Matt Odell, Co-Founder of Final Message: The Past, Present, and Future of Bitcoin

Matt Odell is the co-founder of Final Message and co-host of the popular podcast episode "Rabbit Hole Recap" on Tales from the Crypt. In this conversation, Matt and Anthony Pompliano discuss Bitcoin, mining, interest rates, Bitcoin twitter, financial privacy, and where Matt believes we're going in the future. CRYPTO. COM-----Crypto.com is a pioneering payment and cryptocurrency platform that seeks to accelerate the world's transition to cryptocurrency. With the vision of "cryptocurrency in every wallet", the Crypto.com App offers a full range of financial products with competitive pricing, well designed UX and high security. It is the best place to buy, sell and pay with crypto. COINMINE-----The Coinmine One is like an Xbox that turns your electricity into Bitcoin. You just plug it in, connect to wifi, and tap on the crypto you want. It’s so easy anyone can do it. Everything is controlled from the Coinmine mobile app and the Coinmine keeps getting better with over the air updates that add new coins, features and services to your Coinmine. Visit coinmine.com/pomp to get a Coinmine and earn crypto for powering a new world.

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

• 0:01Speaker 00

  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?

  Matt Odell is the co-founder of Final Message and co-host of the popular podcast episode, Rabbit Hole Recap, on Tales From the Crypt. In this episode, we discuss Bitcoin, mining, interest rates, Bitcoin Twitter, financial privacy, and where Matt believes we are going in the future. I really enjoyed this conversation, and I hope you do as well. Skrt, skrt! Wanna know who has the best URL? Crypto.com. That's right, Crypto.com. They're a crypto platform with one goal: motherf***ing mass adoption. That's why we're all here. We're trying to get crypto in every wallet. Crypto.com is helping people do that through buying, earning, lending, and card payment.

• 0:58Anthony Pompliano?

  Everything you could want at Crypto.com. Go help your boy out, tell him Pomp sent you. Download the app or visit Crypto.com. Pomp's got you, always. Everyone wanted to get into mining and didn't know how? Don't worry, your boy Pomp's got you. Everybody got some electricity and wifi? All you gotta do is go to CoinMine.com, you buy a coin mine. It's like an Xbox or a Playstation that helps you turn your electricity into Bitcoin. That's right, you purchase it, it shows up at your doorstep, you pull it out of the box, you plug it in, connect to your wifi, five minutes or less, you're mining Bitcoin. All you have to do is control it from the mobile app they provide, and then you receive over-the-air updates that add new coins and new features on a consistent basis.

• 1:43Anthony Pompliano?

  Kinda like how Tesla does over-the-air updates and updates the car software. Just you're updating your coin mine. Consumer mining made easy. That's right, go to CoinMine.com, tell them Pomp sent you, and thank me later.

• 1:56Speaker 00

  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.

• 2:21Anthony Pompliano?

  Alright, bang, bang. I'm here with Matt. This is a long time coming. Probably one of the most prominent Bitcoin maximus in the world? Is that fair to say?

• 2:31Speaker 02

  That's a little bit, little bit too intense. I don't know about that.

• 2:35Anthony Pompliano?

  Too intense. Um, let's start with just your background and kind of how'd you get into Bitcoin?

• 2:41Speaker 02

  You know, I was just, I, I discovered Bitcoin in, in 2012. I thought it was gonna fail. You know, I thought it could never work and then it, it pumped in 2013. And while it was pumping in 2013, I was like, shit, maybe this could work. And I jumped into it and I just tried to figure out how it couldn't work. And the more I went down that rabbit hole, I was like, more, I was more and more confirmed that it would work. And I basically came up with the conclusion that even if it didn't work long-term, it would work short-term and I could make a bunch of money from it.

• 3:21Speaker 02

  And, and then the rest was history. It was, you know, you just, when you, uh, my dad taught me from a very young age that if you invest in something, you should know what you're investing in. And just everything, you know, from there, I just, not only was I investing, but I, I had to learn as much as possible.

• 3:39Anthony Pompliano?

  Real quick, there's a live stream going on for those that are just listening to this. Jack Mahler is coming in hot. What's up brothers? What's up Jack? So, why did you think that it had a low probability of success when you first saw it? Was it just like, this is such an ambitious thing that it just naturally is a low probability? Or were there certain aspects of it that you, you didn't believe in or didn't understand? Or like, what would you say about that?

• 4:03Speaker 02

  Was, so we were post Snowden at that point.

• 4:06Anthony Pompliano?

  Post Snowden in this, you said 2012?

• 4:08Speaker 02

  Yeah, we were post Snowden and we were post-financial collapse, right? In 2008, right? So I grew up into the financial collapse. And I was a New Yorker, so a lot of kids... Their parents were Bear Stearns and Merrill Lynch and everything and I so I saw that unfold. And everyone's, you know. That like basically said to me as as a young kid. You know, everyone who pretends they know what the fuck they're talking about is just winging it all at the same time, right? So that opened up a ton of of thought processes to go down in in all all facets of life, right? And then Snowden happened. And I was at that point, I was like, fuck, we can't trust American companies, right? At that point, I thought, you know.

• 4:52Speaker 02

  I had I already had a fuck the man kind of attitude, but I was like, even if the US government spying on me. Like I was, you know, I was a Google fanboy, like Google, Google will protect us, you know, and.

• 5:03Anthony Pompliano?

  What was it, a don't be evil?

• 5:04Speaker 02

  Yeah, don't they they won't be evil. They told us they're not gonna be evil. We're gonna be good. Um, you'll just use the built in security settings or whatever Google gives you. Uh, and then I discovered Bitcoin and I was like. Okay, this is pretty awesome. Um. It kind of combined all those those things together into one. Um, but I I thought they would squash it, you know, I thought they would, I I.

• 5:32Speaker 02

  I thought the response was gonna be way more aggressive than it ended up being.

• 5:36Anthony Pompliano?

  Okay.

• 5:36Speaker 02

  And I thought it was gonna be easier to squash. Than it ended up being. So I when I had that realization, when I was like, oh shit, they're gonna have to do a lot more than I thought. I was like, okay, I'm I'm in. This is it.

• 5:47Anthony Pompliano?

  And and so, uh, was there one moment where that switch happened from like? Oh, this is cool, but unlikely to be successful to like. I'm in or was it more of a gradual kind of like you're gaining confidence in the fact that this is gonna survive?

• 6:01Speaker 02

  So the other thing that happened was we had the online gambling ban in America. Right? I may or may not like to gamble. So I actually, the first thing that clicked for me was. Even if it's just used. Buy Americans to gamble online. It should be, it should be, you know, moderately successful. Right? So I thought that was like a good bridging point. At that point, I wasn't. You know, saying, oh, like, like, this is gonna be the global reserve currency of the world. Like, we've come a long way since then.

• 6:33Anthony Pompliano?

  So you go from, uh, maybe, but unlikely to like, oh, this thing's not gonna go away to. Before we get into some of the nuances, like, where are you today? When you think of Bitcoin, like, what is it to you? And then where do you think we're going? Like, how big can it get? Is it global reserve currency at some point in the future? Like, where's your kind of vision of the, the future?

• 6:55Speaker 02

  I think Bitcoin is the best money we've ever had.

• 6:59Speaker 02

  I think Bitcoin is like essentially like a global escape hatch. It allows us to, as individuals, to voluntarily opt out of, of basically a shitty hand that young, young people have been given. I mean, I sent my first Bitcoin transaction before I ever sent a bank wire. Right? And now I send bank wires and I, I look over it like twenty-five times. You know, like Marty always says, like, oh, I'm still double checking my addresses. I always get worried when I send Bitcoin. Like, to this day, I get worried when I send a wire. Like, I, cause even if there's like ways to reverse it, like, who wants to spend hours on phone trying to figure out where the money went and where, what, what happened?

• 7:39Speaker 02

  So I, I, to me, I immediately see that, that change in friction, that whole thing is digitally native. Uh, and to me, like, I have, like, I have real money and then, like, I have US dollars. Like, that's, I have fully made that transition in my head with my own mental, uh. It feels more tangible to me, even though there's no physical thing to hold in your hand. It feels so much more tangible. It's like really hard to put, uh, put my finger on, on that feeling, but it definitely exists. And I think that anyone who's a Bitcoiner feels that. And then at this point, like. It doesn't really matter. I I I mean, I think that it could be the global reserve currency. We're sitting on that.

