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The Crypto Skeptic vs The Coinbase CEO | Brian Armstrong x Nikhil Kamath | People by WTF — Transcript

by Nikhil Kamath · 26,298 words · 3,946 segments · language en · Watch on YouTube

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0:04[music]
0:05Mhm.
0:15[music]
0:28>> [music]
0:30>> So crypto is interesting. Everything
0:33from
0:34bitcoins, [music]
0:36blockchain, salana, ethereum. I'm no
0:39expert in these, but I've always
0:42wondered what what the nuances of this
0:45industry are. And today is a is probably
0:48a good day to find out. I am a critic. I
0:51have never bought any of these ever. I
0:54don't know if I'll remain a critic after
0:56this, but I suspect I will. So, let's
0:59see how the conversation with Brian
1:00goes. I know he's going to take the for
1:02side. Somebody has to take the against
1:05side. It probably has to be me, even
1:08though I don't know too much about it.
1:10So, this should be fun.
1:15[music]
1:25>> [music]
1:29>> How are you?
1:29>> Great. Good to meet you.
1:30>> Good to meet you.
1:31>> Yeah.
1:31>> Come.
1:31>> All right.
1:33>> Yeah. Not too far away. Got a big crew
1:36here.
1:39>> Do you like coffee?
1:41M
1:42>> maybe decaf or something if you have
1:44that or just water? Yeah. Do we have
1:46decaf coffee? [music]
1:48>> If not, I'll just do water. Yeah.
1:53>> You drink matcha?
1:54>> Mint.
1:56>> Mint tea.
1:57>> Uh, mint tea sounds great. Yeah.
1:59[laughter]
2:00>> Is that like your diet?
2:02>> Well, I drink caffeine, but I try not to
2:04after noon, so it's easier to sleep, you
2:07know. [clears throat]
2:08>> Yeah.
2:11>> Yeah.
2:13A lot of the people I met who were into
2:16crypto, like really into crypto, for the
2:19first time in a long [music] time,
2:22they've become very disenfranchised
2:25in a way.
2:25>> I've heard that argument before and um I
2:28don't really see it. You know, I'm going
2:31to call that out.
2:35[music]
2:53Are you jetlagged?
2:55>> No, I was actually uh Ohigh.
2:58>> Okay.
2:58>> And I just drove back last night.
3:02>> Okay.
3:02>> Yeah.
3:03>> You doing like a retreat there or
3:04something? That's an interesting city.
3:05>> Yeah. There's this pledge. So, this was
3:08the 3-day offsite.
3:10>> Yeah. Thinking about how to do
3:11philanthropy effectively.
3:13>> Mhm.
3:13>> That's great.
3:14>> Yeah.
3:14>> Yeah. Something I need to learn more
3:16about.
3:16>> Yeah. Do you believe in it?
3:19>> Well, yeah. I mean,
3:21ultimately, all the money we're making
3:23can only go to taxes, philanthropy, or
3:26your kids, I guess.
3:28>> So, unless we figure out how to live
3:30forever, maybe that'll happen.
3:31[laughter]
3:32Um, so yeah, I mean I think I've seen a
3:36lot of friends uh engage in philanthropy
3:38and it's it's just like startups. A lot
3:40of it doesn't work, but the best ones do
3:42incredible things.
3:43>> Yeah.
3:43>> Yeah. And I've seen some people try
3:46doing philanthropy and I think it had
3:47unintended consequences actually.
3:50>> So it's it's humbling. You know, it's
3:53probably quite difficult to do it well.
3:55>> Um Yeah. Have you done any philanthropy
3:58that Yeah. What's what are your main
3:59focuses?
4:00Uh that was quite interesting. The door
4:03opened on its own.
4:04>> I [laughter] What's wrong with it, you
4:05know?
4:07>> Yeah, we've done a bit of climate.
4:10Uh the last year I've been doing a bunch
4:12around entrepreneurship.
4:14So, a lot of people in India
4:17>> need seed capital to get started.
4:20>> Mhm.
4:21>> Uh this podcast is also like that in a
4:23way. Uh it's not for profofit. There are
4:26no ads. There are no sponsors. uh we
4:30don't monetize anything. The intent is
4:33very much to tell young people where the
4:37opportunity lies.
4:38>> Mhm.
4:39>> Um that's what today is about in
4:42everything that you're involved in.
4:45For today, we're going to make Brian not
4:46a startup founder, but a college
4:50professor who can teach people where the
4:53opportunity opportunity lies in your
4:55industry to build.
4:56>> Mhm.
4:56>> Yeah.
4:58>> It's great. I'm I'm very passionate
4:59about how we can get more people to
5:01build companies in the world. I think
5:03>> entrepreneurship's a huge lever on how
5:05to improve the world and yeah I mean
5:08India has so much raw talent in that
5:10department as well. So
5:12>> but if uh like you asked earlier about
5:14giving if people live forever
5:17>> Mhm.
5:17>> or for longer
5:18>> Mhm. and they don't give. And if wage
5:24price inflation does not keep up with
5:27asset price inflation, like it does not
5:30even in America for the last 30, 40
5:33years.
5:34>> Mhm.
5:35>> What happens to income inequality? I've
5:37spoken a lot about this over the last
5:39week cuz I've been there listening to
5:41lectures around this. What do you think?
5:43>> I mean, it's such a big question, right?
5:45>> Yeah. I mean, I think one way to solve
5:49it is to make everybody a capital a
5:53capitalist, right? So, you're not just
5:54working for labor. How do you make it so
5:57everybody even if you have relatively
5:58low income, you can put a little bit of
6:01money aside to own own stocks or, you
6:04know, um parts of other companies that
6:06can that can grow, right? So, there's
6:08something like 4 billion people in the
6:10world today who are unbrokered. They
6:11don't have any ability to buy equities.
6:14Um, and if you can democratize that,
6:16then everybody can become have a piece
6:17of it, right? Like here in the US,
6:19there's an experiment that's being done
6:21right now. These Trump accounts, you
6:22probably saw that. So
6:24>> Brad Gersonner, I think,
6:25>> yeah, Brad Gersonner has been great on
6:27that along with others. And just getting
6:29every kid $1,000 of the S&P 500 at birth
6:34can make them have skin in the game,
6:35right? So I think that's,
6:37>> you know, who I heard pitched this many
6:39years ago, Mike Milkin.
6:40>> Oh, yeah. He had this blueprint mapped
6:42out and I think Australia does it in
6:44some way.
6:45>> Yeah.
6:45>> Yeah.
6:46>> Yeah. I mean you could actually do it
6:47with a sovereign wealth fund as well.
6:49Some countries do that very effectively
6:51and when you're born you get a share of
6:52it, right? And then and then it is it's
6:55just like in a any company like the one
6:56you ran or run or the one I run. Our
6:59employees get equity and it's a
7:01beautiful alignment tool of you know we
7:03might not agree on everything but we all
7:05own a piece of the same thing. So we're
7:06trying to work toward that. And then I
7:08think there's another interesting
7:09question which is
7:11is is income equality the goal right we
7:15I think we can all say income inequality
7:17makes people unhappy but we don't want
7:18perfect income equality that would
7:20destroy you know merit and progress and
7:23competition and all these things which
7:25are also good. So, one way I like to
7:28think of it is um you know, it's like
7:30how do we just accelerate growth
7:32overall? Like I think um a lot of people
7:36are looking at two different things.
7:38Like they're saying how how much better
7:41or worse is my life personally versus a
7:43year or a year or two ago and then
7:46they're also saying how much is does my
7:48life better versus someone else. The
7:50second one is envy, right? The first one
7:52is really competition versus uh yourself
7:55and are is your own life improving and I
7:57think we are also seeing an issue in
8:00society where people's own life is not
8:02getting better. Um I think if if if the
8:06rising tide lifted all boats you know
8:07let's say everybody even the bottom 10%
8:09like their life was getting better but
8:11there were some people getting way
8:12richer they would still be o mostly okay
8:14with that. It's if when their purchasing
8:16power or their wages are flat and then
8:18someone's getting much much wealthier.
8:20That's what creates like the the biggest
8:22social unrest. I think
8:24>> it's an interesting thing to think
8:26about.
8:29If productivity were to go up and
8:31everybody's life gets better
8:33>> Mhm.
8:34>> but the rich get 10 times richer than
8:36they are today.
8:37>> Mhm.
8:39>> I don't know if I can extrapolate that
8:41far, but I would still presume people
8:43would be unhappy because the very notion
8:47of wealth is relative. We all have a lot
8:50more today than we had 100 years ago.
8:52>> Mhm.
8:53>> Or 300 years ago.
8:54>> Yeah.
8:55>> But people are not happier because of
8:58the relative change in individual
9:00wealth.
9:01>> Yeah.
9:03>> Yeah. The are you familiar with the
9:04concept of the the hedenistic treadmill?
9:06>> Yeah.
9:07>> Yeah. So I think both are true. Yeah. If
9:11um you know some there's some things
9:13which today you know like even just
9:17having like a great uh a great shower
9:19with like hot water or something you
9:21know I take it for granted
9:23>> uh but if I go camping for a week and
9:25I'm sleeping on the hard ground and I
9:28have to shower in cold water I come back
9:30like a hot shower is like the most
9:32amazing luxury you know in the whole
9:33world. So you forget that if you you
9:36sort of become acclimatized to these
9:37things even if your own life is getting
9:39better. But then you're also you're
9:40right it's the other factor is the
9:42looking at other people and comparing
9:43and we that's part of human nature as
9:45well. So it's kind of an interesting
9:46question. Is it 50/50 rel you know my
9:49competing with myself versus others or
9:51is it 8020? Everyone's wired a little
9:53differently and should we what should it
9:56be in society like should we try to
9:57encourage people you know try to improve
9:59yourself don't compare yourself to
10:01others. Should we try to teach that as a
10:03value? But maybe naturally people are
10:06skewed a certain way. So
10:07>> what is it for you?
10:10>> I mean I always try to just compete with
10:11myself. Um you know it's human nature. I
10:14can't help but compare sometimes to
10:16other people but I I sort of try to
10:19catch myself doing that and um and try
10:23to reframe it in my own mind. Right?
10:25Because I just want to get be the best
10:26version of myself. I'm not if you know
10:29if there's a friend of mine who um you
10:32know they made an investment and they
10:34got in series A and I put money in the
10:36series C and they did 100x and I only
10:37did 10X.
10:39>> I'm I try to cultivate a mindset of you
10:42know being happy for them. Now you
10:44someone could say, "Well, that's great
10:45for you, Brian. You know, you're um your
10:47cup runth over. You know, you're you're
10:48living a life of post scarcity and um
10:51there's a Maslo's hierarchy of needs and
10:53all this." There's a lot of truth in
10:54that, right? Like if I was hungry or I
10:57was unsure where my next meal was going
10:58to come from, you know, I might beat
11:01someone up to like take their food,
11:02right? Or, you know, be you become much
11:04more zero sum in your thinking. But um
11:07beyond like a certain base level of
11:09needs, I think it's healthy to try to
11:10cultivate a I'm trying to be the best
11:12version of myself, not um versus other
11:14people.
11:15>> Yeah. Income equality or inequality is
11:19an interesting question.
11:21>> Mhm. [clears throat]
11:21I feel like it's not a problem in
11:24isolation. There will always I'm a
11:27proponent of capitalism like I know you
11:29are and I've heard you speak about iron
11:31in a couple of places.
11:32>> Mhm. Uh I hear you when you say separate
11:36church from state and then separate
11:38church from separate state from
11:40economics as well. But I think the
11:44magnitude of income inequality is
11:46somehow becoming a problem.
11:48>> It's probably smart for
11:53the beneficiaries of capitalism
11:56to also
11:58fiend altruism because that allows for
12:00them to remain capitalist for longer. F
12:03you're saying feain altruism
12:04>> fiend
12:05>> fiend fain fain altruism.
12:07>> Yeah. Okay. Fake basically fake it.
12:08You're saying okay got it
12:11>> right. Like when I remember the books of
12:14childhood like I I can't remember where
12:16I read the story but
12:18>> in a kingdom if the net produce is 100
12:22>> and the king has 10 and the rest of the
12:27city has 90 it's okay. Mh.
12:30>> But when the king has
12:32a vast majority of the resources, at
12:35some point the people come to his door
12:37with
12:39I don't know axes and try to take it
12:40away.
12:41>> Yep. Guillotines in some cases. Yeah.
12:43>> Is the world getting there?
12:46>> I mean I think um
12:49you can look at you know there is a
12:50measure for income inequality, right?
12:52The genie coefficient. Mhm.
12:54>> And um I haven't looked at it recently,
12:55but the last time I looked, I think
12:58we're not at like um all-time highs or
13:00anything like that. There there have
13:01been periods of high and you look at
13:03it's different by country as well. Um
13:07so it it goes up and down. I think it's
13:09probably my guess is it's up a bit in
13:11the last 20 years, but we're not at like
13:12all-time highs for the US for instance.
13:15Uh but yeah definitely it creates
13:16feelings of unfairness um when that goes
13:19up and I think we're seeing that now um
13:22with certain politicians getting elected
13:24mandami like these kinds of folks
13:27>> and of course AI is a big factor there
13:29too everyone's trying to think like is
13:32it is it going to take my job and you
13:34know so those fears are totally natural
13:37and then the question is you know what
13:38do we do about it right um
13:42you know some people would say we should
13:43slow
13:44we should press a button to pause all AI
13:47development and to that I would say well
13:51uh how are you going to get the
13:53countries of the world to collaborate on
13:54that right um if the US does it is China
13:57going to do it there there's literally
13:59there's people I've talked to who
14:00they're they're like no the US
14:02government should be meeting with the
14:03other you know India and China and all
14:05the superpowers and saying um we should
14:09collectively agree to do it and I'm like
14:10well then how are you going to guarantee
14:12that they do it there's going to be
14:13inspectors
14:14walking through the data centers, you
14:16know, but it's like you can't you can if
14:18you if you're training like a new AI
14:20model on a data center, you can turn it
14:22off when the inspector is there and 10
14:23minutes later the thing is training a
14:25different piece of software, right? So,
14:27it's hard for me to imagine a realistic
14:30scenario where the world collaborates to
14:33pause AI. So, okay, I think that's off
14:34the table. Maybe maybe agree, maybe
14:36don't. So, we're so we're in a world
14:38where we have to the only way through it
14:40is forward. like we have to try to build
14:42it responsibly. um you know we have to
14:46uh you know um try to leverage it for
14:50good and instead of bad like it's just
14:53like any technology right fire or you
14:55can make up any example you want crypto
14:57is another good example right like bad
14:59people have tried to use crypto a lot of
15:00I think it has a lot of benefits to
15:02update the financial system we can talk
15:03about that uh so I think the only way
15:06out of it is through it and you have to
15:08just whoever in that moment is ready to
15:10step up and try to build something good
15:12in the world they can sort tell people
15:14about it and see if the world buys it or
15:16not. And people vote with their dollars,
15:17too. You know, nobody wants to buy an AI
15:20model that is dangerous, that's inside
15:22their company, um or that's against
15:25their values, right? Like if it's um if
15:28if they think a company is evil or
15:29something, they're not going to buy
15:30those products. So, the free market is
15:32actually somewhat of a um a governor
15:35here on some of this. And I think other
15:37people would say, well, the government
15:38should come in and do something, right?
15:40And then you have to kind of it raises
15:42the question of how competent do you
15:43think the government is on the frontier
15:45of technology. Um at least in the US
15:47sometimes I'm skeptical on that.
15:49[laughter] You know the the Indian
15:50government has actually done some things
15:51very impressive uh working with you know
15:53like UPI and these things are
15:54incredible. So in some ways um we see
15:57competent government in some parts of
15:58the world.
15:59>> Yeah. I have a different like I think
16:02the lens at lens with which you are
16:05looking at AI and the one I use
16:08[clears throat]
16:08>> is slightly different cuz here you're
16:11wondering if
16:14the fruits of AI are getting
16:15concentrated in a handful of people and
16:18a bunch of companies.
16:19>> Mhm.
16:20>> Uh in India it looks like
16:23are the fruits of AI getting
16:25concentrated in another country
16:27altogether?
16:28>> Yeah. which is
16:30a harder place to be because it's not
16:32about
16:34income inequality anymore. It's if we
16:36are any part of that value chain, what
16:38happens if you're not?
16:39>> Mhm.
16:40>> Yeah. I think countries like India then
16:43go the other way and they're like, can
16:46we be part of the AI infrastructure
16:48value chain? Can we be part of the
16:50energy value chain? Can we be doing
16:53something uniquely over there to capture
16:55some of this value? So it becomes really
16:57hard and especially in a time when
17:00America has become as combative as it
17:02has uh with tariffs and trade overall it
17:07it gets even more complicated
17:08>> for sure. Yeah. Yeah, I mean India has
17:11so many great engineering schools. I
17:13imagine uh that there's major efforts
17:16underway to build out the top AI
17:19companies in various ways there. And um
17:23you know, one other thing that we're
17:24thinking a lot about is what's going to
17:26be the financial layer for AI, right?
17:29Because AI agents increasingly need to
17:30go get work done on your behalf and
17:32they're going to have to make payments.
17:34And so there's a whole emerging area of
17:35agentic commerce that we're building out
17:38and um that's been exciting too.
17:40>> Why does
17:43a asset that you deal with say anything
17:46on the blockchain
17:47>> Mhm.
17:48>> win as a commodity of transaction for
17:51agentic AIS versus another?
17:55Well, you know, I think AIS are going to
17:57use a variety of things, but the reason
17:59why I think stable coins in particular
18:01and blockchain are well suited is that
18:04um you know, like an AI agent is going
18:07to have a hard time uh signing up for a
18:09credit card at a bank and you have to
18:11show an your ID, which you know, only
18:13human beings currently can get this
18:15governmentissued piece of paper. Um but
18:18a AI agent can spin up a self-custodial
18:21crypto wallet with stable coins and um
18:24by the way there should you know we
18:26there should be a rupee stable coin and
18:27everything it can be fiat fiat and
18:30country specific um but the onboarding
18:33works without KYC right um and know your
18:36customer rules which are present for
18:38most regulated financial service
18:40businesses and then um they can uh the
18:44other thing is that the stable coin
18:45rails have gotten very fast cheap in
18:47global right so for these small
18:49transaction amounts like you can send uh
18:52a payment anywhere in the world and
18:53under 1 second in in 1 cent US so we're
18:57seeing a lot of agentic commerce send
18:59small transactions even a couple cents
19:01US to you know gather read this research
19:05paper or get through this payw wall and
19:09um or just call another API query that
19:11kind of thing that doesn't really work
19:13with credit card rails the small small
19:15transaction amounts
19:18The need for KYC in a way is both a good
19:22thing and a bad thing, right?
19:23>> Sure. Yep. There's it's Yeah, that's it
19:27own deep topic. I mean, um
19:30>> especially when the agent does not need
19:32KYC,
19:33>> right?
