Bitcoin Is Eating The World | Raoul Pal

hey guys and welcome back to he Layah Heilpern 
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if you guys want to sign up for them you can   um you can actually get up to 250 at the moment 
and depending on how much money you deposit with   them so i think that's great and before we bring 
on my um very exciting guests i want to just give   a huge shout out to coinflip so they're doing some 
incredible work across the states to push bitcoin   mass adoption um they now have 1 200 bitcoin 
atms which is really cool across the state so   giving everybody access to bitcoin so i also have 
a discount code for them you can get 10 off your   transactions i think that's great so i will leave 
that um i'll leave that in the comments below so   i'm going to introduce a guest today um he 
comes from the traditional world of finance   caused a little bit of a start online recently 
um on crypto twitter he is a former goldman sachs   executive and now actually has 98 of his portfolio 
um in crypto so that is insane it is the man   that's based in the cayman islands it is Raoul 
Pal l how are you doing i'm great how are you   i'm good i'm good it's hard to get all that out 
you know but i'm glad to bring you in how is it   in the cayman islands how are you doing it's 
great it's actually freezing cold right now it   got down to about 24 degrees which for us is like 
the depths of winter but hopefully it'll go back   24 degrees that that's bad that's amazing you're 
talking like actual degrees like we do in the uk   yeah celsius so that's freezing for us 
i'm wearing jeans today that's not normal   oh my god you're living the dream out there well 
i'm back here in the uk and it is absolutely   freezing um so yeah i want to talk about 
your journey into the cayman islands because   you're one of the biggest names in finance you 
know from not west to goldman sachs to real vision   and it all started at plymouth university so 
i want to go back and i want to understand   how you got to where you are today and what are 
some of the biggest challenges that you faced and   how did you overcome them well the story is is i 
took my um for english people don't know what this   means they're a levels that's the exam make it 
about 18 years old i had discovered cars pubs and   girls so i failed all of my exams and i had to be 
i had to go and retake them at a cramer in london   in notting hill i then cobbled together enough 
a levels to get one university offer which was   plymouth yeah the only place i could get into 
so i got i went to plymouth i came out with   a decent degree in economics and law from 
plymouth and graduated in a recession and   i wanted to go either into financial marketing 
my dad was from a marketing background and i was   quite interested in that um but finance you know 
it had been the end of the 80s and it had been   kind of everybody driving porsches and it 
was all very exciting so i thought that's   what i wanted to do so i spoke to a friend of 
my dad's uh at his birthday party once and said   you know what should i do i'm thinking about 
marketing or finance he said well it's really   easy to think about because you can go and work 
for a company like mars fantastic marketing   and i will give you free mars bars or you can go 
and work for a bank and get free money i was like   okay that's what i want to do problem was i went 
to a bad university we're not great university   and a recession and there were no jobs so that 
made me think okay how do i how do i get to where   i'm going and that started my journey of living 
in the future where i stopped thinking okay that's   where i want to be how do i get there and actually 
what i wanted to do was work for goldman sachs but   they were never gonna take me i already had a draw 
full of 200 rejection letters from everybody and   so i had to figure out okay how is it going to do 
it and i became a i managed to get on the graduate   training program for a company called dow jones 
tellerate which is like bloomberg it was like   it was the number two in the marketplace 
at the time and i managed to get in that   and then eventually talked my way into a trading 
desk where i was doing equity derivative sales   and i was doing that for six months started 
doing quite well at it as a salesman and then   my boss left and i was made head of the desk 
wow that's convenient that's a big opportunity   and that's what kind of launched my career that's 
insane i think like you kind of have the playoff   here between luck is in like good timing um 
but then also preparation from yourself right   because like you said you got you had all these 
rejection letters but you were still sort of like   no i'm gonna push through so between if you had 
to weigh up luck versus preparation you know which   would you say was k more into play here actually 
you know it was very difficult to get luck when   you graduated into a recession so so that was 
that was more cunning than luck and then luck   played you know luck plays a huge part but it's 
leveraging luck that plays the biggest part   so once you see the opportunity then 