• 8:24Speaker 02

  But even if it's like magnitudes less, like it's still gonna pump a shit ton, right? So I just.

• 8:29Anthony Pompliano?

  The the thing to me when I first like really it hit me like wow, this is different and this is better. It's like everything about Bitcoin that I think people who believe in Bitcoin usually tell folks is so theoretical and so like uh sophisticated around sound money and inflation. It's like these really complex topics. So you've got to start with like. What is inflation? Why does how does that debase a currency? What are the problems with that? Like all of that to explain like sound money is important, right? But the most practical thing that I ever experienced was uh I I forget where I went um but. I was in the airport and I was about to leave and I had to change money or I had to change from US dollars to um I literally think I was in uh Korea, right?

• 9:11Anthony Pompliano?

  And I'm just thinking like, how stupid is this? Like literally, they won't accept the money that is accepted somewhere else because it's just. You know, a different piece of paper, right? Or whatever. And to me, that was when I was just like. We should probably have a universal global money, right? And so like yeah, technically like your credit card acts that way, even though it's not money, it it's credit. But that's when I started to realize like, oh, it's not just like sound money and the more complex like structural things. Like there's very specific practical, you know, um use cases or practical examples of where Bitcoin is better than fiat currencies. It's just gonna take a really, really long time because if you start with, just take that example, how many people actually exchange money every year when they travel?

• 9:54Anthony Pompliano?

  Like that's a small part of the population, right?

• 9:57Speaker 02

  Most people don't even travel with cash anymore.

• 9:59Anthony Pompliano?

  Well, a whole nother thing.

• 10:00Speaker 02

  They just skipped it and went went to credit cards.

• 10:03Anthony Pompliano?

  And and.

• 10:03Speaker 02

  But then your credit card gets canceled. You have no money.

• 10:06Anthony Pompliano?

  Or or uh you ever have you ever called like uh for the longest time I would call the credit card company be like, hey, I just so you know, like I'm going to X country like, don't shut it off, basically.

• 10:15Speaker 02

  Please don't shut it off on me.

• 10:17Anthony Pompliano?

  And then like recently over the last, I don't know, a year or so, now they say, uh, you don't have to call us.

• 10:21Speaker 02

  Right.

• 10:22Anthony Pompliano?

  And I, and I still like wanna call, cause I feel like, wait, uh, no, I want you to want me to call you when I travel, like you shouldn't be approving.

• 10:29Speaker 02

  I wonder if that's cause they know they're like tracking whether or not you bought plane tickets, stuff like that. Like I never called my American Express, but I buy my plane tickets with my American Express. So I'm like, here guys, just so you know, I don't feel like calling you, but.

• 10:41Anthony Pompliano?

  Yeah, yeah, yeah. Alright, so that leads me to, um, so, so I, I just want people to understand where you're coming from a Bitcoin perspective. Uh, there's a bunch of topics I wanna talk to you about. The one that you've recently been talking a ton about, which, uh, I'm like almost a hundred percent in agreement with you, and I think that you could go stand on top of the Empire State Building, scream till you're blue in the face about, and nobody will care because they don't think about the second and third order effects, is this idea of like KYC can be dangerous? And so just explain like what you mean by that, and then we'll get into some of the nuances of it.

• 11:15Speaker 02

  Well, so KYC is, they're essentially aggregating all of your important data, all in a central database, uh, that either they can use, or they could, it could get leaked. They could, you know, get hacked and they can lose it. So like you have to, you trust them in two, two regards when they take your KYC data, you know your customer data. Uh, you're trust, you're trusting them to use it properly, properly, whatever that is. And then you're also trusting them not to fucking lose it, and they constantly lose it. We see it all the time. We just had the Capital One, uh, hack.

• 11:51Anthony Pompliano?

  A hundred million people.

• 11:53Speaker 02

  Right, and in that case, so people didn't even realize you were trusting Capital One, but you're also trusting Amazon, because Capital One was storing on Amazon servers, and then it was an Amazon employee, right? You know, Amazon runs the internet, basically. Like AWS, everyone uses AWS, and Amazon employee was the one who compromised the data and took it. And Capital One didn't even know the data was taken until someone saw it, put two and two together and told them.

• 12:18Anthony Pompliano?

  So, to clarify, I, I, I believe what happened is, it's an Amazon employee who left the company, but during the employment, like figured out some vulnerability, and then went, got the data. And I, I read an article and it looked like they were almost like. Not being malicious, but also they knew that they were breaking the law. Like it was almost like this weird like. Oh, here I'm like uploading this to this chat because I don't want it to be on my computer. So like they knew it was bad. But they weren't trying to monetize. Yeah, they like she wasn't trying to sell it. She wasn't trying to like do anything with it.

• 12:54Speaker 02

  She just wanted to leak a hundred and fifty million or.

• 12:57Anthony Pompliano?

  I don't even think that she was trying to leak it. Like what it looked like to me was it was it was more like um. At least in the article, it appeared like she was more like it was an engineering exercise of like, hey, I can get this. And then she had written code and like started on GitHub. Which literally had like a IP address or something like like something that pointed to that database. Of where she got the data from. And that's how they ended up putting it together. It's because somebody saw the GitHub code. And then literally was like, they sent an email to Capital One. It was like, hey, by the way, I think somebody has your data.

• 13:26Speaker 02

  Cause they're selling it. Yeah, exactly. But she wasn't selling it.

• 13:30Anthony Pompliano?

  I'm not sure. Yeah, yeah. Who who knows?

• 13:32Speaker 02

  But anyway, that's all moot, right?

• 13:34Anthony Pompliano?

  Yep.

• 13:34Speaker 02

  The point is, is they collect all this information. They know your address. They know your phone number. They know your email address. Pretty much no one ever changes their phone number anymore. So that's like a very big identifier. Then they know your social security number, which people still pretend is like private information. You can open like bank accounts and people's names and and. Take out mortgages. I don't know. You could do tons of shit with the social security number. Um. So like all your private information. Then. If it's a company like Capital One, they know all of your payments. They know your your full payment history. They know bank accounts. They know all that stuff. So when all that data is combined. Um, it could. It's very easily for it to be used against you. And there's a lot of.

• 14:16Speaker 02

  Um, and especially like imagine. So now we now we're talking about KYC. Imagine you're it's a Bitcoin service. They know how much Bitcoin you own. They know where your transactions are going. They know. Uh, yeah, exactly. Those two key things. And then you mix that with all their personal identifiable information and they know where you live. They know who your family is. Like that gets really fucking scary, really fucking quick. So.

• 14:43Anthony Pompliano?

  I agree that handing your data over to any company or organization that has some sort of security vulnerabilities is a huge risk, right? And we've seen, I think it was Marty Bent in his newsletter yesterday or today or yesterday, was like, "We've seen again and again and again and again," and he hyperlink out to like, and each one of them is not like, you know, "Hey, somebody stole five records." It's like they stole like 50 million people's personal information, right?

• 15:10Speaker 02

  Right.

• 15:10Anthony Pompliano?

  So you've literally, probably the odds have to be like, you know, your information's been stolen 30 or 40 times at this point. It's not just, you know, one person got it.

• 15:19Speaker 02

  Well, the Equifax one was really bad. That was just like every adult American, just all the information.

• 15:24Anthony Pompliano?

  Well, and so like, the opposite argument, right, like if I play devil's advocate, if you were talking to a regulator, for example, like, "Well, we need KYC to prevent money laundering. We need KYC to protect markets," like all this stuff.

• 15:37Anthony Pompliano?

  Let's give them the benefit of the doubt that their argument has some level of validity, right? We can argue over how important it is, whatever, but let's just say that's true. How do you thread the needle between those two arguments, right? So like, giving my data is a huge vulnerability for me and a huge security risk because now somebody else is in control of it, they get hacked, etc. But there's this society that I've agreed to live in, and there's some social contracts that are involved in that, that say that the information is necessary to quote-unquote "protect the system" or "protect me," whatever. Where do you think like the common ground is? Or like, what's the solution to that trade-off?

