Mike Dudas: Crypto's PR Crisis

Mike Dudas is the Founder of The Block, a crypto focused community that helps people cut through the noise. He previously Co-Founded Button and before that, worked at Venmo and PayPal. In this conversation, Anthony and Mike discuss the role of media in the crypto industry, why CoinBase is the most important company in the space, and why CNBC is more entertainment than substance.

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

• 0:02Anthony Pompliano?

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

• 0:14Anthony Pompliano?

  Mike Dudas is the founder of The Block, a crypto-focused community to help people cut through the noise. He previously co-founded Button and worked at Venmo and PayPal. In this conversation, Mike and I discussed the role of media in the crypto industry, why Coinbase is the most important company in the space, and which media outlet he thinks is more entertainment than substance. I learned a lot about the intersection of content and crypto in this one, so I hope you find it as fascinating as I did. 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 opinions expressed by Pomp as a specific inducement to make a particular investment or follow

• 0:59Anthony Pompliano?

  a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:09Anthony Pompliano?

  Why don't you just give us a little bit about your background and what got you into crypto?

• 1:14Speaker 01

  Absolutely. So, Mike Dudas, a relatively recent entrant into the crypto ecosystem full-time. In 2013, started to dabble, bought Bitcoin. I was working at the time at Braintree, the payment processor. We had customers like Uber, Airbnb, and obviously all of the big crypto companies wanted to work with them. So Coinbase came to us and said, "Hey, do you want to accept Bitcoin in your gateway?" And at the time, we chose not to, but it developed, you know, an interest in my mind. Talking with the Andreessen folks, talking with the Coinbase folks, and reading Chamath's, you know, "Everybody should put 1% to 3% of their net worth into crypto" at that time. I was like, "Hmm, let's do this."

• 1:55Speaker 01

  So I've been paying attention to crypto through ownership since 2013, but I left the ecosystem for a while, worked at Braintree Venmo, started a company called Button here in New York. And we had our second child in the fall and it coincided with a pretty significant price rise in Bitcoin and in other cryptocurrencies. And I went down the rabbit hole for the first time and the rabbit hole took about five months before I really felt comfortable having conversations with folks who had been in the ecosystem full time for a number of years and my interest was piqued and I said, hey, what do I want to do for the next 10 years? And after meeting the people I'd met in those five months, you know, thinking the ideas I'd thought and having the conversations

• 2:38Speaker 01

  I'd had, I said, hey, it's time to jump in.

• 2:41Anthony Pompliano?

  Amazing. And so what specific parts of the industry do you think are the most interesting in terms of somebody who's coming from, you know, a non-technical background, but has had, you know, a high degree of success in terms of companies you've worked at, started, etc. Like, what pulls you in and is so interesting?

• 3:00Speaker 01

  Yeah, so the things that, the primary thing that pulls me in relative to what I am now calling traditional tech, and I've written a little bit about this, is the multidisciplinary nature of crypto and blockchain technology. You know, it's not just about technology or sales or marketing or go to market. You know, it's about governance. It's about economics. It's about network security. It takes a team of world experts to execute on, you know, any protocol project. And the other thing that really attracted me is this is the first time, you know, I've been in fintech for 10 years, ever since the Google Wallet days and Braintree Emo. This is the first time that I've actually seen something that could truly

• 3:44Speaker 01

  create, you know, crypto assets, create a parallel financial system versus what we've historically called fintech, which are things that can kind of nibble at the edge of Wall Street and the traditional financial system.

• 3:57Anthony Pompliano?

  Very, very interesting. And what do you think is the biggest mistake people are making in trying to build this decentralized financial system?

• 4:07Speaker 01

  So the biggest thing that I'm seeing right now, the ecosystem as a whole, I think the biggest mistake that I'm seeing, and it's kind of like a game theory thing, and every rational actor is probably making the right move in terms of maximizing their own near-term wealth. But I do think that for crypto to succeed, we're going to need to coalesce around, you know, the dominant protocol in each of the verticals that are being pursued. So let's just say Bitcoin as sound money, Ethereum as, you know, the worldwide universal computer, and I'm using extreme shorthand language here.

• 4:48Anthony Pompliano?

  Yep.

• 4:49Speaker 01

  Zcash or Monero as the privacy coin. Now, I don't think it's reasonable to coalesce quite yet, but I think it's supremely problematic when you see, you know, some of the leaders of the industry who are working on five or six projects. And I think it's really problematic when you see some of the strongest voices in the industry, the Fred Wilsons of the world, and many others who are, you know, using economic incentives to get developers to work on things that, you know, probably have very little chance of success, like Kix can, you know, relative to the other platforms out there that can do similar things better.

• 5:24Anthony Pompliano?

  Got it. And so I think that part of the beauty of crypto is the fact that people who have independent thoughts and, you know, kind of do a bunch of research, learn, formulate their opinions, and they're able to share them, and there's a little bit less of a, you know, kind of group mindset. Right? In traditional tech, if everyone's into scooters, everyone's in scooters, right? If everyone's doing this, and the tribalism and the kind of ferocious intellectual debates that happen in crypto, I think actually allow a lot of the best ideas to rise to the top. But that also allows people and environment to present unpopular or controversial ideas, right?

• 6:05Anthony Pompliano?

  What would you say is your most unpopular or most controversial idea that a high degree of people would disagree with, but that you believe?

• 6:13Speaker 01

  So as somebody who is a Bitcoin maximalist of uh so basically I'm a Bitcoin maximalist. Um but I would say that extreme Bitcoin maximalists would disagree with me as would people who aren't Bitcoin maximalist. So I think there are multiple definitions of Bitcoin maximalism, or there should be. Um so I fundamentally believe that you know Bitcoin has the highest probability of any coin by a wide margin of establishing sort of the store of value use case and and perhaps eventually medium of exchange and and unit of account and and becoming, you know, and is sound money.

• 6:51Anthony Pompliano?

  Yep.

