Halsey Minor, Co-Founder of Salesforce: The Rise of Distributed Computing

Halsey Minor is one of the biggest internet and tech pioneers of our day. In 1993 he co-founded CNET, which would eventually be sold to CBS for 1.8 billion dollars. In 1999 he helped Marc Benioff co-found Salesforce. Today, Halsey is working on a bunch of projects, including Videocoin, and in this conversation, Anthony Pompliano and Halsey cover everything from distributed computing, crypto currencies, and blockchain technology. ----- Join the Off the Chain newsletter. Pomp's daily email analyzes the crypto market for institutional investors. Simply, it’s the best crypto newsletter delivered to your inbox every morning. No frills. No bullsh*t. Just everything you need to know in a 3-minute read. https://offthechain.substack.com/ ----- BlockFi BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. ----- 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.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Most of you know me as Pop. You're listening to season two of Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:15Anthony Pompliano?

  Halsey Miners, one of the biggest internet and tech pioneers of our day. In 1993, he co-founded CNET, which would eventually be sold to CBS for $1.8 billion. And then in 1999, he helped Marc Benioff co-found Salesforce. Today, Halsey is working on a bunch of projects, including Livecoin. And in this conversation, we cover everything from distributed computing, cryptocurrencies, and blockchain technology. I hope you enjoy it nearly as much as I did.

• 0:42Anthony Pompliano?

  Before we get started, I want to talk about one of our sponsors, BlockFi. These guys are doing really interesting work in crypto lending. What they allow you to do is keep your crypto, put it up as collateral, and receive a US dollar loan funded directly to your bank account. They do loans ranging from $2,000 to $10 million, and they're perfect for helping you reach your financial goals of all sizes. You should visit blockfi.com/pomp. Again, that's blockfi.com/pomp. Again, one more time, type it in, blockfi.com/pomp. If you'd like to learn more about putting your crypto to work without having to sell it, definitely do it. 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.

• 1:27Anthony Pompliano?

  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.

• 1:42Anthony Pompliano?

  Welcome, guys. I have Halsey here. You have an epic career in technology and do some pretty interesting things today. So I appreciate you joining us.

• 1:52Speaker 01

  Yeah, glad to be here.

• 1:54Anthony Pompliano?

  For sure. All right. So let's just start from the beginning. Maybe let's go through your background and then we can get to kind of early days of the internet.

• 2:03Speaker 01

  Yeah, well, I was definitely part of the early days of the internet. I started CNET Networks in 1993.

• 2:13Speaker 01

  Because no web publishing software was available, I had to build my own web publishing software, which became the industry standard. It became a company called Vignette, which ended up being an $11 billion company. CNET made a billion and a half dollars on spinning that out. And I, when I left in February of 2000, CNET was a NASDAQ 100 company, which I built from scratch, obviously. We had about a $500 million run rate. And the company that I spun out, Vignette, became, like I said, they became about $11 billion company.

• 2:55Speaker 01

  And we also started a search engine internally, which NBC bought and became NBCI. I left in February of 2000 because Salesforce launched in January of 2000. So I basically left a NASDAQ 100 company that I had built to go spend the next four and a half years to helping build Salesforce. And for the first two and a half years, Mark Benioff, who's now very well-known, didn't actually run the company, was a guy named John Dillon, who did a wonderful job. In 1999, I quit $19.5 million, which I don't know what that would be in today's

• 3:36Speaker 01

  money, in Salesforce. So I was, you know, the, I think more than half the money came for me. And I was the second largest shareholder, I think. When I left CNET, I owned about 15%, which was actually more than I owned at CNET at the time. And Mark owned about twice what I owned. So, you know, I spent four and a half years helping to build the company. It was an idea that seems so obvious now. It was obvious to me because it was clear that Cloud-based computing was, in our case, Salesforce, it was one-tenth the cost,

• 4:20Speaker 01

  one-tenth the complexity, endless innovation as you sort of update. And Mark came to me because, seeing it at the time, was one of the top 10 websites in the world in traffic, and then I'd started this enterprise software company. So I had the kind of the perfect blend of these two. So anyway, I spent four and a half years helping to build the company, actually rang the bells with Mark and the New York Stock Exchange, and then I got off the board and started to do other things, which was starting what's now called Google Voice, it was called Grand Central. And I started a company called Open DNS, which has about 3% or 4% of global DNS.

• 5:03Speaker 01

  It was bought by Cisco, pardon me, three or four years ago for, I think, $640, $650 million. And a couple of others were smaller companies that were acquisitions, they didn't go public or anything. And then I got interested in this industry in 2012, and I launched a company called Uphold, which is one of the few companies, certainly at the time, that had access to UK, EU, and US banking for buying crypto, just like Coinbase. And that was really about solving the most difficult problem at the time, and still

• 5:47Speaker 01

  so much today, which is how to get money from the banking system into to be owned by crypto. Very difficult problem. They certainly didn't make it easy. They really don't still make it easy. So, started that. They've been around, they've done very well. I'm a large shareholder there, but I don't run it. And I spent the last three years building a Excuse me, um, the our video platform that includes a video cloud. And the cloud takes in this huge amount of video from a VR camera. And then it sends it to, you know, it does fancy stuff called encoding and and it sends it to uh to

• 6:29Speaker 01

  to YouTube and it sends it to Facebook and it sends it to uh uh Centa Galaxy Gear and, you know, Oculus and so so we have to ingest all this video and we have to send it out to all these platforms. The person I hired to run my cloud actually built Intel's video streaming cloud, which was a competitor to AWS and was a competitor to uh to Google. And I don't know their exact logic, but I think they they didn't want to compete with with their uh two big buyers of their product, Google and Amazon. So they ended up selling that to Facebook and that's how Facebook got into video is they they effectively bought this uh

• 7:11Speaker 01

  they bought this uh cloud-based video utility uh from uh from um uh from Intel. And so, you know, my history is, you know,

• 7:27Speaker 01

  uh, building platforms, you know, around kind of a known use case. So so I ended up building the number one um platform for doing web publishing. And I did it because I understood that that's what I had to do to actually do web publishing at CNAPP. So so I literally had to build the platform underneath me. And uh, you know, it was a little different at Salesforce, but basically what we did is we took a CRM app uh that was growing very quickly, uh and we enlarged it and made it a cloud-based platform for building any kind of, you know, of uh of business-related uh business-related, cloud-related software. So the ecosystem around Salesforce now is I think they had one hundred and eighty-five thousand people

• 8:11Speaker 01

  at their most recent event, uh which is called Dreamforce.

• 8:16Speaker 01

  So given the experience we have in crypto and in video and the fact that we've built this, you know, probably the most sophisticated video app in the world, basically done the same thing, which is to say, we've got an app, why don't we build the infrastructure underneath our app in a different kind of way, which is really to distribute servers all over the world as opposed to using the ones that are only in Google or Amazon's data center. And we'll use a business model that's now becoming prevalent, which is using underutilized resources to dramatically lower costs. So that's the, you know, that's, that's the history in five minutes or less.

• 8:56Anthony Pompliano?

  Well, and there's a bunch of really interesting stories along the way, right? Because it's, there's a lot of people come on and we talk about technology and very few people have the historical context of how a lot of this technology got built, you know, what business laws have worked, haven't worked, how to monetize those companies along the way. One of the most interesting stories, I think, with you is back in, I think it was 93, 94, you bought a ton of URLs, things like mac.com, search.com, etc. Tell us that story.