19:34Well, that's what we're, you know,
19:36that's the question mark, right? Is um
19:39those KYC rules are in place for good
19:41reason. They're trying to stop elicit
19:42activity. Um a lot of firms have looked
19:45at this and researched uh you know what
19:48has been the cost and the benefit of it
19:49right and um there is a pretty high cost
19:52for all financial services with that
19:54type of regulation. There's some
19:55estimates that only uh I think about 1%
19:59of all illicit activity is frozen or
20:01seized as a result of AM AML activities
20:03globally. Uh AML is anti-moneyaundering
20:05as you know. Um
20:08so look I mean we're we're a regulated
20:09financial service business as well. We
20:11do we you know we do this uh in the US
20:13and every country where we operate and
20:15so we're happy to follow those rules as
20:17a regulated financial service business.
20:18Um but I think you know it creates such
20:21a high friction in the economy that um
20:24it's like imagine you know like sending
20:26a WhatsApp message. It's free instant
20:28anywhere in the world. Um the number of
20:31WhatsApp messages per day I think is in
20:32like the hundreds of billions or
20:34something. And you know when text
20:37messages cost 30 cents there was there
20:39was only 1/100th of that amount. So
20:42>> it's kind of a question of you know for
20:45agents on the internet like how uh how
20:48how how much friction do we want to
20:50introduce into the system um and there's
20:52trade-offs around that for sure. So this
20:54every democracy around the world I think
20:56trying to figure out what the regulatory
20:57framework should be and that's something
20:58we've been working on in the US as well.
21:01um getting hopefully this uh bill
21:03through Congress in the next couple
21:05months. Hopefully
21:07>> when I send a WhatsApp message to you,
21:10I am subsidized the cost of sending the
21:13message to you by WhatsApp for business
21:17or the data being repurposed for
21:21different things by Meta.
21:22>> Mhm.
21:23>> What is the equivalent when I send you a
21:25stable coin?
21:27>> Well, you you are paying a small
21:29transaction fee. So it might be about a
21:30tenth of a cent US. So that might
21:32directly cover the cost um of the people
21:36running the sequencers and the nodes and
21:38those kind of things. Um you know the
21:41they're the stable coin issuers they
21:43actually are holding the like in this
21:44case the dollars but it could be rupees
21:46or anything.
21:47They're holding them in US government um
21:50or government bonds I should say. Right?
21:52So that's the business model of these
21:54stable coin issuers. So there's the
21:56stablecoin issuer who's holding it in
21:58government bonds. They they pass along
21:59some of that economics to the customer
22:01but not all of it and they hold some for
22:02themselves and then the blockchain
22:04itself is taking like a small
22:05transaction fee typically. Yeah. Like in
22:07on the base chain at least it's about a
22:08tenth of a cent US.
22:10>> So Brian I'm not an expert in this
22:11world. I know very little.
22:13>> So whenever I ask you a question if I
22:16sound too much like an idiot excuse me.
22:19>> No no I doubt that will happen but yes
22:22I'm happy to start it. Start wherever
22:23you want to start.
22:24>> Yeah. So when I look at okay let's
22:26assume USDT or USDC is backed by
22:29short-term American treasury
22:32>> which yields about 3 4%.
22:36>> Now if I take USDC from Circle and
22:40Coinbase
22:41>> Mhm.
22:42>> and Circle and Coinbase is earning 4% on
22:44it. when I in turn say pledge or utilize
22:48the USDC that I have and I monetize it
22:52further say I make another 3 or 4%.
22:55Treasury can only yield once. Where is
22:57the additional money coming from?
23:00>> Right. Well, so in that case, um,
23:02Circle's the issuer, they're holding it
23:04in the short-term government treasuries.
23:06Um, actually, if you're when people are
23:08holding those USDC on Coinbase, majority
23:10of that is actually passed to them, the
23:12economics. So, maybe 90% of that. Um,
23:16>> isn't that what the Clarity Act is for?
23:18like I I read parts of it but it seemed
23:20like
23:21>> you're not allowed to pass it on and
23:23after this act you can.
23:25>> Yeah. So this is being carefully has
23:27been carefully negotiated in the draft
23:29clarity act. Uh the banks kind of made
23:31this concern out there in the world that
23:34um they didn't want any rewards to be
23:36paid on idle balances. So that made it
23:40into the latest draft of the Clarity
23:41Act. But as long as the customer is
23:43doing some sort of activity like a
23:45payment or trading then they would be
23:47eligible to get these rewards. So the
23:49customer can still at least in the
23:50current draft if it becomes law um and
23:52it's currently allowed under the the
23:54Genius Act which already became law um
23:57customers would get you know they could
23:59get the the majority of these uh
24:01benefits from the underlying dollars
24:03held in short-term US treasuries. Um so
24:06that's the current arrangement. And then
24:08you you had asked about another 3 to 4%.
24:10I wasn't sure what what that part was.
24:12>> Like if I were to like lend my USDC, I
24:14can monetize it again.
24:16>> That's correct. So customers can opt in
24:19and choose to lend USDC into say a D5
24:22protocol if they want.
24:23>> Mhm.
24:24>> And um yeah, and can earn some
24:26additional uh yield on that.
24:28>> Right. Now, if I were to buy USDC
24:32directly
24:33>> Mhm.
24:34>> No, forget that. Actually, if I were to
24:35buy American Treasury directly
24:37>> Mhm. I have a certain amount of risk.
24:40Let's say there is crazy inflation,
24:43yields go up, I have a marktomarket loss
24:45on the change in interest rates. Even if
24:47it's short-term paper, I'm not talking
24:49tables. I'm saying 6 month paper, one
24:51year paper, whenever there is a
24:53significant change in interest rate as
24:56it has happened historically, I would
24:58lose some money.
24:59>> Mhm.
25:00Why would I
25:03for the same return as I would get if I
25:06bought USDC or DT directly put an
25:09intermediary in between and add a layer
25:12of
25:13an additional layer of risk to own the
25:16same instrument that gives me the same
25:17yield.
25:19>> The reason is you can use the stable
25:20coin as a payment
25:22>> payment uh instrument or you can use it
25:25for trading and you can use it in DeFi.
25:27So in the traditional financial system,
25:30they have this separation. And they'll
25:32say, "Okay, well here you can have your
25:34checking account, right? And that's for
25:36payments, but you don't earn anything on
25:38that. And then over here is your savings
25:40account or your money market fund, and
25:42that we'll pay you some yield for that,
25:45but you can't spend it. You can't use
25:48your money market fund to pay for coffee
25:49or something." So in this new financial
25:52system, we're trying to update the
25:54financial system. We're saying why do we
25:56force the customer to move their money
25:58between these two buckets? Why can't you
26:00just have one pool of money where if I
26:02want to spend it, I can spend it and if
26:03I want to earn some yield, I can earn a
26:05fair rate. So that's kind of the goal
26:07with stable coins.
26:11>> In a way, the reason banks do that is
26:12they can use your money to lend and
26:14monetize the money they have. Right.
26:15>> Exactly. Yeah.
26:17>> They they basically want to have the
26:18deposits in your checking account where
26:20they don't have to pay you anything.
26:21Mhm.
26:21>> So in my view, you know, historically
26:23they've acts they've intentionally
26:25created this friction so that um they
26:27get a larger net interest margin spread
26:29is what it would be called in the
26:30banking world. But
26:32>> so where's the spread for you guys for
26:33Circle and Coinbase?
26:35>> If you're going to give out all the
26:37treasury yield while you take the
26:38underlying risk of a crazy spike in
26:41interest rate,
26:42>> where is the spread to me good for this
26:45equation?
26:46Yeah. So we keep um it's about 10% of
26:50the economics of the it depends how much
26:52um you know money people have and people
26:55could negotiate different rates at
26:57different providers. Maybe the market
26:58will compress even more over time. I
26:59don't know. But currently today it's
27:01about 90% of the the economics at least
27:03on Coinbase are given to the user.
27:05>> Mhm.
27:05>> So we are keeping you know the 10%.
27:07>> Is that enough?
27:10If you were to say America has as much
27:11debt does it have as it does
27:14>> and a lot of countries across the world
27:17are pairing down their exposure to
27:19American treasury because
27:21>> 4% is not commensurate to that level of
27:24debt
27:26and in a certain way the American
27:28government has indicated that they would
27:31like to see their currency depreciate to
27:33be more competitive from an export and
27:36manufacturing lens.
27:37>> Mhm. is 10% of the economics on 4%. I'm
27:42guessing that's like 40 bibs or 50 bibs.
27:45Is that enough to cover the risk of an
27:49interest rate spike?
27:51>> Yeah. Well, a couple points. One one is
27:53we're not we we're not getting exposure
27:55on the interest rate spike. Um we don't
27:58have liability there. I mean, so if I
28:01think before you were kind of saying the
28:02interest rate you're earning on
28:03short-term US treasuries may not cover
28:06um the inflation risk and and things
28:08like that,
28:08>> the change in interest rate.
28:09>> Yeah. But that's not [clears throat]
28:10something that would um affect us like
28:13in terms of our bottom line. So we're
28:15just whatever the interest um you know
28:18the short-term bond rate is, we would
28:20pay 90% of that to the customer. Um
28:23>> and would you also pass on the mark
28:24tomarket of interest rate changes to the
28:26customer?
28:28the marktomarket interest rate changes.
28:29What do you mean?
28:30>> Like say say the treasury moves from 4%
28:32to 5% or 4 and a half to 5 and a half%.
28:35>> Yeah, we would adjust it. Yeah.
28:36>> Right.
28:37>> Yeah. But I think the the broader answer
28:39to your question is, you know, is that
28:41enough? Right.
28:42>> And how do you cover calendar risk? Say
28:44you have different maturities of
28:46treasury.
28:47>> How do you how do you cover the calendar
28:49spread of different treasuries losing
28:51different amount of money? You would
28:52just pass on all of that to the customer
28:54whenever it changes. Yeah, I think
28:56there's um you know, we're not a we're
28:58not a stable coin issuer, but I think
28:59the ones like Circle and then they uh
29:02they hold different maturities like some
29:03of it is probably some percentage of it
29:05is 24 hours, you know, overnight, some
29:07of it is one month, some of I think the
29:09max they can do under the Genius Act is
29:1190 days or 93 days. So the, you know, in
29:14the worst case scenario, if everybody
29:15wanted to withdraw it all at once, um
29:18there's there's a lot of liquidity for
29:20short-term US treasuries, but in the
29:21worst, even if that went away, the worst
29:23thing you would do is just you everyone
29:25would get their money over 90 days.
29:27That's what the US Congress kind of re
29:30um landed on as a reasonable lowrisk
29:33backing. And by the way, if you compare
29:35it, you know, banks um do fractional
29:37reserves. So they've lent out most of
29:39the money and they that's partly why
29:42they're so heavily regulated. They do
29:43they're doing fractional reserves. So in
29:45a stable coin issuer is is 100% reserve.
29:48Um the the only risk they're taking is
29:50at most a 93day US Treasury, which most
29:54people would consider that to be, you
29:55know, the risk-free rate, so to speak,
29:58>> right?
29:58>> Yeah. But I but I think your your
30:00broader question was sort of like is,
30:01you know, is that enough? And I my my
30:03comment on that is that I think that the
30:07the cost structure to run a great um
30:09fintech company is is just come down
30:12over many decades, right? Um the
30:15classic, you know, bank model where you
30:17have these giant buildings and you know,
30:18[laughter] and skyscrapers and you have
30:20branches on every corner. Um and you
30:24have armies of tens of thousands of
30:26people doing compliance. You know, I
30:28like I Coinbase, I think we're just a
30:30much more efficient company. we can pass
30:32on those benefits to the customer,
30:34right? So, we don't have branches. Uh we
30:37don't have skyscrapers in major cities
30:39around the world. We have we have some
30:40offices. Um you know, and we're able to
30:44use things like AI and automation to
30:46make a lot of these compliance processes
30:48just much more efficient and more
30:50accurate, higher quality. So, we're
30:52trying to just build the next generation
30:54of financial service business that can
30:56provide better financial services to
30:58people. C- crypto is an important, you
31:00know, piece of that, but it comes from
31:02all kinds of things, you know, um policy
31:05work and good customer service and
31:06everything. I mean, you know how hard it
31:08is to build a great financial services
31:10company, right? So, um that's what we
31:12see is we think that crypto is a piece
31:14of that puzzle. We can help update the
31:16financial system, just make it faster,
31:17cheaper, more global, permissionless
31:20access for everyone. Yeah. I tried for a
31:23little while a couple of years ago to
31:25figure out if there is a business to be
31:28built around
31:30repatriation of money back into India.
31:33>> Uh remittances are quite high.
31:35>> Yeah.
31:35>> Uh
31:36>> I think the amount of money that goes
31:38back to India is about 150 billion a
31:40year.
31:41>> Yeah. I I think I read it's the highest
31:42remittance market in the world, right?
31:44>> Yeah.
31:45>> Yeah.
31:45>> Yeah.
31:46The problem is there there will be there
31:50were no offramps back then in India for
31:52a stable coin per se and
31:56the government very rightly so is
31:59disincentivized
32:01to provide a offramp for a stable coin
32:04that is backed by the American dollar in
32:07a way
32:08>> by virtue of
32:11what happened when the US sanctioned
32:12Russia and the swift I mean you don't
32:15want
32:17I I don't see where the incentive lies
32:21for the Indian government that runs a
32:23really tight fiscal policy by virtue of
32:27you know the oil shock and everything
32:29else that has happened in the recent
32:30past to allow for an ecosystem like that
32:33to foster because once you provide a
32:36offramp you don't know if people start
32:37transacting in it you you can't really
32:40monitor USDC in that way.
32:42>> Mhm.
32:43>> Yeah. So I don't know if that business
32:45opportunity is there. Have you guys
32:47considered Coinbase? I know you guys
32:48came into India at some point a few
32:51years ago and you're probably coming
32:53back.
32:54>> Yeah. Well, yeah. So on the stable coin
32:57point um yeah I mean I think every
33:00country has the right to um have
33:02sovereignty over their own money and you
33:04know I know uh India is very that's very
33:07top of mind for them. So every country
33:09in the world like these major countries
33:11of the world they're all creating
33:12digital versions of their own fiat
33:14currency right so that a lot of stable
33:16coins today are dollar denominated but
33:18there's euro stable coins and yen
33:20>> but none of them are working
33:22>> um well I think that's you're right like
33:25the US has actually been forwardleaning
33:27on that and um I would be certainly
33:30advocate of India having a digital rupee
33:32that uh in a stable coin format that has
33:35clear legislation backing it that that's
33:37what really caused it to take off in the
33:38US. Um, because without that, you're
33:41right, like people are going to be
33:42tempted to have dollar back stable
33:43coins. Um, and I think India should be
33:47forward-looking on that just as they've
33:49been with UPI and all those things that
33:50they've kind of the envy of the world in
33:52terms of digitization in every other
33:54category. So, they might as well have a
33:56digital rupee. Um, and you're correct.
33:58You know, Coinbase actually we did uh
34:00try to launch back a few years ago and
34:02we had trouble accessing the UPI system,
34:04but we've got that fixed now. So we're
34:06actually planning to relaunch in India
34:08on Monday and we I I believe we're now
34:11the first um you know international
34:13player in India that has a local license
34:16and access to the local payment rails
34:18and you know we registered with the FIU
34:21and um so we've got a local entity local
34:23license and yeah I'm excited to have
34:26Coinbase live again in India.
34:27>> Can I ask you like a far extrapolated
34:30question? Yeah,
34:32>> we have a need
34:35to get more dollars into the country in
34:40exchange for rupees.
34:42>> Mhm.
34:43>> What kind of product or ecosystem
34:46under what you're building can help us
34:48foster that? Like I had this stupid idea
34:51at some point and I spoke about it
34:53somewhere that Indian households have a
34:55lot of gold.
34:56>> Yeah.
34:57>> Like insane amounts. This is all we've
35:00been buying from you know like if I can
35:03remember my grandparents and
35:04great-grandparents it might have been a
35:06gram of gold but people have been buying
35:08gold in uh all of our history.
35:12>> Yeah.
35:13>> I was thinking of a coin where there is
35:15a clearing house in say every town and
35:18every district. Uh people have say 10 20
35:2330 different pieces of jewelry that they
35:25can't use at one point. They can only
35:27wear one thing at a point. So you take
35:29what you own, go to this clearing
35:33depository custody place.
35:34>> Mhm.
35:35>> Place your jewelry when you're not using
35:37it. And in return for that, you get a
35:40coin backed by gold that you can
35:42monetize by lending, investing,
35:46pledging, and doing other things with
35:48it. Do you think something like that
35:49could work?
35:51Yeah, I mean I think in the same way
35:53that rupees and dollars can be
35:55tokenized, you can also tokenize gold.
35:58Um you can tokenize stocks, you can
36:00tokenize bond, treasuries, bonds. Um so
36:04anything can get tokenized and what
36:06generally happens is that you see a more
36:09liquid market for that underlying asset
36:12and more better distribution globally
36:15and you know real-time settlement. Like
36:17it's pretty difficult to take a bar of
36:19gold and uh transport it across the
36:21world or to pay for a cup of coffee with
36:24it cuz you know chip off a little flake
36:26and measure it or something but you know
36:27>> but you don't have to transfer it. Say
36:28if I'm in India and I created a gold
36:31coin and Brian in LA wants to trade with
36:35me I'll call up a vault here and settle
36:39the equivalent value of gold as the gold
36:42there without actually transferring the
36:44commodity.
36:45>> Yeah that's what I mean. Yeah. like when
36:46gold was backed by the dollar was backed
36:48by gold actual physical gold did not
36:51move around people just settled it
36:53>> right so I think that would absolutely
36:55happen yeah in that case um there
36:57actually are some people I think who've
36:59done that they have um tokenized gold
37:01reserves on chain and I would say by the
37:04way Bitcoin is the like a digital
37:06version of gold
37:07>> um you know it's actually created it's
37:10very much inspired by gold and the gold
37:12standard and countries all over the
37:15world h have that sort of affinity and
37:17cultural history with gold and so the
37:19the scarcil the scarce scarcity of it
37:22and the decentralized nature of gold
37:24like there's no one country who controls
37:25it right the supply is finite so that's
37:28what gives people a lot of trust around
37:29it and then you know it's uh it's quite
37:32durable you know it doesn't uh go bad
37:35like maybe people might trade um bags of
37:39rice or something but it could go bad
37:40like the gold doesn't go bad right so
37:41these are some of the the properties of
37:43money right and bitcoin is I think it
37:46takes all the best properties of gold
37:48and it is even better on a couple of
37:49dimensions like the portability right
37:51you can transfer bitcoin instantly and
37:54uh the divisibility of it you can very
37:56easily divide it down to eight decimal
37:57places so in many ways I think the
38:00creators of bitcoin you know Satoshi
38:02Nakamoto whoever that is they were
38:04inspired by the gold um standard and
38:07tried to make a new gold standard
38:08actually
38:10>> can I lean on professor Brian from
38:12founder Brian for a while and go to
38:15first principles.
38:17What was Bitcoin? I read the white
38:19paper.
38:20>> Mhm.
38:20>> It it kind of was a protest around
38:24the banking crisis of 2008, right when
38:26it came out.
