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We got a bunch of news for you.
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We're going to take you through about 30 minutes of recap of the news.
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Then we got a stacked lineup.
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Uh we have an update on Elon Musk. He's leaving Washington.
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Here's how that affects the Trump agenda.
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Interesting uh story with Elon.
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Obviously, he went into DC, built out the Doge team.
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Had some wins, had some losses, some setbacks, some arguments, some debates.
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Um but he has now concluded his tenure as a special government employee departing the White House.
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It's back to work on space, baby. He's he's going back in.
0:35
Uh it there's a there's a lot at stake uh at SpaceX.
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We're seeing the the ninth launch.
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Interestingly, uh the the latest starship launch uh broke up again.
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Another rud, rapid unscheduled disassembly. Great. You hate to see it.
0:52
Great name for when your spaceship blows up, but particularly bad for the people that were in the whole firmament camp. Yeah.
0:59
Because it broke up on re-entry. Yeah.
1:03
And so it had actually reached velocity.
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So anyone that says, "Oh, it can't go through the atmosphere at all and space doesn't exist."
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Uh, bad day because the the latest the latest Starship actually does in fact reach its peak.
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It could in theory drop off uh payload and then it just breaks up on the way down which means it's a very expensive nonreusable spaceship right now. Yeah.
1:30
Uh which is of course breaks the whole economic model doesn't actually work.
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So they got to figure out how to get it back without it breaking up.
1:35
But good news that they're at least getting it there.
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But they have some really important milestones on the horizon that they need to hit.
1:41
And so Elon's probably going back in there.
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Also we saw the the X outage and kind of you know things falling apart there.
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I'm sure he's like, "I need to be sleeping in that conference room, too.
1:50
I need to be on the factory floor, SpaceX."
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It goes directly to the conference room.
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I heard a rumor that there were tents set up at the XHQ, okay, for people to sleep in in the office because it be o over the weekend when when the site was down recently.
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Because it was, you know, it's embarrassing for your service to go down in such a big way. Yeah. Yeah.
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And I'm sure that uh the culture there just doesn't tolerate, you know, downtime.
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Although it held up really nicely for us yesterday with crypto day.
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Yes, massive day on the internet. Massive day.
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And the interesting thing is Tesla the Tesla stock price has been pricing in Elon.
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Didn't even get to Tesla.
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Elon leaving Washington for a while.
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It's up 22% over the past month alone because there was that there was that whole Wall Street Journal reporting report that said that Elon might be stepping down as Tesla CEO and he said absolutely not. No chance.
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Um, but yeah, I mean, he's getting back in back in the game.
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Can you pull up the poly market on Tesla new CEO? I want to see that.
2:50
And I'll take you through some of the news.
2:54
Probably down horrendously.
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Probably now that he's not working for the government anymore. Um, yeah. It's had a 1% chance. Yep. As of today.
3:02
So, so when is when is Elon Musk leaving the government exactly?
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As a special government employee, Musk's tenure was limited to 130 days, which runs out at the end of May.
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A White House official said that Musk's offboarding started Wednesday, adding that he hadn't been uh he hadn't been a regular presence in the West Wing in recent weeks as my scheduled time as special government employee comes to an end.
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I would like to thank President Donald Trump for the opportunity to reduce wasteful spending, Musk wrote on his social media platform X late Wednesday.
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And so they also cut this off. Yeah.
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because he specifically said the Doge mission will will only strengthen over time as it becomes a way of life throughout the government.
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And I just had to call out that the journal had to uh chose to not include the second part of of that which I think is important, right?
3:54
He's not just saying see you.
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He's saying, "Hey, I actually believe in in sort of I'm trying to reflect on like of the organization."
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How much of this was expected and what actually is happening?
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Because I feel like the prediction on the right was that uh Elon and Trump are going to be a an unstoppable force forever and they're they're going to reign forever and and and they're going to clean up the government, do everything.
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And then and then the other side on the left it was like they're going to have the most massive blow up and they're going to be at each other's throats and they're going to hate each other, right?
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And it's like what actually happened?
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Like seems like they kind of did some work together.
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They like worked on a project together.
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They did a group project. School project. School project.
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And like they seems like maybe they're still like kind of friends and kind of chilling, but also Elon's like I got other stuff to do.
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I think that Tesla Model Y is still parked outside of or or it's a S. Cybertruck or S Model S.
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You know, Trump got the red Model S front. Yeah. Yeah.
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I'm Yeah, it doesn't seem like a blow up entirely.
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At least not from Trump and Elon. They seem to get along.
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Although Elon did say like he's kind It seems like Elon's more like disillusioned with government overall because he said he's not going to be donating again and that and that it seemed like like there were so many special interests that once he got into the swamp, he's like it's just too swampy.
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It was like me with my HOA.
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bought my bought my house, went to the first HOA meeting being like, "Oh, this is a brand new excited.
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I'm going to revolutionize HOA.
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There's so many obvious things that we could do to improve, you know, the operations of the neighborhood."
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Realized very quickly that that there were some major, you know, I think you weren't chaotic enough.
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You should have launched like an HOA coin immediately. Yeah.
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Really, really, really shook things. Shook.
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Nobody's building at the intersection of HOAs and crypto. No, no one is. No one is. Whitespace. Long leg. Get on space.
5:43
Um anyway, the the the Democrats are taking a little bit of a victory lap.
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Democrats took credit for Musk's decision to leave uh Washington, arguing that the extensive litigation and public pressure surrounding Doge forced his hand.
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He lost Democracy One, wrote Norm Eisen, a co-consel for the House Judiciary Committee during Trump's first, which is interesting because as a special government employee, his tenure was limited to 130 days and he's leaving at the end of that. Yeah.
6:09
So taking a victory lapal that's like saying you hired a contractor but also that I I I don't know I feel like that that 130day thing like we're kind of hearing about that for the first time now like that wasn't the way it was messaged beforehand.
6:22
It was definitely messaged like Elon's going to be part of this team for four years like like expect Doge to go on a generational run here and do a lot.
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It was not like, oh, Elon's, hey, just to set you just to set the record straight up front, he's gonna be in for 130 days, so like, let's see what we can do then.
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Like, like I I this is the first I've heard of the 130day thing.
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So, it feels heard of I heard of that from another guest that we had on the show who is a special government employee and and he had messaged it to me like, oh, I'm it's just a sprint. It's a sprint. Okay, interesting.
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And that was kind of core to the Doge strategy from the very beginning is special government employees that are on these sort of shortened stints. Yeah. Yeah. Yeah. That makes sense.
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Uh so what did he actually do while he was in Washington?
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Asks the Wall Street Journal.
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Musk came into the government with bold plans to spat to slash spending by as much as two trillion in rapid fire succession.
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Doge and Musk dismantled agencies such as the US Agency for International Development and the Consumer Financial Protection Bureau, leaving thousands of federal employees out of work.
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Musk and his Doge team emerged after Trump's inauguration with a series of shock and awe moves that rattled the federal workforce.
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Um this the subject uh he sent an email to a lot of government employees, Fork in the Road, the same line Musk used in a 2022 email to Twitter employees shortly after he took over the company and renamed it X.
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Tens of thousands of federal workers took the offer um to I'm gonna send an email to the team tomorrow morning with the title fork in the road and it's do you guys want bacon or steak breakfast.
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You're going to get that. It's great.
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Uh Musk promised to slash the federal wedge by trillions of dollars ran into the wall of non-discretionary spending programs such as social security and Medicaid.
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Uh Doge said it had saved the government 175 billion from a combin combination of asset sales, contracts, lease and grant cancellations, workforce reductions, and other moves made since January 20th inauguration.
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So it seems like maybe a decent outcome. I don't know.
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It's like the you know better to not waste that money, but yes, it doesn't write it doesn't correct the budget and so it it's not bill you know increases it dramatically.
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So, it's not it's probably like better to have done some of that stuff than not, but the real question is Social Security and Medicaid.
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And so, the answer to that longevity drugs, move the retirement age to 95 solves all of this. Let's get Brian Johnson. Brian has his way. It'll be 150. Yeah. Yeah. That stay grinding.
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It would completely change entitlements if uh if people could work longer, but very unpopular to ask people to do that. Big news.
9:03
We have Bology in the studio.
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Uh we're going to bring him in, talk to him about for about 45 minutes.
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Uh take his temperature on what's going on in crypto.
9:13
Uh I want the update on what he's up to and really just take us on the whirlwind tour.
9:18
We're going to get to the bottom of what happened in 1971.
9:21
We're going to get the final answer. It's been hotly debated.
9:23
We're going to figure it out right now. Debate will be over. Let's bring in Bology. How you doing? Good to see you. Good to see you guys.
9:32
It's amazing having you on the show.
9:32
Um, can you give us just the update on uh what is your day-to-day like?
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I'm familiar with some of the prehistory, but what are you working on?
9:41
What are you most excited about right now? Sure.
9:44
So, I actually can I project here? Yeah, please. Is it possible?
9:47
Yeah, you can share your screen. All right.
9:48
So, uh uh about in Q4 we just opened something I'm calling network school. Yeah.
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Can you guys see the opening day shot there? Yep.
9:59
So, that was the kind of ribbon cutting. Cool.
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And uh this is something that combines a bunch of things I care about.
10:05
Here's like uh the site is atns.
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com and actually do by the way a fantastic domain. Thank you. Thank you. I appreciate that.
10:14
You guys are connoisseurs also.
10:15
Yeah, we have a fourletter domain.
10:16
You're kind of destroying us at the twolet domain. You mogged us.
10:19
Well well uh I we will uh you know I I I still two you know you're in the uh the four club or something. I guess I don't know.
10:27
The poor characters club, right? Okay. Yeah.
10:29
So, so break it down for me. I saw a 100k fellowship. I also see a school.
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Uh, typically I have to pay for school. Are you paying me? How does this all work? Right.
10:38
So, this is essentially there's several things that are happening at the same time. Sure.
10:43
Like obviously traditional academia is basically over as we know it.
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It's about 10 different things hitting it at the same time.
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Um, and uh it's, you know, lost trust and credibility and so on.
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And uh, you know, what we've got here is we're doing global meritocracy. anybody from anywhere.
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Obviously, Americans are welcome, but anybody who's what I call internet first is welcome, right?
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So, if you're, you know, pro Bitcoin, if you're pro cryptocurrency, smart contracts and so on, you're pro AI, you're pro biotech, pro- nuclear and whatnot.
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And that those kinds of people exist all over the world and uh and so we're bringing them here.
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And so, global meritocracy basically and uh there's there's Vitalic, Brian Johnson.
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Can you see the video on? Yeah. So, this is it.
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Basically, we're actually doing the startup society.
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So, that's what that's what network school is.
11:29
There's much more I can say about it, but that's that's the uh that's the idea. Okay.
11:31
So, uh walk me through the actual experience of joining. Is this cohort-based?
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A lot of these new education initiatives.
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Very few of them have just jumped straight to we're going to replace a four-year experience.
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And I don't know if that's because the four-year experience is fundamentally broken.
11:48
There's a lot of things that are potentially broken about higher ed.
11:50
Um, but what is your view on just the length of time that it takes to get whatever you need to out of academ academia or schooling generally? That's right.
12:02
So, uh, well, very good question.
12:04
This is a long long topic, but just to to to level set, you know, I actually spent, you know, 10 years at at Stanford.
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I was I was an undergraduate graduate.
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Uh, got my MS in chemical engineering, BMS, PhD electrical engineering.
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I taught computer science and stats there.
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I I'm a research scientist.
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I have 5,000 plus citations.
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I blah blah did genomics, taught, you know, computer science and so on at Stanford.
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So, I know academia fairly well.
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And in fact, I thought for the first, you know, I don't know, 10 years or so of my adult life that I was actually going to be a professor and then I, you know, started a genomics company and, you know, basically became, you know, got into tech.
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Um, and my view is there's many things I could say about the four-year uh, you know, college education.
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But, uh, one issue is it's like front-loading all the cost to the beginning and then there's zero budgeted for maintenance over somebody's life.
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So, it's as if you paid $200,000 for a car and then zero for oil or gas or, you know, wheel changes or so on for the rest of life.
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And so people get this expensive education and they forget all of it just a few years later.
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Um I'm sure if you gave test retest you know stats and looked at what percentage they actually retained.
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We know all the stuff about space repetition.
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Um we know forgetting curves and so on.
13:17
So basically the education is gone and what you really want is something that's like continuous education over the course of your life where you know then like for example VO comes out or um some new API comes out.
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What you want is to be able to quickly load that into your brain, be productive, and to have some budget every year in a continuous sense as opposed to um you know like a like a upfront forget everything sense.
13:43
That doesn't even get into the fact that you know unless you've been in the world of work, you don't actually appreciate how amazing it is to have just time to purely study.
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You have to learn everything on the job.
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Um it also is something like frontloading the vacation and getting all these kids at age 18 into like a lifetime of student loan debt.
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debt. There's many many things wrong with it but that era is ending and then what's next like my view you know why why am I doing this in part because you know how well actually we get right into it you know how America started loosely party it was actually America
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was started by the tech and the bro forming the tech let me explain okay so amazing okay here's why Massachusetts Massachusetts was the tech and Virginia was the bro okay there we go there we go So for those who don't know like Massachusetts, the Massachusetts Bay Colony that was the Puritans they
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founded Harvard in the 1600s when you know it was actually just a one room schoolhouse basically a one room one room place right it was a very very small thing very modest at the beginning the Massachusetts Institute of Technology was founded about 200 something years later but basically
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Massachusetts always been the center of like higher learning education and so on in the US in Virginia the Cavaliers you know they were the they were the bro they were muscular they were on horseback and you know they like to shoot things and so on. And actually
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And actually Virginia was the most important state during the American Revolution and a lot of the early American leaders came from Virginia.
15:07
That was like the founder CEO archetype, right?
15:09
And um both of these were actually different factions that at different times won and lost in the English Civil War of like you know 100 something years earlier.
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The Roundheads went to Massachusetts.
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That was like the left of of uh England.
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And the Cavaliers were like the right and they went to to Virginia.
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Anyway, so they basically when when the right and left were working together, that was the tech and the bro, right?
15:32
And that's what made America really great when they were working together.
15:35
Now, of course, not as much.
15:37
Let's say you have a husband and wife and they have kids and they have and and one of one of the adults, you know, wants to participate in the network state and the other parent is like, well, sorry, the kids are in preschool and ripping them, you know, like that that that feels like um a large part of the people that you would want to recruit over time.
15:55
Uh and I and I can imagine exactly what your kind of answers to that would be, but I'd love to hear it from you. Sure.
16:01
So, so first of all, um, you know, like my vision that receive is definitely familyfriendly.
16:07
Um, with that said, you know, who who moves and who moves at what times, right?
16:12
So, typically people move for education or employment and they usually move in their 20s and so on and so forth.
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and so forth. And once they're anchored in territory, they tend to only move if there's like a, you know, a job for both husband and wife, for example, uh, or if they're like refugees, like things get blown up, like in Ukraine or or in, you
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know, Middle East or what have you, or if they're like refugees from, for example, blue states where the policy gets so bad that people just uproot and move and there's like muggings or, you know, something like that, syringes, etc. like a lot of people left blue
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etc. like a lot of people left blue states over the last you know five years as you're aware because of that in part and I know some people say things are getting better or whatever but like you know at least in some places but I think in general that that exodus is still there um that's also actually how the US itself was populated at the beginning
16:59
there's two different forms ways of founding startup societies and they're complimentary the first is the wild west frontier kind of thing where you have single men coming out but the second actually the Puritans had quite a few married couples coming out but because because they had an ideological or religious motivation and then you also had waves of refugees from Europe. There's all kinds of crazy wars in
17:15
There's all kinds of crazy wars in Europe like the revolutions of 1848 or you know famine in Europe like the Irish potato famine and that also brings you know like like people out right but uh so so the answer is like um there's only so much you can do at the beginning in a sense you know how Dropbox started as an individual product and then it became a product for small teams and then for enterprise. Yeah. Yeah. Yeah. Right.
17:36
So in the same way like you first kind of have to build a product that works for like the individual remote worker then maybe the couple where it's a two-body problem then like you know the early family then the scaled up family then like the whole community of people who are moving together or the whole startup that's together and so it's just like think of it as kind of going from individual to SMB up the ladder like that.
17:58
So you definitely want families and we actually have a lot of people who brought families.
18:01
Um but the the product for families is itself a product just like Apple has a family plan for example.
18:07
There's new permission structures and so on account structures and stuff you need for family.
18:10
So it's I like how you explain this in productled SAS terms. That's great. That's great.
18:17
No I'm on the Tech Bros podcast so I'm speaking. No.
18:21
I and I I totally buy that it's okay for these to be initially be frontiers and sort of kind of establish um base camp effectively and then then bring more people in over time. Yeah.
18:31
On on the Bitcoin uh thing, I I I imagine that Bitcoin could be kind of the gold standard for many network states if they opt in.
18:40
Um the interesting story that I've been toying with with Bitcoin is that uh that the narratives have shifted.
18:47
Bitcoin promised a few things.
18:50
It didn't deliver entirely on all of those.
18:52
It wasn't entirely anonymous.
18:52
Uh it wasn't entirely used for transactions, but it's become a fantastic store of value and that's kind of where it landed.
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Do you think that that that that that's the correct story of Bitcoin?
19:04
And do you think that crypto projects is there a pattern of this like shoot for the moon, you'll land amongst the stars?
19:11
it's okay to kind of build towards like a threepronged amorphous future because if one of them hits you could still wind up with with a fantastic power law outcome. Oh yeah.
19:19
I mean like I think I think it's the only way of doing things.
19:23
Um in sense of it's kind of like people who there's some people there's one guy who named who like critiques like Elon's self-driving schedule.
19:34
He's like he promised it an X date and it only arrived like like a year later. He sucks so much.
19:38
And and I'm like, you know, like I think uh Elon is saying like Tesla or you know, SpaceX, they turn impossible into late. Yeah. Yeah.
19:50
You'll take that every single day obvious in my view obviously, right?
19:51
Uh the um I want to answer to to your point.
19:57
So the way I the way I think about Bitcoin is maybe the obvious way, but it's digital gold, right?
20:00
That is to say, it is infrequently moved onchain.
20:06
um it stores large amounts of value and it actually serves some of the purpose of gold reserves where like you sort of want to show on chain that you have it.
20:15
It's almost like meant to be public in some ways, right?
20:17
And then the various kinds of features that people have wanted to add over time to Bitcoin.
20:21
wanted to add over time to Bitcoin. The problem is that like gold should be as immutable as possible and mutability is in conflict with I mean programmability is a good value and immutable is a good value but those are like uh you know fire and water they don't mix right there's there you know you want a drink of water and sometimes you want a hot fire to keep you warm but you don't want
20:42
them in the same thing then you get nothing right so immutability Bitcoin's immutability its stability and its predictability think of it as locked right and then what happened was privacy went to like Zcash and zero knowledge uh you know tornado cash which is now legal again and so on and and zero knowledge is booming zero knowledge is one of the big things that people are underpricing
21:03
I think cool bitech arguably another and so on um then uh number two is uh programmability but smart contracts that went to Ethereum and Salana and whatnot number three transactions um you know as digital cash that went to stable coins USDC USDT uh and then other kinds of things like storing data on chain and you know like like uh using as an oracle that went to other stuff like chain link and and other kinds of things and then
21:31
uh you know basically other other functions like uh onchain data is NFTs just like onchain code of smart contracts that that went to NFTs so all of these things that were initially contemplated did happen just happened on other chains that could tolerate the risk because you know you have success and failures then and Bitcoin couldn't tolerate that risk Bitcoin was locked. Yeah. Yeah. Well, uh, with the zero Yeah. Yeah.
21:49
Well, uh, with the zero knowledge stuff, I I haven't been tracking it as closely most recently.
21:55
Uh, are you waiting for, uh, engineering challenges to be hurdled?
22:00
Are you waiting for, uh, just more code to be written?
22:04
I understand that it's incredibly complex code, some of the hardest programming software, or is it more on the customer adoption side?
22:14
We're ready for on-ramps of kind of the masses, but it's just going to take time for people to build the the bridges to actually make these new ZK products uh just lovable and like you know well first just to explain what zero knowledge is.
22:29
Zero knowledge arguably is and Vital also made this analogy.
