Stuart Popejoy & Will Martino, Co-Founders of Kadena: The Intersection of Public and Private Blockchains

Stuart Popejoy and Will Martino are the co-founders of Kadena. In this conversation, Stuart, Will, and Anthony Pompliano discuss their work at J. P. Morgan, what they think about JPM Coin, why they're bullish on building a hybrid public and private blockchain, and why the energy consumption argument is incorrect. ----- 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/ ----- Totle is a rare blockchain investment opportunity, one that offers a live product, active customers, an established revenue model. Totle solves three significant problems with blockchain asset exchange: 1) Security 2) Complexity and 3) Pricing. Over $4 trillion of blockchain assets were exchanged in 2018 and growth is forecast for at least the next 10 years. Totle’s sophisticated platform powers the blockchain economy with safe, simple decentralized asset exchanges at the best price for traders, wallets, businesses and other financial apps. Totle’s B2C Web App and B2B API are live and serving customers today. Visit totle.com/pomp for more info. ----- ZenLedger simplifies crypto taxes for investors and CPAs. We provide the best software for importing crypto transactions, calculating gains and income, and auto-completing tax forms like 8949, Schedule D and FinCEN. If you had losses in your crypto investments, ZenLedger can help you save up to $3,000 on your income taxes, with our tax loss harvesting tool. ZenLedger is also a TurboTax partner and has the best support for EOS owners. Finally, a simple tax tool that saves you a ton of time and headache! Visit Zenledger.io/OffTheChain to get your taxes done with ease, and as an Off the Chain listener, save 20% of your 2018 tax forms! ----- 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. Stuart Popejoy and Will Martino are the co-founders of Cadina. In this conversation, we discuss their work at JP Morgan, what they think about JPM Coin, why they're bullish on building a hybrid public and private blockchain, and why the energy consumption argument is incorrect. I really enjoyed this conversation, and I hope you do as well. I'm sure a lot of you have used Kayak to find the best flight. Total's kind of like Kayak, but it don't find you no flights.

• 0:44Anthony Pompliano?

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• 1:28Anthony Pompliano?

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• 1:48Speaker 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.

• 2:15Anthony Pompliano?

  All right, guys. Two-for-one special today. I've got Will and Stuart here. We've got a whole bunch of stuff to cover as usual, so thank you both for coming.

• 2:25Speaker 02

  Thank you. It's great to be here.

• 2:26Speaker 03

  Yeah, thanks for having us.

• 2:27Anthony Pompliano?

  For sure. Let's go through your guys' backgrounds real quick, and then we can jump into what one of your former employers has decided to do in crypto.

• 2:37Speaker 03

  Sure, I guess I'll kick it off. I'm Will Martino, co-founder and CEO of Kadena. My background is engineering. I used to do distributed systems work. I did the distributed systems initial research for the company, as well as moonlighting as our formal verification engineer. I got into crypto at the SEC of all places. I was there leading a quant group, the quant group's engineering group, and building forensic data analysis tools that are now nationally deployed, and was there when Valerie founded the cryptocurrency working group and raised my hand to be the first tech lead when that group was formed.

• 3:15Speaker 02

  Tell them why you did that.

• 3:16Speaker 03

  Why I did it? Because part of being in the government is that you get to be in the room and help to influence things at an early stage. And I saw the potential of the technology and of the space itself, and wanted to, and felt it was kind of almost my duty to be in the room, and if I needed to shout from the rafters, "Oh, my God, don't ban it. This is going somewhere, and it's good for people." And it turned out that that voice was not needed at all. From a regulatory point of view, the idea of a immutable ledger is amazing. That someone can't cook the books is just, it's too useful to be avoided. So instead, I just was auditing and helping with some enforcement actions, some examinations.

• 3:58Anthony Pompliano?

  And yourself?

• 4:00Speaker 02

  My name is Stuart Popejoy. I'm a co-founder of Kadena and president. And I, before Kadena, I'd been working at JP Morgan. I built the tech team of the research group, blockchain research group, and hired Will and a bunch of other extremely intelligent people, worked with Amber there as well, Amber Ballday. Been doing trading software for about 15 years before that in New York, building both exchange software and front-end trading software, high-frequency, low-frequency, all that good stuff. While we were at JPM, we got to basically talk to everybody. This was circa 2015 and 16, so we got to basically, everybody wanted to talk to JP. So we got to talk to everybody.

• 4:42Speaker 02

  Vitalik came in, Digital Asset, TradeBlock. The Hyperledger Foundation was formed, so of course IBM was in there. And the other thing we were doing was trying to build solutions for the bank. And that's how Kadena kicks off is because we came up with a way to do a scalable private blockchain. People talk about scalability in public blockchain, but scalability is an issue in private blockchain too. And people don't even know because a lot of people don't, you know, a lot of people don't know anything about private blockchain. So a lot of private blockchains aren't blockchain. That's another, you know, kind of interesting thing is that things that people are calling blockchains are not really blockchain. When you're looking at IBM and these kinds of companies.

• 5:19Anthony Pompliano?

  So before, before we get into public versus private and some of the challenges and benefits of each, I gotta ask, guess where the JP Morgan, Jamie Dimon, JPM Coin, what the heck is the plan, right? I mean, obviously while you guys were there, I think you guys kind of got a front row seat, let's say just to the mindset, right? So kind of let's talk first, just mindset wise. How does a bank like JP Morgan look at blockchain technology, even cryptocurrency? And how do they see themselves potentially fitting into that? And then we talk about that specific implementation of it.

• 5:56Speaker 02

  Well, one thing I would say right off the bat is that like the, there's a big divide between what Jamie Dimon might say and what the bank chooses to do at any given point in time. So for instance, the blockchain group was basically JP Morgan wanting to be at the front of these efforts and not be left behind. Because you have Goldman Sachs, you have every other bank looking into blockchain, you know, making investments. They didn't want to be the last ones to market. And in fact, this is one case where JP Morgan really knocked it out of the park. If you think about it, JP Morgan has got tremendous brand in blockchain. Because of Quorum, even this JPM Coin thing they did recently, they're making waves. People are paying attention to them. I think, you know, the Jamie Dimon stuff is almost just kind of like off the cuff. Like it's stuff that, I mean, I could say a lot more about it than that. I'm not, you know, maybe it's not totally relevant to this.

• 6:41Anthony Pompliano?

  Yeah, well, just as they look at it, so one, they want to be a leader, right? Two, obviously, they see some value in the technology. Is it something where they look at it and they say, hey, we want to build tools and products that we can use to sell to clients? Is it something where they say, we're going to use the technology for internal efficiency gains? Maybe there's something else. How do they think about the technology and where maybe they can play in the ecosystem?

