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I've got a six bedroom house on a hillside in Spain. Overlooking orange groves, 10 minutes to the beach and I could lose my job. I could still have anything that and I could work in a bar and I could live there. I'm done, right? Gain. Your life was one. I feel like I could rule the world and no way, I could be what I want to put my all into it, like a days off.
The Road Less Traveled. Never looking
back. It's good to have you. So your you live like in the Cayman Islands or something, right? Or is that where you are right now? Yeah.
I'm in my house. My beach house in Little Cayman today. So, I live between gray and with a little came.
And why are you in the Cayman
Islands? It's beautiful. And it's, it's just a nice place to. It's a nice place to live. I'm English. So don't pay tax here either, which is also nice.
Yeah, and we had, we had a guy on the last episode. That was he's in Puerto Rico and he was just
Like, oh man, like he's like your, he's like, I can't believe you're living in California. Like he's like, you know, you have to keep the money you make and he just he was really laying into me about, you know, paying basically 50% tax and I was telling you, I kept showing me the pool behind him and how he's like, I just sit there 20 days out of the month, right by this pool. Because, you know, I don't have to work because I keep all my money from taxes and I was like, okay. All right. All right. I get your point. I get your point.
Yeah, you just paid to the supermarket here because everything's so fucking
expensive.
Well, I lived expat my whole life. So like yeah, I know what you mean were, you know, you want to buy some product you're familiar with and you're paying like, you know, thirty dollars for a box of cereal and it's a bit strange but you do it because you still kind of met out net out ahead but it is it is funny. I that works. Listen, I was gonna ask you about you know, I don't know. I don't know how much we care about how much we want to basically go into the like, you know, it's sort of impending War that's going on and all this crazy stuff. I wrote
Something in my newsletter today, which was like there's a lot of tech VC that basically, you know, like overnight will become a geopolitical experts and pandemic with a minor in pandemics and like, you know the next at the next thing they sort of feel like, you know, if you're smart in one area that doesn't mean you sort of need to raise your hand and talk about the rest. But the reason I wanted to bring it up with you is because you actually are kind of like a macro investor, right? That's your, that's your domain of expertise. It's and you've seen many cycles and many sort of news events.
You tweeted something out that I thought was hilarious which was like, you know, here's a thread on my advice to you about trading during during, you know, like Crisis or sort of like these Global events. And then, you know, the thread was one tweet, which was like, don't you're not going to have any sort of, you know, doing Arbitrage against headlines for CNN and fox and I all these other guys, like just don't kid yourself, but can you kind of talk about that? Like you've seen, you know, these different things, you've been an investor throughout so talk about that a little bit more. What is your kind of mindset
around that?
My mindset around that is nobody has any clue about geopolitics.
So even at one point out of hedge fund, we hired the ex-prime minister of Israel to help us over the Iraq War.
And the basically information you gave us was useless.
And I've noticed it always it's useless and the market moves up and down on headlines and generally it amounts to a lot of pnl pain. If you try and trade it, best thing is to stick with the with a bigger outcomes. If it's time with the recession, it's different. Those things can see, one year, 18 months, bear markets as a different thing. These events tend to be short and sharp,
right? And so you your career is kind of funny. I was sort of tracking it and it's a
So for those who don't know you basically you were at Goldman you started your own hedge fund and then simply you retired correctly, overtired, pretty yeah, you're retired at 36. But I mean now you have a company now, so you're not in a fully retired and Kickback,
but no, I've got a job something right now.
So right. But you did have a break in-between, correct? So like I think it was 2004 when you would you sort of retired from the hedge fund and it was like 2014 or something when you launched real Vision, so what was going on in between where you're doing nothing, or you were doing other?
That was don't know. About was
writing Global macro investor, but that is a monthly publication. So I don't know why all of you guys do weekly, newsletters or Daily News, Essence hard work. So I yeah, right monthly. But it's big, it's like, well, it started off with about 35 Pages a month and then due to inflation. It gets to about 130 pages a month now, but I write it in a weekend. So I was living in Spain wrote one weekend a month. So I need to monitor markets and talk to people, but it
A part-time job. So really what I've done is kind of opted out of the Rat Race moves to the Mediterranean coast of Spain. I was growing fruit and vegetables in my garden and almonds and olives. And all of that stuff, living the beach life, in Spain. In the middle of a, on the side of a mountain, the middle of National Park, having a great life. In the end. You must start missing intellectual Capital, pick the people around you, because most of the people most of the year round in a Beach town, in Spain, work in a bar or restaurant or they,
Other improper real estate, which is fine, but you feel very isolated when your world is global
macro.