22:31
and Vital also made this analogy. ZK arguably is to crypto what the transformer is to AI in the sense of it takes a bunch of things that were previously special case stuff and it puts it into kind of a common framework where um you
22:45
can like lots of special case subutines um can now be general case to to very to oversimplify and um what that means is you can develop ZK protocols that uh for example you know ZKYC where they just prove what is necessary for a government to be satisfied that this is
23:06
a real human being and nothing else right um and that's necessary because look at these you know these KYC attacks on like you know Raj of Salon and other kinds of people right like the modern form of KYC is where governments force companies to store giant honeypotss full
23:22
of sensitive information and then the governments themselves are often hacked like the OPM hack and so forth so that's one aspect of where ZK can come in and be the solution Um, another thing is that ZK is actually used as a compression technology. So,
23:35
So, for example, ZK roll-ups, um, not just a privacy technology.
23:39
And so, this stuff is actually already there and it's being deployed and it's working.
23:43
There's ZK chains and so on.
23:44
Um, it's it's one of those things where is it consumer visible? Maybe not.
23:49
But I think um I think it's just a really important technology.
23:53
It might never need to be consumer visible is what you're saying. I mean, that's right.
23:56
But but what it does basically mean is there can be sort of magical things where um you can prove what you need to prove. Yeah.
24:04
Without giving up anything else. Yeah. Right.
24:07
You can that's way a lot of KY KYC stuff works right now. I scan my ID.
24:10
Most people don't know that there is a machine learning algorithm with computer vision in there that's reading the ID and checking it with a database.
24:17
Uh people just know, hey, I scanned my ID and I got KYC.
24:21
it could be a lot easier and it could be more resistant to hacks and leaks, right?
24:26
What you want you want is something like SingPass or Estonia's digital ID where it's like an app on your phone and that's your ID card and then that can do a zero knowledge handshake with something else, right?
24:36
As opposed to like a piece of paper like physical card, you know, how are you feeling about coins these days?
24:41
Uh how are you feeling about stable coins these days?
24:46
I feel like there's an immense amount of energy and excitement.
24:48
Um, but it's but they always feel a little bit misaligned with the folks who are like, "Let's get off the dollar.
24:55
Let's, you know, you know, we don't we we we wanted to move away from that system and we're kind of maybe rebuilding it."
25:01
Um, how how are you feeling about stable coins? Are you optimistic?
25:05
Is there is do they play an important role in your vision of the future? Uh, yes.
25:10
Um, though uh I think well, so let me actually show you guys something. Ready? Here is a fun video. Okay.
25:20
Can you see the screen there?
25:22
Stable coin video is dropping right now. Let's see. Uh oh.
25:24
Coinbase and circle announced launch of USDC digital dollar. Yes. October 23rd, 2018.
25:28
And so, guess who's there? Were you behind this? That's amazing. Lore. This is great. There he is. I remember this video. Yeah.
25:39
I remember thinking like, oh, I don't really understand this. But now I do.
25:44
So, you were So, you're This is a long way of saying you were early and right.
25:47
you were super long stable coins, but I've heard it's hard to make money.
25:49
Let me just show you just to underline here is the market cap of USDC, which is now $60 billion. Yeah. Wow.
25:57
And on October 3rd, let's see if I can get the cursor. Bang. What's it? What's it say? October, 2018. Can you see that? Zero.
26:03
Uh I can't see that, but um I I can see the broad chart.
26:09
But uh congratulations for being early. You're always early.
26:11
Uh where are we going in the future with stable coins?
26:15
uh how important are they going to be?
26:17
Because it still feels like there's a little bit of tugof-war with like we're staying on the dollar.
26:20
We're not really moving and new legacy financial institutions seeing that we're in a friendlier regulatory environment seeing the product market fit of stable coins now wanting a piece of the action like when people when the Wall Street Journal reports like the dollar fell in value like the stable coins also fell in value, right?
26:38
And so it solves some problems but not all of them.
26:40
So what what's your take? Right.
26:42
So, well, the term stable coin obviously is historical because it was stable relative to Bitcoin. Sure.
26:47
Um, I think you could sort of separate that out into two things, like a fiat coin and a flatcoin. Totally.
26:53
Like a fiat coin is something that's an onchain mirror of fiat offchain. Yep.
26:56
And a flatcoin would be something that actually retained its purchasing power over time. Yep.
26:59
And that's much harder to do because you'd have to maintain its stability against bread and PlayStations and whatever.
27:05
And if there's an actual shortage of those things, then price might increase for no reason other than than uh you know other than actual physical shortage.
27:14
So but keeping the historical name uh stable coins are so first why are they useful?
27:22
Well, at a minimum they're better international wire transfers.
27:24
Yeah, that alone justifies their market cap. Totally.
27:28
Um that's like tens of billions of dollars in Marquette because they just save you from $25 and more importantly, you know, banks are only open like 9 to5 weekdays, right?
27:36
So like from 40 hours a week uptime to 168 hours a week, which is 247 uptime, that's worth a lot.
27:44
Imagine if websites were only up 40 hours a week, right?
27:46
Um so just that alone, the ubiquity, internationalization, then you add programmability and so on.
27:53
When people say, "Oh, why just put a dollar on chain?" That's why, right?
27:56
That's why they're they're valuable, right?
27:58
And the space is partitioned in an interesting way and I think many other things will partition this way into like a US and a global, right?
28:05
Like the USDC coin or the USDC asset is like US regulated and then USDT is like intentionally non- US regulated, right?
28:13
So like there's like Coinbase and there's like global exchanges and so I think that'll be a common partitioning of of of many kinds of markets.
28:22
Um and so uh so that's that's justation for why I'm bullish.
28:25
But now on to your specific questions.
28:27
Uh I think that one of the things once you've got something on chain, it can just be easily swapped, right?
28:34
And so now that USDC is there, you're going to have probably every other fiat currency up there and what have you because it's become so mainstream and whatnot.
28:42
Uh but when that happens, you get an interesting thing which is similar to launch of Google News in the mid200s.
28:48
As you may recall, all these newspapers put their newspapers online in the late 90s and early 2000s.
28:56
Then when Google News launched, it suddenly showed that the Desmoins Herald and the San Francisco Chronicle and NT WPO, you know, Miami Miami Tribune, whatever, were all basically printing the same stuff.
29:08
There was some custom stuff that they had in their own markets, but most was just reprinting the AP, the newswire. Yeah, newswire.
29:15
And you could see this on Google News.
29:16
It's like 173 other outlets printed the story.
29:18
It's all the same story every time. Yeah. Yeah.
29:20
And that's because those newspapers, they had trucks and they had, you know, used to say, "Never argue with a man who buys ink by the barrel.
29:28
Now, never listen to a man who still buys ink by the barrel." Lol. Right.
29:31
Because, you know, I love it.
29:33
You know, are you buying any ink?
29:35
You know, I mean, I actually like pencil and paper to write, but not to print. Right. Not certainly not new. Early days. We went through a lot. Early days.
29:42
Never fight with a podcaster who live streams for 20 hours a week. Something like that. Exactly. He'll just beat you on. Exactly. Yeah. the modern version. That's right.
29:49
That's right. So, so point point being though that they had these geographical monopolies that suddenly they put their stuff online and there was a delayed reaction and suddenly they realized wait a second every newspapers in competition
30:00
with every other newspaper and so of course all the local ones without any brand basically just all died and only the national one survived and they became much more ideological and the new partitioning of information space was on the base of ideology not geography. So
30:10
So you've got the, you know, Jim Bros and you've got like people are interested in, I don't know, um, various political causes, you've got crypto causes, you've got things sectioned by vertical rather than geographic, horizontal, ideology rather than geography. Okay.
30:26
So the same thing is going to happen with assets.
30:30
And the reason is first you've got these um, fiat currencies that are put onchain. Mhm.
30:34
And then we're we're we're nearing something which I call the DeFi matrix. Mhm.
30:40
And the DeFi matrix starts with observation that fiat fiat can be swapped like forex, but fiat crypto can also be swapped like USD BTC and crypto crypto can be swapped like BTC ETH and of course crypto can be swapped for NFTTS and all kinds of this crazy manager of digital assets now out there.
30:57
So you visualize this giant square of every asset that can be traded for every other asset.
31:00
And there's amazing numbers of crazy financial machinery out there now that will basically do the complexity of finding buy and seller pairs, you know, like unis swap and market makers and so on behind the scenes for this swap.
31:12
What that means is that whatever asset you have, you have less need to get into a fiat currency.
31:19
You can just hold that asset and then when you want to, you just liquidate it for whatever asset you want at some fee. Okay.
31:26
What I mean by that is what what do people call it?
31:28
do people call it? What's what's a hybr way of saying when you sell your company you get a liquidity event liquidity event that's right that's a that's another term of talking about cash is liquidity cash is universal barter cash can be traded for anything y but now anything can be traded for anything
31:43
which means there's less need for cash right and so all these countries will wake up one day and they'll find wait a second just like the newspapers we had a geographical monopoly on our fiat currencies but now we don't and we're competing in this global marketplace of all these other cryptocurrencies as well as really big fiat currencies, right? And uh then they're going to have to
32:03
And uh then they're going to have to compete just like you know the information environment you compete on ideology rather than geography.
32:07
Then the in the transaction environment you have to compete on features not um places right so for example privacy coins or smart contract coins and so forth.
32:20
You you compete on the vertical as opposed to the horizontal of Francecoin which is a franc and Japancoin which is JPY. Right?
32:26
And it's a funny way of putting it, but that's that's like what they are, right?
32:29
So, I'm not saying there isn't any utility to geography, but especially given that so many of these things, what have people done?
32:36
All these countries have gone cashless, right?
32:37
Cash, physical cash was actually something that tethered people to geographical area because you needed to actually hold it and it was issued there and redeemed there and so forth.
32:46
Once you go digital, you don't have to use cash anymore.
32:49
And many people have, for example, crypto cards where they can hold in one currency and spend in another.
32:54
currency and spend in another. and it just Apple Pay or whatever just works you know that people don't know right so stable coins are an intermediate form that facilitates this transition from the you know fiat world to the pure crypto world kind of like putting newspapers online was an intermediate form and just like there was a whole
33:11
battle in the 2010s where newspapers at one point felt threatened oh my god I mean not at one point they still feel threatened but they fought this whole battle of the bulge counterattack on social media tried to take away your voice my voice everybody's voice but they lost you know what ex you know you know what I call When Elon took over X, you know what I call it? What do you What do you call it? X day. It's like D-Day, right?
33:31
All the good guys amassed $44 billion for like the Normandy landing. Boom. Right.
33:38
Like this, you know, because all it was still technically illegal.
33:39
They were like, if you want your own company, why not build one or whatever to get free speech back?
33:45
Remember those kinds of lines of argument prior to right22?
33:49
And then Elon basically gathered the forces and every tech guy like some Marvel movie, you know, put in a mill, a bill, 5 mil, whatever they could afford. Pass the hat around.
33:59
I mean, $44 billion in cash.
34:01
It's like a non Go ahead. Yeah. No, no, it's just funny.
34:04
Passing the hat around and Morgan Stanley puts in 13 billion in debt. It's kind of classic. Yes.
34:08
Yes. So every every center right centrist center left in some cases person who right just just p piled because Elon obviously was the man but so many people backed him right and this was something where like you know Thor landing with a hammer boom like this
34:27
right all of these communists just fly back against you know the walls all these wolves just defeated like this and X day right now what that actually also meant was a Tower of Babel kind of moment because Twitter no longer exists. There's X, there's Truth Social and Gab
34:41
There's X, there's Truth Social and Gab and whatever all all on the right and there's now there's Blue Sky and Macedon and threads and Tik Tok on the left and there's the crypto networks like Noster and Lens and Farcaster and so on. Right.
34:54
So, you have a Taro Bale moment where Twitter has been shattered.
34:56
Anyway, this has been fantastic.
34:58
Bology, thank you so much for stopping by.
35:00
You're welcome to come on and screen share with us.
35:04
Up next, we have Chris Dixon from Andre Horowits.
35:07
First, let me tell you about RAMP. Time is money. Save both.
35:08
Easy to use corporate cards, bill payments, accounting, and a whole lot more. All in one place. Go to ramp. com to get started.
35:16
Um, and, uh, very excited to talk to Chris.
35:19
Uh, obviously extremely storied investor, top of the Midas list, uh, early Coinbase investor, continual Coinbase investor.
35:26
We got Brian Armstrong coming on later to tell his side, the founder journey of Coinbase.
35:32
that uh Chris has been all over the place in crypto for a decade, 15 years, 20 years.
35:37
I think he invested in Bitcoin back in 1994. And right. Yeah.
35:38
A lot of the people that we're having on today were early and right. Yep. Yep.
35:42
Good thing to be Chris, welcome to the show. How are you doing? I'm great. John, good to see you. Good to see you.
35:48
An early silent investor. Yes. Yes. Um good to see you guys.
35:54
Congratulations on all the success with the show. Thank you. Thank you.
35:57
Yeah, it's been a lot of fun.
35:57
Um where should we start?
35:59
Can you give us a temperature on the crypto markets?
36:01
It's been um up and down.
36:04
Let them take a victory lap. Take a victory lap. Let them take victory.
36:08
I feel like you get I know the job's not finished, but they they always twist you and twist your arm into doing podcasts when the market's down and saying, "Oh, you got to hold you accountable."
36:17
And then and then and then where is Cara Swisser calling you when the market's up?
36:21
You know, that's a good point. That's a good point.
36:23
By the way, can you guys hear can you guys hear me? Okay. Yeah. Yeah. You sound great. Okay, great. Um yeah, good.
36:26
I mean it's uh it's yeah it's been a it's been a long uh journey as you guys uh pointed out.
36:32
out. Um I think that uh you know we had a lot of challenges the last uh four years uh regulatory challenges with the last administration and that looks like it's trending much better now with the new administration is sort of more pro tech and I think we have a lot of momentum in Congress um and that's a big
36:48
deal because that created a lot of headwinds um so that's great and uh and then also like the kind of core infrastructure and we can I don't if you guys want to talk more about it but like you know the like so for example one of the things happening right now are stable coins are really taking off so like last month it was something like
37:03
two trillion in stable coin volume which is more than trill with trillion with a T which is more than Visa um and so you know quite a lot of volume and that a lot of that's due to the fact that the infrastructure so Salana Ethereum and so forth has gotten really good yeah um so you can now send an arbitrary amount of
37:20
money anywhere in the world for under one penny in one second but that took years and years of work investment uh you know founders technical folks doing a lot of work so that's great um and so there's a lot of good things I I think that um you know there's there's a lot of challenges too but but uh but overall it's been uh it's been fun. Do you think
37:37
Do you think that the narrative around stable coins is still going to morph into micro payments for the internet?
37:45
Ben Thompson was talking about this with MCP.
37:46
It's not in the standard but you could easily imagine that getting worked into the second version of the standard.
37:52
At the same time obviously just global remittances has always been a huge category.
37:57
category. it is the one category that I used stable coins for years ago and it it felt very real in that moment even while people were were saying oh this is useless it's it felt like okay this is the value um but I'm interested in like kind of the next application of stable coins and then the one after that yeah great um so I think just maybe briefly
38:14
the way to think about stable coins is today we don't really have a global payment system or global financial system we have you know 195 countries each one has many different banking systems when you send money uh to another country like I say you wire money like We've had this experience at the firm where we wire investment and it ends up going through like a bunch of humans and paperwork. It's really just a
38:32
It's really just a mishmash of systems.
38:34
And so the way to think about stable coins is similar to how for those who are old enough to remember text messaging was like this at one like in the 2000s.
38:41
You would send a text message and it would say you don't have a plan to send to Canada. You got to sign up.
38:46
And it was all these different systems.
38:47
And then WhatsApp and FaceTime came along and they built this sort of what they call over the top global network, right?
38:52
So think of sort of stable coins and blockchains as an over-the-top network.
38:55
It's a it's from day one global um low fee, credibly neutral, programmable uh payment system that just sort of works everywhere.
39:03
That that's kind of the simple way to think of it.
39:06
Um and so as you mentioned um you know one of the obvious benefits is just crossber and that's where a lot of the uses are right now and so for example like SpaceX has a program where they move you know they'll sell a Starlink in I think it's like some south like Brazil or something and then they'll immediately you know use stable coins for so-called treasury management.
39:21
This is one of the kind of growing use cases that that folks like Stripe will talk about.
39:26
Uh remittances, you're sending money back home um uh you know from from the US to you know whatever some developing country um countries where the currency is volatile and they want access to dollars or euros.
39:37
Um and then as you mentioned John the the idea that because and actually I encourage those who are interested to go listen to the Collisons.
39:44
They were an all-in podcast a few weeks ago talking about this.
39:46
what they're actually say they're really excited about is less the low fees and more the programmability as you just described.
39:52
Um and so you can do so this is like one obvious thing is you know invoice fraud.
39:56
So people will send you know these these faxes type things that's really oldfashioned where they'll say like here's my wiring instruction and if you guys if you've done this you'll say like please make sure you call first but of course calling doesn't work in an age of AI because it could be a fake voice. Mhm.
40:09
Um and so you know what what Stripe was excited about is that because blockchains are programmable, they can have a full kind of reputation system on top.
40:16
So they know like this is a valid place to send money to for your invoicing system, right?
40:21
So you can program it as you mentioned micro payments, right?
40:23
Now that you can send money for one penny, that unlocks a whole bunch of use cases.
40:28
So machine toachine payments every time you're doing an AI API request, as you mentioned, MCP, right?
40:32
So like why should MCP I would expect would have down the road a payment standard, right? And AI agents.
40:37
So you imagine a world which I think we're headed to pretty soon in a couple of years where you have all these different AI agents running around.
40:43
I'm hey I'm advertising I can program I can I can write your essay for you.
40:48
I can you know do your homework whatever and they're all sort of advertising their services.
40:51
And then you sort of imagine other agents coming along and negotiating and and you know pennies getting transferred back and forth and this big kind of you know economic um uh you know kind of mishmat like kind of collection you know uh on top.
41:06
of the web moves from like these kind of sign up forms to agents sending money automatically and we think that would be powered by most naturally powered by a global uh you know low fee programmable system like blockchains. Yeah. Yeah.
41:19
How has I'm super curious to understand how uh your guys' lobbying efforts have evolved over the past 6 to 12 months.
41:28
We went from, you know, uh, a sort of, um, coali, a a large coalition of people trying to basically, you know, block crypto from getting real adoption and traction in the US to suddenly ETFs being approved and things like that.
41:44
And I imagine that's kind of changed your guys' strategy on the hill.
41:47
So, I'm interested to hear how that's evolved. Yeah.
41:52
So, that's a So, I' I've been doing uh, you know, we sort of I I saw Mark Mark Andre on on you guys.
41:56
I think it was a week or two ago.
41:58
I watched that and um he was talking about a little bit.
42:01
Mark and I have been very involved in this and and by necessity originally like four or five years ago um and then and then over time realized just how important it is to engage.
42:09
They say in in Washington they like to say if you are not at the table you're on the menu. Yeah.
42:14
So so you you don't want to be on the menu.
42:16
So, so, uh, you know, I've been going sort of like once a month and Mark has too and and just and really just kind of trying to explain our our perspective because we feel like, um, the the interests of startup like so start most startups don't have the resources to go to DC, right?
42:29
And of course, big tech companies do and big banks do and all sorts of other big entities do.
42:36
And so our kind of logic was um that we're one of the few entity you know kind of organizations that has enough scale to have a government affairs team um who represents the interest of interest of startups.
42:46
And so we go and we say look we represent small companies and here's what they're interested in.
42:50
So for example they they want to have clear guard rails and rules around blockchains.
42:54
They want to have uh they want to have open source AI.
42:56
That's another really important issue to us.
43:00
Clear rules on like AI and copyright.
43:02
There's a series of things.
43:02
There's a series of things. um you know having a single federal framework and not a 50 state laws on a lot of these things and so forth right and so we go and we kind of advocate for that um we've taken a bipartisan approach from the beginning um we think that's very important I mean look just one is to get
43:16
we think the way you really build industries is legislation if you think back to the internet that was built on really on the 96 telecom act if you know and had things like section 230 which you know you may know is now a contentious issue had section two I like to say if section 230 had been uh you know administrative guidance instead of legislation. It would have been a
43:33
It would have been a political football every four years.
43:34
It was built into legislation.
43:36
And so you could section 230 is what enabled marketplaces, social networks, and so forth to build reliably on the internet.
43:42
So we've always felt that both for AI and for crypto, we want legislation that provides clear rules pass for innovation and and uh and really eliminates or mitigates or eliminates, you know, all all the kind of bad use cases and bad actors.