38:28>> Well, that was mentioned. Yeah. In the
38:29first Bitcoin block, uh this chancellor
38:32on the brink of bailout was the quote
38:34that was kind of enshrined in the first
38:35Bitcoin block. So, that certainly spoke
38:37to
38:39um the motivation of the people or
38:42people or person who created Bitcoin. um
38:45>> is a very simplistic way to define
38:47Bitcoin when it began at least a paper.
38:50It was trying to solve one core problem.
38:54How do people send money over the
38:56internet without needing a bank,
38:58government or company in the middle?
38:59>> That's right. Yeah. Peer-to-peer cash
39:01was what was described in the abstract.
39:03And yeah, they were trying to eliminate
39:06intermediaries.
39:07>> And why? because the Fed was printing
39:11excessively and
39:13there was unlimited
39:16supply of dollars in the system and they
39:18were inflating or deflating the currency
39:20without you having a say over it.
39:23>> Yeah. Well, I so again I speculating
39:25having not spoken to Satoshi Nakamoto
39:27but just having read the paper and
39:29seeing some of the early internet forum
39:31discussions I think yeah it was all of
39:32these things. So it was it was an it was
39:34to try to be a hedge against inflation
39:36and saying that people deserve sound
39:38money that it holds its value and can't
39:40be eroded by inflation. I think they
39:42were trying to reduce this the the cost
39:44of transactions. These intermediaries
39:46sometimes take high fees or introduce
39:48delays. And then I think there was
39:50really like a freedom argument
39:51underpinning it which was that economic
39:54freedom is important uh for anybody to
39:57be able to live their life and start a
39:59business. And you know some sometimes we
40:01talk about other freedom you know
40:02freedom of speech or to congregate. And
40:05if you can take away someone's economic
40:07rights um you can take away all their
40:09rights really because if you can't if
40:11you don't have enough money to have
40:12transportation or food or housing you'll
40:16you know you can't really express your
40:17other rights. And so economic freedom is
40:20this important thing that they were
40:21trying to guarantee with Bitcoin and
40:23said anybody in the world as long as
40:24they have an internet connection and a
40:26smartphone can have access to sound
40:28money and they can hold their wealth in
40:29a way that it can't be taken from them
40:31and hopefully begin to participate in
40:33the global economy in in in a more open
40:35way. So those were the principles that
40:38Bitcoin was founded on at least in my
40:40view and I think they're just as
40:42important today.
40:44>> Can I ask you another first principles
40:46question?
40:47>> Yeah. Can you explain blockchain? What
40:49is a blockchain?
40:50>> Yeah. So, a blockchain is um it's a
40:52distributed ledger. So, typically at an
40:55intermediary like a bank or something in
40:58the prior system, you'd have uh one
41:00company or person keeping an account of,
41:04you know, I'm going to debit one one
41:05rupee from Brian's account and give it
41:07to Nquille. So, I minus one and plus
41:10one. Somebody has to record that as a
41:12single transaction to make sure that
41:14nobody double spent the money. Right
41:16now, what a blockchain is, it's a
41:18computer science breakthrough which
41:20allows a distributed set of computers to
41:23keep a ledger and come to consensus
41:27about who has how much at any given
41:29time. And that was a computer science
41:31breakthrough that really hadn't been
41:32solved before. And so it allows these
41:35peer-to-peer transactions to happen now
41:36without any intermediaries. And um this
41:40distributed set of computers, kind of
41:41like the internet, right? um could now
41:44come to consensus about who owns what.
41:46And so sometimes people call Bitcoin and
41:48blockchain they call it the the internet
41:50of value, right? Because [clears throat]
41:51the internet was a breakthrough in terms
41:52of democratizing publish publishing of
41:55information and blockchains were
41:57democratized um movement of value.
42:02>> Another way to like when I'm trying to
42:05think of it because I don't understand
42:06it truly.
42:07>> Mhm.
42:08>> Is I use Google a lot like Google Drive.
42:10>> Mhm. It's a Google Drive sheet, a Google
42:14Drive Excel sheet of a sort where
42:17everybody has access to that drive page
42:19and when a transaction happens, we can
42:22all see it at the same time.
42:24>> Yeah. So, I'll get into a little bit of
42:26the computer science under it actually.
42:28Um, imagine many of your listeners are
42:30very technical. So, um, and
42:32[clears throat] I actually would
42:33encourage anybody to go read the Bitcoin
42:34white paper. It's a little bit hard to
42:37understand the first time, but I think
42:38it's worth trying to read. And it's a
42:40one of the most important documents you
42:42know written in financial history right
42:44so okay so the way it works is if you
42:46have a set of these computers on the
42:48network anybody can generate a
42:50transaction and broadcast it and they
42:52each kind of relay it to each other so
42:54they're kind of gossiping all the
42:55computers and saying all right what
42:57transactions have you seen and they're
42:59relaying that so everybody has seen
43:00everything but that doesn't mean those
43:02transactions are confirmed yet so to to
43:04confirm a transaction because somebody
43:06might have said um I have one I have one
43:08rupee I'm going to give one to you
43:10Nikquille and one to somebody else. So I
43:12I might have submitted two transactions
43:14and tried to double spend, right? Okay.
43:16So now all the nodes are aware of all
43:18the different transactions and uh there
43:22some of the nodes are miners of Bitcoin
43:24miners, right? In this case we're
43:25talking about Bitcoin, but there's other
43:26blockchains and the miners what they do
43:28is they package up a set of recent
43:31transactions and uh they eliminate any
43:34duplicates like somebody trying to
43:35double spend and what they do is they do
43:38some work on the set of transactions. Um
43:40this is called mining and I can explain
43:43how it works but basically it's almost
43:45like um searching for a rare number in
43:48mathematics that would um you know make
43:51this block um coherent. It would be in
43:55this case we're it's using a hashing
43:57function and you're looking for a
43:58certain number of zeros at the beginning
43:59of the hashing function. But the the
44:00simple way to think of it is to say um
44:03any computer can package up the
44:05transactions and say and search you have
44:07to do a lot of computational power to
44:09find one of these rare numbers. Now if
44:11you find one which is hard to find you
44:13can broadcast that solution to the rest
44:15of the network and it's very cheap for
44:17every other node to say oh that is
44:18that's a real solution you know I
44:20verified it. Um, so it relies on this
44:22asymmetry of like difficult to find,
44:24easy to verify.
44:27And if the first person to announce one
44:30of those, that becomes the next block in
44:31in the chain. And each block has a
44:33pointer to the prior block. So it's that
44:35would be what creates the chain. And so
44:38you have this uh that's what they call
44:39proof of work. It's like basically the
44:40longest chain is is the [clears throat]
44:44official record of the ledger. And it's
44:46and it has a lot of computational power
44:49embedded in it because it took a lot of
44:50work to make this long chain. Sometimes
44:53there's a fork in the chain and
44:54whichever one is the longest wins and
44:56the the other one dies off. Um and so it
44:59relies on at least as long as 50% or
45:02more of the actors on the network are
45:03behaving in a good way. Um it works and
45:08you know if you have a bad actor uh who
45:10tries to submit some invalid thing they
45:12will get outpaced uh by the rest of the
45:14network. So that was the computer
45:16science breakthrough really.
45:18>> And when you do this proof of work and
45:21put a block on the chain,
45:23>> you get a reward which is
45:25>> That's right. Yeah. So if you discover
45:27one of those new blocks, that's how new
45:29Bitcoin are created. And so you would
45:31initially you would get 50 new Bitcoin
45:33by mining one of those blocks. Now it it
45:35gets cut in half every um four years or
45:38so. And so the amount of Bitcoin being
45:40released every um every 10 minutes is
45:43sort of decreasing like an asmtoically.
45:45>> That's because there is a finite number
45:4721 million.
45:48>> Correct.
45:48>> Yeah.
45:50>> I remember a time when people made a
45:53business out of just mining bitcoins.
45:56Does that still work?
45:57>> Yeah, there's lots of Bitcoin miners
45:59around the world. I mean, it's the it's
46:01a business. We don't we don't do that
46:03business, but um you know, you have to
46:04be very good at getting inexpensive
46:07energy. uh for to run the data center
46:09and then using custom hardware uh like
46:12chips, custom chips that are optimized
46:15for mining Bitcoin.
46:16>> If I were to start a business around
46:18because I go back to like people
46:20watching this want to start a business.
46:22If I were to start a business in mining
46:25today
46:26>> Mhm.
46:27>> by virtue of increased energy cost
46:30recently, what kind of irra might I
46:32make? Say hardware being equal.
46:36>> Yeah. Well, it depends. Um, a lot of the
46:39successful Bitcoin mines are adjacent to
46:43uh power plants where there's certain
46:46times of day where they may have just
46:47excess capacity that would not get
46:49monetized. So, you could almost think of
46:51the Bitcoin mine is like um it's like a
46:54floor on the price of electricity. So,
46:56if it if it ever dips low enough, then
46:58all of that can be the energy can be
47:01banked in the Bitcoin that gets mined if
47:03you if you will. So it actually allows
47:05sometimes um it's a real benefit to
47:07people who are trying to underwrite the
47:09creation of new power plants because
47:10they can say all right I know that
47:12there's a floor on the price of energy
47:13and it helps them with their modeling. I
47:15should I should mention though because
47:17some sometimes people have concerns
47:18about how much energy Bitcoin uses and I
47:20know you're focused on climate you
47:21mentioned right and um you know Ethereum
47:25and other blockchains use a new uh
47:27system called proof of stake which is
47:29actually 99.9% more energy efficient and
47:32uh I could describe that algorithm too
47:34if you want but it's uh
47:35>> just before we move on to proof of stake
47:37and proof of history
47:39>> uh if Bitcoin was initially built to
47:45transfer value from one person to
47:47another. It's not necessarily the most
47:50efficient at that if we call it digital
47:53gold today, right?
47:55>> Yeah, that's a great point. Actually, I
47:57I would say that you're right. The
47:58Bitcoin white paper describes it as
48:00peer-to-peer cash.
48:02>> Um, and money has multiple purposes. One
48:05purpose of money would be store of
48:06value. Another one would be a medium of
48:08exchange, which is which is more like
48:09peer-to-peer cash. You're right. I think
48:11it's fair to say at this point that
48:12Bitcoin has succeeded as a store of
48:15value and I don't think it has become a
48:17a medium of exchange. There's people who
48:20have tried to make that happen with the
48:22lightning network was a was a
48:24optimization layer on top of Bitcoin,
48:25but it never really took off. Um it
48:28turns out that um when you have a
48:30deflationary asset like Bitcoin that
48:33people think it'll go up in value over
48:35time. I mean it's volatile. It's
48:36volatile. That's one issue for a medium
48:37of exchange, but the other one is people
48:39think it's going to be worth more in the
48:40future, so they don't really want to
48:41spend it right now. So, we've actually
48:43seen massive growth of stable coins
48:45running on blockchains, uh, fiatbacked
48:48stable coins as the medium of exchange,
48:50and Bitcoin has remained the store value
48:52as digital gold. So, the way I think of
48:55it is we're it's like we're almost like
48:57creating this new financial system, and
48:58it has to it it it's not a perfect match
49:01to the prior one, but it rhymes, right?
49:03Like in the prior system, we had gold.
49:04Here we have Bitcoin. In the prior
49:06system we had, I don't know, Visa and
49:08Swift and you know um and here we have
49:11stablecoin um payments happening on
49:13chain. So yeah, and then there's lending
49:16is being recreated and insurance and you
49:18know
49:20capital formation with stocks. It's like
49:22everything is being recreated on chain.
49:24I used to watch these debates. I don't
49:26remember how many years ago, but Michael
49:29Sailor uh micro strategy
49:31>> I think he put a lot of money in
49:33bitcoins and he would argue gold versus
49:35bitcoin overall market cap what will
49:38happen tomorrow.
49:39>> Yeah.
49:39>> Do you agree with him for a public
49:42company to put he somehow converted a
49:45public company into a fund which gives
49:47you exposure in a more taxefficient way
49:49into the upside of bitcoins.
49:52>> Right. Well, okay. So, he did something
49:55really brilliant, which is um you know,
49:58I think from a financial engineering
49:59point of view, it was brilliant, which
50:00is that a lot of different pools of
50:03capital in the world, um they're able to
50:05buy public company stocks, but they were
50:06not able to buy Bitcoin. Um you might be
50:09aware that recently they've become
50:11Bitcoin ETFs as well, which have become
50:13very popular. I think they were like the
50:14fastest growing ETFs of the last few
50:16years. Um, but Michael Sailor recognized
50:20that a lot of funds could just very
50:22easily buy a public company stock if
50:24they could not buy an ETF or or Bitcoin
50:26directly. So, he happened to make a
50:28public company that just was essentially
50:31100% exposure to Bitcoin and that
50:33created a lot of people created a lot of
50:35demand for that. Then he's using
50:36leverage in creative ways and things
50:38that I'm not entirely familiar with.
50:40Yeah, [clears throat] I mean I think we
50:42just need to make it easier for people
50:43to get access to digital assets and
50:45there'll be various opportunities like
50:46that along the way.
50:48>> Do you want to move on to proof of work
50:51>> or proof of stake?
50:52>> Proof of stake.
50:53>> Yeah, sure. If you want. Yeah. Um
50:55>> I'd love to like understand the math
50:57behind it in a manner like a idiot.
51:00>> Okay. Okay. I'll do my best to explain
51:03the proof ofstake algorithm and then I'm
51:05sure some somebody on the internet will
51:07find a detail I got wrong. But but
51:08that's okay.
51:09>> Yeah. Um yeah. So okay. So I think when
51:13they were creating proof of stake they
51:14said okay proof of work um the Bitcoin
51:16system it's it's very robust. It's it
51:18hasn't failed right and many people have
51:20tried to attack it in various ways. It
51:22never failed. So that's a great property
51:23but it does use lots of energy. Okay. So
51:25how might we create a system that's
51:27equally robust but doesn't use so much
51:29energy. So in this case the nodes start
51:32off the same way. They're all re they're
51:33relaying the different transactions to
51:35each other. you know, gossiping and
51:36sending everybody's proposals and again
51:40um some of them decide they want to try
51:42to propose the next block. Okay, so in
51:46this case um what they do is they
51:48package up the transactions that they
51:50believe are valid and no duplicates and
51:52everything and then um they have to when
51:56they propose the block they actually put
51:58up some money as well. This is the stake
52:00um and it's almost like a bond or
52:03something like that in in corporate
52:04finance. So you put up you put up this
52:06money and you say um I believe this is
52:08the next block and I'm willing to put
52:10some money behind it and um and if other
52:14people agree
52:16and it becomes the next block and by the
52:18way the other people can vote on it kind
52:19of with their own money.
52:20>> Let's ask a stupid question here.
52:21>> Say I stake 35 E or whatever to stake
52:26while I confirm the particular
52:28transaction. What if the value of the
52:30transaction is equivalent to 50,000 ETH?
52:34the value of the transaction but the st
52:36you're saying the stake is a lower
52:37amount
52:37>> is this yeah yeah yeah exactly
52:39>> well so everybody this again it relies
52:41on at least 50% of the participants of
52:43the network hopefully much more but at
52:44least 50% are good actors they're not
52:47going to allow you to propose a block
52:48that is uh that vi that double spends
52:51money or does something bad
52:53>> so do I have to stake relative to
52:55something each time I stake a certain
52:58amount of ETH to confirm a transaction
53:01>> I don't believe the stake is relative to
53:03the amount of money being moved D. I
53:04think it's literally just um I think
53:07it's like how sure you are of that one,
53:09how much you want to put up. Um I I have
53:11to go back and look at that as a detail
53:12actually. But but basically what happens
53:14is so you put your own money behind it.
53:16Other people can vote with their money
53:18and say, "Okay, I believe that'll be the
53:19next block and I I've checked it. I
53:21think it's legitimate." You know, um and
53:23basically the people who are right, they
53:25get their stake back plus interest and
53:28the people who are wrong lose their
53:29stake. So you you forfeit it, right? So,
53:32it's almost like a it's like an
53:34investment that happens, a round of
53:36investment that happens every um like
53:39multiple times a second, you know, I
53:41believe. And it and and um people are
53:44voting with their money and they're
53:46saying, "Which one do I think is going
53:47to be the next one?" And then if you're
53:48right, you get your money back with
53:49interest and if you're wrong, you lose
53:50it. And so that allowed uh this that the
53:53network to reach consensus without
53:55having to use so much computational
53:56power.
53:58>> Okay, please continue. Proof of stake.
54:00Then why do people even [clears throat]
54:04if proof of stake brought down the cost
54:06of transaction because energy was no
54:08longer required and people were staking
54:10by a magnitude of 99%.
54:14Why did that not really become a
54:16currency and people start trading on it?
54:19Also maybe you can tell us about smart
54:21contracts a little bit.
54:24>> Yeah well the Ethereum network uh which
54:27uses proof of stake and there are others
54:29as well. I I mean I think a lot of
54:31people are trading it. I think it's been
54:32quite successful. Um
54:36you know if there's some other part of
54:38your question I'm missing on that though
54:39just let me know. Are you asking okay so
54:41I think yeah I think the the proof
54:43ofstake networks have been quite
54:44successful. Um and then you asked about
54:46smart contracts. So this is another
54:49thing that Ethereum really innovated on
54:50was they said okay we don't want just
54:52just to be able to move money from A to
54:54B. Uh what if we could have programmable
54:57money? Okay so what does that mean? It
54:59means that um we could put some sort of
55:02you know in the traditional world you'd
55:03use a a lawyer to write up a contract
55:06and you know maybe it would say okay I'm
55:08Brian I'm going to put a million rupees
55:11into Nquille's company and in exchange
55:13Nquille's going to give me uh some
55:15shares of his stock and some voting
55:17rights and you know we could write have
55:20a lawyer write up that on a piece of
55:21paper and we could both sign it and I
55:22give you the money and I get the shares.
55:25in the Ethereum world, they said, "What
55:26if we could put the law or the the
55:29contract into software and on the
55:31blockchain itself?" And so they actually
55:32have like um a programming language in
55:35in the uh the blockchain itself. And so
55:38we can make a a smart contract where um
55:41you know, you publish it on on the
55:43blockchain. Anybody in the world can see
55:45it and you and you say, "Hey, I'm
55:47raising money for my company." And if I,
55:49Brian, send money into that smart
55:51contract, I get the shares back. And so
55:53I don't have to trust um that lawyer who
55:56wrote it or some court in some country
55:59like anybody in the whole world can now
56:01participate in that smart contract. And
56:02there's been very there's been very
56:04fascinating examples that have happened
56:05where somebody people who have never
56:07even met each other. You know they've
56:09never they don't there's no lawyers
56:10involved. they've never met and they'll
56:13post um a smart contract and like 20,000
56:16people around the world within 5 minutes
56:18will uh participate in that contract and
56:21they'll somehow collaborate and do
56:23something in the world together, you
56:24know, go buy art or whatever they're
56:26doing. Um and so that's a very
56:28fascinating thing. Now, smart contracts
56:30are very new
56:31>> and there's been lots of um bugs in the
56:33software where people sometimes it's
56:35very diff it's there's not a lot of
56:36people who have experience writing
56:37these. So sometimes people will write
56:39one of these and there'll be a flaw
56:41found and people get money stolen. So
56:43it's it's a very kind of new area I
56:45would say. But um
56:46>> can you give me a simple example that I
56:48could use it for? Like if I need a smart
56:50contract?