• 7:05Speaker 02

  Well, I definitely think it's client facing. It's all about, and that was something that we learned, that was a valuable lesson we learned at JP Morgan, is that if you can't talk about, you can't just talk about like cost savings and efficiencies and safety, you got to talk about new money that is coming down the pipe because of something that blockchain can make happen. And that's something that I think a theme that they've stuck with in this, in the new JPM Coin efforts and all that stuff. So I think they've always been wanting to, I don't think they're actually, they're definitely not focused on build because, you know, they've essentially abandoned Quorum. I mean, nobody knows who's working on Quorum right now. But they have, obviously have an abandoned blockchain from a product perspective. So it's, I think it's very much of a product and client service and wanting to differentiate,

• 7:50Speaker 02

  wanting to, you know, basically respond to their customers' needs.

• 7:54Anthony Pompliano?

  Got it. And JPM Coin, obviously, for those that don't know, is, my understanding is it is a currency that they've created internally to move money for themselves and clients in a more efficient, lower cost manner, right? So it doesn't look like they're yet going and trying to sell this externally, it doesn't look like they are yet going to retail, although there's been some kind of public comments that maybe in the future we might go do that. But for right now, it's more internal use to move money. What's your guys' take having worked there on, you know, good idea, bad idea, likely to be successful? What do you think the challenges are? Kind of just talk through a little bit.

• 8:35Speaker 03

  Yeah, it's a great question. The first blockchain that actually got built and deployed at JP Morgan was Juno, which is the project that Stu and I were working on before we left. And it was kind of the version zero of what has become JPM Coin.

• 8:48Anthony Pompliano?

  Okay.

• 8:48Speaker 03

  The thing that existed before Quorum. And, you know, from the

• 8:54Speaker 03

  From the bank's perspective, like this system looks like an accounting system on steroids. Yep. And it's the, now, when I say on steroids, I mean, it's this incredibly safe, completely resilient system that does allow you to do kind of cross-cutting accounting throughout the bank for pretty dramatic efficiency gains. Now, there's a, you know, the first step in the migration to getting it working, the actual system working, is a bit big, but once you've done that first step and you actually have it working, you can start plugging in new things very quickly and start getting really big efficiency gains. And this is one of the things that a lot of people who look at private or enterprise blockchain and they say, oh, what is that about? And this has been the market trend for the last couple of years, although very soon,

• 9:36Speaker 03

  suspecting in about a month or two, it's no longer going to be taboo to say enterprise and blockchain, the same sentence on the West Coast. We're not quite there yet, but I've been dealing with it for years. We're really close. And there's, you know, a certain background that gives you a huge amount of excitement when you see the potential of these systems, and that is, if you've actually worked big, kind of enterprise back office, like with those big databases, those big gnarly things that are just this immense problem to deal with on a day-to-day basis. And part of the reason is that, you know, at first, you can do a lot of this stuff just with, you know, Oracle or with Postgres or just the traditional database, but as thing, as time goes on and as you bring on new developers and certain things weren't

• 10:17Speaker 03

  quite documented properly, or certain things weren't quite designed properly, you end up with this kind of mess that grows and grows. And this is found not just in banks, it's found in e-commerce sites, it's found all over the place. Once you hit a sufficient size, that backend database that your business runs through becomes kind of a mess. And people who have that experience and have been in the trenches, and you really need to have been in the trenches for a few years and felt the pain of getting that call at 2:00 a.m. on a Sunday because prod died and the backup failed. And now, there's just this mess that you have to go and jump on a train to come to the office and go and fix it.

• 10:52Speaker 03

  When you've been and lived that life, when you see what a private blockchain can do, you get really excited because it's so freaking safe. And it allows you to treat pretty much everyone almost as an adversary so that even your future self, if you forget, oh, I was supposed to do this before I do that, the system itself will be able to enforce, you know what? You did this wrong. Instead of it allowing you to just kind of, you know, with the existing technology, just be a bit more permissive, and then longer term, you build up this legacy debt that you can't get away from.

• 11:22Anthony Pompliano?

  What's interesting is you specifically said blockchain is an accounting system. And one thing that I've talked quite a bit about at this point is every asset, every stock, bond, currency commodity being digitized in the future. So if you think of Bitcoin as just a digital currency, right? There's going to be plenty of other digitally native assets.

• 11:41Anthony Pompliano?

  A blockchain is the accounting system for the automated world, right? And it's kind of this idea of if you are keeping the books, right? In the analog kind of cash flow type business, it can get complex, but literally a person could sit there with a physical paper ledger, write everything down, do some math, and we got the answer. That's not possible for a human to do in an automated world where things are flying around and there's value in micro payments and kind of multiple counterparties to a single transaction and all the stuff. And so you need a better system, right? So it's almost like what you're describing is the, it's not just it's an accounting system. It's an accounting system that it takes the accounting world from like a single variable type input system to a multi-variable input system

• 12:27Anthony Pompliano?

  and allows you to do more complex computations more securely and almost have a greater sense of confidence that the number or output that you see is accurate, right? And I think that's the big problem that a lot of the enterprise blockchain folks see, which is a problem that you're describing. What I wonder is, does that get outside of the enterprise world, right? So if that, if that use case specifically for blockchain technology exists in the enterprise world, do you see a similar type application for either retail investors or kind of outside of the large, you know what, it's called the Fortune 1000 type companies? Is this a problem that Main Street business, you know, Joe Blow's Pizza?

• 13:10Anthony Pompliano?

  Or even for a retail type individual, like a consumer? Do they interact with it in any sort of accounting function? Or is that just for those kind of really large corporations globally?

• 13:20Speaker 03

  I mean, it's, so there's already a little bit of precedence here, which is that you have airline miles. So that is a walled garden and an accounting system. It's just not very flexible nor extensible. Okay. But credits and that type of thing have existed for a long time. Your intuition is, or your thought on like where this is going, what it looks like is definitely right. Although I would take it actually a step further and point out that certain markets aren't actually digitized yet. So insurance is a good example. When you go and make an actual electronic marketplace, it takes a lot of lift from the engineers to go and build that. But it, for things that look the same, or that you can use the, you can kind of make a core and then just repeat it and stamp it out a bunch of times.

• 14:02Speaker 03

  That lift, that initial effort is worth it because you get all these efficiency gains and it becomes much more automated. But insurance isn't like that, where every single contract that, you know, might be bought and sold and sliced up and whatever, it, they're all a little bit different. So you can't just have a common kind of, you know, like a equities market for it, because the things just aren't standardized enough. And blockchain allows you to not only have this incredibly robust, automatable accounting system, but it allows you to have almost importable services. This is admittedly going one step beyond where we are today. Right now, smart contracts can't interact with each other in a safe manner. Parity MultiSig is the best example. Kadena's smart contract language, PACT, has solved this issue.

