Nikhil Kalghatgi, Founding Partner at CoVenture Crypto: Why Aligning Incentives in Crypto is Challenging

Nikhil Kalghatgi is a founding Partner at CoVenture Crypto. In this conversation, Nikhil and Anthony Pompliano discuss Nikhil's work at SoftBank, how to apply Moonshot Investing to digital assets, and what CoVenture is currently excited about as the crypto industry continues to mature. ----- Join the Off the Chain newsletter. Pomp's daily email analyzes the crypto market for institutional investors. Simply, it’s the best crypto newsletter delivered to your inbox every morning. No frills. No bullsh*t. Just everything you need to know in a 3-minute read. https://offthechain.substack.com/ ----- BlockFi BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

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

• 0:01Anthony Pompliano?

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

• 0:13Speaker 01

  Nikhil Colgady is a founding partner at CoVenture Crypto. In this conversation, we discuss his work at SoftBank, how to apply moonshot investing to digital assets, and what CoVenture is currently excited about as the crypto industry continues to mature. This conversation was a ton of fun, and I hope you enjoy it nearly as much as I did.

• 0:32Anthony Pompliano?

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

• 1:05Speaker 01

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

• 1:33Anthony Pompliano?

  All right, guys. Super excited. We've got Nikhil here. We've got a ton to cover, so I'm not going to blab too much. Just welcome. Let's get this thing started.

• 1:41Speaker 02

  Let's do it.

• 1:42Anthony Pompliano?

  All right. Background. What the hell did you do before you got into crypto?

• 1:47Speaker 02

  I did, was there a life before crypto? Basically, I was an engineer. And then I was in military intelligence. It was a pretty weird, crazy experience. Worked on some projects that were actually unbelievable precursors to a lot of blockchain projects that are being developed today, although I had never uttered or understood the word crypto or blockchain in the early 2000s. So...

• 2:15Speaker 02

  I started a small investment group while I was doing that, did a master's degree in engineering management and very quickly I got myself into the startup world. So I was first employee at what is now a decent sized tech company. And then about a year into that, I was feeling the investment bug. And we were fortunate, we were in this tech startup program, the first one outside of Boulder in Boston in 2008. And Brad Feld came and Jason Mendelson, these are extraordinary guys at Foundry Group, and got to meet them. And about six to maybe less than a year into it, I told Brad, I said, hey, I love investing. I want to be an investor. I might go to business school. He's like, business

• 2:59Speaker 02

  school will be the biggest mistake of your life. I tend to agree with that. It's, it's, I now having gone through it, you know, it was an amazing, amazing experience, built incredible connections. And Harvard opens up a ton of doors, for sure, which frankly, I didn't have prior to. So got into that and six months in, I applied to my first venture gig, and it was SoftBank. Got it and never looked back. So I've been a venture investor for almost a decade with SoftBank, and it was a smaller fund, and started co-venture Crypto, joined the co-venture team with Ali, who you know really, really well, Savneet Ateet, who's also here.

• 3:43Speaker 02

  And it's been an amazing, amazing run. So that's sort of the general credit profession. So it's like, it's like Crypto came late, but the origin story of how did it get into crypto is sort of, you know, a question everybody wants to ask. I think everybody has two origin stories. All right, there's the I got lucky and got rich answer. And then there's the I'm ideologically aligned with crypto and I'm passionate about it. And whether that makes you a Bitcoin maximalist, or whether that makes you, you know, a decentralization maximalist, you know, you're ideologically aligned.

• 4:15Anthony Pompliano?

  I'm going to cut it two other ways. The first time you heard about crypto and then the first time you did something about it. And those are usually not the same.

• 4:22Speaker 02

  No. One, one came a lot later than the other. You can guess which.

• 4:28Speaker 02

  So check this, there was a, a, a entrepreneur at SoftBank.

• 4:34Speaker 02

  He just left a company called Prosper, I think it was. And a fellow outside of SoftBank had knew him very well. And we'd become close friends and he'd become a business partner of mine later in life. And he said, Nikhil, you've got to meet this founder. He's actually a SoftBank guy that you never interacted with. He's moving on, he's starting a new company now. So I went out and flew to meet him and he's in Silicon Valley. I sat down, he says, Nikhil, here's this crazy idea. It's called a distributed ledger. This is 2011. And I said, a distributed what?

• 5:05Speaker 02

  I was like, first, what's a ledger? And, and so an hour and a half into it, I still didn't understand what the hell he's talking about. But I knew that there was something really special here. So that was Chris Larson, who ended up starting Ripple. And it was an amazing entrance point to learn about cryptocurrency. And subsequent to that, years later, not too many, I had left SoftBank and started exploring cryptocurrency. And we'd made some investments in the next firm that I had joined. And, and then fast forward from there and it's all in on crypto with a lot of investments.

• 5:46Speaker 02

  So now we've got, you know, angel investments from my partners and myself, ranging from, you know, there's Coinbase and Ripple and Stellar and Blockstack and Digital Currency Group and a whole bunch of other ones that have, have been fortunate to allow us to be around the V1 of crypto. And now V2 is completely different and we have a completely different approach to attacking it as an organization, not as a, as a bunch of individuals.

• 6:15Anthony Pompliano?

  For sure. So before we get into what you guys are doing and how you're approaching it from an investment side, I want to do some role playing. So we've never done this before.

• 6:24Speaker 02

  Sounds romantic.

• 6:26Anthony Pompliano?

  I want to throw out the name or type of organization of other people in the crypto ecosystem that may be under attack or be in a reactive position to some of this stuff. And you just talk through if you were in their seat.

• 6:43Speaker 02

  So if I was pomp under attack by Twitter, what would I do?

• 6:47Anthony Pompliano?

  Oh, the Twitter trolls are easy. I just say, have a great day and give them a smiley face and a fire emoji.

• 6:51Speaker 02

  Fire, fire, fire.

• 6:52Anthony Pompliano?

  All right. So government, if you're a government or some sort of monetary organization in the fiat world, how do you think about crypto? What would you do as either a reaction or maybe something to be proactive in responding to it? What's your thoughts there?

• 7:10Speaker 02

  Ignore it or shut it down is pretty much the gut response that people will have. I think ignore it is the smart move considering it's so small that it's kind of irrelevant from a economic perspective on virtually any government around at this point in time. And then ban it has been the other response. And we've seen that in a couple of ways. There's the outright ban, which only like three countries in the world have basically said, we don't care about this. We're just going to say no and not deal with it because they've got bigger humanitarian issues and they have bigger challenges going on in those countries. I think Bangladesh is one country that has a complete and outright ban on it. But I don't think it even ranks. I don't think it's spoken about in the Bangladeshi

• 7:53Speaker 02

  government is my guess. It's just added to the list of things they don't have to worry about at least. And then, and there's others that kind of take the middle ground. They say, we like this, we don't like that. Right? China's a good example. The US government's a really good example, where I would call it semi-regulated. And those clear definitions of way things are taxed and just clear definitions of way certain pieces are regulated. And there's just so many gray areas that they realize, you know what, this is really too hard for us to deal with right now. Let's figure out the biggest risk areas. Let's make an example of people. So I love what the SEC has done so far, at least in 2018

• 8:31Speaker 02

  in response to ICOs. They don't have thousands of people on staff in order to address all the holes of innovation that are being created.