56:51>> Yeah. Um well the I'd say like the most
56:53classic examples that people have done
56:55so far is that like they want to raise a
56:57venture fund and so they they have LPs
56:59and then so they they'll publish to the
57:01world and say here's what we plan to
57:02invest in and everybody can uh wire
57:05money and then we can collectively
57:06decide to go buy things. Um that would
57:08be an example. Um, another example would
57:12be, uh, right now we're making an
57:14onchain payment protocol. And, uh, you
57:17know, in the world of payments, you need
57:18to think about how to handle things like
57:19refunds and, um, you can authorize the
57:23card, but settle the funds later when
57:25when the item ships, right? Or maybe you
57:28need to think about how to do
57:28subscription payments. So, these are all
57:30things we can actually write into a
57:32smart contract.
57:33>> Um, and so those are those are examples
57:36of the kind of things. It's it it's
57:38actually what would be called a touring
57:39complete language in the smart contract
57:41meaning you can actually write any
57:42software. Um it's it's like a totally
57:44complete just like you know C++ or
57:46JavaScript you can write anything in
57:48there. Um but usually people are trying
57:51to make a very specific uh thing.
57:53They're not trying to like make a whole
57:55computer in there. Yeah.
57:57>> So what are these being used for now?
57:59Say Bitcoin has become a store of value.
58:01>> Yeah.
58:02>> What is being built on top of proof of
58:04stake? like
58:06>> what's the real world use case today?
58:09>> Yeah. Well, another example would be um
58:11borrowing and lending. So, you know, in
58:14many places in the world, it's kind of
58:16difficult for people to get access to
58:17credit. Um
58:20and in the in these people call these
58:22like DeFi protocols like decentralized
58:24finance. Um these are all using smart
58:26contracts. So in this world um you can
58:30have uh a number of people who are have
58:33money willing to lend and many money
58:35they want to borrow and you can have um
58:38an interest rate that gets generated
58:40right um you know you'd mentioned
58:42earlier people on Coinbase can actually
58:44choose to lend their money out and get
58:45and earn these yields and things that
58:47that's using a DeFi protocol underneath.
58:49So some of these have reached maturity
58:51where um and and it's it's by the way
58:53it's global right so anybody in the
58:54world can participate in this um
58:56>> how does it work like again a stupid
58:59question but when I lend money to
59:00somebody
59:02>> I charge a rate of interest based on the
59:04likelihood of him paying me back.
59:06>> So when I lend to somebody on proof of
59:10stake a D5 protocol
59:12>> how do I know if I lend to Brian I
59:14should charge 10% versus I lend to him I
59:16should charge 15.
59:18>> Yeah. So there's um there's different
59:20pools of these in these DeFi. You can
59:22choose, you know, it's kind of like in
59:23the traditional financial world, you'd
59:24have like a credit rating
59:26>> um these agencies and things like that.
59:28So you can look at different pools and
59:29say, "Okay, this one um you know, the
59:32underlying pool is only being lent on
59:35Bitcoin with a 50% loan to value or you
59:37know, different um characteristics like
59:39that." Other pools might have more risk
59:41tolerance and pay a higher yield. Um
59:44>> so they have to pledge something in
59:45order to borrow. Yeah, there's there
59:48would be collateral. Um
59:49>> there's no unsecured lending per se.
59:51>> Uh the not that I'm aware of. There
59:53might there might be something I'm not
59:54aware of, but I think the ones that
59:56we're doing today are all
59:57collateralized.
59:59>> And if we can move on to Salana and
1:00:01proof of history. Can you explain that
1:00:02as well?
1:00:03>> Yeah. Well,
1:00:05Salana is another blockchain um that was
1:00:08built for more like high throughput uh
1:00:10speed and low cost
1:00:12and they've been very successful as
1:00:14well. So, um, yeah, I'd say that, you
1:00:17know, there there was a for a while
1:00:18there there was actually like dozens of
1:00:20these chains that were coming out and,
1:00:22um, it's really kind of consolidated
1:00:24down where now the I'd say for store
1:00:27value, it's Bitcoin and for the, um, the
1:00:30utility layer or like let's say the
1:00:32medium of exchange with all the
1:00:33programmability, it's basically Ethereum
1:00:35and Salana. And even on on Ethereum, the
1:00:38the most popular layer 2 solution is
1:00:40called Bass, which is something we
1:00:41incubated. Um, so a lot of the
1:00:43activities actually it's really like
1:00:45Bass and Salana I think are the two
1:00:47competing to be the utility layer
1:00:49chains. Um, so we don't we don't need
1:00:52too we don't need like dozens of
1:00:53blockchains. We need like a couple that
1:00:54work really well and then there can be
1:00:57millions of different applications on
1:00:58top of those.
1:01:00>> So stable coins fit in where on this?
1:01:03They sit on which chain?
1:01:06Well, stable there are stable coins
1:01:07running on most chains at this point,
1:01:09but a lot of it's running on base and
1:01:12Salana.
1:01:13>> Yeah. And I'm sorry I'm asking you like
1:01:15questions about the fundamentals of this
1:01:18and not Coinbase per se, but
1:01:20>> I feel like for people who want to
1:01:21start, if I'm a young kid wanting to
1:01:23start a business in this, it helps to
1:01:26hear about the fundamentals of what
1:01:28they're building on top of.
1:01:29>> Yeah, that's great. Yeah. I mean uh we
1:01:33we can talk about anything you want.
1:01:34Anything in the world.
1:01:35>> Yeah.
1:01:36>> What would you like to speak about
1:01:38opened?
1:01:39>> Well, okay. Um
1:01:42how do we create more entrepreneurs in
1:01:44the world? Let's talk about that because
1:01:46um you know, I think part of it starts
1:01:49with education, right? Um India has
1:01:52amazing universities. There's probably
1:01:53lots more that could be done there. You
1:01:55know, I think AI will help a lot with
1:01:57education, by the way. That's that's an
1:01:58important area. Um, and then there's
1:02:02like the financial markets, right? How
1:02:04do you get your first seed check
1:02:06because, you know, for me that was a big
1:02:07deal. Like I I had a job and I had an
1:02:09idea and I was kind of nights and
1:02:11weekends working on my idea, but I but I
1:02:14didn't I wasn't going to quit my job
1:02:15unless somebody gave me a seed check,
1:02:17you know, cuz I had to pay rent. I had
1:02:18to, you know, I had to uh buy buy food
1:02:22and things. So um in Silicon Valley you
1:02:26know there was I went to Y Combinator
1:02:27and they had a startup incubator there
1:02:30and Paul Graham was the first person he
1:02:32gave me 150k check and that allowed me
1:02:35gave me the confidence maybe someone
1:02:37believes in me that's what caused me to
1:02:38quit my job and go try to really work on
1:02:40it and then and then good mentorship and
1:02:42everything that came along with that
1:02:44we've we've tried to do a little bit of
1:02:45this in India um actually the base chain
1:02:48we have this program called base grants
1:02:49and we've given uh like $10,000 grants
1:02:52to a bunch of different developers in
1:02:55India and um a lot of them we actually
1:02:57fly them out to Silicon Valley and they
1:03:00do a session where they um get
1:03:02mentorship and pitch and everything and
1:03:03then they go back to India and there's
1:03:05been I think maybe like 4,000 base
1:03:08builders now in India which has been
1:03:09really great. Um but yeah like what do
1:03:12you what do you think we could what's
1:03:13the what's you know the limiting factor?
1:03:15Um I know Elon likes to talk about the
1:03:17limiting factor. So what what's the
1:03:18limiting factor on more entrepreneurs uh
1:03:21in India do you think
1:03:23>> risk capital is one definitely
1:03:26>> there isn't very much available I tried
1:03:28to copy y combinator and start our own
1:03:30version in India
1:03:32>> mhm
1:03:32>> it's called foundry we give about 20 25
1:03:36kids half a million dollars each
1:03:40>> every uh every like 6 months and they
1:03:43live in a house and try to build
1:03:44consumer companies together.
1:03:46>> Huh?
1:03:47>> But barring risk capital,
1:03:51culturally in India, unlike the west,
1:03:55people have not yet learned to
1:03:58appreciate failure.
1:03:59>> Yeah,
1:04:00>> I think that needs to change. I don't
1:04:02know how
1:04:03somebody changes mindset enough
1:04:07where somebody who tried something and
1:04:08failed is cooler than somebody who never
1:04:10tried. That distinction has to happen,
1:04:13>> right?
1:04:14>> Yeah. what what happens um culturally is
1:04:17is it like it's looked down upon it's a
1:04:19failure it's a shame or something like
1:04:21that.
1:04:21>> Yeah. See the thing is a lot of this
1:04:25comes in societies with abundance where
1:04:28it's okay to fail once because you can
1:04:30try again and again.
1:04:32>> Yeah
1:04:34>> it's harder there. Uh it's changing and
1:04:36things are moving in the right
1:04:38direction. I know the prime minister has
1:04:40launched this new fund for deep tech
1:04:43startups where
1:04:45a bunch of venture guys are getting
1:04:46money to then in turn put money into
1:04:48deep tech startups and I think he's
1:04:50doing a great job with it but the scale
1:04:52of India is massive you know like
1:04:56America has 300 something million people
1:04:58India has 1,500 million people
1:05:00>> mhm
1:05:01>> u to affect change
1:05:06even in culture at that scale is a
1:05:10significantly harder proposition.
1:05:12>> Mhm.
1:05:13>> Yeah. But things like this
1:05:16>> I mean the the popularity of your
1:05:17podcast tells me something that um
1:05:20people in India look up to
1:05:21entrepreneurs. I mean the a lot of the
1:05:24best CEOs in Silicon Valley you know
1:05:26came from India and um I think even in
1:05:30India there's actually a couple like we
1:05:32invested in uh coin switch and uh coin
1:05:35DCX um amazing entrepreneurs you know I
1:05:38think my sense is they're kind of like
1:05:41uh they're like heroes you know to many
1:05:43people there uh rightfully so um
1:05:47there's another thing I like about um I
1:05:50noticed about Indian culture which is
1:05:51that I feel like engineering is really
1:05:53celebrated as well. um you know in the
1:05:57US like in our government it's often run
1:05:59by lawyers you know and uh um there's
1:06:03actually I can't remember the name of
1:06:04the film I it was an Indian film I saw
1:06:06but it was basically about three
1:06:08engineers and like they all
1:06:09>> three idiots
1:06:10>> yeah three idiots like that that was
1:06:12>> Khan movie
1:06:13>> right I I don't think that film would
1:06:15have been made in America because people
1:06:16don't celebrate engineers like that I
1:06:19don't know do you think that that's is
1:06:20that true
1:06:23Yeah.
1:06:25See, for a long time
1:06:27because of what you said earlier, the
1:06:30Indian origin people who came here and
1:06:32did very well.
1:06:33>> Mhm. Like when I was growing up,
1:06:37the ultimate upside for me at some point
1:06:40of time, not today, but like 25 years
1:06:42ago, would have been clearing some kind
1:06:45of an exam, maybe going to IIT and then
1:06:48coming to the US for college and then
1:06:50joining Intel or IBM back in the day,
1:06:53>> right?
1:06:54>> Because getting paid in dollars back
1:06:57then felt like something which was
1:07:00unattainable back home in India. Mhm.
1:07:02>> I think [clears throat] that's changed
1:07:03to a certain extent. A lot of people
1:07:05have done well.
1:07:07A lot of firstg people who started with
1:07:09nothing. People like us and many others
1:07:11like that got lucky in the boom cycle in
1:07:15India which has you know strangely
1:07:18lasted over 20
1:07:2225 years now. We didn't
1:07:25we didn't really get hit in the subprime
1:07:27we didn't get hit in the subprime
1:07:29meltdown. uh the regulators did a good
1:07:32job of keeping leverage at check and the
1:07:34Indian markets have I think compounded
1:07:37at about 11%
1:07:41I might be wrong but over the last 20 25
1:07:43years so a lot of people have done well
1:07:47>> but we're working off a smaller base and
1:07:49the pace of doing well has to go up
1:07:52exponentially
1:07:53which
1:07:55for which maybe a lot has to change.
1:07:59Yeah.
1:08:00>> Mhm.
1:08:00>> Are you
1:08:02what is your connection to India outside
1:08:04of this? Is there any anything there?
1:08:06>> No, I mean um I've visited uh before and
1:08:10we're excited. You know, we we have an
1:08:12office in Bangalore.
1:08:13>> Yeah, I'm from there by the way.
1:08:15>> Okay. Okay. Yeah. And um yeah, I mean
1:08:19I've spent some time in Delhi speaking
1:08:21with the government and in Mumbai and
1:08:23everything and just found them to be
1:08:24very engaged on crypto topics. And um
1:08:29you know actually by most uh reports
1:08:32India believe it or not is the number
1:08:33one uh crypto country in the world by a
1:08:36number of people who use it.
1:08:37>> I I read that but I don't know how I I
1:08:40read it and I don't know if I believe
1:08:41it.
1:08:42>> Well there's more trading volume in the
1:08:43US.
1:08:44>> Yeah. Um but yeah those are that I think
1:08:48chain analysis published that that
1:08:49report.
1:08:50>> Um maybe you're not seeing it dayto-day.
1:08:53I don't know but
1:08:53>> I don't see it like when I meet people
1:08:57I mean for unfortunately this is true of
1:09:00the recent past.
1:09:02>> A lot of the people I met who were into
1:09:05crypto like really into crypto but also
1:09:08really levered on crypto. And I think in
1:09:10the last [clears throat] correction for
1:09:12the first time in a long time
1:09:15they've become very disenfranchised
1:09:18in a way. Uh
1:09:19>> yeah because I think it was sudden like
1:09:22I remember all these guys telling me you
1:09:24need to create a 100 bitcoin a thou
1:09:27whatever number of bitcoin wallet when
1:09:29it was at about 110 115,000 which is not
1:09:32a long time ago.
1:09:33>> Mhm.
1:09:34>> But the last correction seems to have
1:09:36hit people hard.
1:09:37>> Yeah. Yeah. Yeah. Well, crypto is down
1:09:40the last few quarters. Um, for sure. One
1:09:43thing we've been doing is um just
1:09:45diversifying the set of asset classes
1:09:47that are in, you know, we're building
1:09:49the everything exchange. So, you can
1:09:51trade stocks and commodities and um FX
1:09:54and everything, right? And you know,
1:09:56index funds. So, we we see every asset
1:09:59class being tokenized and brought into
1:10:01onchain to, you know, 247 and global
1:10:04liquidity and all this kind of thing,
1:10:05which is much more efficient. But the
1:10:08other the other thing I would say is
1:10:09crypto is not just about trading. I mean
1:10:11it started that way. In the first 10
1:10:13years were mostly about trading, but now
1:10:15we're seeing stable coins just grow like
1:10:17crazy and it's totally uncorrelated with
1:10:19so even if the trading markets are down
1:10:22um stable coins are growing like three
1:10:24or 3 or 4x per year. So I think that you
1:10:27know that'll balance things out and
1:10:29people need to pay for things all the
1:10:31time. Trading in trading something's
1:10:33always going to be up, something's
1:10:34always down.
1:10:34>> Yeah. When I think of stable coins, I'm
1:10:37still not able to wrap my head around
1:10:40like Satoshi's white paper started
1:10:44around protest against
1:10:47not being under government control in a
1:10:50way, not being subject to excessive
1:10:53printing by governments.
1:10:56Now it seems to have turned around 180°
1:10:59where
1:11:01you know after the genius act everything
1:11:02is backed by US treasuries and there is
1:11:05KYC at every point uh blockchain is not
1:11:10really transparent because everybody can
1:11:12see if I'm a central bank
1:11:14and I'm adding allocation to a c say I'm
1:11:17a foreign central bank and I'm adding
1:11:18allocation to a particular thing on the
1:11:21blockchain it's visible to others
1:11:22there's no anonymity per se It seems to
1:11:25have become the opposite of what it
1:11:28began as. Don't you think?
1:11:30>> I've heard that argument before and um I
1:11:34don't really see it. Um it's true that
1:11:37you know it started off as like very
1:11:38fringe and kind of renegade and you know
1:11:41anarchists and everything and it is
1:11:43becoming more mainstream. So like now
1:11:45that we have regulatory clarity in some
1:11:47major markets like in Europe and America
1:11:50and in Singapore and places um we are
1:11:52seeing more institutional money flow in.
1:11:54We're seeing the Bitcoin ETFs. So, these
1:11:56in some ways it's becoming um
1:11:59>> yeah, it's becoming more credible. But
1:12:01if you if you're a central bank moving
1:12:03money in Bitcoin, um people might be
1:12:06able to see the ledger is open, but you
1:12:08can't always see who the person is,
1:12:10right? Um
1:12:11>> but with KYC, you can't don't you know
1:12:14which
1:12:14>> well law enforce so if you're using a
1:12:16centralized exchange that does KYC like
1:12:18Coinbase in India and in America and
1:12:20other countries, um we work with law
1:12:22enforcement. If law enforcement sends us
1:12:23a subpoena, we're required to turn over
1:12:26that information. But um but it but the
1:12:29average person won't be able to see it
1:12:30like um
1:12:31>> like like it is for a bank transfer. The
1:12:33average person can't see it. But the
1:12:35protest was very much against law
1:12:37enforcement and
1:12:40>> Well, I don't think Bitcoin was ever
1:12:41against law enforcement. I think they
1:12:43were against um high inflation eroding
1:12:46people's wealth and
1:12:47>> caused by the government.
1:12:48>> Yeah. Yeah. Well, yeah. overprinting in
1:12:51some cases or um intermediaries taking
1:12:54high fees and slowing down innovation or
1:12:57you know banks being bailed out
1:12:59[laughter] you know these kinds of
1:13:00things. Um so it's true the centralized
1:13:03exchanges which are sort of the link
1:13:04between the fiat world the traditional
1:13:06financial world and the new financial
1:13:07world they are largely regulated today
1:13:10and um they're doing KYC and all these
1:13:12things once people have crypto um I
1:13:15think they can start to participate in
1:13:17the new economy and um that's where
1:13:20they're using DeFi or doing payments on
1:13:23you know crossber and saving money on
1:13:25remittance fees and things like that. Um
1:13:28it's still it takes a while to update
1:13:30the whole financial system. You know um
1:13:32there's still people in America who pay
1:13:33their rent with paper checks and these
1:13:35kinds of things. Um in many ways like
1:13:38India's ahead with uh you know mobile
1:13:41payments and UPI. So
1:13:44our goal as a company is really to
1:13:45update the financial system make it
1:13:47faster, cheaper, more global, more fair
1:13:50um just provide better financial
1:13:51services. But you're right it's like
1:13:53there's a lot of pieces to get moving in
1:13:55that direction. What is uh Zcash, Brian?