• 6:51Speaker 01

  Uh I think that if Bitcoin went to zero, I think it's, you know, a very low probability that cryptocurrency, you know, exists in 20 years successfully at scale. At the same time that I'm a Bitcoin maximalist in terms of value of uh the token, I believe deeply in the other projects happening out there, many of the other projects, you know, including Ethereum, uh including, you know, Zcash, um including smaller ones like Poet, you know, and I think there are a lot of interesting projects, so I'm not sure that value will accrue to the token, but I wouldn't call them shitcoins. Like, I actually think

• 7:34Speaker 01

  that, you know, the token in some respects for many of these projects is a way to sort of market and signal interest and get monetary incentives to get developers in the ecosystem. And I I applaud that, even though my more extreme, you know, Bitcoin maximalist friends would probably frown upon that.

• 7:50Anthony Pompliano?

  A- absolutely. Well, and it's also the the incentive piece, right? So if you have a centralized company and you want to recruit talent, right? You basically need to have uh a team and a mission that is attractive, right? You need to have uh the ability to pay uh money, right? So actual cash. And you've got to usually use some other incentive uh mechanism to. Hire and retain that talent, right? And so you see everything from I'll give people equity in a company, right? To I'll provide them free lunch, right? And so there's a whole bunch of different things that you can do. But that's in a centralized, you know, single location or multiple single location type business where everyone's coming together at the same time.

• 8:28Speaker 01

  No question.

• 8:28Anthony Pompliano?

  When you go to the crypto world, you have this distributed team, no for-profit entity type structure, where a lot of those incentive mechanisms that you use in kind of traditional, you know, company building is not available to the founders or the people who start these projects. And so the argument it sounds like you're making is just that those incentive mechanisms are being replaced by these tokens, which have monetary value associated with them, but they're no different than the free lunches, the equity, et cetera.

• 8:59Speaker 01

  Yeah, I think that's close, that's close to what I'm saying. And what's interesting is, so, so the slight differences, I think a lot of the investors who are investing in these tokens do actually believe that many of them will have long-term value for a host of reasons, which would take a multi-hour podcast and we'd have to probably explore right vertical. I think most of them won't have value.

• 9:22Anthony Pompliano?

  Yep.

• 9:23Speaker 01

  But I'm more making the point, and you were making this as well, that, you know, these are the incentives that right now are encouraging folks to work on these problems that I think are real, are hard, and are worthwhile. But it will, you know, there will be a day of reckoning when there's kind of this, you know, separation of Bitcoin, Ethereum, and some of the other, you know, top tokens from some of the tokens that haven't made progress. And I actually hope that, you know, some of the scam coins go away and some of the smaller market cap tokens that actually have use cases and potential utility, even just to use a silly one like Spank Chain that only has a market cap of 15 million and a, I believe, 15 million,

• 10:07Speaker 01

  in a really significant industry, which should be a prime use for cryptocurrency. I could look at that and say, hey, you know, maybe, maybe there's some room for this one to go up.

• 10:18Anthony Pompliano?

  Absolutely. And so let's talk about community, right, in crypto, because I think that there's both the good side and the bad side. Um, let's talk first about the good side of the community, right? So, so if you look on social, um, and you look at some of these projects and the tribalism that goes on, uh, there's just a rabid fan base or rabid interest, right? Like, how do you see that in comparison to the traditional technology startup world where, you know, people are always trying to, I want customers that love me, right? To now this rabid, um, you know, interest in the crypto world.

• 10:48Speaker 01

  Yep. So in the traditional tech world, uh, outside of gaming and, and real like consumer tech, uh, esports and things of that nature. And there's more examples, but I'm just, you know, those are a few of the examples where you see these rabid fan bases. And I actually think crypto is most analogous to those rabid ones to, to sports teams in the real world. Uh, in tech, you see, you know, developer fan bases and, and they'll go to Google I O and, you know, F8. But those are very different, you know, very controlled experiences. Uh, in the crypto ecosystem, people come with, and, and you've heard this before. I'm not saying anything particularly novel in this

• 11:29Speaker 01

  area, but you know, with, with almost a religious belief and an anchoring and a strong bias and, and as strong a tribal nature to associating with specific projects as I've ever seen.

• 11:42Anthony Pompliano?

  Yep.

• 11:43Speaker 01

  Uh, and frankly, it's because they've had access. I mean, it's because these folks look at themselves as angel investors, you know, true investors at the earliest stages of these projects, um, because clearly, you know, nearly almost none of them are even close to fully developed yet. And so I think that's a positive. At the same time, it can be a curse. So an example of where it's genuine is, is clearly Ethereum, right? And clearly Bitcoin, but that's been talked about a lot, but you're clear Ethereum from a developer perspective and you have tons of developers, you know, flocking. To it, solidity is a language that's not just Ethereum specific, but folks, if folks really want to work on the Ethereum blockchain and with, and so you're seeing apps and services

• 12:28Speaker 01

  built on top. And so I consider that a really healthy, organic, natural community. At the same time, I see really unhealthy communities. So, you know, the obvious canonical example of that is Ripple. So Ripple has a centralized structure where Ripple Corp basically says, hey, we put our tokens in escrow, but still, you know, they're obviously under their control and they're released over a period of time. And then, you know, they have a host of real people who are Ripple extremists, and who knows what their motives are and what their compensation is and why they're doing what they do. But they really become

• 13:11Speaker 01

  kind of a hive mind in public and really come after anybody who questions the validity of XRP and of Ripple. And then you can go one level past that, which is just false and fake communities, right? And, you know, it has echoes of what happened in our election and, you know, bots. And Ripple's a case where there's certainly real people who are supporters, but there's no question that there are tens of thousands of bots associated with Ripple.

• 13:45Anthony Pompliano?

  And do you think that's something where the company and the people in and around the company are actively trying to create this stuff? Or do you think it's a thing where community members who like the project, who hold the coins, right, have a financial incentive in seeing it succeed, are trying to push that narrative through, you know, social channels, etc.?