• 16:13Speaker 02

  I think that to use the traditional finance system, you have to submit to all this information. It's by design. It's how they set up the whole fraud system. Otherwise, they would just, they would get screwed. There'd be no way for them to basically collect their debts.

• 16:32Anthony Pompliano?

  Yep.

• 16:33Speaker 02

  With Bitcoin, it's unnecessary.

• 16:35Anthony Pompliano?

  Okay.

• 16:36Speaker 02

  That's one of the groundbreaking things about Bitcoin, because it's a push system. It's completely unnecessary. Like BitMax, you know, makes millions of dollars every year, and they never, no one ever, you know, defrauds them. No one ever steals money from them because it uses a Bitcoin system. They don't have to know anything about their customers. So, so as far as I'm concerned with KYC, is if you're an on-ramp, I reluctantly accept it. Because, or an on-ramp or an off-ramp, there's no way, it's very difficult to get in and out there unless there's some kind of... Person to person element like Bisk where someone's sending it to you from their bank account directly to the buyer or

• 17:19Speaker 02

  I mean the reverse directly to the seller or something like local Bitcoins. You know, stuff like that where you have person to person, but if it's any kind of regulated on-ramp like we're gonna have to deal with KYC. Uh, but as I, there's no excuse for Bitcoin company that isn't uh, an on-ramp to be dealing with KYC and oftentimes the excuse is well, you know, we have to connect to Fiat and stuff. Well, I just, you shouldn't do that. Don't connect to Fiat, right? Like, look at Bitmex. Bitmex has no, no Fiat connection whatsoever.

• 17:50Anthony Pompliano?

  So, so your argument is there's two separate systems, right? The alternatives to each other. There's the Fiat system, there's the crypto system. In companies where there is a bridge, naturally the Fiat system is going to require the KYC.

• 18:02Speaker 02

  Right.

• 18:03Anthony Pompliano?

  But you're actually making the argument that in the crypto only world, so if you're going crypto to crypto, if you're just using Bitcoin, etc. within a system. Because there is no bridge back to that Fiat system, that KYC is necessary, shouldn't be done, etc. Like, that's a very nuanced argument versus.

• 18:19Speaker 02

  Bitmex versus Coinbase or whatever.

• 18:21Anthony Pompliano?

  Yep.

• 18:21Speaker 02

  Right?

• 18:22Anthony Pompliano?

  Yep.

• 18:22Speaker 02

  Or.

• 18:23Anthony Pompliano?

  The on-ramp is actually where the KYC has a place.

• 18:26Speaker 02

  Right.

• 18:27Anthony Pompliano?

  But if you don't have that on-ramp, then that's where it, your analysis of KYC completely changes.

• 18:32Speaker 02

  The on-ramp or off-ramp, right? This is like one of the issues as well, like things like all the the Bitcoin credit cards, right? Where you're like spending and it automatically converts to Fiat.

• 18:42Anthony Pompliano?

  Yep.

• 18:42Speaker 02

  They have to do full KYC.

• 18:44Anthony Pompliano?

  Yep. See, like, I actually think that argument is much stronger than, hey, there should be no KYC ever. Right? Like, just kind of blanket, whether it's Fiat or crypto, there should be no KYC. Eh, gonna be hard to convince a lot of people to get behind that. And then the argument of like, there should be full KYC on both the Fiat and crypto world, regardless of if there's on-ramps, off-ramps. I think that's pretty hard to get people around as well.

• 19:07Speaker 02

  Right.

• 19:07Anthony Pompliano?

  And so the nuance of KYC in the Fiat world, not needed in the crypto world, but if there's a link on an on or off ramp, then you have it as well. Like, that seems pretty reasonable to me.

• 19:17Speaker 02

  I think. Obvious, I don't think KYC is effective at all at stopping money laundering. I think we have tons of money laundering and it's not the types of people that would get deterred by KYC on their.

• 19:28Anthony Pompliano?

  We were gonna get to this point, go ahead.

• 19:31Speaker 02

  But that's besides the point. I mean, the whole idea, the whole Cypherpunk manifesto, like the whole idea is that we do what we can, right? You run code and, and you try and create tools to circumvent that.

• 19:47Speaker 02

  And, and that is like a tangible goal. Like, we can have any, all Bitcoin-only businesses can never do KYC and we'd be good, but you have to follow like certain principles. And this is part of the reason why I was like freaking out during 2017 is like everyone completely lost the plot. Because it does, it goes farther, like I simplified it by saying fiat on-ramps and off-ramps. Like, if your service is domiciled in America, is based in America, you have American founders that are known. Uh, you have major investors all investing in it. Your business is gonna have to do KYC as well. And I think the whole value prop here

• 20:31Speaker 02

  is, is circumventing that friction, circumventing KYC, uh, and censorship resistance. So if you don't have that, you are, it's worthless. Whatever that is, is worthless. And I see, and that's one of the big critiques I, I throw at Ethereum all the time, is that I think like a lot of their so-called depths, like, the, the main, the main, they think of all these technical reasons why that they're censorship resistant, but the, the main issue they have is actually the people issue. You know, who's behind it, their known actors, all this stuff. Like, I wanna see more like anonymous Bitcoin companies with dope products.

• 21:06Anthony Pompliano?

  Yeah, so like, I don't even think, you're using the word circumvent, but like, I don't even think it's circumventing, right? Cause what you're really doing is you're saying, um, it, it's very similar to like, hey, today we signed contracts on a piece of paper. Then all of a sudden, somebody invents like electronic signatures. Like, you didn't circumvent the paper, you just created a better way. Right? Like, that's essentially what you're talking about here is, you're not circumventing, uh, the rules of the law as in like a, we want to break the law. What you're doing is you're creating a better system that actually should be more compliant. Like, the thing I keep going back to is Bitcoin transactions are immutable when they're put on the chain, right? And so if you're a money launderer today and you're using all the different methods you have available, you want to use cash because it's not traceable.

• 21:51Speaker 02

  Right, but they want to ban cash too.

• 21:53Anthony Pompliano?

  So the logic, if that follows, is if there's a system that's writing down every transaction, right? It's pseudonymous, so it's not like, you know, the police can just go search Matt Odell and figure out that Matt Odell did this transaction. But what they can see is the wallet-to- wallet transactions, etc. And so if they deem somebody did something illegal, it is actually, you know, I had a D agent come on and he's just like, "Look, it's easier to track here than it is cash." Of course.

• 22:20Speaker 02

  Right.

• 22:20Anthony Pompliano?

  Right?

• 22:21Speaker 02

  But I mean, I think that's kind of an issue, but...

• 22:23Anthony Pompliano?

  Okay, so I want to get in because I know that as part of this KYC thing, privacy, right? So things like Samurai Wallet, etc. People are working to take the pseudonymity of Bitcoin and turn it into a much more private type transactions. I don't think we're... I feel strongly we're not there, right? But the work that's going on, moving us in that direction, I think can have a lot of advantages. From your perspective, how do we kind of settle on KYC, privacy, the pseudonymity, but also not changing the core benefits or the core criteria and aspects of Bitcoin itself?

• 23:03Speaker 02

  Well, so to connect those two things together, like, one of the major issues we have with KYC is that Bitcoin is a transparent ledger, which is pretty immutable, it's going to last for a long, long time. And by mixing those KYC, that KYC information, they could then follow you through the chain, right?

• 23:24Anthony Pompliano?

  Yep.

• 23:24Speaker 02

  All the transactions you do after that. And that doesn't just de-anonymize you. It also reduces the anonymity set of everyone else that you ever interact with, right? So like, imagine, in the most simplest way, like, imagine your boss pays you... Uh, your, your boss pays your salary, right? And then you, you buy a cup of coffee somewhere. The famous coffee that everyone's buying with Bitcoin. Uh, the barista shouldn't know what your salary is, right? You pay rent, you pay rent, you know, your landlord shouldn't know you lost $200 in poker yesterday, right? Like, so, so.

• 24:02Anthony Pompliano?

  There's some default privacy that, that you should be afforded without having to compromise that just because you want to use a certain asset?

• 24:11Speaker 02

  Yeah, I mean, I think, I think that all this gets stuck in the weeds about

• 24:17Speaker 02

  all these theoreticals and people are shouting at each other and it gets, it gets very intense. Uh, but I, I think at the end of the day, what everyone wants is the ability, this is why I like distilling it. Is I, I think what everyone wants is the ability to receive a payment from someone or pay someone with the expectation that all your future and past transactions aren't completely visible to them, right? There should at least be some level of plausible deniability there.