Totally so described the moment because I think a lot of people listen to their. So just so I don't know how much, you know about the podcast, but basically the podcast is usually me and Sam who is not here because he's traveling. He's actually in Portugal. Right now. We just saw are usually spit, they were both Founders. Both recently sold our companies in the last two years. We started the podcast went after we sold because that's when you have a bunch of time on your hands and and it's usually just spitballing different, kind of like business opportunities Market opportunities, and so just stuff that we see that we think could work.
Is
interesting, but we're not going to go do it ourselves. So this became our Outlet to do that. And so you get like we have like, I don't know like over million downloads a month and those Pete, what the people who listen what they're doing is they typically are either like they want to start a business but they don't bear. They have like a good paying job and they're looking thing about making the leap or they have their own business. And this is like they're doing this while there, you know, doing their chores and it's like I get to hang out with my buddies who are shooting the shit about business. Because like, you know, we talk about stuff that they want to.
Talk about they just don't make me have the friends around them that want to talk to nerd out about business all the time. And so we kind of had that same thing where you needed that intellectual sparring to to feel good. But the thing you mentioned which was like, you know, you sort of 11-game you're doing well in one game, but you decided to exit the rat race. What was that? What did you have? Like a kind of come to Jesus moment? What did you have like a? Was that a long time coming? How did that happen?
My meta-narrative is the game is life itself.
The game is not money. The game is quality of life and how you live it. So that was always my objective. So, when I was on the tube in London, at 5:15 in the morning, to get my, get to my desk at Goldman before, six.
The reason I did it is because I knew that the next thing I want to do is go and live in the Mediterranean and wants to have that quality of life, you know, for me, a lot of people think of money as the primary objective actually like houses as you can tell from the house behind me, right? Because this is where I live. This is the quality of life. This is my bank. This is everything. And so I like where I live and how I live that's why I live in the Cayman Islands us while lived in Spain, they're beautiful places and I live a quality of
Life, so that is always been my journey. But what I want to do is I always take steps towards the end game. I kind of live in the future, always in everything I do. So, I always have a vision of My Future Self or whether that future state of financial markets, where I think it's going, whatever it may be. I'm always well ahead.
And so I then can look it's much easier to live in the future and look back and say, how do I get here? Then stand here today and go, I want to go forward. It's kind of weird. It's a psychology thing. And so I had realized that the Mediterranean, was this life and I was my ex-girlfriend. When I was at University, her mother lived in Majorca in Spain. And I was there in Majorca one point and we were on the small Beach eating grilled.
So it says this perfect Mediterranean Sea, right? Grilled sardine, somebody's making the big oil drum on the beach. You've got a cold beer, some grilled sardines. And on this little mini Peninsula is a bunch of pine trees and palm trees. And there's this long table of like 30 people, 25 people of different age groups, parents kids, grandparents eating paella, the Spanish national dish on this Sunday, drinking wine laughing. I'm like that is quality of life. And so I kept that in my mind.
And so I can't have facilitated it to happen. That I would move to Spain. Right? And I did it in steps as well. So I did it in the step that I was speaking to my father. I was having dinner with him and he's like, and I was just chatting every glass of wine. I was like, you know, I'd love to buy house and spend at some point and he said the I've Got Friends selling house in Spain.
Random thing. So I said sure. Well, let me know. So he sent he this isn't the day of faxes is like 1998 or something. He sends me a fax of this six bedroom house on a hillside in Spain and what that's great. Dad. How the hell am I supposed to afford it? He's like I was 30 years old as working at Goldman. He's like, well, I don't know how much it is.
So he came back and said it was 150,000 pounds, which at the time was like, 250,000 us 200,000 us, and I just had a bonus and I felt like I should buy that in cash and I did, right? And it was game-changing, had a mortgage in London. Everything else. It's game-changing because now I'd won the entire game. I've got a six bedroom house on a hillside in Spain. Overlooking orange groves, 10 minutes to the beach and I could lose my job.
I could still have many things and I could work in a bar and I could live there. I'm done, right? Gain, your life was one. So that was the marker Stone to allow me to take more risk to do the next thing. And so, that's how I've always done these things.
And how do you get that Vision? So I'm the same way. But I've noticed about myself is, like, every I call them like this chapter. So it's like every sort of like five years like a new chapter, and what I've noticed, if I go look back at the kind of last three chapters, so I'm 33 about 3:30 4:00.