• 14:06Speaker 01

  Yeah. So, the Ripple Corp team is an exceptionally professional, talented team. They truly are. Like, I've spoken with them, I know, you know, some of them personally, and they're very talented. They're talented, you know, both at creating, you know, functioning financial products. And they're also very talented at, you know, increasing the value of things related, you know, to the corporation they're working for. And the token is clearly, you know, part of that, right? So, so Brad Garland House's comments about, you know, pilots that might have eight transactions, uh, total globally ever, uh, that, you know, they issue a press

• 14:48Speaker 01

  release about, you know, those are clearly, uh, strategic decisions they make where they know it's not material, uh, but will impact the price of the token. Um, so, so the management at Ripple clearly does things to move the token price, uh, separate from actually creating value, uh, at the core product. At the same time, they have an incredible team. Their product team is doing a good job, uh, on, you know, a number of, you know, financial institution and bank products that they're working with and increasingly, you know, getting more and more partners. Uh, that being said, you know, if they were just a traditional equity backed, uh, company, you know, they'd be valued nowhere near what

• 15:29Speaker 01

  they're valued at today. Um, and then to the question of the community and the bots, uh, I think they could do more to police it and it's not in their interest to do so today. So they don't. And, you know, I've experienced it personally and I know many other folks who have, like my friend Jeff Goldberg, who's explored the Ripple Bot problem. Um, and they invite, you know, the Ripple team definitely invites, uh, many of the most prominent, you know, tweeters, uh, affiliated with them to all of their events and sort of encourages them to continue with this sort of mini, mini celebrity game that I don't think is a healthy one that they know helps to artificially support the token price.

• 16:08Anthony Pompliano?

  So I, I think that that argument is, uh, popular and, you know, relatively well accepted by a lot of people. I would take the opposite side and I, I don't even know if I have a different opinion about Ripple specifically, right? I don't know and I haven't spent enough time with them to have an opinion on them, but the mechanisms of, uh,

• 16:31Anthony Pompliano?

  You know, let's walk through. So if they announce pilots, right, that are early, you could say, hey, they're doing it to manipulate price, right? Or you could say they are being overly transparent, right? The, uh, the idea of them, um, working with people who are big fans of a brand, right? Every company in the world does that, who has any sort of size, you know, public, uh, influencers.

• 16:57Speaker 01

  True, and it happens throughout the industry, you know, consensus, and it does it with a lot of other, you know, IBM, yep.

• 17:02Anthony Pompliano?

  One of the things that I try to wrap my head around, and I don't have an answer here, right? But, but I think is, is really interesting is, you know, part of the ethos of crypto, right, in, in general, as, as an industry is, um, decentralized, you know, distributed teams, kind of, all, all of that that goes in that bucket. At the same time, it's experimentation, it's, you know, trying different ideas, not getting tied to the sacred cows, all this stuff. And so, you know, in, in the case of a Ripple or, or other projects, those are almost in direct conflict with each other, right? Because actually what they're doing is they're doing experimentation, they're doing, um, you know, they're really pushing the edge and trying to figure out, you know, do these new models work? And, and how do, can they drive value? Um, but they aren't decentralized, they aren't distributed, right?

• 17:45Anthony Pompliano?

  And so how, how do you think through, like, where that line is?

• 17:48Speaker 01

  So it's, it's a great question. So I think one way that they could basically eliminate all doubt is to say, hey, instead of compensating ourselves in this token, XRP, which, you know, the founding team has, the leadership has, um, you know, David Schwartz has, uh, they could choose to, you know, basically renounce those tokens and, you know, take value in, you know, more value in the equity of Ripple, the corporation, which clearly has a connection to XRP, the token. But I think it would reduce questions as to whether they're, you know, our, our ulterior motives, uh, when they are announcing things. That's just one simple thing.

• 18:28Speaker 01

  Again, that being said, um, you know, structurally, it's really difficult for that management team to execute without people asking questions externally, just given the structure of, of, you know, the corporation, how it's tied to tokens. And that's just, just one example. That's even a healthier community than, than some of the other ones out there.

• 18:49Speaker 01

  You know, the, the, the Tron community, right? I mean, it's, it's, it's a total scam. It's not even worth getting into that. But you know, you mentioned Tron and say scam and you know, you're going to have a hundred bots in your inbox, uh, in seven minutes.

• 19:03Anthony Pompliano?

  Quickly.

• 19:03Speaker 01

  Yeah.

• 19:04Anthony Pompliano?

  Uh, all right. So, so let's just gears, let's talk about, uh, the media in crypto, right? So it's something you care about a lot. Um, it seems like there are three separate buckets of, uh, media outlets or types, right? So you've got the crypto media. These are people who super well-connected in the industry. They really understand what's going on. They do a fairly good job in terms of reporting that, you know, in detail, accurately, um, maybe a little bit smaller, uh, audiences, right? But, but very much, hey, these are people who understand this industry. Then you've got the traditional media, right? Which, you know, depending on who you're talking about, may or may not understand what's going on. Accuracy is questionable sometimes, right? And, and the way that they are delivering the message can, uh, lead to a lot of retail investors

• 19:47Anthony Pompliano?

  changing their opinion about certain tokens, acting differently, etc. in the market. And then the third bucket is what I call like the citizen journalist, right? Which is, you know, the, these Twitter accounts that explode that all of a sudden, you know, um, I, I'll, uh, Whale Panda, right? Or, uh, you know, Bully ESQ, right?

• 20:05Speaker 01

  Or even like Nick Carter, or you know, some of these folks.

• 20:07Anthony Pompliano?

  Yeah, just they have a voice, right? They've got a publishing platform and, and, and what they're doing, people want to hear. And so, um, they, they grow these audiences.

• 20:14Speaker 01

  And Anthony Pompliano.

• 20:16Anthony Pompliano?

  Uh, I, I am, uh, I'm just having fun, but they're, they're actually providing, uh, legitimate value. And, uh, and, and so through that, like, how do you see that ecosystem and the relationship between the three playing out over the next, you know, five, 10 years?