• 8:41Anthony Pompliano?

  We're talking right now on the government shutdown. I don't even know if they have anybody.

• 8:45Speaker 02

  I know, no registrations are going through, no, it's wild. But up until the shutdown, I'd say they were actually quite, you know, they actually had a very, very clear response.

• 8:56Anthony Pompliano?

  What do you think they should do? So I agree with you that that's what the different ones are doing. If you're-

• 9:01Speaker 02

  Let innovation, let innovation go wild up until it very clearly breaks rules. I think that's the right approach. Why? They don't have the resources in order to do much more than that, first of all. Their other option realistically is do nothing. And I think that sends an equally bad message as an overcorrection. So the US government in particular would, has the most to lose by overcorrecting. By sending investors abroad as a result of them not being able to do what they want to do here is really, really bad for the US government, especially right now.

• 9:36Anthony Pompliano?

  What if you're an incumbent financial services company?

• 9:40Speaker 02

  So like big bulge bracket banks, things like that.

• 9:44Anthony Pompliano?

  Payment services or banks?

• 9:46Speaker 02

  Look, every bank is just like every other major company that you can think of. They want to make a ton of profits. They're willing to go to extraordinarily great lengths in order to do so. The one thing is, is that they're not going to throw away the baby with the bathwater when it comes to regulation. So they're going to say, we don't believe in this. We think this is BS. We are, you know, we are not supporting this type of activity until they can very extremely clearly look their chief risk officer and head of compliance in the eyes and get the blessing to go full throttle. Meanwhile, in the background, they are spending a ton of resources internally on making sure they've got all the right patents in place to make sure that their traders are being

• 10:28Speaker 02

  sophisticated, to make sure that they've actually moved their smartest people into this burgeoning growth area off of whatever area is dying. And the same thing happened in, in mortgage-backed securities and the same thing happened in gold and the same thing happened. And every single time there was a massive trend at some of these big banks, they moved some of their greatest talent over right before it was the time to take advantage of it. So don't get me wrong, it's going to be no, no, no. And then it's going to be a quote unquote overnight success that took two, three years in the making.

• 10:57Anthony Pompliano?

  And do you think that a lot of these banks feel like they're under pressure or their core business could be eroded away? Or do you think that they look at this as an additive business where it's just our core business isn't going anywhere? This stuff actually isn't going to attack that. We just have now a new revenue, a potential revenue source when this is, has regulatory clarity?

• 11:19Speaker 02

  So I spent a lot of 2017, 2018 going around to big banks, teaching them about cryptocurrency, teaching them about blockchain. We hosted classes at our office and at big financial institutions' offices about why they should care about blockchain, why they should care about crypto, and why it makes them more money, not so much less. And I'll tell you, there's a couple of varieties of responses. Invariably, particularly in 2017 and the first half of 2018, there was the classic, in the drug dealers, what is a blockchain kind of conversation? Fine, that's okay. Education's the first step in this whole process. So, once we get past that, there was invariably some folks in the room that said, hey, just

• 12:03Speaker 02

  so everyone knows, I've been mining personally, like, I think this is a great idea. But they were always the minority in the audience. I won't name which banks, but let's call them, you know, the top five banks in America, you know, by AUM perspective. And now, they kind of recognize that this is the reinvention of a lot of their assets, ironically, to a state where it's kind of like how the world was before banks. So, people, people talk a lot about a barter system, which never really existed in humanity, right? There was effectively a sense of credits and debts that happened well before we even had physical printed money.

• 12:48Speaker 02

  And, in essence, what I'm saying is that there was virtual money before we had physical money. And now, we're kind of going back to this post-bank world of virtual money again. And it's a really, really efficient process. It's a lot more complex, obviously, now than it was, you know, 6,000 years ago. But I actually think that most of the processes now will become much more efficient as they become blockchainified or as they eliminate a lot of middleman resources. I think most of the big banks recognize this. They probably recognize it first in patent defense. Bank of America, I think, has the largest number of patents among companies in the US.

• 13:33Speaker 02

  By like globally, the number one patent holder in the world of blockchain. Do you know?

• 13:39Anthony Pompliano?

  China?

• 13:40Speaker 02

  Correct. Which company?

• 13:42Anthony Pompliano?

  I don't know.

• 13:43Speaker 02

  Alibaba. And they had 10% of all patents in 2017. I think that's the latest numbers I have.

• 13:52Speaker 02

  Pretty wild.

• 13:54Speaker 02

  The point is, is that most of those are not due to their e-commerce and they're due to the financial services. Grew up in Tamiya Financial.

• 14:00Anthony Pompliano?

  So, okay, so that brings me to, if you're a traditional investor or like an incumbent financier, there's been this rise of everything from ICOs, right? So kind of the ability to sell tokens for non-dilutive funding to tokenized securities, tokenized debt, all this stuff that's kind of coming down the pipe as ways for entrepreneurs or asset owners to gain access to capital markets. If you're sitting and you're running a traditional venture fund, a traditional private equity fund, you know, even a bank as a lender type situation, how do you think about this space as it's growing and what would you do if you're sitting in those shoes?

• 14:36Speaker 02

  So the first checkbox that needs to be hit is legal. I don't mean regulatory, I mean legal, right? You need to make sure that how are these things actually enforced? Can I get my money out in the event that, you know, there's a default or in the event that something triggers into another type of asset? And that's probably the hardest challenge that we have right now. I think the regulatory framework follows the legal framework and the regulatory framework depends on what structure there is and the enforceability around it. So that's the first big challenge. When I think of tokens as they're structured right now, security tokens in particular, it's mostly PDFs on a blockchain. I'm seeing a number of efforts being that out there. I mean, you've seen Spice Trade and you've seen

• 15:19Speaker 02

  Spice dot VC, I was specifically saying, and then that's sort of version 0.1, I would say. That's basically just funds that are theoretically tradable, although it's going to be hyper limited in terms of the liquidity. Okay, that's V1. What I think happens over the next two years is you're going to have this incremental growth that is going to be short-lived. This is not massive step function evolution of the security tokens. This is going to be bit by bit crawling forward, inching forward, and we'll look back and say, wow, that was so embarrassing how little distance we moved. But they're really important steps. So if we want to get to this goal line,

• 16:03Speaker 02

  and the goal line is all the stuff you've probably heard and talked about a million times. Every single asset tokenized, all the things that's on the balance sheet, the banks are tokenized, fragmented liquidity, new liquidity, new pathways of capital flowing. You've got debt that upon these triggers turns into X, Y, and Z because it's all in a smart contract globally. That'd be great, right? But in order to get there, we're going to need just to do the simple stuff. Like, what if we just increased accessibility to existing products that already are around today? I'm not saying you open a door that's never been opened. I'm saying the door's already open, people can go and buy this product. But we're going to open the door an inch more through tokenization.