Basically, you know, three chapters. I've done three chapters now, and each time. It was sort of this like fortuitous bounce where I get in touch with somebody. They show me a glimpse into this lifestyle or this kind of like mode that they're in and then I just can't unsee it. I'm like, why the hell am I not doing that? Right? It's your version of seeing people even buy a drink of wine at a 30 person table. Just enjoying life on the, by the water, and you're like, that's the glance. That's the Glimpse I needed to do it. So, is that how you also got your vision for the next? For the next kind of like
chapter?
And so the next thing was not so I'd been in Spain and I realized thing I was missing was intellectual Capital, even though my clients were the world's most famous hedge fund managers, you know, all of these super smart guys, but they weren't around me. They're all around the world and it was not as easy to get in touch. Twitter wasn't really around. You know, there was less ways to be social online podcast didn't really exist. Right? So and then I think I probably discovered.
Tim Ferriss.
And another friend of mine mark heart has gone down this journey of looking at Silicon Valley and Entrepreneurship. And that was the thing that I thought. Okay. This is the next thing for me. How can I, how can I take the entrepreneurial Journey outside of, you know, setting up my own research business which was a one-man band. Essentially. I wanted to take that entrepreneurs journey and push myself. I want to see what I was capable of. So that was the next. That was the next thing
you get people said, so you're at Goldman. That's a good job. What do you make in back?
You know basically like what was your kind of like? Because I think for a lot of people, they're like, okay some people feel trapped when they're, when they're making a high salary on a nice company. They feel trapped. They don't, they don't take those leaps and other people will look at this and say, well, it's easy for you. You probably making a bunch of money at the time, you know, so, yeah, you could take these leaps of Faith because you had kind of a safety net. So, wave wind the clock back. We're talking almost 20 years ago or something like that. You know, how are you doing financially then versus, you know, at those two
It's kind of like probably search firm and Goldman.
I've been really lucky. You know, I worked in the banking industry.
Selling derivatives to hedge funds, right? So, these are the mega trend of Finance the mega trend of derivative, and the mega trend of hedge funds. So, I, you know, I was doing pretty well, you know, the 30 years old. I was only earning more than a million dollars a year. So, but
you managed to walk away from that, which is pretty
impressive. Yeah, and I first went to a hedge fund, don't forget. So I left Goldman went to hedge funds. I took a risk, but I used to argue with my boss, every time he used to give me share options.
And restricted stock. I'm like, thank you. It's worthless. I'd rather have cash because how dare you, you should be proud to have equity in Goldman. And that's why we can give you so much more compensation. I said, it's worthless. He said, why do you say that's a because it's not money, I can spend. So he got really pissed off with me. And then when I finally quit to go to my biggest customer and the biggest customer of Goldman's Equity derivatives Equity desk.
It's higher Equity floor in Europe, GLG partners. He then called me into his office and goes Braille. You were dead. Right? It was worthless said, so I lost all I'm going to cash in some of it but I lost millions of dollars to make that move, but I wanted to make that move because I wanted to see whether I could. If I could run money, myself and be a macro investor because it was another chapter that I wanted to pursue for my own goals.
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And then let's kind of fast forward till today. So you came on my radar. I think I'd seen real Vision a few times but I hadn't I'm not from the financial aid from the Silicon Valley Tech world and you know, so we all kind of have our like media sources that we learn from based on whatever industry you care about. Right? And so I had seen it but I hadn't really paid too much attention, but I saw you start talking about crypto and this was you. I didn't realize that you had actually started talking about crypto back and I don't know 2013 2014 and I went back and
Read your old kind of like memos and the stuff that you put up screenshots about. So, you know, like you said ahead of the curve, you have the receipts to prove it, but I think it was 2019 or 2020 where you started becoming very vocal and then you made the Big Splash where you were like, I've moved some ridiculous part of your liquid, net worth. I think it was. I think you might have said 50% at one point. I thought you heard. You say, 90% into ungrouped. Yeah, 100% into crypto. And so that caught my attention and attention.
Of a bunch of other people. And so, you know, I know you've talked about this before but this a new audience will give you kind of the origin story of how the mind virus of crypto. Kind of like, what were the steps where you went from, like, Curious to convinced. What was that Journey like for you, where you put in ninety percent of
100 players. My job is to live in the future. So I have got I have lived through the financial crisis and predicted it. I had also lived through the European crisis and predicted it and have been in Europe and had to buy a generator.
And food and get cash out of the bank and keep it at home, right? That's how close we were in Spain to losing our entire banking
system. And as a
macro guy, I knew the issue was leverage and leverage had meant that we had a unique problem which was
there's a layer of collateral and all of this debt is against the collateral.
And usually you've got like 30 claims on the same piece of collateral. In fact, the average US Treasury has 32 claims on it. We did them may have more now. So, therefore who owns? What in an unraveling, you know, who's going to get screwed?
