Transcript
What the heck is going on with crypto? The SEC is suing Binance, suing Coinbase. As usual, the headlines are all BS, but they do create a feeling of panic among Main Street investors who don't really understand what's going on. So I brought on one of my favorite guests, Omen Malakhan. He's come on many times before to talk about the history of money, crypto. He was part of the whole Wall Street Insane series where we talked about all our adventures on Wall Street from my hedge fund days. Used to help Citigroup with all their crypto activities. He wrote a great book about crypto and Bitcoin called rearchitecting trust. I highly recommend it for anyone who's trying to understand this whole $1,000,000,000,000 industry. And he brings up some amazing points in his podcast, like, why crypto is here to stay and why this is potentially a great opportunity, all these things that are happening right now. Anyway, listen to the podcast. Here's Ahmed. This isn't your average business podcast, and he's not your average host. This is the James Altucher Show. Omid, first off, how's life? How's things going? Life for me is good. Things are good. In a way, I am relieved that the US government has decided to sue everyone in my industry into oblivion because this is now the beginning of the end of how this whole thing is gonna play out. I agree with you, but first off, let me tell you a small experience I had. A couple weeks ago, I was in Norway, and I was talking to bankers who work for the central bank, or one guy had previously run the central bank. I was talking to a whole bunch of central bankers in Norway. They're all serious about taking their national payment system to the next level, looking at crypto, looking at CDBCs. Like, every country in the world, it seems, except the US, is taking crypto extremely seriously. Like, nobody wants to be left behind, and they realize that the old system is an antique almost. Yeah. And I would tie those things together. I think one of the reasons every other country is increasingly taking crypto seriously is because of the US's increasingly negative attitude towards it. It's almost like a very effective advertising campaign, which is like, hey. America really doesn't like this thing that might be a threat to American financial hegemony, to which if I was any other country, we'd be like, oh, really interesting. So it's a threat to America, you say. Well, we we've been looking for a way to diversify from America's choke hold over the global financial system. We should look into this crypto thing. Well and, look, every country's currency is weak relative to other currencies, usually the dollar, and some currencies are weaker than others. So, of course, they would like to latch on to a potentially stronger currency that's global where they could become a banking center ahead of the US. I mean, I think this is the thinking in many countries. That's such a great point, James, because there's always been this race to see who can be the next major global financial hub, because we've seen what it's done for London, Dubai, Singapore. I think at this point, it's pretty easy to see how crypto is going to be a big part of the future financial system. Well, is it or isn't it? Like, I don't wanna I always wanna make sure I'm not smoking crack and I'm not being religious about crypto. And those might be 2 separate things, but in this case, I'm linking them. So in general, I don't wanna be smoking crack, but I also don't wanna be religious about crypto, like blindly religious. Like, is it a done deal that crypto is gonna be part of I mean, money evolves. Money always evolves. It went from metals to paper money back by metal to paper backed by the trust in your government, you know, AKA fiat money. And it went digital with basically most money now not being cash, but just sort of, like, a line in some account on a bank or a federal reserve or whatever. And now we're we're saying crypto solves many of the problems left over with fiat money. Like, you have to trust your government. You have to trust many banks that are in the way of every single transaction. You have to deal with fees upon fees upon fees. You know, as you mentioned last time, $3,000,000,000,000 in fees every year from from financial transactions. So crypto solves all these things, but it is it kind of a done deal that people said, okay. When the infrastructure is built, we're all gonna switch to some form of either Bitcoin or central bank digital currencies with some sort of blockchain based currency environment. Let me turn the tables on this a little bit because I think it's a very good question. We've spent a lot of time in my previous appearances on this podcast discussing all the reasons why I think that's true, all the historical architectural technology reason. So I wanna try a different argument this time. Okay. The one thing I think everybody would agree about crypto right now is that it is getting an insane amount of negative attention, particularly within corporate and political circles. You know, just just the fact that, like, so much of the US regulatory agencies' attention is now going to, like, suing Coinbase and Binance and creating new rules. Can we, summarize that for a second? Because for anybody listening who doesn't know, something that's been happening in the crypto world in the past few days, really, or the past week is that the SEC, which is the regulatory government organization, which is in charge of all stocks and and things like that are saying that some cryptos or securities are being very vague about how they're defining cryptos as securities, but that they're not letting that vagueness stop them from suing crypto exchanges that are trading in these, quote, unquote, securities. There's a disagreement, basically. The SEC says they're doing something illegal at trading securities, and they're saying they're not even trading securities. And there's sort of this gray area in between, but that's gotten everybody freaked out, including the exchanges. And it's driven the price of crypto down as people say, hey. I'm gonna take a step back and wait and see how this shakes out. And, you know, of course, the headlines are going crazy and saying the SEC is trying to wipe out crypto, forgetting the fact that crypto's got several 100,000,000 users all over the world, not just the US. But, anyway, go ahead, Omid. That's right. And some of the allegations, particularly against Binance are are even worse than just violation of securities laws. There are allegations of fraud and them, like, commingling customer funds and and wash trading and other extra bad things. And why are they saying that? Because the s c because Binance has been pretty transparent from what I know and basically says that's just ridiculous. Like, where does the SEC have any evidence? Yeah. I mean, it their one is that they're clearly, working with some of the former executives of Binance US. Binance US was supposed to be an almost independent company that all it did was license Binance's technology and software, but, otherwise, like, completely different structure, independent management, you know, different kinds of controls and stuff. And, also, in the SEC suit, our claims that none of that was true, that it was really just a front, that CZ, the same individual who runs Binance Global, was also running Binance US. But they obviously have high ranking insiders that are cooperating with the investigation, and they have documents. We'll see how they got access to those documents, and and we'll see. Though, I I do think I wanna differentiate. It's important to know that, like, one way to categorize the Coinbase lawsuit is, like, procedural. Like, oh, Coinbase didn't have the right paperwork in place and didn't register and fill out the right form, etcetera, but there's no allegation of, like, you know, fraud. And, you know, full disclosure, I own some Coinbase shares, but I wouldn't own Coinbase shares if I thought they were doing anything like that. The Binance accusations or allegations, if true, and I have no idea if they are, would mean that if you are a customer of Binance, you should be concerned. But, nevertheless, to your point, the the US government has has come down very hard, particularly from the Securities and Exchange Commission, and that's the backdrop. And, I would summarize everything that's happening that it's basically become impossible to do crypto in the US in a compliant way, and that's not just my opinion. If you're a centralized exchange? If you're an exchange, but even if you're a hedge fund who wants to use it in exchange to trade. Like, it's not clear if any exchange, except maybe, like, the cash settled futures or the CME, are the kind that