43:56
And so that's always been our approach. It's been bipartisan. That's the legislation.
43:58
You need bipartisan first of all.
43:59
And secondly, you know, like the Democratic party has like most people sort of think, you know, Republicans are pro crypto, Democrats are anti. That's not really true.
44:05
Like we just had a last week a Senate sort of it was a procedural vote on this stablecoin bill and I believe there were 17 Democrats who voted for it.
44:12
Um, you know, which is significant and I think, you know, our view has been we want to kind of, you know, shift the Democratic party back to the values of Obama and Bill Clinton when they were protect and not sort of the kind of blue sky thing Democrat thing that happened the last years.
44:28
I mean, the interesting thing about the lobbying is that I looked at the I looked at the donation dollars that were coming from crypto aligned people and crypto funds and it was split almost exactly 50/50.
44:38
Like the entire crypto community really did go super bipartisan with the spend and obviously the Republicans won.
44:44
So, it feels like a Republican issue like right now, but I it doesn't feel like it's going to remain that way.
44:49
Um, on the issue of government, I'm interested to know uh maybe stable coins are a good example, but just general crypto adoption.
44:55
but just general crypto adoption. um how do you bucket how do you think about the adoption uh across government B2B or just direct to consumer because when I think about stable coins for example there's people that want to pay people individually but there's so many ways
45:11
that you can just tuck stable coins under some business like with the AI thing if you get anthropic open AAI Google Microsoft using stable coins in an agentic application the user might never know that I'm paying a fraction of a cent to access a Wall Street Journal article it just happens and I'm not even aware. So what are the key drivers for
45:28
So what are the key drivers for the different uh the different constituencies and then the different applications and how do they fit together?
45:35
No, that's a great question and like I have a broader kind of framework I like to talk about. Yeah.
45:40
Which is sort of I I sort of like to distinguish technologies between what I call inside out and outside in.
45:43
And so inside out are things that sort of start with established institutions like AI to some extent is like that you know the iPhone was like this.
45:49
It came out of Apple a very established institution.
45:51
AI came out of you know Stanford and so forth.
45:54
forth. Um whereas crypto very much you know bitcoin started at the fringes right and sort of like open source software and there's you know other kind of tech movements have started at the fringes and it sort of worked its way in right so stablecoin started for the main use case was settling you know crypto trades you know seven years ago or
46:09
something and then over time you started to see more and more like you know payment providers in Argentina for example and that you know sort of more more kind of moving to the center now stripe you know I think of stripe is is very much probably I think the smartest a lot of people think the smartest one of the if not the smartest fintech company is all in on it. You know, they
46:24
You know, they did a billion dollar acquisition bridge to to get, you know, to ramp up their efforts.
46:29
Um, I think the main the gaining factor like I speak to a lot of like bank like what I would love to see is a world where you have banks and, you know, asset management firms and every payment provider as you described John like behind the scenes.
46:39
It's just sort of it's the substrate.
46:41
It's the infrastructure, right? It's like HTP or SMTP.
46:44
It's just this thing that exists.
46:46
Um, a they al a lot of them say we just want like that final, you know, regulatory clarity piece, right?
46:50
because they want that assurance because they're look they're riskaverse.
46:53
We just had four years of kind of lawfare against the industry.
46:56
Um so that's why I think that's really like honestly like I probably spend more than half my time on that now.
47:02
Like that that's just kind of the key.
47:04
There's two just say there's two big kind of bills that we're that we're advocating for. There's stable coins.
47:09
There's one called market structure that's just coming forward in the house now which is also to kind of clarify more broadly on tokens.
47:13
But I think that's the main thing right now.
47:15
I think and I but to your point exactly I don't think most people ultimately will will think of even the word stable coin.
47:20
And I think it'll be like digital dollars um you know that like for the for the average person industry term like ERP people interface that they don't know and like actually but we'll see like like we have a fintech group at the firm that's not crypto.
47:32
I don't if you know folks like I think you've interviewed Anish and you know all those folks um and you know they like crypto but they're not like crypto and they'll tell me now like it's become pretty standard in the stable in the fintech stack that people will use stable coins. Yeah. Yeah, you're sorry.
47:46
One, you're like a three person startup and like boom, you push a button and you got 190 countries.
47:51
That's very different than the old days. Sorry.
47:52
I want to get your point of view on the competitive forces and dynamics right now because we have startups which there's entire subcategories.
48:00
You have hyper decentralized, you know, crypto companies.
48:04
You have sort of hybrid companies like maybe bridge that are kind of sitting in between fintech and uh and crypto rails.
48:11
And then you now have big institutional players that are coming in.
48:15
maybe they brought ETFs to market to start and then now they're thinking about, you know, stable coin applications as well.
48:22
How do you look at the market and and what kind of advice do you give to portfolio companies that are trying to figure out who they are, whether that's fully decentralized or some type of hybrid uh or or or so on? Yeah. Yeah.
48:36
I think that that's a great question.
48:38
I think that I mean the the the you know the the point is not for like decentralization and kind of this new architecture of blockchains for its own sake.
48:45
The point is they have specific benefits.
48:47
So like why why would one build on a blockchain like Ethereum or Salana as opposed to a traditional you know um on AWS like a traditional architecture and the answer is by build you know when you build the way I like to describe it uh most simply is blockchains allow you to build digital services that remove the intermediaries.
49:04
So you remove so for example stable coins you have no intermediaries that are taking fees.
49:07
You don't have the banks and the payment providers and the payment networks right that take the all the different layers of fees.
49:12
So that's an important benefit is you're building these you know you can build social networks without fees.
49:16
You can build games without fees.
49:17
You can build AI systems without fees right without fees.
49:21
It's like very low like sub like couple basis points.
49:24
basis points. I actually have a for those interested I wrote a book read right Own and I have a chapter on take rates where I go through this in detail but it's essentially you're going from like 30% in the app store you know 100% in Facebook and 50% on YouTube to like five basis points or something right so um or you know two and a half% for
49:40
payments and so forth so um so so the first question is why would you want to build on them the other one we mentioned before is programmability you know you can do all sorts of cool stuff on top um and so I think it to your question I think it depends like like ultimately I think of startups is you want to work backwards you want to say what do you want do for the world. What kind of
49:54
What kind of service you want to provide and then you work backwards and you say how do you want to build that? Right.
49:58
In some cases that means you want to build something on a blockchain like a pure service like a protocol we call it with a token and so forth.
50:04
In other cases you want to build more traditional software that maybe like for example like you mentioned that that bridges between a bank and an asset manager and a and a blockchain system. Right.
50:12
blockchain system. Right. So I think it ultimately we think of it through that lens as kind of now as an investor I I skew towards things I like things with for example network effects because they can be very I' my career I found that network effects can be very powerful right you invest in something it grows it kind of has a natural kind of
50:29
defensibility and kind of gets better as more people use it um so there's just kind of different lenses you can look at it I would the last thing I would say is to your to your listeners I know you have a broad audience I think that the crypto space right now the real shortage we have is startup talent um in that there's a lot of obvious good ideas where there just aren't many people pursuing it. Um, so I think it's
50:47
pursuing it. Um, so I think it's actually the opposite problem than most like then you might have an AI right now where I imagine AI it's an amazing technology and and deservingly people are excited as they should be excited about it but you probably for every idea have I don't know 50 good startups pursuing it in crypto I think we're undercompeted like we have under too too
51:04
little competition honestly like so I would say to your listeners if you're a smart person thinking about doing a startup I think there's a lot of white space right now if you're in AI pivot to crypto we heard it here first or do both we love AI it is my how how um are are you I'm sure you're perpetually going to be unsatisfied with the technological progress because you understand the full potential, right? Where where are you at
51:27
Where where are you at right now?
51:29
You know, we had Bology on earlier.
51:31
He's, you know, was was very bullish on ZK proofs and and what's coming down the pipeline there and there's obviously Yeah.
51:37
prediction markets during the election.
51:39
It was like, wow, this is a completely No one was talking about this during the Bitcoin white paper and yet crypto has created something that everyone gets value out of in one way or another. Yeah. Yeah.
51:49
I think I I think we are still, you know, I think of these these technology things always go in S- curves.
51:56
We're clearly still at the sort, you know, somewhere in the bottom of the S-curve.
51:59
Like I think there's just a lot more growth.
52:01
And just like user base, there's something on the order.
52:02
there's something on the order. There's tens most of these applications I'm describing have you know up to 50 at the highest end probably 50 million users which is 1% of the internet so it it's still very early and you know poly market is doing incredibly well but I assume it's still in that kind of sub 1%
52:17
of the internet it's not the internet has you know five billion people now right so we have a long way to go I think a lot of the kind of core infrastructure is now as of a year and a half ago kind of good enough you know I think a lot of these technologies have that characteristic where you have kind
52:30
of you know whether like neural networks only got good enough I don't know whatever circa let's call it you know something in the 2010s because of the you know the moors law and GPUs right and so you know iPhones once you had capacitive screens and semi whatever processors and so forth um I think blockchains I think we no longer have
52:47
infrastructure as an excuse anymore like now it's about building applications about getting regulatory clarity and I think we're pretty far along there I think we have a long way to go fully exploring kind of the IDMAS and all the different cool things you can do um and and you know and then bringing it to billions of people is the goal. How have
53:02
How have you been advising uh crypto emerging managers?
53:07
My my one of my favorite I'm I'm going to kind of butcher the stat, but uh apparently like the the sort of median crypto fund massively outperformed like the median venture fund for most of the last decade.
53:18
And so I thought that that was this beautiful narrative violation because you know people traditional venture would love to poke fun at crypto VCs yet they were sort of like systemically outperforming uh the other party.
53:31
But but what what kind of um general guidance are you giving to uh somebody that maybe was an active trader and wants to get more into the actual you know kind of venture side of the game?
53:44
I I look I've been so you know I've I've invest so I've been investing in in venture funds and crypto funds for a long time.
53:50
just sort of after I sold my first company.
53:52
In fact, Mark Mark Andre and I have done it together for a long time.
53:55
Um, and have been doing crypto funds since gosh, probably 10 years and just consistently and I'm still very bullish and to your point, I think that's probably correct like on the on their, you know, the data like they've just they've done and I think it's just it's just traditional finance in the sense of you have to, you know, non-conensus, right? Right.
54:11
Like as much as we hear about crypto, it's still very non-conensus.
54:15
still very non-conensus. a lot of a lot a lot of venture funds just simply maybe they'll have a little bit of Bitcoin but they'll otherwise they'll rule it out if there's tokens and things um you talk to fund of funds um they a lot of them will say we have a no crypto rule you know sovereign wealth fund so all the kind of giant pools of capital that fund the
54:32
venture world and so it's still kind of this considered this kind of weird sideshow um like obviously the past doesn't predict the future and so forth and we don't know how things will play out but it's still very non-conensus I think from a from an financial investing point of view the broader crypto So I I look I believe that's where the opportunities are in in in venture investing. Um
54:49
Um obviously you have to also be right and so and time will tell but it's I think it's still much more non it's surprisingly non-conensus in the investing world I I think to to this day despite the performance.
55:03
Can you explain a little bit of the dynamic of how venture fits into the life cycle of a new crypto company these days?
55:10
Because there's liquidity available from retail in some cases.
55:15
Um there's some companies that are going to be profitable very early because of their you know uh insane product.
55:22
We had Alain from from Pump on earlier and that's classic example able to be very efficient and I think we've seen uh on the other side you have companies like Hyperlquid that got out and and have a token very early.
55:38
So I'm curious yeah how how you think of the capital life cycle. Yeah. Yeah.
55:40
So we I mean let's see if I can answer that.
55:44
So like one reason we started a separate crypto fund originally like I guess 2018 was so that we could um before that I was doing like crypto investing. Yeah.
55:53
But it would always get these questions from the LPs and like what is this? Is it equity? Is it tokens?
55:57
And so created a separate crypto fund with the basic idea was we have maximum flexibility.
56:00
Um and and we went to the LPs and we said look this is going to be different and here's the idea and here's and a lot of them opted out. Some of them opted in.
56:06
Um but we were very clear up front what it was.
56:10
And so what we what we think of it is we can do everything from we can buy bit buy bitcoin or something just directly which we do.
56:15
Um people see our funds and they assume it's all ventures not like we do a lot of you know just buying like tokens that we think have have um upside.
56:24
Um we also do a lot of we can do equity investments like a coinbase.
56:26
It's just a classic equity investment.
56:28
We have a bunch of those that you know the goal would be to someday IPO.
56:31
Um they could be cash flowheavy ones that that do dividends like the ones you're describing Jordy.
56:37
describing Jordy. like maybe some of those or maybe I don't know what their plans are pumped up maybe they IPO maybe they dividend maybe they buybacks right if you have cash flows you have a lot of options and then the third one which is actually you know one of our core ones is you'll you'll do an equity um a project will start as a as an equity
56:52
investment but then over time we'll launch a token and the equity investors get sort of praa uh rights to those tokens and that actually that's kind of that was sort of the new thing that we really wanted to lean into back in when we started the crypto fund that was a new idea um that you know we helped kind of pioneer that I think um and that was like the warrant structure you guys. Yeah. Yeah. Well, it's basically Yeah, Yeah. Yeah.
57:13
Well, it's basically Yeah, it's very simple.
57:14
It's a term sheet with two extra things that has essentially token rights. Yeah.
57:18
And it can be a warrant and there's different ways to structure it.
57:20
Um and what what's nice about that is it you know one of the reasons startups work so well is that they're max like when they work is that the investors and the founders are fully aligned.
57:29
So before that structure existed, I don't know how deep you guys want to go on this, there were these things called sa safs and like these kinds of things where you do token purchases.
57:37
And the problem is it created all these weird incentives where the founder would try to create a token just to do something.
57:41
What we what we believe very strongly is alignment between the investors and the founders.
57:44
investors and the founders. And so there's sort of this this equity structure with token rights or token warrants is one where if they decide to they can stay an equity company and they can do you know just do traditional kind of go for profits and things or they can
57:55
create a token or they can create two tokens or whatever is best for that service they're trying to create and in in in whatever way that they eventually um decide to you know whatever business model they pursue they the investor will participate kind of parado alongside the founders. What happens to the CC Corp in
58:10
What happens to the CC Corp in that scenario where they launch a token, the token grows and the community and like the the asset is now controlled by the token and the CC corp still exists.
58:20
Are there roles for foundations and nonprofits and and and different transitions that could happen?
58:24
Yeah, it's a great question.
58:26
A lot of times they'll become um they'll just become like kind of one software provider in the network. Oh, sure.
58:31
Like um you know they're so so for example um you know think of the Ethereum Foundation.
58:36
I don't know if you guys know the relationship between Ethereum Foundation and Ethereum. Ethereum is a network.
58:42
Ethereum Foundation, you know, they help make a little bit of software.
58:43
They give some research guidance, but they don't control the network.
58:46
They don't, you know, just like kind of in the same way this is sort of a foundation that has some kind of a bully pulpit.
58:51
Um, sometimes they can have a separate business model.
58:54
Um, you know, so like unis swap is a is a decentralized protocol that we're investors in sort of a a think of it as a decentralized New York Stock Exchange or something.
59:04
Um, that's doing very well.
59:06
that's doing very well. multiple trillions and trillions in volume traded and they separately so they spun off this protocol and then they separately have uh a website that they operate which is what the company does and the website is now I believe it's sub 5% of the volume on the protocol but it's
59:21
still 5% right and so they're just one front end to it and so that I think that's probably one of maybe one of the best examples of what you're asking John that makes a ton of sense Jordan where what are you expecting to see out of the kind of cate real world asset that category over the next couple years. It
59:37
It feels like it's it this year, at least to me, it's felt like we're days or weeks away from some pretty highprofile assets coming on chain.
59:47
Uh I'm curious how you think about the category broadly. Yeah.
59:52
Um I mean, I think of stable coins as sort of the initial real world asset, right?
59:56
world asset, right? is so you have dollars in the bank account and then the next and then and then the great thing about that the kind of adoption there and hopefully all the regulatory clarity we're getting is that will be a natural
1:00:05
stepping stone to you know you have Robin Hood talking about stocks you have Black Rockck talking about you know Treasury bills um wouldn't I think it would be nice if anyone in the world I think it'd be good for the US and I think it'd be good for the world if
1:00:17
anyone in the world could buy you know four and a half% Treasury you know interest treasury bill right and have it secure and easy and permissionless and low fee uh I think it's you know good for our you know the US the popularity
1:00:30
of the dollar and I think it's you know it'd be nice for somebody who has a volatile currency to have access to those um um so you know stocks stocks bonds and then you can imagine you know um all these sorts of so-called dark pools so you know still a large part of
1:00:44
finance is people using Bloomberg and calling each other and a lot of that you know like trading bonds and uni bonds and corporate bonds and things like that there's a lot of interest from the banks to think about ways to use blockchains
1:00:56
uh to create essentially marketplaces there you know maybe permissioned marketplaces where only kind of certain participants can participate for them the benefit is you know why haven't they created a network like a marketplace before because um they you know they
1:01:08
they don't trust each other they don't want like who's going to create it is Goldman going to create it and JP Morgan's going to use it they don't trust each other you know they don't trust startups to do it because then the startup will start taking big fees
1:01:18
they've just sort of kept it informal and and by phone um and so in a way a blockchain kind of solves a political problem of getting these 20 entities or 100 entities ities who previously wouldn't kind of coordinate together. I
1:01:27
I think that's one broader way to think of blockchains is like it's it's like if AI, you know, is solving all the problems in the world that that they need more intelligence, right?
1:01:37
Blockchains try to solve the problems in the world that need more coordination, right?
1:01:40
Or more, you know, kind of collective um uh collective action getting a bunch of, you know, blockchains are fundamentally social technologies and it's about getting a bunch, you know, that's what money is ultimately social, right?
1:01:50
it's getting a lot of people to agree on a standard and to and to use the the same the same systems and tools.
1:01:56
Um, and so similarly with real world assets like that.
1:01:58
with real world assets like that. And then there's other interesting ones to your question like we have one called story protocol a project we're investors in that's putting intellectual property on blockchains um and letting people you know do capital formation and licensing and so forth around you know so you
1:02:12
create a new you know superhero theme thing and someone wants to make an AI remix of it and like how do they AI really important rights and so we think a lot about like in an AI world like how will you know creators get paid how will IP work how will how how will money flow on the internet in a world with abundant content, right? Um, and and I think we
1:02:29
Um, and and I think we think blockchains have an important role to play in that.
1:02:33
How would you like to see the industry and kind of the world collectively try to solve social engineering hacks?
1:02:41
Feels like Worldcoin is is one yeah potential solution there, but I imagine there's a bunch of other sort of businesses that you could fund and then a whole regulatory piece as well, which is we sort of force these large companies.
1:02:54
Now, biology described it as like, you know, to to basically hold these, you know, honeypotss of of of data.
1:03:01
And there's probably got to be a better a better way. Yeah, a great question.
1:03:07
So, you mentioned worldcoin. I'll just say briefly.
1:03:09
So, whirlcoin does is is what we call proof of humanity.
1:03:11
So, it's a way for you to get a cryptographic key that proves you're human.
1:03:14
And the idea is in a world, you know, as we're moving too quickly with AI bots and deep fakes and so forth, it was useful to be able to say, "Hey, I'm truly a human."
1:03:20
And then, you know, I can get a imagine a blue check on Twitter that actually lit, you know, cryptographically means you're human and not just that you paid $10.
1:03:27
Um, and we think that would be useful.
1:03:30
Um, it's sort of a missing, you know, kind of building block, so to speak, for the, you know, for the internet that I think we all want.
1:03:36
And so, one thing we think about is like what are those missing building blocks?
1:03:39
You mentioned zero knowledge proofs.
1:03:41
Zero knowledge proofs are, I think, a really interesting cryptographic breakthrough that I think people underestimate in the broader world how important they are.
1:03:47
Um what they let you do is um is essentially um uh prove things.
1:03:53
So I can prove you know like a bank needs to know I'm a US citizen let's say or I'm you know have a certain income or certain profile you know health data or so forth.
