The Exchanges

Q Interesting. Okay, so we've talked about blockchains, we've talked about tokens, we've kind of talked about kind of how they, how these things work. Um, let's talk about, like, Getting rich, right? The valuations, like, of these things going up. Should we think about this like gold when there is fear in the world and people want to feel safe? Gold and blockchain will keep increasing in value?

A I think there's a couple core things going on. So, The Bitcoin blockchain is, its best use case is a store of value. It's not that effective as a currency because it's expensive and slow to transfer stuff at the moment. They're working on changing that, but it's not moving very quickly. But as a store of value, if you compare it to gold, it is, ah, in a number of ways better. You don't have to store gold underground and hire guards to protect it. It's this internet-based thing. You don't need a bunch of, ah, like, third-party vaults to take care of it, although that is the case in some, you know, kind of how it's being organized in the world. But, so, Without getting too deeply into it, you basically got a store of value that is, it works like gold, but is much better than gold in every respect that you care about in a store of value. The issue with the Bitcoin blockchain is that it's not as trusted yet as gold, but my belief and the belief of, you know, for example, Naval Ravikant, the AngelList CEO, is that it will become as trusted as gold, and if it does, it will be worth trillions of dollars. Another key point there, though, is for, as an investor, you want to be, I think, diversified across multiple blockchains that are stores of value, because...

AI assessment note: “you basically got a store of value that is, it works like gold”

Q Oh, wow. Interesting. So if I want to get rich in this space, I just literally, I literally, as we're talking here, I just put a thousand bucks in Coinbase following your instructions. Is it more important for me to do that to build wealth or should I go set up a bunch of little mining towns? To earn tokens.

A Well, I mean, crypto, crypto businesses are, are definitely difficult, and it's just like any, it's just like any startup, but I think there's an added, there's two added layers of complexity in that you have to design a good economy, you have to design a town, which is tricky, and crypto economics are new, and the other thing is your, your workforce is going to be distributed, and you've probably dealt with that in your, in your work life, it's just tricky to deal with a whole bunch of people around the world. So, An easy way to get good returns in this space is, um, is just to buy into these tokens, which are, which are units of currencies in these little town economies, because you and I, for the first time in history, we have liquid venture capital. We can, we can buy into the same projects that, that A-sixteen Z is buying into, and we can buy into them from day one. We can, yeah, let me use this analogy quickly. So Facebook IPO, Bought into that. Maybe I five X my, my money, but most of the value has already been created and accrued to the VCs and angels who supported them early. Uh, within the crypto world, people's tokens are going liquid often before they even have a product. So you or I can buy into a hundred different projects. We can ride up that value creation. Of course, we're going to, some of the projects will fail, but it's a really key point for the first time …

AI assessment note: “An easy way to get good returns in this space is, um, is just to buy into these tokens”

Q don't understand it fully yet, but I'm going to, because of this interview and because of the money I just put through Coinbase, any, any other things that I just, because part of getting good at interviewing, is understanding the right questions to ask. This is a rare exception where I might have actually missed a critical question. Is there something I haven't asked about that we should know about?

A It's... It's 1999 in this space in many ways. Or maybe it's 1998, but... For the first time in history, we have liquid venture capital, but there was only 66 offerings of these liquid venture tokens last year. So, extremely limited supply, crazy demand for these things, because you, anybody in the world can buy them and they're liquid, which is an amazing thing. Um, so people should be aware that, yeah, there might be this token with a market cap of, say, two hundred million, but it might only be a four-month-old project with no product, no product market fit. So it truly is like liquid seed stage venture capital in many cases, um, which is, I think, in many ways, a wonderful thing. It's gonna fuel a lot of innovation, and the tech bubble in 99 fueled a ton of experimentation, and that led to a lot of tech we have today. But, you know, could there be a major correction, and has there been major corrections in the last five years? I mean, there's been several, so we're at a, we're at a pretty bubbly time right now, and it's, I think everyone should participate, but I would say, um, Absolutely participate, and at the same time, participate with the awareness that you're buying something that, uh, you know, may go to zero.

AI assessment note: “For the first time in history, we have liquid venture capital”

Q Interesting. When I have Eugene on, I will talk to him about pure emitting. That'll be fun. Tom, this is good stuff. Um, we didn't talk a ton about Walter.ai, but why should people use Walter.ai?

A So all of us in this, in this space, um, Need to support the good projects. We need to invest in the right token so that we can do financially well, but also so we're supporting the good projects and the good teams and we're building the space. Um, In order to do that, we need information. A lot of it's qualitative, and so what Walter's pursuing is a really difficult mission, but it's basically, let's build a global community of contributors who are doing research in this space to put all of our information together in exchange for reward. That reward is the Walter token that goes up in value as the data becomes better and cleaner. So it's, uh, the ask there is basically like, um, you know, get involved and join the conversation, contribute your data and, and enjoy the data of other people so we can all make better decisions and support better projects.