• 9:31Speaker 01

  Yeah. Pardon me. Yeah. So, you know, you know, early on, people didn't understand that, you know, the internet was going to be very big and that domain name for valuable. And so I think for less than $15,000 in 94, 95, and I won't get them all, but we bought search.com, news.com, tv.com, radio.com, community.com, chat.com, mac.com, java.com, shopping.com. There are more, all of the same, download.com, shareit.com. So, so, you know, we, I mean, we honestly, we didn't pay more than $15,000 for any of these.

• 10:16Speaker 01

  Yeah, what part of my strategy for growing the company was news.com became our news site, download.com became our download site, shareware was another one. And, you know, part of the reason that it seemed like got so big, and like I said, we were, I think when I left, we had more traffic than Amazon, was we had services like download.com where you could come and search for and find software. And I think we had 10 million people a day who actually did that, all the way back to 2000. So, you know, this was a very scarce resource that people didn't sort of appreciate at the time. And I had a, it's interesting,

• 10:55Speaker 01

  I had, the guy who bought these for me was my assistant, who was actually employee number three, who actually went on and was actually with the company longer than I was, and ended up ultimately becoming the ambassador to Great Britain, a guy named Matthew Barson. And he was just out of college, so he was a perfect guy to go, you know, plead for to all of these people who, you know, who had these key domains we wanted and obviously didn't want to, you know, overpay for if at all possible.

• 11:36Anthony Pompliano?

  And at one point, you got approached to sell mac.com to Steve Jobs, right? It's just a crazy story.

• 11:43Speaker 01

  Yeah. Yeah. It was, yeah, so, so I got a phone call. So my assistant came in and said, you have a phone call from Steve Jobs. And I said, okay. So I got on the phone, and it was classic Steve Jobs. He goes, you know, got this incredible new service that we're building, really breakthrough kind of thing, da, da, da, you know, kind of, you know, painting the picture of this big new innovation at, at Apple. And, you know, so I said, well, you know, what can I do for you? He said, well, you have the name mac.com. And I had no idea which way this is gonna go. I mean, obviously, it could have been,

• 12:26Speaker 01

  "And my lawyers will be calling you," which is not the way it went, thankfully. And he said, "You know, we're interested in getting it from you." So I said, "Well, how about this? You guys don't advertise on CNET. Why don't we set up an advertising meeting? And we talk to you about advertising on our network, and we try to figure something out." So we set up a meeting with Steve, and it was just with Steve. He didn't have anybody else in the room. And my head of sales had a very carefully-prepared presentation that he went down. And I started going through with Steve. And Steve got through the second slide, I think, of 15, and he was gonna have none of it.

• 13:10Speaker 01

  He didn't want anyone spoon-feeding him anything. So he just started rapid-fire questions coming in. And my head of sales actually melted down the shot. I mean, just totally, utterly melted down. And so, anyway, this presentation became a very interactive affair. And the net of it was, I effectively gave them the URL, but they had to buy $150,000 worth of advertising on CNET. And anyway, so that's what happened. And, you know, the thing is, is, you know, we were selling banner ads at the time. And so, you know, as you can imagine, you know,

• 13:51Speaker 01

  banner ads aren't the best way for Apple, in Steve Jobs' mind, to market, right? I mean, he likes TV and poster. So, you know, from there on out, you know, anytime I ran into him, he would remind me that he thought his advertising sucked, and it didn't work on the platform. So it didn't end up with Apple as an advertiser, but, you know, at least we got a shot of trying to bring them into the platform. And it's just, you know, they're pure brand. And as we know, things like Google, where they're transactional, you know, we know those honestly were best when it comes to, you know, when it comes to advertising. Today, we know that.

• 14:36Anthony Pompliano?

  For sure. Let me ask this question because I think, you know, as you had these interactions with what are now, you know, tech luminaries, and obviously you've built a number of very large companies yourself, all in and around the computing space and, you know, kind of personal PC, etc.

• 14:53Anthony Pompliano?

  What was the general market temperature or feeling as these companies were being built? I'm assuming most of them weren't just consensus driven, right? Everyone thought that Salesforce was going to work or anything like that.

• 15:05Speaker 01

  No, nobody thought, I mean, no VCs would invest in the company.

• 15:09Anthony Pompliano?

  Really? So explain this more.

• 15:12Speaker 01

  Yeah, well, I mean, I mean, when I say, you know, most of the money in Salesforce was me and Larry Ellison. And Larry Ellison did it because he wanted to spy on the company. And I did it because, you know, I was, I was trying to buy CRM software and it was going to take two years and $5 million, it would take forever to do it. So, so here is the, so literally everyone in Silicon Valley said no to Mark. Everyone, you name the big firm and they all said no. So, so what they didn't believe was that there would come a time where companies would put their most critical information, their customer data in a website. That's how everybody thought of the internet. It's a website, right? It's for publishing.

• 15:53Speaker 01

  And, you know, even the, the, the software that, you know, I spun out, it's called Story Server and the company's called Vignette. So it's kind of like, this is, you know, this is how newspapers put their information online. This is not how companies put their data. And, and, you know, I mean, it's interesting, I went and I was a customer of Merrill Lynch and I went and I met with CTO in like 2002. And I knew they had a huge, like $100 million Siebel software project.

• 16:27Speaker 01

  When I met with him, I said, hey, look, you know, you're probably going to say you can't do this. But, um, but you know, that while you're spending all that money. And if you just adopted, you know, a cloud-based application, um, you know, you get up, get going faster and it'd be cheaper and more innovation, all this other stuff. And he said, he said, well, you're right. It will never happen. And from a regulatory standpoint, we don't even think we ever could put any of this data out in the, in the cloud. So, so, you know, now it seems, you know, now there's such trust in the internet that these things seem, you know, like, why would anybody not do that? But in 2000, we weren't there. And, and the problem was is that what happened with every, uh, we, we ended up having two groups of customers.

• 17:11Speaker 01

  We had little teeny companies who couldn't afford any software. Like, I mean, they didn't have an option. So we were, we were the only option. As it turns out, the other end of it was giant companies who had salespeople all around the world and they couldn't possibly put, uh, you know, heavy-duty Oracle, whatever, uh, software in 50 different locations and try to connect it. But there was just a general, um, belief in the valley, and it was unshakable, that, um, you know, that, that the security people, I mean, you have to remember Salesforce is outsourcing. Like, they're taking people who are doing something today, which is CRM software, and they're shipping it off to another company.

• 17:55Speaker 01

  And the security people, and I used to joke, I'd say, you know, the, um, the only way that, you know, Salesforce will get into the enterprise is the head of sales has been waiting two years for a software, which was common. And he would accidentally run over the head of security in the parking lot. And that's kind of what, you know, that's kind of the way it felt. And, you know, so, so, and, and, you know, we actually avoided big companies.