• 20:29Speaker 01

  Yeah. So I think all of them are important. Uh, so today, but I think, you know, those three are all somewhat insular. Okay? So I think. The way that all three of those types of media today are writing is in a very trade oriented manner. And so Meaning price, like talking about price and what is happening in a market where people are looking to trade. So that would be one example. Yep. But another is like basically writing about Ethereum governance, or you're writing about, yeah, like, why has price gone up or down in the last six months? Yep. If I gave that article to a friend who's an engineer working in traditional tech,

• 21:09Speaker 01

  but with not a lot of knowledge about the crypto ecosystem, they'd probably need to read like four precursor pieces to get to the point where they understood it. So the way I think of those three categories right now, and I'll just start there. Yep. Is, you know, I look at like CoinDesk being the former. So there's this sort of trade magazine type,

• 21:30Speaker 01

  type of ecosystem. And, and really CoinDesk is the only one that has a brand that even in this ecosystem stands out. Yep. And this ecosystem is like a pretty de minimis small number of folks. Okay. You know, compared to the global interest in cryptocurrency. Of course. Technology. And then you've got Bitcoin Magazine, Coin Telegraph, C C N, which copies everybody else's stuff. I mean, it's just a small, small, you know, I'm sorry, it's a big group of brands that write very similar things. Yep. Okay. Then, to your point, you've got the Bloomberg's, the Fortunes, who, you know, and then there's a host of others who are writing about this New York Times, but I think Bloomberg and Fortune are doing the best job. And they have folks on the beat who are deeply informed.

• 22:15Speaker 01

  And they write and they break news, right? And they write some really good pieces and they write some, you know, pieces that I wouldn't write that aren't good, right? I think there's a group that's a little bit different than that. They have better editorial judgment. You know, CNBC is a disaster. I mean, it's just terrible for the industry. Why? Shit show. It's basically no holds barred, completely unethical. So basically, you've got these folks on air, Brian Kelly, you know, crypto man ran, who blocked me on Twitter for calling him out for being an absolute shill of coins that he owns. Buys them. And then tweets about them, you know, through his private vehicle.

• 22:57Speaker 01

  CNBC literally allows people who are telling people how to buy cryptocurrencies and informing and educating them supposedly to literally run hedge funds on the side. It's a fucking joke. It's embarrassing, makes me irate, and it hurts people, hurts people's pockets. They're a sham, okay? So CNBC is different than everybody else and it's embarrassing and Comcast should be embarrassed to allow this on television. And it's probably the thing I'm most passionate right now. I care less about Ripple than about CNBC being held accountable for hurting the common investor. They're terrible for the industry and they mislead people. So, sorry for going off on that tangent, but I think it's important that people understand that. I believe it deeply.

• 23:40Speaker 01

  And, you know, so that's sort of the mass market. If you asked people walking down the street, a thousand people, you know, what's the biggest brand and media of Bitcoin, crypto, blockchain, name all the terms, I think they'd probably say Bloomberg. You know, a thousand people, even in New York, maybe a couple would say CoinDesk, but they'd say Bloomberg, Fortune, New York Times, a couple of others.

• 24:00Anthony Pompliano?

  They've got the name brand recognition.

• 24:02Speaker 01

  And then lastly, you know, the last category you said, I think you sort of aggregated on Twitter and Medium, right? So personal blogs and then Medium? And it is the richest source of high signal information in the industry.

• 24:15Anthony Pompliano?

  I agree.

• 24:16Speaker 01

  It's abundance, I mean, just absolute abundance. It's a shame that I think Medium, you know, needs to hire somebody, a cryptocurrency expert, you know, to really curate this and highlight the best stuff. They're not doing a good job there. Frankly, as the industry, we just need to find some rich person to give them a bunch of tokens to hire somebody to do this. Because it's so wonderful and I'm, you know, every week now I'm curating the best on Medium.

• 24:43Anthony Pompliano?

  Yeah, do you think that-

• 24:44Speaker 01

  Because they're practitioners. It's you, it's me, it's people in the industry.

• 24:48Anthony Pompliano?

  Do you think it's because they're, the other types of media are basically reporting what other people are doing? And what you get on Medium for, you know, specifically is-

• 24:58Speaker 01

  With PR talking to them and you're talking to experts and, look, everybody has an agenda. Versus, I think that, sorry to interrupt, but I think the direction you were headed is, you know, these, this authentic, deep, I've thought about this thing that I personally care about.

• 25:12Anthony Pompliano?

  Yep.

• 25:12Speaker 01

  Like a Nick Carter, some of these folks don't even have their real names, Hasu Fly, who's, who's very bright. A number of folks, you know, who have gotten me really interested in token economics, you know, the Kyle Samanis of the world and Arianna Simpson.

• 25:26Anthony Pompliano?

  It's original ideas.

• 25:27Speaker 01

  Yeah.

• 25:27Anthony Pompliano?

  Right? It's original ideas.

• 25:28Speaker 01

  Yep. Your daily newsletter.

• 25:30Anthony Pompliano?

  Yep.

• 25:30Speaker 01

  You know, you get Ryan Selkis, you know, those are the folks, the folks day in and day out who are living and breathing this are the folks who are sharing right now the best information. And I'm actually writing a blog post that will be published tomorrow in The Block, which is my new business, which I haven't talked about yet, but we'll be publishing. Somebody asked me this morning on Twitter, hey, why do you guys talk so much about what you're building instead of actually building? And I listed a few reasons, but you know, I think it's important that we talk about it because we have so few believers, we have such, so much information, so much change so fast, so much of what's being shared isn't accurate. And therefore, it's really important for the folks who are in the know, who have that judgment and good creation to talk.

• 26:14Anthony Pompliano?

  Absolutely.

• 26:14Speaker 01

  And to get it out there.

• 26:15Anthony Pompliano?

  Well, and I think that what we're seeing is this is probably one of the first industries where part of it is the nature of crypto, part of it is the nature of just communication and tools outside of crypto, is the practitioners, the operators, the engineers are able to talk directly to audiences without the, the, the middleman, right? The media, etc.

• 26:39Speaker 01

  I mean, I.

• 26:39Anthony Pompliano?

  And we're seeing it, by the way, we're seeing it in, our president does it, Elon Musk is doing it, right? Kanye West is doing, I mean, you go through, there's a bunch of people who are figuring out, I can talk directly to my audience.

• 26:49Speaker 01

  Like Jeremy Rubin wrote a piece on, hey, you know, giving, you know, sort of airdrop tokens, giving wealth to people that I read this morning. And by the way, I'm being completely honest. I read the whole thing and I didn't understand any of the equations, but like it made some sense to me and I loved sharing it and putting it out there and you know, having it be debated and discussed. And another guy I respect greatly, Jeremy Gardner, said, hey, I don't necessarily agree with that. And it's a wonderful, you know, it's just wonderful to see all these different viewpoints coming from different backgrounds, some mathematical, you know, some practical, um, you know, having these discussions. It's really exciting.