• 14:43Speaker 03

  And it allows us to begin to talk about this idea that we could go and make a digital insurance marketplace, where all of the, kind of the overlapping set of all of the integrations that you need to represent these assets digitally can exist as individual contracts that are individual services. And then every time you have a new asset that you want to represent, you can pull in the little bits that you need and go and actually digitally represent that contract. And it makes sense because you're not repeating all of that work every time. The majority of the work are these overlapping things that it needs, and it's actually pretty easy to represent the individual asset.

• 15:16Speaker 02

  I might add something to that, to the point you were making, how does this make it its way out to Main Street? Is that when you look at something like making state channels safe, you know, this is something, this is something that actually represents something that you need a very sophisticated and agile financial services company to pull off. And now we're talking about these things just working in a decentralized fashion. So that's, that's a way that like, you know, like the small business that's able to take advantage of fast payments because of state channel is able to build off of this very complex system that is, in theory, been made to be unbreakable and safe. Now, the problem is that if you base it around something like Create 2, that's going into Constantinople,

• 15:59Speaker 02

  you know, or like the issue, a lot of things come back to smart contracts. And that's why you'll hear us keep taking the discussion back to, how are you going to make sure your smart contracts don't have bugs? How are you going to make sure that all your stakeholders know what the code is? Like, it's important that people be able to read the code. And so we, we think of a world where you run a smart contract, you could actually go inspect that code. And while you may not understand all of it, you can, you can read the critical bits. And you can be like, I understand that this smart contract is safe. That's why I'm going to use it. So, you know, some of the things we see with the, it's not just, you know, it's not just Ethereum has done amazing things. And they basically brought smart contracts to the world. And, you know, and we benefit from that, just like everyone else.

• 16:41Speaker 02

  But there are some core things that have made it so unsafe that, and things that are, that they're like Create 2 and Constantin- I don't know if you're familiar with that, but these are things that make it something, that make something like a state channel become very perilous things to undertake. And so that we think that these are the kinds of core bits that people have to get right so that we can bring this. Because, you know, these are going to be complicated systems, but if they're built right, then people just, it becomes like the internet. You know, people don't worry about it. You know, you use SSL, you use the EUS, you don't think about it. That's where we're going to end up.

• 17:16Anthony Pompliano?

  Let's talk about public versus private blockchains. And then we can talk a little bit about what you guys are doing specifically. How would you guys describe public versus private, just given that you've worked on one of, you know, the best known private blockchains out there?

• 17:31Speaker 02

  We increasingly were distinguishing between them less because a lot of the value add is the same for both. And I think to a certain extent, people have gotten hung up on the difference. And even from a technology point of view, a proof of stake system uses the same technology as a private blockchain. A proof of stake system is a permissioned blockchain that has been designed to run in public. So I think these distinctions, the distinction starts with Bitcoin, which is an open access system. Anybody can mine, anybody can come into that system. The system's resilience comes from its protocol itself. It's nothing about the people who are running it. A permissioned blockchain, a private blockchain, is simply

• 18:13Speaker 02

  one that maintains that same level of assurance, but does so by knowing who's participating in there and being able to work with their cryptographic identity and therefore be faster, therefore have fast confirms, and all that kind of stuff. But proof of stake is trying to take that technology movement into public. And the other reason why we think the divide, talking about them in a different breath is a bad idea, is because this is what allowed companies like IBM and R3 to bring private "blockchain" products to market that aren't blockchains. They don't offer any of this assurance that, you know, one of the most fundamental things about Bitcoin is you sign that transaction, that you put that output

• 18:56Speaker 02

  out there that you can only spend by signing that transaction. In IBM, they just throw that away. The user signature is not an important part in the system. It's all this, it all becomes internal to the system. And so it really, there are ways you can say it is fundamentally not a blockchain, but, you know, in the interest of marketing, in the interest of selling software, they've, and also because there are some certain things that people expect from a private blockchain, such as confidentiality, that are challenges for blockchain. Not everything we're going to do as humans belongs on a blockchain. And that's another thing that... Similar, in the end, we're not going to be doing that different of things on public and private blockchains. And right now, people think they're two different worlds.

• 19:40Speaker 02

  And I think it's, you know, it's public key cryptography, it's smart contracts, it's a safe system, it's a resilient system. This is true across the board.

• 19:49Anthony Pompliano?

  And how does that, the fact that you don't think about public versus private being kind of this very clear, you know, line in the sand, you guys are building kind of a hybrid approach, right? So maybe talk a little bit about why you think the, well, first of all, what is the hybrid approach? And then why you think that's the better approach versus either going 100% on either end of the spectrum?

• 20:10Speaker 03

  Sure. So when we talk about hybrid blockchain, let's actually start with the example that's kind of popular right now, which is JP Morgan Coin. So JP Morgan Coin is a private blockchain, it's running inside of JP Morgan. Admittedly, it runs on Quorum, so it won't ever really hit prime time. It's just not going to have the throughput or the scale to get there. But let's say they were to migrate on to our private blockchain solution called scalable BFT. So this runs our smart contract language PAX, and it runs one of the two consensus protocols we have, which is scalable BFT. You know, private deterministic, you know exactly who is replicating and running the nodes, and it's a traditional enterprise private blockchain. That system gets a lot of teeth when it is able to integrate with

• 20:54Speaker 03

  other blockchains, whether they be public or private. Now, when we talk about hybrid, we talk about, or we're thinking about the idea of you have this private system, this known kind of walled garden that's doing smart contracts and is controlling, you know, has better privacy controls around information, and it is linked to a public system. So in our case, this is going to be Chainweb. We're one of the few proof of work protocols out there that are coming out this year. We use a braided proof of work consensus protocol to solve the scaling issue that proof of work traditionally has. We'll be launching with around 10 chains braided together in parallel, maybe 20, hard forking to 50 as congestion increases. This will allow us to have somewhere between probably 100 and 1,000 transactions a second.

• 21:37Anthony Pompliano?

  Describe the braided, right? I don't think a lot of you have heard that terminology before or understand what that is.

• 21:43Speaker 03

  Sure. So Chainweb is, the root of the idea actually is quite old. It's, was first proposed in the Bitcoin forums maybe five or six years ago. It's called BetaCoin or Blockrove. And it was the idea that you could have two Bitcoin chains. Right now, when you make a new block in Bitcoin, it points at its previous block. The idea of braiding two chains together is that you have two chains that are being mined in parallel and that whenever a new block is made for one of the chains, it references both its previous block and that of its peer chain, that of the sister that it's getting tied up with, that it's getting threaded together into a rope. And this idea was initially for security because by having more blocks in a given period of time, you'd keep the difficulty the same, or sorry, you keep the block time the same.