your your, compliance people would be comfortable with today after these latest lawsuits. Well, let me ask you about that. Like, what it doesn't seem like these lawsuits have anything to do with the decentralized exchanges like Uniswap or PancakeSwap. But what are you say are you saying that US citizens might not be able to use those? Or well, there are 2. So one crazy thing in the lawsuit against Coinbase, Coinbase has a bunch of different services. One of them is, like, completely centralized custodial. They control the keys. You trade through them. But they also have things like noncustodial wallets. That's just software that you can use to generate your own keys and do whatever you want. One of the allegations in the SEC lawsuit is that because some people use this noncustodial wallet to do use DeFi like Uniswap, then Coinbase, who created that wallet, should have had a broker dealer license. So there's all this stuff now. There's even a pending definition change the SEC has proposed that it, in its own rulemaking, wants to change the definition of an exchange in a way that would suck up all of DeFi, and then would make all of the DeFi not only noncompliant in the US, but impossible to make compliant because if a DeFi protocol is just code and then the FCC says, well, we think that's an exchange, and the code needs to come in and register. And the code needs to have a way that if we tell them to change things, the code will comply within, you know, a month. Right. Which they can't do. There's no there's no real authority. Right. You know? And and it's, like, it's it's Uniswap is immutable code. You can't change it. You can, you know, issue a new code, but the existing code is deployed forever on the Ethereum blockchain. So, increasingly, it's becoming that if you're a developer and this isn't just my opinion. Like, earlier today, I had conversation with somebody that has a start up that wants to offer crypto custody key management services. They're debating they're originally a US company. They're debating if they should be off shore. Protocols are shifting people, literally telling some of their people that they want them to move to Europe or Asia. Capital is moving. You have murmurs that increasingly VCs are not gonna wanna invest in US space crypto startups doing anything because of all this regulatory uncertainty that the VCs are telling the founders, you know what? Move to England or Dubai to start your company. So I would summarize it all as being that the US government has now fired its best shot at really trying to cripple the industry here. No. We'll see. I don't think it in the long term, I don't think it's gonna work, and I think within a couple years, it'll be viewed as a major strategic mistake. So it it seems to me, and it doesn't really matter the reasons why the SEC is doing this, but it seems to me obviously they're just it's a power play. It's the Securities and Exchange Commission, so they get more power and money the more securities there are. So it's a pretty convenient to say cryptos are securities. But it is scary actually right now. Like, we really don't know what's gonna happen and what they're gonna do and who they're gonna sue next. So it really does put a damper on temporarily or maybe for permanently, like, the end of the entire industry because you don't know what's what's legal and what's not, even though crypto's been trading fine for over a decade. Right. And and I'll tell you, like, an interesting point. Someone I know who works for a major American financial firm that's been trying to get into crypto. The point that he made to me was he said, look. We do many things, much of which is regulated by the SEC. And our fear now is if we try to do crypto even with the best of intentions of being compliant, that's just going to bring the hammer down on everything that we do. And this is the chilling effect. I think it's important to know. Right? When regulators come down on a sector and inter an industry and activity hard, it's not just the people who are already doing it that are going to be affected. There is this very chilling effect that those who are strongly considered doing it are now going to change their mind because every institution has risk and compliance people, and they're always weighing the cost and benefit of doing something. And if one of the downsides of doing anything in crypto is that Gary Gensler might come after you, then I think a lot of reasonable people are gonna conclude it's not worth it. Yeah. Alright. Yeah. That's true. In America. In America. Right. Because in other countries, it doesn't affect you at all. Other countries are moving in the exact opposite direction at this point, which is also fascinating. We mentioned that in the sense that they would like to be this world center of banking before the US does, and they're winning. Like, I would say the UK, Dubai are probably front runners in this, but many, many countries are trying to be centers of banking for crypto right now. But how does this play out here? Like, what's happening? Is there any substance to what it almost doesn't matter if there's substance to these lawsuits, but, like, just what's gonna happen? So, the quickest thing that would change this will be the outcome of next year's election, I think. Because in the US, for whatever reason, it's crypto's become very polarized, and the Republicans are extremely pro. I mean, even yesterday, you had a couple of Republican members of congress propose a bill to fire Gary Gensler. And, like, that you know, congress people in congress will disagree with regulators, but this is getting pretty toxic. There are candidates who are running for office, for president, who are increasingly pro crypto. Interestingly enough, they come from both sides of the aisle. Yeah. Because I I never really view this as a republican or democrat issue. No. Me neither. And and I mean, this very much reforms the problems in the economic system. It reduces fees. It's it's good for people who who don't like spending so much money on financial fees. It's inclusive. Right? The the demographically, young people like it. It takes power and influence away from the too big to fail Wall Street banks that nobody really likes. So, yeah, I mean, I I am shocked that the breakdown has falling along the lines that it has, but the election could change that outcome. Other than that, all of this is going to go into the courts now. And the one thing that's become clear is that because the SEC in particular under Gensler acts in such bad faith, that it's not about rules, it's not about protecting customers, it's about hurting crypto, No one's gonna try to be compliant anymore because it's pointless. Right? In fact, Coinbase, out of every crypto company in the world, was probably the one that tried to play ball the most. You know, we can question whether they went about it the right way and some of the things they should or should not have done, but, nevertheless, like, they made a strong effort to win over US regulators for selfish reasons. Right? Like, if Coinbase had actually found a way to get licenses and approvals from Gantler and the SEC, it would only help his business, but it was all for naught. So everyone's just gonna fight everything now, and then it moves into the court system. But as we know, that process often takes years to play out. And the third thing, which I think is really worth watching now, is that because the rest of the world is moving in the opposite direction, America's in transience is increasingly going to look stupid geopolitically. You know, like Hong Kong and China, which had all but banned crypto, is suddenly coming around to being very pro crypto, and I think they're doing that specifically because they see America fumbling the football here. And it's like, if there's one thing in Washington everyone agrees about, it's that the US should not be ceding anything to China. And I think within a year or 2, it'll become very obvious that if we don't change direction with crypto, we will. Yeah. I mean I mean, right now, what's the status with China? Like, don't they have, crypto as illegal at the moment? Well, James, guess after the US which country has the second most amount of Bitcoin mining in it. I'm gonna guess China. That's right. And that's after they quote, unquote banned mining. Yeah. But over 20% of the global hash power, best that we can tell, is in China. And Hong Kong has suddenly approved crypto for retail trading, announced that it's gonna come up with a licensing regime for crypto a a industry friendly licensing regime. The government has encouraged its banks to bank the crypto companies that are that were unbanked in the US deliberately. And, again, put yourself in the