you can start to really leverage it   yeah i hear you but there's this idea right that 
in life we've got to get a good stable job we've   got to work that nine to five and once you work 
that nine to five then you're on the right path   you're doing the great thing um but slowly people 
sort of waking up and saying this isn't quite   you know the case so what is your journey in 
that respect because obviously you know you were   at goldman sachs now you're sort of off in the 
cayman islands you know you've got real vision   and all this stuff so what's your opinion on that 
my opinion is and it's probably changing over time   but having something really good on your cv having 
been exposed to people who are a lot smarter   than you have a lot more knowledge than you is 
invaluable because it gives you a credibility   statement so nothing up until me working for 
goldman really mattered because nobody cares about   natwest as a uk bank yes we were doing some cool 
stuff at the time we were the leaders in the uk   and in probably in europe at the time but then 
i got poached to go to goldman and that was the   biggest opportunity of my life it's like can 
you set up hedge fund sales here and that's   what i did i was kind of well known for it in the 
industry but with goldman it was like well this   is easy i can call up anybody and say hey i'm from 
goldman sachs setting up patreon sales can we talk   so it was very easy to do um and develop it from 
doing that but that move to goldman meant that   everywhere i went i've been vetted so 
everybody says like you did oh ex goldman sachs   yeah whatever reason it's actually really to do 
with the quality of people you're surrounded with   it gives you a network and you know yes to be an 
entrepreneur from scratch is a great thing too   but anywhere you can build a network and and get 
knowledge um actually supercharges everything in   the end so it's a combination of the two be 
the entrepreneur but also if you can get that   meaningful network from working at an amazing 
firm so a lot of people will go to google now   you know i worked at goldman it was this 
number one requested place to work by   mbas around the world so you know i would not have 
ordinarily got in that i i got into it because i'd   proven myself beforehand but anybody else if 
you work for an amazing tech firm let's say   um and then want to branch out people always say 
oh he learned at google or stuff like that and   you've been vetted so that's that's the tip 
if you can ever orchestrate that that's the   best of everything yeah i think i can i can 
relate because i i worked for many different   news stations before i sort of jumped full-time 
into crypto um and you know when you're working   for the smaller news stations and you're trying 
to get people on as a guest they don't really   know your station they don't really care you know 
especially like the little london ones and you   know when you're when i've done some work at the 
bbc so when i say oh yeah i'm calling from the bbc   they're coming on there's no and then you can 
also say oh well i used to work for the bbc   and now i'm doing that right credibility 
statement and then okay here we are now   yeah exactly so speaking of here we are now you 
are notorious for holding um the majority of your   portfolio in crypto so that's insane but before 
we get into that i want to know why bitcoin and   when did you first come across it i'm talking i 
wanna heal hear that red pill orange pill moment   so i was living in spain writing my kind of 
institutional research product global macro   investor over the financial crisis and the 
european crisis in 2012 when europe almost   fell apart when the banking 
in spain where i was living   almost completely broke down and so i've been 
watching all of this and we've been seeing   the growth of debt and a lot of structural 
problems within the finance industry like who   owns what when lehman brothers lost so i realized 
there was problems and then the solution starts   to become printing of money and so it got many of 
us down the path of okay what does this all mean   and gold becomes one of those things at the time 
i was more worried about the financial system   itself so i was going around with a bunch of 
kind of well-known hedge fund people uh looking   at setting up the world's safest bank uh and we 
this was going to be a non-fractional reserve   place of for people to store assets and have 
services and it's hard to set up a bank so we   kind of gave up eventually and i had a round table 
for global macro investor members in spain and i   was talking about some of these journeys that i 
was on and a guy presented to us all on bitcoin   he's another ex-goldman sachs guy a guy called 
the mill woods who's gone on to do a lot of   amazing things in the industry um and emil is 
very below the radar screen so i probably hate   the fact that i mentioned his name and so um what 
happened was he presented bitcoin as the answer   and i'd seen the rise from about 2011 and had 
been following it a bit i started writing articles   about it and invested first time in it and maybe 
2012.