• 22:28Speaker 03

  The difficulty would actually decrease, so come down by half in this two-chain variety. And the throughput would actually double. And oddly enough, the security actually goes up because you're doing more blocks in a given period of time, sort of how Ghost brings down the confirmation time for Ethereum. And our major contribution to this line of research was figuring out that we could use graph theory to dramatically expand the size of that type of network. Traditionally, it was thought that they could scale to maybe eight or 10 chains in parallel, and then that was it. We found a way by adding this notion of what's called the diameter in graph theory, which means that it takes a few steps to get from one place to another, from a node in a graph to another. The kind of the best way for the, for people who haven't gone online and read our white

• 23:12Speaker 03

  paper, seen our talks on the subject, to understand it is that it's similar to sharding in that you have parallel ledgers. So if you have an account on one chain, that doesn't mean you have an account on another in the network. You have to go make that account. And you can burn coins to go from one chain to another. You can also load balance smart contracts between the various chains. But the main difference with the proof-of-stake sharding approaches is that the mining, the miners are replicating and mining off of all of the chains, which is something that sharding approaches for like Shasper doesn't really involve. So this means that the consensus region, the people who are replicating and validating all the chains, is still a majority of the network. So you keep all of the security that you get from a Bitcoin approach, but you get dramatically

• 23:56Speaker 03

  higher throughput for actually the same cost, energy-wise. This is the interesting bit about it. As you go from a 10 to a 20-chain network, you decrease the difficulty per block by half, you decrease the reward per block by half. The miners overall are basically spending the same amount of money to mine the network because most of the energy and the resources required goes into the actual hashing and mining of the blocks, not the replication. So adding 10 more chains to a 10-chain network, pretty much inconsequential. So this is our system. It goes into testnet in about a month. We're very, very happy to be putting it out there and having people able to kick the tires and start load balancing smart contracts for the first time.

• 24:40Anthony Pompliano?

  Who would want to use this, right? Meaning, are there specific types of assets or issuers or enterprises who say, I have specific needs or criterias that public chains don't necessarily solve, private chains don't necessarily solve, this is the perfect solution, right? Like for you guys, who is that perfect kind of target user?

• 24:59Speaker 03

  There's a few, and I'll let's do the ones more on the business and enterprise side. The first ones that the people that we see the most excitement from are actually solidity developers, people who know the pain of that language. Usually when we talk with an enterprise or business client, we start talking about, oh, it can integrate with all these different backends. Oh, it has formal verification. With a solidity developer, we literally start the discussion of what pact is with, it has error messages. And that usually is enough to get them interested to go look it up because solidity doesn't have error messages, which makes it very hard to write serious code. On top of that, one of the big features of pact is that you can actually upgrade a smart contract if it's broken. So when you make a smart contract in pact, you say, you give it a name and then you tell it how it's governed.

• 25:43Speaker 03

  This can be anything from it just throws an error, so you can't actually upgrade it. This would be Ethereum style governance. Or it has a multi-sig key set, or you know, a set of keys that, you know, two or three or it's five people in the room right now. So three or five of us would have to sign off on a transaction to upgrade the code. Or it can be something that's a decentralized vote. So let's say the DAO happens on the platform. You could have a decentralized vote that would upgrade it to fix the contract, kick the hacker out and recoup all the funds. People have been confusing governance for a while. There's protocol governance, which is inherently political and you're never going to get around it.

• 26:25Speaker 03

  What upgrade should we give to the language? How should we, you know, change and grow over time? And then there's smart contract governance. And there is no reason in the world that if, you know, parity multi-sigs wallet breaks, someone who has Ethereum needs to care about how it gets fixed. There should just be some easy, like this should have been something they could have designed in from the beginning so that we don't have to bring the entire community to talk about, you know what, should we get rid of the kill switch? Well, no, if you get rid of the kill switch in the EVM, then it's actually going to expose all these other contracts to bugs, even though, yes, it will fix parity multi-sig. So for that, a lot of the people, you know, the ones that we, you know, our target audience, people who really are interested a lot of the time are people who really believed

• 27:06Speaker 03

  in Ethereum and really brought into the marketing and the vision, but weren't able to realize that vision on the platform because Solidity just wasn't able to service what they wanted. The throughput wasn't there and that kind of at the end of the day just wasn't safe enough to use.

• 27:24Speaker 02

  The only thing, I basically scalability is just a huge problem for blockchain. So like even a CryptoKitties or basically any app immediately becomes a victim of its own success. And so that's what everyone's trying to do with layer one scaling solutions. We're unique in that we're a proof of work, layer one, I think we're the only one.

• 27:41Speaker 03

  Yep.

• 27:42Speaker 02

  And, and the main thing we say about that is that we offer, we offer the ability to scale your platform over multiple chains. And so what that really is about is just being able to push assets or push resources across chains, but it doesn't happen, there's no magic there. It happens using a simple payment verification, you know, the, the chains prove to each other. It's not terribly fast, but what it creates is that the potential for an ecosystem where you can have like service providers making these things. In other words, layer two solutions work with chain web as a layer one solution so that everybody needs this. This is just one of those like foundational problems with, with

• 28:24Speaker 02

  DApps right now is that they just don't scale. As soon as you, even a token, you know, you throw a token out there and everyone's interested in the token. All of a sudden, nobody can buy it because, and the transaction fees go up, shoot through the roof. So congestion, scalability, you're going to be able to go on to our network and take on as much bandwidth as you can support. So if you want to deploy your smart contract to 15 chain, do it. And then you'll get that throughput and you won't be a victim of your own success.

• 28:50Anthony Pompliano?

  Got it. And one thing I want to touch on, which is tangentially related to scalability is proof of work, right? So one of the big things, you guys obviously have a proof of work aspect to this. And there's plenty of people who will listen to this and say, oh, proof of work is not green, right? It's, it's just a complete waste of energy and resources. And, you know, we should absolutely stop proof of work as a security and as kind of a mining mechanism, and we should go a hundred percent to proof of stake. I think you guys and myself believe that maybe all the facts aren't included in that argument. And so, you know, talk a little bit about kind of how you view proof of work

• 29:32Anthony Pompliano?

  and the greenness of that, and maybe that it's not as bad as people think it is.

• 29:38Speaker 03

  Sure. Proof of Work's biggest problem is that it doesn't have a public relations department.

• 29:42Anthony Pompliano?

  Okay.