And thus, The Leverage was you talk about government or corporate or where, where did you see this pasta style of things harder. I look at
total leveraged Financial system, leverage government, leverage household, leverage and private sector Leverage.
I sort of four hundred eighty percent of GDP. Now, whatever stupid number is right, it's ridiculous. But the problem is that a lot of claims on the collateral. So because not everything is collateral in the system, only some things used as collateral. Anyway, so when Lehman went bust, right? Everyone scrambling to find who owns what. And you know that happens all the time. So I started trying to start the world's safest bank with a bunch of family offices. I thought, you know, we could say a bank that doesn't use leverage. So then people can put assets their their savings, their
And realized they're safe because it wasn't safe. People in Cyprus had all of their money taken out by the government. So I'm like, okay, I need to do something about this and I can do something about it. So I started that journey and a friend of mine called a meal Woods. Who is a subscriber to blow Mac investor? Who is running a hedge fund of the time index, Goldman guy. He said, you need to look a bit coin and I'd read a bit about Bitcoins probably 2012 and I wrote the first macro piece on bitcoin, which is I think the
You referred to as 2013 that's just like I saw it. And thought, okay. So we got two things here. One. Is this asset Bitcoin and that's a scarce asset in the digital world. So that's probably interesting. And secondly, we got blockchain, which is a recorded ownership of everything. Okay? Well that solves the entire Financial system, and this could be something useful for the financial system. In itself is a new version of gold. So I backed out that the fair value of Bitcoin with gold at 1300 using the kind of Supply stock to flow.
Done badly, you know, I know you know statistician or econometrics expert but I kind of back to that so it's probably worth a million bucks. And then how I like to look at things is. Okay. What's the price now? $200, let's assume probably rightly. That rail is a total idiot. So let's assume he's wrong by 90%. So it's worth a hundred thousand dollars and it's at $200. That is the best single bet of ever seen in my entire life. So I bought it and I wrote about it and they held
It all the way through
till and when you say you bought it, that's like a like the first time I bought Bitcoin. I bought like I don't know, a thousand dollars a Bitcoin, right? So I bought it means what like you bought a tiny bit, you bought a medium amount or you went like you put a significant stake for yourself into it
decent, a decent enough amount and I sold it after a 10 x. So, I've done well from it. Sadly. I got divorced in the process. So I have that. So there was my tax, that I don't pay my Cayman
Island. I
chose a voluntary 50 percent tax.
So, you know, it wasn't a life-changing bet but it was a it was good back. Now, how do I held it on to 20,000 when it peaked? Yeah. Would have been life-changing. So, okay. So I've been in it. I got out. I was nervous about all of this for King Wars and everything going on. And I don't understand this. Let's wait and see and then I had talked about it a lot, analyzed it been involved in it, but hadn't been investing it again until 2019. So I'd stick my toes in again because the mark of been selling off, I
starting to get comfortable that. Yes, then we got a recession coming. This is gonna be a useful tool and then 2020 comes along and I was already positioned for a recession. But you know, this opportunity was like okay if the central banks are going to print like crazy then that's the opportunity. So I bought a lot of Bitcoin owned at that point. I was long bonds.
Gold dollars Bitcoin. And then over time I started charting Bitcoin versus other assets and I realized its dominance in performance was so extreme that it made no sense to own other assets. Even with the fact that Bitcoin can be very volatile and have periods. Like, now it's down 50%, It's like, it makes no sense to own anything else. Now. I probably will take other bets here and there, but I think my core strategic hot. So I was Bitcoin first. Then I started
In the work, I was on Twitter, a lot and people. If I were to ask anything about aetherium, people would pile on to me. That makes me want to know more. So I start digging in, has the opposite reaction and you what about etherium? And, you know, but I started properly digging in and I thought, you know, this is really bloody interesting. The chart looks incredible chart versus Bitcoin looks incredible. This makes sense to me, so I started switching
Into a theorem
and when you say the chart looks incredible, so tell me what that means. So I've like I said, come from the tech world. We look at charts all the time, but they're always like users Revenue. Things that sort of like are not based on spec. You're any kind of like speculation about human emotion, whims human emotion. Exactly. So, you know charts, don't lie are, you know, they do if you but unless unless you know what you're looking at. So when you talk about charts, I've
Peter, I see people like do this all the time on Twitter where they're like, you know, it's voodoo magic, they see a chart then they draw this like crazy shape. Clearly. This is doing a reverse Cyclone pattern and it's going to go all the way up. And so are you one of those guys where you actually do the technical analysis? And you say no the price chart is what I'm looking at. Or are you looking at other charts? I'm
both. So I'll come onto that. So price chart I think is the best guide of what the asset is doing. What its trend is how it how people are perceiving it and where it is.