• 27:25Anthony Pompliano?

  Absolutely. And then so what do you think is the, you know, with what you're doing with the block, right? So first tell us a little bit about what you're doing there and then we can talk about how this relates to the media.

• 27:34Speaker 01

  So there's a fourth type of media that I don't believe has existed and it's starting to exist. So it's basically media about media and information and community around the crypto and blockchain ecosystem that reaches, let's just say, I'm making up numbers here, one million people in the world know a lot, right? Those first three categories we talked about are super serving those one million people who already know a bunch of stuff.

• 27:59Anthony Pompliano?

  Yep.

• 27:59Speaker 01

  Well, hey, there's a hundred million people and I'm just again making up numbers, but you know, relatively, I think the

• 28:05Anthony Pompliano?

  Hundred X more.

• 28:06Speaker 01

  The ratios are probably somewhat accurate, uh, who are getting terrible information. They're just following random Twitter feeds, you know, pump groups on Telegram. They don't have access to the best information, the insider information that we're fortunate enough to have access to. So I looked at this ecosystem and said, hey, I really feel like this is where I want to be for the next 10 years. I've been successful in the past, so I can take a 10 to 15 year horizon and you know, I'd love to do this the rest of my life.

• 28:34Anthony Pompliano?

  Absolutely.

• 28:34Speaker 01

  But I want this industry or this ecosystem to succeed so badly and I'd love to do this for the rest of my life. So the block is crypto simplified. And the whole idea here is that we take these concepts that you and I understand and probably many of our listeners understand, and we basically start at the base layer of those and then build up from there and build this education base, uh, create what I call a Reddit meet Slack. Um, and I've created a Slack group. It's a thousand people strong where people are learning from one another. I think people learn best in groups as we see from Telegram. But effectively liberating this and giving it to people so that they can discuss the news, the analysis, the topics of the day together. So anyway, The Block has launched a newsletter that we publish, you know, every other day.

• 29:19Speaker 01

  Our website's launching at the end of September and it's going to be that thing that you check in your phone for a quick take on what's happening. And, you know, we'll aggregate all of the analysis and other information, but it's approachable and we want to reduce. People are fearful. I was fearful when I came into this industry five, six, seven, eight months ago. We want to reduce the fear so people can jump in and learn.

• 29:40Anthony Pompliano?

  Well, and a lot of it too is, you know, if I said, hey, go learn everything you can about quantum, you know, mechanics, right? You would say, I don't know anything, right? Or maybe you're an expert, but I don't know.

• 29:50Speaker 01

  Give me a link, dude. I have no idea.

• 29:52Anthony Pompliano?

  Yeah. And so you would start Googling, right? You'd find some, okay, hey, these look like these are the people who understand a bunch. I can search on YouTube. Okay, I'm going to go watch these videos. I'm going to read, you know, some stuff off of Wikipedia and I'm going to find a book and an expert and you just go down this rabbit hole and you eventually come up with, oh, all right, I understand it at some, at some degree of, of knowledge. The problem with crypto is those people, those videos, et cetera, don't look anything like we've ever seen before, right? It's pseudo anonymous accounts on Twitter. It's these secret Telegram groups. It's these videos where I've literally seen people who are incredibly intelligent are doing videos and their faces are covered.

• 30:31Speaker 01

  Yeah.

• 30:31Anthony Pompliano?

  Right?

• 30:31Speaker 01

  It's like Medium sort of gives text credibility. You know, we're looking to have The Block give a number of these concepts, these voices, credibility. And then to basically take a lot of what they're doing with their endorsement and present it in a way that people feel comfortable. And then we're actually going to ground that in a physical community as well. So we're starting here in New York with something called The Block at WeWork. It's a coworking space. It's going to be launching this fall. And we're going to invite crypto projects, you know, 100 plus people to join us and folks who are part of the block community will be able to drop in. And so it's really grounding. I'm sorry, it's really, you know, we think right now New York is one of the top three,

• 31:15Speaker 01

  if not the top, I mean, I'm exceptionally biased, crypto ecosystems in the world. So we'll start here and we'll see how it manifests itself, that physical plus digital community that's welcoming. And one other thing I want to say, there are some other fantastic teams that are doing this right now. I mean, again, huge kudos to you with with your newsletter, which I think is much more approachable than a lot of what I've seen out there. The team at Messari Crypto is doing some phenomenal work. I mean, they have a team, Ryan Selkis just wrote about it this morning, a guy I respect tremendously, and, you know, 125 folks who are who are offering up, you know, analysis of tokens and other things. So they're working for transparency and wealth of information. And Token Daily is another one. These are

• 31:58Speaker 01

  different things. Token Daily, who is having just amazing people contribute like they have on Medium historically and then allowing conversation around it. So the block isn't the only one. And I think we're all going to be able to work together. And I'm just like, it's, I think this is the time and the place. And what's great is because price has gone to shit over the last six, eight months, we can all just focus on building.

• 32:19Anthony Pompliano?

  Yep.

• 32:20Speaker 01

  And, you know, this is not a permanent thing. I think we all believe in this technology. I mean, sort of in this ecosystem and its ability to change so many industries and to change money. When we come out of this, it's going to be wonderful that we've all been working heads down. It's like the 2008, 2009 quote unquote crisis. I think you may have said it, you said it in your newsletter, you know, birthed Uber, birthed Airbnb, birthed some of the greatest companies of the last decade. So it's really exciting.

• 32:46Anthony Pompliano?

  For sure. What do you think is, if you could wave a magic wand, right, and change one thing about the crypto industry, what would you change?