• 29:43Speaker 03

  If it did, we could have had people out there debunking this from day one, but instead it's taken five or six years. Proof of Stake's main motivation, just go on to, let's say, the Casper articles, or sorry, the Casper docs on GitHub, and see the motivations for going to Proof of Stake. It's all about being green. Now, there's a whole other argument to be made that that's a wrong engineering mindset, that we have something that is so ironclad in Proof of Work that moving over just because it's greener doesn't make sense. We can just say, oh, let's just try to make it, let's try to incentivize things to be more green. But at the end of the day, there's been a recent kind of couple posts that have come out that have pretty thoroughly debunked, and it looks like there was just one guy on

• 30:24Speaker 03

  the internet kind of making up the numbers about all of the energy that goes into mining for Bitcoin coming out of coal from China. A lot of people don't understand kind of how the energy markets work, or how the energy grid works. There's effectively no way to actually store energy long term. We're not really good at it, at least electricity. And that means that you have to make excess electricity in case the demand increases. So it's not uncommon for large hydroelectric dams to be having, I think it's something like 200 terawatt hours extra, just sitting around. And that's

• 30:58Anthony Pompliano?

  And if they don't use it, they lose it.

• 31:00Speaker 03

  Yeah.

• 31:00Anthony Pompliano?

  Because you can't store it.

• 31:01Speaker 03

  It literally, I think, gets burned. I don't know exactly what they do with it.

• 31:04Speaker 02

  Or heat.

• 31:05Speaker 03

  Yeah. I think it gets, it gets turned into entropy. I think it gets turned into actual heat. And that's more than, I believe, double what even if you were to round up at every single point in the calculation, how much energy Bitcoin uses on a daily basis. So, and that's just from like one dam. There's a good post on this, I forget the exact, the name of it, but it's, you know, an energy trader who got into it and just said, look, this is all BS. There are more articles coming out about that on, you know, there had been more coming out over the last month. So the main point that I would want to make is that proof of stake has known security problems that need to be overcome. There's a reason that it hasn't launched yet. There's a reason that there have been these, you know, these, the difficulty curves in Ethereum to make sure that they actually have the motivation to

• 31:50Speaker 03

  go to proof of stake in time. And they weren't able to because it's a really hard research problem. I don't quite know if it's going to be solvable. I kind of hope that it is just because I'm a nerd and I would like a really hard problem to be solved on general principles. But for now, we don't have a good solution to proof of stake, an actual implementation that we know is safe. So it's time to think, reopen the debate about, should we be accepting the shortcomings of moving to that type of system if the main motivation under which we started to accept them as a kind of a culture in crypto was to make proof of work green? And that's been debunked.

• 32:30Anthony Pompliano?

  Yeah, basically, the, there was a flawed thought process as to why we should do something. And so now should we question, should we do it at all? This is what I'm making.

• 32:39Speaker 02

  Well, and mining's a weird thing. It's one of the few industries that can go to where the power is. Most industries, you can't just relocate. You can't like, you can't just say, oh, I want to go into the middle of the forest. Like, you know, well, where are your workers? You know, mining can, mining can go right next to that dam. And they have. In fact, that this is where you always see mining, you know, shooting up is places where some energy source is plentiful because you just need machines there. You need how many, you know, probably need like five people to run or three people to run a huge mining plant.

• 33:08Speaker 03

  It's actually one of the biggest distinctions between the current financial system and, you know, proof of work or Bitcoin based system is that the ability to use energy in places where energy is plentiful and cheap is unparalleled in Bitcoin. You can just go to next to the dam. But if you're trucking around, let's say, I don't know, a hundred million or a hundred thousand dollars in a, I'm sorry, in one of those armored trucks around New York City, you're burning that diesel in New York City. There's no way around it. Those things are incredibly heavy. You need a giant ass diesel engine to move the money at all.

• 33:40Speaker 02

  And the guards.

• 33:41Speaker 03

  And the guards.

• 33:42Speaker 02

  And the army to protect the Bitcoin.

• 33:43Anthony Pompliano?

  You guys are making me think of, and I forget where the study, but I read that one of the greatest, if, I think it actually may be the greatest contributor to global warming is cow farts.

• 33:58Anthony Pompliano?

  Methane, yeah.

• 33:58Speaker 02

  Methane, yeah.

• 33:59Anthony Pompliano?

  The methane, right? And the thought process basically was, somebody said, you know, look, if you really want to get rid of global warming, you kill the cows. Right? And basically, you have this thing, and they were making an obviously outlandish recommendation to prove a point of, you know, we think it is the trucks, or it's proof of work, or, you know, it's all these things that are easy for us to wrap our heads around as humans and say, we should stop doing X, Y, or Z. But actually, when you look at the data, the data suggests that it's an animal farts are the greatest contributor to global warming. And so, the reason why I know this is, I've actually seen and been pitched businesses,

• 34:41Anthony Pompliano?

  there's a certain type of seaweed that is grown in the ocean that you can put into the cow food, and it drastically reduces the methane that the cow emits. And so, the whole thought process is, there's people who want to create these seaweed farms in the ocean, so you're basically farming in the ocean to grow the seaweed, you then take it and you put it into cow food, you feed that to the cows, and you can have a huge impact on global warming. And so, if that's the link that people are thinking about and potentially going to try to curb some of this stuff, I think proof of worth's okay, because most of the large facilities are looking for the cheapest power, and the cheapest power today comes from renewable energy.

• 35:26Anthony Pompliano?

  Right? So, we may not be great at storing it, but we've gotten pretty good at having cheap renewable energy. Now, the key is, right, I think Tesla's working on some of this stuff, etc., is how do we store that energy so we can even improve the situation better, you know, moving forward? There's the lake, right? You're talking about the lake.

• 35:41Speaker 03

  Oh, yeah, one of the biggest batteries in the world, I think it's in Britain. When there's excess energy in the grid, it'll pump water up into this lake that they built in the mountains. And then, when there isn't enough energy, it'll switch the turbine, and it'll produce energy as it lets the water flow back down.

• 35:55Anthony Pompliano?

  Really?

• 35:55Speaker 03

  Yeah, it's from, I think, the 60s or something. A few of these are built, I think one's in Spain, too.

• 35:59Anthony Pompliano?

  So, it's basically a bidirectional pump that will expend energy when needed, but it will also create energy when needed as well?

• 36:07Speaker 03

  Yeah, it can store, it's actually not a terrible storage facility for energy. It's not great, but it's good enough.

• 36:14Anthony Pompliano?

  That's pretty crazy.

• 36:15Speaker 03

  Yeah, this is the, you know, the common problem of, um, that the British have of their, uh, grid gets this huge surge in demand right around the same time every night when people go to turn on their electric kettles to go make tea. And there's just one specific period that is like the time that everyone is ready in the grid to be able to service this demand and it goes back down.

• 36:34Anthony Pompliano?