position of the Communist Party of China. They had their reasons for wanting to restrict certain amounts of crypto, for example, to preserve their capital controls. Right? But here you have a rapidly growing, dynamic, disruptive industry. It already has 100 of millions of owners, investors, adherents all over the world. There's a lot of capital in crypto. It stood the test of time despite all the volatility, and your biggest geopolitical rival hates it. Yeah. That almost in of itself to me is reason enough for the CCP to be like, oh, well, we'll figure out how to make crypto work for us. So what's gonna happen next with this? Like, right now, the SEC, just in the past week, has put, you know, the whole industry into this spiral of what's next, who's gonna get sued next, what's the actual law here, we don't know, and on and on. Yep. So what's actually gonna what do you think is gonna how is this gonna play out? We have a little bit of a in between period now where, some of the court cases have been already going on for years, so we await to see what the judges rule in them. It is interesting that independent of crypto, the Supreme Court has increasingly been harsh on regulatory agencies that it believes are stepping over their bounds. The current court increasingly takes the position that if just because Congress didn't rule on something doesn't mean the regulators get to. And there's hope. There's a famous case involving Chevron that people think the Supreme Court might overturn, and that could have reverberations throughout all industries that are currently in a state of confrontation with their regulator over an issue that was not explicitly spelled out by congress. So that, I think, is a sort of a tailwind. But, ultimately, the thing everybody should remember is that crypto's gonna keep cryptoing. This is not just an American thing. It's a global thing. Europe, as we speak, has a new pro adoption regulatory framework going into effect. In the UK, you have the current prime minister talking about how he wants to make the UK a hub for digital assets. Yeah. Dubai and Abu Dhabi, you know, they're they're you could argue number 1 in that race to become the next major global financial hub. So they're I hear stories about it, like, everything they're trying to do to help American crypto companies set up shop there. So usage is gonna continue. I think adoption is gonna continue, and the stuff that you can't do in America, people are just gonna do elsewhere. Yeah. It's very true. Like, UK and Dubai have have not slowed down, and, also, just the work hasn't slowed down. Like, Ethereum has more transactions per day than Bitcoin now. Many of these infrastructure coins, like, I I call them picks and shovel tokens that help you help different blockchains communicate with each other, help offer more services on a blockchain, like lending and staking and all this kind of stuff. These projects continue to grow. You have you have I'll call them utility tokens or however you call them, like, tokens like render, which allow you to do 3 d rendering of videos. These are being used by movie studios right now to to make their movies. And so so crypto's in use and hasn't slowed down. Oh, yeah. Here's a headline. I'm gonna quote it from today. Guy Fieri and Sammy Hagar launch web 3 tequila loyalty program. See, that's actually I don't even I haven't even heard that news, but what you just said there was loyalty program, this is gonna be the multi $1,000,000,000,000 use case that people don't realize is gonna be the biggest use case for crypto. Agreed. And it's awesome because that's a real world use case. Right? Yeah. Like, that's real world adoption. Any other way. I mean, you can do frequent fire miles, but then you're limited to just your company. You're not there's not gonna be, like, exchanges where you could trade these things for other there's gonna be more incentive with this with a crypto based loyalty program because there's so many additional features that crypto provides you because it's built into crypto. Yeah. I mean, there there was a headline not that long ago, I think in the last month that Lufthansa is exploring blockchain based rewards. And, like, who knows the rewards game better than an airline? Yeah. And they didn't have to do this. It's also not you know, in in a year and a half ago, during the peak of the bubble where all the, you know, speculative access was going on, companies would announce that they're gonna do something with tokens, NFTs, etcetera. And so the critic would say they're just, you know, giving into the hype. They're feeling peer pressure. This is the sexy thing. Every baseball stadium is is named after or every every, you know, sports venue is named after a crypto company, and Tom Brady is into it. And Matt Damon is telling us during the Super Bowl that fortune favors the bold. That's why they were doing it. Right? Here we are a year and a half later. The opposite is true. Prices are down. The headlines are constantly negative. You know, SPF is on his way to jail. And yet every day or every other day, you hear from some otherwise successful corporation brand individual that they see some value in tokens for rewards and customer engagement or payments or whatever. So that to me is the kind of data point that proves that there is real world utility. Yeah. I mean, the fact that crypto's up almost a 100% since the FTX scandal is a lot. Like, we've had you know, that industry has had nonstop bad news, and yet the tokens are up, like, a 100% or more. So so so, again, like, how does this play out though? Because if you're like, right now, if I was just getting involved in crypto, I wouldn't wanna hold my tokens at Coinbase and particularly not Binance. And if I had already my tokens at Binance, I'd probably be pulling them out. Maybe I would be with Coinbase as well. Like, it it, you know, it does slow down adoption at least in the US right now this second. And in fact, I was just reading, you know, Google searches related to crypto are at a 2 year low at the at the moment. So so, basically, Main Street has pull is doing a wait and see approach now to crypto. They pulled out a crypto, and they're waiting. Some some parts of Main Street. Although there was, I believe, data from the Federal Reserve that came out in the last couple weeks that showed in the last 2, 3 years, a percentage of US individuals who own some kind of a crypto asset has gone up. What's the number? I'd have to look it up. So it was one of those that on a percentage basis, it it's like the the numbers doubled, but doubled by the mean gone from, like, 6% to 11%. Mhmm. Here. Fed surveyed, 12% of US adults held crypto. But this was in 2021, so it could be outdated data. But, no, I I think, actually, you know, who knows what prices will do? And and certainly with, you know, part of the challenge now as far as prices are concerned is that, you've had 2 of the biggest gateways that people use to acquire crypto, Binance, and Coinbase come under significant scrutiny. But then there's always this question of how much of that is priced in. I actually, at this point, think, like because some people were actually surprised that Bitcoin and ETH's price didn't fall that much when this news hit. I I no. Bitcoin partly because it's it's generally the one coin that's being left alone. You know, the s e c the CFTC, another US regulatory body, declared years ago that Bitcoin is not a security. It's a commodity, and that was under Gary Gensler when he ran that agency. He thought he's not gonna reverse on that. By the way, Coinbase stock hasn't even really fallen. Like, it's up 4% today. It did. Coinbase stock, I believe, fell significantly when the Binance Mhmm. So but the that too. Like, Coinbase stock has gone from, what, 300 to 50 or something like that. So it's a lot of this a lot of the negativity is priced in now. And I would actually say, at this moment in time, the asymmetric risk as far as regulatory headlines is to the upside, meaning that, you know, if the, SEC comes out tomorrow and sues Robinhood, And I'm using them as an example because one of the things that has happened is Robinhood and a bunch of other places where people buy and trade crypto have started delisting certain coins. Because in the Coinbase or Binance lawsuit, the SEC for the first time said, well, that's a security. That's not compliant. But if the SEC sues Robinhood, I don't know if we're gonna move the needle that much. People are like, yeah. Like, Gensler hates crypto, and he's just gonna sue everybody because he doesn't care about being right or destroying his agency's credibility. That's priced in. But if in one of these ongoing lawsuits like the Ripple 1 or there's Coinbase actually sued the