I think 2012 i first started investing in   bitcoin so i bought it 100 in a month and i sold 
it i was like okay that was quite interesting   uh and then i kind of followed it for a bit 
and started getting people more interested in   it and then i kind of reinvested again probably 
in 2014 and sold out into the big rally in 2017   as i got confused about forks and you know what 
does this all mean i don't really know so i'm   gonna get out um and so so that was that i then 
started to learn about blockchain technology again   from emil and a few of the others at the round 
table coming out of that round table is why people   like dan tapierra and mark yusko are all because 
they're all global macro investor guys that's why   they all got into bitcoin it's because they all 
heard about at the same time we're all like okay   then we started hearing about blockchain 
technology that got us all start thinking about   the digital asset space overall and where this is 
all going again this was super early kind of 2015   we started learning about that whole space um 
and so from that i then got back in again because   i'd sold out i wasn't back in again the price had 
been falling and then dan tapiero started annoying   me almost every day by saying we need to talk 
about bitcoin i'm like i'm not interested right   now there's a lot going on with a dollar a lot 
going on with bonds he goes no we need to talk   about this and so eventually we did a piece on 
real vision and um and then dan got me back into   bitcoin again which was 2018 and i started 
investing again and spending a lot of time in the   space so speaking of dan and bitcoin and stuff i 
watched a video um on i think i think it was real   vision at the beginning of this year um before 
well actually not before actually in march as soon   as everything just kicked off right you mentioned 
printing of money everything shut down so i want   to talk about quantitative easing because i find 
that it's such a such a like a controversial   kind of topic you know people you know central 
bank sort of do it to stimulate the economy and   everything's all very exciting and you know joe 
biden's proposing another 7 trillion it's all   very great but you know people like in this space 
people like you you know we're all quite concerned   about this we don't necessarily think it's 
great so talk to me about quantitative easing um   especially how you know what we what's what we saw 
happen in march and how the year has kind of like   looked since then yeah quantitative easing means 
different things to different people in terms of   in terms of its effects yeah everybody in the 
stock market thinks quantitative easing is what   drives the stock market higher the central 
bankers thinks it's what stimulates the economy   the europeans probably thinks it's what holds 
together their economy because if not all the   banks go bankrupt and the crypto space in the gold 
space thinks it debases currencies right so we've   all got a different narrative based around this 
the narrative that i've found is most consistent   is the debasing of fiat currency over time and i 
started looking at this in a different way i came   at it with gold so i thought okay if gold is money 
let's take that as a hypothesis then gold should   establish a price versus other things over time so 
i chart gold versus real estate gold versus equity   markets gold versus copper gold versus things 
right real assets and you can go back 100 years   200 years and most of the time it trades here in 
the range so it's consistent in saying it prices   money you know the value of goods and they they 
vary around that so then i started putting gold   versus a basket of 27 global currencies because i 
saw everybody's printing so let's see not gold in   dollar terms but against this basket and lo and 
behold the picture comes clear that as they print   gold rises versus these currencies they stop 
printing it flattens out they start printing   it rises i'm like huh fascinating so it's showing 
you that even though the printing of money doesn't   necessarily generate inflation i the cost of 
your tvs you know in the supermarket don't   go up but the value of your money falls in this 
kind of weird world of foreign exchange markets   and if they're all doing it you don't see it 
because it's not like your currency's falling   it's not venezuela what you're finding is all 
of them are lowering in value versus hard assets   which is one of the reasons the art market's 
gone up and the collector's cars market's gone up   and gold's gone up and bitcoin's gone up so it's 
that whole concept of easing so then when we saw   this happen in march we realized that with this 
much debt and this bigger economic shock it was   going to be massive and it was going to be quick 
as well because it's the only trick the central   bankers knew because interest rates were zero so 
then they also explained that because velocity of   money is low because most of the banking systems 
around the world aren't operating properly   the only way to get money in people's 
hands was give it to them directly   but the governments couldn't afford to do that 
so the central bank were essentially going to   pay for it by the back door and once you started 
doing the joining the dots and looking forward   i realized okay this was going to be a 
really unique moment in time for bitcoin   because it was going to be a key driver i'd 
also followed previous recessions and the   quantitative easing or the stimulus tends to go on 
18 months two years maybe three years afterwards   so this was only the start um and so that's why 
i got very aggressive very quickly in the space   so what does that mean for the dollar then right 
because the dollar is supposed to be um you know   this global currency people sort of run to the 
dollar you know even i know i know venezuelans   are obviously buying crypto but they're also 
buying the dollar um you know all over um these   kind of countries you have kiosks where people can 
literally change their money into dollars so what   do you think about the dollar i mean it's down do 
you think people say you know it could potentially   become the end of its lifespan do you think it's 
still um i guess you know i mean i know sort of   talk about gold is that safe haven asset but the 
