Ami Ben-David, Managing Partner at SPiCE VC: Why Ami Believes Long the Bankers

Ami Ben-David is Co-Founder & Managing Partner at SPiCE VC, and Founder at Ownera. In this conversation, we discuss tokenized securities, the role of bankers in the financial system moving forward, how freedom and privacy are related, and where Ami believes the biggest opportunities in digital securities exist today. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

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

• 0:01Anthony Pompliano?

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

• 0:13Anthony Pompliano?

  Ami Ben David is co-founder and managing partner at Spice VC and a founder at Onera. In this conversation, we discuss tokenized securities, the role of bankers in the financial system moving forward, how freedom and privacy are related, and where Ami believes the biggest opportunities in digital securities exist today. I really enjoyed this conversation, and I hope you do as well.

• 0:37Speaker 01

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

• 1:03Anthony Pompliano?

  All right, guys, coming live from CIS, I feel like a radio disc jockey saying that, so I'm gonna keep saying it, with Ami. Thank you so much for doing this.

• 1:12Speaker 02

  Thank you.

• 1:14Anthony Pompliano?

  We've got a lot to talk about. Some we agree on, some we don't. This is gonna get good really fast. So, let's go background first, and then we can get into some of the stuff you're doing now. But what did you do pre-crypto?

• 1:28Speaker 02

  I was an interpreter. I started six companies.

• 1:31Anthony Pompliano?

  Six companies?

• 1:33Speaker 02

  Yeah.

• 1:33Anthony Pompliano?

  Okay, that's a lot.

• 1:34Speaker 02

  Yeah. Some did very well, some did terribly, some did okay. And I think the last important thing I did before crypto was AI, machine learning.

• 1:46Anthony Pompliano?

  Okay.

• 1:46Speaker 02

  And distributed search engines, things like that. Basically, most of my companies were companies that I invented a product and led the product. That's usually what I did.

• 1:58Anthony Pompliano?

  Got it. And so what was the big company?

• 2:02Anthony Pompliano?

  We're getting handed water.

• 2:04Speaker 02

  Thank you. So I'd say the biggest company before I started the fund was a company that did a distributed search engine based on HTML5. And it was selected by Firefox and Telefonica to be the search engine for the Firefox OS.

• 2:27Anthony Pompliano?

  Okay.

• 2:27Speaker 02

  Yeah, a doomed operating system that tried to compete with Android and with iOS. But it was very cool. It's a search engine where you would ask a question and instead of getting links as a result, you get apps pop up which you can swipe between the apps. And each app would answer your question from a different provider. So completely decentralized search engine.

• 2:50Anthony Pompliano?

  They're gonna give you a different microphone.

• 2:53Speaker 02

  Okay.

• 2:54Anthony Pompliano?

  Can you guys hear him now? All right.

• 2:57Speaker 02

  Okay. Yeah, I'm here.

• 3:00Anthony Pompliano?

  Yeah, all right. All right, so you do the search engine and how do you eventually discover crypto? Like, what's the first time you ever hear about crypto and you're like, wow, let's go change the world, let's buy some Bitcoin?

• 3:10Speaker 02

  So when we were doing the search engine, a few of my developers were constantly talking about this new thing called Bitcoin and fighting about it and so on. And I said, oh, whatever, I'll buy a few. So I bought a few at 500. And then, no, actually, I bought it at 1,000 and then it dropped immediately to 500 and stayed there for two years or so. So I forgot all about it. And then suddenly it started going up again. And it went up and up and up. And then from my previous day, when I did the search engine, we did it together with a guy called Brendan Icke. Brendan was from Mozilla, from Firefox, he's the guy who invented JavaScript. And he was talking about crypto and about blockchain.

• 3:54Speaker 02

  And I understood what he said, but I didn't really sink in.

• 3:58Anthony Pompliano?

  Yep.

• 3:58Speaker 02

  Until he actually did the Brave launch and, you know, raised 35 million dollars in 30 seconds. So I immediately called him up and said, hey, what's going on?

• 4:07Anthony Pompliano?

  Yeah, so for those that don't know, Brendan is a founder of a whole bunch of stuff, but today Brave browser.

• 4:14Speaker 02

  Yes.

• 4:15Anthony Pompliano?

  And the BAT token or the basic attention token.

• 4:17Speaker 02

  Yes, so I...

• 4:19Anthony Pompliano?

  Okay, so you see him just ball out and raise 35 million dollars in 30 seconds. You're like, that sounds pretty interesting.

• 4:24Speaker 02

  Yes, and he was like, yeah, well, it was so amazing. And we started talking about it. And I said, well, we're building a fund. Can we make the fund tokenized? And then we realized we can't really make the fund tokenized because tokens are utilities and a fund is a security by definition. People give you money, you're supposed to give them more in return. So that's the security. So you can't do a fund with a utility token. So we said, let's do a security token. We started looking around. Nobody was doing it. There was no platforms, no legal structure, nothing. And since I've been doing startups all my life, we just sat down and said, okay, let's go ahead and just do that.

• 5:01Anthony Pompliano?

  What year is this?

• 5:03Speaker 02

  That's 2017.

• 5:05Anthony Pompliano?

  Okay, so 2017. And when you do this, explain what a tokenized fund is and what the difference is between that and a traditional fund.

• 5:13Speaker 02

  So a regular VC fund, you, the LPs give money to, and then they're, they're waiting for the exits. And when there's an exit, the exit spreads between the LPs. So if you have 10% of the fund, you get 10% of the exit, roughly. A tokenized fund, we did exactly the same. If you want to be part of the fund, you buy tokens. And if you hold 10% of the tokens, when there's an exit, you get 10% of the money. So for all intent and purpose, it's just a regular VC fund. But you have tokens and tokens are tradable and you can, it becomes liquid from day one. So we basically took an asset class that is illiquid for seven years on average and made it immediately liquid. So we were very excited about that.

• 5:53Anthony Pompliano?

  Okay. And when you do this, what did, how much did you guys raise? What was the reception?

• 5:58Speaker 02

  The reception was initially very good from the crypto side and very, very hesitant from the institutional side.

• 6:05Anthony Pompliano?

  Why?

• 6:06Speaker 02

  Because they didn't know what tokens were. Tokens were connected to crypto and to utilities and basically lack of knowledge. And to be honest, nobody knew what security tokens were because we were the first. Nobody. So security tokens were not in vogue yet at the time. We ended up raising about 10. We're now, the NAV that we're managing is about 15. So the fund grew up nicely. And the reason we didn't raise so much was that crypto crashed when we were raising. So the crypto people disappeared, the fiat people hasn't arrived yet. So timing is very important sometimes.

• 6:42Anthony Pompliano?

  And how many of the people are buying a fund like that because they want to be in a tokenized fund versus they want to bet on you and your ability to pick companies and kind of the traditional things that a venture capitalist would be evaluated on?

• 6:55Speaker 02

  I think that's the main thing that we learned. So initially, we kind of led with the fact that we are a tokenized fund and explained what we were doing. Today, when we're talking about raising, we're talking only about the asset. The fact that it's tokenized by now is not news anymore. People are used to security tokens. It's already becoming more and more acceptable. So if I were talking about a fund today, I would talk only about the fund. And the fund itself, funnily enough, also invest in the infrastructure for a security token because we saw this thing as that we did for ourselves and we realized that this is just the tip of the iceberg. I was just doing a fund, but this is, the story is funny. We built a platform for ourselves and Carlos, my partner, put out a blog post to say, this is our platform.