• 16:42Speaker 02

  A good example is you can go, I ask everyone this, like, do you own any of the FAANG stocks? And you say, yes. And then I say, wow, well, it's obvious why you'd own the FAANG stocks, right? The highest growth sector for the last five years in the US, and you know, they're super popular. You're probably a user of those stuff, so you're very familiar with the companies. And you know, they're traded with an extreme amount of liquidity, blah, blah, blah.

• 17:06Speaker 02

  But do you own any of the FAANG of China? China's been growing extraordinarily over the last five years. Let's not count the last three months of emerging markets crash, but the last five years generally. Do you even know what the FAANG of China is? Chances are, in one of the highest growth countries of the world, in the highest growth sectors in the world, in one of the most popular products in the world, that's going to be a decent bet over that period of time. But people don't. And they don't really know that you can actually go online and buy these really, really easily. Do you have a Fidelity account? You could probably figure out a way to do it. But my mom has a Fidelity account. She has no idea what A shares are. She has no idea how to put a wrapper around a Chinese listed stock. And I can tell you, if someone went to her and said, "Hey, give me your cash.

• 17:50Speaker 02

  I'll turn it into whatever the Chinese listed stock is." That would be great. The trick is, the product that this person's offering my mom is, "I'll take your money. I'll turn it into some Bitcoin. I'll buy it for the swap exposure to a publicly listed product." And bam, there you go. You've got a new product that basically did not do anything innovative in the world, other than gave someone exposure to a completely liquid asset that's already available. Now, that's neat, right? It's a party trick. But I think these are the incremental benefits that we have to start in order to get people to trust the technology itself, and start trusting that there's financial assets

• 18:30Speaker 02

  that can be backed in cryptocurrencies and blockchain products. And I think we start moving forward from there. But it has to begin with trust and accessibility before we can create entirely new products.

• 18:44Anthony Pompliano?

  Yeah, and it's also, many people ask me, "What's the one thing that has to happen for the world that we all envision to become reality?" I say, "Time." Right? It's just, and it's time is a proxy for let entrepreneurs build companies, let investors find those entrepreneurs, give them capital, right? Let regulators educate themselves and begin to create rules that are kind of pro innovation, but still keep the scammers out. Let users kind of demystify this for themselves, right? Of like Bitcoin's pretty scary for a lot of people, right? They've heard that, you know, it can be stolen. They hear the criminals use it. They all this stuff. When they start to understand, okay, you know, I get what it is. I understand how

• 19:24Anthony Pompliano?

  it works. I have an easy way to access it. You're just demystifying or reducing those barriers and time brings a lot of that stuff.

• 19:31Speaker 02

  It has to be time, but it also has to be within the timeframe that people actually remember, right? The first time people.

• 19:40Anthony Pompliano?

  So I disagree with that. I disagree with that. Here's why. Most of the products that are popular today, when they first were brought out into the world, no one used them. And not like, not even in the first day, like email is a perfect example. I think email was created like early 80s, if I remember correctly. How many people were using email in 1993? Not that many, right? So you could argue that, well, email had a 20 year window, right? And that was still within the time that they remembered. I think this stuff just takes much, much longer. And so, you know, this idea of go back to, you know, every asset being token, every stock, bond,

• 20:20Anthony Pompliano?

  currency commodity being tokenized, like if that takes 15 years, will we have all forgotten about it? Probably not. Will we have all of the hype and hoopla that maybe 17, you know, 2017 brought? Probably not. And so it's somewhere in between of like completely forgotten and like, this is going to change the world tomorrow.

• 20:41Speaker 02

  I think there's merit there. I would say anybody that came into the stock market crash, the tech crash in 99, it took them a little bit of time in order to feel comfortable about investing in tech again. And the time when they felt comfortable was probably when.

• 20:59Speaker 02

  The amount of capital that they're investing now is more than the amount of capital they lost in 1999. So the only way to get that back is unfortunately, a price point that is somewhere reminiscent of whatever the price point was at their last entry. And sadly, if a lot of people entered in on $20,000, it's going to be a little bit of time, probably, until they feel like, okay, it's been five years, Goldman Sachs is offering this, it's at 25,000, you know, now I'll go in. Now it's legitimized.

• 21:27Anthony Pompliano?

  Yep. Hey, that's fair. While we're on the topic of kind of the intersection between traditional markets, traditional finance, etc., and crypto, what advice would you have for people that are in the traditional finance world? They've already mentally switched over and said, hey, this crypto blockchain thing is really interesting to me. I'd like to work on this for some part of the future of my career. How do I get started?

• 21:52Speaker 02

  I love this. I love this. So our firm is based upon this kind of talent, right? Folks moving in from traditional finance, hedge funds, big banks, traders, all that have bought into the Kool-Aid. In fact, many of us were the same thing. There's a mindset in traditional finance of hierarchy, a focus on what you're doing, do it really well, and you'll be rewarded. Go up these rungs, these step ladder function, and you can get ahead. And if you don't, you got to move off to somewhere else that's a little bit easier. Okay, that's fine. But that's not the world of crypto, right? We have hired folks that are fresh out of school, that have spent two years in institutional finance,

• 22:35Speaker 02

  and now they run parts of the business, right? It's much more horizontal. The application of that horizontals within the entire industry is that everyone's kind of accessible. You're pretty accessible, I'm pretty accessible, you know, and we run decently sized businesses. So how do you, you know, how does someone stand out? And now that you know that there's a thousand doors open, how do you know which one to go through, who to reach out to? I mean, it's pretty darn easy, right? If you're writing, if you're communicating, if you have your own independent conviction, share that with the world and you can get, you know, it's pretty easy to get promoted on any of these blogs or any of the websites. Many of our team actually now have started publishing their own thoughts.

• 23:20Speaker 02

  Ali publishes, Winford, Honor, these are all folks on our team that are independently blogging, both for ourselves as well as for themselves. And if you want to get super smart, it's the same thing you do in traditional finance. Have a point of view, believe in one aspect of the business and go super, super deep on it. Everyone thinks that they're an inch deep in crypto because it's so hard to be smart in crypto. So hard. If you could be smart in any one topic, own it and people will listen to you. So if you are a trader, you know, there's a lot of people out there doing technical analysis of Bitcoin. Great. Have your perspective on it. Own it. It's still your point of view.