• 32:53Speaker 01

  So I would change the

• 32:58Speaker 01

  I would change this mindset that I sometimes see where people judge others, and this is not universal, but I do see a significant portion of people who judge others either explicitly, or just you can kind of see it in the back of their head by how long they've been 100% immersed in the industry. As somebody who has immersed myself fully recently, but been, you know, caring about it and an owner for a long time, I think it's bullshit, you know, when somebody says, hey, you know, you weren't around when we did XYZ, and therefore you don't understand. I would, and my retort would be, hey, you know, explain it to me. Because by the way, my whole mission is that the person who joins in three years has a platform in the block where

• 33:42Speaker 01

  nobody's going to treat them like that and scare them off. That's really the biggest thing, I think. And I think, you know, bringing, I would change the sort of lack of focus on design. And the last thing I change is frankly, this, and I wrote about it this morning in a tweet, is this sort of like pre pre-sale, pre pre pre pre sale, like triple pre pre pre pre pre-sale. And I know Meltem, you know, probably talked about it this morning, the shitcoin waterfall. It's disgusting. It's a terrible, terrible funding mechanism. I know we're moving away from it. But, you know, a number of very prominent investors have benefited from it. And I just think it sends a bad signal. And I think some of those folks should stay quiet for a while and stop with their moralizing.

• 34:26Anthony Pompliano?

  Got it. And so out of all of this, you know, let's fast forward 10 years, you know, you've built an incredible company, a bunch of other people have continued to build what they're doing. What do you think is the outcome of all of this talent and capital that's flowing into the space, right? Is it Bitcoin becomes a global reserve currency and nothing else? Is it Bitcoin plus everything else that's being built? Like, where do we end up?

• 34:52Speaker 01

  Yeah, so 10 years, I mean, it's hard to pick the date, right?

• 34:55Anthony Pompliano?

  Of course.

• 34:56Speaker 01

  Because it's going to base it, you know, it's like the fall of Blockbuster, the fall of...

• 35:01Anthony Pompliano?

  The beauty is when people listen to the podcast, if they listen to it from a year from now, 10 years is still 10 years away.

• 35:06Speaker 01

  Exactly. There you go. So I'll be right. For you know.

• 35:09Anthony Pompliano?

  At some point.

• 35:09Speaker 01

  Yeah, so um, you know, I'm hopeful. It's a very low probability that Bitcoin becomes like just from a pure probability. Like, do I believe it? Like, I ascribe a higher probability to it.

• 35:20Anthony Pompliano?

  Yep.

• 35:21Speaker 01

  That Bitcoin does become, you know, the global reserve currency and, you know, eats the US dollars dominance, right?

• 35:27Anthony Pompliano?

  What do you think the probability is right now? Not what you believe, but just like the the kind of sober probability that that happens?

• 35:33Speaker 01

  I'm gonna go, you know, below uh, bel- like below 5%.

• 35:38Anthony Pompliano?

  Okay.

• 35:40Speaker 01

  But.

• 35:40Anthony Pompliano?

  That's fair.

• 35:40Speaker 01

  You know, that's currency is like, that's, hey, we're talking hundreds of trillions of dollars worth of value for for Bitcoin. I may have actually, is there even hundreds of trillions? I may be off by an order of numbers, but but there's a lot of value to that.

• 35:55Anthony Pompliano?

  Yep.

• 35:56Speaker 01

  You know, but but, you know, becoming a better gold, like, in my mind, it's so obvious that it's a near certainty.

• 36:03Anthony Pompliano?

  Yep.

• 36:04Speaker 01

  That, uh, you know, like if Paul Krugman and I saw each other, we wouldn't even be able to talk because like we we literally would be from such a different grounding of ideas.

• 36:13Anthony Pompliano?

  But do you think somebody like that actually believes what he's saying?

• 36:16Speaker 01

  I believe Noriel does not believe what he's saying and is a troll. I believe Paul Krugman does believe what he's saying and he's just old.

• 36:24Anthony Pompliano?

  Got it.

• 36:24Speaker 01

  And by old, I don't mean it in an ageist way. I mean it old of economic philosophy.

• 36:29Anthony Pompliano?

  Got it. That makes sense.

• 36:30Speaker 01

  And what makes money and what he has seen throughout his life.

• 36:34Anthony Pompliano?

  Okay, so we put less than 5% chance that Bitcoin becomes a global reserve currency.

• 36:40Speaker 01

  You know, now Jack said, you know, it's gonna happen in 10 years. Um, you know, Pierre Richard will probably not allow me at any more of his Bitcoin maximalist dinners for saying less than 5%. Now, the hopeful, you know, part of me says 1 in 5 chance.

• 36:54Anthony Pompliano?

  Yep.

• 36:54Speaker 01

  Um, and I think over not a 10-year horizon, but, you know, a 20, 30-year horizon.

• 36:58Anthony Pompliano?

  Okay. And then what outside of Bitcoin, what happens to all of this, you know, tens of billions of dollars that now have come into the space, you know, thousands of people?

• 37:07Speaker 01

  Yeah, the good news is it's not that much money, right? Like if you look at it, you know, outside of Bitcoin, I expect Bitcoin dominance to actually increase through the remainder of the year. Literally, as I was taking the subway up here, I said, you know, Chris Berneski said, what do you think is going to be one big thing that happens and a milestone to watch in the crypto industry this year? I think Bitcoin dominance going over 70% is something I'm going to keep an eye out for, and I think very well might happen. Because I think you're going to see people realize that most of these protocols that have significant value are nowhere close to delivering anything of value.

• 37:39Anthony Pompliano?

  Yep.

• 37:39Speaker 01

  And so that doesn't mean Bitcoin will skyrocket. I just think you're going to see, I'm actually hopeful, whether it happens this year or next year, to see, you know, every coin not rise and fall, you know, the same percentage every day.

• 37:54Speaker 01

  I lost my train of thought though on your original question, actually.

• 37:57Anthony Pompliano?

  So what do you think happens to everything outside of Bitcoin in terms of all of it?

• 37:59Speaker 01

  Oh, yeah, so outside of Bitcoin. So I think, you know, you're going to see a flight to quality. So things like Ethereum, right now, what is it, 35 billion today market cap? Like maybe a little less, you know, that's not unreasonable for, you know, Airbnb is 30 billion. It's not unreasonable for the ambition and the potential of that platform and the developer activity. It's certainly way over its skis. I mean, it, you know, but look, when Stripe was valued at $9 billion, having been somebody who was competing with them, I was like, holy shit. That's an overpayment. And I don't like Keith Rabois at all, but that guy was dead right about that company being a generational company.