SEC not that long ago seeking regulatory clarity. There's the lawsuit over Bitcoin ETFs and the Grayscale Bitcoin Trust, etcetera, etcetera. I I think there's more potential bullish catalysts that could come out just because we priced in the worst. Yeah. And and the worst has already happened. Like you said in the very beginning of this conversation, it's almost good that finally the SEC has sued everybody because this has been expected for at least a year or 2. But the question is, like, a year from now, what is happening? How does this play out? How do you think this plays out? And by the way, as this plays out, every way in which this plays out is bullish. Yeah. Because crypto's not and they're not gonna make crypto illegal. They're just making it difficult, but somehow it'll get resolved. Right. Do do you this is a funny reference, but do you remember when Elliot Spitzer went down? Yeah. Of course. Right? Like and and and his thing was was, like what what was it? He was visiting a prostitute, and they Yeah. Or and he he well, no. He paid for the prostitute to come to where he was. I think he was traveling from New York to DC. He was governor. So he paid the prostitute. So it was, like, overstate lines, you know, sex trafficking sort of thing. What what what whatever it was, it was, like, my impression of because if you remember, Spitzer was a bulldozer. Right? Yeah. He he bulldozed over He put a lot of financial people in jail, a lot of very rich people in jail. He put rich people in jail over, like, dubious kinds of accusations in the sense that, like, you know, yes, I guess, like, Wall Street analysts were pumping token or coin stocks, that their bank traded or was one of the IPO for. So but it wasn't like let's just say that other people have not gone to jail for doing far more dangerous things in financial services. And then when he was a governor so he was attorney general when he did those things, and he used that to, sort of, like, catapult his political career. Then as a governor, he was a bit of a bulldozer too. And I am by no means a political expert, but I had this strong impression at the time that one of the reasons he went down was because nobody liked him. Right. And people were celebrating in the street when he when he went down. Yeah. So I I even with with someone like a Gensler, I would say there's a certain level of a*****eness that nobody likes you, even the people who are ideologically aligned with you. And I think Gensler has really crossed all of those lines. Just the amazing thing. So here's another revealing thing. First of all, he's the Coinbase lawsuit was intentionally wait. Let me step back. There was a very positive development in the US in the past week also that, the Republicans in 2 different committees in the, Hassle Representatives proposed a very well thought out and comprehensive crypto regulation bill. And it was so they clearly took the time to learn about what differentiates crypto assets from traditional assets and and, you know, like, thoughtful ways of how something could begin as a security. But if it's sufficiently decentralized and they even have threshold for what that means, then it becomes a commodity, etcetera. So they proposed a very comprehensive new law. No democrat supporting it yet, but a good conversation starter. And Gensler's SEC timed the Coinbase lawsuit to coincide with a hearing that congress was having in discussing this. And this is one of many times where he clearly thinks he's more important than the elected representatives. And that's not just my opinion. Congressman Ritchie Torres of New York, who's a considered a rising star in the Democratic Party, called Gensler as being in in, I think, something like he acts in contempt of congress. Yeah. I saw that. That he he he doesn't wanna let the democratic process come to a solution here. Then at the same time so congress is having a hearing over this new bill. Gensler completely steals their thunder because all the headlines that they were about the Coinbase lawsuit, not about, you know, expert witnesses testifying about this bill and so on. And then Gensler goes on TV to talk about why he's suing and all the usual nonsense about cleaning up the industry, and there's been too much fraud. But then at one point, he says, we don't need any more digital currencies. We already the dollar is already digital. The euro is already digital, and this is this ignorant comment that some people have been making to me for years. They're like, oh, well, you know, my my bank account is accessible through the Internet, and the bank uses a database. So isn't it already a digital currency? But I thought this was Gensler really revealing his hand, that he's just trying to kill this thing. And that's the kind of thing that's remarkable for a few reasons. 1, this is a guy who taught an entire class on Bitcoin and blockchain at MIT, which I watched a lot of the video for. The content was pretty good. He was involved with the MIT Digital Currency Initiative, which covers crypto, not, you know, electronic banking from the 19 seventies. And now he goes on national TV and says all of that is completely pointless. So this is what I mean. Like, it takes a certain level of being a low rent, low integrity individual to pull a switch like this. I as someone who works in academia, I feel bad for all of his former students and colleagues because how are they supposed to interpret this? They were like, wait. He he he was one of us, and now he's telling me today that everything I do is completely pointless. So that's revealing. The other thing is he slipped up in the sense that while the SEC is supposed to create integrity for financial markets primarily by eliminating information asymmetries, it's supposed to be neutral on the merits of an investment. And even Gensler himself has said this in the past that if a company files to go public, it's not the SEC's job to determine if its product is good or if it's That's a good point. Right? Or if its business model is is viable or if they should be, like, you know, charging more. What he's saying, though, maybe personally, he's saying, you know, the US doesn't need another digital currency. But from a legal standpoint, what he's saying is he's making it he's not saying crypto's outlawed. He's just making it too difficult for anyone to trade it. But but he's saying we don't need it, right, which is a major, major revelation and slip up because it shows what his real intention is. It's also a direct violation of the SEC's mandate, which is not just to regulate regulate markets, but to facilitate capital formation. And don't take my word for it, you know, to the listeners at home. Just go to the SEC website and look up what their mission is. It's explicitly to facilitate capital formation. In the US, among the federal financial regulators, the SEC and the CFTC are generally perceived to be the pro market, free market regulators, whereas, like, the bank regulators are more the socialist ones. But that's because when congress created these agencies, it gave them these specific mandates that you're not just here to be the cop. You're not just here to crack down on bad people doing bad things, but to enable good people doing good things. And when Gensler said on CNBC that we don't need any more digital currencies, he showed that he's acting to stop capital formation. And I think I hope that that level of being a extremist in the position of a regulator comes back to bite them in the a*s somehow. It looks like there's a couple ways this could play out. 1 is congress and the courts get so disgusted that they basically say, look. You can't do this. You're trying to win an industry that, a, is not going to be ruined, and b, it's gonna leave the US behind, and c, you just don't have the right to do this. Like, you're you can't make law. You just have to enforce law. The other way it could play out is all these lawsuits go to trial and he just loses because you can't sue Coinbase over something which is not law. But he's basically saying they're they're trading these securities, but no one's ever defined what how crypto's a security. Even he refuses amazingly enough, like, another way that he's just a bad faith actor. He would they still refuse to say whether ETH is or is not a security. And all these video clips have unearthed us Gensler in his role at MIT shortly before he took the gig at the SEC where he's like, well, you know, ETH is not a security. Bitcoin is not a security. Litecoin is not a security, and then he says some other things might be. But he was drilled himself in front of congress, like, a month ago about whether ETH is a security, and he weirdly alternated between saying the SEC has all the authority