1:04:01
know health data or so forth. What zero knowledge proofs let you do is I can prove that to the system without revealing any of that like my actual you know where I can I it can basically send me a a a cryptographic kind of a game that says prove that you're a US citizen and I can prove it back without
1:04:18
revealing all you know my name and all the other kind of stuff that might that might dox me right I mean I just you know we just saw like you know day after day we see these giant hacks KYC hacks so like at this point you should just assume all of your information has sadly has been hacked many times and I you know having social
1:04:36
security as like your unique ID and password is just like a ridiculous system in this era right so we and meanwhile we have these you know we carry around these these supercomputers with with you know biometrics and advanced cryptography like why aren't we using it right the problem is not the is not the the the tech the core tech the
1:04:54
problem is coordination again like is how do you get everyone to agree on what the standards are right and that's why I think blockchains can be important because it's really the all the pieces are there, but how do you kind of put them all together in a in a broad kind of, you know, standard or coordinated system? Amazing. That's great. Thank you so much Amazing. That's great.
1:05:09
Thank you so much for coming.
1:05:11
Love to continue for Yeah, we could go way longer.
1:05:12
We need to have you guys talk more. Appreciate it.
1:05:15
Congratul It's great to see somebody contrarian idea that a tech show that actually likes tech. Yeah, what a concept. I'm very bullish on it. So, thank you. Thank you so much.
1:05:23
We'll talk to you soon on Chris. Have a good one. Bye.
1:05:26
We got Brian Armstrong next.
1:05:26
The gong is still ringing in the studio.
1:05:30
This dong, the gong, the gong, the real gong rings much longer than the fake gong. Yeah.
1:05:36
Um, while we're waiting for Brian, let's tell you about Adqu. adqu. com.
1:05:38
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1:05:42
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1:05:49
It's out of home built different, John. It is. It is.
1:05:53
Uh, and we have Brian Armstrong here.
1:05:55
Welcome to the stream, Brian. How are you doing today? I'm doing great.
1:05:59
Thanks for having me guys.
1:05:59
Great to have you so much. Welcome.
1:06:02
Um I don't even know where to start.
1:06:02
I mean we were kind of in the same YC batch.
1:06:06
My first company was in YC summer 12.
1:06:08
Uh it was soilent or soilent.
1:06:08
I It's a weird story because I joined the company shortly after YC and I was in a different YC company.
1:06:16
So uh but that's a story for another day.
1:06:18
Um I I give uh John uh problems all the time for for not you know tapping you on the shoulder and you know demanding that you take an angel check in that era.
1:06:27
But uh anyways well 2020 hindsight I I can assure you we were not like the the hottest startup in that YC batch at the time.
1:06:34
I mean it was hard to actually raise our seed round etc.
1:06:37
But you know obviously it worked out.
1:06:39
It was not not obvious though. Yeah.
1:06:41
Was it was it what was the incentive for joining Coinbase back during the YCD days?
1:06:45
Is it a full Bitcoin as a referral fee? Yeah.
1:06:46
I mean, I was kind of stealing a page out of the PayPal uh book where, you know, everybody would get about I think you could Yeah.
1:06:54
If you invited your friend and they onboarded, they got $10 of Bitcoin and you got $10 of Bitcoin.
1:06:57
And at the time, that was like about one Bitcoin.
1:07:01
So, so crazy to think about. Yeah.
1:07:03
And there was a lot of people.
1:07:03
I went around to like probably thou a thousand or more people in the Bay Area at that time.
1:07:08
And anybody I could find, I'd be like, "Hey, do you want some Bitcoin?
1:07:10
Like, I'll send it to you on my phone."
1:07:12
And I'd try to get them onboarded to the Coinbase app.
1:07:13
And yeah, I think we started out it was like5 or $6 for a bitcoin. Yeah. Yeah. Yeah.
1:07:16
Um, so so how do you tell the story of Coinbase now?
1:07:21
I mean, it's such a huge story.
1:07:23
Do you think about it in particular eras?
1:07:25
Are is the going public era a different distinct era or or do you or do you even map it to like the the the bull the bull cycles and the and the bear cycles?
1:07:38
Does that does that have a a tangible feel in the Coinbase story internal to the company? Yeah. Yeah.
1:07:45
Well, I I think of it in different So Fred Wilson had this great thing he told me one time.
1:07:49
He said like companies have multiple founding moments on the way to being a public company. Yeah.
1:07:52
And that was definitely true in our case.
1:07:54
that was definitely true in our case. So the first era was it was like Fred Ersome and myself in an apartment just grinding it out like you know 14-hour days just doing everything ourselves like answering customer support tickets like trying to recruit people trying to
1:08:08
get anybody to join uh writing code this ourselves right and so that was like the pre-product market fit like how do we try to get something moving and then you go through hyperrowth right and your problems totally change which is like how do we get a real set of leaders into this company, how do we not get hacked? How do we go raise more money? Like
1:08:27
How do we go raise more money? Like build a real board.
1:08:29
And so you go through this period of hyperrowth where we were like we'd never managed anybody, but we were suddenly we were managing 25, 50, 100, 500 people and we were we were hypers scaling just trying to keep up with all the demand.
1:08:41
And then you know crypto went through ups and downs.
1:08:45
You eventually uh Fred decided to go found his own company which was super successful like paradigm and he's doing another company now.
1:08:50
So I had to bring in an executive team.
1:08:52
That was like its own experience with a bunch of infighting and blowups and drama and I finally got a exec team that worked and then we went public and you know Emily Choy is like our president and COO now.
1:09:05
So she's like you know it's multiple foundings along the way to get to these uh eventual outcomes.
1:09:08
It it takes like 10 years to be an overnight success quote unquote overnight success.
1:09:12
We love overnight we love 10 year overnight success.
1:09:15
We lost the overnight success button.
1:09:17
We have a soundboard and it plays overnight success.
1:09:18
Every time somebody says it took them 10 years to really be successful, we hit that.
1:09:21
But um uh what what other industries did you look have you looked to for learnings to kind of like build through these boom and bust cycles because it feels like you know you guys are are acclimated to that now.
1:09:35
But I know I know this is you know the case oil and gas is is probably a prominent one.
1:09:39
Did you were you able to pick up anything from outside of crypto to help you steer the ship through cycles? Yeah, a little bit.
1:09:48
I mean, every company has different challenges.
1:09:50
So, I actually don't think ours are that bad, but one of the one of the challenges we had when we were getting ready to go public was like our revenue was super unpredictable and volatile, right?
1:09:57
Like we'd have a trading quarter where we would just blow it out of the water and we'd be like printing money and then we'd we it'd be down like 70% the next quarter or something.
1:10:06
And, you know, in the public markets, investors really love you to have these predictable revenue streams.
1:10:11
I don't I actually don't I still don't to this day know why they're so fixated on that.
1:10:14
It seems like they should be thinking about the growth potential, but they love the predictability of it.
1:10:17
And so, yeah, we had to look at oil and gas.
1:10:20
There's like some energy brokerage like, you know, actually the traditional brokerages like like NASDAQ and NY like they have the same issue.
1:10:26
If they can tell you, one of them told me one time, he's like, "If you can tell me what the S&P 500 is going to do next quarter, I'll tell you what our revenue is going to be."
1:10:32
But of course, like if you can do that, you you've got you got like you got it made in other ways.
1:10:36
So, but you know, whenever I'm I feel like we're having a bad time, I always look at like the hard tech companies, right?
1:10:44
Like the biotech companies in the public markets get beat up way more than we do.
1:10:48
Um, they have much less predictable revenue.
1:10:51
Their revenue is pushed out way farther.
1:10:53
All my friends who are working on hardware companies, I'm like, "Wow, they're really doing entrepreneurship."
1:10:58
You know, I'm like, they're they're they're always calling me up and like, "I've got four weeks of cash, you know, we're trying we're trying to raise money."
1:11:04
And I'm like, bail me out.
1:11:06
You've been trying to raise money like every month for the last 18 months, just living like one month to the next month.
1:11:11
And like those guys have true grit.
1:11:13
So in software, our margins are high and it kind of covers up mistakes that we make.
1:11:19
And we actually had revenue relatively early in our journey.
1:11:21
Whereas in like in biotech, you have to invest in it for 10 years to try to get your first dollar of revenue sometimes. Yeah.
1:11:26
Uh there there were a whole bunch of narratives around crypto back in 2012 even before uh decentralization, resistance to government control, an anonymity, uh just faster payments, all these different things.
1:11:41
What's the state of the union from your perspective?
1:11:42
How would you grade the the the different executions across the original goals?
1:11:50
Some of them have just kind of fallen by the wayside as we found different solutions to those problems.
1:11:53
But what are you uh what do you think we've knocked it out of the park on?
1:11:58
And what do you think we still have a lot more work to do on?
1:12:03
Well, the ultimate vision for crypto was always economic freedom in my mind.
1:12:05
In fact, that's the mission of Coinbase is to increase economic freedom in the world.
1:12:10
So that's like how do we give people more self- sovereignty, more control of their money.
1:12:13
It enables them to not only like live a freer life and have not be have things taken away from them, but it also it's better for society because if we have a society with good property rights and sound money and like rule of law and these things, you can actually try more things.
1:12:29
Like if if people are rewarded with the upside of their labor, they're going to they're going to go try more ambitious things in the world.
1:12:33
ambitious things in the world. So you see that there's actually economists who measure across different countries like how high is economic freedom and you see that in high economic freedom countries there's like higher GDP per capita but there's also like less corruption there's less war there's lower infant you know lower infant mortality like all
1:12:50
these kind of downstream effects so the ultimate potential of crypto is to get more economic freedom in the world and we've been trying to push on that through a variety of ways like one way we've done it is by getting legislation passed in the US or pushing on that we had a big influence in In this last election, uh the crypto voters showed up in a massive way. We had like 2 million
1:13:06
We had like 2 million advocates who raised their hand in the US saying they wanted to elect a pro- crypto congress and candidates.
1:13:11
We had like a couple hundred million dollars in the in the fair shake super PAC.
1:13:14
And so we now have the most pro- crypto congress that we've ever seen and we're on the cusp of getting stable coin and fair and uh market structure legislation passed.
1:13:24
The other thing is we've been pushing on our products, right?
1:13:26
They have to be easier to use for the average person.
1:13:29
like the early crypto products were just it felt like some computer scientists came from on high down the mountain and they tried to make this accessible to mere mortals and like that was never going to work.
1:13:37
So the products are slowly getting easier and simpler for average people to use and crypto is growing into these areas like payments and tokenizing securities and it's not just like trading as a as a use case, right?
1:13:49
So we're getting closer and closer but ultimately I think crypto is going to update the entire financial system globally and like the majority of all payments will run on these crypto rails.
1:13:58
They're just faster, cheaper, more global and that's how we're going to get more economic freedom in the world.
1:14:04
That makes a lot of sense.
1:14:04
Do you think the conversation around economic freedom over the next few years will shift away from the US and more towards emerging markets who are adopting digital assets but uh may face you know push back from from their governments and you know potentially even more aggressive way than we have in the United States over the past four or five years.
1:14:24
Yeah, it's a great point because I think the unmet need is higher in some of these other count emerging markets, right?
1:14:31
where people like in Turkey they're getting like 70% inflation a year or something.
1:14:35
It's just like it's devastating to their entire economy.
1:14:38
People have very high demand for the dollar and then Bitcoin.
1:14:40
Same thing in Nigeria, etc.
1:14:42
Now, some of those markets are going to be very resistant to it.
1:14:46
Like especially if the government is not fully aligned with the people's interests like the government wants to run their fiat currency because then they can kind of print money and abuse it and you know it's um it's one of these kind of original sins of like fiat currency, right?
1:14:59
So or like some of these these markets have capital controls, right? Like in India.
1:15:02
So I I think the governments will be somewhat reluctant to embrace crypto in some of these places, but the the average person will love it.
1:15:11
Like the people are demanding it.
1:15:13
They're rushing toward it.
1:15:15
The governments are a little hesitant.
1:15:16
And so in democratic countries, it'll be an it'll be allowed because more people will vote for it.
1:15:22
But in places like China, they're really cramping down on it.
1:15:26
You know, I don't think North Korea is going to add it anytime soon.
1:15:27
So, it's a little bit like the internet, right?
1:15:30
China has the great firewall of China.
1:15:32
Uh, North Korea has their own private internet.
1:15:34
And so, some of these like really corrupt regimes, I think, will have they'll try to crush crypto.
1:15:41
But in most places in the world, it'll happen.
1:15:42
North Korea even has their own Linux distribution, Red Star Linux. Did they? I didn't know that.
1:15:47
They gave it a cool name.
1:15:49
I mean, you got to admit it's a cool name. It is a cool name.
1:15:50
Um, I want to talk about Bass.
1:15:53
Obviously, it's powering a lot of uh consumer crypto use cases right now.
1:15:56
What how did that come about?
1:15:58
What has it been like incubating something like that inside Coinbase?
1:16:03
Yeah, a lot of people have asked me about that because they're always surprised that like a relatively big company can still innovate or whatever, but I think the uh the way that you know I can't take too much credit for it by the way.
1:16:14
The big the biggest thing that I did was I we have we have a very entrepreneurial culture, different people we've brought in and um Jesse Pollock came to me at one point.
1:16:22
He was like, "Hey, I want to work on a new chain." And I was like, "Cool."
1:16:24
like take a small team, go run at it, you know, like two pizza team or whatever, like five people.
1:16:30
And I had no idea if it was going to work, but the the biggest thing I didn't he deserves all the credit to be honest.
1:16:35
The only thing I did was I kind of shielded it from the rest of the organization a little bit and just gave them time to cook.
1:16:40
And he went through like five or six iterations and I I I saw a couple of these along the way and I was like, honestly, I have no idea if this is going to work.
1:16:46
Um, and it turned out to actually really hit.
1:16:49
And so that's that if there is like a secret to this, which I don't I don't know if it's a secret, but it's like you have to allocate some percentage of your budget to these venture bets and toler two, three, four people like working on it.
1:17:04
Kind of like a YC company, not like don't put a hundred people on it or something.
1:17:07
It's going to be like a big bureaucratic thing.
1:17:08
Um, as long as they're small bets, you can tolerate like, you know, 75% of them not working out and once in a while something hits and it pays for all the rest of the bets.
1:17:18
I mean it's just it's kind of like having a venture capital internal at the company.
1:17:20
So we actually set up this thing called um we call it like next bets and twice a year anybody in the company can come pitch um it's like a a group of people we call it like internal venture capital and they're basically the people who run different product groups but there's also some really kind of like smart young engineers etc.
1:17:38
Basically if any one of them raised their hands and said I want to fund that out of their budget then you're green lit to go do it.
1:17:44
You don't have to get a unanimous yes.
1:17:46
You just need one person to say yes.
1:17:47
And there's there's actually some pretty big like USDC.
1:17:51
I will tell you I actually voted no on USDC to like which was a terrible now it's like it's like almost a billion dollars of revenue or something for us.
1:18:00
Um and and I I voted no because I was like a little skeptical.
1:18:03
I didn't think it was like decentralized enough or something.
1:18:07
But luckily somebody else on our team voted yes so it got funded and it turned out to be a massive thing.
1:18:11
So it shows you how much I know. That's incredible.
1:18:14
Uh, I want to talk about uh putting stocks on chain.
1:18:16
You go back to that original like Peter Teal lecture in the 90s talking about maybe we could have a digital dollar that's not backed by gold or the treasury but actually backed by stocks.
1:18:26
Um, is there a world where that happens? What needs to happen?
1:18:31
Is there a world where Coinbase shares are securitized on chain?
1:18:33
And I I know you probably can't give like forward guidance around that, but like walk me through the the the changes that would need to be made.
1:18:43
And is that even a good idea in your mind? Yeah.
1:18:44
Well, well, just starting first with that PayPal uh point that you made.
1:18:48
I mean, there's a great book, I think it's called PayPal Wars.
1:18:52
I believe it's about the founding of PayPal.
1:18:54
And um you know, it really there was a lot of like that libertarian ideology of like economic freedom was in the origin, the founding team.
1:19:02
As you can imagine, they went on to do many other things.
1:19:04
Um and I think like in many ways, crypto is fulfilling the vision that the early PayPal team started with around economic freedom.
1:19:13
the and the the the main reason I can think of for that I mean there's a lot of reasons they got acquired by eBay etc.
1:19:17
etc. the the team changed and some of the motivations but like at the end of the day nobody wanted a US company to run the global financial system like if you were the Indian government or random person in some country like you didn't do I really want to put all my money in some US company but if it was a
1:19:33
decentralized protocol that nobody controlled like kind of like the internet it's like okay we'll all kind of integrate with that and so Bitcoin was like the key innovation I think that unlocked that opportunity um let's you also asked about like kind of tokenizing securities and I I do think that's an exciting area. We're
1:19:48
We're we're pretty interested in that as well.
1:19:52
Um you know, it's like the trading of stocks is just one more area of financial services that could be improved by crypto.
1:19:57
I mean, as an example, um there's a lot of people around the world who want access to US securities, but they don't have a simple way to open a brokerage account and track that.
1:20:06
So, it's like the international access would be better.
1:20:09
You could get like perpetual futures markets spun up for these stocks, which would give traders more leverage.
1:20:13
You could do 24/7 trading.
1:20:15
You could do fractional shares.
1:20:16
So I actually think like most traditional securities are going to get tokenized on chain in the next 5 years.
1:20:22
U we we've been working a little bit with like the SEC task force on this and trying to find the right path to do it.
1:20:28
So it's something we're interested in, but yeah, obviously nothing to announce today.
1:20:31
Where are you getting the most leverage from AI internally?
1:20:36
I can think of a bunch of different potential applications, but I haven't seen you do online virtue signaling about it yet, like like other certain CEOs have, but I'm curious, you know, what what you're excited about. Yeah. Okay.
1:20:50
Well, so I think we're doing a lot of the current best practices that most people are doing with well-run companies.
1:20:56
And then there's a couple areas on the horizon that we're that are more cryptosp specific that I'll tell you to.
1:21:00
So I mean the basic ones you probably know it's like we got we onboarded all of our engineers to co-pilot and cursor and everything like that.
1:21:07
So we got 100% of them onboarded that was good.
1:21:09
Um our customer support I think like maybe 60% of inquiries are being answered by AI now which is really good.
1:21:16
We also for a long time been building AI models around um fraud prevention and like detecting risky transactions.
1:21:23
Um so but you can yeah obviously like any process within the company that has a clearly defined input and output you can train a model on and like um generating compliance reports like there's so we're trying to integrate it everywhere the ones that are a little more on the frontier or like cryptospecific uh for us.
1:21:43
So, one is that um I guess people are calling it agentic commerce, right?
1:21:48
Which is like, you know, your agent is increasingly kind of like your assistant and it might need to book you a ticket to go somewhere or it might need to get through a payw wall or something like if you're like, "Hey, go read all the research papers from nature on this topic and give give me a report like okay, those cost money to ingest it."
1:22:05
And so AI agents are going to need to have a wallet to go pay for stuff.
1:22:07
Um we think that crypto will be the backbone of that.
1:22:11
like USDC on base is um is starting to be adopted by some some of we we actually released this open source thing called agent kit which makes it easy for any LLM to have a wallet and um we're working on a couple of uh checkout type solutions with other players that we'll announce soon where um AI the AI agent can actually get through the checkout flow in many of these e-commerce sites and pay with USDC on base.
1:22:34
So I think agentic commerce will be a big one.
1:22:36
Um, I think it's also we're going to get like AI agents that can be kind of like your RAIA, you're like your registered investment adviser or almost like your your trading bot.
1:22:47
So, imagine like you you you're in the Coinbase app and you kind of tell them, "Hey, I want to put like $1,000 or $10,000 something into this account and you're talking to a trading bot and you're like, "Just go make me money."
1:22:58
You know, I I don't know like don't make Tell it, you know, make me I I joked about this before 10% compounded return daily. Don't make mistakes. make mistakes. Yes. Yeah.
1:23:07
And it it may have some questions for you or like it may make mistakes and like there's a lot of details to figure out, but um I think having a trading bot like do a lot of that for you and it's like, hey, make like if I if it goes up a lot, lock in some gains, you know, so I don't regret it later.
1:23:23
You can give it kind of abstract concepts like that and it'll go it knows how to make the limit orders for you or whatever. Yeah.
1:23:28
How how do you think that uh how do you imagine that type of capability really being dispersed?
1:23:35
dispersed? because I imagine I mean obviously there's people with you know trading bots today and they're actually I imagine some of them are so effective that they just say well we don't actually want to release this because we should just use it ourselves but it it
1:23:50
sort of could potentially tie into this dynamic between closed source AI and and open- source AI and is that is do do you think part of Coinbase's opportunity is toffect if you know make sure these types of tools are available to as many people as possible versus just a handful of of traders. Yeah, it's kind I mean so we we're not
1:24:08
Yeah, it's kind I mean so we we're not doing prop trading on our own balance sheet so we're not like trying to be a hedge fund or something with a proprietary algorithm.