1:14:00>> Yeah, Zcash you asked about as well. I
1:14:02mean, so Z, you know, after Bitcoin, the
1:14:05Bitcoin white paper came out, there was
1:14:06lots of innovation that people made
1:14:08other variations of this in computer
1:14:09science. So, Zcash um made a privacy
1:14:12focused blockchain
1:14:14>> and they said that, you know, financial
1:14:16transactions are some of our most
1:14:18sensitive information. Of course, we
1:14:19don't want to broadcast it to everyone.
1:14:21Uh we should have optional privacy.
1:14:24So Zcash had a lot of brilliant uh
1:14:26cryptography behind it and this guy Zuko
1:14:29is like a really smart cryptographer who
1:14:31pioneered a lot of these zero knowledge
1:14:33proofs. Um so yeah it's gotten a
1:14:35resurgence of interest lately actually
1:14:37people are trading it again. Um there's
1:14:39also people working on private
1:14:41transactions on on base uh including us
1:14:44for instance. So uh [clears throat]
1:14:45hopefully we'll be able to launch um the
1:14:47first uh private transactions on base
1:14:49soon as well. So I think yeah for this
1:14:52truly to be adopted we had to solve a
1:14:54couple of to to make a new financial
1:14:56system you had you needed a few things
1:14:57like you needed scalability of the
1:14:58blockchains to get the cost down and the
1:15:00speed speed down you needed regulatory
1:15:03clarity [clears throat] and then we
1:15:05needed privacy of the transactions. It's
1:15:07actually it's actually almost perfectly
1:15:09mirroring the evolution of the internet
1:15:10because you know when the internet first
1:15:12started there was no https
1:15:14so there was no secure uh private um
1:15:17transactions you didn't have broadband
1:15:19so it wasn't scalable
1:15:21>> so it's actually it's kind of going
1:15:22through like a similar evolution um on
1:15:25the crypto side
1:15:26>> I was speaking with your colleague
1:15:28earlier uh your communications colleague
1:15:33>> uh very interesting person
1:15:34>> I'm sure she'll be thrilled to be in
1:15:36this interview.
1:15:37>> Yeah, we can.
1:15:38>> The comm people always like to be behind
1:15:39the scenes, but [laughter]
1:15:40>> you can say something about her and then
1:15:42maybe we can play it.
1:15:43>> Okay.
1:15:44>> She told me about her three kids. Okay,
1:15:46>> we'll we'll put up her picture when this
1:15:48part is playing.
1:15:50>> She was showing me the Jamie Diamond
1:15:52interview this morning.
1:15:53>> Okay.
1:15:54>> What was that? [laughter]
1:15:56>> Well, um, yeah. So we are trying to
1:16:00advocate for our customers to have clear
1:16:02rules in America to have benefits from
1:16:05this new financial system. Right? So
1:16:07that includes a whole variety of things
1:16:09including what I shared earlier about we
1:16:11want people to be able to earn more
1:16:12money on their money.
1:16:13>> Mhm.
1:16:14>> Um some of the banks are thrilled with
1:16:17this. They're actually doing
1:16:18integrations with us. We we're doing
1:16:20stable coin integrations with five of
1:16:22the 20 largest banks in the world. Um
1:16:26some of them are less happy about it. Uh
1:16:27it's a little unclear to me why I
1:16:30there's the reason that sometimes the
1:16:32bank it's not it's actually not really
1:16:33the banks themselves usually it's the
1:16:34bank lobby uh which a lot of industries
1:16:37have these lobbying groups in DC which
1:16:38become more protectionist sometimes
1:16:40>> but I get it like if I were a banker and
1:16:44if you park money with me I get 1% but
1:16:47if I park money in a stable coin you
1:16:49give 4% is a problem.
1:16:52>> It's competition right?
1:16:53>> Yeah it's it's actually a problem right?
1:16:55Well, it's a problem in terms of they're
1:16:57going to have to improve their products
1:16:58and maybe offer more to their customers,
1:16:59but I don't see it as a problem
1:17:01systemically or something like that. So,
1:17:02they're, in my view, they're they're
1:17:04trying to craft um arguments to instill
1:17:07fear in legislators and lawmakers and
1:17:10say, "Well, this is dangerous." And um
1:17:12you know, I I don't think I don't think
1:17:14there's any truth to it. Like, the
1:17:16president's own uh council of economic
1:17:18adviserss put put out this report saying
1:17:20that the bank's concerns were elucery
1:17:22and fake basically. Um, and they've
1:17:25they've sort of made these claims like,
1:17:26well, if you want to if you want to do
1:17:28this, you have to have a bank license
1:17:29like us. And that's not what the law
1:17:31says. The law says you you need a bank
1:17:32license if you're going to do fractional
1:17:34reserve lending, which we don't do. And
1:17:37and the Genius Act, which passed in the
1:17:39US, already made this clear and legal
1:17:41that stable coins can be backed by
1:17:43short-term US treasuries, 100% reserves,
1:17:46right? So,
1:17:47>> I have another question here.
1:17:48>> Sure. Yeah. Sorry, I'm going to
1:17:52when a bank is doing fractional reserve
1:17:56wherein I need to keep a part of the
1:17:58money that you have and then lend it and
1:17:59all of that.
1:18:00>> Yeah.
1:18:00>> And you get to keep 100% you have to
1:18:03keep 100% of the money I park with you.
1:18:07>> Banks don't banks in their we call this
1:18:10kasa in India. It's current account
1:18:12saving account and how much money is
1:18:14there versus how much money is lent. I
1:18:15don't know what that word is in America,
1:18:18>> but banks on pure banking alone do not
1:18:21make a lot of money. They make money out
1:18:23of a whole bunch of other things. But
1:18:25out of if Brian gave me money and I took
1:18:27the money and lent it to somebody at a
1:18:29carry of say 2 3 4% depending on what
1:18:32I'm lending against on that business the
1:18:36NPAs the
1:18:38the percentage of loans which don't pay
1:18:41out and they go like defunct
1:18:45cut my carry or my profitability to such
1:18:47a large extent that I'm I struggle to
1:18:49make money as a bank.
1:18:51>> Mhm. If a bank is going to struggle even
1:18:54with holding a fractional portion of the
1:18:56reserve, how will you do better holding
1:19:00a 100% of the reserve? Needing a 100% of
1:19:04the reserve always to be parked.
1:19:06>> Yeah. Okay. So, you can go look at the
1:19:08biggest the big banks and kind of where
1:19:10is their revenue coming from, right? And
1:19:12some of it's coming from this fractional
1:19:14reserve which they you know net interest
1:19:16margin they call it. Some of it's coming
1:19:18from their payment businesses. is some
1:19:20of it's coming from asset management.
1:19:22There's lots of different types of banks
1:19:24and um and so in this world, you know,
1:19:27in my view, we should have a financial
1:19:30system that does not have fractional
1:19:32reserve as the foundation because it's
1:19:34it's not a secure foundation to build
1:19:37on, right? There's been many examples of
1:19:38these bank runs for instance, and
1:19:40typically what happens is either the
1:19:42company blows it blows up and um even if
1:19:45there's FDIC insurance, the customer
1:19:47only gets a maximum of 250k or
1:19:49something. So there's either the
1:19:51customer loses money or the government
1:19:52has to come in and bail it out and it
1:19:54creates this kind of adverse incentive
1:19:56for banks to take unnecessary risk.
1:19:58Occasionally they blow up. I don't
1:20:00really see why we need a financial
1:20:02system based on that. If you're there
1:20:04can be an underlying layer of companies
1:20:06that actually just store if if you're
1:20:08paying you know I'm keeping my money
1:20:10with someone why not ask them to keep
1:20:11100% of it right. Um now if if uh in a
1:20:16stable coin world these regulated stable
1:20:17coins like they can be held in
1:20:18short-term US treasuries that's the
1:20:20government has said that that's quite
1:20:22low risk. It's the risk-free rate you
1:20:23know some people call it. Uh we can take
1:20:26a a small percentage of that. We can
1:20:29provide products uh for people if the if
1:20:31the customer is choosing to lend out
1:20:33their own money that's they're opting
1:20:35into it right it's not um something
1:20:36happening without their permission. Uh
1:20:39we can take a fee on that. we can have a
1:20:41payment fee that's it's again it's
1:20:43probably a 10x improvement over the
1:20:46traditional financial system but it's
1:20:48still a fee right um so we make we make
1:20:51money on trading um stable coins you
1:20:54know uh custody fees like staking fees
1:20:57we have a coinbased card where you can
1:20:58spend stable coins in crypto so we're
1:21:01doing we're doing great as a business
1:21:03but our cost structure is just
1:21:05fundamentally
1:21:06different than the than the big banks
1:21:08and traditional financial service
1:21:09companies and so like any disruption
1:21:11that comes along in the world like you
1:21:12know when you had newspapers and now the
1:21:14internet arrived or anything like that
1:21:16and you know these these the big banks
1:21:18that they're great companies they're
1:21:19smart CEOs they're going to adapt and
1:21:21they they understand this is an
1:21:22opportunity they've survived many waves
1:21:24of innovation you know from the internet
1:21:27um to electronic trading and you know
1:21:29ATMs instead of having uh people at the
1:21:32branches working their bank tellers
1:21:34right so the best comp the best banks
1:21:36are leaning into this as an opportunity
1:21:38we're working with many of them to power
1:21:39a lot that tech. Um, and some of them
1:21:42are still trying to preserve the old way
1:21:45and their lobbying fir, you know, firms
1:21:47and organizations are sort of doing a
1:21:49zero sum kind of regulatory capture
1:21:51mindset. I just have I have very little
1:21:53tolerance for that as a CEO. I I believe
1:21:55that we all have a responsibility to
1:21:57build the future. You know, accept that
1:21:59change is constant and we should try to
1:22:02make better products for our customers
1:22:03and compete on a level playing field.
1:22:06Um, and you know, if I see a a company
1:22:08sort of uh trying to do protectionism,
1:22:11you know, I'm going to call that out.
1:22:13>> In the direction that you're going in,
1:22:15especially when you mentioned the DeFi
1:22:17thing,
1:22:18>> will you soon become like Robin Hood or
1:22:20will Robin Hood soon become like you?
1:22:23>> It's starting to sound like the same. I
1:22:26mean, the business I have in India is a
1:22:28lot like Robin Hood. We've been
1:22:29>> Yeah. discount brokers for about 18
1:22:33years now and
1:22:35>> regulation is different. We can't
1:22:36fractionalize. We can't do a bunch of
1:22:38things that Robin Hood is doing,
1:22:39tokenize,
1:22:41but
1:22:44the the path you're heading in and
1:22:47they're heading in seems to be
1:22:48converging at something.
1:22:50>> Yeah. Yeah. Well, I'd say that um lots
1:22:53of fintech apps and companies are adding
1:22:57more of these features, right? So
1:22:58they're they have customers who want to
1:23:00trade not just stocks, they want to
1:23:01trade crypto, they want to trade
1:23:03commodities, they want to trade um FX
1:23:05like perpetual futures. So yeah, we've
1:23:08actually done a great job of that now of
1:23:10you can trade all those things on one
1:23:12platform at Coinbase and have um
1:23:15increasingly you can have global pool
1:23:17liquidity and capital efficiency uh for
1:23:19traders who that's important to. We also
1:23:23want to become the primary financial
1:23:26account for people over time. So,
1:23:27they're doing direct deposit, they have
1:23:30Coinbase card, and they can get a loan.
1:23:32So, it's partly a um it's partly an a
1:23:35brokerage investment function. It's like
1:23:37here's the pool of money I want to grow
1:23:39over time and build wealth for myself
1:23:41and my family. Here's the money that I
1:23:43want to use to like live my ordinary
1:23:44life and be safe and pay rent and um
1:23:47earn good rewards on that and maybe send
1:23:49money to my family abroad and whatever I
1:23:52need to do. So, I think that we can use
1:23:54crypto to just that that's the main
1:23:56thing that I would say is different is
1:23:57that we are we're the company in the
1:24:00world that stores more crypto than
1:24:01anybody else. We're crypto native and we
1:24:04so we're leaning into crypto as the way
1:24:05to update these financial services and
1:24:08hopefully provide um you know 24/7
1:24:10global trading, faster, cheaper global
1:24:12payments, better rates on your loan, you
1:24:14know, better rewards on your on your
1:24:15card. We want to use crypto to improve
1:24:18the financial system. I think we're the
1:24:19best company in the world at that. But
1:24:20you will see lots of I think every
1:24:22financial services company will
1:24:23integrate crypto in some way, shape or
1:24:25form. Uh we hope by the way to power a
1:24:27lot of that for other companies using
1:24:29our Coinbase developer platform uh which
1:24:31is kind of like our AWS.
1:24:33>> But um if they build it on their own as
1:24:36well that's great because it's going to
1:24:37take thousands of companies to update
1:24:39the financial system
1:24:40>> and even the banks will join this I
1:24:42guess.
1:24:43>> Yeah, they are already actually. Um
1:24:44we've I mean we've announced actually
1:24:47you know integrations we've done with JP
1:24:49Morgan and City and um uh a number of
1:24:52others that I probably I'm not sure if
1:24:53I'm allowed to say. Yeah. [laughter]
1:24:56>> You in a way gone from
1:24:57>> Black Rockck we work with Black Rockck
1:24:58as well to power their Bitcoin ETFs and
1:25:01different things.
1:25:02>> You know the best argument somebody made
1:25:05for crypto. I have a friend who runs a
1:25:08private equity fund in San Francisco
1:25:11called Mickey Mala. He has a
1:25:13>> I know Mickey. Yeah, he's an early
1:25:14investor in Coinbase actually.
1:25:16>> Yeah.
1:25:16>> So whenever I see Mickey, I saw him like
1:25:19some time ago and we were having a meal
1:25:22and he spoke about
1:25:25he spoke about bitcoins and crypto not
1:25:28as
1:25:29things on the blockchain but how they're
1:25:32inherently energy as the unit of
1:25:36transaction.
1:25:38He made a very nice argument for it. In
1:25:42the world that I live in or we live in,
1:25:47it does seem to be going that way that
1:25:48the future of
1:25:50transaction will not be
1:25:53what the central bank of our countries
1:25:55tell us is a unit equivalent to
1:25:58something but some form of energy. And
1:25:59if
1:26:00>> this can be considered that, it kind of
1:26:02starts to make a little bit of sense.
1:26:05>> Yeah, that's an interesting idea. I mean
1:26:07I have heard people discuss this that if
1:26:09AI and robots continue to accelerate at
1:26:11the pace that they are and we live in
1:26:14this world of abundance where
1:26:18>> this bottle of water is essentially free
1:26:21or you know
1:26:23>> mining and manufacturing and okay so
1:26:25then what is still scarce I think
1:26:30you know real estate would probably be
1:26:31scarce isn't they're not making more of
1:26:33that at least on this planet Um energy I
1:26:37think you're right it could be um there
1:26:39will you know you could imagine the
1:26:42demand for energy just becoming
1:26:44exponential.
1:26:45>> Real estate is scarce if there are more
1:26:46humans.
1:26:48>> Yeah that's true. Well even if there's
1:26:50more robots though maybe I mean
1:26:52>> robots need real estate I guess.
1:26:55>> Yeah I mean we're not like running out
1:26:57of space to make data centers at the
1:26:59moment but um I guess you could imagine
1:27:01it's I still think real estate will have
1:27:03value. It would be hard for me to
1:27:04imagine real estate becoming free
1:27:05because it's not like you can just
1:27:06produce infinite amounts of it. But
1:27:09>> um yeah, so you could end up in a world
1:27:12where I mean yeah and then there's
1:27:14Bitcoin which will be scarce. So
1:27:16[laughter]
1:27:17I think yeah I mean in some ways like
1:27:20real estate is the original Bitcoin
1:27:21because it's like pro provably scarce.
1:27:24Um I think energy could be really
1:27:27compute could be another fundamental
1:27:29unit. Real estate won't be scarce if uh
1:27:32Elon goes to Mars.
1:27:34You're expanding in a different
1:27:35dimension.
1:27:36>> Yeah. Yeah.
1:27:38>> Do what do you like? I I sit far away
1:27:41from what's happening in the world of
1:27:44AI, but I interview a lot of these
1:27:46people like Sam, Elon, and Dario and all
1:27:48of them. [snorts] What do you make of
1:27:51it? Like me, the stock trader investor,
1:27:55I'm starting to feel at this point that
1:27:59if I were to take every private company
1:28:01in AI and short their stock today, in 5
1:28:06years I might make money.
1:28:08>> Okay. Why why do you feel that?
1:28:11>> Because it's a bubble or what?
1:28:13>> It feels a bit like the internet bubble.
1:28:17uh I'm not saying AI will not have a use
1:28:19case but
1:28:21again this is a very like immature
1:28:24understanding of somebody who does not
1:28:26who's not an expert at the science I'm
1:28:28not an engineer or in that domain but I
1:28:33feel like all of these models will get
1:28:35to a point where they're very similar to
1:28:37each other
1:28:37>> mh
1:28:38>> uh either by copying or reverse
1:28:40engineering or whatever there will come
1:28:42a point where
1:28:45these models become so similar to each
1:28:48other that more countries will go the
1:28:51China way where I think the world was
1:28:54getting globalized. The next phase is
1:28:56the world gets fragmented. India will
1:28:58have its own copy of the model. Another
1:29:01country will have its own copy.
1:29:03>> Mhm.
1:29:04>> Uh the tokens, the energy, all of that
1:29:06will sit domestically within our
1:29:08country. It might not be the at the
1:29:10cutting edge but it'll do the job. If
1:29:13the world goes in that direction, I
1:29:15don't see the reason to pay the
1:29:18multiples that these private companies
1:29:20have today.
1:29:21>> Yeah, I think I see what you mean. I I
1:29:24think I probably somewhat agree in the
1:29:26sense that
1:29:28I mean right now the the demand for
1:29:30intelligence seems to be unlimited. So I
1:29:33think that's going to continue.
1:29:35But you know the open source models are
1:29:38really like 6 months behind and they're
1:29:40like 99% cheaper or more sometimes for
1:29:43inference. So I think it's entirely
1:29:46possible that um a larger percentage of
1:29:49the workload goes to these models that
1:29:51are like 99% cheaper. It's kind of like
1:29:53what Moors law happened with chips,
1:29:55right? But even more dramatic. And you
1:29:59know the chip industry didn't like it's
1:30:01a it's a very important industry. It's
1:30:03had a good run recently because of this
1:30:04new wave, but it's not um just going to
1:30:07grow infinitely forever, right? So,
1:30:09there is going to be some world we get
1:30:12to where um okay, there's like these
1:30:14very powerful frontier models that are
1:30:16useful for discovering new physics or
1:30:17something, but 99% of people are just
1:30:20running on um like they become price
1:30:23sensitive at a certain point and the
1:30:24models get good enough and cheap enough
1:30:26where you can run it on commodity
1:30:28hardware. Um, so yeah, I don't know what
1:30:31the terminal value of these AI company
1:30:33and then it's just like any technology
1:30:35revolution like where is the value going
1:30:36to be captured? Is it in the is it in
1:30:39the frontier models or is it really in
1:30:41the people building chips and energy? I
1:30:43mean the the the coding harnesses to me
1:30:46don't feel like that defensible um you
1:30:49know they're that you could some of them
1:30:51have actually been leaked on the open
1:30:52source. I mean you could actually like I
1:30:54think software is basically free so you
1:30:55could recreate a coding harness like the
1:30:57anthropic coding harness I think um so
1:31:00it's like yeah I you know it makes me a
1:31:02little nervous when I see these
1:31:04valuations growing this fast as well
1:31:05like I've I've seen things like this
1:31:07happen before in crypto and they you
1:31:09know they correct and then they there's
1:31:10real value under it so you then they
1:31:12grow later all markets seem to repeat
1:31:15these cycles with the internet and
1:31:16everything even going back to railroads
1:31:19and
1:31:20>> canals and everything
1:31:21>> I agree with that in a way I'm rooting
1:31:23for it.