• 18:22Speaker 01

  Because they would say things to us like, okay, we'll use you, but you have to build the entire data center inside of our data center. Like, what, how's that different from what you're doing today, right? So we said no to a lot of big companies because they wanted to wanted to break our, to break our, our, our model. So, so it was just, you know, I, you know, I was in a unique position. I created an enterprise software company, you know, I understood how to build webs, you know, websites. And I was actually, when Mark came to me, I was actually a customer. Like, I was already looking at buying the software. And I'm like, this is crazy. It'll take me two years, all this money, and it

• 19:05Speaker 01

  probably won't even work at the end of it. So, so I was in a very good position to, you know, to just sort of recognize why this, this would work. And, you know, I would generally say that sometimes it's important to look at things at a very high level, right? I think this is true blockchain. And say to yourself, say to yourself, you know, ultimately, are the characteristics of what are being sold so good that people will ultimately have to acknowledge and accept the model? Like, is it that much better that just, you don't know how, you don't know when, you don't know why, but it is, the value is so great

• 19:50Speaker 01

  that you know it will have to be accepted at, at some point. And Salesforce did it in that category perfectly.

• 20:00Anthony Pompliano?

  It's so interesting, because a lot of what you're talking about is directly correlated to the crypto industry, where most people either don't understand the trends, they don't believe it's going to happen, right? But within the crypto community, there's incredibly high conviction around decentralization, etc. Do you see that parallel as well, or is that, is that an inaccurate statement?

• 20:21Speaker 01

  Look, I see a lot of parallels. I mean, when, when, when CNET started, the number one business plan, most successful business plan on the internet was porn. Hands down. That was, that was first people to do transactions. And, you know, if you wanted to paint another big picture of the internet, which many people wanted to do, that's what they would, that's what they would, they would present.

• 20:48Speaker 01

  And you know, people have the base to figure out the Internet like the beginning of 1998. So it took a while before, you know, a lot of very smart people sort of even recognized its utility. You know, that period from 93 to 2000 was in many ways not as similar to what's happened recently with the price followed by the dramatic fall in the price. CNET actually went from around $67 when I ran it per share, down to 63 cents in three

• 21:32Speaker 01

  years, where it traded below cash. And then it came back and was ultimately bought by CBS for $17 share. So, you know, there was a huge inflow of capital into the Internet, and I think it was something like $9 trillion ended up being lost in the contraction. And I used to always say to people who talked about the fact that this went on and how bad it was and how much money was lost, and I said, "Well, think about it this way. If the bubble had not happened in the United States, if it had happened someplace else,

• 22:16Speaker 01

  all of the big world dominant companies would be in another country. Amazon would be there, eBay would be there, Google would be there." You could write down the list. You know, you have to actually sort of cover all the bases to make sure that you actually enable the really big companies, right? And so, you know, people weren't crazy in the Internet bubble. They were right. Something major was happening, right? A lot of these things were ahead of their times. A lot of them were being run by people who didn't have any experience running anything. That was a huge problem.

• 22:55Speaker 01

  Capital was too easy to get, so, you know, so a lot of things got funded that wouldn't have if people had spent a little more time analyzing them. But... Fundamentally, what happened was beneficial to the United States that it happened here. So we've obviously gone through a very similar sort of trajectory, up and down. And if you believed in the Internet, you know, in 2001, 2002, 2003, you know, you could have bought a lot of companies that became extraordinarily valuable for not a lot of money at all.

• 23:35Speaker 01

  There was huge opportunities to buy Amazon for pennies on the dollar, fractions of pennies on the dollar. So, you know, the only thing is, sometimes when these things go up really quickly, they tend to overshoot on the way down. But for me, it's all about, is what's happening, does it bring fundamental benefits that are undeniably useful? And if they are, then, you know, you just, you find the best, you find the best people,

• 24:15Speaker 01

  you know, in the industry, and you get behind them, and, you know, you don't look at it, you know, day to day. I mean, after we went, you know, public Salesforce, Microsoft would announce that they were going to compete, and stock would go down. SAP would announce they're going to be, the stock would go down. And we all knew none of those guys were going to be able to compete with us. Why did you? But investors were afraid. Because it was a completely different business model. Excuse me, excuse me. You know, it's like, everything that we did was different, right? So they would have to make software for lots of different kinds of computers, lots of

• 25:00Speaker 01

  different kinds of databases. You know, we just made software for one kind of computer, one kind of database. We did it in the cloud. You know, rather than software having to be updated every two years, we made it better every quarter. You know, I say to people, you know, what's the, what's the last time somebody showed up and their Oracle software just got better? Never. Happens to websites, happens to websites all the time. So, you know, there was...

• 25:30Speaker 01

  You know, and a certain inevitability to the very concept of of cloud in my mind, just because, as I said, the benefits were just, you know, when you scrape off all of the, you know, all of the, well, you see through all of the fog that's always created when there's something new, you know, in there was something to me that was just undeniable in its utility.

• 26:05Anthony Pompliano?

  For sure. Let's move to talk about computing, right? Because I think that the computing today obviously looks very different than it used to. And one of the things that really has fascinated me is we've historically lived in this CPU-heavy world, right? Most of the computing capacities and the needs have been CPUs. Obviously, people built those CPU facilities, but it's shifting. The computing needs are becoming more complex. And so things like video, AI, self-driving cars, machine learning, DNA sequencing, all of that's going to require GPU-based computing power. What's your perspective on the difference

• 26:47Anthony Pompliano?

  between the CPU-GP that evolution or kind of, you know, move to the GPU side?

• 26:56Speaker 01

  Well, you know, we're sort of heavily vested in GPU computing. So what we do at Live Planet is we don't not only have a cloud, but we also have the best, most capable VR camera that connects to our cloud, that connects to all of the clients. So, you know, it's an entire chain of plug-and-play services that makes it much easier for people to, higher quality and much less complex. We use a huge amount of GPU processing in that. And so, you know, the What's happened on the Internet is now eighty percent video.

• 27:38Speaker 01

  And so video processing is typically, you know, often very GPU intensive. Now, now, there's a process called encoding. And whether it's a GPU or CPU, it has the power to essentially compress and decompress video. And that's how video gets, gets, uh, basically gets, gets distributed. But I think if you look at Moore's Law, I think it would have slowed down, uh, except for the fact that GPU has sort of picked up and, and, and made up for the, for the, for the deficit, the deficit in CPU computing. You know, now that, now that the, so on the Internet, you've got eighty percent of the Internet is video. It's growing twenty-five percent compound annual, right?

• 28:22Speaker 01

  So, so we're not in the world that Google and Facebook and all these other guys started out, which is really text and graphics. And we're moving to a completely different kind of Internet. It's fully, you know, video. And, you know, even within video, you have, to your GPU story, you know, you have things like VR that are going to become monstrous in terms of, I mean, in every capacity, in data, et cetera. But it actually takes video and using a GPU, it transforms video into something entirely new called reality, right? So, so video is at this really weird inflection point.

• 29:05Speaker 01

  So, in the world today, you know, what, what, what really is sort of driving technology is, you know, growing bandwidth and GPU computing. It is, it has to do with video, it has to do with self-driving cars, uh, it has to do with AI, um, in the world, uh, I mean, you know, the CPU brought the world a long way, created the whole, uh, PC revolution. But the world now really belongs to the GPU. And that's, of course, why Nvidia has, uh, has, has done so well over the last two or three years.

• 29:42Anthony Pompliano?

  For sure. And why do you think the, you know, obviously, Google's got their TPU and Anon's starting to offer GPUs. But why do you think they haven't kind of really double or triple down on building that out faster? Do you think it's lack of demand, like large demand? Do you think that it just takes time to build the technology? You know, where are we in that life cycle of those large incumbents?