1:24:14
So our goal would be to like make this available to as many consumers as possible.
1:24:17
And yeah, I mean it might it's kind of adjacent to financial literacy, right?
1:24:22
Like many people might come in and be like, "Yeah, I want to make like crazy returns."
1:24:26
And this thing can kind of tell you, well, okay, that's pretty high risk.
1:24:29
Like why don't you like dollar cost average into this um diversified portfolio over time and like it that might be more in line with your risk appetite, but if you want to take 10% of it and try something more high risk, like you know, so it can it can teach people about these concepts.
1:24:45
Um, and while also doing what they ultimately want to do, what they would have done anyway in the app, but it's just making it easier for them. Totally.
1:24:52
Uh, can you talk about the extortion attack, how you handled it, and I'm particularly interested in going forward?
1:24:58
There's a lot of tools in your toolkit.
1:25:00
You can throw more money, more people, more technology at the problem.
1:25:06
What's going to what's the next few years look like in terms of beefing up security? Yeah. Yeah. Yeah.
1:25:09
Well, I I mean, we've had a really good track record on security at Coinbase over the last 12 years.
1:25:15
And even in this attack, you know, we didn't see any private keys or funds accessed directly by the attacker.
1:25:20
So, what they unfortunately they were able to do is they were able to bribe some of our customer support agents and to share with them like personal information on on customers like name, address, etc.
1:25:29
And you know, they want this information.
1:25:32
Attackers want this information because they want to text people, call people, try to socially engineer them and to get them to send their money.
1:25:37
And so unfortunately they were able to successfully do that with a handful of customers which we've reimbured 100% at this point.
1:25:44
Um and then they sent us this demand once once we were you know they realized they had been found out and customers were kind of getting educated about this.
1:25:51
Um they sent us this demand for $20 million or we're going to release all this information.
1:25:57
And it was an interesting moment.
1:25:57
you know, we came together and thought about it and um you know, on the one hand, we could have paid them the money, right?
1:26:04
But we were we we talked to a bunch of security researchers and people and they were like, you know, there's really what typically happens in these cases is you if you pay the extortion, they're just going to come back in 3 months and extort you again.
1:26:15
And and it's like, do we really want to be in this situation where we're like funding their next attack and like rewarding this kind of behavior, or do we want to try to create a deterrent to this kind of behavior?
1:26:26
So, we we we decided to flip it and as you probably saw, we put out a $20 million bounty for any information leading to their arrest and conviction.
1:26:35
And that's been kind of a crazy experience.
1:26:36
I mean, just as one data point for comparison, after 9/11, the US government put out a $25 million bounty on Osama bin Laden, and we put out a $20 million bounty on these guys.
1:26:44
So, we had like maybe 5,000 uh in like tips or inquiries like come into the the email that we put out there. Most of it was junk.
1:26:55
And we we kind of whittleled it down.
1:26:57
There's about like 70 or so credible leads, I would say.
1:26:59
Um, and we always have to be a little careful because some, you know, some of these could be like the the uh the threat actor themselves sort of trying to throw us off the trail or run down some wild goose chase.
1:27:09
Um, some of the other people sending in uh tips or leads are like other threat actors who kind of have beef with these guys or like they're um there's kind of like no honor amongst thieves, right?
1:27:20
And uh so, you know, I'm which is fine with me, but it's I really enjoyed the the you know I saw the video that you put out and I enjoyed imagining the dynamic of the thieves real you know sitting around a table realizing that you know that the sort of game theory of who's going to turn in who you know it was a it was a nice it was a nice visual. Yeah. Yeah.
1:27:44
So, that's exactly what we're we wanted to create was a real a real deterrent here.
1:27:47
It's like if you're if you're going to attack our customers, you know, you need to look over your shoulder um and always wonder like who's going to turn me in or who did I interact with in my entire life who might have known about this, who's going to turn me in.
1:28:00
So, anyway, I I can't say too much more.
1:28:02
We're working closely with law enforcement, but we're going to run down those leads and and hopefully get a good result.
1:28:06
I mean, you you asked about beefing up security, too, I think.
1:28:08
And u yeah, just kind of going forward, you can imagine let's le let's hire more people, better people.
1:28:14
Let's throw technology at this.
1:28:16
Let's monitor comms and where data is flowing.
1:28:18
Is this more of a technology issue or a talent issue or an oversight issue or policies like like how do you see investing in the next round?
1:28:28
The thing that popped into my mind the way that you're already leveraging AI is there's a world in the future where a more secure CX function would be entirely code, right?
1:28:36
and and you wouldn't it'd be much you know you could create an environment for or at least AI oversight of everything of every interaction but yes I'm interested to hear what your take is. Yeah.
1:28:47
Well, it's a great point.
1:28:49
I mean, the the 60% of inquiries being answered by AI now, I mean, they're they're not going to get bribed.
1:28:54
I mean, there are other threat act threat threat vectors with AI, too, right?
1:28:58
Because people are always trying to jailbreak these agents and things.
1:29:01
So, it's not there's not a perfect solution, and I don't think we're going to have we're still going to have like human in the loop on a lot of things for a long time.
1:29:06
Um, but yeah, there you know, never let a good crisis go to waste.
1:29:10
This was definitely a good moment for us to go implement a bunch of changes and we mobilized a team of about three or 400 people like right away that just went into overdrive kind of trying to lock down a lot of these systems.
1:29:21
A lot of it was not just um our own systems.
1:29:24
There's vendors that we work with that you know we needed to push them to hit a higher bar as well.
1:29:28
Um we did relocate some of our uh customer support operations.
1:29:34
um you know the ones that got targeted the most were these overseas um contractors and things like that and you know you can imagine like some of the money being offered as bribed would have been like pretty imp impactful even in the United States if people were there and we we need to have 24/7 coverage etc.
1:29:50
So it's not a perfect solution to like just move it all in the US and pay people more like it doesn't 100% solve it but we are relocating some of those support operations and then essentially just hardening our systems like luckily we had we had some good controls already which limited the scope of it but we obviously didn't do enough and so we've got to keep investing in that. Yeah.
1:30:10
Do you have any uh advice for younger builders maybe the the younger version of yourself?
1:30:16
You know, we had Chris Dixon on the show earlier today and he said that crypto, you know, one of crypto's biggest problems now is just a lack of talent.
1:30:26
There is talent here, but uh it's probably, you know, could have 10 times more to create a lot of of great outcomes.
1:30:33
I'm curious if you if you feel the same way around kind of talent in the industry today. Yeah.
1:30:38
Well, I think there's a we we've never been never had it easier actually recruiting great people into Coinbase.
1:30:45
I I think there's there is like a great part that's due to our scale, right?
1:30:49
Startups have to really fight for talent.
1:30:50
Um but I think if you look at like the top five most exciting tech trends in the world right now, like my five would probably be AI, crypto for increasing economic freedom and all that.
1:31:01
Um brain machine interfaces, fusion energy and and longevity I think is also in no particular order by the way like long you know there's a biotech company I co-founded called New Limit which is working on epigenetic reprogramming which is really cool.
1:31:14
It's it's a longevity company.
1:31:15
We talked to the founder. We were blown away.
1:31:17
We came away extremely excited by that conversation. Nice. Nice. That's awesome. Yeah.
1:31:22
I mean, so I think to me it's like how do we accelerate progress? Sure.
1:31:27
And I think the smartest people from a talent point of view, like the smartest kids, up up and cominging, you know, people, whatever, they all want to work in things that are going to change the world.
1:31:34
So like those are those are the top five.
1:31:36
And uh you know, I think like there's actually a pretty incredible amount of talent in crypto.
1:31:41
It's like you just got to go try you got to go try ambitious bets and be okay with some of them not working.
1:31:46
Like I think sometimes people think that well Coinbase started and now it's big and so they're just a success.
1:31:51
And it's like no that's not true.
1:31:53
Like we're we're trying these venture bets all the time.
1:31:55
Like I told you about USDC and base.
1:31:56
I mean there's others that didn't work, right?
1:32:00
Like we we launched Coinbase NFT and it was pretty much a flop.
1:32:02
Like we launched Coinbase in Japan.
1:32:04
We invested all this money in time.
1:32:06
Like didn't work for a bunch of reasons I can tell you if you want.
1:32:09
Um, and we shut that down.
1:32:09
And so we're constantly like, you know, stay hungry, stay foolish.
1:32:14
Like we're trying new ideas a lot.
1:32:15
And you have to be okay with like two or two out of three or three out of four just not working.
1:32:19
What about the Super Bowl ad?
1:32:21
Was that a similar one person greenlights it and who green lit it and what was the what was the story with the QR code? Yeah.
1:32:29
Well, as as usual, like success has many fathers and mothers, but um you know, it it partially came out of a rushed uh like a short time, you know, time constraints creativity, right?
1:32:38
So, we actually didn't I think by the time we bought the ad, we didn't have enough time to like go film something for months and months.
1:32:46
months and months. And so the team just got really creative and and um I don't even remember who it was in the meeting like our our CMO and there was an agency involved and it was a collaborative effort where someone was like you know well what if we did kind of like a direct uh direct marketing type campaign
1:33:02
where we want people just to install the app but the you can never measure the result of most of these brand ads right you're always like I don't know did it drive revenue or not and nobody really knows so we're like well we could actually measure how many people just like scan it and sign up if we if we just put a QR code on the screen. So, I
1:33:16
So, I don't remember who said it actually in the room, but it obviously it worked. It was cool. Yeah.
1:33:21
And and and you tracked the ROI and it was positive. Um Okay.
1:33:25
So, that that's actually a very complicated we we looked at the bore you with the exact details, but um long story short, like so our site actually crashed because we got about like 20 it was like 20 or 30 million visits in in 20 seconds.
1:33:41
like and we we knew there was going to be a big surge and so we had like I think the first page loaded and it was heavily cached but then um like 20 million people started going through the signup flow and like everything shut down so we had to email a bunch of them later to come to actually come back and finish it.
1:33:59
Um long story short, so we lost like probably about a third of the value in just like overwhelming demand that we unfortunately couldn't scale to, but it would have been very profitable.
1:34:11
It's It was still profitable depending how you count it.
1:34:14
The fact that we're talking about the ad today means something. Very memorable.
1:34:19
Yeah, the brand value alone maybe maybe paid for itself even with none of the direct revenue.
1:34:23
I have one last question then we'll let you get out of here.
1:34:26
Um uh and feel free to just uh take it as like meta commentary on the nature of the question, but who is Satoshi Nakamoto?
1:34:36
Um, so the official answer is it doesn't really matter because like the idea stands on its own and so if anybody ever comes out and we find out who it is like in their their will or you know whatever I but but the the unofficial answer I
1:34:49
think is is probably some combination of like Hal Finny and Nick Zabo and um maybe one other person but um that's my guess is that it was a collaboration between those people um And you know, but ultimately it doesn't matter. And how
1:35:05
And how Finny is frozen at Alor, but he's he no he's no longer living so we don't you know uh but maybe if Alor actually works which is a big if in the future we bring him back to life. We'll find out.
1:35:16
Yeah, that'd be amazing then.
1:35:18
Yeah, we'll have him on the show.
1:35:20
We'll have him on the show.
1:35:21
Yeah, that'd be fantastic.
1:35:21
Uh Jordy, any other questions? No, this is great. Back on again soon.
1:35:25
You're you're our first public company Fortune 500 CEO. Yeah, that's right.
1:35:30
So, thanks for doing this.
1:35:32
This is a big milestone for us. We really appreciate it.
1:35:33
Well, I love that you guys are uh championing tech and uh it's Yeah, the the enthusiasm is palpable.
1:35:39
So, uh I I get to see your clips all over enthusiasm.
1:35:43
What are you talking about? [Music] Enthusiasm.
1:35:48
We're going to need a bigger gong.
1:35:49
We're going to need a bigger gong.
1:35:52
We're going to need a bigger gong. Thank you.
1:35:53
It's great having you on, Brian.
1:35:53
Uh and uh thank you for the work that you do. We'll talk. We'll talk to you soon. See you guys soon. Bye. Cheers. I love great great hit.
1:36:03
The the gong is it's working wonders.
1:36:09
Uh well, next up we have Dan from Farcaster coming to the studio.
1:36:11
And big news, you can watch TBPN on Farcaster.
1:36:16
Someone built a Farcaster mini app and which is a very cool novel sort of experience that you have on Farcaster. Yep.
1:36:26
People can create kind of sub apps within the app and they live in the feed. Yeah. Let's bring Dan in.
1:36:30
I think it's uh Jamie Hoffman who built this for us. Good to see you guys. Dan, what's going on?
1:36:36
Are you talking about the pirate uh feed of TBPN authorized reproduction?
1:36:43
As long as it has our ads on there, we're happy. We're It's authorized.
1:36:44
You guys are like the Grateful Dead.
1:36:46
Anyone can record the episode as long as the ads are on there. Exactly. Exactly. Exactly.
1:36:53
It is it is fascinating because I remember I mean uh when forecaster dropped it was like very much like it looked a lot like Twitter back then but you look at the trajectory of the two platforms and now like you think about like oh you can build a mini app that like repurposes TBPN and like that is something that's completely on not on anyone else's roadmap and and the products evolved in a very very interesting way.
1:37:14
So, uh I mean anyway, can you just give us kind of the update on like how things are going?
1:37:18
What uh what what is the current pitch for Farcaster?
1:37:23
Where do you see it going?
1:37:25
And kind of uh take us through a little bit I have to say Dan and I were neighbors.
1:37:29
We lived on the same street. No way. Very cool.
1:37:31
And it's just been amazing to watch to watch you build uh Farcaster in such an intentional way from the very beginning.
1:37:38
I think you kind of had I don't know if you had a master plan, but you you guys seem to have this pace of building, but also uh like patience and just like long-term thinking the entire time.
1:37:48
So, it's been awesome to see.
1:37:50
Well, first of all, thanks for having me.
1:37:52
Um, I wanted to point out that I am the almost last person in the the group chat that started the Moz podcast back in the day that's been on your show.
1:38:01
Antonio has not been on your show yet. I know. We missed him.
1:38:04
We missed we missed Antonio today.
1:38:06
That was a missed by I'm just going to say I'm so happy I'm on this show before Antonio. Yeah. Yeah. Bragging rights forever. Yeah, exactly.
1:38:14
But uh open invite to Antonio. Yeah.
1:38:14
So Farcaster um 5 years in this year um when we started decentralized social pretty contrarian.
1:38:22
Um I think Elon changed the the dynamic a bit in the sense that all of a sudden people got interested in building alternative versions of Twitter.
1:38:31
Um, I think we've tacked more into crypto over time and so I think where we are today is we're decentralized social network but it's targeted for cryptonative folks, right?
1:38:42
So there's a built-in wallet and many apps as you point out and so it just if you want to do fun things in crypto, you use forecaster and we're increasingly making that happen in the sense that we support a bunch of different chains.
1:38:52
So you can use Ethereum, you can use bass, you can use Salana.
1:38:55
I think we're going to add other ecosystems over time.
1:38:57
to add other ecosystems over time. So, if you can kind of think of like if you've ever had to do something in crypto where your friends tell you, oh, you got to get into this, you got to mint this or do whatever thing that you're trying to say, uh, you could just
1:39:08
get on Faster and it's like two taps away and then there's no complexity around switching chains and bridging and gas and all this other kind of stuff that if you if you talk to like the average web 2 founder, it's like the the UX that's acceptable in crypto is crazy. Yeah. And so, you know, 2025, we finally Yeah.
1:39:22
And so, you know, 2025, we finally actually have the infrastructure to be able to like build decent consumer experiences.
1:39:30
And so, that's what we're trying to do.
1:39:31
trying to do. Do you think you ever loop back around and go back into crypto non-native folks and tuck some of the crypto features under uh under kind of like a stablecoin wrapper or something that like uh like abstracts it away over time because you you you've gotten that like core fire going and then you need to turn it into like a raging fire and
1:39:52
people um I guess the meta question is like in in 10 or 20 years does the average consumer just in America are they are they do they does everyone become cryptonative or Does Crypto Native cease to be a cease to be a concept because everyone just I think it's probably more ceased to be a concept in the sense that I think stable coins are working. So we do all of our
1:40:07
So we do all of our weekly rewards.
1:40:09
So we pay out $25,000 a week and our version of X payouts. Yeah.
1:40:14
Um it's a little bit broader base and and you can be a much smaller account and get it.
1:40:18
We do that with stable coins.
1:40:19
So we do that every week. Works perfectly fine.
1:40:21
We didn't have to integrate any other fintech provider or there's no just every user has a wallet.
1:40:27
we're able to stream stable coins to them for a ridiculously cheap amount in terms of like fees there, you know, so there's no middleman.
1:40:32
So that that that's for sure working.
1:40:34
I think um so we we originally tried to do this whole thing where we were using crypto under the hood, but the whole point is like we're using it as a technology, not the kind of forefront.
1:40:43
And I think that the reality is um 2022 left crypto with a pretty big black eye with like FTX and a bunch of that other stuff.
1:40:52
And so I think there are a bunch of people that I think otherwise um are pretty intelligent and and I would say reasonably open-minded, but when you talk to them about crypto, they just they they froth at the mouth in terms of, you know, it's all scams and griffs.
1:41:07
And look, there are plenty of scams and griffs.
1:41:09
It's it's a reputation that it's earned over time, but I actually think there's plenty of good stuff being built in increasingly.
1:41:14
And so I think stable coins is probably the the thing to highlight in the sense that that's just been chugging along, right?
1:41:20
And and where did Stablecoin start?
1:41:22
Tether was a scam and a griff that for 10 years everyone kept saying it's it's it's on the verge of exploding, right?
1:41:27
And it's now the most profitable business in the world.
1:41:31
I think it's like they make like $80 million per employee.
1:41:32
And so stable coins have taken a while to bake.
1:41:35
The infrastructure is finally there where it's like I mean now Stripe's in it, right?
1:41:40
So it's like ramp your one of your sponsors.
1:41:41
Um so I I I think like stable coins are just going to make crypto way easier.
1:41:46
Um, and then I think there's this concept of embedded wallets which you, you know, you may have heard of, but like there are a bunch of providers.
1:41:53
We use a a company called Privy.
1:41:55
And basically, I think over the next three or four years, like every app, uh, whether it's like a, you know, kind of fintech app or consumer app will have built-in wallets.
1:42:05
They probably will use stable coins.
1:42:07
Now, whether you can buy like Fartcoin or whatever memecoin in your, you know, Bank of America account, probably not.
1:42:14
But I do think um everything will get kind of like crypto enabled and to the degree that you're using a more crypto forward product like a Coinbase or a Robin Hood or like a completely cryptonative product like Farcaster, I think it's just like a more of a personal preference.
1:42:30
Um it's top of mind for me.
1:42:33
Uh yesterday you launched Farcaster Pro, a subscription.
1:42:36
Uh you you you brought the the 10K NFT collection back.
1:42:39
uh talk through the whole process there, you know, why why use kind of that mechanism and and it and it's sold out.
1:42:49
So, it sounds like uh you know uh a cause for celebration.
1:42:57
Yeah, Kobe would say job's not finished.
1:42:59
So, I think uh like good good progress.
1:43:01
I mean, we sold $10, $120 subscriptions with stable coins in a little less than six hours.
1:43:06
um the 100% of of the revenue we're generating, so this is kind of like for the protocol is going back into creator rewards.
1:43:13
So effectively we've doubled the amount of like weekly payouts we're going to do for the next year.
1:43:18
Um, and I think I think you had Chris on earlier, but this idea of like a zero take rate network, I think is pretty powerful.
1:43:25
And and going back to your question, John, of like how do you actually get out of the like crypto native and move towards a broader base is just like most social networks you use today, what percentage of the value are they capturing?
1:43:37
Like, you know, Meta's market cap's pretty high.
1:43:38
they're capturing a lot of that value.
1:43:40
I think that the way for protocol based social networks and and specifically ones that use crypto for the economic plumbing, the way for them to win is to have it be as close to zero take rate as possible.
1:43:53
Um and and basically you by participating on a on a crypto social network one you you're or you know decentralized social network you you actually own your audience.
1:44:01
You can't get your like links nerfed like you guys are building like an amazing media brand.