dollar do you think that has much of a lifespan   do you think it could be replaced uh no i don't 
think it's gonna replace fully um right now eighty   percent of the world's transactions are done in 
dollars while the us is 25 percent of world gdp   so it's actually it has an outsized impact 
on the globe that's one of the reasons all   of these other central banks are trying to move 
to central bank digital currencies and talk about   trying to reduce the dollar's weight in the world 
that will happen will it happen yet is the dot   has the dollar rolled over properly yet or is 
this the bottom end of a range i'm not entirely   convinced that it's rolled over yet i still think 
the dollar may go higher i could be wrong i've   been wrong this year on it um if it continues to 
go lower well we've got this narrative of what the   imf and the bank of international settlements and 
everybody else is talking about which is either   fragmenting into basket currencies using central 
bank digital currencies or doing something that   reduces the dollar's weight in world trade which 
everybody desperately needs if that's the case   then the number of dollars held by people 
will fall and the dollar will fall itself   so again there's there's a whole other narrative 
in the background that is very very positive   for crypto i do not think the dollar is at risk 
of hyperinflation uh loss of reserve status or   any of that that's just narratives of people 
wishing that their assets assets go up faster   it's not the way the world works yeah i think 
it's pretty interesting um you know especially   in the crypto space there's this huge narrative 
of um you know inflation and we're not seeing   hyperinflation it's not it's not what we're seeing 
um no and we're very very very unlikely to see it   because of this aging demographic this massive 
population the fact that the banking system   doesn't work fully to create hyperinflation 
is actually really really difficult to do   so you know it's not even clear we can generate 
inflation don't forget the japanese have been   printing money for 20 odd years now they have been 
fiscally stimulating for 30 years they're buying   their own stock market they're doing everything 
and they still don't generate inflation because of   demographics and demographics is the key driver of 
everything so no i don't believe in any of those   narratives could that happen in 30 years time 40 
years time maybe still doubt it okay that's pretty   yeah i think it's pretty interesting but you know 
when we look at um these safe haven assets there's   this huge um you know tug of war between gold and 
bitcoin um especially um you know i guess in your   community as well i mean i know you mentioned 
dan tepiero there so what are your thoughts do   you think you know they could work simultaneously 
as the safe haven assets gold and bitcoin could   bitcoin potentially you know surpass gold i mean i 
know mark josco has sort of made comments on that   it could if it reaches a certain market cap um 
they exist together they do similar things one   is for the modern age which is bitcoin actually 
integrates perfectly with the new digital system   um and so it makes much more sense it also is 
generational sure gold's been around for five   thousand years is not going away it will always 
be a store of value but you know if you're younger   you probably have a propensity to understand the 
value of a digital asset better than um somebody   who wasn't brought up with digital assets so i 
think there's a generational shift so i do think   over time because bitcoin is not only this kind of 
reserve asset store of value pristine collateral   which is what gold is it also as a technology and 
it has that whole technology layer that offers   a different potential future so i think over time 
the combination of those the knockout punch which   means it outperforms over time which is one of 
the reasons i sold all my gold i've seen you know   bitcoin is basically outperforming every other 
asset on earth and we haven't even started the   peak point of the halving cycle pattern so you 
know the chances the point of owning any other   asset right now is is almost zero um so gold will 
probably underperform but gold probably goes up   too so what is it about bitcoin though because so 
how much of your portfolio is actually in bitcoin   i i mean i read recently that it was 98 but i 
don't know if that's just like crypto in general   yeah no 98 is crypto in general of which it's 
an 80 80 20 split between bitcoin and ethereum   good choices good choices so why bitcoin what 
are like the top five things you have to do i'm   not gonna tell anybody anything that they don't 
know although i think i was the guy who came up   with the pristine collateral idea is what i 
like about it is obviously the res the the   restricted supply there's nothing like 
it you know the distributed nature of it   um the divisibility exchangeability um you know 
the digital asset the way it can be moved around   the world is is phenomenally powerful um and the 
immutability of the whole thing and the blockchain   technology so all of that is great everyone knows 
that at application level i think it's it's very   interesting just as a replacement to gold you know 
it works you can store it offline much you can do   with gold and a gold vault but it's it's easier to 
transport and there's a number of other benefits   i think um so the store of value thing is pretty 
obvious the collateral thing is a very different   thing that people haven't got their heads around 
so the world runs on collateral so collateral is   what allows you to borrow money the whole world 
runs on one true source of collateral which is   us government bonds european government japanese 
government bonds they also are but u.s government   bonds are the the most prestigious collateral of 
all problem is is that collateral they can issue   more of it at any one stage and in a recession 
when the value of the collateral so if you want to   borrow money for me it's a bad recession you can't 
get money and you want some of this collateral so   you can borrow money you should pay me more money 
for it the current system is the opposite because   the central bank lowers interest rates and the 
price and collateral actually gets cheaper so   i'm taking risk and lending it to you but i'm 