AI assessment note: “so we can all make better decisions and support better projects.”

Q different focus. I wanted to have you back on to talk more about this stuff. So here's what I'd like to do. Tell us first about Walter.ai as kind of the base, right? Because this is like the, this is how you're productizing, I think, your interest in this space. And then I have specific questions about issuances and Ethereum and some of the other things. So what's Walter.ai do?

A So, We have a market that, let's call it the token market. We've gone from zero to ninety billion market cap in like, you know, around five years. We only had a couple years of these new altcoin tokens, and there's very little information on this market. There's information that's public, like, okay, each of these, each of these tokens is built on a blockchain, and we can explore those public blockchains to determine how many people are using them, are people interested in them. But doing that work just takes a lot of time. So that's one thing. We just, there's this explosion of interest and explosion of projects, but people just haven't taken the time to do the digging to determine, okay, what's actually going on. The other thing is that, um, This is liquid venture capital. So these tokens represent not even equity in most cases, but they represent kind of an exposure to a startup project. And what that means is that, as you know, investing in startups is a little bit probably more about qualitative information than it is about quantitative. You want to know, are the teams working? Do users actually care about this? And that's information that's kind of hard to get. Like, you have to go and meet the teams. You have to, you know, research how many people are engaging with them on their Slack channel or their, or on Reddit. So we've decided to apply the distributed model of buil…

AI assessment note: “build a global research task force for researching this space, providing data on this space”

Q strikes me as that kind of model. You are, it doesn't matter what's going to happen with crypto or Bitcoin, but you know, it's going to be big and Your little pickaxe shop and you're selling pickaxes and jeans and panning, you know, things to pan for the gold is Walter.ai. Is that accurate? And if so, how can other entrepreneurs listening think about what to build around this ecosystem?

A The, the first, the first thing that people have to get clear on is that building stuff in this world is It's using a model that we've never seen before. So the old way, again, Twitter, go get your money from the capital markets, hire people, build a product, release it. Value accrues to Twitter corporate, which accrues to Twitter shareholders. In the crypto world, you actually create, because we can transfer value on the internet, you basically design like a micro economy with incentives, like, and you release that to the world. People all around the world come into your micro economy, and they do work for you. They build your infrastructure for For you in exchange for incentives, and Bitcoin mining is just an example of that.

AI assessment note: “building stuff in this world is It's using a model that we've never seen”

Q Right. So like you said, okay, you said one thing was as people gain trust that, that this will be more like gold, it gains value. So, so that's critical. Um, but is a unpredictable leader like Donald Trump, right? Like, like blockchain's best friend, because the more unpredictable the world is, the more people are going to go towards these other things that aren't relying on one political leader.

A I think so. Uh, so, Bitcoin is a store of value. Uh, it's becoming more trusted. If it even becomes a fraction as trusted as gold, it's gonna be worth many billions of dollars, which it already is, and then if it goes beyond, it becomes at least as trusted as gold, people are gonna run to it, and it's gonna be worth trillions of dollars. You can never prove that any blockchain is secure, because there's always a bug that somebody might find in the future, but the, in cryptography, the longer you wait to find a bug, the more trusted the thing gets. Um, but because you can never trust a single blockchain, I think there's going to be multiple blockchains that act like gold, digital gold, and multiple blockchains worth trillions of dollars. So that's kind of like the, the one category, which is the long-term buy and hold investing. The other category, which is, you know, a bit more complicated, but where a lot of people are making a lot of their money is in these new tokens, which go up in value, you know, Ethereum, what, what are we at now? Like, You know, 200 X since, since launch, that's probably not accurate, but something like that.

AI assessment note: “I think so. Uh, so, Bitcoin is a store of value.”

Q Is there a way to figure out, like, what are the cheapest Where are the cheapest places to mine? Like, how do you measure the resources it takes to earn a token or packet across all these different mining opportunities? Is that a real question?

A Yeah. Yeah. So you've got, say you have, say we have 500 blockchains right now, and within, say, 200 of those, you or I could go on the internet and we could contribute something, you know, Burning Man style. We could contribute something to that community and get rewarded for it. One case is we run an algorithm on a piece of hardware, and we, like, search for transactions, and that's called proof of work, and that's basically mining. Or it might be as simple, though, as you and I can go online and post something on a blockchain-based social media platform, and we can get a token for posting something. So the ways in which you can contribute are really, really varied right now.

AI assessment note: “So the ways in which you can contribute are really, really varied right now.”