• 24:41Anthony Pompliano?

  I, I think that's a perfect way to put it.

• 24:43Speaker 02

  Right, and I think people are leaking way more information than they realize. And it's not just on Bitcoin, it's across all of these networks. I mean, it's across non-crypto networks, like, a lot of people don't even realize that they're leaking all their Venmo, all their Venmo transactions are being publicly broadcast, right?

• 24:59Anthony Pompliano?

  My favorite part about Venmo is they put a social feed and people go on and just read through the feed.

• 25:03Speaker 02

  Who does that? I don't even.

• 25:05Anthony Pompliano?

  Alright, so, so that's on the KYC, the privacy side. I want to talk about, uh, tangentially related to privacy is, uh, you, uh, talk a lot about, um, wasabi, about Samurai, right? All these tools that are being built around privacy. What is your kind of best practice for somebody when they go to send a transaction? And they don't want to, uh, expose the data, et cetera? Are there a couple of data points that you're just like, look, you should be doing A, B, and C? You can use a bunch of different service providers to do it or different tools, but like, these are the key components to, like, protecting your privacy while using Bitcoin?

• 25:44Speaker 02

  So KYC, once again, just to go back, makes all of this so much more difficult, right? Like, if I just, if you bought Bitcoin from like a cash seller. The only person who can follow that trail is the cash seller and he's not keeping track of anything, right?

• 25:58Anthony Pompliano?

  Or if you mined, right?

• 26:00Speaker 02

  Mining is the best. Mining is always the best. You just, it's permissionless, you can plug in a miner. You can just convert it into Bitcoin.

• 26:09Anthony Pompliano?

  Virgin Bitcoin for the moment. I don't know if that's a term that'll stick around, but...

• 26:12Speaker 02

  No, yeah, I mean, I don't, I don't think that Bitcoin should have any more value than any other Bitcoin. If it does, then, then we failed. But, but it is, it is the best way to get Bitcoin in private, if you care about privacy.

• 26:28Anthony Pompliano?

  Okay, so you mined Bitcoin, right? Now it's sitting in my wallet and I want to send the Bitcoin to you. What are those steps that you think...

• 26:35Speaker 02

  So right now, the best tool we have is CoinJoins and you can either use Wasabi or Samurai. I think Wasabi is a little bit more fleshed out right now. There's still a bunch of UX issues. It's a wallet that you run on your, on your computer. You send Bitcoin to it and then it mixes it with other people's Bitcoin to basically give you plausible deniability. Let's say I mix it with fifty people or whatever, it gives you, all of a sudden the transactions could have went one in fifty different ways. And if you keep repeating that process, you get increased, increased levels of plausible deniability. So then at the end, if I give you, you know, a UTXO with Bitcoin in it, it'll be hard to see, if not impossible to see where it comes from.

• 27:19Speaker 02

  But the thing is, the way Bitcoin is set up currently and the way, because these tools are so new,

• 27:26Speaker 02

  there's a lot of places where you can fuck that up. So I think that the most important thing for people to realize is that Bitcoin isn't anonymous, that most of these networks aren't anonymous.

• 27:37Speaker 02

  Like the only privacy coin that's even vaguely interesting is Monero to me. But like, no matter what, like you should just assume, the key is to realize how much data you're leaking. That's the first, that's the first step to take. And then start trying to take steps into your own hands into learning how these tools work and trying to use them effectively. You know Samurai...

• 28:02Speaker 02

  Their plan is that they're just gonna have an app on your phone. They're gonna have a node in a box with the Nautilus guys. I really like the Nautilus guys. You buy the node, four hundred dollars, you plug it in. At home, you connect it to the internet, it syncs up, now you got a full node. And you can pair it with your phone by just scanning a QR code, right? And then from that point on, you're using your full node. And you can just mix right on your phone, just click a button, it should be a lot easier. And then the key here is, is after the coin joins, where a lot of people screw up is spending them afterwards. And if you mix certain outputs, especially outputs that are still linked to your KYC information, still linked to you, then they can... They can track it.

• 28:46Speaker 02

  People can track it. So Samurai wants to make that post spend simpler. I'm hoping Wasabi does the same. And to people who say like, "Oh, well, that's like, it's crazy like expecting people to spend four hundred dollars on a node." You can have a situation there where like, fifteen, twenty of your closest friends are all using the same backend.

• 29:08Anthony Pompliano?

  Skrt skrt! Wanna know who has the best URL? Crypto.com. That's right, crypto.com. They're a crypto platform with one goal: motherf***ing mass adoption. That's why we're all here. We're trying to get crypto in every wallet. Crypto.com is helping people do that through buying, earning, lending, and card payment. Everything you could want at crypto.com. Go help your boy out, tell him Pomp sent you. Download the app or visit crypto.com. Pomp's got you, always. Everyone wanted to get into mining and didn't know how? Don't worry, your boy Pomp's got you. Everybody got some electricity and wifi. All you gotta do is go to coinmine.com, you buy a coin mine.

• 29:49Anthony Pompliano?

  It's like an Xbox or a Playstation that helps you turn your electricity into Bitcoin. That's right. You purchase it, it shows up at your doorstep, you pull it out of the box, you plug it in, connect to your wifi, five minutes or less, you're mining Bitcoin. All you have to do is control it from the mobile app they provide, and then you receive over-the-air updates that add new coins and new features on a consistent basis. Kinda like how Tesla does over-the-air updates and updates the car software. Just your update in your coin mine. Consumer mining made easy. That's right, go to coinmine.com, tell them Pomp sent you, and thank me later. So I've heard two arguments, right? When we go and talk to investors, I bring up CoinJoin quite often as a way to,

• 30:33Anthony Pompliano?

  like, there's technologies that are being built, right? They're very early, but there's encouraging signs there. And I get one of two reactions. The negative reaction is, so wait a minute, I'm gonna put my money into a pot. That pot is literally going to get mixed up or laundered, right? And then it's gonna come out the other end magically to somebody. That sounds like money laundering, right? It's kind of the hyper-negative response. The positive response is, if I take a dollar bill out of my pocket right now, and I go and I deposit it in a bank, right? That dollar goes into the bank, along with all the other dollars. And if you then go and I tell the bank, send it to you, and you go and you pull a dollar out from your bank, it's not the same dollar, right?

• 31:15Anthony Pompliano?

  So there's a, kind of, you put your one dollar into this pot of other dollars, right? And then you're getting a transaction on the other side, and pulling it out, it's a different dollar, right? The fungibility is different than with Bitcoins.

• 31:30Anthony Pompliano?

  Where do you think the technology can evolve without regulators coming down and saying, "This is illegal," right? Like, that's where I always go to, is just, as regulators kind of clamp down more and more on this stuff, they're gonna go to, like, the privacy technology, right? Kind of like the argument against encryption in the 90s was like, "Well, if you have nothing to hide, why do you need encryption?"

• 31:51Speaker 02

  Right, that's what they always go for. That's what they always do.

• 31:53Anthony Pompliano?

  Well, I can tell you a lot of reasons why. And by the way, 25 years later, it's the standard now.

• 31:57Speaker 02

  And they're, but they're still doing it, right? Like, the AG just said that he wanted a backdoor.

• 32:02Anthony Pompliano?

  Crazy. So where do you think that we can get on privacy? Do you think we can get to full, private Bitcoin transactions? Or do you think that there's some roadblocks there that are gonna make that difficult?

• 32:15Speaker 02

  I mean, it really just matters how regulators respond. I think that they've already responded way better, by basically not responding than I expected. I, I, I mean, I thought...

• 32:30Speaker 02

  I thought Bitcoin, you know, part of the reason like the whole concept of hodl like really resonated with me was because I was genuinely afraid that if you tried to time the market in twenty fifteen or twenty sixteen or whatever and sold something like you wouldn't be able to get back in like America would ban it and then it would pump everywhere else and I'd be like, oh, my god, I can't like that would be like worst case for me, that would be worst case scenario. Um, so I I think but you still should don't be that cocky like the goal, the goal here should be to try and accumulate as much Bitcoin as possible. Your government, whether that's America or somewhere else, may very likely ban it.