• 38:39Speaker 01

  And I love the Collison. So the brothers who run the company are incredible entrepreneurs, great people and geniuses. And so, you know, sometimes things surprise you to the upside that you never could see because you were thinking of the business model in a different way. And I just couldn't imagine Stripe turning a simple few lines of code into something that had the margins that it has, just based on my knowledge of Braintree. So when you look at Ethereum and you see, you know, hey, it, you know, crashes when one Specific DApp gets a ton of usage on a given day. It's easy to say, hey, they're not gonna, you know, there's nothing there, right?

• 39:14Anthony Pompliano?

  Yep.

• 39:15Speaker 01

  And by the way, like my probability bet, I would say there's more likelihood that there's not than there is. But yeah, it's very reasonable to think that the value of Ethereum, you know, increases significantly. So my point isn't about Ethereum. My point is I expect a flight to quality.

• 39:32Anthony Pompliano?

  Yep.

• 39:32Speaker 01

  And I really, I don't know if I expect it or I hope for it. You know, I hope Neo, I hope I O, I hope Tron, you know, just absolutely evaporate.

• 39:42Anthony Pompliano?

  Absolutely. And then what, um, what do you think is the most important company in crypto today?

• 39:47Speaker 01

  Yeah. So I've long thought this, and again, this will rile, you know, most of my closest crypto, you know, folks of the philosophy. I think the most important company, company in crypto, in the history of crypto is Coinbase.

• 40:03Anthony Pompliano?

  Why?

• 40:04Speaker 01

  Without a doubt. They are the first folks who made crypto, who attracted investors and got the backing of folks who the financial industry took seriously. So Unisquare Ventures and Andreessen Horowitz. They are the first company that made it something where people like me who were intellectually interested in it felt comfortable and safe, putting money, you know, into this, this token that was vapor, effectively at the time, 2013, you know, I don't believe it's vapor. I've done a lot more studying today. You know, my brother invested, you know, I could convince other folks to do so. And they stuck with it and they grew

• 40:47Speaker 01

  and they've evolved, right? I don't agree necessarily with everything that their CEO says. And, you know, one of their founders has moved on, but the company, the entity itself, folks like Dan Romero, who have been there since the beginning and are amazing people.

• 41:01Anthony Pompliano?

  Dan's fantastic.

• 41:02Speaker 01

  Stay strong.

• 41:03Anthony Pompliano?

  Yep.

• 41:04Speaker 01

  Take criticism and have really brought this to the masses. And I am so sympathetic to people who bring important technology to the masses. I think engineers and, and sort of like really extreme religious Minded people don't believe and understand how important that is. So Coinbase is super easy to hate and is against much of the sort of libertarian philosophy of why some people support Bitcoin, for example. But we wouldn't be here without them. It's a company that almost went out of business a couple of years ago and is now a behemoth. And, uh, you know, I'm very optimistic about their future. I'm hopeful for their future and rooting for them because I think they've done so much for the industry. I think they're the single most important company, uh, in the industry.

• 41:48Anthony Pompliano?

  That's awesome. Um, all right. Last question for you is what is? What do you do on a daily or weekly basis that you think has formed much of your opinion in this space?

• 42:00Speaker 01

  So the number one thing that forms, uh, my opinions that that helps me to learn and that directs and guides me to where I should be paying attention. And I'm very fortunate for this, uh, is, uh, Telegram. And, and I'm in, you know, three Telegram groups that I value, you know, very, very highly. I can't name them. It's like, you know, once you name them, you're out. Um, but it's probably.

• 42:28Anthony Pompliano?

  This is where like a real journalist will get you to name them, but I'll let you off the hook.

• 42:32Speaker 01

  I wouldn't, but because you're in, I think all of them. Um, so, you know, it, you can't pay attention to everything, uh, about them. Right? I mean, it's just, it's overload, but if you pick and choose, you're going to happen upon. And certainly when I was learning and I had more time, but turn it leave, I was fortunate enough. But, but starting my day with Telegram, moving some of those thoughts to Twitter and then engaging has been the most important thing of my learning. And then sort of broadcasting my ideas on Twitter and sharing has been what's helped me build my company and our company, A Block. So the two folks who, uh, are already, you know, have accepted Dot Online, you know, Mark Radoski is my co-founder and editor in chief.

• 43:15Speaker 01

  And I can't name the person who's joining us. I had her head of research in a week and a half. Both quote unquote, met me on Twitter, right?

• 43:22Anthony Pompliano?

  Amazing.

• 43:23Speaker 01

  And I'm speaking to two more people over the next couple of days and I've had multiple conversations with them and I'm gonna close them. I hope they're listening. I hope this gets published really soon. Are also folks that, you know, I met through Twitter and

• 43:37Anthony Pompliano?

  Twitter is the new LinkedIn.

• 43:39Speaker 01

  It is. LinkedIn is just a total shit show. It's a wonderful, wonderful broadcast medium. It's a terrible, terrible business connection medium.

• 43:48Anthony Pompliano?

  Amazing, amazing. Alright, man. Thank you so much for doing this. This is awesome. I think I think you've got a very unique perspective on the world and all the best of luck to you and we'll talk soon.

• 43:57Speaker 01

  Yeah, I mean, literally right back at you. I appreciate the opportunity and a lot of fun, buddy.

• 44:01Anthony Pompliano?

  Alright, sounds good.

• 44:04Speaker 02

  Sorry, let's um, I kinda actually like what Melton did at the end or she got to ask you one?

• 44:07Anthony Pompliano?

  Oh, man!

• 44:10Speaker 02

  I actually think that's gonna be a little

• 44:12Speaker 01

  Okay, I got one.

• 44:13Speaker 02

  After every podcast, let's have them ask you one.

• 44:16Anthony Pompliano?

  Alright, ready? Alright, so uh

• 44:18Speaker 02

  And then at the end, we're gonna have to edit this in, so just thank him again for coming on.

• 44:23Speaker 01

  Yep.

• 44:23Speaker 02

  Make this like the new end.

• 44:25Speaker 01

  Cool.

• 44:27Anthony Pompliano?

  Alright, so we've started allowing people to ask me one question when they come on, which scares the hell out of me. But yeah, what one question do you have for me?

• 44:37Speaker 01

  Okay. What is one important thing that you have strongly asserted over the past six months about the tokenization of securities that you believed at the time and that you strongly disagree with or disagree with today?

• 44:57Anthony Pompliano?