• 7:39Speaker 02

  You can come and invest in our, in our fund.

• 7:41Anthony Pompliano?

  Yep.

• 7:42Speaker 02

  And we got a lot of people calling us and saying, hey, can we use the platform to launch our own asset? So two things happened out of that. One is that we spun out, securitized a separate company, which is now a market leader and we're, you know, one of our portfolio company. And the second thing is we doubled down and focused the entire company, our fund, on investing in the security token infrastructure and the ecosystem, which has grown dramatically over the last year and a half.

• 8:09Anthony Pompliano?

  All right, let's talk about the ecosystem. Where is the infrastructure today for security tokens? Give it a grade before we get started. A, B, C, B+, C-,?

• 8:21Speaker 02

  A+.

• 8:21Anthony Pompliano?

  A+? What? All right, go ahead, explain why.

• 8:25Speaker 02

  Wait, wait, wait. A is good or A is bad?

• 8:26Anthony Pompliano?

  A is good. In America, A is good.

• 8:29Speaker 02

  Oh, so I'm from England.

• 8:30Anthony Pompliano?

  Oh, wait, is A, wait, hold on, I'll explain this.

• 8:32Speaker 02

  Let's do it the other way around.

• 8:34Anthony Pompliano?

  In England, A is bad? Man, our C is good? Because I'd have been a genius in England.

• 8:40Speaker 02

  A star is the best.

• 8:42Anthony Pompliano?

  A star?

• 8:43Speaker 02

  A star is the best. Yeah. No.

• 8:47Anthony Pompliano?

  If I have kids, I'm gonna send them to England. They're gonna be the smartest kids in the room.

• 8:51Speaker 02

  Send them over. So yes, I would say that we're still starting. It's not, it's not very advanced.

• 8:58Anthony Pompliano?

  So C minus?

• 8:58Speaker 02

  C, I would say is where it's at.

• 9:01Anthony Pompliano?

  You're being nice. Go ahead.

• 9:01Speaker 02

  Depending who, I mean, there's, as I said, our portfolio companies, Securitize, they're the market leaders. So they do what they do very, very well. But it's just the beginning of the market. The rest of the market, other companies are way behind.

• 9:17Anthony Pompliano?

  All right. So I did this with somebody recently. It hasn't been aired yet, so you get to rebut them if you disagree with them. But let's go through the ecosystem. There's issuance platforms, there's protocols, there's exchanges, and there's service providers. It's the way I think about it, right?

• 9:32Speaker 02

  Yeah.

• 9:33Anthony Pompliano?

  You gave them a C combined. Let's go to the issuance platforms, which Securitize does. So this helps assets actually tokenize an issue.

• 9:40Speaker 02

  And they're doing well. They're good.

• 9:41Anthony Pompliano?

  Okay, so they're good. They get an A?

• 9:43Speaker 02

  They get an A.

• 9:44Anthony Pompliano?

  An England A or an American A?

• 9:45Speaker 02

  American.

• 9:46Anthony Pompliano?

  American, okay. What about the entire issuance platform ecosystem? Like, when you look across the board, right? So not just Securitize, but everybody. Is that the most developed part of the ecosystem?

• 9:57Speaker 02

  I would say it's now the most development, developed part of the ecosystem, but there's a lot of players out there that haven't actually deployed anything.

• 10:04Anthony Pompliano?

  Okay.

• 10:04Speaker 02

  So they make a lot of noise, but they haven't really deployed anything. And for me, marketing is just boring. Deploy.

• 10:13Anthony Pompliano?

  All right. Protocols.

• 10:16Speaker 02

  Protocols, I would say most of the market today is working on top of Ethereum.

• 10:20Anthony Pompliano?

  Okay.

• 10:20Speaker 02

  Ethereum was not designed for security tokens. So it's really hard. It's an anonymous network. And it's just built by, you know, by anarchists. So it's not ideal for securities. So you have to build on top of it. The first protocol that was launched was a DS protocol by Securitize. There's another few other protocols that haven't been used very widely.

• 10:45Speaker 02

  We're just starting on the particle side.

• 10:47Anthony Pompliano?

  All right, we'll get into what you're doing there in a second. Exchanges.

• 10:51Speaker 02

  Exchanges, we really in the beginning, there's T zero out with very, very little trade. There's open finance, which we are trading on. The trade volumes are not high. We're trading above now, so I'm happy, but it's not, you know, it's not, you know, there's not enough volume in there. And within SPY, we invested in three exchanges because-

• 11:13Anthony Pompliano?

  Okay, what three exchanges?

• 11:15Speaker 02

  We invested in INX, that's going to go in New York. We invested in Archucks, that's going to go-

• 11:20Anthony Pompliano?

  Who's that one?

• 11:20Speaker 02

  Archucks.

• 11:21Anthony Pompliano?

  Archucks?

• 11:22Speaker 02

  Archucks.

• 11:23Anthony Pompliano?

  Okay, what is that?

• 11:23Speaker 02

  They're a security token exchange that's going to go in London.

• 11:27Anthony Pompliano?

  Okay.

• 11:28Speaker 02

  City people. And we invested in InvestaCrowd, that's going to be in an exchange in Singapore. Because I believe that while the assets are international, trade is going to be local. So we want to have a big player in each main market.

• 11:43Anthony Pompliano?

  Are you worried about the Circles, the, or Ploniacs, Gemini, Coinbase, maybe even a Binance, like coming top down and getting into the security token game? Or do you think that these kind of native security token type exchanges can win?

• 12:00Speaker 02

  I think I'm the opposite of worried. I'd love them to come. However, I don't see them, you know, most of them are not really inclined to go and do the regulation that is required. And they already have a history and a past and existing business that is not exactly compatible with being regulated. So it will be hard for them to do that, but the more the merrier.

• 12:21Anthony Pompliano?

  Got it. And then service providers is the last part. What grade are we giving service providers?

• 12:26Speaker 02

  It's very, very initial in terms of service provider. If you want to launch-

• 12:30Anthony Pompliano?

  No, you gotta give me a letter.

• 12:31Speaker 02

  C.

• 12:32Anthony Pompliano?

  C?

• 12:33Speaker 02

  Yeah.

• 12:34Anthony Pompliano?

  All right, why?

• 12:36Speaker 02

  Because the market is not mature yet. It's now maturing. There are only, there are just a very few small number of players actually done things. And a lot of people that are theorizing and marketing and telling stories and so on. But it's just being built now. This is a new ecosystem. It's growing in massive scale, but it's still very, very new. I mean, we launched our token in April of last year and we were the fourth token ever. So we're just talking less than a year now.

• 13:04Anthony Pompliano?

  Do you know what the first three were?

• 13:06Speaker 02

  The first, sorry?

• 13:07Anthony Pompliano?

  The first three?

• 13:09Speaker 02

  Blockchain Capital was the, before Science was, before, I don't remember the third one.