• 30:05Speaker 01

  So are you talking their specific chips that compete with Nvidia, for instance?

• 30:10Anthony Pompliano?

  So, well, I think there's a couple of different pieces, right? So there is the kind of the hardware that needs to compete here. And then also what I would, the consumer offerings, right? So just like Amazon AWS, right? Yes, they are ramping up the GPU offering and Google's got their stuff too. But it just feels like we haven't yet hit kind of the turning point where there's a ton of demand. But I don't know if that's actually what's holding us back, or if it's something more technological, or what your take there is?

• 30:39Speaker 01

  No, I mean, I mean, look, I mean, if you look at AI, right? I mean, AI is, is, I mean, going to play an extraordinary role in everything we do. But, you know, I mean, in that particular area, there just aren't a lot of engineers. I mean, if, if, you know, it would go five times faster if there were five times more engineers in the world. So some of these aren't even technology deficits. So they're just engineering deficits. So there's no doubt that most modern computing is really centered around, around the, around the GPU. It's a different kind of, it's a different kind of computing, though, and

• 31:19Speaker 01

  it takes a different set of skills, right? Because GPUs, a lot of it is, you know, multi, you know, multi-threading. So, so, you know, Intel will send you eight chips on a chip. Intel will send you, you know, 5,600 chips on a chip. So, so it's a different actual model for computation. And

• 31:43Speaker 01

  And as a result, we have a world of CPU developers and we have really a deficit of GPU developers. But if you look at self-driving cars and all these things, they're so GPU-heavy. So I just, you know, I think over the next, I mean, I don't know how long it can be forever, but certainly over the next 10 years, you know, all of the heat around new applications and sort of breakthroughs in computing are all going to center around the GPU or, you know, its variants, for instance, the Drive AI. They're either GPUs are very GPU-like in the way they in the way they function. So, yeah, I mean, I think I think the transition is happening.

• 32:28Speaker 01

  And I think, I mean, honestly, I think one of the biggest things slowing it down is really lack of a talent pool. I mean, if you want to go out as a company and you want to hire AI guys inside of your company, I mean, they're going to go work for an AI company. So massive lack of skills around GPU-based computing in general.

• 32:50Anthony Pompliano?

  And as this gets ramped up, right, what is the need of, let's say, those AI companies? Do you think that there's going to be concerns around outsourcing or using kind of cloud options versus actually keeping the computing power internally?

• 33:09Speaker 01

  No, I mean, I mean, let's kind of bring this, let's kind of bring this back to the to the block to the blockchain. Because I think it's it's an interesting lens to look at this. So to me, the blockchain is a new architecture for computing. And, you know, we've gone, what happens is that we we go from centralized, decentralized, back to centralized, decentralized in our history. So we started out with mainframes, and then they were broken up by servers that people put, you know, client server computing, which they put, you know, inside their company and all these servers, you know, you know, number of servers a company had for all their apps, you know, like CRM exploded. And that became too complicated. So we went back to

• 33:53Speaker 01

  the cloud. We started using companies like Salesforce. And so now we're seeing this decentralization. And, you know, for me, you know, people talk about decentralization in a lot of different ways. You know, some people refer

• 34:08Speaker 01

  Some people talk about it as kind of a moral imperative, right? For them, it's the way that it should work. And, you know, that may or may not be true. It really depends on the application. Some things are better centralized. And I don't think we're ever in a world where everything is decentralized. But if you look at it as a new kind of computing architecture, what it allows you to do is tap resources wherever they are in the entire world, right? And so we have ideas, you know, today that are in our heads from Airbnb and Uber, who are completely different from Marriott.

• 34:53Speaker 01

  I mean, like, they're in totally different businesses, even though from a consumer, they're kind of like the same thing, right? So if the blockchain allows for easy decentralization of processes, which it does, that opens up entirely new avenue for doing computation. And that's why, you know, you've got, you know, AI is an example. And so, you know, there will be data centers that are run that have AI. But there will also be resources that are all around the world that people tap into. Let me give you one reason for why the decentralization may actually went out over the data center.

• 35:38Speaker 01

  5G is designed to do something that very, two things are very specific. The first is to deliver significantly more bandwidth, you know, one gigabit kind of thing to people. The other thing is very low latency. So if you're, you know, I think Microsoft announced they're creating an Xbox in the cloud. How do you do that? Well, you have to have very low latency. So when people talk about 5G, they don't say it's faster than 4G. They say it also has lower latency. So what you're doing then is you're pushing the applications to the edge. It's the only way that you can do this, right? So if people really are going to have their AR, you know, goggles, VR, you know,

• 36:24Speaker 01

  watch their video, it's going to run from a data center that's very local, right? I mean, I'm not making this up. This is the future of 5G. Anytime you see people talk about it, this is what they talk about, low latency. So, so the whole centralized data center model for all kinds of computing doesn't work around 5G. You know, it, it, it, it's not, it's contemplated to pushing all the computing to the edge. So, so while, you know, companies like ours, you know, around video can claim that we are much lower cost than Amazon or Google for providing the same services.

• 37:04Speaker 01

  Ultimately, we fit the new computing model, which is an edge-based, an edge-based model. And so I think it's the ability for the blockchain to enable this edge-based model in an ecosystem of people who can get paid for, for, you know, for dynamically showing up on the edge and putting, making resources available. It is, it is, is underappreciated how much of a new computing model that the blockchain represents today. I mean, I started thinking about his money and, you know, how do people buy Bitcoin or whatever, but it took me a couple of years to finally realize this is a fundamental

• 37:48Speaker 01

  change in the way a lot of computing will actually take place, particularly as it lines up with, with 5G.

• 37:56Anthony Pompliano?

  All right. Before we continue with this conversation, I want to mention our sponsor again, BlockFi. Remember, they do crypto lending. So you posted your crypto as collateral, they give you a US dollar loan, and you can use the US dollars to do whatever you want. You should visit blockfi.com/pomp and then tweet at me that you went. If you tweet at me after you went to blockfi.com/pomp, maybe I'll throw you a like, a smiley face, or the fire emoji. The fire emoji is the best. Remember, go to blockfi.com/pomp and I'll see you on Twitter.

• 38:26Anthony Pompliano?

  One of the questions that I've had, right? So you guys are doing like video compression stuff and really, I think, taking a nuanced view. Maybe before we get into it, why don't you describe a little bit about how your, how the technology actually works at VideoCoin and then we can kind of jump into some of my questions.

• 38:43Speaker 01

  Yeah, so I mean, it's, it's the same thing as Airbnb and Marriott. We, the customers, we look the same, but we're very different in what we do. So, so, you know, most people who know Amazon know Amazon Web Services is their only business that makes money and it makes a ton of money. And they use that money to compete with media companies and retailers. And I think they recently announced that they were bidding on five, sorry, 10 sports networks from Disney. So if you, you know, if Amazon Prime isn't enough to, video is enough to convince you

• 39:26Speaker 01

  that they want to be a player here, then that should. So, you know, so we have advisors like Ano Basse, who's the CTO of 20th Century Fox. These guys are paying Amazon huge amounts of money because, you know, cord cutting is just accelerating and, and it takes, you know, sending a broadcast signal out to people is, you know, one cost for everybody. Now with cord cutters, every time somebody connects, you have, you know, you have an additional cost and they haven't figured out how to actually get any more, any more revenue out of that. So, so, I mean, really what we're doing in one regard is really simple.