not getting paid the reward bitcoin changes that   dynamic because i'd be able to charge a different 
rate for lending you my pristine collateral   because you can't mess around with it it's 
distributed there can be no more supply   it's got recorded ownership there's a whole bunch 
of things that doesn't happen with the treasury   bond market so you know i i think that's one 
of the key things for me that i think okay   i can see something massive that this could be 
the base layer of an entire financial system   so then with all of that in mind where do you say 
the base layer of an entire financial system like   that's a huge statement you know because there are 
people out there whenever i post about bitcoin i   mean you know people were screaming scam this 
that and you know all these things and obviously   to say these kind of things they obviously don't 
understand it but you know it's difficult well   it's not necessarily difficult to use but grandma 
can't use it yet you know that's sort of like what   we say this is why it's priced as its price right 
this is why it comes up like metcalfe's law which   is the adoption effect right so it's still being 
adopted so we've got to that yet you know my job   as a macro guys to live in the future as i talked 
about before so we're looking at possible futures   and that seems like a pretty high probability 
future potential and it's the path of getting here   to there is where you make all the money it's not 
there because when it's there it's a low volatile   risk-free asset i want to take it when it's 
risky and nobody believes it because that's   when you make all the money when everybody adopts 
it that brings all the money into the space yeah   i'm totally with you but i'm okay so you're living 
in the future tell me how do you see this asset   though do you see it as a store of value do you 
see it replacing the dollar i know you said not   quite do you see it as a global currency do you 
see it's a global reserve currency like what is   bitcoin's place what could its place be that's bit 
we don't know could it be the pristine collateral   that the world uses to offer leverage on yes 
that's certainly quite possible is it likely to   be the payments layer don't know but could it be 
you know we're seeing bitcoin wrapped on ethereum   there's no reason it has to be the platform it can 
be the asset so will we see other central banks   or central banks put it onto their balance sheets 
for sure because if it goes up a lot and it's hard   money and you're a latin american country that's 
had problems with devaluations and all of this   well game theory would suggest that 
somebody's going to try it soon   and it's going to make their currency go 
up and it's going to help them and in which   case it encourages others to do it so i do 
see adoption by central banks um i do see   a dual world where fiat currency and bitcoin 
exist and one is an on-ramp and off-ramp so you   happen to live in a country and you live in that 
country you have to pay your taxes in that country   but you want to store your money in the 
universal currency i think that's pretty true too   so could bitcoin be everything there's definitely 
a probability of that how high that probability is   i don't know because we're looking 20 or 30 
years out at that point so it's too difficult   to assess but i do know we're going to move 
towards that and again in investment terms   that moving towards it the rate of change is rule 
where all the part where it gets very interesting   so you got yourself into a bit of um stir online 
i'm talking regulation talking xrp we'll get to   xrp in a bit um but with regards to regulations 
so you said that um regulation will come and you   will still use the crypto essentially um which 
is pretty interesting because actually today i   read a news article that um france have now um 
brought in a potential new kind of regulation   which would actually stop french people 
from using any anonymous crypto accounts so   given the nature of crypto that's that's quite 
huge um for regulation so how do you see do you   see regulation as this necessary evil in terms 
of mass adoption or do you are you do you support   regulation what are your thoughts the world is 
always about trade-offs and something like bitcoin   doesn't care what you think it should be it will 
be what it is right it's a distributed system that   has a life of its own so it will go wherever it 
goes depending on the demand and use cases so if   people want it to go up in price then more people 
need to buy it it's the very nature of the asset   if more people need to buy it then the reality 
is it won't be driven by retail investors   it'll have to be driven by institutions those 
institutions cannot buy it without more regulation   or enough regulation so if not their trustees 
won't allow them to buy it and it's dead so in   which case it remains is what it is dead as a as a 
institutional asset so in which case it's a retail   asset that's okay too it's just a different 
future but if you want to have a hyper bitcoin   coinalized world the traditional financial system 
has to use it and that's going to take regulation   i am prepared to take the trade-off 
of privacy because i don't think we   have any you know we're currently on a google 
chrome browser they know exactly where you are   that you're talking to me where i am they know 
my email address they know everything about it   they know what websites i've just visited they 
know every single aspect they know you know   we are tracked by everything and everybody 
so i'm not that fast and blockchain   tracks all of the movements of the money anyway 
so my anonymity if it's to avoid paying taxes   well you can play that game and maybe you get 
caught maybe you don't that's up to you but i also   know if i live in a country where taxes are due 
for services i'm happy to pay them other people   aren't i get that um but unfortunately that's why 
you've got a passport that's what it tells you is   we will protect you we will give you services 
you may not think you get the value for money   but if you want to live here you have to pay taxes 
that's what it is what people want it to be is a   different matter so i don't see a problem with it 