• 13:14Anthony Pompliano?

  Got it. All right, and let's talk about the assets that are getting tokenized today. I think everyone got excited about funds and equity. I've now seen bonds. I've seen a bunch of asset-backed tokens by commodities. Where do you see the most activity? And where do you think the sustainable assets will come from first?

• 13:37Speaker 02

  All of the ones that you said, and you didn't mention real estate and infrastructure projects and things like that. I think the answer is initially, every asset that is illiquid by nature.

• 13:49Anthony Pompliano?

  Is illegal?

• 13:50Speaker 02

  Iliquid.

• 13:51Anthony Pompliano?

  Oh, illiquid.

• 13:52Speaker 02

  Iliquid, non-liquid, non-liquid assets.

• 13:54Anthony Pompliano?

  That was a bad translation on my part. Illegal versus illiquid is a big difference. All right, illiquid.

• 13:59Speaker 02

  So non-liquid assets that are large, these are the prime ones to be to be tokenized now. And what I've found from my experience is that in this market, the supply of assets that want to tokenize is infinite. Infinite. We raised our hands when we launched the Curitiba, we want to tokenize. Immediately, we were flooded by, you know, people that wanted to tokenize. The problem of the market is to get it normalized and to build the infrastructure so that investors come as well. But the problem is not going to be from the supply side. Suppliers do want to tokenize their assets because they're sitting on non-liquid assets that are worth, you know, hundreds and tens of millions of dollars which they can't touch. So.

• 14:42Anthony Pompliano?

  If the supply side is not the problem, then the demand side, obviously, there's issues.

• 14:47Speaker 02

  Yeah.

• 14:48Anthony Pompliano?

  Where, like, why are investors not interested in doing this? Or at least, why are they not doing it? What's holding them up?

• 14:55Speaker 02

  I would put it this way. The infrastructure that the big investors, the institutional investors required in order to invest, is not there yet to the level that they will be comfortable with it. And they're very, very risk averse. And they're managing other people's money. And they have fiduciary rights. And for them to jump into holding a digital asset, even if it's connected to a real asset in the real world, it has to be solid. And from what I'm seeing today, it's not yet solid enough. So first of all, it's running on a blockchain, Ethereum, which is, you know, has some bad reputation and a lot of crypto association and built by people that have different ideology. Let's put it this way.

• 15:35Anthony Pompliano?

  But is their ideology incorrect? Or is it just not in line with what institutions believe?

• 15:42Speaker 02

  It's just incompatible. I mean, a lot of the ideas that you would hear in a crypto conference where, you know, I put a tweet out where I said that I think anonymity is not important. Privacy is important. I was nearly stoned, basically. So.

• 16:00Anthony Pompliano?

  Twitter is a dangerous place.

• 16:02Speaker 02

  Yeah, as you would know.

• 16:04Anthony Pompliano?

  Trust me. All right. So as these institutions are looking at coming into this space. So let's put on the table one of the things we disagree on. Then we'll talk about Onera. And then we can talk about other things we disagree on.

• 16:19Speaker 02

  Okay.

• 16:19Anthony Pompliano?

  All right. I got him like captive now. He can't get away. He's got to talk to you about this stuff. So first is, I'll go easy first. Long Bitcoin, short the bankers. You very cleverly wrote an article called "Long the Bankers", which when CoinDesk sent it to me, I literally responded and I said, "Ha ha, that was very smart." Explain what you mean by "long the bankers" and kind of what the logic there is.

• 16:47Speaker 02

  Okay, you constantly say that everything is going to be tokenized. All the currency, but also all the assets. Now, the assets are the key. The big capital behind the assets is in the institutional market. These are the big, big, big, big capital. These are the trillions of dollars. And these guys require somebody to mediate for them. They can't go direct to every small issuer or every big issuer. They need trusted entities that they trust to underwrite for them and to distribute for them. And those entities are the investment bankers. So if we think that everything needs to be tokenized, if we think tokenization can be a trillion, multi-trillion dollar market, the road goes through investment banks.

• 17:31Speaker 02

  And then when they do their job, it will flow to the rest of the market. It will go to smaller players and it will go to the market, it will go to retail. But initially, you need to get the big money there because as I told you before, supply of assets is unlimited. If you can get a banker, if you can get JP Morgan, if you can get any of the big bankers, I'm just saying JP Morgan is an example, or Citi, or ING Capital, or any of these players to take an asset and then turn around, underwrite it and say, "We trust this asset." And then turn around and sell it and provide all the tools to their investors because they know what the fiduciary rights are and do it in a regulated manner. That's where this market is coming. And it's not going there without the bankers.

• 18:16Anthony Pompliano?

  So I disagree.

• 18:20Anthony Pompliano?

  Automation is going to take out white collar employees before it take out blue collar employees. And the bankers are at the top of the fucking list, right? And here's why. I've invested in multiple companies at this point that use data to underwrite loans, equity, et cetera, in automated fashion that render the bankers completely irrelevant. Right, I'll give you an example. So there's a company that we invested in called Bravo Capital. What they do is they work with mobile app developers that monetize through subscription. Right, so think of Spotify, for example. They go to Spotify and they say, "Give us all your data. Give us your bank account, your advertising account, your analytics, all this stuff." They suck it in, they use algorithms to underwrite CAC and LTV.

• 19:05Anthony Pompliano?

  They then say, "I'll give you a loan for you to use for customer acquisition." You use that money to acquire customers, but when that customer pays, they pay the app store, right, $10 a month. Apple takes their cutout, then they send the money to Bravo. Bravo takes their cutout and they give the rest of the money to Spotify. Right? In that case, normally you would have an investment banker underwrite the loan, right? Do the work, all the stuff. They completely remove them with algorithms. Right? Figure is another one with the mortgages. We basically go from having seven, eight different middlemen and seven, eight percent fees to now there's one middleman and it's an algorithmic product that completely removes all of the middlemen in the mortgage process and you can compress the fees. Right? Again, the bankers are gone.

• 19:49Anthony Pompliano?

  Like it's not a, is it gonna happen? It's, I have proof points that's gonna happen. My theory is that what the bankers are gonna do is they're gonna gravitate towards the assets they feel like they can keep hold of the longest. And so it's gonna be the super esoteric stuff. It's gonna be the really big real estate deals, like all of that type of stuff. So it'll be the big dollar stuff, but the volume on an aggregate basis is gonna go algorithmic within the next like five years.

• 20:18Speaker 02

  I think that you're right when you're talking about.

• 20:20Anthony Pompliano?

  He admitted he was right. Yeah, look at that.

• 20:23Speaker 02

  I think you're right when you're talking about assets that are, I would say commoditized.

• 20:27Anthony Pompliano?

  Okay.

• 20:28Speaker 02

  Okay. So when, when I, when an asset is commoditized, the, the job of underwriting it can be automated because it's commoditized.

• 20:35Anthony Pompliano?

  Yep.

• 20:35Speaker 02

  But the, the vast amounts of money out there, the big capital, the trillions of dollars, are not necessarily in things that can be automated. Like if you have a $600, $600 million mall in Romania that wants to be tokenized. Okay? You can't send an AI to underwrite it. You need to have somebody and the issuer, if you, you can't trust the issuer as well. The issuer will say, yeah, this is a billion dollar mall. No, you need to have somebody look at it and say, I put my reputation, I stake my reputation, that this is a $600 million mall in Romania and then turn around and sell it to a buyer in, in the US. Okay? That functionality is not going away soon.