• 40:09Speaker 01

  We have a, today, we have Google as data center. We write all of our software that runs on their hardware that they provide. The software is ours and we're simply taking that model and saying, instead of it running just in one data center, let's let it run in any data center where they can perform the kinds of things that we want. So it's encoding the data, which is compressing it, it's storing it and streaming it.

• 40:36Speaker 01

  The big advantage that we have over just about really any, any other kind of project is that whether it's a GPU or CPU, or it's your iPhone, or Samsung Galaxy, whatever it is, every computer has what's called, a chip has what's called an encoder. And your encoder is either for compressing your video or decompressing it. So, so unlike miners who have to buy specialized hardware, every computer sitting in a data center today has an encoder, all of them. In ninety-five percent of the cases, they're sitting in a data center and the encoder is completely unused, because they're doing all kinds of other stuff.

• 41:18Speaker 01

  I mean, they're only, you know, only in like an Amazon data center, or Google data center, or some others are actually using this encoder. But, you know, and we, I'm using an encoder right now that compress my video, they're using an encoder, you know, on your end, so decompress it. And it's, it's actually essential to, to, to video. It turns out in our domain, they are twenty percent of all servers around the globe that are called zombies. They are totally unused. The, the problem was identified in twenty fifteen, and between twenty fifteen and seventeen, it actually got worse. So there's been massive overbuilding in, in, in data centers.

• 42:01Speaker 01

  And so that creates an opportunity to start with just to lower the cost. Okay. And so, you know, I used, I used to tell people, you know, with Salesforce, I said, you know, you're gonna buy us because we're cheaper, but you're gonna keep us because we're gonna be way more innovative. And because this is essentially an open source project on an open source network with a development community, you don't have a lot of innovation around Amazon Web Services, you don't have a lot of innovation around Google's cloud. And as a result, there's been very little innovation around video. I mean, YouTube came a long time ago, and video is totally controlled by these big companies, and they've had no real reason to do any real innovation, because they, they've

• 42:45Speaker 01

  got it, you know, right now, they've got it where they, where they want it, they know how to monetize it, et cetera. So I think by taking this out of, I'm not saying monopolistic hands, but I mean, the people who truly control, you know, everything that's about really, the internet, creating a new architecture and driving an ecosystem of developers, I think you're going to start to see, just like, I mean, our app, you know, effectively today runs on the video coin network, the VR app, in the same way that at Salesforce, we started a CRM application and then we created an entire platform underneath it that allowed

• 43:30Speaker 01

  you to build any application, right? Just at CNET, you know, I built web publishing, but I had to build a platform underneath it. In that case, I spun it out. And Salesforce, you know, didn't make sense to spin our platform out. It was part of this CRM. So we built the most sophisticated video processing app already and, you know, we want to be able to broaden the appeal of that and we want to be able to dramatically reduce our costs. So part of this, you know, part of this came from the, the company's called Live Planet that does VR. And the idea is that you have streaming VR all over the world. You can pop into a museum or, you know, play or whatever it is, you know, just by putting on the goggles.

• 44:15Speaker 01

  To run our camera 24 hours a day, seven days a week to all platforms costs $26,000 in, you know, mostly in coding costs. So, you know, even for our core model to work, we need to drive the cost down dramatically. We know also that, you know, companies like Fox that have tons of video that they have archived, they would love to be able to push that into the cloud and create new products around it. Like what's the history of the soccer team? What's the history of the football team? What's the history of this player? They have all this content, but it's locked away. If you reduce the cost, they can push it up into the cloud and they can start striping it and creating new, creating new products.

• 45:00Anthony Pompliano?

  And so I guess the big thing here is as the cost of computing comes down, right, or I'm sorry, as the cost for the use of computing goes down and it actually makes more money for those using it, really, the innovation, I guess, is happening not only, you know, it's happening at multiple layers. You've got the energy sources, right? People are actually finding cheaper energy to use. Then you've got people building better software, right? Better hardware is more efficient, etc. And then you actually have, I would argue, even better business models. And this is where like things like incentives, the token economics, etc., come in to not only use dedicated hardware in the cloud, but but really to use that unused or zombie computing

• 45:45Anthony Pompliano?

  power, etc. Yeah. How have you thought about, let's go kind of maybe top down, right? So how have you thought about the incentives given, you know, a couple of people are trying edge computing or decentralized computing to do this? What do you think kind of we end up is the right model?

• 46:03Speaker 01

  Yeah, I mean, I mean, so the way that we work is is pretty straightforward. And, you know, in our model, we don't really see people turning on their home computer and, and, you know, we see data centers really being the ones to do this. And we know that they're out there. We know they have unused capacity. So, sorry, I just, I'm sorry, I forgot your question. Give it one more time.

• 46:34Anthony Pompliano?

  Around the the use of incentives and the token economics, etc., how you think that'll play out?

• 46:40Speaker 01

  Yeah, sorry. Yeah. So, so our software does three things. It runs on servers and it determines whether the server can actually do the task that we want it to do. So there's got to be a proof that it's actually capable. The second thing it does is it measures what it is that server does. And the third thing it does is it transfers value to that participant so they can be compensated for it. I think that is, I think that is the model. You know, the hard thing that everyone's kind of struggling with here.

• 47:23Speaker 01

  You've got a constantly changing environment around regulations. And when I say that, I mostly mean the United States, not that this is not happening around the world. But it does scare me because the United States has actually done things right before. So when the Internet got started, the US could have required every website to pay taxes. Now, for you to understand the problem, there are, at least there were when the Internet was young, there were 9,600 tax jurisdictions.

• 48:04Speaker 01

  So there's a state, there can be a local, there can be hotel tax, it's all taxing. If the government had required Amazon and others to calculate the appropriate tax, you couldn't have operated. It's just too much complexity. The overhead of calculating all the taxes in all these different jurisdictions would have overwhelmed the development process. So as it turned out, that actually went on for 17 years. And at the end of it, what the government said was, you state by state, you can decide whether you're going to collect tax. And when this was going on, states and localities were complaining to the federal government, we're losing all this money.

• 48:49Speaker 01

  The issue that I ran up against was the phone companies went to, there's a law that says if you provide phone service, you have to guarantee that the phone is always on, even if the electricity doesn't go out. So they went after Skype and what's now Google Voice and these others said, ah, they can't provide that because they're running on top of our network. So, or they're running on top of their person's Internet. So they can't guarantee always on. And the FCC took a look at it and said, you know what? I'm going to exempt them from those rules because they don't control the hardware. So they can't be expected to perform the same thing. So they gave them an exemption.

• 49:32Speaker 01

  So the big question now is, are the regulators willing to be thoughtful enough to create the right set of exemptions that can allow, you know, some of these business models to kind of logically play out? And, you know, I was just writing to somebody, you know, this morning, it's just like, this is the first time, you know, where this has become, the government has become such a big part of my path to innovation, right?

• 50:09Speaker 01

  I mean, and, you know, it's, it's difficult, and I think it has definitely slowed the pace with which this industry has been able to move. And I think we're still kind of caught in a place where nobody, I don't even think the SEC really know, you know, what are the rules of the game? And so, you know, at some point, we need enlightened government, and by the way, we've had it before, right? I mean, I gave you those examples that were actually kind of enlightened.