• 24:04Speaker 02

  I assure you that the number of people from traditional finance that are getting into crypto is still smaller than the number of people that are in crypto from every other asset class. So you've actually got a huge edge, I think. The reality is everyone, there's a startup community in crypto that has never worked in traditional finance, has no idea how it operates. So if you are sub-five years experience and you've worked in traditional finance, you have, I think you're a pick of the litter in terms of joining venture-backed, high-quality startups right now. And if you ever, and you can reach out to me, I'm at Nikhil Kal, N I K H I L K A L, on Twitter, and I can give you a long list of folks to, that are looking for amazing jobs and that are hiring.

• 24:46Anthony Pompliano?

  That's good advice. What themes are you excited about in crypto?

• 24:51Speaker 02

  Ooh, so my best themes, we keep in our back pocket and wouldn't share, obviously. But some other themes that I'm happy to share.

• 24:59Anthony Pompliano?

  I'm just gonna start, I'm gonna go to the store and buy some beer, give it to you, and then we'll get them out of here.

• 25:04Speaker 02

  As if the beer's not on the table right now. No, it's traditional financial products with a slightly nuanced crypto spin on them is, I think, the best way to make a lot of money in a short amount of time in crypto.

• 25:18Anthony Pompliano?

  And really what you're talking about is if you think of like a Venn diagram, you've got hardcore decentralized the world crypto type investment opportunities. And on the other side, you've got traditional financial products everyone understands. When you bring those two together, that overlap is really where you guys think is interesting.

• 25:34Speaker 02

  I'll add, yes, and I'll add another dimension to that chart. Think of it as like a two by two matrix. And you've got on one axis, you've got new firm versus old firm. Like, like, you know, Blackstone versus company startup X. And then you've got new idea versus old idea on the other axis. And so you've got four boxes. And the ideal places to be are a new firm with an old idea or an old respected firm with a new idea. The other two boxes are really, really hard. Old firm, old idea, tired. New firm, new idea, too scary and risky for a lot of investors.

• 26:16Anthony Pompliano?

  Uphill battle. Yeah, we talk all the time that whenever there's a new piece of technology that's created, you can do one or two things. You can either build things with it that the world's never seen, or you can use it to improve the old world. And most of what I would call hardcore Silicon Valley is go build new things. The bigger, from a addressable market and market cap standpoint, the bigger opportunity is actually to take that new technology and improve the old world.

• 26:41Speaker 02

  Exactly. And that's what we're seeing right now. So, so for example, I've got a thesis that horizontal plays within financial services are going to be the first applications of blockchain tech that we see at scale.

• 26:54Anthony Pompliano?

  Okay, explain that.

• 26:56Speaker 02

  So the, the reality is that all the big financial institutions have done, you know, some proof of concepts that have go back to 2014, 2013 even. And that's great. They've got some 10 to 50 people inside the business that are familiar with the tech or heard of it, or responsible for managing people or funding it. Great. So there's some education that's already happened institutionally, and that takes years. And those years have already transpired. That has happened across, I don't know, how many, how many financial institutions have done anything in crypto internally?

• 27:26Anthony Pompliano?

  Probably all of them have looked at it.

• 27:28Speaker 02

  Right, right. That's extraordinary. So let's say there's 6,000 or 8,000 of these legitimate firms around the world. And they've all, you know, 5,500 of them have done something, I would say. And that's great. So now they're smart on it being something that they are allowed to look at and allowed to explore. They recognize that a completely verticalized application is not going to be ripped out and replaced. Just try taking any single application within an old world regulated firm, ERP tech, or, you know, financial modeling, or even your QuickBooks, you know, really basic things that are applicable across any company. And it's very, very hard to rip those out.

• 28:11Speaker 02

  So my suggestion is if you can create a product that's applicable across the entire industry, then you've got 6,000 to 8,000 customers out there already ready to buy it. All right, you're not going to be replacing, you know, an entire vertical group. So the examples of these are, you know, that everyone throws around would be KYC AML are applicable to everyone. You're not saying they're doing a whole new KYC AML process. No. Everyone's going to have their jobs. This is going to be a slight improvement. It's going to cost a lot more, but it does everything that's already happened and then some. That's like the first layer where I think it starts to fail in the vision that's, you know, contemplated everywhere else is non-financial services entirely vertical plays. So everyone wants to point to supply chain.

• 28:56Speaker 02

  I think that's going to be the hardest application for cryptocurrency and blockchain tech.

• 29:00Anthony Pompliano?

  Why?

• 29:01Speaker 02

  It's global by nature. You're dealing with multiple governments inherently. It's step function harder than dealing with one government. The one government alone is really, really, really hard. Two, it is, it is mission critical kind of tech for the companies you're servicing.

• 29:18Speaker 02

  That's in one essence, good because people have incentive to do it. But you don't replace tech that's mission critical, ever. You just legally can't get around it. It's means too much. There's a lot of protection. You really don't screw around with the cash cow. If it ain't broke, don't fix it, kind of mentality. So KYC and AML, you know, while it's in the critical path of doing business, it's not generally revenue generating for financial services. It's something that people always want to lower their costs on. And it's just a completely different sales process. If you explain to me how much more money blockchain can make for some of these companies, sure.

• 30:00Speaker 02

  But right now, it's, I think, largely seen as a cost-saving mechanism, which is a harder sell. But I think it's the only sell in the near term for financial services firms. For these massive industries that are trying to replace entire vertical stacks, that's super, super hard. The friction in the sales process, the friction of proving it out is a too-high hurdle, I think, right now. And more importantly, usually, these entire vertical stacks get swapped out when there's a hammer that forces you to do it. The Chinese government says, "You must do this." Or Walmart says, "Supply, you know, my entire supply chain, you must have RFID tags in every single shipment," or something like that. That is how you completely change a vertical stack. That's really, really hard across, you know,

• 30:45Speaker 02

  a grouping of people that are collectively trying to, you know, do this together as opposed to someone saying, "You must do this."

• 30:54Anthony Pompliano?

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

• 31:24Anthony Pompliano?

  What's your take on other things that are interesting? So what you described with like the KYC AML, that's essentially building technology as a service, right? It is a service today that, yeah, there's some technology solutions, there's some that's done manually. But if you can come in, you can build technology that automates or makes more efficient that process, there'd be incredibly valuable. What's one or two others that are similar to that that you think would be either one interesting for entrepreneurs to look at, or two would be valuable for potential customers to be pitched?

• 31:56Speaker 02

  Settlement is probably the biggest opportunity today. It takes, you know, a day to five days to settle most transactions. And I'm not even talking about, you know, inter-country transactions, you know? Everybody likes to throw out the idea of real estate. I think there's probably much faster, simpler products out there. So just look at one company. So if you're inside, if you're inside a big bank right now, ask yourself, what are the slowest intra-bank settlement times? All right. You know, do you got instant? I'm sure, you know, checking account or checking account of a traditional commercial bank, you know, is pretty fast.