His, what you might perceive as fair value. So okay, you know, you notice certain characteristics, like crypto tends to be exponential in price. So you put on the logarithmic chart, it starts to make sense. You know, you look at things like copper and lumber they tend to be mean reverting assets because you they get met by excess Supply with high prices lead to excess Supply. So right now with oil and 100 bucks, everybody wants to make as much oil as possible. So, the price comes down, over time. It doesn't happen with crypto cause you can't write. So, you need to understand the structure of markets where
A sense of an is, is it overly bearish like day? Like today? He got overly bearish and so suddenly, you start to see a reversal. So, these kind of things are interesting, but my big Discovery and why I really started loading up on etherium was another chart, which was a understanding that metcalfe's law was the primary driver of all crypto markets. And in fact, almost all of the tech stocks that we've known today. And once you realize that
These are basically networks. And once you realize that crypto our networks where you actually own the network, so Facebook is a great Network stock and it works. Perfect. Analog chart and is an exponential. Does. All the things is you imagine. You can value it in metcalfe's, law terms. But the fundamental difference is shareholders and network users are not aligned the shareholders, make the money, the network users get the utility.
Along Comes crypto, you've not marry that the network user with the owner. Okay. Now you've got Network a pet fix upon Network effects, like behavioral
economics. Right, man. I think a religion meets metcalfe's law, right? It's like yeah, it's naturally happening. Now. I'm about the thing. It's
religion makes capitalism. It's basically what it is, right? So that is incredibly powerful. So I start looking at the fact that Bitcoin and etherium
Charts, just at different points. When they at the same point in the top stock will remarkably similar and then it dawned on me, is they're all the bloody same thing that all about adoption. So then, so, so if you look at it, and if you're honest with yourself, if Theory, mm, if you think about metcalfe's law, it's about the number of users, and then the kind of connections between the users and the applications built to create those connections. Well, Bitcoins, kind of a wobbly. One-sided one, which is a bunch of people own it as a store of value like go.
Nothing wrong with that, but there's not many applications built and when you look at a theorem, it's like holy shit. I mean, this is like the internet, right? That moment is like, okay. This is far superior bet. And so that's why I took that bet and then I eventually shifted majority into aetherium and then took other bets in the space to express, macro views.
Yeah, it's funny. I have one-tenth of the intelligence of you, but I did the exact same.
Pattern. So, you know, I heard about it in 2013, bought a little bit, dabbled sold during when you know, I went I went to a wedding and my aunt was telling me about how great Bitcoin or three moles. I was like. Oh, that's probably a bubble 2017 2018 sold for a nice profit was patting myself on the back, you know, in retrospect were straight. I ever made should have just held everything, you know, bought started buying back in in 2020 in 2019 or 2020. I kind of announced that I've had moved 25% of all my liquid net worth into the thing, but that
It was right before, you know, another know the run-up. And so that became quickly, 5060 percent and, and, you know, peers and some people are telling you you're crazy. I'm sure you had the same and same thing. You know, why are you betting on this? Are you just kind of speculating? And I said no, like basically I spent my whole career studying the power of network effects, right? I'm trying to build marketplaces and social networks in Silicon Valley because I know that a network effect is the most powerful force imaginable and and then I see this chart, this adoption chart of this. Much new Money Network. I said, well, if the
If the if the social network was worth X, and the information network was worth why. And then the, you know, Fitness Merchant Network, which is like, you know, basically Amazon it was worth, you know Z, then this thing is going to be the Money Networks going to be worth a lot. I can tell you that and so I was like didn't know much more than that, but I just knew if you can bet early in a network effect. That's still going through its kind of like excellent, you know adoption curve, you know, you'll do pretty well. And so that was kind of my my bet.
Coming from a completely, you know, sort of a different different take but ended up in sort of the same conclusion. And I remember being impressed that you were talking about Network effects as I didn't really see a lot of people and kind of traditional Finance talking about that at all and they're missing the point, you know,
really one of the first people to really start saying, unless you understand Network effects. You understand what this is at all because everyone was able to find weird
because people people listening, maybe don't know. Now, we're going to sew so to Define it Network. Effects is describes this phenomenon where let's just take
Take, you know, a language. If I'm the only person who speaks English English is not very useful. Same thing with a telephone system. I'm the only person with a telephone is not that useful, but now another person gets a telephone or learns English. Well, in English, just got more valuable. And then the more people that learn English, the more valuable English is as a language. And so it's described as phenomenon that every participant that joins the network makes the whole network more valuable. So it's like the opposite of like a popular nightclub where everybody who joins makes the thing sort of, you know, diminishes the popularity.