i don't see a problem with regulation i've worked   in financial services my whole life uh regulation 
is just part of what it is i also know that this   is an incredibly smart community of developers and 
if they try and stop some form of custody wallets   that can't be uh anonymous somebody will 
figure another way out because nature   it's almost impossible to fight that battle so 
what we will find is the main players in the space   will be regulated both the investors and the 
service providers and a ton of smaller service   providers that offer different solutions that 
will be not regulated because they will find   jurisdictional ability or other ways of doing it 
so i don't worry about it whatsoever i think the   market might even sell off on it because there's a 
panic and i think that's going to be a huge buying   opportunity because two things happen one adoption 
is good secondly people will solve the problem for   individuals who who want anonymity yeah but i 
i think what kind of gets me is that you know   solving the problem of anonymity i think that that 
anonymity given the news about france is going to   be taken away i just don't think we can have that 
kind of anonymity you don't have any anonymity now   you have a bank account you have a credit 
card the amount of cash transactions is   limited in europe you're only going to 
take out a certain amount of cash um   so there is i mean anybody who thinks there's 
this free world of money is it's nonsense   nobody can but that's the goal though isn't 
it but that's the goal and so don't find what right the goal of bitcoin there is no goal 
it's distributed it goes wherever it goes it's   a network it's not a person it's not a philosophy 
it's none of those things and everyone hates that   but i said look you can have your own view 
on it and if you can corral enough people   to do the same thing as you but bitcoin is not 
that it's a living breathing network yeah it's   pretty interesting isn't it because the community 
is so tight right and there's narratives and   there's ideas and the propaganda is wild like it's 
like state-of-the-art propaganda like and so i   think like i think it's really interesting to hear 
somebody actually say well actually you know who   says that's the goal we don't even know the person 
that created it so how do we and they're not in   charge of it nobody's in charge of it so that's 
all narrative so why does these narratives exist   because different people want different 
things for themselves and their future   you know there's a lot of people are angry with 
how things are but also there's something about   bitcoin that most people don't understand why did facebook get so big it's because it used 
behavioral economics which is the like button   daniel kahneman taught all of these guys from from 
um google facebook twitter in fact every major   platform was taught by the guy who won the nobel 
prize for behavioural economics they explained   how the dopamine system works and how like buttons 
and follows and likes make us feel rewarded right you can affect human behavior then that was in 
2007 that he basically held this famous summit   for all of the leaders of silicon valley who 
adopted it on mass and took over the world then   in 2009 comes bitcoin bitcoin is the perfect 
behavioral network because it rewards you in money   the more people you bring into the network the 
more your money goes up that by definition will   create tribalism because everybody is now 
incentivized for their network to go up   more than the other network and for all other 
networks to fail it is an incredibly powerful   tool for building a network where you have money 
attached to it so imagine if every facebook like   was a dollar imagine what that would do or 
everybody you brought onto facebook page   and facebook shares that's what bitcoin is 
it's incredibly powerful and that's why it   creates narratives because like a religion it's 
all about getting more and more people into it   yeah i mean you touched on two things 
there so the tribalism is something i   really want to talk to you about but i want 
to go back a sec i can't remember what the   netflix documentary was i watched the netflix 
one about maybe you know the social media   um uh social network yeah whatever it was yeah 
yeah and wow that blew my mind i mean i knew   already the programming and this but you know it's 
the dopamine it's the like pulling down and seeing   the refresh getting the hit the notification 
if you haven't seen it watch the secrets of   silicon valley a two-part series on the bbc that 
was five years before the netflix documentary   and it is unbelievable and explains this in great 
detail everything that that is going on here   yeah and like on this documentary they even 
have to have um i think there's a job now about   digital ethics you know if it's ethically okay 
to because they know that they're programming   us they know that they're doing that um you 
know every time every time they get follow   every time they get a notification it's a 
dopamine hit so they know that they're sort   of creating that addiction so they now have 
people in you know actually job vacancies for   you know people understanding whether this is 
ethical or not well this is a real problem because   once you've unleashed the genie out of the 
bottle of behavioral economics and big data   everybody figures out how to 
use it for different means   and it splinters everybody into different groups 
um and it it's almost impossible to deal with   because it's a network right so it's not centrally 
pushed facebook's not centrally pushed yes there's   an algorithm and stuff like that but it's a 
network that everybody's incentivized to get   more people into the network because it makes them 
feel good by getting the dopamine hit of the likes   it's crazy and that's where we are and bitcoin 
is the like the most perfect echelon of this   of anything i've ever seen and most people don't 
really understand that so you mentioned tribalism   so this is hot right because you were attacked 
for wanting to know a little bit about xrp   um so what did you learn about xrp um not a lot 
i mean i just had one interview but you know what   was interesting as i said i've got an open mind 
to it when somebody whenever in the investing   world when everybody says they hate something it's 