• 32:38Speaker 02

  But I assure you, as soon as you get away from this hyper liquid stuff, it gets much, much, much harder. So those I think are going to be the first ones because now you're dealing with a regulatory environment and a decision-making process that's so much, so much faster. Things are on the opposite end of the spectrum. The worst idea is remittance. I think it's wildly difficult for crypto today. And yeah, there's some great stories with Ripple, there's some great stories with a handful of other companies that have done nine-figure remittances that I've seen at least. But again, two governments is three times harder than one government.

• 33:20Anthony Pompliano?

  What um, if you're a retail investor, right? You don't have, uh, let's say all of the opportunities today, just given the regulations to invest in anything. Right? So there's some, uh, private offerings that are only available to accredited investors. I think most people in the space would wish that they were open to everyone. They're not because of regulations, hopefully that changes in the future. But if you're a retail investor today, how would you think about crypto as an investment opportunity? Right? So not necessarily like, hey, what would you go invest in? But much more around, uh, is buying equity interesting? Is, uh, investing in some of the liquid tokens interesting? Are there specific themes that you would look at? Just how would you, uh, maybe explain to people?

• 34:05Anthony Pompliano?

  If you're a retail investor, this is the way to look at it.

• 34:07Speaker 02

  So every retail investor, um, thinks on, I think, on the two. Most retail investors think on too short a timeline, right? The compounding effects of money take time. And so if you're looking for a get rich quick sort of thing, um, I don't think you should think of cryptocurrency as that angle anymore. Hopefully it's a real asset class and real asset classes have a much higher level of trust, a little bit lower level of volatility. Though we saw in 2016, 2017 and even 2018 for that matter. So if, if I was a retail investor out there, I would think of, you know, what's in my price range? You know, what's in my investment horizon?

• 34:50Speaker 02

  And how does this diversify from what I have already? If you are mostly illiquid and you've got a very tiny amount of liquid investable assets to your name. Um, you know, let's call it, you know, 50% of your net worth, right? Is liquid and it's, um, you know, money that could otherwise go to your savings. And, you know, your rainy day or six months of buffer, right? That's not investable assets, right? That's money that you should be careful with and treat it as like your, your, your core, uh, you know, money in case anything goes wrong. Now, if you do have a bunch of money left over, right? The way I think about investing is what do I absolutely, what can absolutely go to zero and doesn't matter?

• 35:35Speaker 02

  And that's the stuff that I would put towards, um, you know, the most risky assets. And that includes startups, that's angel investing, that includes things where I'm, I'm learning, uh, and.

• 35:48Speaker 02

  A lot of folks unfortunately put some cash into crypto that should have been into that at that bucket. And I've heard a number of really challenging horror stories. The biggest horror stories I've seen are around tax unawareness and people not realizing that they made a bunch of money and they reinvested it from 2017 into 2018 into tokens. And then they owed money on 2017, but then they lost all of it in the reinvestment in 2018. And they owe, and guess what? Taxes, you know, you if you call BK, you know, you you still gotta pay those off no matter what. Okay. So what should people do? So where

• 36:25Speaker 02

  the question started. If I was investing in, in the equity of crypto companies, I would want to be in the traditional piece of the cap stack today because I've seen most of the token economics and governance be very punitive to investors. So reading the terms on those documents is super, super, super important. Now, as, so what I look at is, and what I look for are entrepreneurs that are fully aware of the alignment of their investors with, with common shareholders. And it's actually really hard because it's constantly changing. And most entrepreneurs don't really care about being smart on this.

• 37:10Speaker 02

  They care about building their business and money is a means to an end for them to get to their vision. So why are they going to spend time being super smart on this? If they're not super smart and can't spend to the investors, then the investors are really, really screwed. So when I was at, when I was at SoftBank, we were tasked with an interesting challenge. It was coming up with the top 100 companies. And we said back to Masa and co. Masa is the founder and CEO of SoftBank. What do you mean top 100? And he's like, top 100. And, and so we kind of had to reach the line, this is top 100 companies to invest in, to buy, to do partnerships with, I mean, in the world. Right? It's pretty wild. It's

• 37:52Speaker 02

  an amazing thought exercise if you haven't done it already. You know, if you had a magic wand and you could have equity in the, you know, any companies in the world that you wanted, which ones would they be? And that's not even getting to what if it wasn't equity? That's a lot harder. But the interesting thing is you start with, start with, start with that question. And then you realize, okay, if I know these are the best companies, right? Can I structure a deal that makes it the most valuable asset for me? So I went to, so that was a really, really interesting exercise for me. And it got me to think on another plan or level in terms of what are the most valuable assets in the world? Cause assets are really, as an investor, they're not just the underlying value creation that's happening in the company.

• 38:37Speaker 02

  It's also the structure around it. So this is why, this is how I got here from your question of how does the structure, you know, influence? You know, how you're buying equity? And for me, that's just an example, a permutation of how does structure affect being an investor of any kind? So really, well, the way SoftBank, you know, operated when I was there, we were trying to do these extraordinary deals was, was really simple. It's like, look, I love you. You might like me.

• 39:09Speaker 02

  I, here's an offer that I think will make us both a lot of money. And oh, by the way, if you don't take it, I might give it to someone else.

• 39:18Speaker 02

  And it's an honest, very transparent, hard negotiating strategy that, that tended to work out for the better. And I've seen it done a few times. I said, the best thing I ever learned from SoftBank was the art of negotiation. And, and it served me, served me well since then.

• 39:36Anthony Pompliano?

  What's the number one thing you learned about negotiating from SoftBank?

• 39:42Speaker 02

  Always be willing to walk away from the deal.

• 39:47Anthony Pompliano?

  Any examples you want to give?

• 39:48Speaker 02

  No.

• 39:50Speaker 02

  Definitely not.

• 39:51Anthony Pompliano?

  I thought I set him up for that.

• 39:55Speaker 02

  Yeah, that is, yeah, emotion plays no role in this sort of thing. Excitement plays no role in this sort of thing. In fact, I recall there was a deal that Ate and I were trying to do last year. And we had a very, very big meeting to iron out terms on an extremely strategic deal for us. And, you know, he calls me up right afterwards or messaged me, I forget what it was. And he's like, he's like, how do you, how do you feel? Right afterwards. And I said, no feelings. And that's how I knew we were on the right path. We made the step in the right direction. There can't be any emotion on these kinds of things.

• 40:40Anthony Pompliano?

  For sure. And you've previously talked about moonshot investing, which this is, which is this idea of going after things that are pretty binary in outcome, but if they are successful, they are beyond our wildest dreams of what a company could accomplish and what the returns could be, et cetera. How do you apply that to crypto? How do you think about that?