  So, um, I think that there are a number of things that

• 45:06Anthony Pompliano?

  I strongly believed and I can't say that I strongly disagree with them, but I am much less excited about. And I think how I arrive at being less excited about or thinking that they are less important, probably a mix of the two.

• 45:21Speaker 01

  And that makes sense. Like I am, you know me, I'm so euphoric and I say things And get excited and I tone it down.

• 45:26Anthony Pompliano?

  Yeah, well, I think part of it is education, especially on the technical side of like, you know, let's go deeper into the tech and understand exactly how this is going to work. And then two is having more data points from a timeline perspective, right? So just watching some of this play out.

• 45:40Speaker 01

  Being in market trying, you know.

• 45:41Anthony Pompliano?

  Exactly.

• 45:42Speaker 01

  Working on different deals.

• 45:43Anthony Pompliano?

  So I think there's two things. One is the idea that tokenization is going to occur because of the technology. I'm probably less excited about. So the idea that, you know, instantaneous settlement, 24 hour trading, fractional ownership. Like, I think these are all features that are important and interesting. But I don't think that's actually why people are going to use the tokenized securities or interact with them. I think now I'm a much bigger believer that it's a user behavior where people's interface into the digital world. It's going to be a digital wallet in order for them to have that digital wallet act like a bank and a brokerage account. They can hold stocks, bonds, currencies, commodities.

• 46:24Speaker 01

  Yep.

• 46:24Anthony Pompliano?

  And in order for anybody with an asset to allow that person to hold those assets, they have to digitize it. Right? So it's more of the digital aspect in the in the support of a digital wallet than it is all the transactions, et cetera. So I think that's one thing I've kind of walked back into a different, you know, kind of thesis around.

• 46:42Speaker 01

  Yeah, no, I love that. Like, actually, I remember some of the rebuttals to some of the things you were saying four or five months ago.

• 46:49Anthony Pompliano?

  Yep.

• 46:49Speaker 01

  And like, that seems eminently reasonable as a rebuttal. Because we all know, user experience, if it's in the place where you do the other things, then, you know, hey, you'll do it if you can make it as easy as the other things are.

• 47:01Anthony Pompliano?

  For sure.

• 47:02Speaker 01

  And valuable as the other things are.

• 47:03Anthony Pompliano?

  Yeah, and then I think the second thing that I would argue on is tokenized securities specifically is the idea that

• 47:14Anthony Pompliano?

  people are going to want to buy this for liquidity, et cetera. I think that I'm very much in the camp of, at the end of the day, if you're going to buy tokenized equity, you're going to evaluate it as equity. If you're going to buy tokenized real estate, you're going to evaluate it as real estate, right? It's still, I think, you know, if the asset is good, people will want it and therefore it will get a premium in price. Asset is bad and it, you know, is not going to appreciate value, et cetera. Then people are not going to want it. It's going to decrease in price. And so this idea that if I have capital that I want to invest, I already understand the asset classes, right? Stocks, bonds, commodities. The technology in between me and that asset is probably less important to me.

• 47:56Anthony Pompliano?

  Right now, tokenization for a whole host of reasons, I think, is actually going to be the winner. Right? In terms of what people are going to use. But I don't think the mass consumer or mass investor is as interested in, oh, I bought the tokenized version of the equity versus.

• 48:11Speaker 01

  It's just access ease transparency.

• 48:13Anthony Pompliano?

  Yeah, they just want, they just want to buy the equity. Right? And so the egregious example is nobody runs around and says, I bought electronic shares of Apple. Settle in DTCC.

• 48:21Speaker 01

  Yeah.

• 48:21Anthony Pompliano?

  Instead, they just say, I bought shares of Apple. Same thing whether it's tokenized or not.

• 48:25Speaker 01

  So the key thing, and what's your biggest, do I get two questions? I'm going for it.

• 48:29Anthony Pompliano?

  All right, go ahead.

• 48:29Speaker 01

  What's your biggest worry? Or do you worry that we, you know, maybe end up in analogous situation to, you know, the Blythe Masters induced, you know, CDO situation of 2008, 2009?

• 48:42Anthony Pompliano?

  So I think that tokenization is not going to be the cause. I think that people will do it.

• 48:49Speaker 01

  Yeah.

• 48:49Anthony Pompliano?

  Right? But I also think that's going to happen with Bitcoin and it happens with a lot of assets.

• 48:54Speaker 01

  We can already see it, right? With, you know, every kind of future and, you know,

• 48:57Anthony Pompliano?

  Of course.

• 48:58Speaker 01

  A mixture of derivatives and you name it.

• 48:59Anthony Pompliano?

  Ultimately, here's.

• 49:01Speaker 01

  Thought of and spun up over time.

• 49:02Anthony Pompliano?

  I haven't fully formulated this yet, but if you think about engineers, really good engineers that understand this kind of decentralized, distributed world,

• 49:14Anthony Pompliano?

  they have a superpower that Wall Street has never had to, you know, available to them. When you take those people who have a superpower and allow them to play in a financial system that they probably don't have a deep understanding or experience in.

• 49:32Anthony Pompliano?

  There's a lot of good that comes out of it because they don't know which rules are not supposed to break, right? The unwritten rules kind of disappear. But that also means they haven't learned the lesson from past bubbles and problems. And so I think what we're going to see is all of the elements of Wall Street are going to get exasperated, right? And so the good and the bad.

• 49:51Speaker 01

  Yep.

• 49:51Anthony Pompliano?

  And so when that happens, you bring these people with the superpower into that financial system, just buckle up, right? Because you're going to get both up and down.

• 49:57Speaker 01

  And I guess my hope would be that because we have these sort of religious people, you know, who are feeling like, hey, this is our ecosystem, that there will be, you know, a level of checks and balances and transparency. But it's going to be fun to watch. We'll see how it evolves.

• 50:11Anthony Pompliano?

  Absolutely. That is the, that is the hope. So, look, man, I appreciate you coming on. Obviously, best of luck with what you're doing. I think that you're definitely off to the races here and we'll talk soon.

• 50:20Speaker 01

  Likewise. Thank you so much, buddy.

• 50:22Anthony Pompliano?

  Cheers.

• 50:24Anthony 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.