it needs to decide that and then refusing to answer the question. And it got to the point where Coinbase actually sued the SEC, and one of the things it asked for is to provide a list of what is or isn't a security. You know? So it's like, take the top 100 coins and just tell us yes or no. And the SEC's response to this court was that I'll I'll simplify here, but it was basically, we will not provide a list of what is or is not a security, but we will keep suing companies for register for trading illegal securities. Yeah. So how can that doesn't make sense. That's almost like a a Babylon Bee article or an Onion article. Like, how can he get away with doing that with a straight face? I don't know. The straight face part, I don't know. He's like I said, he And I'm not even being, like, pro crypto here. I'm being, like, anti this is like typical bureaucratic government stupidity. This is like the post office saying you're not allowed to use FedEx because those aren't real letters and only letters all letters have to go through the post office. And people say, well, what do you mean they're not letters? Oh, we're that's up to us. Don't worry about it. Yeah. I don't know. I I and, also, like, I'm not a mind reader. You know, everyone has been saying all of this is going to come back on the SEC in a bad way either because they they lose in court or congress forces them or, you know, frankly, the president just appoints a new maybe the next president after the election if we have a change in leadership appoints a new SEC chair with a mandate to clean all this. It's gonna, like, destroy the credibility of the agency. Gensler is not gonna be around for any of that to happen. It just shows you, though, like, how much of a scoundrel must you be that you have no qualms about single handedly singing the credibility of a, what, 80, 90 year old agency just because either you have an ax to grind or somehow he thinks that being the the, like, the bad guy of crypto will serve his own personal or political ambition. So if you were to guess, what are the next things that happens and what are the next catalysts for crypto, good or bad? What would you say? How would you kinda take this and because in the remember, initially, in the conversation, you said you you were implying this is a good thing. Well, it's a good thing in that, like, the worst is now behind us in the sense that, like, we knew we knew the SEC was gonna come down hard. They have there'll probably be other suits. A lot of people are waiting for the justice department to go after Binance for criminal violations that, would be more severe, but so what? Right? Binance has many 1,000,000,000 of dollars, and it's already hired all the world's top law firms, so they'll they'll fight this to the ends of the earth. And I I don't have any personal allegiance to any of these companies. I just think that, like, we should have ways that well intentioned crypto service providers exchange it, etcetera, become compliant, register. But it's not what Gary Gensler says that literally he keeps saying, like, well, you know, the law passed in 1930 is all we need to know how to regulate digital currencies that were invented 3 years ago. Yeah. So all of that will play out. The the other thing is as the election approaches you know, it's interesting that Ron DeSantis, pro crypto, RFK junior, who's running in the Democratic primary against Biden, pro crypto. All the Republicans will probably be, pro crypto. But Elizabeth Warren is campaigning, she's up for reelection, against crypto. She actually has, like, a campaign ad that she's building an anti crypto army, which is just funny to me. Why does she think, like, people care about this issue at all? Like, either you're pro crypto or you don't care. Yeah. Look. I can't, like, I can't imagine a single person who hates crypto enough that that becomes the reason they go vote for a candidate in election. There are plenty of people who don't believe in it, are skeptical, don't like it. The main argument of a politician is that a lot that they say a lot of crimes are committed using crypto, but you could have argued this about first off, you could certainly argue it about the dollar. A lot of crimes are committed in with the US dollar, by Every day. Drug cartel and the regulated banks. Right now, as we speak, there's, like, a $100,000,000 being washed through the banking system. I mean, JPMorgan just settled, I think, for $290,000,000 for victims of Jeffrey Epstein. So, you know, that's the US dollar and the largest bank in the world. And, again, the Internet started every new technology kinda starts with nefarious use. Just 3 months ago, Wells Fargo, one of the biggest banks in America, was ordered to pay a $3,700,000,000 fine for various violations. And no one batted an eye. No one was like, oh, boy. You know that Wells Fargo, it just paid a 3.7 $1,000,000,000 fine just for stuff that it's done in recent years. It's like, yeah. You know, Wall Street commits crimes, gets fine. All is good. But let me put this number in context. Right? If I'm looking at, like, crypto market caps, the Uniswap token, UNI, has a market cap of 3,200,000,000. Chainlink is 2 point something 1,000,000,000. No. Shiba Inu coin, 4,000,000,000. So Wells Fargo paid the equivalent total value, like, the 20th biggest crypto coin one time. And if you go back, obviously, like, to 2,008, they probably paid well over $10,000,000,000 in funds, and that's normal. No one has a problem with that. But then, oddly, you have Elizabeth Warren going on about how crypto is the thing that enables fentanyl distribution. I actually have no idea what she's talking about, but that's her new talking point. Yeah. So it's crazy. It's, like, insane what's happening. Yeah. And and the other thing that I think could happen is that as I mean, first off first off, we I've even covered this on the podcast about Fentanyl distribution with general Robert Spalding who was a who's a was the White House expert on China for many years. We know that China's been giving for free Fentanyl to Mexican cartels who have then just been showering it into the US at super cheap prices Wow. I didn't know that. In dollars. So I don't even know what Elizabeth Warren's talking about since there's all the evidence is that I mean, there's, like, hardcore evidence that it's China. Also, here's the other amazing thing. There used to be a time where it was Republicans that if they wanted something to not happen, they would be like, oh, but the drug dealers. And there was always, like, a hint of racism to this too. It's amazing to me that this is completely flipped, that it is now progressive Democrats like Elizabeth Warren who fall back on these stupid tropes that, well, this is gonna enable drug dealing. And, you know, crypto is disproportionately black in the US. If you look at it globally, the countries that have the highest per capita adoption are countries that are poorer, the global south, places where you have, you know, a lot more black and brown people than you do minorities. And here you have a progressive democrat campaigning against it in a fashion that it's like, oh, well, I guess Elizabeth Warren prefers Wells Fargo. The other thing I could think could happen is as the rubber actually meets the road and the campaign gets going, people like her just realize how stupid this position is and how there's, like, not a single person who's gonna vote for you because of it, but a lot of the kind of people who, like, take my cla*s. Right? There are people who are from Latin America, and they have both experienced crushing hyperinflation and the fact that remittances to and from their country, you know, 20% fees goes to intermediaries, those are the kind of people that I feel like would otherwise vote for an Elizabeth Warren along for various issues, but they're very passionate about this crypto thing because they see it as a fundamental good. So you're basically thinking that you don't really know exactly the form in which how this plays out, but it's almost certainly gonna play out in favor of crypto. Like, Gensler is gonna lose some power. You know, the head of the SEC is gonna lose some of his power, and crypto will move forward. Would you just so we don't really know the form this is gonna take. Do you have a sense of how long it will take? Because in the meantime, I would say public interest in crypto does go down when you feel like you can't trust any institution to to put your money there or to trade there. Again, in the US. This is a global phenomenon. I I don't timing is always the thing. And and if if, like you know, and and just sorry to interrupt, but just to your point, if it's just in the US and eventually, like, eventually, it just hits