usually the time to buy it i haven't bought xrp   maybe i never will but i reached out to somebody 
i really trusted santiago velez and said look tell   me about it and he's a super super intelligent 
very rational very balanced person and he sat down   with me for just over an hour to explain how much 
of a use case it has and how it's being used and   where it could go and again he's not saying it's 
definitely going there he's not part of the xrp   army he's just saying listen rel the narrative is 
behind the reality um and then that is it's a scam   because a centralized company issued the tokens 
he's like yeah that's pretty normal most companies   issue shares so yes it's with the token it's 
the defined amount we know how many it is   and this is how it works and then this 
is who's using it and this is its value   system and this is how it could appreciate 
in value and i'm like okay i get it this is you know i know there's still people who say he 
doesn't understand it's a scam it's not it's just   a different thing and it's not bitcoin nor is 
ethereum bitcoin nor is anything else bitcoin   bitcoin is bitcoin and so we don't need to 
compare them it's like comparing saying well   it's not an orange no it's an apple no it's not an 
orange i can't hear it's not an orange no it's an   apple it's different fruit that's what's going on 
right now yeah i i think it's pretty interesting   i think it's kind of um quite interesting because 
the bitcoin community is all about you know   generally speaking freedom um which kind of 
implies freedom of everything right like freedom   of speech freedom of thought freedom to you 
know understand more especially when we look at   bitcoin as views on politics and everything 
that's been going on at the moment whether it be   you know counselling people and so on there 
seems to be some kind of common ground that   bitcoin has sort of had when it comes to 
this thing um which is why i'm surprised   that we're not allowed to ask questions like 
wait what is xrp you know what what is ethereum   or could there be a future financial system 
where there are many protocols there's an   interoperability layer across them that allows 
assets to move you can have bitcoin that trades on   xrp's network and on ethereum's network can that 
happen yes will it happen yes will somebody it's   already happening it's already happening so get 
used to it but to say it can there can only be one   you might say i think there's only going to be one 
in the future so i i want to bet on that i'm fact   i'm so passionate about it i'm going to short the 
other ones that's how the world actually works by   saying you can't even talk about xrp because 
you're an idiot for not seeing what we see is   religion and i don't think that's right but again 
if you remember its behavioral incentive structure   is if you can get your network to be the one you 
make all the money then your bags pump basically   yeah because you take over the world so therefore 
you're incentivized not to play across networks   but once you start looking at the rest 
of the world and understanding okay   this is a whole future financial system that's 
all going to net together in this incredible new   way then you're incentivized to say well other 
things may be undervalued versus bitcoin some   may be overvalued and that's how we can invest 
accordingly to take advantage of the whole space   and again somebody may say oh it's all going to be 
built on bitcoin great then just invest in bitcoin   if you think they're all a scam that's i've been 
saying to people a lot of people say well ripples   are scams xrp's the scams are fantastic 
short it that's how markets deal with that   you short it and you can make money but then yeah 
i mean no you know i wouldn't do that oh you can't   short a scam on that really yeah i mean i you know 
like i said that's how financial markets work that   that's the that's the free market for you you 
like it you don't like it do your research you're   incentivized to do your research um so you know 
no one's forcing you to buy xrp i want to get your   thoughts actually on privacy coins have you looked 
into them much um i mean i know i was yeah go on   tell me about your thoughts on privacy points um 
there will be a place for them and you know some   will get regulated and some will be used you 
know i think there's a place for all of this   you know privacy coins matter particularly when 
people are they really matter when you're in a   jurisdiction that is oppressive in terms of comes 
with violence adherence with violence well then   having privacy in the extreme is incredibly valid 
and i think it will stay around for that you know   will the us try and shut down this kind of stuff 
of course they will um and we've seen this before   i've talked about this a couple of times um in 
the uk back in 2014 something like that no earlier the whole bunch of synthetic drugs that came 
onto the market and they were called plant   food at the time okay i don't recall right 
it's a synthetic stimulant right it's a coke   interesting kind of thing yeah it came out and 
obviously they weren't banned so everyone was   importing them from china it was a fraction of 
the cost of drugs and it went viral in the uk   and what was that but what was it what was it 
what was the substance it was a synthetic thing   that triggered the same sensor sensory system oh 
and it made it and so this went viral all across   the world now so what the regulators did was they 
tried to ban it by saying this chemical formula   substance is banned so then the chinese reinvented 
another one and then another one and another one   and the regulators had to then figure some 
all-encompassing way but they couldn't get   rid of it new zealand in the end just said 
fine it's illegal we can't regulate it um   see different jurisdictions deal with stuff like 
this internet privacy is the same issue ins you   know there's many issues on the internet the same 
china you don't get the choice the us you get   probably more choice than than you need to have 
different countries will and europe will change   will probably be somewhere in the 
middle um and it's just how it is   yeah i was talking to um a couple of people 
from the monero core development team and   they gave quite an interesting opinion they 