• 50:51Speaker 01

  I mean, I think we all know now, I forgot what bank it was, that had like $200 billion of money laundering that went through one bank for the entire industry. And while, you know, Sarbanes-Oxley and all these regulations are being taken off the banks, you know, now they're focusing on crypto. I mean, we're a gnat, right? And this is a gnat, but we're a spark of innovation. And so, you know, I just hope that...

• 51:26Speaker 01

  You know, the SEC is not using this as kind of a way of saying, well, you know, we're killing a bunch of regulation over here, but God, we're going to go regulate these guys, you know, over here, uh, we're trying to do new, new, new stuff. And it kind of feels like that, you know, it kind of feels like we have been, uh, given the overall size and scale of what we do, which is so small. Um, we have been, um, uh, sort of overwatched. Now, I'm not telling the SEC that they shouldn't do their job, and I'm not saying they shouldn't go and find obvious fraud and, and, um, but I, I, I think there should be, you know, uh, there should be a, a direct interaction with leaders in the industry coming in, helping to guide them in their policy.

• 52:11Speaker 01

  I mean, you know, I mean, we, in the United States, we've, you know, we're terrified of China. We're terrified of what they're going to create. We're, you know, and, and here we are on the cusp of a major innovation. And to my, to my knowledge, there's no body that's been established to help advise the government to not screw this up. And, um, you know, it's, it's unfortunate.

• 52:37Anthony Pompliano?

  Well, if, if somebody did create that organization, what do you think the, uh, one key things they should, uh, should focus on? And what do you think, um, the types of people that would be involved in that organization? Like if you, if you were to kind of, you know, create the dream team, is it people from different disciplines? Is it all technologists? How do you see that coming together?

• 52:58Speaker 01

  Well, I mean, I think they're enlightened people in, inside and outside of the industry, right? And, and, and I think, you know, I, I think it would be, um, sort of the industry to try to come up with the people who sort of best, uh, represent. I mean, there are, there are brilliant academics who understand this. There are brilliant entrepreneurs, brilliant, brilliant investors, um, you know, who understand this. And, and I mean, it all comes down to basically, what does tokenization mean? Like what, what is, okay, you know, tokenization is an entirely new kind of thing. I mean, it is and it's not, right? I mean, you know, uh, when, uh, you know, when I was running CNET, we tokenized our equity and we traded on the NASDAQ. You know, so, so, so

• 53:40Speaker 01

  these ideas around tokenization, uh, yes, they already exist in some form. There's a great, um, there's a great analogy that somebody gave me and they said, you know,

• 53:52Speaker 01

  When there's a quantitative change, it leads to a qualitative change. So for instance, when a IBM computer gets shrunk down so it fits on your desk, it becomes a PC and a totally different thing. I mean, you take your PC and you shrink it down to the size of the phone, it becomes a completely new thing again. And I would argue the same thing is going on right now, that, you know, tokenization of stocks, which is very hard to do. I mean, you know, going through the whole process of, you know, public or whatever, that's being shrunk down to something that can be done very quickly and very easily, technically.

• 54:29Speaker 01

  And so it's going to require qualitative differences in the way it's addressed. And so to my mind, there's nobody who's addressing this issue of tokenization in all of its forms, you know, in all of its forms, right? I mean, from the standpoint of a video client, I mean, we have to be a utility. We're competing, we're building, we're competing with Amazon Web Services that is a utility. We're laying across the internet a new video utility, right? I mean, it's patently obvious, right?

• 55:07Speaker 01

  And so, and so, you know, I see very little thought going into, you know, what are the forms of tokenization? What are the benefits of tokenization? What are the technologies behind tokenization? And how might we differently treat them in order to capture the innovation that's happening? And I said this to people in like 2013, 2014. I said, you know, when in the 1970s, you know, I was...

• 55:42Speaker 01

  Ten, twelve, whatever. I remember when the deregulation of the airlines happened because all of a sudden, tickets on the airline went from being unaffordable to Southwest. Cheap, right? And I mean, it blew the industry up because, you know, they were all used to having the governments set their prices and yet these new companies came in and, you know, anybody could now fly, you know, basically on an airplane. At the same time, they also deregulated Wall Street commissions. So people went out and got brokers and then Charles Schwab was born, right? As an old new way of, of, you know, buying and selling stocks that didn't cost so much money.

• 56:25Speaker 01

  And it became a, you know, and it revolutionized both of those industries. Both of those things were driven by the government. The government decided to deregulate and it had a profound impact on how the economy works and a profound impact on equity ownership. It had a profound impact on people's ability to get around. What I tell people is Bitcoin came along, but there's no government mandate for change. Like the change arrived, but it wasn't because the government said, hey, guys, let's go find a better way to do this. Here's Bitcoin and all this other stuff. So, so we've got a problem, which is it's the new way of, there's a new way of doing

• 57:06Speaker 01

  things that's better, but it's not because the government ushered it into being. It has to usher itself into being inside of the government. And, you know, I don't know, I know the Office of the Comptroller of Currency is now looking to issue new banking licenses for innovative companies. But I know from 2008 to 2015, at least no new banking licenses were issued in the United States. So if you think about it, we had this catastrophe, this financial catastrophe, and we didn't invite more competition. We did the exact opposite. We actually made it harder for small banks to operate. So.

• 57:50Speaker 01

  You know, that that's the four corners of what we're up against.

• 57:54Anthony Pompliano?

  Yeah, no, and it makes complete sense. I guess the my question to you would be, so I'm a believer, right, in the sense of I agree that, you know, a lot of this stuff is going to happen. And I think that we're well on our way and kind of all of the right tech trends, technology, regulation, etc., are all kind of coming together at the right time. In your eyes, though, let's say we get 10 years out and this failed. What would be the number one likely cause that it would fail?

• 58:24Speaker 01

  Oh, it's clearly regulation.

• 58:26Anthony Pompliano?

  You think it is regulation?

• 58:27Speaker 01

  Oh, it's unequivocally regulation. And, um, yeah, and, and look, I mean, you know, the problem is large, right? Because one of, you know, what, what, what's the greatest, uh, what, what's the greatest benefit of Bitcoin? Well, it's the first currency you can send all the way around the world to anybody instantaneously. It's, it's lack of, of, you know, it's, it, it's ubiquity. You know, whether you think it is a currency or a, or gold or whatever it is, it's the first credit use case where you can just send this stuff anywhere in the world, right? And, and, and if half the world, um, you know, didn't accept it, uh, or people couldn't somehow get it, it would have its, its utility.

• 59:14Speaker 01

  You know, with people like me and others are building, we're building these global utilities, right? So, so the problem is not just the United States, the problem is kind of everywhere. Unfortunately, a lot of people look to the United States for guidance.

• 59:26Anthony Pompliano?

  Of course.

• 59:27Speaker 01

  But I think that, I think that if, um, I think there's no doubt that regulations currently, um, and lack of, of, of either engagement and or, um, or.

• 59:42Speaker 01

  Understanding the technology sufficient to be able to come up with an enlightened, enlightened ways of creating sandboxes around which people can operate and people can learn. It is the globalness of what we're building that is so powerful. But it is the global, you know, every jurisdiction has some rule that touches some facet of this business. And, you know, that's, you know, that's, that's, that's been a problem and I think it will continue to be a problem. But I will say this, though.

