The Exchanges

Q Is it based off speculation or based off utility? Um,

A It's mostly based off, uh, speculation at the moment. The applications, the practical applications for these currencies are still fairly limited. So for the case of Bitcoin, the primary application is cross-border transactions, uh, remittances, import, export, trade, currency, and capital flights for those who are in countries where you have devaluation or hyperinflation. For Ethereum, it's crowdfunding. It's, uh, ICOs as well as various forms of, uh, governance systems like The centralized organizations creating a new form of governance, a new form of corporation. These are very interesting applications, but they're still in their infancy. And as a portion of the world economy, they're still, um, tiny. So a lot of it is basically looking at those applications and saying, okay, what does this look like in the future? Do I want to be involved in that? My primary investment in this is education and knowledge, which fortunately can't go down in value. Uh, the more knowledge you accumulate rather than investing in the underlying, uh, currency speculatively. I think that's dangerous. It behaves very much like a penny stock at the moment, and most people are not equipped, um, to, to handle volatile investments like that should probably limit it to a very small part of their portfolio.

AI assessment note: “It's mostly based off, uh, speculation at the moment.”

Q And, uh, uh, Andreas, for people listening right now that want some exposure to crypto that are total newbies, how would you recommend they just, if they want to say, okay, I have a thousand bucks laying around. I want to put money into crypto just to learn how it works. How would you recommend they do it?

A Well, first of all, my, my primary advice is don't buy crypto, earn it. Uh, so the, the interesting thing about this is that this is an online digital economy with the participants around the world. If you sell a product or service that you have, especially if you sell it internationally, but even locally, if you cut hair, cut hair for Bitcoin. If you drive a taxi, drive a taxi and accept tips in Bitcoin and ether or whatever it may be, whatever skill you have, graphic designers, music artists. Software engineers, marketing managers, all of these professions, accountants can earn bitcoins, um, as a living. I earn the majority of my income directly in cryptocurrencies and have done so for three years. So I don't buy them. I don't invest in them.

AI assessment note: “my primary advice is don't buy crypto, earn it.”

Q So are you offering us essentially a quick rich scheme, which sounds something like this? Hey guys, listen, take advantage of the dumb people putting money in crypto, do your own token issuance, and then take 80% and liquidate it pocketed ten million bucks and go run. It's their fault. They're stupid investors.

A I'm not involved in any of the ICOs. I've spoken against investing in the ICOs, and in fact, I'm not really interested in cryptocurrencies as an investment vehicle. To me, this is a get free quick scheme, a system that delivers liberty for people around the world by introducing a global currency and a system of trust that doesn't have intermediaries or third parties, that allows people to transact direct person to person and allows people to innovate In a distributed manner. I'm not that interested in the ICO craze. However, I do realize that one of these applications is the fact that we're opening up a brand new space for crowdfunding, um, which kind of bridges the gap between angel investments in BC, and maybe in 10 years, once that space becomes mature, it's going to be a very significant new form of funding that is global in nature, that is open to everyone, that is borderless and transnational, uh, and that's It's a fantastic thing, but in the meantime, yes, of course, you know, this is, uh, just like any early technology, there's a lot of risk, and if people ignore that risk, they're going to get burned.

AI assessment note: “I'm not involved in any of the ICOs. I've spoken against investing”

Q he wants to do the damage, right, because of, you know, past People, countries acting unethically or ethically, regardless of that, he could still do serious damage, right, with crypto. Is there any way, I mean, this is, look, this is, the reason I'm asking this is because this is ultimately what regulatory people are going to try and figure out, right, is, is there a way to regulate this?

A Uh, no, there isn't. Uh, we now live in a world in which, um, the, um, flow of money around the world, uh, will be detected, dictated by protocols and, and mathematical structures and the internet, and we will have free flow of money around the world. Now, the impact of that is that it's going to empower billions of people and pull them out of poverty and give them access and inclusion in the economy. The illusion that we can control bad behavior or bad people by controlling flows of money It's not only an illusion, a delusion because we can't, but in fact, it's very damaging because you don't, you don't, hold on, let me just capitalize on that subject real quick.

AI assessment note: “Uh, no, there isn't.”

Q Let me, let me shift, let me shift, I think that was a healthy discussion, let me shift now to something else. So, um, why, why did Ether take off so quick over Bitcoin? Was it Simply the utilitarian nature of smart contracts versus digital currency?