• 41:01Speaker 02

  Oh, I think about this every day. Those are my favorite things. Luke, can I take you back to a story before I answer?

• 41:06Anthony Pompliano?

  Of course.

• 41:06Speaker 02

  So basically after-

• 41:08Anthony Pompliano?

  This is, by the way, podcasts are basically just story time for adults.

• 41:10Speaker 02

  Story time? Okay, good. So, so here's a fun thought exercise and everyone, everyone at home should, should think about doing this too. I have a group of friends, we all became best friends. They're extraordinary entrepreneurs in the world. You've, you know, probably heard of them. Not Elon Musk, but a couple of them are, are at that level. And we all catch up pretty, pretty regularly. And we went to the strip one time and, and we all were deciding what we want to do with our next chapter with our lives. We'd been fortunate, we've had a bunch of success and, or we've had a bunch of failures too, that's for sure. And, and we happened to be at this point in our lives at the same time, we had a little bit more time to think about what it is we want to do next.

• 41:50Speaker 02

  And, and the question came up was, well, let's say all the world's resources are ours because we really feel like we've unlimited resources within arm's reach.

• 42:03Speaker 02

  What is the most undervalued asset in the world? Is it a person? Is it a group of people? Is it a piece of real estate? Is it a technology? I don't know. And so we Time. Time. And then can we acquire the asset? And let's go acquire it. And and so we did. We we spent like 18 months of time focused on this sort of thing. And went around and tried to find it. It ended up being an amazing thought exercise. The actual economics behind it

• 42:41Speaker 02

  were wildly were nearly wildly lucrative. It ended up becoming a failed project in the end. But I can tell you through that exercise, we brought in some of the world's most powerful investors together. We built this, you know, plans to build a $10 billion clean energy redevelopment project in America. And it was an amazing, amazing experience. Now, some of those folks are involved in the in the crypto world, most of them are in energy and in tech. And in the application of that thinking was really simple. What is something that's actually unobtainable today? And then let's flip it on its head. Let's just say we could get it. Right? What are the characteristics of things that are unattainable?

• 43:25Speaker 02

  How do we create a framework around that? And to identify the top 10 things in the world that are unattainable that we think could be worth something if we were to make it accessible? And and that's kind of how I think about crypto today. Like, what would make?

• 43:41Speaker 02

  What is completely impossible today? That through the use of this technology that I believe in, that you believe in, could be worth, you know, tens or hundreds of billions of dollars? Or maybe even more? And so that's, that's one of the frameworks that we think about. And yeah, it's a lot of pie in the sky, but we very quickly turn it down into actionable investment theses that we then

• 44:03Anthony Pompliano?

  So let's talk about co-venture crypto, right? So if this is kind of your background, your perspective and the thoughts that you spend on a daily basis, what exactly is co-venture crypto? And what the heck are you guys doing every day?

• 44:15Speaker 02

  Yeah. So very simply, co-venture crypto intends to provide institutional-grade access to cryptocurrency products. We are a part of co-venture, which has multiple sleeves, venture, credit, and crypto. And, you know, we've got some extraordinary backers ranging from high net worth individuals to SBI Holdings, fully known as SoftBank Investments, which is a large publicly traded financial institution that seeded our business. So we think of, we think of the world as institutional investors will come in, it's going to take time, let's

• 44:59Speaker 02

  build products right now that we can monetize, whether that's strategies around asset management, as well as products that can be distributed through retail and approved by governments, whether that's the ICC, or the FSA, or other jurisdictions of the world. So our strategy is diversified, you know? I like to think of ourselves as a data company. We try to source data from all these different brains, these brains being people, as well as companies, as well as infrastructure, as well as partnerships. And we've built, you know, many of these already. We're collecting this data, and then we try to turn that into proprietary data infrastructure,

• 45:42Speaker 02

  and proprietary data itself that we can then monetize. Most of that today is monetized through trading, but we've also expanded into venture, and now we're expanding into other categories as well.

• 45:57Anthony Pompliano?

  Very cool. Where do you see institutional investors today? What's kind of been your touch points with them and what they're thinking about right now in January of 2018, February 2018?

• 46:11Speaker 02

  Institutional investors today?

• 46:12Anthony Pompliano?

  I guess it's 2019.

• 46:13Speaker 02

  Yeah, and I did.

• 46:14Anthony Pompliano?

  I'm a year behind.

• 46:15Speaker 02

  That's okay. Institutional investors are currently concerned over is this asset class going to be around forever? Right? I would, I'd put this at the lowest point of institutional conviction that I've seen. It's really, really scary. That being said,

• 46:37Speaker 02

  this is the most optimal time to make investments into the sector. Equity valuations have gone down the most. The number of applications have dramatically increased. Every day you're hearing about tier one caliber institutions getting in. And once that credibility comes in, I think it will alleviate a lot of the concerns that are in there. I'm tired of hearing about how X company is coming in and is going to launch something in Q1 of this year or next year, or is going to launch this thing and it's going to be big and it's going to be huge. That's, I think everyone's tired of that. The person who's most tired of hearing that is the institutions themselves. It's great. Fidelity, March, please come in. We can't wait.

• 47:22Speaker 02

  I'd much rather hear about them having launched than that they're going to be launched. And that's actually a huge difference between the venture community and the institutional investor community. The institutional investor community loves to talk about things they've already done. You know, and the tech and venture community loves to announce things six months before they're, before they're actually starting work on it.

• 47:42Anthony Pompliano?

  For sure. Well, let's go through one of the deals you guys did. Are you guys publicly announced that you invested in NoMix?

• 47:48Speaker 02

  Yep.

• 47:48Anthony Pompliano?

  Right? And maybe just talk about what that is, what got you guys excited, kind of how you think about that business moving forward?

• 47:54Speaker 02

  Yeah, sure. So, so our DNA is tech, trading, and data.

• 48:04Speaker 02

  All of us have a background in engineering and traditional finance. And we've been able to parlay that into investments in those kind of subsectors. Nomics basically takes a very different approach to the same sector where they are an API company that is educating a lot of the exchanges and frankly is becoming the back end for a lot of the exchanges and the trading venues out there. That's exactly what we've been doing in the background as well. We have spent months and months with several exchanges telling them, well, this is how institutional investors think. This is how a sophisticated trading team would want to engage with your exchange. These are

• 48:45Speaker 02

  all the hurdles you need to take from regulatory perspective. We're not getting paid consulting fees for these types of things. We're getting paid in opportunities to invest before anyone else. Nomics is a really great example, a company we believe in. I mean, the investment thesis is made public. We've already blogged about it. Clay Collins is an extraordinary entrepreneur, great successes. We believe in Clay and I think he'll have an even bigger success here. There's another company that we haven't announced an investment in where we've been partnering with them for six months. We've been working with them and we were able to get them to open up a round of investment just for us originally. And that's, that's an example of, you know, being hunters, not being responsive. And I think the best

• 49:29Speaker 02

  venture folks are all hunters. If you look at Gurley, you know, Greylock Benchmark, you know, Sequoia, the big, the big funds out there, their best investors are all hunters. They're not just reacting to the deal flow that comes in their way. And our best way to hunt is to use our sharpest arrows and knives, and those are around trading and data. So anything that's an exchange or a trading venue or derivatives or offering an institutional kind of trading product, whether that's prime brokers and this quote unquote institutional structure, infrastructure for trading that everyone, this mythical infrastructure that everybody keeps talking about needs to be built. That's the, that's the stuff that we're looking at, mostly because that's the background it came from. And that's what

• 50:12Speaker 02

  we, we know best. So we're, anything that we don't see out there, we, we may even try to build ourselves.