• 1:00:21Speaker 01

  When I put nineteen and a half billion dollars in Salesforce in 1999, I believed that there was an inevitability to this. Big companies weren't going to use it. I mean, there, it, it just, there was an inevitability because it was just a fundamentally different way of operating for companies. I mean, one of the great things that we did at Salesforce is we took companies who aren't innovative and by adopting our platform, they became innovative. That's a really big deal. That's a, that's a really big deal. So, so I do believe that there is an inevitability behind this.

• 1:01:02Speaker 01

  I, I don't, I, I can't tell you the timeline because I don't, a lot of it has to do with how quickly, you know, regulators in the US want to become enlightened. I mean, I think that's probably the number one, just want to become enlightened. But, but I would say I don't believe that there will come a time where it doesn't happen because I think that the evidence will continue to mount that there is a fundamental nature of this technology that makes it powerful enough that it has to ultimately be adopted.

• 1:01:36Anthony Pompliano?

  Interesting. Yeah, I mean, look, it's I always joke about this idea of decentralization and people are, you know, oh, it's not going to happen, or we don't need that, etc. And I laugh and I say, well, Airbnb is simply a decentralized hotel. And Uber is just a decentralized taxi company.

• 1:01:55Speaker 01

  Exactly.

• 1:01:56Anthony Pompliano?

  Right? And when you start to think of it that way, really, what you're talking about is just building a decentralized data center.

• 1:02:03Speaker 01

  Yeah, it's yeah, I mean, it's the same. It's an architecture for doing business. And so when people talk about it as an architecture to doing business, you know, I, I, you know, I'm totally on board with them. There are other instances where people talk about decentralization, and it doesn't actually make things better. It just becomes some sort of moral imperative, as opposed to being a way of making the world work better.

• 1:02:30Anthony Pompliano?

  Right.

• 1:02:31Speaker 01

  And so, and so I think people can go overboard and try to decentralize some things, which, which for a variety of reasons, may be better off being centralized. But in the world that I'm living in, the examples that you're giving, both the things that have already happened and things that can happen, the ability to decentralize is going to lead to a whole nother enormous set of new companies that are been enabled by a new business model around decentralization, just like the internet enabled centralization.

• 1:03:11Speaker 01

  As ironic, but, you know, you know, I had people from all over the world coming to CNET for everything computing. And of course, Salesforce, I don't know, 110, 120 billion dollar company for everybody comes to them, you know, for centralized CRM and other applications. So, so the blockchain that allows for decentralized business models as an architecture. And that's where I think it's real power lies. Particularly when you can combine two things on a blockchain, you can combine money and you can combine, you know, the information.

• 1:03:50Speaker 01

  And part of the reason that I think businesses have struggled is they've had a hard time using the blockchain for money because it's volatile. And I think we're going to see more and more. So, you know, when I launched Uphold, we had Bitcoin and 15 tokenized fiat currencies. And so I think we need a broader concept of tokenization that exists beyond just cryptocurrencies. And that includes, obviously, fiat as well.

• 1:04:24Anthony Pompliano?

  And what's your take on the crypto industry in general, right? Is, do you feel like we are kind of early, mid 90s and kind of we got a long way to go and there'll be this bubble, you know, a couple of years out? Do you feel like the 2017 bull market into 18's bust is kind of that 1999 type, you know, hype cycle? You've lived through this stuff. So kind of how do you look at that in comparison to the internet bubble and the infrastructure being laid and all that innovation?

• 1:04:55Speaker 01

  Yeah, I mean, I'd say it's very, I mean, I think about this a lot. Obviously, I haven't been through, you know, that cycle. What happened in the late 90s, excuse me, what happened in the late 90s was the, the whole movement was co-opted, in fact, taken over by the US banking system. In other words, it led to enormous numbers of IPOs. I mean, I use Morgan Stanley and Goldman Sachs. And they, Morgan Stanley took me public. I think

• 1:05:40Speaker 01

  Morgan Stanley took Salesforce public. So they participated in the IPO. Their trading desk traded our stock and their customers were customers of

• 1:05:52Speaker 01

  My companies and other internet companies. So this wasn't kind of a fringe thing. I mean, this was right in the heart of, it's right, it's right in the heart of what was going on. I mean, the number of times I was on CNBC was ridiculous, you know, compared to for the size of the business that I had. I mean, it was ridiculous. I mean, GE couldn't find a way to get to get on, you know, CNBC at the time. So it was like front and center and, and, and, and the banks and all these other guys, they were making a fortune off of this, a fortune off of it. And that's how you got to nine trillion dollars of value and that, that's nine trillion and $2,000, right?

• 1:06:33Speaker 01

  So because the banks haven't been able to make any money off of this, and I don't just mean commercial banks, I mean Wall Street in general, right? If they had all been able to co-opt this and make money off of it, this would be a hundred times bigger, maybe a thousand times bigger. I mean, it would be absolutely enormous. So the good news is though, is the rise and the fall, you know, it's really affected a very narrow group of, of technologists, you know, primarily. Nobody could call their broker and go buy any of these. It's real work to go buy a cryptocurrency. You gotta do a lot of work. It's not easy. You know, despite the fact that Apple, we tried to make it easy.

• 1:07:16Speaker 01

  It's, you know, you gotta know, you know, a Bitcoin address, you gotta know security and, you know, in ways you don't have to know about that with the stock. Let's call your broker and your account. You don't have to do anything. You don't have to worry about anything. So, so this is, you know, so this bubble, it was, it's really a mini bubble, you know, it's, it's a very small, well-contained kind of bubble. And for the people who are in it, it feels huge, right? And, and, and obviously, you know, for anybody who's had 10 times as much money as they have today, you know, it feels profoundly large. But the reality is it's very, very, very small.

• 1:07:53Speaker 01

  And so I don't think overall that the broader world feels like they've been, they've been hurt by what's going on. I, I think if anything, they feel like, you know, If it comes back, they won't have missed out and will get an opportunity around the next the next time. So, so the lack of of acceptance by kind of the mainstream financial system contained the size of this in a way that that never happened in in in the 90s. So, you know, you don't have, you know, cab drivers running around having lost, you know, half

• 1:08:34Speaker 01

  their money. I mean, there were horrible stories I heard all the time about people, what happened after the, um, you know, after the stock bubble. So, so I, you know, I, I think this is, I think we're really, really early. Um, I think this is kind of like an early lesson for a lot of people. Um, which, you know, the next time it kind of gets going, hopefully people will kind of keep in mind. Um, but I don't, I don't think this is kind of a wipeout scenario where for the next three years, you know, um, you know, nobody's going to want to engage in crypto. I think if anything, you know, it will, you know, whenever it kind of bottoms out here, um, you know, I think people can get back to

• 1:09:16Speaker 01

  trying again to do useful things with more knowledge about what can and cannot work in whether it's regulation all the way through to, to, through to technology to, to business model. So I, I think this, this is a minor crisis, you know, compared to what happened with, with the, the internet in 2000.

• 1:09:42Anthony Pompliano?

  Very interesting. Um, all right. I could talk to you for hours. This is super, uh, super fascinating stuff and you just have a really unique perspective. So I appreciate all the time. Um, before we wrap up though, I've got a couple of quickfire questions for you. Uh, the first being, what do you think the most important company in crypto is other than Europe?

• 1:10:07Speaker 01

  Well, I think the most, I don't know whether I would hold it, but I think the most interesting thing to happen over the last two to three years is Tether.