A Well, I, I think there's, um, you know, we're seeing all of these hype cycles, so a lot of this is, uh, is speculation about what the next big thing is. I think many people miss out on, uh, perhaps the initial run-up for, uh, Bitcoin, and they're looking something else, at something else in order to, uh, gain great returns, and so, um, they're speculating across the, the, across the field. It's not just the Ether. There's, uh, almost a thousand cryptocurrencies Um, that have some economic value, more that have no economic value. And the top five, uh, in total reached, I think, a hundred and something billion dollars in total market capitalization. It's a big market and it's growing. It's a, it's a brand new technology. It has a lot of potential across the board. I think comparisons between the various, um, cryptocurrencies and their market capitalization are not particularly useful, um, because these things ebb and flow based on speculation.

AI assessment note: “a lot of this is, uh, is speculation about what the next big thing is.”

Q I've been pitched many, many times, you know, I do investing in B to B SaaS startups mainly, but a few people have pitched me recently who are ex-fintech people on, hey, I'm creating a five million dollar kind of crypto hedge fund. What are your thoughts on that? And what kinds of questions should I be asking the person pitching me that to see if it's legit or not?

A Well, uh, this is a tricky question because one of the main purposes of these cryptocurrencies in the architecture is designed to decentralize control over money. That means you hold your own crypto. You don't put it in the custody of anybody else. We're removing intermediaries. So what are these crypto funds doing? They're basically holding crypto for thousands of investors on their behalf as custodians. That's business as usual. That's traditional banking only now with a new currency. The problem with that Is that if they hold the currency of a thousand customers, their security has to be a thousand times better than each of the customer's security, uh, in order to make sure they don't lose that money or have it stolen from them. And most companies can't do that.

AI assessment note: “if they hold the currency of a thousand customers, their security has to be”

Q can't track where, where money's going and really anyone has access, which is a wonderful thing. Like the example you just gave. However, uh, let's say a, uh, ISIS strikes Greece and your parents are killed and you learn that the method or the way they acquired the chemical weapons that, that they launched that terrorist Attack was on the crypto market. It's perfect for terrorism. How would you respond?

A Um, I would say that we probably shouldn't have spent the last 20 years bombing the shit out of their countries in order to promote an oil monopoly and funding all of that terrorism and training and weapons through the State Department, the CIA, and other intelligence agencies around the world using dollars and oil as a primary funding mechanism and creating, ah, millions of jihadis and, ah, others through, ah, appalling policies of oppression and colonialism around the world. And to, to blame the means of cryptocurrency rather than looking at the root causes of, of terrorism. And, and the fact that very much of our middle class lifestyle and cheap oil in the United States is based upon, uh, essentially a, a bargain of blood around the world is the real problem. So, you know, I see that as a misdirection and a distraction. ISIS was funded and trained by the United States. States, just like Al Qaeda was, just like Bin Laden was, um, all of these people are our allies first until they turn around and become our enemies, and we cycle them over the last 20 years in one unending tragic catastrophe.

AI assessment note: “to blame the means of cryptocurrency rather than looking at the root causes”

Q want to focus on more about what you just, yeah, on what you just said. So, so you're, look, one of the things I've struggled with is how to clearly communicate what crypto is to an audience that knows nothing about it. Arguably, you are, or should be, based off your publishing history, the master at this. So, except Explain to an elementary school student right now, what is cryptocurrency?

A Uh, cryptocurrency is the application of networks and market economics to the flow of money internationally, just like the internet was the application of a flat network, um, system to the communication, uh, around the world and the free flow of information around the world. It takes the same internet dynamics, um, the use of open protocols that are participatory in nature that allow anyone to innovate and access anywhere in the world without permission, without a license, without borders, Without identity, and it, uh, allows us to do the same thing for trusted communications, for trusted transactions, and for currency on a global basis. It is a system that does not belong to any company, is not controlled by anyone. It removes intermediaries, just like the internet has done in so many industries, but it does that in the most powerful industry of all, which is banking and finance, by removing the unnecessary intermediaries and third parties who make a lot of money, um, but also have a lot of, um, Unwise power. Um, and it allows people to transact on a, on an equal basis worldwide with each other, peer to peer, person to person.

AI assessment note: “cryptocurrency is the application of networks and market economics to the flow of money”