  That's pretty crazy. Um, all right. I want to talk about, uh, smart contracts. Um, help me understand, uh, what are the problems that kind of non-technical people don't know of, about smart contracts? If you're a developer and you're looking at smart contracts, there's a whole host of issues that you guys understand that I think that the average person doesn't. And so maybe let's identify what those problems are or the areas of concern. And then we can talk about things like formal verification, et cetera, and why that stuff's important.

• 37:02Speaker 02

  Sure. Well, I mean, smart contracts start with Bitcoin. You know, Bitcoin implements a simple contracting language, which is why you can have different kinds of signatures. So, you know, Bitcoin allows multi-sign. You know, that means you want to do a two out of three signing, uh, ownership protocol for releasing funds. Uh, you get, you know, you specify three public keys, but only two of them have to sign. That's some, that's the flexibility in the Bitcoin system is that it allows you to script these things. So that's, that's where we start is the idea is that you have this resilient system that is nonetheless flexible. It can do more than just one thing. It doesn't have hardcoded functionality. You can do whatever you want. Or it can do within constraints, of course, and that's an important, uh, very, very important concept in

• 37:44Speaker 02

  smart contracts is well, what, what should we be doing with these systems? So Ethereum comes along and says, um, let's try to make it into something that's far more powerful. Let's try to, let's, let's remove the restrictions off of, off the system that Bitcoin designed. Um, and they started talking about a world computer. That's, you know, like they, they started saying that like, oh, now we're going to have this big kind of distributed machine and we're going to run everything on it. That frankly went just way too far in the other direction in the sense that they're that did you know one of the things Ethereum has is a thing called gas. It's a regulated computing environment. You can only compute so much. It needs to share it with everybody else who comes onto the system. So it needs to be fair. That means you're necessarily wanting to keep transactions short and keep them cheap.

• 38:28Speaker 02

  And there's a million useful things you can do within that universe. There's so much you can do with just being able to talk about different kinds of assets, talk about different kinds of interactions. We're talking about human business or other kind of transactional interactions where you want to capture that stuff. You want to be able to point to it in the future and say that's there. You want to be able to do future actions based on the previous actions. So it's quite a lot, but it's not everything. So for instance, when you hear people, you should be suspicious when you hear someone start talking about like AI on the blockchain. That's a classic example of like, no, let's not do that, or at least not right now because right now we haven't even we've realized maybe a you know, a hundredth of the possibilities

• 39:12Speaker 02

  that we could realize with basically taking the Bitcoin dream, which is, you know, take one kind of interaction. We're now going to say we're going to take all these kinds of transactional interactions and put them on a blockchain, make them safe, make them easy for, you know, the average user to design. And we think that's a that's the other thing about smart contracts is that they have the potential to be very democratizing in the sense that if you make it easy for people to reuse these tools and come up with new ways to use things, you're going to get into a situation where people can put all these new products and new interactions and basically bring this kind of infrastructure to not just for new products, but new populations. You know, as you know, there's so many great projects where people are figuring out how

• 39:52Speaker 02

  to use blockchain to, you know, address social problems or get resources to people who normally don't have them. So these are, we haven't figured out how to do that safely yet. We haven't figured out how to do that scalable yet. And that's where we think that's that's the kind of that's where smart contracts really starts and that's where we are right now. And it's an incredibly exciting field. But when you see somebody saying that they're gonna that everything's going to move on there and that you need to have all this power inside of a blockchain, that's questionable because you know, the example I like to give is, you know, when you're using a GPS system and it's figuring out your the route to go from New York to Boston, which granted is pretty easy, but you know.

• 40:34Speaker 02

  You don't know how long that computation is going to take, and that's okay. You want to be able to burst out as much compute power as you need and then just come right back. On a blockchain, it's kind of the opposite. You want to know how much things are going to cost. You want to be able to do them over and over again and scale that out and make money based on that. And so that's kind of where smart contracts start. They go a lot of places from there. But the reason why that's an important concept is because when you make a language smaller, when you make it less powerful, you make it safer. Bitcoin is a very, very safe system because it lets you do so little. There are so many bugs that are just impossible to write in Bitcoin.

• 41:13Speaker 02

  So when we set out to, you know, we saw smart contracts as a problem that needed to be solved. And when we set out to introduce our smart contract language, which is called PACT, we thought that we should be a lot closer to Bitcoin. We should be somewhere in between Ethereum and Bitcoin and make it possible for people to write these things easily and make it impossible to have certain kinds of bugs. So for instance, a good example is that very multi-sig. This is the kind of thing that is actually a little hard to do on Bitcoin. Like a lot of wallets don't support it. This is something that's just natively supported in PACT. Anytime you have a key, you can have multiple keys. And a developer just doesn't have to worry about that. We don't even say key. We say set of keys or a key set.

• 41:56Speaker 02

  So this is the kind of thing that, you know, to write a multi-sig in PACT is literally one line. To write a multi-sig in Ethereum, I think, is pages and pages of code.

• 42:05Speaker 03

  392 lines of analysis. We were doing a demo today for some of the, some people we had visiting the office. And I was sitting in it and I wanted to point out to people why, like, key set, yeah, it's a little bit weird. It's a new term. But like, why we bothered to do this? And so I went and got the multi-sig source code that's available online and had the person who was doing the presentation put it up and said, that's why. You see 400 lines of solidity. And it's all to do the same thing that you do in literally one line because we thought about this stuff ahead of time. Multi-sig's important. You know, for smart contracts also, when Ethereum was first marketing itself, it had two major promises. One was tokenization. It knocked that one out of the park.

• 42:48Speaker 03

  This is ERC20, and that's where it derived all of its value and became one of the major players in the cryptocurrency space. There was a second marketing prong that was promised and never achieved, which is the ability for smart contracts to interact with each other. We call it smart contract interop. It has wholly failed in that approach. You know, something as simple as a little contract that just provides the price of Ethereum in Bitcoin that gets updated once a day is radically unsafe to use on the Ethereum network. The best example of this is Parity multisig, where people were using, were importing one contract, were interacting with it to make, to form their multisig wallet, and someone went online, or someone on the blockchain and poked it in the wrong place and it blew

• 43:29Speaker 03

  up and now $200 million is locked up and people still don't know how to get it back. So, we bring to the table the second one. And when you start talking about smart contracts interacting, you start talking about smart services that have a native version of currency. It's almost like taking these existing enterprise API services like Bloomberg, but making them much easier to make smaller, you also make them much safer, you give them a native currency and you can put them onto this commons that is our public network. And then you can actually start synthesizing together various kind of little parts of business workflows into larger parent ones. So, for example, FedEx could have a smart contract that could be imported by someone who, I don't know, was shipping from Etsy.

• 44:12Speaker 03

  And it could just automate that entire transaction flow, creating the shipping label, make sure that it was sent to the right email, identify, you know, the person it's getting shipped to, they get an email saying with the tracking number, that whole thing. It could be very easily, that could be very easily done by synthesizing a couple different sub workflows that is represented as the smart contracts into one parent contract.