• 33:12Speaker 02

  They may very likely ban self custody. They may very likely ban coin join usage.

• 33:19Speaker 02

  Try and take the proper precautions now. Try to leak as little data as possible. Try not to connect your known identity to Bitcoin, so you're more resistant in those situations. Like, we're very much fucked in that regard.

• 33:32Speaker 02

  But, uh.

• 33:33Anthony Pompliano?

  Our, our names and faces are everywhere.

• 33:35Speaker 02

  Yeah, exactly.

• 33:35Anthony Pompliano?

  They got us already.

• 33:36Speaker 02

  But like that's that like that's the number one thing you can do. I mean, if you could actually, if you find a place where you can buy without KYC and you can just like hide in the showers, shadows and because I don't think any of this kills Bitcoin. I think it just delays it and it fucks over the citizens of whatever country it's in. Right? Like, that's what people say like, oh, like coin join is great and like I love coin join. If America just said coin joins are illegal, then anyone who sent like anyone who drew from Cash App or something and then sent it to a coin join, it's pretty obvious you go went into a coin join, they just close your account, right? Like that's and that that's that you you can use those Fiat onramps with coin join. Right now, they're not doing that.

• 34:18Speaker 02

  So what does that say to me? That says to me, you should coin join as much as possible right now, just in case, because it isn't illegal. It's just it's using Bitcoin privately, like it's a new tool to use Bitcoin privately. It's like saying that like signal is used for drug dealers, right? It's like the same exact thing.

• 34:32Anthony Pompliano?

  Yeah, the, the thing also to me, uh, we touched on a little bit is that the idea of mining, right? Like, what like the creation, right? Or the, the distribution of an asset, uh, in the fiat world. The only way to get dollars is all coming through KYC'd or or you know, related avenues. Like you can't go in your house and just be like, hey, let me get, let me create some coins, right? Like like like physical coins or let me create a dollar.

• 34:58Speaker 02

  Right.

• 34:58Anthony Pompliano?

  You go, you get in trouble for that, right? Whereas in uh Bitcoin, you can, and so there's some dynamics that change, right? At least for uh next, you know, hundred, hundred and twenty years, whatever it is.

• 35:12Anthony Pompliano?

  I don't think that regulators or even users yet understand the impact of that. Right? Like the idea that you can actually go and produce it yourself with the electricity in your home or somewhere else. It's like you having a printing press, right? But but it's you're you're participating as part of the system. And the the entire network of those printing presses are governed by the same algorithm or software.

• 35:42Speaker 02

  I mean, I look, so first of all, I think, I think everyone that's obsessed with blockchain, like the real innovation is distributed proof of work. That's the innovation.

• 35:52Anthony Pompliano?

  Uh explain uh what you mean by distributed proof of work?

• 35:56Speaker 02

  Bitcoin mining, right? So like we have miners around the world that are mining. They're getting paid by the network for work they provide. Uh it's basically a free market price for energy. And and no one can stop those individual miners. Like you don't, they're they're they're the existing miners can't be like, well, that new hardware that plugged in isn't getting paid from the network, right? That's a, it's just a fundamentally different change um than having like a a setup like a Ripple or something where you have known validators that are that are basically acting in like a semi trusted uh setup.

• 36:33Anthony Pompliano?

  Real quick, uh Russ Okong, I saw you come in and say what's up. We gotta give you a shout out. Ru- Russell Okong is uh an NFL player and a Pro Bowler who absolutely um ha- has taken the world by storm by bringing Bitcoin to a uh group of people that frankly, nobody in crypto or Bitcoin could uh could do themselves. So uh big shout out to you, man. What's up, Russ? Alright, let's go back to this idea of the distributed proof of work because I think that not only is it a technical advancement, right? And we've seen it grow and be adopted and kind of gain the strength that it has, right? It's the strongest computing network in the world. It has impact on the regulation, right?

• 37:18Anthony Pompliano?

  You saw a congressman recently, he's like, "We cannot stop this, right? We cannot kill it. Everyone who's tried has failed and therefore, rather than trying to kill it, we should embrace it and we should encourage innovation, we should get people to come here, etc." 100% confident it can't be killed? 90% what do you think the risks are to proof of work or just Bitcoin in general?

• 37:41Speaker 02

  Well, I think in general the cat's out of the fucking bag.

• 37:44Anthony Pompliano?

  Meaning Bitcoin, proof of work, both?

• 37:47Speaker 02

  Yeah, just cryptocurrencies using distributed proof of work.

• 37:50Anthony Pompliano?

  Yep.

• 37:51Speaker 02

  I think it will be Bitcoin. I think that, you know, I think that it'll be really hard for them to destroy credibility in basically the UTXO set, which is the most fair ledger that I think has ever existed because you can never replicate, you know, my co-host on TFTC Marty likes talking about the immaculate conception, you can never replicate. So even if like for some reason, you know, the Bitcoin network failed, I think whatever advantages, like whatever we've learned from that situation will like continue on from the UTXO set, right? Like that most, the most recent agreed upon UTXO set.

• 38:34Speaker 02

  But I mean, I just, I just think that it's, like Bitcoin is more than just code, right? It's like all the people that believe in it and all the people that put money into it and have faith in it and I don't, I think the genie's out of the bottle, like I don't, and first of all, anyone can spin up a new proof of work currency anonymously, like this is where we go back, like that's why I think like the whole ICOs with pre-minds and advisors on the, on the paper, all these guys are located in Palo Alto and shit, like that's, it was a perversion of the whole idea that... Like at least like the original, the original shitcoins, like they were just some rando on, you know,

• 39:19Speaker 02

  online that was just posting an announcement thread, like I'm releasing this new, this new coin and no one knew who he was. There was no, because when you, when you start talking about storing billions, trillions of dollars on these things, like it's gonna get a lot more, there, there's things there that become worth it because there's so much money on the line for nation states and wealthy individuals, you know, like stuff like missile strikes and EMPs and shutting down internet in large swaths of the country. Like you can do some crazy things once it, if it becomes this, this global financial system.

• 39:56Anthony Pompliano?

  The power went out in like a section of Manhattan and people were ready to kill each other.

• 40:01Speaker 02

  They handled it pretty well, things considered.

• 40:03Anthony Pompliano?

  They, they really did, but, but it was, uh, it, it was weird walking around and you could just feel energy in the air. Um, so, uh, one of the things that, um, I've been thinking more and more about is I don't think that there is a single company that raised zero dollars and has reached 200 plus billion dollars in market cap. Where like every company took money at some point somewhere, maybe they went a while without it, but, but eventually they had to raise money. Bitcoin's not a company, but it is a network that we ascribe value to by the US dollar exchange price.

• 40:39Anthony Pompliano?

  It is absolutely insane that this happened. Right, like the, to get to the point that we are in 10 and a half years where you have the president, the treasury secretary, congress, senate, they're all talking about it, the G7, the central banks, etc. And it came from somebody who is pseudonymous, who we don't think was very well connected. You know, it's not like some, you know, rich billionaire who did it.

• 41:02Speaker 02

  Could have been.

• 41:03Anthony Pompliano?

  It could, could have been, but, but just the way that it was put into the world at least wasn't like, hey, let me go get me and all my friends to, to, you know, put a bunch of money behind this. Um, it doesn't appear there wasn't any investment, right? And it is probably one of the most naturally adopted technology products the world's ever seen.

• 41:21Speaker 02

  Okay.

• 41:21Anthony Pompliano?

  Right? No marketing campaigns, no anything.

• 41:25Anthony Pompliano?

  Going back to your idea of like this immaculate conception, right, that Marty talks about a lot. I don't think it can be replicated. Like I like, I literally do not think you can replicate it at this point because there's too much attention.

• 41:36Speaker 02

  Right. It was like, it got to, it got to grow up in this nice little vacuum chamber where no one was poking it and prodding it and trying to fuck with it.

• 41:45Anthony Pompliano?

  What, what a lot of people don't realize, like you said it earlier, right? You are probably one of the most outspoken Bitcoin proponents. Meaning that not, not like a, a negative or a critical way, but meaning that you are, here's what I believe and I'm willing to say it publicly, et cetera. Right?