bottom in the US, but then the rest of the world, of course, is moving forward. If prices start to go up, the US is gonna be pre US is gonna be pretty insistent that, hey. We need to be a part of this. Yeah. Timing has always been you know, I've been wrong about many things in my years of working in crypto, and timing has always been number 1. I generally expect things to happen sooner than they do, so I'm forcing myself to be more conservative. But I I think within 2 in the next 2 years, we're gonna have significant resolution of almost all of these topics. I think the election would have happened, and it we would have seen that there are actually many people who see the core proposition of crypto as good. I think the court system will have had time to weigh in on some of the SEC's more ridiculous charges, and I think global adoption away from America will have really taken off up to and including state level adoption. Right? So I think I talked about this before that I think there are already governments that are secretly adopting Bitcoin either by mining it or slowly buying it up. I mean, there are smaller governments that publicly have said they've been doing it like El Salvador or even Bhutan, but I would not be surprised if you look at the access of China, Saudi Arabia, the UAE, Iran, Russia, that they have many incentives already to begin to slowly embrace the Bitcoin, and that the US government's crackdown is actually the best advertising campaign for them to accelerate that process. You know, if nothing else, we America drove down the price of Bitcoin, so it's cheaper to acquire. And what do they what do you think these other countries see as the ultimate use case? You know, again, like I said, I was I've talked to people at other governments. They are moving towards some sort of CDBC or blockchain based payment system as many governments have already discussed. But is that does that necessarily involve have to involve Bitcoin, Ethereum, and and all the cryptos we know and love? Not on day 1, but I think other governments increasingly have a dollar problem. I think they see that so much global commerce now happens in dollars, but the US has gone overboard in weaponizing that fact in order to try to control and influence everyone and everything. Even like the way, you know, the SEC acts now. Like, if you actually listen to people like Gensler talk, there is this this hubris and arrogance that, like, you know, well, I am the America's premier capital market regulator, so whatever I say is truth. And I don't care that my counterpart in literally every other agency, even in Canada, disagrees. You know, I'm I'm Gary. This is America, and we tell you what to do. So the world has this dollar problem. There's no other currency that is, like, immediately better. You know, you you definitely don't want, like, to switch to the Chinese yuan because of their capital controls and their political process is a lot less trustworthy than ours. Right. And and and, you know, this was a concern, about 2 months ago when, oh my gosh, there was oil transactions for the first time done in the yuan instead of the dollar, and then the Brazilian real instead of the dollar. This is the end of the dollar. And I'm telling myself, do people really want the Brazilian real, like, $2,000,000,000,000 worth of the Brazilian real instead of the US dollar? Right. Like, this is ridiculous. It's not nothing is you know, maybe the worst case is some basket of currency is gonna replace the dollar, but even then, I don't see how a basket where you're reliant on the value of lots of currencies all of a sudden is gonna replace the dollar as a safe reserve currency. Agree. So I should make it clear. I'm while I believe that de dollarization is a thing and it's increasingly going to be a thing, I do not think that, like, even within the next decade, suddenly, everyone's gonna hit a switch and dump all their dollars and buy other currencies for the reasons that you alluded to. However, I do think that countries are increasingly going to try to find regional solutions and bilateral solutions. So, yeah, like, the rest of the world does not want China's currency as their major reserve currency or Brazil's, but it's not unreasonable for, you know, China buys commodities from Brazil, and and Brazil manufacture goods or electronics from China. It's not unreasonable for them to say, hey. Let's start settling some of this in our two currencies. Right? Like, you know, Brazil's like, okay. I'm gonna I'll accept some some Chinese yuan for my exports because I'll turn around and just use those to buy chips that manufactured in China. If this kinda, like, regionalization starts to take hold, then, again, like, no one's dumping all their dollars. There are many reasons why the dollar's reserve currency having also to do with, like, how easy it is to borrow in dollars, for example, the the popularity of US treasuries as collateral. But I do think that countries are gonna be a lot more willing to do regional baskets, bilateral trading. And when they do that, they are gonna need some way of settling things occasionally. And I think eventually you know, this might take my entire lifetime to play out, but I think eventually Bitcoin becomes the preferred thing to do that. You gotta start somewhere. So, again, like, I don't think anybody's gonna be like, oh, we're dumping our $1,000,000,000,000 in treasuries and putting it all in Bitcoin. There's literally not enough Bitcoin in existence. But I also don't think it's unreasonable for a country to say, hey. Our sovereign wealth fund has $600,000,000,000 in assets, some combination of, like, currencies, real estate, equities, whatever. A lot of it is dollarized, which we're worried about because if there's, like, another Russian war situation type stuff, who knows what America will try to sanction? So we decided to put 2% of our sovereign wealth fund into Bitcoin. That's where I think it begins. Right. And and to be clear, right now, essentially, 0%. So a sovereign wealth fund is like the investments managed by an entire country. So, like, you know, a sovereign wealth fund could be 100 of 1,000,000,000 of dollars potentially or or or greater. Yeah. And right now, there's essentially 0% invested in Bitcoin for and forget about the other cryptos, but 0% because of the exact thing that started last week, which is that every sovereign wealth fund has been waiting for the US SEC to do something. And now you're right. This has now started. This is the beginning of the end of this worry that's been going on for years. Institutions, Fidelity, they don't want to invest in crypto until it's clear what the US regulatory position is. Now it's gonna be forced for everybody to figure this out. And when that happens, this is this is actually and now that I'm thinking out loud about it, this is the this is really the catalyst everyone's been waiting for is that what does the regulatory landscape look like, and now we're gonna finally know. Right. In one way or another. Right? Like, either America's gonna come around and and create sensible regulations for crypto or America is gonna effectively ban crypto from Americans, which, again Which is impossible because It's impossible, but, you know, if they even tried to do that, ultimately, like, crypto is either valuable or it's not. And if you think Bitcoin is valuable, then America suppressing Americans' ability to buy and hold crypto just means that you get it cheaper. Well, it it just reminds me again of I remember in I guess it was 1994 or 1995, I was explaining this new phenomenon, the worldwide web to executives at HBO, the media company, the tip TV company. Mhmm. And the one of the top guys who eventually became for a short time, the the CEO of HBO, he was asking me, wait, he said, do you mean through, you know, the phone wires and the cable lines, people could send audio and video and text to other people? And I said, yes. And he said, well, won't the phone companies are never gonna allow this. It's in the and they have the government in their in their back pockets. Like, the government is just gonna ban this. They're not gonna let the phone companies go out of business. And, of course it all got figured out and resolved, and the phone companies now own the Internet, basically, or the the backbone of it. And, you know, same thing's gonna happen here. That's amazing. Yeah. Yeah. That that's an amazing anecdote. So so I wanna I know we've been talking for a while, but I wanna go back to a question you posed in the beginning of this conversation, which was you said you don't wanna take it for granted that crypto will be the future. And I said that, you know, we we've spent enough time discussing the reasons