1:31:24>> Yeah.
1:31:25>> Like a correction. The one thing I do
1:31:27hope
1:31:30you know especially in India this is
1:31:31again personal to me but since I am from
1:31:34there I'm batting for that region.
1:31:37We had this phase where
1:31:40there was Microsoft available and there
1:31:42was Linux available. They were both
1:31:44>> almost equally the same thing. But
1:31:48>> getting stuck with a Microsoft
1:31:52>> for a few years when they don't charge
1:31:54much takes you to the point where they
1:31:56begin to charge and it becomes harder to
1:31:59move away from it.
1:32:00>> Mhm. I hope people building in India
1:32:03pick opensourced over these models which
1:32:06are charging a fee because the last
1:32:09thing India needs is you know a kid
1:32:10paying $20 a month to another American
1:32:13company especially if you're building
1:32:16a business which is an application layer
1:32:18on any of these models. You don't want
1:32:21to be held hostage to these guys
1:32:25when tomorrow the the thing that was 6
1:32:29months behind has caught up but you're
1:32:31stuck because they can get you stuck.
1:32:35>> Yeah.
1:32:36>> Yeah. I don't know how to I don't know
1:32:37how to articulate this better.
1:32:39>> Yeah. I mean I'm a fan of open source. I
1:32:41think um I'd like to see the open source
1:32:44models continue to evolve and build and
1:32:46get better and better. Um
1:32:49yeah. So, and then I also appreciate
1:32:51companies who put in all the time.
1:32:53There's like a thousand details to get
1:32:54right to make something good. You know,
1:32:56it's like um
1:32:59having Mac OS or something like that,
1:33:01you know, versus an open source that
1:33:02didn't it the I'm glad Mac OS exists,
1:33:06you know, these kinds of things. So,
1:33:08it's a good it's a good healthy balance,
1:33:10you know.
1:33:11>> Yeah. What are the are there any
1:33:13companies in India focusing on open
1:33:15source models that are particularly good
1:33:18>> building on building an application on
1:33:20top of open source
1:33:20>> or or Yeah. or making the models
1:33:22themselves.
1:33:25>> There's surv which is
1:33:28India's answer to a large language
1:33:30model.
1:33:31>> Mhm.
1:33:32>> I think I hope they do well.
1:33:34>> Yeah.
1:33:34>> Yeah. I hope they do well for all of our
1:33:36sakes.
1:33:38>> U but I think that's the thing. If
1:33:40you're building open source model, I
1:33:41don't I don't know if it matters who
1:33:44built it.
1:33:44>> Mhm.
1:33:45>> As long as you can
1:33:47get the most productivity out of it.
1:33:49>> Yeah.
1:33:50>> Right. I think that's brilliant. And
1:33:54that's one when I when I think about
1:33:56these things, that's one way I think of
1:33:58it.
1:34:00The other path it might take is if these
1:34:02companies keep getting any bigger, they
1:34:04get nationalized and we go into some
1:34:07form of socialism where the productivity
1:34:10gains of this are redistributed in some
1:34:13UBI kind of way.
1:34:15>> Yeah, I'm very I'm very skeptical of
1:34:17that too. Whenever
1:34:19>> whenever somebody says um this is so
1:34:21scary, you everybody should have to come
1:34:24in and get a license from the
1:34:25government. I'm like, well, the
1:34:27government does a lot of things very
1:34:29well, but the one thing they're not
1:34:30great at is like understanding the very
1:34:31frontier of technology, and that usually
1:34:33just slows things down and it makes it
1:34:36better for the incumbents and it kills a
1:34:37bunch of startups. So, I I agree with
1:34:39you on that.
1:34:40>> The one disservice I think
1:34:43I don't know disservice to who, but the
1:34:45American government is making the entire
1:34:48crypto world very American right now.
1:34:51>> Either willingly or unwillingly.
1:34:53uh 5 years ago when I thought crypto
1:34:58blockchain I thought
1:35:01democratic open free accessible
1:35:05when I think of crypto today it's
1:35:08increasingly becoming the imagery in my
1:35:10mind is more Trump
1:35:12and President Trump and stuff like that
1:35:15I don't know I I know it helps in the
1:35:17short run and I know it's strange for
1:35:19you to be a engineer
1:35:21who has in some may become a lobbyist to
1:35:24a certain degree because you've maybe
1:35:26had to.
1:35:27>> Uh it kind of works out in the short
1:35:29run, but long term I don't know how it
1:35:30plays out.
1:35:32>> Yeah. Well, we you know, I certainly
1:35:34believe crypto is not about any
1:35:36particular political party. It has
1:35:38benefits for people on both all sides of
1:35:40the aisle. you know, um when I speak to
1:35:42Democrats, they're excited about it in
1:35:44terms of financial inclusion and people
1:35:47um that they care about in certain
1:35:48communities are over represented in
1:35:51adoption of crypto, you know, and then,
1:35:53you know, Republicans are more
1:35:55conservative people are interested in it
1:35:56from um priv privacy and freedom points
1:36:00of view or, you know, national security.
1:36:02So, there's something there for
1:36:03everyone. I think I think crypto is
1:36:05inherently apolitical.
1:36:07Um it's true that Trump has really
1:36:09embraced it, right? Which has uh given
1:36:11that the prior administration in the US
1:36:13was so anti- crypto that that um you
1:36:16know it was kind of a welcome uh relief.
1:36:18But we going forward my hope is that
1:36:20both whoever is in power in the United
1:36:23States would be just recognizing you
1:36:25can't uninvent this technology. It's
1:36:27going to clearly exist. We should just
1:36:28have a clear set of regulatory
1:36:31frameworks to make sure it's done in a
1:36:32trusted way. And then hopefully you know
1:36:34the US has an interest in having these
1:36:36companies built in the US for uh
1:36:39economic reasons and soft power reasons
1:36:41just like I think India should have the
1:36:42same goal. Certainly you know China has
1:36:45their own motives here like they
1:36:47certainly recognize the power of
1:36:48blockchain um and they've actually
1:36:51digitized the remn and made it like a
1:36:55central bank digital currency which they
1:36:57you know has allows them to have more
1:37:00control over the population. So the
1:37:02people in China actually love crypto.
1:37:04The government is nervous about it. So I
1:37:07think in democracies around the world
1:37:09like crypto crypto will flourish.
1:37:11>> Is there anything interesting you've
1:37:12learned about politics?
1:37:14>> Oh, sure. Lots of awesome things. I mean
1:37:19so I you know I'm I'm an engineer by
1:37:21background. So I and I I never really
1:37:23had any interest in government. And my
1:37:26simple assumption as a young
1:37:28entrepreneur was that um you know as
1:37:31long as I just follow the law I don't
1:37:33have to inter interface with the
1:37:34government at all. Like I just don't
1:37:36have to spend any time on that cuz I
1:37:37just follow the law. Obviously it's very
1:37:38simple. Well it turns out if you're
1:37:41building in a new area um the law is
1:37:44often times unclear
1:37:46and if [clears throat] your company gets
1:37:47big enough you will you will eventually
1:37:49intersect with government. Even if you
1:37:50have no interest in the government, the
1:37:52government will eventually develop an
1:37:53interest in you. And
1:37:55>> that's true everywhere in the world.
1:37:56>> Totally. Yeah. And so I was very naive
1:37:59on this, I would say. And at a certain
1:38:01point, my board started coaching me and
1:38:03they're like, "Okay, we're at that point
1:38:05now. You might want to start to go to DC
1:38:07and these different um meet with the
1:38:10government in different countries where
1:38:11we're operating all over the world and
1:38:13begin to develop a relationship and be
1:38:15an at the minimum become an educational
1:38:17resource, right? and just put on a suit
1:38:19and be presentable and make sure you
1:38:21develop these relationships. Now, we
1:38:24started doing that and I didn't I
1:38:26couldn't really tell if it was
1:38:27accomplishing anything. Um, and it
1:38:29wasn't until in the US in the last
1:38:31administration the SEC chair Gary
1:38:33Gendler, who is this, you know, kind of
1:38:35figure that polarized them and you won.
1:38:38>> We did. We sued the SEC we won. I'm glad
1:38:40you know that. Thank you. [laughter]
1:38:41Um, that was very
1:38:43>> It's a very inspiring thing. I hope more
1:38:44people can do that across the world in
1:38:46different ways. Well, you have to be.
1:38:48Yeah, it's very contrarian to as a
1:38:49public company CEO to sue sue your
1:38:51regulator. Um, most people told me,
1:38:54don't do that. That was a bad idea. And
1:38:56I and I think in general that's true.
1:38:57You shouldn't do it unless you it's
1:38:59existential and you're right, which we
1:39:00happen to be in this case. Um, if we had
1:39:03capitulated, it would have probably
1:39:05spelled the end of the crypto industry
1:39:06in the United States. So, we took a
1:39:08stand, sued them, and we did did
1:39:10eventually win. Um,
1:39:12>> I think we have to take a break.
1:39:14>> Sure. And after the break, maybe we can
1:39:17get a little I'm going to add two
1:39:18friends who know more about crypto than
1:39:20I.
1:39:20>> Okay.
1:39:28[music]
1:39:36Okay. I introduced Arian on a previous
1:39:39podcast, so I won't do it again. Arian
1:39:41is my 21-year-old chaperon in the US.
1:39:45>> Chaperon. Okay. Making sure you stay out
1:39:47of trouble.
1:39:48>> Yeah.
1:39:48>> Good.
1:39:48>> Yeah.
1:39:49>> And get into it.
1:39:50>> Yeah. Because I can't go to most places
1:39:52cuz he doesn't he's not allowed in.
1:39:54Right. And if you're always hanging
1:39:56together, it keeps me away from
1:39:58>> Okay. I like it. [laughter]
1:40:01>> So, Hardik is a friend of mine.
1:40:04He makes a lot of money.
1:40:06None of us know how he makes money.
1:40:08>> Okay. And people in India are always
1:40:10wondering because he has the things that
1:40:13what come with money you know
1:40:15>> like from a from the lens of viewing it
1:40:18from outside.
1:40:19>> I finally figured he trades crypto
1:40:23>> not too long ago and he's tried to
1:40:25explain a couple of times the different
1:40:28trading strategies and stuff like that.
1:40:31So I thought it'll be interesting to
1:40:33have somebody who does really well
1:40:35trading crypto on this.
1:40:36>> Great. So he can ask you things that I
1:40:38did not and so can Arian. I think Arian
1:40:41had a question on purpose. Maybe you can
1:40:43start with that.
1:40:44>> Um that's mostly because that's the most
1:40:47relevant part and most interesting part
1:40:48to me. I think hyperlquid has been like
1:40:50a
1:40:51>> it's been on the rise for the last 6
1:40:52months. Everyone in SF talks about it.
1:40:54All my friends have it. It's intriguing
1:40:56because equities that are used to be on
1:40:585day markets are now 24/7. There's
1:41:01insane amounts of like volume that is
1:41:03floating around on these things. Um and
1:41:06and and so it seems like we're going
1:41:08towards that direction. I think we've
1:41:09like soft agreed that everything becomes
1:41:12more tradable. We'll tokenize
1:41:13everything. And I guess that's the
1:41:15direction Coinbase is going into. Uh the
1:41:17thing that that is the question that I
1:41:20had was this a few months ago there was
1:41:23a lot of talk around this you know
1:41:25degeneracy wave that will you know
1:41:27accelerate if everything becomes
1:41:30tradable and speculation just keeps
1:41:32growing because a lot of young people
1:41:33who would have chosen to build companies
1:41:35or they had a traditional path to wealth
1:41:38creation. Um and on one hand these
1:41:40things are great because I love
1:41:42prediction markets. I love the burps. I
1:41:44think they do a lot of good and um
1:41:46markets in general are good. But on the
1:41:48other hand, the more the more this stuff
1:41:50proliferates like it seems like these
1:41:53are like the traditional path of
1:41:55shutdowns or speculation and these
1:41:56lottery ticket like mechanisms seem to
1:41:58be the only way to create wealth. Um and
1:42:01so I'm just curious like if you were a
1:42:03young person today or like when you look
1:42:05at people like me who are u you know
1:42:07thinking about what they should do, is
1:42:09this net kind of positive for society?
1:42:11Do you think it's net wiring brains in
1:42:14slightly not great ways? If speculation
1:42:16sort of grows
1:42:18more than it should or like where's the
1:42:21boundary like how if you were to lead
1:42:22these things or make decisions, how
1:42:24would you make decisions?
1:42:26>> Yeah. Well, you're touching on a couple
1:42:27great points there. So uh first the rise
1:42:30of perpetual futures or pers is a big
1:42:32trend and we've been working on that as
1:42:35well especially trying to get it to be
1:42:36available in the US in a trusted safe
1:42:39way uh that's truly 24/7 and with
1:42:41reasonable amounts of leverage. Um so we
1:42:44actually just today got approval for
1:42:47crypto per uh and options tradable by US
1:42:50people. I think we're the first
1:42:51regulated exchange in the US to do that.
1:42:54So that's been a bunch of policy work
1:42:56and um you know Hyperlquid has been
1:42:59amazing as well and I think onchain per
1:43:01is a whole other big trend that's going
1:43:02to happen and we're going to see some of
1:43:04that happen on base and the whole thing.
1:43:05It's great. We we're going to work with
1:43:07Hyperlquid in a variety of ways um
1:43:09including with USDC.
1:43:11So that's all good. Now I think your
1:43:12question is a really good one about just
1:43:14you know financial markets obviously
1:43:16bring a lot of value. Are there
1:43:18downsides as well? And I would agree I I
1:43:20think there are certainly downsides like
1:43:23some of these things can become uh super
1:43:25high leverage. They can become you know
1:43:27I think at times where crypto was under
1:43:30threat from the government um the only
1:43:31things that were allowed were sort of
1:43:33sketchy things and you saw the rise of
1:43:34like meme coins and and sort of um
1:43:37different things like that. Now leverage
1:43:40and speculation is has been in the
1:43:41traditional financial system for a long
1:43:43time right? So it's not I don't think
1:43:44this is unique to crypto. uh you can uh
1:43:47trade stocks today that are regulated
1:43:50you know by the SEC and it's but they
1:43:51they went down 90% right there's lots of
1:43:54you know Spotify and um you know uh
1:43:57Figma went down like 85% right so these
1:44:00are the blue chip companies there's no
1:44:02such thing as investing without risk so
1:44:04that's that's important uh for people to
1:44:07understand and um in the traditional
1:44:09financial system there's been many
1:44:10examples where people got excessive
1:44:12leverage and things blew up right Um so
1:44:16I think that you have to approach this
1:44:17with caution and say okay um what is the
1:44:21healthy mechanism either from a
1:44:23regulatory point of view um or you know
1:44:26I actually think there's one nice thing
1:44:28about the crypto markets which is there
1:44:30there's there's not like a bailout
1:44:31coming right like you know if you if if
1:44:33something does take on too much risk and
1:44:34blow up they they suffer the losses it's
1:44:36not the government that's going to come
1:44:38on the taxpayers's dime like bail it out
1:44:40I think that's a feature not a bug so
1:44:41but it does mean you're going to
1:44:42tolerate periodic failures
1:44:44So, one one thing we've tried to do at
1:44:46Coinbase is just try to help the crypto
1:44:48ecosystem mature and be more legitimate.
1:44:51And we do that by like cyber security
1:44:53audits on DeFi protocols. We do it um by
1:44:57being a little more hesitant sometimes
1:44:59on what we list on Coinbase and uh
1:45:01sometimes people are frustrated by that.
1:45:03They're slow we're slower to adopt it. I
1:45:05think you're going to find more
1:45:06reasonable levels of leverage and things
1:45:08like that, you know, um than you might
1:45:10find in some of the unregulated offshore
1:45:11exchanges. So, we're hopefully doing our
1:45:14part to make it legitimate and trading
1:45:16and is is great for that. Uh, we also
1:45:19need investing for just people to build
1:45:20wealth. And then there's lots of other
1:45:22things in crypto just around payments
1:45:23and borrowing and lending that'll just
1:45:25everyday people can use that is not
1:45:27related to speculation at all.
1:45:30>> Hardik, would you like to go next?
1:45:32>> H my question would be first tell us a
1:45:36bit about what you're doing in crypto. I
1:45:38basically trade burps in a degenerate
1:45:41way like I'm the one causing those
1:45:43liquidation cascades and stuff like used
1:45:45[laughter] to at that point. [snorts]
1:45:46>> Uh come into context to this
1:45:48conversation.
1:45:49>> Can I ask you another question? When I
1:45:50trade equity,
1:45:52>> I trade them based on the fundamentals
1:45:54of the company, the earnings, the
1:45:56industry, the sector.
1:45:58>> When you trade the asset class that you
1:46:00do, what do you base it on?
1:46:02>> Good question. So
1:46:05unlike traditional companies which have
1:46:07like tangible hands going on to work and
1:46:09stuff where where you can quantify
1:46:10someone's work based on like how many
1:46:12human hours of input has been given like
1:46:14an employee and stuff and then you base
1:46:16and come to like a bias which is usually
1:46:20a 5149 in favor of either going up or
1:46:23down deriving value like where is this
1:46:26company going in the future unlike that
1:46:28BTC is like one unique asset
1:46:31which had times has a 50/50 bias which
1:46:35means the half the world thinks that
1:46:37it's going to the moon and half the
1:46:39world thinks that it's going to zero.
1:46:42So it's a very different asset to trade
1:46:45and it's a very psychological asset to
1:46:48trade
1:46:48>> a bit like gold.
1:46:50>> Bit like gold yes
1:46:52>> if you remove jewelry from it. I mean so
1:46:55the whole relationship between the gold
1:46:58which is
1:47:00tangibly removed from the earth versus
1:47:02bitcoin which is also like a system that
1:47:05is mimic it's mimicking the digital
1:47:07proof of work system
1:47:10it has very psychological impact like
1:47:12say for example BTC is at whatever
1:47:15amount like it can be at a million
1:47:17dollars and people will still think that
1:47:19it can go to zero and it can still go to
1:47:2110 million or 100 million or a billion.