• 21:14Speaker 02

  Now, if I have to wait until an AI can get on a drone, fly to Romania, inspect the mall and come up with, with, with something reasonable, we'll have to wait a long time. I, I, I think that there are two innovations here that are happening in parallel. One innovation is blockchain and the other innovation is AI. And I think that they will be. Connected in some places where it makes sense. And I'm already seeing it exactly the places that you mentioned are where these things are being connected. But if we want to reach the trillions of dollars of security tokens, then the bread and butter of the big capital is still managed by asset managers, still distributed by these guys.

• 21:58Speaker 02

  And we can offer them something amazing. We can offer them private securities, which until now they did not distribute. They did not touch. And even if they distributed them, there was no transactions post-sale. And we can bring them literally trillions of dollars of new money. It's not some sort of a blockchain efficiency improvement. Let's put a blockchain and improve your IT 10%. Nobody cares about that. This is new business for these guys. So I think that in the majority of things, what you're saying is like 10 years away. So that's why I'm saying.

• 22:32Anthony Pompliano?

  I live in the future.

• 22:35Anthony Pompliano?

  All right, so talk about what you're building now.

• 22:38Speaker 02

  So one of the projects that I actually talked about as a concept here in this conference, six months ago, I kind of saw it coming because I'm seeing the market very early. And what I saw was that we need a new blockchain for security tokens. I said Ethereum is not going to cut it. It's just not built for this.

• 22:58Anthony Pompliano?

  You hate Ethereum.

• 23:00Speaker 02

  For security tokens, I do.

• 23:01Anthony Pompliano?

  Okay.

• 23:02Speaker 02

  It's just not relevant.

• 23:03Anthony Pompliano?

  Do you own any Ethereum?

• 23:04Speaker 02

  Sorry?

• 23:05Anthony Pompliano?

  Do you own any Ethereum?

• 23:06Speaker 02

  Uh, no.

• 23:07Anthony Pompliano?

  No, okay, you're talking your book. Okay, go ahead. Sorry.

• 23:09Speaker 02

  I don't own Ethereum, but that's not a good, that's not a good proxy because I hold some EOS and I don't believe in that either.

• 23:19Anthony Pompliano?

  You can't say that in LA. All right, go ahead.

• 23:22Speaker 02

  Yeah, rub some salt on this.

• 23:26Speaker 02

  So yeah, what we're doing with Onera is we're building a new blockchain, a base layer network.

• 23:33Speaker 02

  Dedicated to security token from the ground up.

• 23:36Anthony Pompliano?

  So basically, this is like an Ethereum type protocol. But rather than it be Ethereum, it's your own and it's specifically built for security tokens.

• 23:45Speaker 02

  It's for institutional investors.

• 23:47Anthony Pompliano?

  Okay. Explain what the main difference is between an Ethereum and what you're building. What's it called?

• 23:52Speaker 02

  It's called Onera.

• 23:53Anthony Pompliano?

  Onera, okay.

• 23:54Speaker 02

  It's a blockchain for ownership.

• 23:55Anthony Pompliano?

  Okay. And what is the main difference between that and like an Ethereum?

• 23:59Speaker 02

  So two main things. The first thing is that it's institutional grade. So it's built on something called on code of the hyper ledger fabric. In hyper ledger fabric, when you go to a bank, they're accepting it immediately. They can deploy it on IBM, on Amazon, on Microsoft, on Google. It's acceptable. So immediately, the tech problem goes out of the question.

• 24:21Anthony Pompliano?

  Yep.

• 24:22Speaker 02

  So it's built on that. The other thing that's interesting about Onera is that I'll describe a problem that I found with the current security token ecosystem, which makes it a problem for institutionals. Today, in the world of security tokens, the token is considered as just a thing that can be traded and moved from one hand to the other, but it doesn't include any value. The value of the token is off chain. So you'd say, you can have a token that says you own a building. The document that says that you own the building is off chain, is kept on somebody's server. And just the token is moving around and it's a proxy. And I see that this is a big problem.

• 25:02Anthony Pompliano?

  Why?

• 25:02Speaker 02

  I called it the Brooklyn Bridge problem. So imagine, I actually did this. I went on Raven Coin, which is a, and I created a token called Brooklyn Bridge. And I can sell you the Brooklyn Bridge token and you will own the Brooklyn Bridge token. All the miners in Raven Coin are going to be extremely happy because you're now the owner of Brooklyn Brooklyn Bridge and I'm not. It doesn't make you the owner of Brooklyn Bridge, because it wasn't mine to sell in the first place, and nobody's incentivized to look outside the blockchain.

• 25:32Anthony Pompliano?

  Yeah, but in that situation, I could create a LLC right now called Empire State LLC, and I could technically sell you ownership in Empire State Building LLC. You don't own the Empire State Building, but we don't not use LLCs because of that.

• 25:50Speaker 02

  You could cheat in the real world too, but in the real world, you buy the securities initially, and then you can do your due diligence. It doesn't then start traveling across exchanges, across peer-to-peer, across the internet. The problem with the... Not the problem. The advantage of security tokens is that they can move around. So it's not enough that the primary buyer can do their due diligence, because next day it's moving to another person, another person, and another person. And suddenly, the original value that I bought, I don't know where it is. I actually challenge you today to pick any random security token out of the internet and tell me what the underlying value is. And I'm telling you, you'll have to be a detective. You'll have to dig really hard to find what the value is, and it's not immutable.

• 26:34Speaker 02

  The board of this company can come in and say, "We'll make a decision that from now on, you're not getting 50% of the revenues. You're getting 20% of the revenues." And nobody would know. There's no way to tell the digital security owner.

• 26:45Anthony Pompliano?

  So how do you guys solve that problem?

• 26:47Speaker 02

  So the way we solve it is Onera, the token actually carries the values inside it, with it, everywhere it goes.

• 26:54Anthony Pompliano?

  That's smart people stuff, so explain that.

• 26:56Speaker 02

  Okay. So what we're doing is we invented something called KYA.

• 27:00Anthony Pompliano?

  KYA?

• 27:01Speaker 02

  Yeah, Know Your Asset.

• 27:03Anthony Pompliano?

  Okay.

• 27:03Speaker 02

  It's the equivalent of KYC. KYC is Know Your Customer. It's about the identity of a person. KYA is Know Your Asset. It's about the identity of an asset.

• 27:13Anthony Pompliano?

  Okay.

• 27:13Speaker 02

  And what this includes is everything you need to know about the asset that the token represents. So if it's a building, it's all the documents of the building. And then you also specify what rights you have as a token owner, and it is signed by the issuer.

• 27:29Anthony Pompliano?

  Okay.

• 27:29Speaker 02

  And that's put on the blockchain, together with the token, encapsulated together, immutable. So that no matter who gets the token, they can open it, look inside, and their rights are there. Nobody can deny their rights. Nobody can say that it's different now, and they don't have to look for it anywhere. It's on the blockchain. So information becomes available for everybody.