why. So I wanna tackle this question in a different way. There are a lot of people who hate crypto. There are a lot of very prominent people who are anti crypto and borderline obsessed with it. Would you agree with that? Yes. Look at look at, like, Vaseem Taleb, who's a very, very smart guy, and he was pro crypto all the way through. Up till 2019, he was writing very pro crypto things and problems with the dollar versus crypto and so on. I don't know. I like, we only this year, I think, or past year or so, he's been kinda down on crypto, and he says because of the volatility. But, actually, Bitcoin's been very unvolatile this past, you know, 8 months, 6 months. So in Nassim's defense and I I know Nassim, and, he often is invited to my class to come and give the anti crypto argument because I wanna give the students both sides, and he makes some very interesting and often, if nothing else, entertaining arguments. But, yeah, I mean, there there are people like him, what Elizabeth Warren is doing. Like, you would think that the most pressing thing going on in America right now is, like, whether Dogecoin is a security and that we didn't have an inflationary crisis, a banking crisis, chaotic political situation, a war in Russia, etcetera. Right? And then they're like, reporters. There are many academics, actually. Most people I come across in academia are very anti crypto, people on Twitter, etcetera. And the question I have for you is Yeah. By the way, even even the White House, one last data point, earlier this year, they published their, like, 500 page annual economic report about the state of the US economy, and it had a whole chapter on how crypto should not exist or has serves has no value, which, again, right, like, we just had a banking crisis, which I don't think we're necessarily out of the woods with the regional banking issue. Inflation is at multi decade highs. There are many problems with the American economy, China reshoring, chips, infrastructure, the environment, climate change, and it's like the White House said, no. We need to have a chapter for why this relatively small industry has no serves no value. So the question I have for you is, has there ever been anything that got that much negative attention that turned out to be just completely hype and bogus and had no impact in history? It's a it's a difficult question because by saying have had no impact, we don't really talk about it now. So it's unlike for instance, a lot of a lot of industries had negative impact negative hype when they started, but they ended up having positive impact. So the automotive industry, huge negative discussions in the turn of the the 20th century, you you know, Oh, all the horse and buggy drivers are gonna be out of business, or you're gonna have a heart attack if you go faster than 35 miles per hour. Yes. You know? There's gonna be pollution. Yeah. So there was a lot of, But but that that sort of proves my point. Right? Like So I'm trying to think of the answer to your question. Like, was there anything that had the negative hype that ended up ultimately having negative impact where where basically the crowd was correct and everybody was magically correct for the first time ever? Right. And it had no impact. Right? Like, the the you know, automobiles ended up becoming a thing. I'm sure, like, with electricity, I know with, like, radio, people thought it would fry their brains, but it doesn't even have to be a technology. Right? It could just be an idea. Like, there have been a lot of ideas that have been very controversial at some point, had some very vocal critics that stake their personal careers and reputations being against it. Right? Like, say, climate change. You could say most of the social causes that we now sort of accept as mainstream, like, you know, civil rights, pro gay marriage, whatever. These are all things that elicited a lot of passion and excitation from certain otherwise intelligent, credible people. But in the end of the day, the we learned that, ultimately, if it's almost like any kind of attention proves that it's gonna be a thing and an important thing. Positive or negative doesn't matter. Well, I think climate change is a great example of this because let's say belief in climate change is a spectrum where some people are, you know, 100% convinced that every piece of man made pollution contributes to climate change, and other people aren't completely on the other side, which is that climates always change because of nature and blah blah blah, and there's and then when there's no bad effects. And then there's most people are somewhere in the middle where something some things are man made, some things are just the natural cycle of things. Right. There clearly is some change. We don't know if it's because of man made or anyway, some most people are in the middle. But I would say regardless of how you feel, the impact has been largely positive, like the development of battery powered vehicles and technologies, solar power as as an industry and as a technology has grown exponentially in the past 20, 30 years. So these things are net positive. I'm just trying to think if there's any been new technology or discovery or financial innovation, like even take mortgage derivatives. Okay. From the OOs had not only had a huge negative hype, but created a the worst financial crisis in US history. And now they are just the bread and butter of every bank and hedge fund. It's it's just now normal business now, mortgage derivatives. And I'm trying to think of what else, you know, what what had negative hype where it ultimately did not have any impact at all? Yeah. Even if you go back all the way to the the South Sea Bubble, that was basically the first central bank was basically, you know, the the South Sea Company. Mississippi. But yeah. Yeah. Mississippi Company. Yeah. No. That was in France. It was a Mississippi Company. I actually don't know, but was the I know more about the Mississippi bubble than the South Sea bubble, so I don't know. They were related. They were kinda caught up at the same time. Yeah. Yeah. John Law, who was British, kinda learned from the example there and brought it over to France. Like, he exported it to France. I'm trying to think what else. What But but so so so, yeah, that's the and and, you know, we could crowdsource this. Right? You have a wide audience. Like, I would love to be because what I'm getting at, obviously, is the the fact that to me, the fact that crypto generates so much negative attention proves that it's going to be disruptive and impactful. If it wasn't, people just wouldn't care. Right? If it wasn't, people would say, oh, well, yeah, you know, the bubble happened? Alright. Well, people lost money on a dumb idea. I I don't care. It's got nothing to do with me. Or, like, oh, FTX happened and turned out to be a total fraud. Be like, alright. Well, I guess I guess, you know, those who trusted bad technology got what they deserve, and then they wouldn't talk about it. But they're literally, like, people I mean, I follow them on Twitter, some of them, who are obsessed. And it's like, every day they have to tweet something about, like, why crypto is bad. And what I'm saying is that that to me proves that it's going to be extremely disruptive. Yeah. I mean, again, it reminds me of the Internet, but not in 1995, but in 2001 where, you know, if you weren't, like, a technologist, even the most diehard Internet investors basically said, this is a scam, this whole web Internet thing, and they gave up. They threw in the towel, which is why, you know, Nasdaq fell from 5,000 to whatever below a 1000. But long term, you know, by 2,005, the Internet had a 1000000000 users worldwide, and the rest is history. So my guess is something similar is gonna happen here, but you I'm just trying to think of if there's any answer at all to your question of something that was discussed a lot and ended up having no impact? That's the question. And and it it actually part of this reminds me of my favorite Rick Rubin quote or saying that great art splits the audience, and, and I think that's crypto. Right? You have, like, a minority, but a sizable minority of people of which I'm a part of that are just deeply passionate believe that this is going to be one of the most transformative things to hit society in our lifetimes. And then you have a bunch of other people who who are not just, like, opposed to it, but they're staking their careers and reputations on being opposed to it. And, no, we've split the audience. It's very interesting. So, you know, great science in some ways mirrors great art in that way. But I'm gonna think about this. There must be something. But if you think about it, like like, everything, what else