1:44:07
If you lost your ability to do streaming on a couple of the major platforms tomorrow, that would hurt your growth.
1:44:12
And so the idea of like actually having a a social network that you can be guaranteed to have direct access to your audience, I think that's no built different.
1:44:19
We would we we would just mail everyone a DVD every day. Easy. Daily problem solved. Daily DVD.
1:44:22
Daily DVDs with stable coin payments. Yeah.
1:44:26
With stable coin payments.
1:44:26
Um I want to know about uh some of the economic incentives on a social network.
1:44:31
Uh it's been like the microp payments thing has been floated around.
1:44:36
Is there a world where with AI slop we need to be charging people to post or can just algorithmic feeds kind of sort out the wheat from the chaff?
1:44:46
Um does any of that make sense?
1:44:48
Are there any new trends in kind of like the design of a healthy social network that has high I guess not just high retention and arpoo but also maybe high NPS because the the classic thing with a social network is like it's printing money but everyone says they hate it. Yeah. Yeah.
1:45:04
So I think that's a stated reveal preference where printing money people are they actually love it. Totally. I completely agree.
1:45:10
So yeah, what what I actually think you bring up a great point and we are for sure at the forefront of this because if you know anything about crypto and people think there's an economic incentive, you you bring out a lot of uh coin operated uh users, right? Yep.
1:45:22
Um I think that any version of pay money as a solely a mechanism for like oh there's some version of quality or nonbot-like behavior not going to work. Mhm.
1:45:33
I think any version of I prove that you're a human.
1:45:36
Well, you're proving you're human, but I could go use chat GPT to write the responses.
1:45:39
So, like I think this is an extremely hard problem.
1:45:44
Um, if you actually go look at like Meta's 10Ks, like they specifically say that like they are the biggest and best in the world at this and this is still an extremely hard problem for them to solve.
1:45:52
solve. They estimate something like 10% of like all users are potentially like spam or is it still you know but I think it'll be kind of a a a variety of tools right so I think economic activity is really hard to fake like one thing we
1:46:09
had yesterday is a bunch of accounts paid $120 to a protocol no refunds right like you know stable coins nice thing is like you can't charge that back um whether they're a bot or not that money is now going to an algorithm And this is where I'm actually a big fan of algorithms. Now, maybe algorithm of
1:46:24
Now, maybe algorithm of choice we could talk about, but the algorithm, if you design it right, is going to reward the interesting posters, the best posters, and you're extracting revenue from the bots.
1:46:35
So, I do think charging is actually a good idea.
1:46:37
And then I think algorithms are the way to actually, as you point out, we from the shaft, so to speak.
1:46:45
How do you see crypto long term as a funding mechanism for creators, artists?
1:46:52
I mean, we had um um Ben Pastnack on earlier today to talk about, you know, his vision for Believe and it's yeah, you you people are using it to create memecoins.
1:47:03
memecoins. are also using it as a you know funding um you know funding mechanism for for different projects and and I bring it up because uh we've talked about you know we had Chris Best from Substack on um uh maybe a week or so ago and and there's this idea that
1:47:21
like people subscribe to Substack to get value in the form of content but it's also a mechanism to just support support somebody to just do interesting things in the world and be able to spend all their time, you know, thinking about a specific area or um sector. And it feels like there could be
1:47:38
And it feels like there could be some element, you know, some I could imagine a world in the future where Farcaster is powering that type of of activity.
1:47:49
Is that correct, incorrect?
1:47:49
Is that a is is that a problem space that you think about? Yeah.
1:47:53
Although I to Substack's credit, I think they're doing better than the vast majority of web two in the sense that I think what they take 10%.
1:48:01
And you know like YouTube I think what is the 730 7030 cut in terms of I think they take 70% and you get 30. Yeah. Right.
1:48:09
So so so like we're improving in the web two spectrum.
1:48:11
I think what crypto does in a world where the UX is good and it's pervasive.
1:48:15
I think these are like embedded wallets with stable coins.
1:48:18
You you just start competing things down to zero, right?
1:48:22
like the ability for the platform to take a cut of payments um I think drops pretty significantly and what the platforms that do take a cut they are going to say hey I'm getting you distribution right if if you go on an app like Substack a lot of then you talk to Substack newsletter writers they're
1:48:39
getting a lot of their subscribers these days from the Substack app so that's value that Substack is providing um I think where crypto is interesting is that you know like basic payments are like you're you're talking like 10% % improvement like marginal improvement and I think where you're looking for is like 10x improvements. Yeah. Um as I you know Yeah.
1:48:56
Um as I you know you're pretty aware of the space and and uh believe is a great example of this is like I think capital formation fundraising with big quotes around that because obviously that's a pretty loaded word but the ability to kind of like internet flash mob money into a certain thing whether that's a memecoin or uh like a gofundme equivalent or a kickstarter.
1:49:17
Actually, someone built a mini app with stable coins uh called crowdfund on Farcaster.
1:49:20
Basically is Pixar, right?
1:49:23
Like you use smart contract, you put your USDC like stable coin in and if it hits the funding threshold, it's unlocked.
1:49:28
So that makes sense 10 years ago.
1:49:31
Now it's a someone vibe coded over three days, right? Yeah.
1:49:36
It makes so much sense as a mini app because in many ways people would just go to GoFundMe, create this thing, and then take it to social to promote it.
1:49:44
And why doesn't it just exist natively in the product? Yeah.
1:49:47
And I think the other thing that you you have is like the liquidity in the sense that I'm not fragmenting.
1:49:52
I don't fund my GoFundMe wallet over here or I have to like connect this payment method for the seventh time.
1:49:57
And again, anytime you're using like a card-based payment method, Visa and Mastercard and the banks are getting their 3%. Right?
1:50:02
So I think it it will be slow in in many cases, but this stuff will just become increasingly pervasive and people will choose it if the kind of like platforms or creators are giving an incentive, right?
1:50:15
Like if I can not have to pay 3% to a card network by having you use a stable coin, I'm going to make that the default payment and maybe I give you a 2% cash back or you get some loyalty points or an NFT or what whatever reason to to get you to switch your your payment method. Yeah.
1:50:31
Um what are what are you seeing?
1:50:33
Um, how how do you think about international long-term?
1:50:34
international long-term? I know the Farcaster network is like default international because because crypto is default sort of borderless and international, but um I I feel like the the conversation in in uh the the
1:50:49
beginning of the 2020s was really around sort of social media censorship and then you know we had Bology on the show earlier and he's talked about this moment with X where created this kind of fragmentation and uh you know censorship on on X potentially being solved. But
1:51:02
But then there's plenty of countries, you know, globally that that um are that have even bigger issues than we have today around censorship.
1:51:12
And so h how do you think about um you know, enabling uh enabling free speech through Farcaster uh over the long run? Yeah.
1:51:20
So we're a US-based company, so I'm a big believer in the constitution and US laws.
1:51:24
Um Farcaster basically is exporting that as like our social networks policy.
1:51:29
So, if I get a local jurisdiction somewhere in the world and says, "Please remove these activists from Farcaster to quote Elon," they can shake their fists at the sky.
1:51:40
Um, like there's we're beamed in over the internet.
1:51:43
If you want to block, you know, our our our app or or the network, go for it.
1:51:47
But I think but then in theory, somebody a dissident could build up spin up a new iteration of the app on the Farcaster network theoretically and it would be out of your control, right?
1:51:58
So it's in addition that that that person could be directly posting like via the command line or something and having it go to out to a global audience.
1:52:06
And so I think that the the network design of Farcaster looks a lot more like a blockchain under the hood.
1:52:12
And one of the reasons is it actually provides really strong censorship resistance whereas something that's a bit more federated.
1:52:17
So if you kind of look at like blue sky like there are instances where they're already complying with local law of like okay well we won't be able to serve our other users in this country because they will just shut down the whole site.
1:52:28
So I I I think again I it's it's not like a primary consideration but should we be successful in continuing to scale the network I'm I'm confident that um if if you think that the US free speech laws are like a good baseline global policy that's basically what Farcaster is going to fall in terms of our app. Yeah. Amazing stuff. Thank you so much.
1:52:47
Uh we'd love to have you back and get come back on again soon. Thanks for having me.
1:52:53
You have some of the best I'll put it on the record.
1:52:55
Some of the best taste in crypto and I put it out there.
1:52:57
It shows up in the It shows up in the app and and everywhere and um Yeah, it's great.
1:53:04
Great to finally have you on. Come back on again soon. I love the new studio. Thank you. Yeah, come by.
1:53:07
Do do your next appearance in person. Yeah. Yeah, that'd be great.
1:53:11
It's it's only three hours away from the west side in Hollywood. Have a good one.
1:53:19
I went on X and I posted uh you know the big teal fellow question that uh is on every application for the Teal Fellowship is what important truth do you do very few people agree with you on?
1:53:32
What is something you believe that very few people agree with you on?
1:53:34
And I said I believe it's possible to interview the entire Teal Fellowship class on a single podcast episode.
1:53:39
It could even happen today.
1:53:41
They said it couldn't be done.
1:53:43
They said it couldn't be done but it's happening. Our next guest is here.
1:53:47
Let's bring him in the studio.
1:53:48
Stephen, how are you doing?
1:53:50
Congratulations on the Teal Fellowship. It's great to meet you.
1:53:52
It's great to meet you, too. Thank you very much. Uh, fantastic.
1:53:56
Would you mind giving us a little uh little intro on yourself and the company you're building? Yeah. Yeah.
1:54:02
Um, well, I'll start with the company I'm building.
1:54:03
Um, or we build non-invasive neuromodulators.
1:54:06
So little devices stick on the back of your ears um and stimulate this inner ear or organ called the vestibular system which controls your perception of motion to generate hallucinations and motion.
1:54:16
So you can like toggle a button and feel yourself spinning around and flying around and stuff. That's crazy.
1:54:20
That's huge for VR, right?
1:54:22
Because there was always this question of like, you know, if the VR can be very convincing visually and the audio can be very convincing, but I can't feel like I'm actually flying. But now I can.
1:54:33
It's actually there there's actually even bigger problem VR which is without this you get incredibly motion sick and so you can't play like most most games.
1:54:41
So when we started um one of the primary cells it's like hey we have VR devices are ready to go.
1:54:47
You can hop into a like ornithopter right now and fly around and feel like you're flying around and we always had this guess that like oh you could also use this system to build therapeutics that are a lot more powerful than anyone else could ever build.
1:54:58
At the time the field didn't exist and we were like okay we could be totally wrong.
1:55:01
So we went in going like, "All right, we're going to build the tech out for VR."
1:55:04
Once we did, we realized not as surprisingly useful as the therapeutic.
1:55:08
Um to the point where it doesn't really make sense to do anything else.
1:55:11
So that's mostly of course I mean uh uh I think Neuralink's going through something similar where you know you could eventually everyone will have one and we'll be all communicating via Neuralink but in the short term let's just cure blindness and you know um and and help people who are paraplegic uh use the computer and play civilization all night which is amazing and and miraculous.
1:55:30
Um so are you going through an FDA pathway?
1:55:33
Are you regulated as a medical device?
1:55:35
Like what is that process like?
1:55:36
Can can you take us through like again reintroducing like what is the actual product experience for the person using it? Yeah. Yeah.
1:55:43
Let me talk about that first um because then the regulatory pathway becomes a little bit more more clear even though it's still pretty messy.
1:55:51
Um so the the thing we build interacts with this sensory organ in your inner ear.
1:55:55
And uh it's called the vestibular system.
1:55:57
If you want to look it up, if you go to my Twitter, you see a video of me driving a human around with an RC steering wheel um of just like controlling where they go.
1:56:05
Um but uh there bunch of things you can do with it.
1:56:09
The most important one is the vestibular system evolved like so early on in the evolutionary chain that it's entangled with a bunch of deep brain regions that like some of it it has some business being entangled with and other parts it really doesn't have much business being entangled with it at all.
1:56:23
That's why you see like parents rocking their child to sleep.
1:56:24
Like there there's no good explanation for why that works like from an evolutionary standpoint except the connectivity is there kind of makes sense.
1:56:31
So we started by like sending signals like that and essentially what we did is we built like a precise modulator of this external sensory organ.
1:56:38
Um and that makes them really easy.
1:56:40
These guys spent like eight months cranking at it um to figure out the things that I couldn't figure out before we got it.
1:56:44
But um once you do um you control a bunch of autonomic nervous system functions by making these almost like highle API calls of like oh regulate your heart rate like this or your breathing rate like this.
1:56:54
It makes brain stimulation a lot easier and allows you to do like actually important things.
1:56:59
So the upshot of that is can make you sleep a lot better.
1:57:00
We're doing some experiments on metabolism right now to see if we can try to beat ompic without all the side effects, but we're not there yet.
1:57:07
Um but um I think on all of these things we're not not quite to where we want to be yet, but it's a lot further than neurosim has ever gone before and we're getting pretty damn close. Yeah.
1:57:16
What what's your what's your personal approach to testing?
1:57:18
Are you testing everything on yourself first?
1:57:23
kind of you know like a a young Tony Stark or what does it look like?
1:57:26
So everything I can say on air um is um I'm testing on myself very heavily.
1:57:33
Um everything is tested on me first.
1:57:35
everything is tested on me first. And the the fun thing is like um traditionally what you need in order to test whether these things work is you need like 50 people and you need to hold a control trial in order to see if
1:57:45
there's some statistically significant like if you have statist statistical power but we but um we built stuff that's like powerful enough that if you turn it on like you know that it's on and you know what it's doing like I can't naturally sleep like this no matter how I am. There's there's no way to achieve this
1:58:02
There's there's no way to achieve this effect of like okay I have two hours two and a half hours of M3 deep sleep tonight which according to my whoop is aberant and I've never experienced it in my life or like you turn it on you feel the world start spinning.
1:58:13
You don't need like n equals 30 to know that there's some stat you turn it on and you feel your heartbeat drop or like your blood pressure rise.
1:58:21
It's just like kind of instantaneous.
1:58:24
So what is the actual uh device experience for you or the consumer?
1:58:26
Is it something I can put in and take out?
1:58:30
Is it like does it feel like an AirPod or something or or or do I need to go into the knife?
1:58:35
Am I am I am I going through surgery to get something installed? Yeah. Yeah. Let me grab it.
1:58:42
This is why we do this show. This is fantastic.
1:58:44
Um Colton, can you grab me an electrode? Thank you. One electrode, please. Uh one of ours.
1:58:51
Um so, uh sticks to the back of your ears and uh like it you can just like kind of peel it off when you want.
1:58:58
I'm trying to grab one so I can see.
1:59:00
Yeah, but there's no surgery.
1:59:00
It doesn't actually have to go under the skin or anything like that.
1:59:03
That's kind of That's kind of nuts, right?
1:59:04
Like if I'm thinking about it of like the central reason to do all this is for building most neuroche kind of constrained by knowledge of the brain.
1:59:10
The hardware is compared to what we're used to building not that hard. It's not rocket science.
1:59:15
Um the the big thing is you don't understand how this thing works at all.
1:59:18
And that's a pretty big challenge.
1:59:18
And you want to gather a lot of data in order to figure it out and you can't really distribute something at scale in the near future without like you know if you have to do surgery. What is it?
1:59:26
It's like some 20 30 surgeons are able to do the neural link surgery right now.
1:59:30
Well, they had to build a robot for it because it was so precise. Yeah. Yeah. Right. Exactly.
1:59:35
So, this is what it looks like.
1:59:36
Um, we built some of our own hydroel electrodes with HCL backings.
1:59:38
I'm just stick it in the back over here.
1:59:40
Um, we ripped this out of a system.
1:59:42
Um, where's the full the full system is just a headband that you put around.
1:59:45
Um, we're all pretty pretty scrappy right now.
1:59:47
And that leads into the regular story question. Um, it's not so clear.
1:59:51
It depends what indication we go for. for right now.
1:59:55
Um, we silently hold state of the art for a couple different parts of neurom modulation that maybe I shouldn't say on air, but it's not clear which one is going like month over month a bunch of these effect size and they're going up literally like 1.
2:00:07
5x every month or 2x every month.
2:00:09
Um, so it's not so clear when we hit donation return.
2:00:11
Um, but the upshot is like we don't really think that humans should be like necessarily sleeping for eight hours a night in order to get what we need.
2:00:20
Um, it's kind of weird that the way we lose weight or like become stronger is to go into a room and lift heavy objects for a very long time.
2:00:27
I'm going to stop you there.
2:00:29
I think it's actually extremely cool that that's how we get stronger.
2:00:30
But we won't tolerate sleep slander on the show.
2:00:35
We're sponsored by eight sleep.
2:00:35
I think sleeping's great.
2:00:37
I all of a sudden I don't like any of this.
2:00:40
It took away all the things I like.
2:00:42
See, I I So with the teal fellowship money, the first thing I did was I bought eight sleep because it's amazing. It's amazing product.
2:00:49
The next thing I did is actually I placed a wholesale order for Lucy which don't ship in Massachusetts anymore. That's amazing.
2:00:55
So like we're pretty into this stuff but like we think like it's kind of upper bounded right like how much performance increase you can get whereas like if you start modulating the brain you can get a lot better than that.
2:01:06
So um hopefully we'll get there in near future. Yeah. Yeah.
2:01:08
So what is the feedback cycle?
2:01:10
Obviously like you're collecting data on on sleep or stimulation or anything and then you're feeding that big back into some sort of system to adjust the neurom modulation.
2:01:20
Uh is that is that is that cycle time like single days?
2:01:23
It seems like you're moving pretty quickly. Yeah.
2:01:28
So well it depends what you mean.
2:01:28
If you're talking about like closed loop stimulation paradigms like this is like like milliseconds delay of like getting a signal sending something back.
2:01:35
Um but um if we're talking about like how we develop, what we do is basically we do a couple things.
2:01:42
Um but um when the effect sizes are large enough, you really only need to run a few trials along like 30 minutes each on each person for four or five people before you know that something's working.
2:01:52
And most of the time it surprises you by doing some really weird things um to your body of like, oh, I didn't expect that to happen.
2:01:59
We just like write it down in a lab notebook and be like, all right, this is what happened here.
2:02:03
You can start parsing together how the brain works and over time you get all these insights that it's hilarious.
2:02:06
We confirmed a long-standing neuroscience theory yesterday that people haven't been able to prove or disprove for the last 10 years because we just running stuff.
2:02:15
Wait, this is the only explanation. So just stuff like this.
2:02:17
Um cycle time's usually around two or three days for us right now if we have to build new hardware and software.
2:02:23
Um but um if we don't then you know they can be about like two three hours and we're trying to bring most things down to two three hours. That's amazing. Well, congratulations.
2:02:33
I'm extremely impressed and excited. Yeah, this is awesome.
2:02:36
And uh feel free to, you know, consider us testing partners, you know. Yes.
2:02:39
Um Oh, also if you ever podcast longer, send somebody on your team to set us up and then you can watch the stream and just, you know, Yeah.
2:02:48
Maybe instead of the sound it triggers and we we involuntarily laugh.
2:02:52
We burst out into laughter. Shocking.
2:02:58
If you ever if you ever want to try the world spinning around thing, let me know and I can hook you.
2:03:01
Sounds horrible, but I'm in. I'm in.
2:03:07
Count me in for the the tilt whirl in my brain. Congratulations.
2:03:10
Super excited for you and the team. This is fantastic. We'll talk soon.
2:03:14
We'll have you on again soon. Bye.
2:03:18
Uh, next up we have Juan coming in to the studio.
2:03:20
We are excited to keep this lightning round going.
2:03:23
And we have 1 2 3 4 5 six seven teal fellows left for the day and they said it couldn't be done.
2:03:31
They said it couldn't be done. Nobody believed. Nobody believed. Have some faith.
2:03:35
They said technology didn't need another podcast and yet here we are.
2:03:37
Um welcome to the stream. How you doing? Hey guys. Thank you for having me. Welcome. Of course.
2:03:45
Uh would you mind kicking it off with a little bit of an introduction on yourself and the company to get get us started? Absolutely.
2:03:50
So I'm currently like the the founder of Faze Labs.
2:03:56
Phase Labs is a research lab that it's building that technology to regenerate complex organs directly in your body.
2:04:02
So basically imagine imagine you lost imagine you lost a limb for example you were like a war fighter you went to the military maybe you suffer from di diabetes and you had to be amputated.
2:04:15
There's no way you could regenerate that right now.
2:04:18
you have to like rely on prosthetics but prosthetics is is kind of [ __ ] Yeah, honestly.