• 27:49Anthony Pompliano?

  So when you sell me the Brooklyn Bridge token, now I look inside, I realize you tricked me. Basically, I know that I don't own the Brooklyn Bridge immediately.

• 27:57Speaker 02

  So that was the first layer. But it didn't solve the Brooklyn Bridge problem yet. It only solved the information problem. But then you have to solve the second problem, which is verification. And that's the second thing that Onera does. Onera is run by nodes that we call underwriting nodes.

• 28:13Anthony Pompliano?

  Uh oh. All right, what's an underwriting node?

• 28:16Speaker 02

  An underwriting node in a regular blockchain, a node is anybody with a computer. On Onera, an underwriting node is a financial institute, like a bank, like a broker dealer, like any company that is reputable to do these kind of things. And if you want to upload a token to Onera, you have to take your KYA to an underwriting node, convince them that it's true, and they upload your token to the Onera platform. So all the KYAs and all the tokens in Onera are verified by underwriters.

• 28:50Anthony Pompliano?

  And if I'm the purchaser of the token, I'm counting on the fact that this reputable organization was willing to put it on here, so they must have done their diligence.

• 29:00Speaker 02

  Yes, and we also added the business model behind it. So if I'm an underwriter and I take an asset and bring it to Onera, I do the work. Listen, I'm going to use blockchain terms now. I do the work to verify that the KYA is true, not only on the blockchain, but also in the real world. So I did the work. Then I stake my reputation to it, and I put it on the network. And as a price for that, as a fee, from now on, every transaction for the life of the asset, I'm going to get a transaction fee for it. So I get the lifetime revenues. I basically become the blockchain, the block producer for this asset.

• 29:43Anthony Pompliano?

  Got it. Where are you guys in terms of building the product today?

• 29:47Speaker 02

  So we already have a basic test proving that it can be done on Hyperledger Fabric, because people thought it couldn't. So we're showing how Hyperledger Fabric can be turned into a public network, how you can store tokens on it, how the tokens can store the KYA, how underwriting nodes can underwrite the KYA. All of this, the basic proof of that has been done. And now we're starting to scale up towards a proper, real implementation.

• 30:15Anthony Pompliano?

  So you're like the ninth person in security token slash financial services around blockchain that have told me they're using Hyperledger. Why is everybody using this?

• 30:25Speaker 02

  I think because what I said before, Hyperledger is perceived as institutional ready, institutional grade ready. IBM is behind it, Microsoft is behind it, Amazon is behind and so on. But it's an interesting point to understand. All the people that you talk to are building private networks because that's what Hyperledger was built for. What we've done is we did something a little bit clever where the Hyperledger, if you remember, I said that every issuer have an underwriter. So from the point of view of the underwriter, they have a private network. They only deal with their own issuers. They don't deal with any other issuer. But the users connect to all those private networks together. So from the user perspective,

• 31:06Speaker 02

  it's a public network. So we created a public network out of a combination of private networks. So for the user, I can have one wallet and I can have assets managed by Citi and asset managed by JP Morgan when they become nodes and asset managed by any other node in the platform. So you basically have a public network. You can have liquidity. You can have, you know, all the exchanges can use the same network and so on. So what we're doing with Hyperledger is quite unique.

• 31:32Anthony Pompliano?

  What if I don't trust the banks?

• 31:34Speaker 02

  If you don't trust?

• 31:35Anthony Pompliano?

  Don't trust the banks?

• 31:36Speaker 02

  Then choose another underwriter.

• 31:38Anthony Pompliano?

  Got it.

• 31:39Speaker 02

  It's an open platform. Let them compete. If you can build a new underwriting node with an AI in there and your AI is doing the underwriting and, you know, people will trust yours better. You can also price it any way you want. It's a completely open platform. What we've done here is we've taken the real world situation where people take assets public, they go through an underwriter, and we just made it open, completely open. And we let the market dictate what KYA means. We let the market dictate the prices. We let the market dictate who they trust as their underwriter. It doesn't have to be a banker.

• 32:17Anthony Pompliano?

  All right, before we wrap up and we may have time for like one or two questions, rapid fire.

• 32:22Speaker 02

  Okay.

• 32:23Anthony Pompliano?

  Most important company in crypto other than your own?

• 32:26Speaker 02

  Coinbase right now.

• 32:27Anthony Pompliano?

  Coinbase? Why?

• 32:29Speaker 02

  Because it's bringing it to, it's helping bring crypto concepts to the masses.

• 32:34Anthony Pompliano?

  All right, that's fair. If you can change or improve any one regulation, what would it be?

• 32:39Speaker 02

  Reg D, I'll make it a lot simpler.

• 32:42Anthony Pompliano?

  Which part would you simplify?

• 32:45Speaker 02

  I would say that it's just wrong. What it does, it allows people to invest. It allows only the people that already have money to make more money. So it says, if you're rich, go ahead, be more rich. If you're not rich, don't be more rich. The way that I would do it is I would make it as a percentage of somebody's income. Because you don't want people to go bankrupt and so on. You say you can invest up to 10%. If you have $1,000, invest up to 100. If you have 100 million, invest up to 1 million. But, you know, in a scalable way.

• 33:16Anthony Pompliano?

  Got it. What's the most controversial thought you have in crypto? Other than long the bankers, because that's outrageous. What is your second most outrageous thought?

• 33:27Speaker 02

  I think that the, and that's, a lot of people in crypto value anonymity. I think anonymity is the most dangerous thing any platform can have. I hate anonymity.

• 33:37Anthony Pompliano?

  Why?

• 33:38Speaker 02

  I'll give you an example. Anonymity is what allows people to hide and then do the worst thing possible.

• 33:47Anthony Pompliano?

  Which is?

• 33:49Speaker 02

  On Telegram, people basically cloned my profile and tried to hack people out of money and succeeded in hacking people out of money. It's terrible, only because of anonymity. In election, when you're talking about election in countries here in the US, there's election now in Israel, bots can come in and become anonymous and they can ruin everything. And I think there's a very, there's a very good game theory about this that says that when you need trust, there are only two states of equilibrium. Either everybody trusts everybody or nobody trusts anybody. Now, in a market where there's no anonymity, you're much more likely to be in a position where people say what they think and they have consequences and so on.

• 34:33Speaker 02

  So trust is achieved. In a market where some people can cheat, very quickly, all trust collapses. You don't know who to believe. Everybody's a liar. And it's just if 5% of the anonymous people cheat, it ruins trust in the entire platform.

• 34:50Anthony Pompliano?

  So, we don't have that much time. We could talk about this for hours. I actually think that's a good thing. In the fact that I don't want to trust anybody. I don't think you should trust anybody. I don't think they should trust anybody. Right? I, I think that crimes, fraud, all this stuff happens. I don't blame somebody for cloning your profile and like trying to fraudulently induce money from somebody. I blame the fact that those people trust you. That's the, that, that's the problem. If they didn't trust you, they would never give them money. Right? If they didn't trust me, they would never give money to those frauds. Instead, if everyone was in the position of I trust no one, I verify everything, then you remove all of those risks.

• 35:33Anthony Pompliano?