• 44:36Anthony Pompliano?

  What do you think is the probability that, I don't know, a large percentage of the existing smart contracts are at a technical risk that actually they shouldn't be being used? Right? So, it's not that, oh, look, there's some concerns that we have about how they're structured or security or things like that, but it's actually like, it's unhealthy how much risk that these smart contracts are at and therefore we shouldn't be using it. Is that a high percentage of the number of smart contracts that are out there or a low percentage, somewhere in between?

• 45:10Speaker 03

  I mean, this is why we harp on formal verification, because this is a question that is hard to answer if you don't have the ability to get a computer involved.

• 45:20Speaker 02

  If you're just gonna go around and stare at a bunch of code and be like, hmm, I think that, you know, like basically the OpenZepwin project, right? The OpenZepwin project is basically doing curated code where a lot of people have looked at it and they're like, yeah, we think this is pretty good. What you want is you want a computer to basically be able to examine the entire space of any way that code could run. And this is what formal verification does is that, you know, when you test software, you think, hmm, this could go wrong if I click this way. What a formal verification does is it goes the other way. It says, I am going to prove mathematically that the entire state, the entire universal space, universe of possibilities that this program can inhabit cannot make this bug happen. So this is a long-winded way of answering your question to say, we don't know.

• 46:05Speaker 02

  If you were to go onto Ethereum right now, you don't know what bugs are in there because there is no way for any system to evaluate Ethereum to be able to tell you. Now, it doesn't look good when people have, you know, you've had circumstances where a report came out that showed that something, some non-trivial amount of ERC20s had this bug that could allow an attacker to do a double spend. So that's a, that's an example of something where, you know, that Ethereum can upgrade your contracts, right? So those, that's value that's actually existing out there. Those are contracts that can be stolen from. We know this and there's nothing they can really do about it. I mean, there is something you can do.

• 46:50Speaker 02

  They can fix the bugs and move their ledger over to someplace else. But the point being is that that stuff's in people's wallets. That's gonna be a pretty hard transaction to do. You know, it's, it's a, it's a big undertaking. So that, that's one of the, that's one of the things that we think is slowing adoption of kind of the broader use cases is you need to, it can't just be something where you're like, yeah, I've stared at this code for a little while now. I'm pretty sure it's safe. And I had, I had Will look at it too and I, you know, I had Pop look at it. We all think it's great. No, you need to prove that it doesn't have

• 47:24Anthony Pompliano?

  To actually use a computer to prove it? No, I think that makes sense and seems rational to me.

• 47:30Speaker 02

  It's actually surprising. It's one of these things that like I think non-developers and even a lot of software developers don't even realize is that we're weirdly primitive in this way. The way that we program computers, that we program computers in such a way that, you know, when you tell this to a non-developer, they're like, wait, why aren't you using the computer to find the problems already? Isn't that what you smart people do? And the answer is, no, we don't. The way we code is actually really stupid. And, you know, most applications are built this way because it's actually, this is where these things start to harmonize. Remember when I was saying before that you want to have a more constricted language? Well, one of the reasons why we've had formal verifications for two years is because we're turning incomplete language. It makes it possible in a small amount of time, and by small, I mean computer small,

• 48:15Speaker 02

  microseconds, for the computer to be able to examine this state space. You take a simple application on your phone that's written in, you know, a normal JavaScript or some normal programming language, and the computer's going to have to chug away for like a year to figure out every possible place that code could go because it wasn't, it's designed for general computing. It wasn't designed to do a smaller set of things. So this is where, one of these things where like, we're struggling now, but the future is very bright. The future is that we could have these smart contracts, have a computer assure to us that the bugs aren't there, and now we can just go make all these exciting products and really create this market that really doesn't exist today.

• 48:53Speaker 03

  And that's one of the things that I would want to point out is that your initial question kind of presumes that there's a lot of different smart contracts out there running around because there's been a huge amount of marketing in the space, but really the adoption of smart contracts outside of a few that get copy pasted with a couple parameter changes is pretty low. And the ones that have had, you know, five or six or seven hacks by now, yeah, I would probably say those ones are safe and they're probably the vast majority of the contracts that are used. The ERC20 has been broken, I don't know how many times. And at this point, well, it's probably iterated through all the problems. But when we actually have the ability for people to write new stuff and have it be safe without having to have, you know, a thousand people try to use it and have it break 50 times, when you can actually have a computer assure you that there isn't a bug,

• 49:38Speaker 03

  that's when we're going to start to see the adoption and experimentation really take off.

• 49:42Anthony Pompliano?

  Before I finish up, I always do rapid fire questions. What's the most controversial thought you guys have in crypto?

• 49:51Speaker 03

  Um, Stu, why don't you take this one?

• 49:54Anthony Pompliano?

  Nobody ever wants to answer this one. Somebody's got to answer.

• 49:58Speaker 02

  I think it's just that we're at the very beginning of this and people think we're at the end. You know, people think that, um, you know, that we've, that, uh, we're looking at what blockchain looks like. And the fact is, is that we're at the very, very beginning of this. That's not terribly controversial though. That's just cautious.

• 50:15Speaker 03

  No, I guess, no, I guess my most controversial one, I mean, outside of that, uh, big, that proof works biggest problem is that doesn't have a public relations department. Is that, uh, there are, is that smart contracts are about, how about the enterprise blockchain is going to be a thing because it makes freaking sense. This one I've been fighting about for two years, but we're not going to go enterprise. We're going to go the other side. Then it's that smart contracts and blockchain is about a fundamentally new way of expressing value. And it's not about the next generation of the web. We're not going to put Uber on a blockchain. That's just really crazy.

• 50:52Anthony Pompliano?

  Yeah, we got to create new things. That makes sense. Um, what's the most important book that you guys have ever read?

• 50:59Speaker 02

  Most important book? Moby Dick.

• 51:03Anthony Pompliano?

  Why?

• 51:05Speaker 02

  Uh, well, just because it's that thing of like, you know, chasing after something that you're not gonna, that, that's probably gonna kill you. You know, like, but you do it anyway. It's also just fantastic work. Cover to cover. It's a page turn.

• 51:20Anthony Pompliano?

  I agree with that.

• 51:22Speaker 03

  I don't know if I have a most important. I kind of cycle through them. I like to digest the, you know, don't have a management or a MBA background. So I've been, you know, on basically flights and commutes, downloading as much as I can from all the books that I just ask all the people who have a lot of experience. Hey, what's your, what's your manual on, um, having a conversation, having like difficult conversations with employees? And I'll ask three people that two will agree on a book and then just read that book. So that was probably the last one. It was probably difficult conversations. Reading Never Split the Difference Now, which is the FBI negotiator's, um, book on how to do negotiation. That one's pretty interesting. Um, tactical empathy is a interesting phrase we'll go with, but I wouldn't say it's important yet.