2:04:22
Um, and this happens if you look this happens not only with limbs but actually with all the rest of the organs of the body.
2:04:29
So, we're building that technology.
2:04:31
That's kind of the glimpse of it.
2:04:32
How much of this is like I mean this is pure sci-fi feels like.
2:04:35
Is this informed by what is it the salamander that breaks the tail off and then they regrow it?
2:04:41
Is this like Jurassic Park where you actually learn something from that or is there a different Didn't we we got Ompic from some crazy dragon? Yeah. Yeah.
2:04:50
The Komodo dragon the Hilo monster. Uh yeah.
2:04:52
What what is the basically I want to know trace back for me the tech tree that got us to today.
2:04:57
I imagine you're standing on the shoulders of giants. Is crisper relevant?
2:05:01
Like what is relevant to allow you to do this?
2:05:06
Because this sounds like pure sci-fi to me. Yeah.
2:05:08
So I I will start with that last line like the crisper line because I think that's that's extremely important.
2:05:15
We are not doing genetic engineering um and and that has advantages from regulatory point of view but also like on the underlying R&D I actually and that this might be controversial but I actually don't think that you can solve this problem with genetic engineering like finding one two three genes that you could basically correct the problem.
2:05:33
I don't think that's possible at all.
2:05:34
We are basically modifying the physiological signals directly in the body.
2:05:39
More specifically, we are leveraging electrophysiological signals.
2:05:43
So a lot of people doesn't know but the same signals that rule your brains actually are all over your body.
2:05:50
Basically when you were born you were a single zygote and literally that that zygote self assembled yourself into a living human functioning being.
2:05:58
So let's give it up for the zygot.
2:06:01
Let's give it up for them. This is fantastic.
2:06:03
Uh so basically what we have discovered and this is bas this is work of the last 15 20 years is that these electrophysiological signals during the process of development encode information instructive information to to control morphagenesis which is the process of growth and form of of an organism.
2:06:24
Um so yeah definitely we are like on the shoulders of giants. That's that's a fact. Yeah, regrowing a hand.
2:06:31
That seems like the final boss of this potentially.
2:06:34
Uh, what's the easiest thing to regrow?
2:06:36
Are you starting with like a fingernail and then you work your way up or do you go for the hand straight out and try to oneshot that?
2:06:43
Like is there is there something that we already regrow that we can maybe build on? Yeah. Hair.
2:06:48
We know the hair loss market.
2:06:51
Maybe you should pivot into just hair loss.
2:06:52
There seems to be a lot of money in that.
2:06:54
That would be that that would be extremely profitable, honestly. Yeah. Yeah.
2:07:00
ju just just as a matter of fact I mean babies human babies are able to regrow the the tip of their of their fingers of their digits uh once like they are they are young yeah that that that already happens what happens is that like the
2:07:15
human body lose this capacity throughout the time throughout aging uh and now like regarding the question what is the final b what what is the final boss I actually think the kidney it's even anatomically speaking It's even more complex than than the limp. But the limp
2:07:29
But the limp is right up there.
2:07:33
Like this will like these two indications will be kind of in the next 10 15 years.
2:07:38
This will are kind of long-term research programs.
2:07:40
On the short term, we are focusing on indications that where we could basically move a lot faster in the next five years.
2:07:48
So for example, chronic bone healing.
2:07:50
This happens to diabetic patients when they suffer from ulcers and it's actually the main cause of amputations worldwide.
2:07:56
So, so we are basically tracking these initial problems first.
2:08:00
What about even something like scar tissue?
2:08:02
Like a lot of people have like C-section scars or scars from anything.
2:08:06
Is that is that relevant or like the same kind of biological process or is that a different fork of the tech tree?
2:08:12
Yeah, actually it's it's pretty similar.
2:08:15
It's it's based it's based on the same electrochemical signals in the regenerative process.
2:08:22
So if you look that are already in the market electric wound dressings that you actually can put in the skin and accelerate the wound process.
2:08:31
Uh but these basically there are these are extremely limited to a stage two and a stage one uh injuries.
2:08:38
So for example if you have like an injury of five millimeters but once you start like involving like one two centimeters it starts to be incredibly more complex.
2:08:47
You you touch muscle you touch bones.
2:08:49
So that's that's that's a lot harder. Yeah.
2:08:53
What um what what's exciting about what's happening in the uh I saw some recent news around a genetically edited pig kidney that was transferred into a human and it sounds like it was somewhat effective.
2:09:05
Is there anything that you you guys can learn?
2:09:07
Uh just just immediately my my reaction to that is like I would rather have a you know regular human kidney that was generated just for me instead of a genetically edited pig kidney that gets sort of uh transferred uh transplanted in.
2:09:22
But what what are you learning from from that space or tracking?
2:09:26
space or tracking? Yeah, I I think I think those initiatives I mean any initiative that tries to to crack the problem it's it's worthwhile but I'm I'm I'm quite skeptical with with those approaches because there are a lot of questions regarding the immune system how much like what would be the rejection of a human body in these cases
2:09:46
uh like the immunogenicity of the related process it's like a huge huge question mark um and and I actually think that if we if we want to solve the regenerative problem not only like one organ But like actual regeneration, whole body regeneration like Deadpool or Wolverine for example, we we actually need to leverage the fundamental mechanisms that the body already uses. So go there, understand what is the
2:10:09
So go there, understand what is the language, what is the code that the body uses for for morphogenesis and and and learn to modulate that code like more fundamentally.
2:10:18
I think that's important.
2:10:20
What's the user experience?
2:10:20
I you've been mentioning like electro stimulation.
2:10:23
Is this not a pill that I take? Yeah.
2:10:27
So there's there's a continuum of technology and this is important.
2:10:30
So for the limb regeneration the the stimulation will be a lot more complex than just like electric currents.
2:10:36
Of course it's it's a it's an anatomical structure that it's a lot more complex.
2:10:42
But starting like with the chronic wound healing with the short-term um research program uh we are working uh with a with a medical device approach in mind. Why?
2:10:52
Because medical devices are a lot easier to pass through the FDA, do clinical trials on top of them.
2:10:56
Once you start with biologics, they are extremely hard.
2:10:59
So we want to accelerate that process first.
2:11:01
And then I think that the ide the ideal version of this technology is kind of a combination product where you use these biohysical stimulation with light and ultrasound but also leverage kind of the molecular specificity of of proteins at the same time. Yeah.
2:11:17
uh if you're if you're successful as you sound like you're going to be, what is what is the craziest potential future that you could imagine?
2:11:24
Are we are we, you know, regenerating entire uh versions of ourselves? I want extra arms. Make me like Doc O. Yeah. I I I want Yeah. from Spider-Man. I want six arms. Uh yeah.
2:11:37
What What's the craziest, you know, potential potentially skip leg day, regrow your leg muscles? Can you imagine? John would love this. John would love this.
2:11:46
Just massive quads without ever hitting the leg press.
2:11:48
The world would change overnight. Yeah. Probably. Yeah.
2:11:54
Uh what like one one important Yeah.
2:11:59
I I think there are there are two two variants of like a really optimistic crazy future.
2:12:03
The first one I think it's more like a cultural change.
2:12:07
We we have like this idea that uh steel that if you like use you are be able to edit yourself with maybe a a hand a robotic arm and you are kind of a blend of robotic human person like somehow you will be stronger.
2:12:21
Uh but but that I mean that's just a bias that we have because we have not been able to engineer biology like successfully as we wanted.
2:12:29
successfully as we wanted. I I I would love like for humans to to to understand that biology could be as robust as any other thing and even start relating this technology to aging itself and and and of course there's still like a gap in which that that we we should answer that to what extent regenerating all the organs of your body would be related to
2:12:50
aging and increasing longevity but but I think there's we have big reasons to believe that that it it will be high connected so basically expand like the the lifespan of people like a hundred years more to be able to be more productive, have like healthier lives, change our our our societal construct of what it's a meaningful life would be amazing. And then on the limit, it would
2:13:09
And then on the limit, it would be also awesome.
2:13:11
It would be extremely awesome to be able to engineer like artificial biological networks in the same way that we are doing right now with uh artificial neural networks in AI.
2:13:21
So basically constructs, biobots that can go out there and solve solve all sorts of problems for us.
2:13:26
I I think that that would be amazing as well. That is amazing. I love it.
2:13:32
Congratulations and thanks for breaking it down for us.
2:13:36
Yeah, this is super exciting. It's a lot to process.
2:13:38
Like it's not a simple business. This is amazing though. I'm very excited.
2:13:42
But yeah, I mean we could do a whole hour on this.
2:13:43
So yeah, we'll have to have you back. This is fantastic.
2:13:46
Thanks so much for stopping by. We'll talk to you soon. Absolutely. Cheers. Bye.
2:13:52
Next up, we have Teddy Teddy Warner coming in from coming into the studio.
2:13:58
Uh, while we get him queued up, let me tell you about Figma.
2:13:59
Think bigger, build faster.
2:14:01
Figma helps design and development teams build great products together.
2:14:06
You can get started for free. Go to figma. com. It's fantastic product. Jord's addicted. He's a Figma addict.
2:14:12
He can't stop using Figma.
2:14:15
He designs endless slide decks in it.
2:14:17
Um, our our beautiful website tbpn.
2:14:20
com was designed in Figma.
2:14:22
Um, we've actually experimented the entire overlay that you've seen.
2:14:26
This is all from Figma and then gets baked into our production software which we don't talk about because it's our secret. It's our secret sauce.
2:14:33
Anyway, welcome to the stream, Teddy. Good to have you here. How are you doing? Good. How are you? I'm great. Thanks for having me.
2:14:40
I heard um I heard y'all are in a new studio, which is We are This is the first day.
2:14:43
We have a giant the first day.
2:14:45
Yeah, it's it's an honor.
2:14:47
I'm We're with Teal Fellow Tuesday.
2:14:49
We're very excited to have you here.
2:14:51
I said it couldn't happen. Yeah.
2:14:53
Uh can you introduce yourself? break us down. What are you building? How'd you get there? Where'd you grow up? Give me the whole thing.
2:15:00
I'm Teddy from North Carolina.
2:15:02
Used to work in a in a maker space in a machine shop.
2:15:04
This is my technical baseline.
2:15:06
One way or another, found myself in California.
2:15:08
Uh worked at Mid Journey in a past life.
2:15:10
Now I run a robotics lab called Intempus.
2:15:12
This is so funny about the Teal Fellowship.
2:15:14
really quickly like the whole idea is like dropping out of college and Jordy was making this joke that like oh like you know the teal fellowship has a combined you know five years of work experience because like no one's supposed to have worked and it's like a joke that every every startup's like oh you have 20 years of management experience combined but like most of you that we've talked to have years of experience somehow.
2:15:32
So were you working and going to school like how did you work at midjourney while not while not have like dropping out yet?
2:15:41
If you want the the very a bridged Teddy timeline is I I grew up in North Carolina, worked in this in this machine shop in this maker space for about four years.
2:15:49
Somehow wound up in biotech.
2:15:51
I was doing manufacturing for invasive electrodes for chronically ill children.
2:15:55
So everything from EEG to ECG electrodes. Very cool. Just an engineer.
2:15:59
Uh discovered I I was actually like exceedingly squeamish.
2:16:01
And so on a whim went to university in LA at USC for about a year. Uh studied art. Jordan's back. I'm back. I'm back.
2:16:11
I had to hit the air horn. How's it going for SC? Yeah, let's go. Let's go. We love USC. Um, had a total blast.
2:16:18
Studied art and technology and and a bit of business and some film and the whole shebang.
2:16:23
I I know when you go to California, you get pretty caught up in the culture.
2:16:28
And so, unsurprisingly, I started a venture.
2:16:29
Um, wound up meeting David, MidJourney David through this venture.
2:16:35
Uh, which is how I wound up at Midney. Very cool. About a year ago now. Nice. left nine months ago.
2:16:41
Now I run a robotics lab called In Tempest.
2:16:42
I make robots expressive.
2:16:44
Robots currently suck at communicating what they're doing.
2:16:46
They're really hard to understand.
2:16:47
You have to pay expensive nerds like me to come use the command line anytime you're trying to understand what they're what they're up to.
2:16:52
And so I make them communicate like every other mammal and like every other human.
2:16:56
Uh such that you can interact with the robot even though you don't speak its language.
2:17:01
What are we talking about robots?
2:17:02
I felt like it was pretty easy that that robot that was like on a stand. Oh yeah. Yeah. Flailing around killing.
2:17:07
That was pretty understand some of it's telltale. Yeah.
2:17:10
I mean, are we talking about like industrial robots like like like cucka arms and stuff or are we talking Roombas or the future humanoid robots?
2:17:19
Like what's the first product that you think needs what's the first robot that really needs humanization? Sure.
2:17:23
I mean, as you can tell, like robots is probably the largest umbrella term that we have.
2:17:28
It spans from humanoids to like glorified Roombas and everything in between.
2:17:33
So, how do you make them expressive?
2:17:36
Well, I think it's uh quite telltale.
2:17:38
If I have an anthropomorphic robot like a humanoid, I can say, "Oh, it waves."
2:17:42
Or, "Oh, it it smiles or moves around."
2:17:43
And, you know, this makes sense.
2:17:45
But Intimpus focuses on non-anthropomorphic robots, specifically the ones that already exist.
2:17:50
So, where do robots exist? They exist in industry.
2:17:52
Yeah, robots work great in industry.
2:17:54
99% of the time they work wonderfully.
2:17:56
Uh, like if you think about an Amazon warehouse, there's a bunch of little Roombas that roll around and move the the carts and stuff.
2:18:01
Uh, and you know, on occasion, probably 1% of the time, these robots fail, and they hardly ever fail for technically complex reasons.
2:18:09
Usually robots fail for some trivial reason.
2:18:11
Say, um, you know, Jord's in a in an Amazon warehouse, and there's a rainbow trying to pass him, and it gets stuck because Jord's in his way.
2:18:18
And so the room the the robot in the warehouse just fails and it leaves a fail code in the command line and it moves on and does something else.
2:18:23
And what Intestus does is we allow these robots to be expressive.
2:18:27
We allow them to give convey their intent to people like Jordy in this case who would not otherwise understand what the robot is trying to do.
2:18:35
So what if this robot upon seeing I'm not I'm not technical. I'm not technical.
2:18:39
Just really just not a shock.
2:18:42
If you see if if you see a robot like getting nippy with you like a small dog, it's like, "Oh [ __ ] I should probably move out of the robot's way."
2:18:51
And so you can save a bunch of money on debug costs uh and also reduce downtime of robots just by allowing them to communicate what they're up to.
2:18:57
And in the future, of course, we'll get into consumer and service and humanoids, but right now it's an all industry. Awesome.
2:19:06
Uh I mean uh you gave the example of Amazon.
2:19:08
They acquired KA systems in 2017, eight years now.
2:19:10
Uh I'm sure they're thinking about this.
2:19:13
Uh is Amazon the right customer for you or do you want to start kind of in the more mid-market or do you want to be more, you know, productled growth, developerled growth, hackers, get into like the next generation of robotics companies?
2:19:31
What's the go to market look like?
2:19:32
Yeah, I I have a few thoughts here.
2:19:34
I mean, so In Tempest's initial customer base are all enterprise robotics manufacturers.
2:19:38
They're people who sell the robots to Amazon.
2:19:40
Y and seemingly everyone is vertically integrating in in this policy space.
2:19:44
I think it's hardly prophetic for me to say that we're going to have a lot of robots in the future, uh whether it be in industry or in service or in consumer.
2:19:52
And that these robots are going to have to interact with humans.
2:19:54
And it's quite shocking that, you know, not many people are focused on the interaction layer, how humans and robots are going to interact.
2:20:00
Instead, they're focused on making robots functional. Yeah.
2:20:02
And so I'd love if more players like Amazon and big big players would get into this space.
2:20:06
I want you guys to imagine like say you're walking down Hollywood uh to the office in 10 years from now and you pass by 20 robots uh and one robot is running an Amazon model and one is running an Intempus model and one is running a a Tesla model.
2:20:18
This is like the same experience as going to talk with like walking down the street and chatting with a Nigerian and then a Canadian and then a Lithuanian.
2:20:25
There's three different languages, three different dialects, three different humors.
2:20:30
It's a terrible user experience.
2:20:32
Uh, and so it's seemingly very important that we figure out one standardized means of human robot interaction.
2:20:35
And the way that I'm prolifer proliferating into this space is through the enterprise manufacturers that are selling robots to big companies, to small companies.
2:20:44
As long as there's a scalable impact, I'll work with them. Cool.
2:20:48
How influenced are you by uh movies like Wall-E, right?
2:20:51
You know, the sort of the fun robot feel.
2:20:53
It feels like you want robots to be uh doing serious work but in a have it be sort of enjoyable to interact with them.
2:21:00
Is is that is that accurate? Yes, absolutely.
2:21:05
Uh I'm a big Interstellar fan. Yeah, Tar. Great. Great. Tar is killer. Tar is killer.
2:21:11
There's one scene in Interstellar where Cooper sets Tar humor level or truth level to like 90%. 90%. Yeah.
2:21:17
One of the tricks like behind making robots expressive is giving them emotions because what are you expressing?
2:21:23
where you're expressing emotions and you can view all of these as scalers.
2:21:26
And so I can give robots a 90% humor level or a 90% joy level.
2:21:29
And so it's pretty cool like it it shocking to me how on point Tars is.
2:21:34
There's a whole bunch of like interesting media that came out of the the creation of Interstellars on how they they simultaneously made Tar he's a cold ex-military robot and also Cooper's best friend.
2:21:46
And so this is absolutely the the intention. Fantastic.
2:21:48
Uh talk to me about the tech stack.
2:21:50
I imagine that you mentioned command lines.
2:21:52
Are you doing post training on a fin on a foundation model?
2:21:57
Are you using llama open source stuff?
2:21:59
Like what what how do you actually uh solve the technical problem?
2:22:04
What what is deeper in the supply chain of your tech stack?
2:22:07
So there's as I mentioned earlier like seemingly everyone is focused on vertically integrating control policy.
2:22:14
All the big companies are doing this and you get big horizontal companies that are awesome like physical intelligence.
2:22:18
Y and I really don't want to compete with these people.
2:22:21
In fact, I want to work with them.
2:22:22
And so when I initially put my mind to how do I construct this architecture, I I had to say like okay, I absolutely need to be an augmentation at top the transformer layer.
2:22:30
So after uh you know a robot is told what to do by its decision transformer, I run this interaction layer.
2:22:37
Now I want you guys uh you guys have both heard the phrase time flies when you're having fun.
2:22:41
Of course, this is like a pretty integral way in which humans perceive the world.
2:22:47
The inverse is also true.
2:22:47
Your perception of time moves slower when you're stressed.
2:22:50
And so we have fun and stress to emotions and they change how we perceive the world subjectively.
2:22:56
And so what Intest does uh we equip these things called time constants.
2:23:01
The question is like time flies when you're having fun.
2:23:04
What is time for a robot? Well, time is compute.
2:23:05
So what if you could allocate compute such that when a robot is having fun or when it's, you know, not needed to do any like daunting task, it can use the minimum amount of compute necessary.
2:23:15
can move as quickly as possible.
2:23:17
But when a robot is stressed, you know, when it's failing, it should use more compute to a collect more data so we can train the and and squash the edge case and b convey why it fails to again people in factories and people that would otherwise not understand what the robot is trying to do. Yeah.
2:23:33
And that that aligns with like test time inference scaling rules right now where you want to do more reasoning for harder problems. That makes sense. Yeah. Very cool. Uh anything else, Jordy? Are we good? I think we're good.
2:23:44
But come back on again soon, Teddy. Yeah, this is fantastic.
2:23:46
This is this is super exciting and uh I look forward to interacting uh speaking uh the the Intempus language with many many robots throughout my life. Me too. We'll talk to you soon. Have a good one. Cheers, dude. Bye. Bye.
2:24:00
Next up, we have Sigil, founder of Extraordinary coming on the stream.
2:24:06
Very excited to have him.
2:24:06
I got to say these TFL is pretty punctual. We haven't had late.
2:24:12
This is a very crazy thing.
2:24:15
You get this calendar invite.
2:24:15
You just hop on the stream, buddy. He's here right on time. It's amazing. Hey, join at 142.
2:24:21
Um, Sigil, great to have you on. How you doing? I'm doing pretty good. How are you? Uh, doing great.
2:24:27
It's been a super fun day so far.