1:47:23So the the way I trade this asset is
1:47:27it's very psychological on a day-to-day
1:47:29basis and it depends on a lot of
1:47:32geopolitical factors on how people
1:47:35derive that psychology that one day I
1:47:37think that it can go up one day I think
1:47:39it can go down. So the liquidity of
1:47:41Bitcoin or any other crypto asset is
1:47:44very different compared to a stock. Like
1:47:46there's a fair value for a stock to buy
1:47:48and sell, but Bitcoin can have a million
1:47:52fair values in it in a single day. So
1:47:55it's it's very different from how you
1:47:57trade stocks.
1:47:59>> You have a question for Brian?
1:48:00>> And I'm actually I'm curious, are you
1:48:02using um AI agents at all to get
1:48:04synthesize the psychology of the market?
1:48:06>> Absolutely not. I'm a very instinctual
1:48:09trader.
1:48:09>> What are you what are you ingesting
1:48:11every day to to feel the vibes of the
1:48:13market?
1:48:13>> Uh
1:48:15my knowledge of American history,
1:48:17>> how it's performed and previous empires
1:48:20falling and rising
1:48:22>> cuz BTC is a very psychologically driven
1:48:26asset. It depends on the emotional
1:48:28capability of a person to think if this
1:48:30is going up or this is going down.
1:48:32>> Mhm.
1:48:32>> As of now cuz there's no real value of
1:48:36Bitcoin, right? I can't buy milk with it
1:48:39unless there's a paper money thing
1:48:41attached to it, which is the value part
1:48:43of it. So,
1:48:44>> is the offramp easy now for Bitcoin? If
1:48:46I had one BTC, can I convert it into
1:48:49$75,000 of cash easily
1:48:51>> in 1 second on Coinbase?
1:48:53>> Mhm.
1:48:54>> Cash?
1:48:55>> Yes.
1:48:56>> Yeah.
1:48:56>> USDC is basically one is to one peg to
1:48:58the USD. And I think Coinbase offers one
1:49:00is to one offramping in the US with zero
1:49:03cost.
1:49:03>> There is a offramp from USDC to cash.
1:49:06I'm talking physical cash
1:49:07>> instant. It comes in your bank account
1:49:09in seconds from Coinbase,
1:49:11>> right?
1:49:13>> You have a question for him?
1:49:15>> Yeah, I do actually have a question for
1:49:16you. So, um, great job with Coinbase. I
1:49:20think that's the
1:49:21>> only exchange that I trust in this
1:49:24world. And why so is cuz as I said in my
1:49:27previous conversation, it's a very
1:49:28psychologically traded commodity. And we
1:49:31have on today like massive machine
1:49:35learning programs that decode human
1:49:37emotion real time in relation to Bitcoin
1:49:40in predicting what level of the trading
1:49:44volume thinks at this point. There's
1:49:48this one company that has developed a
1:49:49complete AI algorithm that connects to
1:49:53I know of there other international
1:49:55exchanges that exist and as prerequisite
1:49:57order flow uh priority and stuff to gain
1:50:01access to that psychological information
1:50:04derived through numbers today
1:50:07are you willing to give that access to
1:50:10these kind of market participants in the
1:50:12US in the future
1:50:14>> what kind of access would it be it's
1:50:16like the the market the trading volume
1:50:18data or you're saying this
1:50:19>> it's autoflow data and orderflow
1:50:21priority
1:50:23for AI algorithms which
1:50:27consistently have priority over like
1:50:29retail investors or retail traders
1:50:31>> and then they can predict on a microcond
1:50:34level what the psychology of the buyer
1:50:36and the seller is at that point cuz I
1:50:38think Coinbase doesn't have it yet.
1:50:40>> Mhm.
1:50:40>> And that's why I trust it so much cuz it
1:50:42that's the kind of edge that we have as
1:50:44a retail trader.
1:50:45>> Yeah. But
1:50:46>> yeah, so obviously a lot of the market
1:50:49data is public in terms of um volume and
1:50:51trades and things, but
1:50:52>> we definitely try to make it a level
1:50:54playing field for anybody to access it.
1:50:56>> In the traditional financial world,
1:50:58there there is there are tiers to you
1:50:59payment for order flow and things like
1:51:01um correct.
1:51:02>> Yeah. Where you could get coll-located
1:51:03at this data center and intercept, you
1:51:06know, at the peak level and all this.
1:51:08We we've built this in the cloud where
1:51:10anybody can spin up an AWS instance in
1:51:12the same availability zone and have the
1:51:14same access as Citadel or Jane Street.
1:51:17>> Um so that's one of the principles we
1:51:20try to have is like a level playing
1:51:21field for any any trader.
1:51:22>> Okay. Got it. Thank you.
1:51:24>> Mhm.
1:51:26No, I I was going to follow up on so
1:51:29in u we I don't think you guys like
1:51:32fully covered u
1:51:35what you've done with base and and the
1:51:37reason like I care about that is my
1:51:40exposure to crypto. I have some assets
1:51:42here and there. I think I like playing
1:51:43around with everything but um it's easy
1:51:45to build. It's permissionless. That was
1:51:46kind of the premise why this started. If
1:51:48I want to build a new kind of product
1:51:50where a yield product, any kind of
1:51:53transaction product, it I can go pull in
1:51:56a bunch of contracts, tie them together
1:51:58and get going. Mhm.
1:51:59>> Um I the way I see the most exciting
1:52:03part of this just crypto sort of growing
1:52:06in the future is more kinds of financial
1:52:09products being created by more parties
1:52:10and more participants because the
1:52:12traditional financial system you guys
1:52:13spoke about regulation and licenses like
1:52:15it's still somewhat gated um for the
1:52:17right reasons but I think there's a lot
1:52:19of value to be created if you can um
1:52:22sort of channelize the free market and
1:52:24and sort of let people go uh build
1:52:26whatever they want to build. Um and and
1:52:28so what what where is Bass headed? Like
1:52:30if is this the direction uh like or
1:52:34maybe you have thoughts on how you think
1:52:36this should be steered in the future?
1:52:38>> Yeah. Well, for for anybody who doesn't
1:52:39know, Bass is a layer 2 blockchain that
1:52:41we build on top of Ethereum and it's
1:52:43gotten a lot of traction. It's the most
1:52:44popular layer 2 on top of Ethereum now
1:52:47and it's people are using it for all
1:52:48kinds of apps to be built and payment
1:52:50stable coins and trading and a AI agents
1:52:53like Agentic Commerce is happening on
1:52:54there. So you're right. One of the best
1:52:56things about it is it is a it's
1:52:58permissionless to build on top of it. Um
1:53:00it's decentralized. So you don't need
1:53:02our permission to build on top of it. Um
1:53:04and one thing we're doing is we we've
1:53:06been progressively decentralizing base
1:53:07over time to provide that as a guarantee
1:53:09into the future, right? To make sure
1:53:11that we fully don't control it. So we
1:53:14there's different stages of
1:53:15decentralization, you know, that Vitalik
1:53:18has outlined in his um writing. And we
1:53:20we've made it through stage zero, stage
1:53:22one. Um we're partly partway through the
1:53:24final stage of stage two and to do that
1:53:26we've um we've explored issuing a base
1:53:29token um and there's a path to
1:53:32potentially decentralizing it over time
1:53:34um on that route. So that's what we need
1:53:36to do next to ensure that that
1:53:37permissionless um innovation is
1:53:38enshrined forever like in a way that we
1:53:41couldn't nobody in the future could
1:53:42change it. Um and I think that we talked
1:53:45about earlier how we made some grants to
1:53:47different people including in India um
1:53:49these base grants of like $10,000 and
1:53:52people are building all different kinds
1:53:54of apps. There's about 150 startups I
1:53:56think that have come out of in India
1:53:57building on top of Bass and a lot of
1:54:00some of the top ones we fly to the US to
1:54:01kind of meet with startup entrepreneurs
1:54:03and then they fly back to India. So
1:54:04yeah, it's um Bass is one of the things
1:54:06I'm most proud of because it's it's a
1:54:08public good. It's a public utility and
1:54:10it's gotten a lot of adoption and I hope
1:54:12we can just keep building that into the
1:54:13future. And just as a follow up on this,
1:54:16this is more a selfish question, but I
1:54:17think uh I think there's a world like as
1:54:20just AI adoption
1:54:22increases like financial services will
1:54:25structurally change because if the
1:54:26nature of jobs changes or the nature of
1:54:28what people do day-to-day changes like
1:54:29maybe credit changes like lots of things
1:54:31have just structural changes in society
1:54:34will have downstream effects on
1:54:35financial services and if you were
1:54:37building something like if you're 25 22
1:54:41uh if you were building a financial
1:54:42services company today um maybe on base
1:54:45maybe not on base like using crypto
1:54:46rails maybe not like what would you
1:54:49think about like what structurally
1:54:50changes in how financial services
1:54:52>> works today in the US
1:54:54>> yeah okay so I I'll just share a few
1:54:56ideas off top of my head but um you know
1:54:59I think sometimes I think about the
1:55:01history doesn't repeat but it rhymes you
1:55:02know so so what is what needs to get
1:55:05built in this new financial system and
1:55:07we talked earlier about some of the
1:55:08pieces like digital gold is there and
1:55:09now we have stable coin stable coins and
1:55:11payments and okay what are some of
1:55:13pieces that are still missing. I mean,
1:55:14one of them that I see is actually like
1:55:17an onchain uh credit score or reputation
1:55:19score. Uh something that can use all the
1:55:22data on the blockchain with a it's a
1:55:24it's a graph structure, you know, like
1:55:26um in computer science has a graph
1:55:28structure like like Google has a page
1:55:29rank algorithm. There could be an
1:55:30equivalent to that on chain to decide
1:55:33how creditw worthy someone is or if I'm
1:55:35about to send money to buy uh buy
1:55:37something from a company, you know, is
1:55:38it what's the reviews on that company?
1:55:41And um so I think an on-chain reputation
1:55:43or credit score could be interesting. Um
1:55:46I think like there could be someone who
1:55:48builds an onchain ad network actually as
1:55:51well. This is basically monetizing um
1:55:54attention or distribution on chain like
1:55:56and this is one of the best business
1:55:58models in web too right with Google and
1:56:00Meta and everything. Um people have lots
1:56:02of pluses and minuses to advertising of
1:56:04course, but onchain um if I publish a
1:56:07smart contract or a DeFi protocol and I
1:56:09want um to incentivize people to come
1:56:11use it, you know, there could be
1:56:13something I put in my smart contract
1:56:15which is like a rev a revshare or
1:56:17something and any any wallet or
1:56:19brokerage out there that wants to
1:56:20connect into it and send could get a
1:56:21percentage of it. And you could sort of
1:56:23see all this on chain of like, okay,
1:56:25where where am I getting the best rates
1:56:27by sending my customers? And um anyway,
1:56:31so an onchain ad network would be
1:56:32another one. Um I don't know the last
1:56:34one I would just think about is um
1:56:38I think that
1:56:40um like special economic zones are very
1:56:42interesting and how are people going to
1:56:43do governance
1:56:45>> in these new worlds. Um this is kind of
1:56:47crypto and blockchain going beyond just
1:56:49money and value to
1:56:51>> how we might do um onchain voting or um
1:56:54>> coordination. Yeah, coordination like
1:56:56tokenizing uh parcels like cubic meters
1:56:59of land in like a new uh specially
1:57:02planned community or something. So like
1:57:03title title you earlier you talked about
1:57:05doing insurance and things like or um
1:57:07mortgages you know and this could be
1:57:10done in in a world where all the land in
1:57:12a certain area is tokenized and um I
1:57:14think you could eventually have new
1:57:16forms of governance that emerge from
1:57:18that and that would that's that's a more
1:57:20ambitious long-term startup idea
1:57:22[laughter]
1:57:23are
1:57:25>> it's a very different question uh but um
1:57:28I've followed your journey from the
1:57:30beginning it's quite commendable and
1:57:32you've always fought for what's right.
1:57:34So my question is, is Brian for
1:57:36president in the future? [laughter]
1:57:39>> Well, thank you for asking that. That's
1:57:41the first time I've been asked that. Um,
1:57:43you know, so I don't think I would be a
1:57:45very good politician, but let me first
1:57:48say what what you're I've always fought
1:57:49for what's right. I I think that that is
1:57:50>> that's what would make you a great
1:57:52politician.
1:57:52>> Hopefully. Yeah. I mean,
1:57:54>> one that thinks that they cannot be a
1:57:55great politician always are the greatest
1:57:57politicians.
1:57:58>> Ah, well that is that is a good insight.
1:58:00I that is true of managers too by the a
1:58:02lot of the best managers of people who
1:58:03like that they don't want to be
1:58:04managers.
1:58:04>> They're just really good engineers or
1:58:06something like that.
1:58:07>> Um I do think that we have that's a
1:58:09defining characteristic of Coinbase. You
1:58:11know, when
1:58:12>> um we published the mission first blog
1:58:14post about not having political activism
1:58:16in the workplace or when the SEC tried
1:58:18to kill the industry in the US and we
1:58:20>> sued them and won or even this most
1:58:22recent bill in the US, the market
1:58:24structure legislation where the bank
1:58:26lobby is trying to you know take away
1:58:28people's rights and things. I, you know,
1:58:30we've fought back against that.
1:58:32>> So, I appreciate you saying that. Um,
1:58:34>> I've got to spend more time in DC, uh,
1:58:38you know, working on some of these
1:58:40things. And
1:58:42>> it's definitely I would say it's less
1:58:46it's not as fun of a job as being a CEO
1:58:47because as as a CEO, you have all kinds
1:58:49of problems, but you ultimately you can
1:58:51listen to everyone's input on your team
1:58:53and your board and your investors and
1:58:54you get to make a decision and you go
1:58:56and if people don't like it, they can
1:58:57leave obviously. But um at least someone
1:59:00makes a decision and you get but in in
1:59:02by design the government is the founding
1:59:05fathers intentionally put this in there.
1:59:07It's kind of hard to get anything done
1:59:08so nobody can have you know unilateral
1:59:10power. So anyway the Senate and the
1:59:13Congress it's just like it's like
1:59:15hurting cats and you know 100 kings and
1:59:17queens to try to get them to align on
1:59:19something. It's pretty hard to get stuff
1:59:20done.
1:59:20>> I think it's persistence and you have
1:59:23it.
1:59:24>> Yeah. Well we have been working on this
1:59:25legislation for like 5 years. I've had
1:59:26like my multiple US bank accounts shut
1:59:29because of like on-ramp and offer stuff
1:59:30and if it wasn't for you, we wouldn't be
1:59:32sitting here with like such easy access
1:59:34to it and doing everything
1:59:36>> amongst other million things that you've
1:59:38helped the country progress in the
1:59:40digital asset space,
1:59:42>> but I think you have the persistence to
1:59:44fight. I think all of those difficulties
1:59:47put into place shape a precedent. Well,
1:59:51maybe if we can get one of these new
1:59:53special economic zones set up on Mars, I
1:59:55would I would I would I would do that,
1:59:57you know. [laughter] We'll have to see.
1:59:59But honestly, America is worth fighting
2:00:01for, too. Um,
2:00:03>> yeah, I mean, this is like a bastion of
2:00:06freedom and rule of law and all that.
2:00:07So, I hope there there's this is a
2:00:09longer conversation, but yeah, there's
2:00:11structural things that worry me about
2:00:12it. Um, you know, def deficit spending.
2:00:15Yeah,
2:00:15>> there's not like a cap in the like I
2:00:17wish there was a constitutional
2:00:18amendment to sort of cap deficit
2:00:20spending and um size of government, you
2:00:23know, otherwise dem I worry democracies
2:00:25are going to trend toward um these
2:00:27deficits because like that's it helps to
2:00:29win elections to get more free stuff.
2:00:31>> Um and then yeah, we we could go we
2:00:34could go on down the list. Um but yeah,
2:00:36I think there'll be somewhere in the
2:00:38world the the frontier is where freedom
2:00:40will exist somewhere in the world.
2:00:41>> Look forward to that. Yeah, maybe as a
2:00:43president like if we have network states
2:00:45or proto states then you have more
2:00:47places to be presidents in.
2:00:49>> Can I can I ask you a selfish question
2:00:51from the India lens?
2:00:52>> Yeah.
2:00:53>> You know the tax policy.
2:00:55>> Yeah.
2:00:56>> You know the 30%, you know the TDS. What
2:00:59does a 25year-old in India build
2:01:03around this world that has a use case?
2:01:07>> Well, I I think that's mostly a policy
2:01:09issue for the government. I and I will
2:01:11say yeah the 30% tax um on trading in
2:01:14India is quite punitive. I think that's
2:01:16actually one of the most punitive
2:01:17regimes any anywhere in the world that
2:01:19we operate. So I hope that the Indian
2:01:21government relooks at that again. Anyway
2:01:23I you know I don't I don't know if an
2:01:26entrepreneur can solve that. I I with a
2:01:28new product I think it's a tax policy
2:01:31issue. I think people can do it by
2:01:32essentially like we talked earlier about
2:01:35there's so many um Indians using crypto
2:01:37now that um they there's probably a
2:01:41policy effort like what happened in the
2:01:42US with stand with crypto maybe we can
2:01:44bring standwithcrypto.org to India and
2:01:46get uh people to raise their hand and
2:01:48say they want to elect pro- crypto
2:01:49candidates and I think it's generational
2:01:52so sometimes the people who are in
2:01:54office don't realize there's a real
2:01:55constituency for this um that would be
2:01:58my first idea
2:02:00>> and tell us a bit about health I know
2:02:02you're passionate
2:02:03how long is Brian going to live for and
2:02:07what is one thing I can take inject eat
2:02:11that will help just one thing
2:02:14>> well okay So yeah, broadly I mean I'm
2:02:17just interested in how you how to use
2:02:18technology to improve the world, right?
2:02:20And um you know getting some liquidity
2:02:23from Coinbase has allowed me to think
2:02:24about how to invest in other companies
2:02:26and I actually think you know fortunes
2:02:29are being made in software and in crypto
2:02:31and everything. So it's it's on all of
2:02:33us to think about how to put that
2:02:36capital into hard tech problems which
2:02:38are sometimes more risky. And um I was
2:02:40very inspired by you know what Elon did
2:02:42with his companies after PayPal and
2:02:44things like that. So anyway, I I did
2:02:46co-found this biotech company in the
2:02:48longevity space and invested in it
2:02:49called New Limit. And they're doing
2:02:51something called epigenetic
2:02:52reprogramming to try to find new drugs
2:02:54that restore function your cells had
2:02:56when they were younger. Company's doing
2:02:57really well. The first drug trials will
2:02:59happen uh next year. Um and they've been
2:03:02doing a lot of cool stuff with AI to dis
2:03:04discover these new drug candidates and
2:03:06whatnot. So that's been really fun. I um
2:03:08I invested in this company called
2:03:10Research Hub, which is trying to make
2:03:11scientific research more like open
2:03:13source software. Um so that company's
2:03:15been really exciting and gotten good
2:03:17traction and you know recently I've
2:03:20invested in a couple of um companies
2:03:23doing uh reproductive tech. Um, so this
2:03:26is helping people, you know, everyone
2:03:27knows about like IVF and things, but
2:03:29there's these frontier uh these biotech
2:03:31companies that would allow you to sort
2:03:33of um create egg cells, egg cells out of
2:03:35skin cells and reprogram them or um you
2:03:39know even have like artificial wombs and
2:03:41there's all kinds of people doing
2:03:43interesting um things like even embryo
2:03:44editing. There's a company I invested
2:03:46in. So I think that that will be an
2:03:48interesting area. Um,
2:03:51yeah. I I I guess like, you know,
2:03:54there's lots I I I hope that everybody
2:03:56sort of picks an interesting trend on
2:03:58the horizon that they're particularly
2:04:00excited about and goes and tries to
2:04:01build a company in that space. I think
2:04:03that's the best way to improve the
2:04:04world, have a fulfilling life, build
2:04:06wealth. Um,
2:04:07>> but you didn't answer my question, bro.