• 52:07Speaker 03

  Man, for book, I don't know. My favorite is, um, uh, The Moon is a Harsh Mistress, but I wouldn't say it's important.

• 52:17Anthony Pompliano?

  Are aliens real?

• 52:21Speaker 03

  Um, do they exist somewhere in the universe? I would imagine so, yes.

• 52:26Anthony Pompliano?

  High probability?

• 52:28Speaker 03

  It'd be so boring if they don't. It just, I'm sorry, I was, that's kind of my opinion, it'd just be like so boring if they aren't.

• 52:34Anthony Pompliano?

  I agree, no, I agree, yeah. What about you?

• 52:38Speaker 02

  They're not in Roswell, I know that much, because I'm from New Mexico, so I know, I know all about this.

• 52:42Anthony Pompliano?

  Oh, really? There's no aliens there, this Area 51 stuff is all, all garbage?

• 52:47Speaker 02

  Actually, you know what's really hilarious about it is that when they started, you know, there's a bunch of Air Force experiments and stuff like that, and so when people started seeing it, they, it's, it's come out in the last few years that the, that they'd actually go out to these people, someone would go out as a disgruntled Air Force person who's, says they're lying about this stuff, man, and it's a way to basically put a bunch of misinformation out there as an effective cover for what's going on, you know, for whatever things. So that that way, when people do see some weird flying object that the government is working on or something, they get dismissed as cranks. This has been admitted now, that like the Area 51, that they are actually working with the people in the UFO community to feed them things, so that they would propagate that they were.

• 53:32Anthony Pompliano?

  So the US government was, uh, was executing psychological operations on the people of Roswell, New Mexico?

• 53:40Speaker 03

  They just want you to think that.

• 53:42Anthony Pompliano?

  All right. Yeah, oh yeah.

• 53:44Speaker 02

  Even better, yeah, how far?

• 53:46Anthony Pompliano?

  Or are they telling you that as the psychological operation? All right, that's fair, I, I've actually never talked to anybody from New Mexico, so that's a, that is a new data point for me, uh, I'm a big believer, I think that they're real, they gotta be out there, mathematically, the probability is very high that they exist. Um, cool, I, I end each one and let you guys ask me one question, we've never had two people on the podcast at the same time, so, uh, we will break the rule and maybe let each one of you ask one question.

• 54:14Speaker 02

  When do you think crypto winter is gonna end?

• 54:17Anthony Pompliano?

  Crypto winter, when is it gonna end? Uh, I don't think it's this year, right? I think we kinda go sideways for a while. We uh, we're doing this i- the last day of February of 2019. Um, I don't think we've seen the bottom yet, probably. Uh, so I could even see us go a little bit lower. Uh, at this point, when you've fallen eighty, eighty-five, ninety, ninety-five percent, whatever, you know, each individual token's fallen, what's the difference between ninety-five and ninety-seven percent? Really, pretty far. Um, but uh, I, I, yeah, I think we haven't seen the bottom and uh, I think we just go sideways for a while. Like, people have to get bored, right? I- i- it's like, when people get bored, uh, I've seen one or two people

• 54:59Anthony Pompliano?

  uh, quit their jobs in crypto and go back to like non-crypto stuff. So like, that's interesting data points. Um, but I, I think it's not gonna recover this year, so we'll see.

• 55:10Speaker 03

  Um, and maybe you actually said this during the first question, but your first rapid fire question of like, what is the most important book you've read is the question that I ask other successful people when I talk to them, so.

• 55:19Anthony Pompliano?

  So I cheat, cuz uh, it's my podcast, I can do whatever I want. But uh, there's four books and I put them into uh, separate ca- uh, buckets. So one book that stands by itself is Guns, Germs and Steel, uh, which is all about uh, kind of uh, different societies and the growth of uh, humans over time, etc., which I think is just a it's a great way to have historical context on how the world got to where we are today, and also what are the things that made certain societies more developed than others and all of that. So that's definitely a book I'd recommend. And then the other is a package of three books. They're not actually packaged, I just read them all at the same time when I was twenty years old and they were incredibly influential um, on my life is uh,

• 56:01Anthony Pompliano?

  Rich Dad, Poor Dad by Robert Kiyosaki, uh, Think and Grow Rich, and The Richest Man in Babylon. And uh, somebody sent me the books, I unfortunately don't even remember who sent me the books, uh, but um, I read them and they were basically like, look, at this point in your life, you don't know what you wanna do. Like, it's more about trying to explore different mindsets and like, one will resonate with you and you should do that by reading and talking to people and all this kinda stuff. Uh, and I read those three books, um, literally back to back to back over like a uh, I think it was like a three-month period. And I remember um, maybe five or six years later being like, That was a point in my life where I don't want to say like there was like a hard right, but there was definitely like I started to think about things differently. And so whenever

• 56:46Anthony Pompliano?

  I talk to kids that are in high school, college, or maybe even right after college, I always say, "Look, if you want to think differently, then you've probably been trained classically in school, etc." Like those three books really have a have a good way of doing that in a simple to understand way because they're not kind of preachy or academic. They're just very much, "Hey, we're going to tell you a story and you get from it what you get from it." So, I don't know. I told you four books, you asked for one. Cool. Thanks. Life goes on. Alright, guys. Thank you so much. I'm super excited for you guys to launch this thing in a month. Maybe when this comes out, it might be like two weeks or something, but I think that it's a truly cool context that you have, having worked at JP Morgan and

• 57:28Anthony Pompliano?

  kind of seen, you know, how they think, what they've built, and spinning out and then working on this. So I appreciate you coming and we'll have to do it again in the future. Yeah. Thanks, Raj. Another word from our sponsors at Total. They're kind of like Kayak, which helps you find the best flights, but Total helps you find liquidity by aggregating decentralized exchanges and optimally routing trades for execution. Remember, that's totle.com/pomp. T-O-T-L-E dot com slash pomp. Go check it out. Let me know what you think. Tweet at me. I'll drop you some fire emojis. totle.com/pomp. As we all know, crypto makes tax season a headache, and nobody liked dealing with

• 58:07Anthony Pompliano?

  this stuff. So let ZenLedger do it for you. If you go to zenledger.io/offthechain, you'll get 20% off your 2018 tax forms. These guys have a fast and simple tax reporting tool that saves you time and money. That's right. When you listen to this podcast, you get smarter and richer. One more time for the people in the back. That's zenledger.io/offthechain. Go check them out and let me know what you think. 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

• 58:52Anthony Pompliano?

  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.