Overtime Network effects. Typically described that they it gets more valuable at it Square, basically, as exponential, not linear. And then, if you
think about the in other terms is, let's say, let's say, let's look at web 3 as a network, and a network of Engineers engineering Talent, right? This is where it gets really interesting. Why is it exponential is because there are Parts when everybody's trying to hire web three Talent, right? We are every single person I know is right? And the actual pool.
Of people are capable of doing. It's probably like a thousand,
right? And they're also multi millionaires who don't want
jobs, but that's the point is their salaries and the demand for them is exponential the demand for the network. Of those guys becomes exponential over time. They'll be millions of train people and it becomes the network effects. The overall space is very valuable, but the opportunity that ramp that's the single most important interesting part of network effects, right?
Look like that. You can own a share of the network. So even when the network flattens out and is now worth, I think 200 trillion dollars for the digital asset space is currently two trillion dollars. That's 100x in market cap. That's huge. We've never had anything like this
before, right? Like when the when they first, when the information network was getting built out, which is just the internet and it was pretty clear, like, slowly. But surely people were adopting, they were getting online and then stuff was getting built stuff to do. And then everybody who's online made made being online.
Better because you could communicate with them or they might write a blog or whatever. The whole internet was getting better. The more people that joined right? That was a network effect, but you couldn't invest in the internet, like you couldn't just invest in generically the internet. And so you had to pick, you know, certain platforms and even then how do you become an unless you believed in Amazon or Ebay or whatever? You're only getting a slice of the total internet and even then they don't want, you know, the average person could not invest and that to
me, it feels like and of teas right now.
We want it all. Get involved in at ease. You have no idea what's gonna
win. I mean, I
mean, you don't have the ability to go and every Discord its bandwidth constrained. We all are in this space. We know it's huge. We all know it's huge. We also know it's a bubble. We also know tons of this is going to 0, that's fit.
What's interesting about only youth gives you, that gives you the action of
entities, the kind of, you know, that that kind of makes sense. Like owning Oracle did a pretty good job of capturing the
That right? And so, you've been now kind of following this. And so what is, what is a Viewpoint you had about crypto that you have changed your mind on or you what you believe before. Now you realize this sort of wrong and you think about it a different ways, or any as a been anything, as this kind of, you know, it's kind of like this rapidly evolving thing. You're sort of like d, fogging, this like brand new world, you know, so, you know, maybe some mental picture, you some mental framework, you had before.
Hasn't really held up and maybe something different is happening. It. Can you think of an example of that?
My
views on bitcoin changed significantly. I don't think no less of it as an asset, but I thought about it in network terms and the community and I thought the community is not attracting new people and the job of a network is to attract new participants. And if the network was actively rejecting people, I thought going to underperform which was surprising to me, because I was very bullish on bitcoin first because I thought look, it's going to have a larger place. And what's happened is almost immediately and it made me change my mind.
Is the institution start going? Well, I actually don't like this space and they started buying eith.
And that was a so that's that's new. I haven't really heard that. So tell me about that because you're connected to all these folks right? Like, you know, they just fun guys cios. What do you know, a bunch of different people in that world
have fun. Stay poor at each other and putting laser eyes, right? Makes them look fucking stupid and irresponsible with their money. Well, eith feels like it's a technology play. Yes, it's amusing because everyone's saying GM to each other and all of this stuff, but it's not at War while Bitcoin was at war with every other network.
Work. Because that's what networks. Do, you know, religions, go to war with each other for the same reason right there exactly the same principles. So, you know, it's the same reason Russia and NATO. It's that they're all time. They're all networks fighting each other for the robustness of their own network. I get it. So that that that whole process of seeing and students getting turned off by, it was a it was a big deal to me. I just thought. Yeah, I don't like this either. So that was one thing I'm trying to think.
I've been seeing a lot of news about institutions buying Bitcoin, whether it's Tesla or microstrategy or Square or you know, some like, you know, random insurance company buys a hundred million dollars worth of bitcoin. So we've kind of heard those, we hear less of that with Edith. Is it just going on under the radar? Is it coming? What's your sense of that? Because I haven't, I'm
in this mess right ton. It's happening below the radar because people keep coming to me saying, when's this wall of money? I'm like, it doesn't come as a tie.