• 42:00Speaker 02

  Well, you said that, I didn't say that.

• 42:02Anthony Pompliano?

  I'm saying that. I'm, I'm claiming that for him. The part that always shocks me when I talk to you and others like you, right? Most of them start out skeptical, right? It wasn't just like, oh, I saw it like I knew.

• 42:16Speaker 02

  That'd be ridiculous.

• 42:18Anthony Pompliano?

  Of course. So like, but I think when people come in today, what they just see is like, oh my God, who are these crazy people who just like believe this thing? And you're like, you know, in your case, you're like, dude, seven years, right? Of, and like the first two or three, like I didn't necessarily think it was real. Right? Even if you talk to like Safe Dean and others, they're like, you know, one, two, three, four years of being skeptical or being highly, highly cautious. But yet optimistic.

• 42:45Speaker 02

  And hearing the same, keep in mind, like, hearing the same skeptical claims over and over again. That we've refuted in our own heads, we've refuted on Twitter, we've refuted across a bunch of different mediums, but it just keeps getting replayed over and over again. It's like the same, similar fud lines.

• 43:01Anthony Pompliano?

  I, I don't know if you've seen, uh, Barry Silbert's been like screwing around with the CNBC hosts and he keeps tweeting out like, you know, there's five levels. Well, Joe's the example they used at first. Now he's doing it with like Andrew and Melissa, et cetera, where he's like, you know, level one is basically, you don't even know about Bitcoin. Level two, you believe or whatever it is. And like level five means like, you're like a shill.

• 43:21Speaker 02

  It's like full Joe level.

• 43:22Anthony Pompliano?

  Yeah. Yeah. Like, like full on Bitcoin, you know, promoter. There's also that for the like haters, right? Like if if somebody tweets at you on Twitter and they're like trying to troll or saying something negative, you could almost back into like, ah, they've probably been around for like six months, right? Because the the uh sophistication of their argument against Bitcoin starts out really dumb, right? Like, oh, you guys are crazy. You can't replace money.

• 43:46Speaker 02

  Right.

• 43:46Anthony Pompliano?

  Then it join, then it goes to like, oh, it's slow. The transactions don't work. Then it's like, oh, not only is it slow, nobody uses it, right? It's kind of like there's this graduation. And the part to me that's interesting is like, you eventually get to like the level five of the nonbelievers. And then they fall over and then they start believing, right? You've seen this with everyone from economists to guys like Joe on.

• 44:06Speaker 02

  Well, some people just dig their feet in because they regret it. They regret it forever and they'll be forever salty.

• 44:12Anthony Pompliano?

  Yesterday, when I did Peter Schiff's, uh, the debate with him, um, at one point in the conversation, I asked him like, why, like, why not, you know, participate now, right? And he said something to me that just, I literally almost fell out of my chair. He's like, because it's over. I missed it.

• 44:27Speaker 02

  Right. Everyone thinks they're late when they come in. I thought I was late as fuck when I got in. Like, I was like, oh, I could have bought Bitcoin at thirty cents, two dollars, three dollars, like, if I was then, I would have bought so much.

• 44:38Anthony Pompliano?

  Tr- Trace Meyer, uh, was writing, um, Run, I think it's called Run to Gold. It was like a, a, a gold bug, uh, newsletter back in, uh, two thousand ten, two thousand eleven. And, uh, Saf Dean has publicly said that's how he learned about Bitcoin originally was he was reading Trace. And Trace was writing at the time that he missed it. And it was like, two bucks, right?

• 45:00Speaker 02

  Everyone thinks they're late.

• 45:01Anthony Pompliano?

  It's incredible because you hear it in two thousand nineteen, the same things were happening in two thousand ten. I'm willing to bet in, you know, fifty thousand dollar Bitcoin, hundred thousand dollar Bitcoin. They're all going to say the exact same thing.

• 45:12Speaker 02

  I thought, I thought ten thousand, when people were making the ten thousand claims, I thought. Fucking out of their mind and I was bullish as fuck, you know, but it's still 10,000 was like a moon number for me. And like I actually talked to Pierre about this, like me and him were like super during the 2017 run.

• 45:28Anthony Pompliano?

  Yep.

• 45:29Speaker 02

  We were super reasonable, like up to 10K. We're telling people like dollar cost average, like don't put in more than you can afford to lose, like blah, blah, blah. And then like the second it passed 10K, we were like hybrid Bitcoinization is coming out, it's happening quicker than any of us expected. We have no, it's like the moon is.

• 45:45Anthony Pompliano?

  Eighteen days, 10K to 20K.

• 45:48Speaker 02

  Yeah.

• 45:48Anthony Pompliano?

  Which, which.

• 45:49Speaker 02

  That was insane. That was absolutely insane.

• 45:51Anthony Pompliano?

  So here's what scares me is let's say that that type of cycle repeats. Is the next, you know, move, is it like 150 to 300,000 in, you know, 20 days? Like I meant like the numbers of just doubling, right? So, so forget it 10 to 20, it's just if there's a doubling that happens right at the top of a bull market before it kind of turns over into a bear market. The numbers may literally be like it goes up $10,000 in a day.

• 46:18Speaker 02

  Yeah, I mean, I just, it's unfathomable. I can't comprehend it. So I don't try, right? Like that's the beauty of stacking sats. Like you just, you just keep dollar cost averaging once a week, you know, every two weeks, every month, whatever it is, don't look at the price, just money you can afford to lose. And it should go up. Like that's the theory. It's not a very complicated, uh, too simple.

• 46:39Anthony Pompliano?

  You, you said stacking sats and, uh, I want you to explain what it is, but just explain what it is. And I'm gonna tell a story real quick that, uh, cracks me up to this day. But what exactly do you mean by stacking sats?

• 46:50Speaker 02

  Dollar cost averaging with money you're willing to lose that you can live without, like not, you know, with money that you can live without.

• 47:00Speaker 02

  On a reoccurring basis without caring about price and then taking custody of it and making sure that, you know, you have control of it. No one can take that Bitcoin from you.

• 47:11Anthony Pompliano?

  All right. So. You and Marty were the first two people I ever heard say stacking sats. Uh, and when I saw it, I was like, that is genius. Like it just, it makes sense. It's catchy. Like people are gonna love that, right? And it took off. Uh, and I'm not sure exactly where it came from. I, I think I've seen now you said that you guys didn't even come up with it.

• 47:30Speaker 02

  Well, someone tweeted it in 2017.

• 47:32Anthony Pompliano?

  Okay.

• 47:33Speaker 02

  Uh, it had like no engagement. He like disappeared in the.

• 47:37Anthony Pompliano?

  He's one of the smart ones.

• 47:38Speaker 02

  The bear market happened. He was gone. This is just 2017. I think I heard it bef- before, even before that.

• 47:44Anthony Pompliano?

  Yep.

• 47:44Speaker 02

  This is a really nice alliteration, but like I popularized on Twitter. Like I created that, the hashtag.

• 47:49Anthony Pompliano?

  Yep.

• 47:49Speaker 02

  And I just, we chilled the shit out of it and just constantly.

• 47:52Anthony Pompliano?

  You guys kept tweeting it and then it somehow got associated with Cash App because you guys weren't talking much about Cash App.

• 47:57Speaker 02

  Yeah.

• 47:58Anthony Pompliano?

  And so one day I remember I tweeted at you and I was like, that's like a genius marketing campaign. Like, you know, like you guys will never get credit for like creating that, but like, that's awesome. And I, and I was telling the, uh, my partner Jason the other day, I said, uh, and then you came in and you like.

• 48:13Speaker 02

  Dunked on you so hard.

• 48:16Anthony Pompliano?

  Reverse window between the legs, stick my elbow in the rim, dunked on me in the comments. It was like, it's not a marketing campaign. It's a lifestyle.

• 48:24Speaker 02

  No, no, it's not crypto. It's Bitcoin. It's not a marketing campaign. It's a lifestyle.

• 48:28Anthony Pompliano?

  So I said, that's the best crypto marketing campaign. And you were like, it's not crypto. It's Bitcoin. It's not a marketing campaign. It's a lifestyle.

• 48:34Speaker 02

  I felt bad about that dunk, by the way.

• 48:36Anthony Pompliano?

  Well, you shouldn't because.