  And so anonymity doesn't even matter at that point. Now it's up to you whether you want to be anonymous or not, because whether you're anonymous or not, nobody, they don't trust you either way.

• 35:41Speaker 02

  I think what you're saying is, is the theory of what you're saying is cool. But you know, so are a lot of, so are, a lot of theories in theories are cool. I mean communism in theory could be cool. But then in reality, it's a shit show. Because what happens is when people start cheating, as you said, uh, real people get hurt real fast. And I mean, talk hurt, I mean financially, physically, abuse.

• 36:06Anthony Pompliano?

  People who are not anonymous hurt way more people. Jamie Dimon has hurt more people than all anonymous accounts on the internet combined times 20.

• 36:17Speaker 02

  But you know, we know who he is and we can decide whether we, uh...

• 36:20Anthony Pompliano?

  He's one of the richest people in the world!

• 36:22Speaker 02

  I know, but, but at least we know who he is and we can decide whether we like it or we don't like it. But if somebody showed up on, on, on, on Twitter, looking exactly like you, with the exact same names and same everything, and then said, said something that, that hurt somebody...

• 36:39Anthony Pompliano?

  But that's not anonymity, right?

• 36:40Speaker 02

  That's anonymity. Anonymity allows that to happen.

• 36:43Anthony Pompliano?

  No, no anonymity, like all that is, is they've basically, they've, um, they've copied my information, that they're, um, they're pretending to be me, right? So they're pretending to be something that's not anonymous, but the anonymity would be if they're on Twitter and they just have an egg photo. Right? Because even like if you look at, uh, I don't know... Crypto bully or bully ESQ, you know, his name or panda whale or whale panda or any of these guys. Like, they're actually not anonymous. They're pseudonymous, right? Because they have their, they have a name that you associate with their account. And over time, you can choose whether or not to believe them, not believe them, whatever.

• 37:23Anthony Pompliano?

  But the anonymity, like, I would actually argue that there's almost no anonymity on Facebook, Twitter, etc. Like, it's all pseudonymity, which we can argue whether it's good or not, but anonymity doesn't exist on these platforms. Right?

• 37:38Speaker 02

  I don't see a lot of difference between anonymity and pseudonymity. As long as you don't have to, as long as you can speak without your true identity, and you can do things without your true identity, and you can buy things without your true identity, and so on and so forth. This is a slippery slope that ends where I get attacked physically. Okay, and it happened. It's not a theoretical thing. Now, you can be a theorist as much as you want, but once your family is in danger, once your livelihood is in danger, once your well-being is in danger, suddenly it's not so cute anymore. And I think anonymity is exactly that kind of thing. And, you know, people, people kind, you know, all the crypto zealots, you know, they're, they want everything to be anonymous and so on.

• 38:22Speaker 02

  For me, if a terrorist organization can get more funds because they're using anonymous platform, I don't want that platform.

• 38:28Anthony Pompliano?

  What if it violates my personal freedoms and my rights?

• 38:31Speaker 02

  I think there's a balance here, and I think that I do not support regimes that would use the identity to, to, you know, to attack you. But I don't support it in the same amount of fervor. I mean, I don't, I don't agree to that. Doesn't mean that I have to agree to the other. I think anonymity is dangerous, and I think anonymity reduces the, the, the quality of the public discourse. And, you know, there's a hashtag that says, "Everything is stupid." And, and in the end, if everybody's anonymous, everything is stupid.

• 39:05Anthony Pompliano?

  I got you to say that we're gonna automate the bankers. I can't get you on the anonymous side. All right. Uh, most important book you've ever read?

• 39:13Speaker 02

  I don't read books, actually.

• 39:15Anthony Pompliano?

  All right. None?

• 39:17Speaker 02

  I have an eye problem, so I don't like reading. I can answer on a TV show if you want.

• 39:21Anthony Pompliano?

  Okay, TV show.

• 39:21Speaker 02

  I'm following two TV shows now. I'm following Billions, which is cool. I don't know if you're seeing it. And I'm following Star Trek, the new one.

• 39:29Anthony Pompliano?

  Star Trek.

• 39:30Speaker 02

  Finally, Star Trek is doing something interesting.

• 39:32Anthony Pompliano?

  Perfect. Let's talk about aliens.

• 39:33Speaker 02

  So Star Trek's, what they're doing now is they're taking your favorite subject, AI,

• 39:38Anthony Pompliano?

  Yep.

• 39:39Speaker 02

  and pitching them as the villain that will end all life.

• 39:43Anthony Pompliano?

  Don't believe anything you see on TV. All right, aliens, real or not?

• 39:47Speaker 02

  Real for sure, but we'll never meet them.

• 39:49Anthony Pompliano?

  Why not?

• 39:50Speaker 02

  They're too far away.

• 39:53Anthony Pompliano?

  All right, that's fair. Listen, I don't know, man, you ever seen Zoom? We might just start video conferencing with them.

• 39:58Speaker 02

  Could be.

• 39:59Anthony Pompliano?

  All right, what one question do you have for me? And it'll take two questions from the audience.

• 40:03Speaker 02

  Two questions?

• 40:03Anthony Pompliano?

  No, just one question for me and then to let the smart people ask two questions.

• 40:07Speaker 02

  Okay, so I would ask you,

• 40:12Speaker 02

  in terms of your view of of security tokens, do you think it's bigger than crypto, smaller than crypto, just about the same?

• 40:21Anthony Pompliano?

  My view has evolved on this. I don't believe in security tokens. What I mean by that is I believe that every stock, bond, currency, commodity will be digital, right? And that's literally the core thesis since the day I got into this stuff.

• 40:34Speaker 02

  It's just another name for security tokens, digital securities.

• 40:37Anthony Pompliano?

  It's the digitization of the assets, the idea of a security token to me, like it just doesn't make sense in the sense of like, it puts too much emphasis on this is different than it's actually the same thing. It's just the underlying technology gets swapped out, right? So I don't use that vernacular anymore because of that.

• 40:55Speaker 02

  So what do you call it? Digital securities?

• 40:57Anthony Pompliano?

  Yeah, I usually just call it digitally native asset, right? So it could be a stock, a bond, a currency, commodity, it could be whatever. But with all that said, One of the most painful times I've ever been on the internet was when I came out and I said that digital securities were going to be much bigger and more important than Bitcoin and the recreation of money. So we agree on that. Well, so here and why I said it was on a pure market cap basis, the money supply globally is, let's call it, you know, 80 to 90 trillion dollars, real estate globally is 215, right? Just on, just on market cap. Now, there's an argument to be made, and I actually am sympathetic and believe most of

• 41:38Anthony Pompliano?

  it, where, yes, but money is integral, even though it's smaller on a market cap basis, it's so core as the unit of value that importance isn't just about market cap, which I think is a fair argument. So it's just not black and white, but, but I do think that people are underestimating how big it will be. Yeah. All right, two questions. Whoa. All right, three. Four. All right, fine, four. Just those four, I'm not taking any others.