I'll wave it comes as a flow, right? You don't see it until you look back and go. Wow. So I mean, I literally every other day I'm speaking to the world's largest financial institutions who put me in front of their investment committees and talk them through crypto and how to invest and the narrative change. It really surprised me. It was always Bitcoin, you know, can we put picking up as she has to invest in Bitcoin? What's the diversification move very quick to look a. Theorem feels like it's a technology play that makes sense.
With the applications, we can't were interested in D5 excetera. Then it very quickly became oh shit with. How do we get involved in web 3? So it moved very fast, which is why in the NVC got most of the money because they saw the broader opportunity. They all came through the 20/20, lens of Bitcoin is the asset and the other the Michael sailor root and even me, you know in the early part of 2020. A lot of people came in that and then like all of us, they kind of go
Oh, wow. Okay. This is much bigger. So, you know, I've started a fund of hedge funds which is investing in crypto hedge funds. To allow institutions another way into the market because they don't really want to buy just ithil Bitcoin. They want exposure to this two trillion dollar asset classes going to. Go to 200 trillion over the next 10, 12, 15 years. Whatever the number is. So hedge funds are pretty good for that because their job is to manage the exposure and, and to capture the to capture this big move. So,
So, you know, that's another way that it's coming in. That people don't see, you know people it's not all about the Bitcoin ETF. I don't think that's going to move the needle as much. It'll be positive, only in a positive
Market. Yeah, the way you describe yourself. It's not one giant wall of money, like most things, it's not, you know, a single moment in time or just goes from from, not here to here. It's like a more like a Cascade of dominoes and every day you hear something. It's a that's another Domino that's tipping the next Domino.
Each one influences, the next one. And then you sort of, once you tip it off it, which is already happened. It just takes a matter of time until the whole domino said it runs through, and it's all
yeah. And I'm seeing institutions using this weakness and not being frightened by it. So that look, this is fantastic opportunity and need to use this. I get it the volatile space. They understand the people who are trying to put Capital work, understand.
But once the price starts going up again, then you'll see the Stampede right? You know, you know if Bitcoins at 65,000 or 70,000.
Then people say, okay. We've had all year long, correction. It's now going up. Next phase is going to go to 160,000 right? And they'll be in and they'll be in and we'll be a mad panic because they've all been doing the work over the last year and a half. So they'll be like we've got to get in now got to get in there because if they don't they miss the out performance of their peers who have got
it.
And what do you do with your you? Like let's put it into D Phi or you're earning interest or yields. What you put in an it away. Don't touch it.
To remember that story of the house in Spain. Once you win something. Don't let somebody else take it away from you. It's a simple as that because if I was staking I get what five percent yield or if I'm really clever and I'm mess around in deep defy. I'm getting like a 15 percent yield.
I'm going to get rubbed or something goes wrong, or it's on an exchange of gets hacked. I just that's not the risk. I want to take it's not worth it. If my expected future return is, you know, 10 X, Y, take y, get a five percent yield. It's nonsensical. So I just don't know
why I tell you exact is, basically why take a, even if it's a small chance of multiplying, the whole thing by zero, you know, that's, that's not really the best to make. What I do is I take a very small percentage. I say this
Is my learning budget like because I, you know, basically, if I had done that with Bitcoin, I would have just sort of sat on my Bitcoin, never touched anything else. And I said, well, no, actually it was quite useful to start playing in aetherium, fairly early on. And similarly, now playing and defy or nft is you take a learning budget and you say, look, this isn't the principal. This isn't the one that's going to make all the money but this is also where I get to continue to play the game and understand how this whole thing unfolds. Yeah, and I
I've never been interested in yield, even a financial Market, all the old stuff is boring to me. I'm a I'm a guy who likes the Capital game room and different people, right? There's a whole bunch of people who love yield cat is called yet Perry and financial Market. They want to get Kerry and others want to go for performance and they're two different equations in the carry guys. Do really really well until they blow up and the guys like me tend to do mediocre mediocre and then make huge things. They're just different ways of skinning, the cat, right? So I
Spent my time because we don't have enough mental ability to focus on all the things in the space. So I started going down a different Rabbit Hole. I saw 10 ft is I understood it, mainly not all of it. Understood the yo, that the macro view of what these things are and how big this is. I wasn't really that interested in these communities. And grabbed a
give the, give the, here's my understanding of an FTE because I think, like, you know, the third most Googled question is like, what is it?
NFD. So so, you know, even people who like hear about it, maybe even own a couple but they don't have a great frame and I think you're very good at framing things. And so give us your current frame of entities.
So if they re mm, introduce the piece of magic in a smart contract,
A smart contract attached to a blockchain means that any contract in existence can now be attached or blockchain.