• 48:37Speaker 02

  You teed me up, but I felt bad.

• 48:39Anthony Pompliano?

  I've never told the other side of it is when you tweeted that and I was sitting there and I read it, I literally died laughing and I said to myself, he wins this one. Like I, I'm just not even gonna say anything like he wins.

• 48:50Speaker 02

  Marty texted me afterwards. He was like, Pom was just being nice, dude. I was like, I appreciate that, but he shouldn't have said crypto and marketing campaign.

• 48:58Anthony Pompliano?

  Listen, you, the, the other thing we should talk about with Bitcoin that, um. Is this whole like, oh, it's a toxic community. The one thing that I can say.

• 49:07Speaker 02

  We're not toxic.

• 49:08Anthony Pompliano?

  Well, here's what I will say is, and I, this is coming from somebody who's been on both sides of correcting people and absolutely getting fucking destroyed on Twitter at times, right? Is the Bitcoin community understands probably better than you would ever think they do. There is nobody to protect us other than us, meaning the community, right? There's no company, there's no marketing, there's no PR, there's, there's nothing there other than the people who believe in Bitcoin and use Bitcoin. And they take that shit seriously, right? And so when they see people saying like, you know, the, the Narel or Beanie's and all those types of guys are really easy because they're just being so ridiculous that, you know, people just tee off on them. But even inside their own community, like, how many people are considered in with the Bitcoin community?

• 49:53Anthony Pompliano?

  And it's not that people turn on them as much as just like, it's like, hey, man, like, you, you stepped out of line, right? Or, or hey, walk that back, right? And I think that that is drastically underestimated and it gets labeled as like, oh, it's toxic, it's this, it's that. It's essential, right? In order for this to be successful, because if not, then the detractors, the media, et cetera, will all control the narrative. And I think that's really, really harmful to Bitcoin for all the new people who have to come in.

• 50:19Speaker 02

  Yeah, I mean, I think there's plenty of toxic shit in this space. I think, uh, there's plenty of toxic shit in the world, but I, I don't think it's, it's like Bitcoiners are more toxic than the average.

• 50:32Anthony Pompliano?

  That's fair.

• 50:33Speaker 02

  Bitcoiners are very educated, they're very defensive, they're, they see through bullshit. You know, we've been fed so much fucking bullshit over and over again, uh, that, that sometimes we can be a little bit cranky about it. But it, the, the, the thought is in the right place. Like, first of all, I don't think that Bitcoin needs us, you know, trolling shitcoiners on Twitter for Bitcoin to succeed. Like, all shitcoins are going to trend to zero in Bitcoin terms.

• 51:02Anthony Pompliano?

  I think. You think everyone goes to zero?

• 51:05Speaker 02

  In Bitcoin terms.

• 51:06Anthony Pompliano?

  Okay, alright.

• 51:06Speaker 02

  Along with every other asset on earth, right? Like, I think that Bitcoin is designed to essentially pump forever and all this stuff is going to trend to, they can't pace, keep, like. Like you interviewed like the guy who did the Monarch token.

• 51:20Anthony Pompliano?

  Yep.

• 51:20Speaker 02

  Right?

• 51:21Anthony Pompliano?

  Yep.

• 51:21Speaker 02

  Like the question to ask him, besides all the Roger Vera apologizing that he did, is, is what are the trade offs? Why, why would someone ever hold Monarch token?

• 51:32Anthony Pompliano?

  Mm hmm.

• 51:32Speaker 02

  When they could hold Bitcoin?

• 51:34Anthony Pompliano?

  Mm hmm.

• 51:34Speaker 02

  There's no reason to. If you can easily move in between the two, why would you ever hold it?

• 51:39Anthony Pompliano?

  Alright, so thi- thi- this is a good conversation because I'm gonna take devil's advocate. Things that I'm about to say, I don't necessarily believe, or else I'll caveat all this. But I believe that some portion of the people with utility tokens, right? So not everyone, but, but some portion of people who have, and not even utility tokens, just non Bitcoin tokens, would say, uh, my token is used to make transactions and, uh, the lack of volatility is really important. So whether it's a stablecoin or it's some other, uh, coin, um, this was purpose built for this use case, which is one of Bitcoin's least valuable use cases. And therefore, in this one use case, this token is better than Bitcoin. Response.

• 52:19Speaker 02

  So I want to delineate here between security tokens and utility tokens.

• 52:24Anthony Pompliano?

  Okay.

• 52:24Speaker 02

  Okay, security tokens, if you have like a partial ownership of the company, while not censorship resistant,

• 52:30Anthony Pompliano?

  Mm hmm.

• 52:31Speaker 02

  and probably comes with KYC as per our previous conversation.

• 52:34Anthony Pompliano?

  For sure, yep. By the nature of being a security, it will have to.

• 52:37Speaker 02

  Right. And known actors and all these different accountability measures to actually ensure that you're getting any kind of equity, right? Um, could have some value.

• 52:46Anthony Pompliano?

  Mm hmm.

• 52:46Speaker 02

  Um, but, like, you, you should just use money. Like, don't make up fake money that no one's gonna wanna hold.

• 52:57Anthony Pompliano?

  Yes.

• 52:57Speaker 02

  For your product, like, all these things can be used with, you know.

• 53:00Anthony Pompliano?

  Yeah, your, your. Bitcoin. Your argument is basically that for the purposes of a store of value or a medium of exchange, Bitcoin is the best as a holistic solution and therefore use what is the best rather than try to create something that has one single use case and you think can compete on this one thing. Because ultimately, the thing that's the best is going to be the best in everything.

• 53:20Speaker 02

  Bitcoin is a utility token as well, right? Because it's, it's paid in the miners. Like, it provides a very distinct utility of paying the miners and for the fees.

• 53:29Anthony Pompliano?

  Mm hmm.

• 53:30Speaker 02

  Um, but it's developed this monetary premium. It has this store of value quality to it. The, the question to me become. All of these pre-mines and ICOs and tokens are short-term thinking. It's a way for the founders to get rich really quick, dumping this coin onto retail and also pre-dumping it onto hedge funds who then dump it onto retail or whatever.

• 53:53Anthony Pompliano?

  Pre-dumping it on the hedge funds.

• 53:55Speaker 02

  But they also get a dump out of it too. But anyway, long-term, whatever chain is successful, which I think is Bitcoin, is everyone is gonna, whatever their project is, they're gonna want to operate as frictionless, with the least amount of friction between them and Bitcoin.

• 54:16Anthony Pompliano?

  Okay.

• 54:16Speaker 02

  Okay? The projects that don't will have a disadvantage compared to the projects that do.

• 54:23Anthony Pompliano?

  Okay.

• 54:23Speaker 02

  But then the projects that do, there's no reason to hold their token if you can easily move in and out of it for whatever the specific utility is.

• 54:32Anthony Pompliano?

  Okay, so I...

• 54:34Speaker 02

  Damned if you do, damned if you don't.

• 54:36Anthony Pompliano?

  Yeah, yeah, yeah. So I'm also of the belief, which I think you're gonna agree with, is a lot of times people talk about all the things that can be built on top of blockchains, etc. So take the security, like the highly regulated, we're gonna basically digitize an asset, right? So take all that out for a second. Building on top of any of these chains, the way that I conceptualize it is like, there's a spectrum. So you have security and then you have like innovation on the other end, right? And the farther you move towards innovation, the less security you get.

• 55:05Speaker 02

  The more centralized, basically.

• 55:07Anthony Pompliano?

  Uh, it doesn't necessarily, well, yeah, yeah, essentially because of the security. So it becomes more centralized and also it just becomes there's less history, right? It's more risky.

• 55:18Anthony Pompliano?

  Instead of moving along a horizontal spectrum, I don't understand why people aren't thinking more vertically. So you have the most secure chain, right, and has the longest history, etc., and then building on top of it.

• 55:30Speaker 02

  That's what Bitcoiners have been preaching this whole time, and that's what we're doing.

• 55:33Anthony Pompliano?

  And so if you think of it as you can go horizontally, so you can take the idea of Bitcoin and replicate it with different, you know, criteria, different aspects, or you can go vertically in...

• 55:45Anthony Pompliano?

  Almost every example in history vertically integrating things has been valuable.