• 50:19Anthony Pompliano?

  Very cool. Before I wrap up, I usually do a rapid fire of questions. Lately, people have been making it not rapid fire. So we're going to try to make it rapid fire. What do you think is the most important company in crypto?

• 50:34Speaker 02

  China.

• 50:35Anthony Pompliano?

  Why? And that's not a company for the record, but go ahead.

• 50:38Speaker 02

  It was fast though.

• 50:41Speaker 02

  Now you slowed it down, you know that.

• 50:43Anthony Pompliano?

  No, it's another question, why? Why China?

• 50:45Speaker 02

  They, single-handedly, have focused the energies of, I would say, the most, the second most important global mind of engineering talent around blockchain tech as opposed to crypto trading. And the second that they reverse that opinion, I think that trading venues around the world will have their hand forced.

• 51:11Anthony Pompliano?

  Are they ahead or behind the United States?

• 51:14Speaker 02

  Ahead.

• 51:14Anthony Pompliano?

  Technology? Ahead. Alright. What's the most controversial thought you have in crypto? When people hear this, most people are gonna disagree with you on.

• 51:25Speaker 02

  The winners of most of the subsectors in crypto will be determined by who's got the most runway.

• 51:32Anthony Pompliano?

  Really? I'm gonna completely disagree with that. I love this. Wait, explain why?

• 51:37Speaker 02

  You're in crypto winter right now. The number of companies, number of distressed companies out there that are great is wildly high. I'd put it at, you know, 2000, you know, the year 2000 kind of levels. If you've got a lot of money out there, you can sit and wait this one out. If you don't, it doesn't matter how, the greater your talent, you know, you are, are in a tough position. There's, there's that old, there's old adage, right? It's about, you know, you're a

• 52:04Speaker 02

  a great employee of a company, or you're at a great company, or you're in a great industry. Alright, which one of those three leads to the most success? Do you have an answer?

• 52:16Anthony Pompliano?

  The one that leads to the most success, and I'm gonna sidestep the exact question, but I'm gonna say the people who are most successful are the people who are surrounded by the rest of the most successful people.

• 52:28Speaker 02

  Surrounded by? What do you mean by that? Meaning they're, they work for them?

• 52:31Anthony Pompliano?

  Work with them, for them.

• 52:33Speaker 02

  If you're on a rocket ship, it doesn't matter if you're a C player or a D player, right? You are going to benefit massively.

• 52:39Anthony Pompliano?

  Yeah, if you're around much winners, then you win.

• 52:41Speaker 02

  Yeah, exactly.

• 52:42Anthony Pompliano?

  So here's why I disagree. The companies that I think are currently executing the best are likely to be the companies that have raised smaller amounts of money, right? The companies who raised tons of money are actually not performing. I tweeted about this the other day. I said, if you're a company that raised in 2017 and were in 2019, you still haven't released your product yet, the odds that you're going to be sustainable or valuable are incredibly low.

• 53:07Speaker 02

  Yep.

• 53:08Anthony Pompliano?

  And the other data point would be that even though we're in a bear market, the best companies will still get funded. So let's say that in 17 during all the hype, you know, 100% of companies get funded. I'm not making this up. If in a bear market, only 10% of companies get funded that would have gotten funded in 2017, investors hopefully have good enough filter that those are the 10 best percent companies. And therefore, if you're good, you don't care if it's a bull or bear market, you're still able to get the funding you need.

• 53:37Speaker 02

  Totally fair for companies being invested in now, companies that already exist that have a two or three year head start that are going to be around in two years. Maybe they've already got two years of product out there. Have you got a two year head start on launching a product in the subsector? That's pretty extraordinary. If they never launched a product, absolutely. If you haven't launched a product and you raised, you got 500 million bucks in your balance sheet, you're going to fail.

• 53:57Anthony Pompliano?

  I'm going to say this right now, and somebody somewhere will pull this up when I'm wrong.

• 54:02Anthony Pompliano?

  Less than three companies that raised money in 2017 and now in 2019 have not released a product yet, less than three of them will be around in 10 years.

• 54:14Speaker 02

  Okay.

• 54:14Anthony Pompliano?

  Because my guess is that, let's say that there's, I don't know, probably 100, 200 companies that raised money in 17 still have not released their product in 2019, less than three of those companies will be around. We'll see.

• 54:25Speaker 02

  Yeah.

• 54:25Anthony Pompliano?

  So trust me, somebody's going to save this on the internet. Come back to me.

• 54:29Speaker 02

  Two archives.

• 54:30Anthony Pompliano?

  What, if you could wave a magic wand and change or improve one regulation, what would it be?

• 54:34Speaker 02

  Ooh, I would, uh, let's see. I would love, love, love, love to have extreme clarity.

• 54:47Speaker 02

  On KYC AML requirements for companies that hold crypto.

• 54:54Anthony Pompliano?

  It's fair.

• 54:55Speaker 02

  It's one of the biggest blockers, I think, for financial institutions coming in. And that might be solved through custody solutions, it might be solved through a tech solution, it might be solved by just declaring, hey, you must have a letter from, you know, lawyers from each person you take money from, whatever it is. But just something that would solve it would, I think, would be phenomenal.

• 55:18Anthony Pompliano?

  Okay, most important book you've ever read?

• 55:21Speaker 02

  Most important, Ender's Game, had a huge influence on me. I read it when I was really young. Ender's Game is a sci fi kind of book, there's a movie on it. I think it was not that great. And I massively, I learned a lot about resilience, about fighting for what you believe in, even when it's hard. I think I was what, like 17 when I read it, or something like that? I would say as an adult, my absolute favorite book that had wide ranging impacts on me, which is a much harder thing to get, is a, is the book that we actually named one of our funds off of.

• 56:03Speaker 02

  You can edit this part, right?

• 56:07Speaker 02

  Thank you. The book that had the greatest influence on me as an adult is called Three Body Problem. And Three Body Problem is by, I'm gonna butcher the name, but, a Chinese guy named Si Chin Liu. And it is a mind expanding story. It was very popular last year, actually. I think Obama mentioned it a couple of times, or whatever it is, but.