2:24:29
Uh, the class is absolutely stacked and congrats on on making it in.
2:24:35
Why don't you start with a bit of backstory, your personal story, and then what you're working on? Yeah.
2:24:41
So, I'm CJ Joel, the founder of extraordinary. com.
2:24:43
We are the extraordinary talent company of America.
2:24:47
Um, if you Google 01 visa for extraordinary ability, you'll find my face is the cover image.
2:24:50
And I'm the guy going around giving out these alien of extraordinary ability hoodies that you see on your X feed. Amazing.
2:24:57
Uh, talk about your personal journey to kind of building this company. Yeah.
2:25:03
So, um, when I was in high school, uh, I built this, uh, project that was, I think he did like 100k in revenue this first month.
2:25:12
And I used the funds to pay someone to finish high school for me. And I San Francisco.
2:25:16
And, um, I came here on a tourist visa.
2:25:19
I'm originally from Toronto, Canada.
2:25:20
I'm like, "Holy [ __ ] these people are based uh, these people are incredibly ambitious. I have to stay here."
2:25:26
And if you don't go to college, um, at the time, I originally got into the Mnt program at the University of Pennsylvania.
2:25:32
I decided to opt out because I was pretty stubborn.
2:25:35
I I really just wanted to be in Silicon Valley and the only visa options was the 01 for extraordinary ability and this is what the US government calls it.
2:25:44
And at the time, this was probably 3 years ago.
2:25:48
Uh it wasn't as proliferated.
2:25:48
The one person I knew was Patrick Collison who had that.
2:25:53
Um I couldn't get a TN visa or the H-1B cuz you need a degree.
2:25:55
So I had to go for the 01.
2:25:58
and I hunted down every single person in Silicon Valley that uh that had the O1 visa tried to understand what could qualify and after 8 months with an immigration lawyer. I filed it.
2:26:08
It was sponsored by Nepal.
2:26:08
I built this company with him and uh I was approved at 20 and I was like, "Holy [ __ ] this is it's so hard for the world's best talent to to come here. It's so unintuitive."
2:26:18
And uh I made a YouTube video uh about the about the process that has since been seen by hundreds of thousands of people.
2:26:25
And um I I made this this hoodie during uh as merch for that YouTube video.
2:26:32
So, and that kind of took off.
2:26:33
What are the overall trends in the 01 visas?
2:26:36
It feels like I mean like immigration is obviously complicated, but it feels like all the stars align for like everyone being like 01's are great.
2:26:44
Uh Elon has come out and said he, you know, loves 01's and like it feels like it's aligned with American values and freedom and like brain drain and even strategic stuff.
2:26:54
like there's a lot of there's a lot of pro um are the number of ones 01's increasing? Is this a new program?
2:27:00
Can you give us like a little bit of like history and trajectory for the 01 program broadly?
2:27:04
Yeah, I mean I I like to think that the 01 was created for the Manhattan project.
2:27:09
I think the the it's it's that ethos.
2:27:11
Um I I don't know the exact origins but it's it's it's been around and it's it's been used to the premise of it is that you are the top you're an individual has risen to the top of your field.
2:27:24
I like to say you're like the top.
2:27:26
1 percentile at at what you do and USCIS has these eight criterias to adhere towards.
2:27:33
Um, you can you can be a tattoo artist, you could be a chip designer, you could be a uh, you know, the founder of the fastest growing AI company who I'm currently helping out.
2:27:47
Um, as long as you can prove that you are extraordinary at what you do, you can get it.
2:27:51
And I think for the longest time it was it's very unclear because when you go to the website, it's like examples you uh, you have a Nobel Prize or like whichever.
2:27:59
And the the the way this company came to be was I literally mapped down um 500 people who have 01s and EB1s for extraordinary ability.
2:28:07
I gave them these hoodies.
2:28:09
I actually built a website and just compiled them in terms of like their stories and like how they came to America.
2:28:14
And um yeah, I think that because of that more and more people have been applying for it. There's no cap to it.
2:28:22
as long as you meet um their bar for and convince USCIS that you're extraordinary, you can get it.
2:28:30
And so I think it's very positive summit of the visa. Yeah.
2:28:31
So what what is the process actually like?
2:28:33
I imagine there's a lot of paperwork and lawyers and cost stuff that's you know tailor made for LLM automation and just even just normal SAS apps and stuff and form filling.
2:28:45
Um, what are the headaches that 01 uh recipients typically report as particularly painful?
2:28:52
I mean, my process took eight months.
2:28:56
It cost me more than $10,000.
2:28:58
I mean, you got to you got to keep in mind what what what is the end product?
2:29:02
Um, I have a printer here.
2:29:04
You're literally printing 500 pages of paper like with a bunch of citations to all evidence that you might have heard like there's recommendation letters to which you got to go chase down people and be like, "Hey, can you please vouch for me being in America?
2:29:17
I think I can contribute to to this economy.
2:29:21
One-shotted by ChachiBT from now on.
2:29:21
You can imagine so many M dashes.
2:29:25
There's thousands of M dash."
2:29:27
Let's delve into why he should be a 01.
2:29:29
I'm sure I'm sure that's happening.
2:29:32
That got shipped shipped off to like USCS, Texas.
2:29:33
They they still use like they still break open code open the box and then scan it which is like super archaic. Wow.
2:29:41
They don't even accept like a PDF. No, they don't.
2:29:46
I I have to ship it through FedEx and then it paran Yeah. And then some scan it. Wow. Very efficient.
2:29:53
I high school diploma just adjudicates whether you're extraordinary. Okay.
2:29:56
Well, we're big fans of paper, but even that Yeah. Yeah.
2:29:59
Even that might my my strategy.
2:29:59
Um how how have you thought about the the business model for extraordinary?
2:30:03
Uh it feels like you know there's some immediate probably upfront value that you can capture and just making this process less painless.
2:30:12
But when you think about taking somebody at the absolute top of their field and bringing them to the best economy in the world where they're going to attract other talent and capital and things like that, it feels like a lot of the value creation is on the things that they The obvious business model here is to sell the data to venture capital firms. Yes. Yes. Yes.
2:30:32
Which I I I feel like might already be happening judging by the involvement of Naval. No.
2:30:40
I mean, what's the actual business model? Jokes aside. Yeah.
2:30:42
So, I'm tempted to rename the company to the Victoria Talent Company of America.
2:30:47
Um, our our flagship first product obviously just making this much more seamless and faster.
2:30:53
Like I think it should be a standard deviation uh of speed up which already is we already power ramp uh cognition and we of top founders building uh companies that we know and we should see we should see a lot more of that on our uh X feeds coming along.
2:31:11
coming along. I mean look you can you can make a good amount from providing the the best product uh and and serving these great talent to relocate here on the visa basis but um where I want to take things like I I don't actually view this ultimately as a as a visa filing company I think it's an extraordinary
2:31:28
talent company and um if you look at the life cycle of extraordinary talent like someone who's I don't know like a senior engineer creating who's shipp like 60% of Devon I just filed that one case right like the the whole life cycle of them uh one being like placed at their
2:31:47
company all the way to um how they even relocate there like most of the value capture isn't actually that like visa filing and I think also AI is going to uh eat away at margins in terms of services across all technology companies and so then like what what can you build that has network effects that has innate
2:32:06
distribution um that can just attract the world's best talent like I want to build something where if you're remotely ambitious and talented, you have a means to be discovered and uh if you want to if you remotely want to come here, like you're going to be on extraordinary.com. com.
2:32:22
How do you how do you think about giving people an opportunity to get to America without having credentials yet, right?
2:32:30
Like like presumably there's somebody out in the world who's 16 years old.
2:32:35
they're in some like high school type situation and they actually could be one of the world's best programmers or something like that, but maybe they haven't gotten a job.
2:32:44
Is there an op is there a world in the future where you would create sort of like open testing where people could kind of like uh prove their abilities?
2:32:52
I'm sure somebody would figure out how to how to hack it pretty quickly.
2:32:55
But how do how do you think about kind of creating the ability for for people to to prove their capabilities prior to getting the ability to get traditional credentials? Yeah.
2:33:07
First off, I I actually got a 16-year-old approved for an O1 visa a few weeks ago.
2:33:16
What What are they extraordinary at?
2:33:18
um uh interaction design for Roblox. Amazing.
2:33:25
The most elite Roblox player and um on on on the on the talent discovery front um I I think that uh the the way that the way that we value talent is evolving.
2:33:39
I mean right now like it's so funny like there's Meror but then the FL founder of Culie is like building software that hacks the Mor interviews.
2:33:50
Proxies for measuring talent are just like falling through completely. Hilarious.
2:33:54
And so like how do you then measure talent in this new age where uh you know we value people who are able to leverage AI much more and I think the the way that companies hire will evolve.
2:34:06
Um and we need to account for that.
2:34:06
We need ways to of assessing people but also discovering people to showcase just how like competent they are.
2:34:14
And I'm a big very big believer of being able to give those means to um people around the world um regardless of their traditional like you know accolades and just being able to uh empower people who have the merit and who have the ability and uh they should be discovered and sponsored to come to America. Awesome. Amazing.
2:34:36
Well, congratulations on getting into the teal fellowship and uh I'm sure there will be many teal fellows in the future that are go through your your program already helping them.
2:34:46
I'm excited for the first 01 bodybuilder.
2:34:48
We saw what happened with Arnold Schwarzenegger when he came to America.
2:34:53
Had a fantastic impact outside of bodybuilding.
2:34:55
Went on to be the governor of California. Governor of California. Pretty good one.
2:34:59
So, don't count out the bodybuilders.
2:35:01
Let's get all the elite bodybuilders from all over the world.
2:35:05
bring them here on at once. That's my goal.
2:35:07
As long as you're the top at what you do, uh, we help you. That's fantastic. That's great.
2:35:10
Well, thanks so much for stopping by. Thanks for coming on. We'll talk. Cheers.
2:35:16
Next up, we have Koki Mashidita coming into the studio.
2:35:18
Uh, our last Teal fellow of the day, finishing it out strong.
2:35:24
Welcome to the stream, Ki. How are you doing?
2:35:26
Sorry for keeping you waiting.
2:35:28
We were running long, but you're here.
2:35:30
Please introduce yourself and the company that you're building.
2:35:34
Hey guys, uh thank you for having me on. Uh thanks for the time.
2:35:36
I'm Ki, originally from Japan.
2:35:38
Um you know, I spent a lot of time growing up thinking about natural disasters.
2:35:45
I think, you know, in SF, you don't, you know, it's like nice weather, everything's, you know, kind of nice and and you get to work on really, really interesting things.
2:35:53
But, you know, I was in the 2011 earthquake where, you know, 18,000 people died in a couple days and a lot of my friends, you know, homes were destroyed.
2:36:00
And you have these like, you know, typhoons, right?
2:36:02
Um that like blow away my like grandparents roofs every like three years or so.
2:36:06
And I keep asking them like like why?
2:36:08
Like you can just like move because you know you're in Typhoon Alley.
2:36:14
Like what's the whole point of you know having to stay there?
2:36:18
But it's like something so deeply ingrained, right?
2:36:20
It's something you know that you accept that you you know kind of just accept as as feet.
2:36:25
kind of just accept as as feet. And I was talking to the environment minister and the and the infrastructure minister of Japan recently and they were saying that they they've spent billions of dollars on you know disaster infrastructure like they would build these like you know columns under Tokyo
2:36:40
right so like when it floods the water can go in yet like they were like oh shoot we haven't actually solved the the problem which is the intensification um of these events but back then I you know I was 11 and I did not know that you can you know actually start to fight these natural disasters. Um, but I started
2:36:58
Um, but I started like building, you know, robots when 3D printers were really popular, started selling them.
2:37:04
Um, and then the money I made from that I put into Bitcoin and then, uh, got into like hedge funds in high school when I started a a small one.
2:37:13
Um, and then and then in college I I came across this, um, uh, startup which was building AI weather forecasts.
2:37:21
Um as like not many people think about like you know weather forecasting as like this this huge expense that you have to take on but when you look at you know these larger countries they spend about $2 billion per year on supercomputee essentially like you know
2:37:36
a big chunk of the world's supercomputers are used on running partial differential equations to be able to calculate the weather right it's like something um that you don't really think about and with machine learning what you're able to do is reduce costs
2:37:51
by 99% an increased resolution by 100 times and when you see that you know like we started out you know very small like like five people but you know I was splitting time at Berkeley and then um at this startup and we became like the national weather forecast for the
2:38:06
Philippines where it's you know was a lot um more affordable and I started to think about okay wow like our understanding of you know not only just earth itself but like being able to you know model ga gather data and then predict has gotten so much better. I
2:38:20
I start to think about like what's the next natural step, right?
2:38:24
Like the whole point of gaining, you know, more intelligence is so that you can act upon it.
2:38:30
And that's what I said to think about.
2:38:32
Can't really specifically tell what we're tell you what we're doing um in terms of, you know, the the application layer, but this is kind of like the the transformation we're thinking about. So, is it magic? Is it spells?
2:38:45
Are you going to bomb the hurricane? Is that is it a bomb?
2:38:47
I've heard that pitched before.
2:38:50
I I I wonder where you heard that from.
2:38:53
It's a 10,000 times the power of a a hurricane.
2:38:59
Hurricanes are interesting, right?
2:39:00
Because um the power the the amount of energy that goes in there is is so strong.
2:39:06
Like if you look at Google research, they used to have this program where they're trying to harness energy um out of a hurricane.
2:39:11
And if you can, you know, harness it properly, you can power the United States for for months and months just from one hurricane. That's incredible.
2:39:19
Which is like a crazy thing to think about.
2:39:22
So So you're going to make them and then you're going to control them and you're not, you know, and then there's going to be a bunch of sci-fi offshoots where Koke be nice to me.
2:39:33
Koke had a good thing going.
2:39:33
He was powering a lot of data centers with his his homegrown hurricanes and then one got out of control, you know. Yeah.
2:39:39
Uh but yeah, I mean talk to me about uh weather forecasting and kind of the data sources because obviously yes massive uh kind of revolution in AI machine learning generally but you slipped in that you're doing the weather forecasting for the Philippines.
2:39:55
Yeah, like you guys are like a data provider already.
2:40:01
The previous company I I worked at during um school uh that's what we're focused on.
2:40:06
Um and and a lot of it is coming up with with models, right?
2:40:10
How can you compute these partial differential equations more efficiently um with the same amount of data you have?
2:40:16
Um and so you look like Deep Mind or you know Nvidia coming up with their like frontier models, right?
2:40:20
Like being able to you know run diffusion based um models to to forecast better.
2:40:25
But for for us what what we think is you know fundamental is collecting data that no one really has.
2:40:32
one really has. like software has come has become so commoditized that like now it's just like clawed and then you know XAI and then like open A it's just like a never- ending battle for us it's like how can you collect data and how can you like see the world in a different way that allows you to to you know act upon
2:40:49
it and how can you you know causally um act upon um like a weather phenomena right yeah uh you you mentioned diffusion uh is there a distinction between weather forecasting using diffusion models versus transformer-based models or token prediction models like is is that a meaningful distinction or are you kind of using the term broadly? It gets really complicated uh in a sense
2:41:13
It gets really complicated uh in a sense that I think you know both of them are good at you know kind of milking um as much you know information you know looking at okay what what are the laten parameters how can you you know figure out you know somewhat unnoticeable um characteristics within within weather models.
2:41:34
But I think the interpretability um of weather models have also become very important, right?
2:41:39
Like if you can like characteristically like define okay, which parameter within a a highdimensional vector, right, is creating a lot of bias, how can you, you know, tweak that so that you can you know get back on track.
2:41:50
And this like weather is so chaotic that like even one small pertabbation um in an initial condition can really mess up the forecast.
2:42:00
And that's why it's really difficult to forecast like a week out.
2:42:03
And so being able to like assimilate data as you go.
2:42:05
Um and that's why like we're focusing on okay, how can you, you know, collect data that that no one really has.
2:42:12
Um so that you can, you know, make sure you're not like debiased. Um yeah, too much.
2:42:15
Uh talk to me about the data sources for this.
2:42:18
Uh I'm familiar with the Doppler radar systems that like the local news has.
2:42:25
Um, but are satellites playing a role now in weather prediction?
2:42:28
Is the actual data that we're gathering to build these models on top of improving?
2:42:34
And what are the key vectors that are driving uh better data going into these models?
2:42:42
Yeah, satellite data is interesting.
2:42:42
Um, you know, a lot of reanalysis data has always been uh used and it's, you know, made by Noah or ECMWF.
2:42:49
Unfortunately, Noah is not doing uh too well now.
2:42:52
Noah is not doing uh too well now. what we're doing is building sensors and then literally like flying um into you know storms or into clouds to measure um within them right it's it's a complex convective process that you really have to you know just send something in um to
2:43:11
measure autonomous vehicle I assume um no flying the plane personally our our um our focus is on how can you build infrastructure right like infrastructure in a sense that Okay, models are a part of the infrastructure, but how can you collect data um for you know a targeted you know vehicle? So for example like
2:43:32
you know vehicle? So for example like hurricanes are interesting right like I'm sorry like I can't you know say everything in detail but in terms of hurricanes it's like okay if you want to see how convection is happening how what about you know um the the density of
2:43:48
clouds what I don't know grapple columns and and water droplets exist you really just have to you know um fly like a plane in there like it's hard to just do like drones because it's too turbulent or these like sensors are you know too big and so thinking about that um is a is an interesting problem as well. But I
2:44:04
is an interesting problem as well. But I think fundamentally right what we're pushing against is that many of these you know reactive methods of of disaster if you look at you know insurance right like there's about like $140 billion per year in insurance premiums issued in the US uh
2:44:21
for like tropical cyclones um and yet like insurance premiums have doubled every single year for the last you know four or five years in many coastal cities and when you look at like another catastrophe happening like last year hurricane Helina and Milton was was bad, but it could have been a lot worse. They weren't even cattier
2:44:38
They weren't even cattier fives and Congress had to give out hund00 billion in aid, right?
2:44:42
But when a next hurricane Katrina happens in, you know, Florida, for example, then insurance is just going to um be insolvent in many ways.
2:44:52
Is there a market for better weather data by itself?
2:44:57
I mean, it sounds like fighting the hurricane is important, but uh we talked to somebody who works in data brokerage loosely and said like hedge everyone talks about, oh, we'll sell it to hedge funds, but there's only like hedge five hedge funds that buy anything and they're kind of stingy apparently and they don't really buy that much data.
2:45:13
You think about the insurance market.
2:45:14
Yeah, $140 billion dollars.
2:45:14
But if you're an insurer and you know that, you know, a whole bunch of houses are going to be destroyed in two weeks or you know it in four weeks, you're not really going to be able to adjust premiums that fast to make up for that.
2:45:28
So it feels like and then and then you look at the government, the government might want to know, but even then it's like are they really a good buyer?
2:45:34
I'm just just to continue spitballing in in California when there's certain communities that are threatened, they'll have like a private fire response.
2:45:41
I guess that makes sense.
2:45:44
Basically, even an HOA is that a good is that a reason I'm just thinking about like the the dynamic right now where a a hurricane is effectively forming. Yeah.
2:45:53
And the response is to watch it and then tell people to evacuate based on where you think it's going to go. Yeah.
2:46:01
And it's kind of insane that we don't have any sort of proactive response to say, "Hey, this thing is progressing to being more and more intense.
2:46:11
Can we, you know, sort of stop it?" Yeah. So, yeah. Yeah.
2:46:13
Data market, I I don't know how much you can talk about it.
2:46:17
We might just have to have you back on when you No, when you when you look at insurance, it's pretty insane.
2:46:22
Like, they look at, you know, okay, what does, you know, hurricane damage look like in the last 40 years?
2:46:28
Okay, let's you know aggregate average and then kind of you know add bias for like some of the intensification of these events or the increase and the exposure and that's all you do.
2:46:37
And so a lot of the interesting financial assets come up when you look at like catastrophe bonds like catast they're like certain hedge funds that literally just trade on catastrophs right it's just about like estimating what is the the the arbitrage in terms of how much you know wildfire is going to wipe out you know a certain city or you know same for hurricane as well makes a ton of sense.
2:47:00
Uh well we'll have to have you back when you can talk more about the product and and where you're going with the company.
2:47:06
Uh but this was fantastic.
2:47:07
Thank you so much for hopping on. This is a real pleasure. Excited to hear more. Congratulations. We'll talk to you soon. Thank you. Thank you for the Bye. [Music]