying tooling, it's really, you know, it needs a lot of work to deliver. So I'm just curious what your due diligence process is.

• 56:35Speaker 03

  So when you created Litecoin, did you write a white paper? Yeah, the paper is all white.

• 56:43Speaker 03

  What did you do when you started? You just started writing code, right? Yeah. And you eventually created a product and you launched it? Yeah. Right? I think that when you look at, you know, yes, Bitcoin has a white paper, but majority of the work was done by the time the white paper ever saw, you know, the light of day. I'm just not a huge believer in this thing of like, let me write down, whether it's in a deck or a white paper, you know, this grand plan to take over the world. And I'm much more like I have a propensity to invest in things where just they're showing that they have momentum, they've built things, they've launched products, that, you know, and look, the silliest ideas are the ones that usually end up being the most powerful, right?

• 57:27Speaker 03

  So if you think of Uber was a way for Travis and his friends to impress people by getting picked up by black cars. Like, that doesn't sound like a lot of people need that service, right? Airbnb, they had air mattresses in their kitchen. Doesn't sound like that's going to really change the world, right? Amazon, they're selling books, but that was pretty much it, right? But then they become these big multi-billion dollar companies because they understand how to just build products that people want, right? And how to solve those problems. But I think it's just the mania around the white papers and the like Intellectual Olympics. Maybe it's just because I'm not smart, but I'm just not very interested in it. Thanks, guys.

• 58:13Speaker 11

  Hi, my name is Harley. I understand the fungibility aspect, like your point. I was wondering Litecoin was going to solve that for Bitcoin? Like, as in people are going to use Litecoin as a transaction to keep their fund secret of like, you know, so, you know, I'm fairly new to this space. So, yeah, can you elaborate on that?

• 58:38Speaker 02

  Yeah, so the current plan, we're looking into a technology called Mimblewimble,

• 58:43Speaker 02

  which is a way to make things more private and also it also scales pretty well. And to do it in a certain way where it's a kind of a software upgrade, where we can upgrade Litecoin to add this extension blocks where it's all Mimblewimble. So we're just trying, trying it out and see how it goes. Whether or not Bitcoin will actually go the same route, we'll see. Obviously, it's not up to me, but I think making Litecoin more fungible is difficult.

• 59:11Speaker 11

  Um, my last question, do you think the bear market is over or?

• 59:17Speaker 11

  No, he turned it on you.

• 59:20Speaker 02

  Um, well, people keep always asking me like, well, do I think the price will go up or down? Like, if anyone tells you they know, they're, they're lying, right? No one knows if the price will go up or down. So the bear market, I mean, I've, I've seen a few bull and bear markets. I've seen like, some of, some of you think the bear market's over, but then it drops like further. Right? And also sometimes it recovers and it actually doesn't come back down. So it's, who knows, right? I think, I think it's good. We're, we're seeing some recovery. But don't like go all in, right? I never, I tell people never to go all in.

• 59:54Speaker 11

  And my last one, um, how can I be more, uh, connected with people in this space? Um, specifically on Litecoin, like, is there any forums you recommend? Or, or websites where I could, you know?

• 1:00:11Speaker 02

  Go to like Reddit, right? Bitcoin and Litecoin, um, slash Bitcoin slash Litecoin. Just don't go to slash BTC. That's not good.

• 1:00:20Speaker 11

  Thank you. Thank you. All right. Last two questions.

• 1:00:24Speaker 12

  Hey Charlie, I'm just wondering what your thoughts were on the future of public blockchain coins? I know that, uh, here in the United States, that some exchanges will actually comb your history to make sure you don't have any terms or conditions violations. And then I, um, I'm a big user of the Coinbase Earn airdrops. And they highlight a lot of the new coins that are coming out that actually do offer a good degree of privacy. So I wonder what your thoughts are on that?

• 1:00:48Speaker 02

  I think I talked about it, right? I think privacy and fungibility is very important. So I think financial privacy is important. So it's not, it's not cool that people know like how many coins you have just because you sent them something.

• 1:01:02Speaker 02

  So yeah, I think we should work on making coins more, uh, private and more fungible.

• 1:01:10Speaker 13

  Hi, so I was, uh, I was wondering, uh, do you see all these coins as mostly money? Or do you give providence to the aspect that you could sort of save data in these blockchains? I kind of see these as fancy databases that anybody who minds can insert into. And I was wondering if you sort of preferred storing on the UTXO set? Or if you'd like using Opera Turn?

• 1:01:38Speaker 02

  Yeah, so.

• 1:01:39Speaker 13

  Or saw any sort of value in using Bitcoin as a data store and not so much as a money?

• 1:01:46Speaker 02

  Yeah, so using it as a data store is just a very expensive data store, right? So, um, blockchains are inefficient by definition. So in order for, like, blockchain is not for everything, right? For, for money, I think it makes sense. The inefficiency, the cost of mining and everything is worth it because we're getting something very valuable, which is sensitivity resistant and immutability. But for other things, like, I've said this many times, like, for, for an app like CryptoKitties, right? It's, it took the whole, like, pretty much took the whole Ethereum blockchain down because it was so, it's so inefficient, right? If Amazon or Google is running a CryptoKitties app on their data center, people would run it perfectly fine.

• 1:02:29Speaker 02

  No one would actually be afraid that Google or Amazon will steal their CryptoKitties or censor their transaction. So there's no reason why things like CryptoKitties need to be on a blockchain, right? It doesn't make any sense. It's just inefficient for no reason.

• 1:02:43Speaker 02

  Whereas there might be some applications that make sense, right? I think some of the most popular applications on like Ethereum or Tron are like gambling applications, right? Or casinos. And the reason why they're popular is because they're, you can't do that anywhere else. You can't just gamble your money away anywhere else, but you can do it on Tron or Ethereum, right? And those will be popular because there's a reason why they, they exist right there. It's inefficient, but it's, it's getting, there's a reason for it.

• 1:03:17Speaker 13

  So I understand how you feel about, you know, Roger, Cash, and Greg Wright and all that. But how do you feel about apps like Memo, Memo Cash, or, uh, Block, Blockchan? Have you, are you familiar with those?

• 1:03:32Speaker 02

  No, no.

• 1:03:34Speaker 13

  Basically, just people are tweeting and I guess it's all on the blockchain.

• 1:03:38Speaker 02

  It's like saving tweets on a blockchain?

• 1:03:40Speaker 13

  Yeah.

• 1:03:41Speaker 02

  I think it's, I mean, it's need to experiment with it, but I think the inefficiency will catch up to them. Basically, the reason why it works right now is the block rewards. All these coins are creating block rewards. You're basically using that block rewards to pay for storing stuff on the blockchain. But as the block rewards approaches zero, then no one's willing to pay for it. Then it will all come crashing down.

• 1:04:07Anthony Pompliano?

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• 1:04:50Anthony Pompliano?

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