• 55:50Speaker 02

  Right.

• 55:50Anthony Pompliano?

  Right, and like that's essentially what you're doing is you're vertically integrating some application with the core protocol. And so to me, it's just like naturally vertically integrating that is where the value is.

• 56:02Speaker 02

  Right. I mean, I think there's a there's trade offs here in terms of security and censorship resistance versus centralization and cost. So if you want to bring down costs, the more centralized, the cheaper it'll be. That's why, you know, Venmo is cheap or why Ripple is cheap. But but if you if you want decentralization, you want distribution, you know, you want censorship resistance, then it's going to cost you a little bit more. There's a trade off there. That trade off exists. It's not a solvable trade off. But what you can do is if you do layers, then you can you can anchor into that that sensor that that chain that prioritized censorship resistance, which is what I think all this is about. Like if you have to implement KYC chain wide and stuff, it's all worthless.

• 56:47Speaker 02

  It's like there's no there's no reason to use it. You can anchor into the the the main chain and and you can get the benefits from that while but basically the users get to choose varying trade offs of different things. Like for instance, right now, we have Liquid, which isn't really being used that much yet. And we have Lightning. Liquid is more like a Ripple, right? So it's a federated, it's a federated system, but it uses Bitcoin as as the the token, right? It uses LBTC, which is is locked Bitcoin.

• 57:22Anthony Pompliano?

  Explain locked Bitcoin.

• 57:24Speaker 02

  I I mean, my understanding is like, I'm pretty sure they they lock it in a multi sig address that all the the federation controls.

• 57:31Anthony Pompliano?

  Yep.

• 57:31Speaker 02

  So you basically.

• 57:32Anthony Pompliano?

  It's almost like a claim on the Bitcoin.

• 57:34Speaker 02

  Yeah, but to have that Bitcoin stolen from you, you need like, I don't know how many like how how many people they have involved, but like nine of 16 or something would have to collude to take your money. So it's you're you're making a trade off there, right? It is way more centralized than Bitcoin and even way more centralized than Lightning, but you'll have lower costs, faster transactions. And we can do that on a, you know, there can be all sorts of things.

• 58:01Anthony Pompliano?

  Yep.

• 58:01Speaker 02

  Of all varying trade offs that you'll be able to decide. And at the end of the day. You'll be using the best money that's ever existed, which is Bitcoin.

• 58:09Anthony Pompliano?

  All right, I want to switch gears. We've talked about Wasabi, Samurai, Cash App. Are there any other products or services right now that you're like excited about or you think have, you know, a, or worth paying attention to?

• 58:22Speaker 02

  Well, I really like Lolly.

• 58:24Anthony Pompliano?

  Okay. So for those that don't know, Lolly is basically when you make purchases, you get a percentage of the purchase back, kind of like a cash back type of thing. But rather than get paid in US dollars, you get paid back in Bitcoin.

• 58:38Speaker 02

  Yeah.

• 58:38Anthony Pompliano?

  Which is pretty cool.

• 58:39Speaker 02

  But what, what happens is like, we live in a, like a debt-based society, right? People spend way too much money and they shouldn't be. But like, if they spend it through Lolly, then like it'll pump the Bitcoin price at the same time. So there's like, this like interesting, as, as a Bitcoin holder, it creates this interesting dynamic where not only does it onboard people really easily, because they don't have to worry about like actively buying it, they're just doing their day-to-day shopping. It creates this, like I'm a fan of businesses that create like constant buy pressure.

• 59:08Anthony Pompliano?

  Yep.

• 59:09Speaker 02

  It like speeds up the whole, the whole process.

• 59:11Anthony Pompliano?

  So Murad came on and Murad said something to me that was fascinating. He, he turned me on to this idea of if you're an individual, let's say you're a teacher, you're an accountant, you're, you know, pretty much 90 plus percent of professions in the world. You're asked to go to work every day, you get paid in your fiat currency, it's in your bank account. And if you set it there, it gets devalued away, right? So therefore you are incentivized financially to figure out what to do with that currency and put it somewhere else, right? And so you can put it into real estate, you can put it in stocks, you can put it into bonds, whatever.

• 59:55Anthony Pompliano?

  If you're a teacher. You don't know anything about stocks, bonds, real estate, etc. unless you teach yourself. Right? We're not taught that in education, whatever. His point was something like Bitcoin is perfect as a store of value. And because of the deflationary nature, it will actually accrue value over time. And so being able to not have to be a teacher and also educated in investing.

• 1:00:17Speaker 02

  Which is ridiculous.

• 1:00:18Anthony Pompliano?

  You can just be a teacher and then you can store your wealth somewhere.

• 1:00:21Speaker 02

  Save your money. You can just save your money and not have to worry about it. Like I get that a lot.

• 1:00:25Anthony Pompliano?

  And reduce the consumption, uh, consum- consumptionism, I think is the word, right? That you no longer are going to go out and spend it all the time, right? Which you're incentivized to do, instead you're going to.

• 1:00:35Speaker 02

  There's a natural incentive.

• 1:00:36Anthony Pompliano?

  Yep.

• 1:00:37Speaker 02

  And, and, and, you know, I get that a lot of times, like, oh, you know, I'm, I don't get finance. Finance doesn't interest me. Like, that's why Bitcoin doesn't interest me. And really, those are like, it's ideal for them. Um.

• 1:00:49Anthony Pompliano?

  And so Lolly helps you do that in a passive way, right? You just go about your day, you make the purchases you're gonna make, and you are literally stacking sats over time.

• 1:00:55Speaker 02

  Yeah, and it's, uh, it's just a very simple way to, to onboard people into Bitcoin. The other one that I've, that I think is a really important project is BTC Pay.

• 1:01:06Anthony Pompliano?

  Okay, what is that?

• 1:01:07Speaker 02

  So BTC Pay was born, uh, out of basically Bitpay just continuously fucked us over and over again. And, uh, Doria, uh, had this famous tweet where he like tweeted out, "You're dead to me, Bitpay." Like, I'm paraphrasing, I'm not sure, but it's a great tweet. "I'm gonna make you obsolete." And he created BTC Pay along with a bunch of other people. It's an open source, all open source project. And basically, the idea is that you could be your own merchant processor. It gives you everything you need all in one easy setup. You run your own node, you run your own Lightning node, you can set Bitcoin and Lightning, you can like integrate it into QuickBooks, you can, so if you're a store owner, you can just accept Bitcoin yourself without using Coinbase, without using Bitpay, without using any middleman.

• 1:01:51Speaker 02

  And, and obviously, you're receiving Bitcoin though. Um, so you can then convert that manually onto an exchange. But that goes back to our previous point where when you add the KYC, when you add the fiat banking element, that's where all these KYC attack vectors come in. That's where they start pushing you into KYC. So basically BTC Pay makes it super easy for anyone to accept Bitcoin. And what I think is the next step is we, they could, and they were talking about this on Twitter, uh, Like one of the guys working on it was talking about it on Twitter a couple of days ago. And like you can make it so that every BTC Pay merchant, let's say you're running a bodega,

• 1:02:36Speaker 02

  you're accepting Bitcoin. I actually think that the two main reasons people don't spend Bitcoin right now, well, besides the fact that they think the price is going to go up, is the tax obligations. It's like ridiculously cumbersome to have to like deal with that. So you might as well just pay with cash or card instead. And then the second thing is like they're converting it to fiat anyway. So you're not really supporting Bitcoin at all. So but if you knew the merchant was going to keep his Bitcoin and he gives you a discount because he wants KYC, right? Like if you're a merchant, you want KYC for your Bitcoin, the best way is to all your products give a 10%, 5% discount on Bitcoin purchases. And then all of a sudden, all your customers are giving you KYC for your Bitcoin, right?

• 1:03:21Speaker 02

  And then that merchant could actually start selling Bitcoin for cash. Because he has all this Bitcoin that he's receiving and he doesn't have a fiat off-ramp. So he's sitting on all this volatility risk. He could then, you know, sell small amounts of Bitcoin through his store. And then we also all of a sudden have this like distributed KYC-less network that of merchants and consumers that would be hard to enforce any kind of regulations on them. You'd have to do it, you'd have to do it store by store, basically like how they do like cash non-reporting for stores as it is.

• 1:04:01Anthony 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.