• 56:33Anthony Pompliano?

  Three Body Problem. All right, so sticking on that, I'll only ask one non crypto question.

• 56:39Speaker 02

  Are there non crypto questions?

• 56:40Anthony Pompliano?

  Yeah, of course. Well, there's alien questions, which this is.

• 56:44Anthony Pompliano?

  Do you think that there are pets or alien animals? We always think of aliens as like the equivalent of humans, right? Kind of single species. When they get off the spaceship, are they bringing animals or pets with them?

• 57:00Speaker 02

  Uh, no. I mean, if you're landing on a foreign planet, like you're, you're there for business. All right. You think, you think they're there for vacation?

• 57:07Anthony Pompliano?

  So you don't think that they would bring their animals or pets with them? But what about, uh, at their, in their home, I guess we'll call it, uh?

• 57:14Speaker 02

  Do I think aliens have pets?

• 57:15Anthony Pompliano?

  Yeah.

• 57:16Speaker 02

  Sure.

• 57:17Anthony Pompliano?

  Why?

• 57:18Speaker 02

  Companionship, I don't think is a human trait. Think it's probably a, you know, like animals in America, in, in, on, on Earth, like.

• 57:26Anthony Pompliano?

  Do animals have pets?

• 57:28Speaker 02

  I think animals have other relationships that wouldn't be defined as pets, but as a collaborative species.

• 57:34Anthony Pompliano?

  Like I don't see a donkey running around with like a turtle on a leash, right?

• 57:37Speaker 02

  You've got, you've got, you've got, uh, animals that depend on other animals in their micro system.

• 57:41Anthony Pompliano?

  That's fair.

• 57:42Speaker 02

  You know, whether that's for companionship or for sustenance, it's probably a combination of both.

• 57:47Anthony Pompliano?

  That's fair.

• 57:47Speaker 02

  All right. Dolphins play, right?

• 57:49Anthony Pompliano?

  Yeah, dolphins play. We, some of our pets, like, well, not pets, I guess, animals are farmed for specifically eating, but yeah, that's fine. Um, I follow up, or I end each podcast with, uh, letting you ask me one question. What one question do you have for me?

• 58:05Speaker 02

  Um, let's see.

• 58:10Speaker 02

  This is like, this is a fun time where I just get to make fun of you, right?

• 58:13Anthony Pompliano?

  Yeah, it's fine.

• 58:13Speaker 02

  The whole, that's the whole thing.

• 58:15Anthony Pompliano?

  Welcome to the club.

• 58:16Speaker 02

  Yeah.

• 58:19Speaker 02

  Who, who is the greatest influence on your personal life, not in your professional life? Doesn't count, your significant other doesn't count.

• 58:29Anthony Pompliano?

  My parents, easily.

• 58:30Speaker 02

  Mm-hmm. But what have they done for you lately?

• 58:35Anthony Pompliano?

  Just kidding. Probably too much. Um.

• 58:38Speaker 02

  Choose one.

• 58:43Anthony Pompliano?

  I can't, they do everything together.

• 58:46Speaker 02

  It's like if you, if you ask them. You have to answer the question right now.

• 58:50Anthony Pompliano?

  Yeah, I wouldn't.

• 58:53Anthony Pompliano?

  No, I mean, look, it is, it depends on how you'd ask it, right? Who had the most impact on me in terms of probably my ethics and morals and like everything around like how I think as a human? Probably my mother, just because she spent the most time with us as kids, right? And then if you said to me how I interact with the world, right? And how I think from a framework standpoint, etc. Probably my father, because that's how we spent the most time together. And then I grew up in a household with four brothers. So you can imagine there was like, that's why Twitter doesn't really bother me that much. Like, every person in my life who ever talked shit to me actually loved me.

• 59:36Speaker 02

  Were you the little one?

• 59:37Anthony Pompliano?

  And I'm the oldest, so it's even better.

• 59:39Speaker 02

  You act like a little one, though.

• 59:40Anthony Pompliano?

  Yeah, it's fine, because when, whether you act like the old one or the little one, when you've got four younger brothers, you just beat them all up.

• 59:47Speaker 02

  Yeah.

• 59:48Anthony Pompliano?

  No, but I-

• 59:49Speaker 02

  Is that what you see Twitter like? Just beating them up a little bit?

• 59:52Anthony Pompliano?

  But everyone who, you know how many times as a kid I came home and one of my brothers was like, "You're an idiot." And I was like, "Oh, you must've had a bad day."

• 59:59Speaker 02

  Ah, yeah.

• 1:00:00Anthony Pompliano?

  "You want to go play video games?"

• 1:00:01Speaker 02

  Yeah, exactly.

• 1:00:02Anthony Pompliano?

  "Yeah, sure." Right? Like, Twitter's kind of the same thing. There's people who literally, I don't even block them anymore. There's people who just respond like, "You're dumb." "Okay, thanks, have a great day."

• 1:00:11Speaker 02

  Sure.

• 1:00:12Anthony Pompliano?

  "Move on." So, yeah, that's not an answer.

• 1:00:15Speaker 02

  I was, I was the youngest, so-

• 1:00:18Anthony Pompliano?

  So you got beat up?

• 1:00:19Speaker 02

  Oh, yeah. No, I had one older sister.

• 1:00:21Anthony Pompliano?

  So you definitely got beat up.

• 1:00:22Speaker 02

  Big time, big time. Oh, yeah, yeah. She's, she's five years older. But my family was very, you know, we had the typical immigrant story, right? It was, you know, it was a rough, rough go in the first bit, and then it got a lot easier as, you know, parents are able to, you know, move on in the world and do something themselves. But, you know, Twitter's a different animal.

• 1:00:46Anthony Pompliano?

  I've got a, I've got a whole theory that people on Twitter are, what's the saying? Money doesn't make you, it just reveals who you already were. Twitter's the same way. Like, sitting behind a keyboard just reveals who you actually are. You say all the things that you wish that you could say to the guy on the subway who cut you off, or, you know, to the nice person who you see at the bar that you wish you could say a compliment to, you don't want to be creepy.

• 1:01:10Speaker 02

  Right.

• 1:01:10Anthony Pompliano?

  Like, if you're a nice person, you're nice on Twitter. If you're an asshole, you're an asshole on Twitter, and that's fine. All right, man. I appreciate it.

• 1:01:19Speaker 02

  This is fun, thanks.

• 1:01:19Anthony Pompliano?

  This is a lot of fun. We will have to do it again. Thank you so much for coming, and best of luck.

• 1:01:24Speaker 02

  Appreciate it. Take care.

• 1:01:27Anthony Pompliano?

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

• 1:01:58Anthony Pompliano?

  Hey, everyone. Pomp 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.