• 1:10:20Anthony Pompliano?

  Why is that?

• 1:10:23Speaker 01

  Because it begins the tokenization of fiat. And in order to be able to take all of this and push it into mainstream corporate America, we're going to need tokenization of the money that's used by, you know, the 98% of the world that's not in the crypto economy. I think it's, you know, I mean, it's led to like 200 other stable coins coming out. So clearly this has sort of led to, you know, a bunch of thinking about. But, but I think, you know, this is an idea I had when I launched a hold with 15 different tokenized forms of fiat. And I think, you know, we're now getting out of the tokenization of sort of nothing into the tokenization of real things.

• 1:11:08Speaker 01

  And that's, the world of real things is very big.

• 1:11:13Anthony Pompliano?

  Got it. Okay. What, uh, what's the one regulation that you would either change or improve if you could wave a magic wand?

• 1:11:23Speaker 01

  I would make the, um, the whole utility model crystal clear because what you and I have talked about are a lot of utility based ideas. And there could be an explosion of real alternate models around decentralization. If the SEC could just make it clear, um, you know, um, or could listen to, to these businesses and come up with a framework that, um, that, that, that makes these business models much easier. And so the people, you know, they know if they do the right things, um, you know, they don't have to worry about, um, you know, uh, the SEC coming after them.

• 1:12:10Speaker 01

  Just, that would be a huge first step.

• 1:12:15Anthony Pompliano?

  Got it. And then, what's the most important book you've ever read?

• 1:12:21Speaker 01

  Well, it was interesting. I read a book called Snow Crash in 1993. And as I was starting to see that in this, it's really the, it's the first well-known book to talk about virtual reality. And it not only had virtual reality, it has virtual currencies in it. And it has, you know, in many, many different ways over the course of my career, including right where I am right now, Snow Crash, Neil Stephenson, I think he's actually, I think he was actually hired by Magic Leap.

• 1:13:00Speaker 01

  And so it's, I mean, anyone who hasn't read it, they should read it. It's like, many of the ideas to kind of define the world today were right there in Snow Crash in 1994.

• 1:13:12Anthony Pompliano?

  That's, yeah, it's funny, when you join, join Facebook, they, at least in the product side, they give you, I think it's one or two books, one is Snow Crash.

• 1:13:22Speaker 01

  So is that right? I didn't know that. I didn't know that. Yeah. Well, because it's, I mean, that makes sense because right there, they're building, you know, they're, they're building a digital community and they did pay $2 billion for Oculus. So they, they obviously they're driving towards that world, which I think will happen. And, you know, I think VR and, and social, when they come together, I think it's going to be a pretty sound set of innovations, actually.

• 1:13:49Anthony Pompliano?

  For sure. All right. So I usually ask one non-crypto question. And we just got to admit that aliens exist, right? So let's just say that they do. One thing I'm really interested in is what are the odds that there is a more advanced civilization somewhere out there? And they're aware of us, but we don't know about them?

• 1:14:16Speaker 01

  I wouldn't be surprised. I wouldn't, I mean, I would, you know, would I, would I give, if I had to give thumbs up or thumbs down, I'd give thumbs up. I, I think the odds are, I think, I mean, look, if anybody has, you know, had a million year running head start on us, I mean, everything is possible. So in the 13.7476 billion dollars years since the universe started, is it possible somebody made it in 3 billion years above us? I, I would, I mean, look, we're, we're getting to

• 1:14:55Speaker 01

  the point pretty soon where we can tell what the, uh, what the, uh, what the atmosphere is like on these exoplanets. So yeah, I would thumbs up.

• 1:15:10Anthony Pompliano?

  All right. And then I usually end with, with you asking me one question. What, uh, what one question do you have for me?

• 1:15:19Speaker 01

  When do you think the market's going to turn around?

• 1:15:26Anthony Pompliano?

  The timing's the hardest part always, right? Um, I think here's what I'll say. So it's hard to pinpoint like, you know, an exact date or anything like that. But I do believe we still don't have the psychological kind of shock and awe that we're going to need. Um, and I actually don't think the shock and awe is like a one moment in time. I think that it comes out of boredom. People basically give up and they're just like, look, we were wrong and they go home. They leave, they forget about it. Um, and so that just means that we gotta kind of go sideways for a while, right? Maybe go down a little bit more or whatever. But if we just go sideways for a while, people lose interest, they go on to other things, they feel like, um, there's no way to, you know,

• 1:16:09Anthony Pompliano?

  build, um, you know, valuable products or make money or whatever it is. Uh, and I do think that the havings around Bitcoin specifically are kind of great, um, catalyst. And so I think the next one's scheduled to be May 2020. Um, so I don't know if it takes that long, but, but I do think that those, uh, those moments, you know, historically have had, uh, you know, kind of a good impact and I wouldn't be surprised if it happens again.

• 1:16:35Speaker 01

  Yeah, I mean, I'll give you kind of a quick story. I was having dinner in 2002 with Terry Semel, who was, he ran Warner Brothers, and then he went and was the CEO of Yahoo. And we were talking about the fact that internet advertising crashed, and he was saying that he couldn't even get meetings with people in the advertising industry that he'd known for decades. I got a phone call from Businessweek, which at the time was a very big business publication, it's now owned by Bloomberg. And they never built a website. They didn't participate at all in the whole internet, you know, media sort of website

• 1:17:20Speaker 01

  revolution. And they knew I wasn't doing CNET anymore, you know, I was doing, you know, selfless sales force. So they knew I would be sort of an impartial kind of person to talk to about media. So the reporter called me up giddy, because, you know, they had done nothing in terms of building their own presence. And he said to me exactly like this, "Now that we know that internet advertising doesn't work, what does this mean for the industry, for companies like CNET?" And I said, "Well, it's not a problem necessarily for CNET. The internet is going to consume more and more people's time.

• 1:18:03Speaker 01

  So if they go into this thing and they can't be reached by marketers, it is going to wreak havoc in the marketing world, because they can't have everybody disappear in media consumption and be able to market their products. So somebody's going to have to come up with a solution in order for all of this to work." The irony was, is that, I mean, we had the pay-per-click model at CNET, and it was so profitable, that's kind of why we were an asset in our company. But, you know, around this time, Google was rising, you know? And at the moment that everybody had decided this was never going to work, never, never, never. Terry Semel couldn't get people to call him back.

• 1:18:45Speaker 01

  It was, at that moment, taking shape. So I think you're...

• 1:18:52Speaker 01

  Your point may be accurate from my point of view.

• 1:18:56Anthony Pompliano?

  I love it. Well, we agree on many things, my friend. I really appreciate the time you took to do this. It is super enlightening to me and hopefully people at home enjoyed it. So we'll have to do it again.

• 1:19:10Speaker 01

  Thanks. Thanks for having me on.

• 1:19:12Anthony Pompliano?

  All right. You reached the end of the podcast. Congratulations. I appreciate you listening all the way to the end. You deserve a trophy. But before I hand out the virtual trophies, remember to go visit blockFi.com/pomp. They're the crypto lending leader in the US. They do it in 45 states, interest rates as low as 8%. And you can use the US dollars funded directly to your bank account to do whatever you want. You should definitely go visit blockFi.com/pomp. You know you want to do it. So just do it. BlockFi.com/pomp.

• 1:19:44Anthony Pompliano?

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