had negative hype? Well, obviously, the space program had negative hype, you know, because of all the money that was being spent. Like, what good is it to send someone to the moon? Look at all this money that's being spent. And yet, you know, what we've learned through this is is significant, and and we're now setting up satellites regularly based on the technologies developed then. Yeah. I mean, there there been things that fizzled. Right? Like, they they had a mini bubble and and fizzled often perhaps because they were too early. Like, there was a 3 d printing bubble in the last 10 years, if you're But now 3 d printing is gonna change the world. Like, there's another exponentially growing industry. Okay. Railroads, you know, there was a bubble and then a bust. Like, every railroad company went bankrupt in 18 fifties. There were 2. But, yeah, but those examples we know. What what I'm looking for is, like, what is the thing that got enough attention that the leader of the most powerful country in the world at that time took it upon themselves to, like, stake a claim against it and then ended up having no impact. I can't I can't think of anything. I can't think of anything either, and I I need to become a bit more eloquent at explaining what I mean here. But to me, that's the tell. There's a tell that so many people That that's the tell. You're right. I know people who like, I'm at a dinner party. Right? And the last thing I wanna talk about is crypto, because it's just you know, that's my job. It's it's what I do during the day, and I'm at a dinner party. I'm trying to relax. I'd rather talk about sports or movies or, you know, what other people do. Girls? Yeah. But there's there's always talk about at your dinner parties? Yeah. But there is always someone who, like, has to seek me out to tell me why they think crypto is a scam and how they think it's completely, completely bogus. And this this actually happened recently where, like, somebody asked me. They're like, oh, what do you do? I said, I teach. I write. Oh, what do you teach? Oh, you know, crypto. I was like, okay. Well, if you had to summarize crypto in, like, one sentence, what would it be? And I said it's a better way to build trust in a digital setting. And they were like, oh, okay. And then some other random person was standing in the corner. He's like, I have a different summary of crypto. And he was like, it's a complete scam. And and, you know, it wasn't like I disagree. It's just ones and zeros. It's nothing. But it wasn't it wasn't there's always that person where I go where crypto comes. It's not like I don't care. Right? No one ever says, like, I don't care about crypto. The people who do are actually my favorite people. But there's always like, there are people who are like, oh, I love crypto. I'm a big believer. I own Bitcoin. I love NFTs. Whatever. And then there's also the people who are like, it's a scam. It's all nonsense. Blah blah. I mean, the the guy who was, like, the star of the TV show, The OC, the actor has written a book how crypto's a scam and testified in front of congress about this. What? Yeah. How how did he get involved? I I don't know. I should look into this. But it's like OC. Yeah. I only know that one the one actress became famous. I don't know any of the other actors. Yeah. What's his name? Because it it I keeps oh, Ben McKenzie. Yeah. McKenzie. Yeah. Who's that? Yeah. I don't know. But it's like, here's the headline. Ben McKenzie, actor turned crypto naysayer. Like, here's a guy who could have been a naysayer about, like, nuclear proliferation, the war in Ukraine, growing political disharmony, deforestation, droughts, plastic in the ocean. You can go on and on. Right? He picked crypto. Yeah. He wrote and, you know, it's not easy to write a book. Like, he wrote a whole book on it. Yeah. And now it's a scam. Yeah. And that to me is the tell. Like, these people don't realize it, but they're not whether it's Ben or the guy who was yelling at me at the party, they're not anti this because they think it won't be impactful. They're against because somewhere deep in their consciousness, they think that this is going to matter, and it's going to be very transformative, and that's the thing that's triggering them. The you think they're afraid of that? Like, the because it's out of their control, or they didn't make money on it when they felt they should have and they're afraid they're too late? I don't the the money thing was true possibly during the bull market, but, you know, during the bear market, anybody who bought crypto in the last couple of years is down. Yeah. So I don't think it's all much ahead. I think fear of change is a big part of it. I think this really does represent a way to change the social power structure. And it's not just about money. Right? Like, it's when NFTs first became a thing, there were a lot of artists who embraced it, and then there were a lot of artists who hated it. And I was I was actually very surprised by, like, the artists that were hating it because I was like, wait. For the first time, there's a business model now where digital artists could sell their work and make money. It's a new source. You can, like, monetize existing art. There are fascinating new models, like the fact that you could have built in royalties that even if your NFT resells in the future, you get a percentage. And I was like, why would artists be opposed to this? And I met one artist, and I asked him, and he said, you know, there's a lot of s**tty artists in the world that have never made any money, and they're just jealous that somebody that took the time to learn what an NFT is and how to create digital art and sell it on OpenSea or wherever is now making money, and they're not. So I think there's a version of that that's true for a lot of things. Right? Like, decentralization threatens anyone and everything that has something to do with the centralized power structure. I have no idea why that would trigger a former actor, but, you know, maybe he had ambitions of being like a bank CEO, or or, you know, like, working at the New York Stock Exchange or something. So I think there's something there about it's the fact that crypto could be so disruptive that's making these people so reactive, not the opposite. Yeah. So interesting. Well, look, there's a you bring up so many interesting points as always, Omid, and, this really kinda answers a lot of my questions about what's been going on because it's been it's been really like a crazy few weeks with all this stuff, and it's been hard to kind of keep up to pace with it enough to explain to people what's going on. But I think I think I think you're right, actually. The the most interesting thing is that the fact that there is so much discussion about it is almost the bullish thing about it right now. So I'm gonna have to think more about that, but I do agree that this is gonna play out. And this is this is the beginning of the end in the sense that the beginning of the end of a certain stage of crypto where everybody wondered, well, what's gonna be the regulatory framework? Now we're gonna find out. And this is the main thing that's been holding it back every institutional investor, including all these sovereign wealth funds. So at the end of the day, this is either crypto's gonna end, which I don't think it's gonna will, or this is enormously bullish for crypto. And I hate to sound, like, almost religious about it because I'm not. Like, I'm I'm waiting for for crypto to be easier to use. I'm waiting for it to be you know, there's some there's currently problems, but this regulatory issue has been an overhang on crypto for a long time, and now it's gonna get figured out. Yeah. From, from your mouth to Satoshi's ears, James. But I I think this is what was that? There was that Winston Churchill, another Winston Churchill quote that was like, it's not the end, and it's not the beginning of the end, but maybe it's the end of the beginning. Something like that. Yeah. I I but, it's it was a great conversation, and, as always, thank you for having me on. Thanks once again. When are you when's your are you teaching this summer, or are you teaching in the fall semester, or what's the story? I'm teaching in the fall, just doing a lot more blogging and writing and and learning, actually. I'm using a lighter schedule this summer to go back to learning. Because aside from all this regulatory stuff, there's some super interesting developments with, like, layer twos, new protocols. Uniswap just announced its v 4 today. So lots of cool stuff for me to dig into. Alright. Well, as always, come back on the podcast, and I will talk to you soon. Great. Bye bye.
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