2:04:09>> Which part? [laughter]
2:04:10>> What is the one thing I should take?
2:04:11>> Oh, the part you should take,
2:04:12>> eat, ingest.
2:04:14>> Um, well, okay. So, I'm not I'm not a
2:04:16doctor, but I the the general ones are I
2:04:19actually think like, you know, sleep if
2:04:21if sleep was a drug on the market, it
2:04:24would be like the most effective drug on
2:04:26the market
2:04:27>> and it's free. So, it's nice. Everyone
2:04:29should probably get better sleep, track
2:04:31that. Um,
2:04:32>> so I love supermarkets. Wherever
2:04:34whenever I travel, the first thing I do
2:04:36is go to a supermarket.
2:04:37>> Yeah.
2:04:38>> I went to Awan
2:04:39>> and they had these like jellies called
2:04:42sleep. They have melatonin, theanine,
2:04:45and GABA.
2:04:46>> Yeah.
2:04:46>> So, you meant to take one. I've been
2:04:48taking four, five, six.
2:04:51>> Okay.
2:04:51>> And sleep is solved.
2:04:53>> Okay.
2:04:54>> Even with the jet lag and
2:04:56>> don't overdo it. I mean, [laughter]
2:04:58>> yeah. But that
2:04:59>> what can happen with theanine and gaba
2:05:01and a little melatonin.
2:05:03>> I mean, those are over the counter like
2:05:05non-prescription. Probably on the safer
2:05:08side, but yeah. I mean, do you know how
2:05:10many milligrams of mel of melatonin
2:05:11you're taking? Each one has one. Each
2:05:13sache has one. So if I take five is five
2:05:15grams.
2:05:16>> I used to take like a long time ago I
2:05:18took like 3 to 5 milligs of melatonin.
2:05:20But now
2:05:21>> I I realized with just one or even half
2:05:23a milligram it's really the same effect.
2:05:25I think I was taking too much. But um
2:05:28>> it's a sleep trigger, right? It doesn't
2:05:30help you stay asleep.
2:05:34>> I don't know. I don't know. Yeah. I
2:05:36think so. The big ones are like sleep,
2:05:39nutrition, and exercise, right? And you
2:05:43could you could add a fourth one which
2:05:44would be like mental health of just
2:05:46taking time to de-stress.
2:05:48>> Now you've covered everything. I want
2:05:49one thing.
2:05:52>> Sleep 7 and a half hours a night or
2:05:53more. That's probably
2:05:54>> I would agree to that as well.
2:05:56>> Yeah.
2:05:56>> Do you sleep hard?
2:05:57>> I trade ps. I fall asleep automatically
2:06:00every day. [laughter]
2:06:01>> Why is that
2:06:02>> brain thing, right? The brain gets tired
2:06:04psychologically. So like demanding
2:06:07>> actually this is interesting. Brian gets
2:06:10to see a lot of traders
2:06:12>> from the other end
2:06:13>> and hardik is a Hardik is a very
2:06:16obsessive trader who's trading all the
2:06:18time.
2:06:18>> Mhm.
2:06:19>> What can you tell him that
2:06:22you have seen as a pattern in traders to
2:06:24watch out for?
2:06:27>> Well, I mean I'm not going to say
2:06:29anything you don't know. It's like
2:06:30excessive leverage and
2:06:32>> things, [laughter] you know,
2:06:33[clears throat] there's people there are
2:06:34examples of people who've
2:06:36>> built it all up and
2:06:38>> it can unwind quickly. Um,
2:06:40>> so how do you think about uh position
2:06:43sizing and leverage and taking enough
2:06:45taking wins some off the table?
2:06:47>> I've learned it the hard way.
2:06:49>> Yeah, I imagine it's a it's a process.
2:06:51Yeah. The hard thing about trading is
2:06:53like no matter even if you do quite
2:06:55well, which sounds like you have
2:06:57>> with 2020 hindsight, you can always look
2:06:59back and see how you could have done
2:07:00better.
2:07:00>> And so you're you're even if you do
2:07:02pretty well, you're like, "Oh, but it
2:07:04could have been a 20x from there."
2:07:05>> Um it's just it it does weigh
2:07:07psychologically on some people, but some
2:07:09people have the right constitution for
2:07:10it and they
2:07:11>> Yeah. I I don't think about what's
2:07:13behind me at all.
2:07:15>> That's great. That's an important thing
2:07:16>> cuz if you let in this game, if you
2:07:19start weighing everything um down,
2:07:22you're not going to be able to treat it
2:07:24as something that you can do on a daily
2:07:26basis.
2:07:27>> Yeah. So, I think people who are
2:07:29naturally inclined can be great. They
2:07:31should lean in on trading. I think most
2:07:33people should probably not be traders.
2:07:35They should be investors.
2:07:36>> Yeah. you know, and dollar cost average,
2:07:39own the index fund, diversify the
2:07:42portfolio, have some, you know, have
2:07:44some in Bitcoin, some in everything, all
2:07:46the different pieces. So,
2:07:47>> you know, the one thing that worries me
2:07:49about Bitcoin traders,
2:07:51>> is similar to what worries me about real
2:07:54estate developers in India,
2:07:56>> okay,
2:07:57>> the thing they have in common is they
2:07:59believe it will go up in perpetuity. M
2:08:03>> and they believe it so vehemently that
2:08:06>> whenever you take a contrarian outlook
2:08:08even if it's minuscule in nature they
2:08:11will debate you to the end of
2:08:13perpetuity.
2:08:13>> Mhm.
2:08:14>> Like a real estate developer in India
2:08:16will say how can land go down? Land can
2:08:19only go up because it's finite in number
2:08:22and strangely it's similar to Bitcoin in
2:08:24that way.
2:08:25>> Yep.
2:08:26>> Things like that when they fall they
2:08:28fall a lot.
2:08:30>> Yeah. gold like the gold bugs and
2:08:31everything. Um,
2:08:33yeah. I mean, as long as the population
2:08:35keeps growing, there'll there will be
2:08:38less real estate to go around. I guess
2:08:39that's that's true. It doesn't mean it's
2:08:41the best investment that year, though.
2:08:42>> I think in Bitcoin, you can also make
2:08:43money when it goes down.
2:08:45>> Yeah. By shorting it,
2:08:47>> the trader. [laughter]
2:08:49>> Yeah.
2:08:50>> The thing with Bitcoin
2:08:52versus gold, see, I have never traded a
2:08:55Bitcoin ever in my life. Never bought
2:08:56one. So I feel comfortable taking the
2:09:00contrarian view because somebody here
2:09:02also has to.
2:09:03>> Uh the thing with gold is it's not
2:09:06replicatable
2:09:08today.
2:09:10>> At least to the lay man when I think of
2:09:12it. Uh I know nuclear fusion has some
2:09:15byproduct which is a part gold but it's
2:09:17a lot more expensive to make gold that
2:09:20way than it is to buy gold. Mhm.
2:09:23>> I can't go and create 21 million more
2:09:25bricks of gold and call it not Bitcoin
2:09:28but catcoin. But with Bitcoin I worry is
2:09:31what if there is another Satoshi
2:09:33with a similar white paper and he
2:09:36creates another product like that
2:09:39tomorrow.
2:09:41>> Well, if it's if it's not if it's
2:09:44undifferiated, Bitcoin will I think
2:09:46stand as the original, right? people
2:09:49give credit to the first thing that is a
2:09:50breakthrough and Bitcoin was certainly a
2:09:52breakthrough. But if somebody puts out a
2:09:53new white paper of something that's
2:09:55differentiated and better, then yeah, it
2:09:57should get attention and investment
2:09:59should shift there.
2:10:00>> And from our conversation, I've learned
2:10:01that it is not the most efficient of
2:10:04mechanism to store value because if I
2:10:07have to send Arian a bitcoin, I need to
2:10:10spend a lot of energy and hurt the world
2:10:12and a bunch of other things just to be
2:10:14able to do that.
2:10:17>> Yeah. Yeah, I mean layer layer 1 bitcoin
2:10:19transactions are still a little bit
2:10:21expensive and slow. Um but you know the
2:10:23lightning network lets it move faster.
2:10:24We talked about how a lot of the
2:10:26activities move to stable coins on
2:10:28Ethereum and Salana um and base. So
2:10:32yeah, I think the Bitcoin um chain is
2:10:35okay with that. They're not intending it
2:10:36to be used for high volume payments
2:10:38there. Digital gold maybe it shouldn't
2:10:40be moved too often.
2:10:44>> From you guys, anything else for Brian?
2:10:46We wanted to talk about one more thing
2:10:48more opportunities for young people to
2:10:51start a business around this ecosystem.
2:10:54Uh you know the intent of doing this
2:10:56every time is somebody goes back home
2:10:58and starts a business.
2:10:59>> Mhm.
2:11:00>> Even you guys can come up with ideas.
2:11:03What can young people back home start as
2:11:05a business
2:11:07understanding the regulation and
2:11:10compliance requirements around it
2:11:14in India? I mean I've kind of identified
2:11:17a little bit of a gap. I think at least
2:11:19in ter terms of our country I think the
2:11:21biggest advantage of this system lies in
2:11:24remittances
2:11:26like majority of our foreign earning
2:11:30population have no clear ways of sending
2:11:32money cheap and fast even today. So I
2:11:34think whoever today builds that
2:11:38remittance and ram system is sitting on
2:11:40a gold mine. We spoke about this though
2:11:42they will not allow an offramp
2:11:45also it doesn't make sense for the
2:11:47government to I mean say what you may
2:11:49about the Indian regulator the one thing
2:11:55it was one thing when the price was at
2:11:57120
2:11:58>> now at 75 after a recent correction
2:12:01they seem to have preempted a bunch of
2:12:06turmoil and saved
2:12:08>> so I'm not necessarily talking about
2:12:10Bitcoin. I'm talking about like stable
2:12:12coin.
2:12:12>> Yeah. [clears throat]
2:12:13>> Uh
2:12:13>> it doesn't have offramp. anything dollar
2:12:15denominated will not
2:12:16>> I said I'm I'm not saying it was easy
2:12:18but I think that's the opportunity cuz
2:12:20if the opportunity
2:12:22>> that's the hard part but if someone
2:12:24figures out an entire onchain payment
2:12:26system that can then lobby into like our
2:12:29banking system and provide easy access
2:12:31of like overseas transfers fast and easy
2:12:35and cheap and at par with the daily
2:12:39currency pairs and stuff I think that's
2:12:41a huge opportunity in today's world at
2:12:43least for our country.
2:12:44>> I think all this agentic finance stuff
2:12:46is is like it's clearly going to happen.
2:12:49Uh the form factors are unclear right
2:12:51now. But if there is there are more
2:12:53things that are tradable on chain, the
2:12:56best place to build aic finance should
2:12:58be on chain because you can just connect
2:13:01a system to
2:13:03>> a bunch of places you can trade. You
2:13:04have perfect you don't have perfect
2:13:06information. You have a lot of
2:13:06transparency. You you have clear even
2:13:09comparative data. Um and I think partly
2:13:13if uh like new versions of financial
2:13:16advisors and uh if I have a goal and I I
2:13:20sort of build a strategy around the goal
2:13:21in the next five years I want to get to
2:13:22that goal like lots of products around I
2:13:24think advice and just aentic finance
2:13:27that is financial advisor like I think
2:13:28will be
2:13:30interesting next four five years. Brian
2:13:32any ideas?
2:13:34>> I think agentic commerce is going to be
2:13:35big. I mean um I don't the like one of
2:13:39the most reliable ways to start a
2:13:40company is I think there's two ways. One
2:13:43you can identify some technology on the
2:13:47horizon or thing that you just think
2:13:49needs to exist in the world. Um and sort
2:13:53of do it mission focused. It's like okay
2:13:55we need to radically extend human health
2:13:56span. Why do people die after such few
2:13:59number of years? Or we need to become an
2:14:00interplanetary species and make you know
2:14:03space. So you can start with like a big
2:14:04giant mission
2:14:06um and then work backwards from that of
2:14:09like okay if that's that's crazy and
2:14:11lofty and maybe okay what would I have
2:14:13to do to make that possible and that
2:14:14possible and then there's like a small
2:14:15thing you would do today to try to make
2:14:17your first you know bit of revenue in
2:14:19the in the first 3 to 5 years or
2:14:20something. So you can do a company that
2:14:22way that's like going after a big
2:14:24mission which I like. The other way you
2:14:26can do it is just solve a problem that
2:14:28you have yourself right you can start to
2:14:31notice these problems all around you and
2:14:33there's probably people living their
2:14:35life in India where they've encountered
2:14:37these issues um whether it's in crypto
2:14:40or not and if you go build a problem a
2:14:43solution to a problem you have yourself
2:14:45at least you know there's a customer of
2:14:47one and it's like you're not trying to
2:14:48build for some hypothetical other person
2:14:50tends to be a lot easier to build that
2:14:51way
2:14:53>> I force every guest I ever have to pick
2:14:56a stock that is not their own?
2:14:57>> Oh, yeah.
2:14:58>> To buy if they only had $1 to allocate
2:15:00to something, what would you buy?
2:15:04>> Oh, well, I mean,
2:15:08so
2:15:10these you're not going to hear something
2:15:12like totally novel here. I think like,
2:15:15you know, obviously SpaceX getting a lot
2:15:16of attention right now that just has a
2:15:19natural moat. like the best mode of all
2:15:21time would be like how do you get from
2:15:23Earth to space, you know, and like if
2:15:25they're [clears throat] doing 90% of
2:15:26that, that's that's powerful. Um,
2:15:29>> but you can't buy sta SpaceX cuz it's
2:15:31still not listed.
2:15:32>> Uh, right. But you can you can buy
2:15:33SpaceX pers. So [laughter] pre preipo
2:15:36preo pers. Um, it's a new emerging
2:15:39category.
2:15:40>> Um,
2:15:43>> yeah. I mean, I think Google is just got
2:15:45a lot of it's incredible like the
2:15:46breadth of the they've got chips like
2:15:49leading AI models, massive user base,
2:15:52you know, um like any company probably
2:15:54lots they could be doing better, but
2:15:56they're just in such such a good
2:15:58position.
2:15:59>> It's funny how many people say Google.
2:16:01>> Yeah. Um
2:16:04Yeah. Yeah. So I I
2:16:06[snorts] you know in any given day
2:16:09there's probably something that's
2:16:10totally undervalued but if you're
2:16:12talking about like longer term bets
2:16:13these are some of the things.
2:16:14>> Yeah. Anything from you like you'd like
2:16:16to speak about last five minutes or two
2:16:18minutes.
2:16:20>> I just I hope more people go create
2:16:22companies in the world and try it. It's
2:16:23very fulfilling. I think if you if they
2:16:25don't work, you learn a lot and it
2:16:29actually makes you even more valuable as
2:16:30an employee at the next company you join
2:16:32to go learn and then you can go do your
2:16:33next one and try again. And the most of
2:16:36the entrepreneurs that I know, the first
2:16:37thing they tried didn't work, the
2:16:38second, the third, oftentimes the 10th
2:16:40thing they tried didn't work. So they
2:16:41have to just keep showing up, keep
2:16:43trying more things.
2:16:45And if you do that and you have an
2:16:46inclination to do it, you can end up
2:16:48creating a lot of value in the world for
2:16:49other people. Um, you can create a lot
2:16:52of wealth for yourself. Um, and then you
2:16:54can think about how to help put it back
2:16:56into the next thing to help society
2:16:58advance and be on it's a it's a good way
2:17:01to be on team human and like you know
2:17:02advance everything in the world
2:17:04civilizationally.
2:17:06>> Thank you Brian. Thank you for doing
2:17:07this. This was fun. Thank you guys.
2:17:09>> No, of course.
2:17:10>> Super. Thank [music] you.
2:17:12>> Cheers.
2:17:13>> Yeah, that was great.
2:17:14>> Yeah. Okay.
2:17:16>> Yep. [music]
2:17:17I think I don't think like for people
2:17:19like us like when I moved to the US like
2:17:227 years back and set up a bunch of like
2:17:25companies and stuff like if it wasn't
2:17:26for Coinbase like it wouldn't be so easy
2:17:29for me to do the amount sheer scale of
2:17:31things and businesses that I do because
2:17:33of transfers. [music]
2:17:35>> Yeah.
2:17:35>> Yeah. You were saying out there you
2:17:36you're doing your venture investments
2:17:38through Coinbase.
2:17:38>> Yeah. I mean like [music] like
2:17:40investments coming from all over the
2:17:42world and stuff like it just wouldn't be
2:17:44possible. It would like take me like
2:17:46months and months of like regulation
2:17:48[music] to get through like stupid banks
2:17:50and like
2:17:51>> the wire transfers
2:17:54take a lot of time. Yeah.
2:17:55>> Yeah. Is is made a huge impact on like
2:17:57the way I operate in this country.
2:17:59>> Glad to hear it. Yeah. We need to get
2:18:01capital formation to be much more low
2:18:04friction so that anybody in the world
2:18:05with a good idea can just go raise
2:18:08>> a million bucks like that.
2:18:10um they don't even have to meet the
2:18:11person or sign a bunch of like fees over
2:18:14to lawyers and everything. So, [music]
2:18:16>> we're we're starting to work on once
2:18:17this legislation hopefully passes, we'll
2:18:19have a path to maybe go work more on
2:18:21capital formation.
2:18:22>> Any insight [music] information on
2:18:23what's going to happen [laughter]
2:18:25>> on the market structure
2:18:27>> on the clarity.
2:18:28>> I mean, I'll just tell you what I've
2:18:29said publicly, which is um we're working
2:18:31hard on it. I'm cautiously optimistic. I
2:18:33mean, I think you saw it just it got
2:18:35voted through the Senate Banking
2:18:37Committee. That was it with a bipartisan
2:18:39vote. The House has already voted on it.
2:18:41So, now
2:18:42>> the two committees in the Senate have to
2:18:43come together to reconcile their drafts
2:18:45and then it'll hopefully it could go to
2:18:46full Senate vote [music]
2:18:48>> in the next month or two. So, we'll see.
2:18:50>> Amazing.
2:18:51>> Yeah.
2:18:51>> Thank you for all you do.
2:18:54>> Thanks, Brian.
2:18:55>> All right. This is Cheers.
2:18:56>> Can I ask for a picture with
2:19:12Mhm.

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