• 42:06Speaker 03

  So I am victim of identity theft, SIM swapping, remote. My phone was stolen when I wasn't even, it was stolen remotely. And I have a Schwab account, I have bank accounts, and within 72 hours, all of my cryptocurrency was wiped out. If, I still haven't been able to get back on all the platforms. So the anonymity issue that I'm being brought up is really important to me. This has really destroyed me. Not financially, it's the loss of time, money, effort, stress, and anxiety. I spent two or three hours a day trying to, my, my identity is recovered. It's all my assets are basically been corrupted and I don't, it's, it's very hard to even

• 42:51Speaker 03

  know where to go to begin to try to recover all that.

• 42:54Anthony Pompliano?

  So this is really important. So, one, nobody wants that to happen, right? Two, both of my partners have been SIM swapped, one of those has been swapped off like five times, right? And we've been able to develop ways to stop it, et cetera. That's not because of anonymity, though. That's because of the mobile carriers have bad security measures, right? They're able to be socially engineered, like, like there are serious problems there, right? So I don't want to kind of de-minimize what's going on, but. That culprit is not anonymity, right? It's those players. Now, there's a whole bunch of things to be said around if they were socially engineering your information from you through anonymous accounts

• 43:38Anthony Pompliano?

  or pseudonymous accounts, etc. I think that it's a huge problem. It's just not the anonymity is the problem. It's the mobile phone services are done. Right.

• 43:50Speaker 02

  The anonymity of the thief helped him get away.

• 43:52Anthony Pompliano?

  But it's not anonymity, right? It's like saying a bank robber walks in the bank, doesn't tell anybody their name. And because they robbed the bank, they were anonymous.

• 44:00Speaker 02

  What I'm saying is that when this person logged into or registered an address on Bitcoin, for example, they didn't have to provide any details. Now, if they did it through an exchange now, they would have to provide details. And I'm happy with that. If they didn't provide any details, then they could run away with the money and potentially disappear with it. So this is.

• 44:21Anthony Pompliano?

  But this is a key piece, right?

• 44:23Speaker 02

  In a bank, it's hard to do that. Now, I will take, I agree that banks have theft as well and probably more.

• 44:29Anthony Pompliano?

  Yeah.

• 44:30Speaker 02

  But let's not ignore the problems.

• 44:32Anthony Pompliano?

  Just because that happened to him doesn't mean that I should have to give my information to access money. Like, I come at it from my fundamental right is to be private, right? I don't have to be public.

• 44:44Speaker 02

  Private and anonymous is not the same thing.

• 44:49Anthony Pompliano?

  No, but true privacy is, I have complete anonymity.

• 44:56Speaker 02

  You can be, you can be more private and non-anonymous.

• 44:59Anthony Pompliano?

  I don't want to be more, I want to be private. Not because I'm doing anything wrong. It's like encryption, right? Everyone thought, why would you encrypt communication if you're not doing anything wrong?

• 45:08Speaker 02

  So I'll go back to, quickly to what we talked about earlier.

• 45:12Anthony Pompliano?

  We're so over time, they can't stop us. Go ahead.

• 45:15Speaker 02

  So I'll talk about what we talked before.

• 45:17Anthony Pompliano?

  They're staring at me. I just go ahead.

• 45:19Speaker 02

  So on Bitcoin, you get anonymity, but you don't get privacy because everything you do is on chain. On a platform like Onera, you will not get anonymity, but you will get privacy because everything is hashed. So what do you prefer? Anonymous but not private or private but not anonymous?

• 45:35Anthony Pompliano?

  But who knows? Who knows what I'm doing? Do you know?

• 45:39Speaker 02

  There are enough companies out there that can match patterns and know that as long as they know that it's one of the wallets that's connected is yours, they can make the connection to you. So even people that, you know, most people would agree that even though Bitcoin is anonymous, it's not private because it's transparent, while a platform like an institutional-grade platform is not going to be anonymous, but it's going to be completely private. Now, it's not going to be private from the bank because they know it and I know it, and that's fine, but for everybody else, it's going to be private. So what I'm saying is anonymity does not generate privacy by default, and privacy doesn't mean that you're not anonymous to most of the world.

• 46:20Anthony Pompliano?

  I thought we were past this, and then you got to kick-start it again.

• 46:23Speaker 03

  No, but also, my deposit, the deposits have a unique identifier. So whoever the thief was, had to send it to a unique identifier as a deposit. And that is traceable, but not, it's anonymous, but is it traceable by cybersecurity, FBI and all that?

• 46:43Anthony Pompliano?

  For sure. I, in a week or two, we're going to come out with a recording. I interviewed a active DEA agent, who this is his job is to find money launderers using crypto. Fascinating. All right, we got right behind you.

• 46:58Speaker 04

  I'd like to go back to the bank robbery example, because I think that's a really good one to talk about privacy versus anonymity.

• 47:05Anthony Pompliano?

  Man, you really kicked the hornet's nest. All right.

• 47:08Speaker 02

  You asked me for a controversial opinion. I gave you one, didn't I?

• 47:13Speaker 04

  Because I, I like, I like the example of a bank robber, because it's a really good practical example of why we should not have perfect privacy because of examples like that. You could be an anonymous bank robber, have a mask over your face, no one knows who you are when you go in. But we're able to hold that bank robber accountable because the car they're driving might have a license plate that's registered to their name. They might go home to an address that is registered to their name, and we have a trusted, sens- centralized authority in the police or the FBI or some sort of law enforcement who can go and hold that person accountable. So I know this was more of a statement than a question, but to make

• 47:58Speaker 04

  it a question, wouldn't you rather have a society where accountability can exist without perfect privacy so that we can effectively reach more of that equilibrium that you spoke about?

• 48:11Anthony Pompliano?

  No way.

• 48:12Speaker 04

  You don't have, you know, you're not perfectly anonymous. You're not perfectly private. You're somewhere in the middle. So an individual who wants to exist in in general privacy and anonymous behavior can, but we can still hold those accountable who try to take advantage of anonymous, of being anonymous.

• 48:31Anthony Pompliano?

  The only thing that I'll say is the violation of any of our rights is a violation of all of our rights, right? I spent a year in Iraq and guess how Iraq gets how it is or Venezuela or China? It starts with the violation of one person's rights, right? And you're looking at it through the lens of law enforcement, but it is not, I shouldn't have to give up my rights to privacy, to anonymity, to freedom and my personal freedoms, so they can catch you doing bad things. What's that got to do with me? Not my fault, right? Because their job is harder, which by the way, by having anonymity and privacy, it does make it harder, right? We shouldn't give up our rights to make their job easier, right? And when you talk to guys like this D agent, his take is,

• 49:17Anthony Pompliano?

  "Take Monero. It's incredibly difficult, but they are going to figure out ways to solve this, right? To track things, etc." But that is for them to develop. By giving up our rights in that manner, it's a slippery slope. And now look what China does. They literally track your face all around the place.

• 49:36Speaker 04

  And I agree. And first of all, you know, I thank you for serving to protect those freedoms, but I think that's a single Dimensional way of looking at freedom. We're not just free from one thing. We have freedoms that protect us to be free from many different things. Freedom from our government, but also freedom from crime and freedom from other bad things that can happen.

• 50:01Anthony Pompliano?

  No, but you have no innate freedom from crime. That's not a thing. You may not want crime, but you have no guaranteed right free from crime. I actually should have the freedom to come beat you up, right? Now, there's punishments.