were sort of like well you know we have cash   cash is inherently anonymous um to obviously 
some extent um and the same aml procedures   that are put in place for cash will be put in 
place for privacy points to say you want to go   and buy a house with um a load of monero the 
the person you're buying it from might have   several regulatory you know um and compliance 
things whereby you have to sort of give proof   of funds and say yeah you know and they'll say 
like they do with cash so in europe right now   most countries somewhere averaging about 5 000 
euros you're allowed to use for a transaction   so you regulate that and say fine if you want 
your your cash money no problem with that   anything over 5000 euros has to be declared 
for aml and that's it and that will happen   now if you don't want to bring in if you don't 
want to bring it into your system i into your tax   system same with cash nobody has to know about it 
so all of spain still operates with cash you know   stuffed under their mattresses and in bangkok but 
if you want to bring into the system it's bloody   hard unless you'll find somebody else who'll 
accept cash so things trade at different prices   yeah absolutely and i kind of see that being 
the situation with cryptos right because i think   that's the hardest thing you can trade anonymously 
even with bitcoin um but as soon as you get to um   the the on-ramps and the off-ramps that's why 
you hit the kyc and other than that there's no   way really to bring into the system unless like 
you said you know you're dealing you know i guess   peer-to-peer literally if you could offer me a 
service in bitcoin yes and the problem is is i'm   not sure whether you can get away with selling a 
house for no transaction so it's it's difficult   it's difficult so yeah i can give you bitcoin and 
nobody knows about it but what can you do with it   what can i get an exchange it's actually it's it's 
tricky yeah it is so just finally where do you see   the space then in 20 years from now i know it's 
impossible to kind of see but and the financial   system in general where do you see it all i i 
think we're headed towards the internet of money   by a very broad definition which is digital assets 
have value and digital assets are transferable   exchangeable recordable all of those things 
and many most physical assets will be digitized   in terms of its value capture and transfer of 
value whether it's the art market or or you know   thing the trusted ownership of everything will 
be on blockchain technologies which ones who   knows um but that's definitely coming you know the 
tokenization of all assets and income streams and   revenue streams and intellectual property rights 
and everything is coming and it it's all coming   um so you know it change it it's gonna change our 
world as much as the internet changed our world   yeah i totally think so and actually i do have one 
last question for you um because you mentioned it   earlier cbdc's what do you think is going to go on 
there because i have this kind of idea in my head   um just maybe i've watched too many films 
i don't know but i have this idea whereby   i feel like we're gonna have a kind of like tug 
of war between because like you said everything   is inevitable it's gonna go digital i always 
say this everything is digital from you know   dating shopping whatever it is it's all digital 
socializing so working um so i feel like there's   gonna be like this tug of war between you know 
government um you know their own cryptocurrency   cbdc's and then the crypto community who are 
pushing that narrative that we spoke about earlier   i think they all coexist i don't think rid of 
bitcoin i think it ends up being the reserve   asset that has a lot of value to a lot of people 
some governments will adopt it some will try and   regulate against it i just think it's going to be 
there like gold it's always been there people have   tried to ban it from time to time never really 
work so i don't have a i don't think they have   an issue with it either the central bank digital 
currencies are a whole different thing um what   that is is at the top level yeah it's much easier 
for me to send you money right one second thing   great it means that stuff like bitcoin becomes 
seamless into this so for taxation capturing and   all of this stuff that makes nation states making 
nation states fine it's gonna completely change   how economics works because monetary policy run 
by central banks fiscal policy run by governments   that all blends into one because this is the rise 
again of behavioural economics and big data sets   because i can incentivize you differently to me 
you can have a different rate of interest you can   we can do down to the individual in terms of 
stimulus or penalty reward systems but obviously   governments can use it for nefarious means 
too so if they catch you driving you know   five miles an hour over the speed limit they'll 
just take it straight from your wallet because   oh that's scary that brings me out 
yeah um and that and that's the problem   um but it's incredibly powerful in a recession 
like this to have gone okay hairdressing salons   right here's that here's you know here's 10 grand 
in your account immediately um and we'll monitor   your wallet and if you're running out of cash 
we'll redo that for stimulus that would have   really helped yes as opposed to giving it to 
a bunch of banks via quantitative easing and   assuming they're going to do the right thing which 
they won't because they'll either hoard it or   give it to their best customers so the people who 
actually need it can't get it you know this again   matters not whether you like it or not it's 
coming it's happening it's freaky programmable   money at central bank level is definitely going 
to happen well there you go i was going to ask   you your last thoughts but i think that's it isn't 
it programmable money on a central bank level is   going to happen yeah there you go please get the 
heads around that well i want to thank you so much   it's been such a pleasure um and thank you so 
much for coming on yeah really enjoyed it all   right guys don't forget to tune in next thursday 
we will be live at 12 p.m est we'll see you then

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