• 50:15Speaker 04

  But constitutionally, constitutionally, we're guaranteed justice and the security of posterity from our government. So when we talk about what the freedom is that we're guaranteed, and this gets more constitutional than it does theoretical. When we put it in the context of the United States, we do legally, by being a citizen of this country, entrust in a centralized government, the responsibility and the duty to ensure posterity and justice and general freedom to its citizens. So wouldn't it be the job of the government to make sure that that happens?

• 50:51Anthony Pompliano?

  If you had a right to safety.

• 50:53Speaker 04

  With an equilibrium.

• 50:55Anthony Pompliano?

  Yeah, if you had a right to safety, then they should track all of us with facial recognition. They should track all of our license plates. They should make us register.

• 51:02Speaker 04

  I'm not saying we become a maximalist.

• 51:05Anthony Pompliano?

  But where's the line? Where's the line?

• 51:07Speaker 04

  And that's honestly, and I think that's where you leave it up to our courts. And you leave it up to the law.

• 51:12Speaker 02

  So when you said.

• 51:13Speaker 04

  We've been modifying that line since 1783.

• 51:17Speaker 02

  So when you said, where is the line? You basically acknowledge that there's a line. And now it's just.

• 51:22Anthony Pompliano?

  My argument is if you buy into that, if you buy that argument, where is the line that you're willing to stop at? I don't think there should be a line.

• 51:30Speaker 04

  I'll comment on that, though. But in 2000.

• 51:32Speaker 02

  One thing I want to say about this is that you will find that, I mean, I don't know anything enough about you, but the approach that there is no line is easier to take. When you come from a sheltered environment. But if you're part of a minority or you're being abused, the line is in a completely different place for you. So it's really dependent on who you are. So if you're in danger of being, you know, this line that doesn't exist threatens you or your family or your livelihood or your property, you would want that line to be somewhere along where, you know, a gentleman says it should be, where it makes sense, where not too much of your rights are being violated because rights are being violated by laws all the time. You have to pay taxes.

• 52:17Speaker 02

  That violates your right. So the line is somewhere where, you know, people are safe, first of all, from abuse and torture and everything else. So to say that there's no line, for me, is a little bit on the extreme.

• 52:30Anthony Pompliano?

  I just don't believe in relying on somebody else for your safety.

• 52:33Speaker 04

  And but I understand that. And I'll just give an example. I'd like to hear your comment on this specific line. I think it was 2014 Supreme Court case decided on the degree to which law enforcement is allowed to take and possess someone's cellphone. And this particular officer arrested someone, went through their cellphone contents and then arrested them for a different crime. And the Supreme Court ruled that that was unconstitutional and set a line that an officer is allowed to take possession of the phone and check its contents so much to ensure that the cellphone itself does not pose a threat to the officer. So really, just the physical nature of the phone. What are your thoughts on that particular line and that kind of middle ground being thought out

• 53:18Speaker 04

  by pretty smart people who aren't necessarily seeking for power themselves in different contexts that revolve around privacy versus safety?

• 53:28Anthony Pompliano?

  Has a cellphone ever beat you up? Come on, wait. To check a cellphone for danger to an officer, right? Again, I don't have all the details, but that's a pretty far reach.

• 53:39Speaker 04

  I mean, just in practical terms, it effectively means you can look at it, but you can't go in the contents.

• 53:45Anthony Pompliano?

  Yeah, to look at it, right, is different than going into the contents of it. And so, again, it would be if you could search somebody's phone, I would think, right? And again, this kind of somebody who's not a lawyer, who doesn't understand constitutional law, etc., that you would be able to... Not go into somebody's phone unless you had a search warrant. You're searching, right?

• 54:06Speaker 04

  But, but the officer is able to arrest the individual, go into their pockets, pull out a cellphone and look and, and you know, verify. So it doesn't, I mean, doesn't that kind of find a middle ground between true privacy? Because true privacy would mean that no arresting officer is ever able to search my, you know, to search my person. So doesn't that kind of find a middle ground to ensure safety and some degree of privacy?

• 54:34Anthony Pompliano?

  No, again, right? And, and part of this comes down to, yes, officer safety is important, right? Some of my best friends are police officers. And I think what they would tell you is they do that for their safety, but they're doing it after you're already in custody, right? That you're already, you're already charged with a crime in a sense of they, they have now taken possession of your body, right? And, and put you into custody. That's very different than if they walk down the street. They cannot go in your pocket just because they want to, right? It, it, it, it changes when you go, I think from what you were saying earlier, bad people do bad things. And when you do bad things, the rules change, right? Put people in cages, right? For decades for crimes all time. I think that that changes when you violate the rules of

• 55:16Anthony Pompliano?

  society. But if you are a law abiding citizen, they, they can't do that stuff, right? So I think it's different law abiding citizen versus criminal, right? All right, let's move on before, go ahead. Who, who else? Go, all right, he's got a, he's got, he's got a question about why we're here.

• 55:34Anthony Pompliano?

  Man, we're 20 minutes over time. These guys are, all right, just hurry up.

• 55:38Speaker 05

  So earlier in the talk, you'd mentioned about Onera being decentralized, correct? So what is the process for selecting underwriters? How are they chosen, verified? And secondary to that, why can't this be done via AI? Because the data available for your example, say the Romanian shopping mall, from daily foot traffic to car traffic to plot size, to rent numbers, to weather patterns, to all this AI information is available, um, you know, why, why, I guess, so yeah. How are the underwriters chosen? And why can't this be done via AI?

• 56:07Speaker 02

  So to the first question, Onera is going to be a nonprofit foundation, open source, and the rules for who can become a node will be published. So for example, one of the rules will say that if you are a registered entity with the, I don't know, with the SEC or FINRA or any of these agencies, you can immediately become, you can become a node. So basically, the rules are going to be published, and anybody that meets the criteria can get in.

• 56:39Speaker 05

  So doesn't that take away the decentralization of the project then, where you have rules and limitations, and certain people who are only qualified to participate?

• 56:47Speaker 02

  So you're going to open a very, a new kind of worms here about what is actually distributed and what isn't distributed. But I think that if we can have thousands of entities on the platform, all of them approved by their being regulated, okay, it's distributed enough.

• 57:05Speaker 05

  I understand that definitely where you're talking about having one or two people in control versus having thousands, and then the market helps find the equilibrium, right? But it still feels like a centralized solution when you're discussing.

• 57:16Speaker 02

  I'm not religiously decentralized. You know, some people talk about decentralized platforms as if this is an end in itself, and it's not. It's just, it shouldn't be centralized. That's enough. The other question about AI, you know, I've been building AI systems for many years. We're still some time away from what you're describing. If a company, for example, want to launch into the market, and they say that we think our company is worth $100 million because we're doing this, that, and the other, okay? If they can say whatever they want, and based on that, the market will price them, then we'll have the ICO phenomena again. Anybody can say whatever they want, they can bring AI to do that.

• 58:01Speaker 05

  We're talking about data analytics and data being processed through an AI program.

• 58:05Speaker 02

  So as we talked about it before, and I said, anything that's commoditized, the data is commoditized, and can be replaced by AI, I would welcome an automated node on Onera.

• 58:16Anthony 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.