And smart contracts allowed an algorithm or a calculation to be made automatically in verified on the chain.
So that could be your insurance contract for your house. It could be any of the contracts. I mean, if you look around, you almost everything that we have in life is a contract, whether it's a spoken contract, written Lee me appearing on this together with you, is a form of contract, right? So, all of these things are contractual relationships, are everywhere. What this was saying is, we can record all of them and verify all of them. Okay, so, that's a really big concept Beyond which most people understand. And you can understand that, okay, if that's the case, then,
House can go on a blockchain. Yes, because the deeds and then you don't need a notary and then you don't need lawyers that there's all of this stuff most legal stuff can actually go on this.
And then the Breakthrough is that, okay? We've got another thing that's going on in digital world, which needs solving. So, this contract thing is a big deal. We don't even know what this means yet, right? When we talk in ten years time. We'll go. Oh my God, we're going to see that coming. Right? So that's all happening and defies that this contractual obligations between borrowers and lenders. It's all happening on chain.
But what the cut, what the the average person is saying, is a different breakthrough that came out of. This whole concept is in digital world. Everything that gets digitized goes to zero in value.
Or cost everything, right? The price of data, the price of everything is zero over time.
So that's a big problem if you include living in an increasingly digital world. So how do you cement digital value is you have to introduce a system of scarcity and an NF T allows a digital asset to have scarcity. Okay break through now, it could have come from the music industry. It could have come from a number of different places. It ended up being the Art Market, okay.
And where you can say this stuff that was now was basically worthless online.
I mean, get it bought a bunch of image rights but to police it was really bloody hard as well. So ok. Now we can create a one of one of value or a number and do that. So that becomes the value of an mft, the next part of an mft that you say. Okay. Well, if we give a bunch of people, these we can now identify community.
And then these people can be like-minded communities because they coalesce around an idea which is this piece of art and this community which is born a peon club or crypto punks. So that becomes incredibly values, a membership to a club and it's your identification is showing your Rolex and, you know, it's all of that stupid identifying tribal stuff that humans do endlessly and always have and always will. So that's going on and it allows us. Don't forget the internet.
Had taken us from our towns Villages families, which is our social structure and thrown it into a big shouting room from people around the world with different views, right? It's quite exhausting and we all wanted a place.
And what this is giving us is these little digital communities, sovereign states, Villages towns and cities where we can Now operate with civically minded people within that. And these tokens are the identify social tokens of the big thick. There's they're not come. They've only just started that's much bigger. I think than even nft Czar. But let's start with this because this is a way of coalescing humans, because humans, like these kind of identification system of shared values.
Kind of stuff. So, nfc's were a lot of things. That's why they're so big. And again, that's just scratching the surface of what this is. It's Your it can also and will also be your digital identity online.
Right now. You said something about music and I saw you Tweeting about music and kind of the future of Music royalties, or like how anybody can become an A&R, you know, person now describe what you kind of what you're thinking there, because I think that will be fascinating to a lot of people because music, 81 of the music like art is a great.
Entry point for a lot of people whereas, you know, macro investing is deeper in.
Correct. So, what is the world's most vibrant communities? Its Sports and its culture? That's fashion brands, fashion brands, more than any others. It's music. It's art. Its these things right culture. The big unlock here.
Is, if you can tokenize communities, which is now the network owner is the same as the network user. Remember that Facebook example, right? So, now, we've got pop star and token holder. They're all now joined in the same network. So now, every incentivize to grow the value of that Network, you've now made culture and investment. This was not possible.
You could take a cultural marker like an added a sneaker, but you weren't making money from address. You had to buy the shares and there was no connection between the consumers. There was no network of added as users. Now. You're about to create networks, amongst these people. So what is the value of lvmh, the fashion company, right? With all of its kind of Mega brands that people are passionate about their status symbols, that humans, like we've just talked about love these things. So the same with music, right way.
All tribal in music. We love different music. We like different bands. So to be part of that Network, I could now be a 16 year old kid and never have to have a job because I happen to get involved in the right and good at finding the next pop star. If I buy their social tokens, or I invest in this song. I pee on FTS, right? I'm in business. So what this is creating as a system I think is universal basic equity.
Where culture is the investment? They're not living in your and I world where they're building businesses and having to sell them and go through the entrepreneurs miserable Journey. They don't have to do that. They do a different way, which is by using their human instincts about the communities. They want to be part of and which networks are going to thrive and music is so powerful because it's human emotion and people. And it's it's a place in time and I remember I'm a huge music fan.
You know, I didn't time music by its year, what I was doing what it smelt. Like what I heard who I was hanging out with, I mean, everything right music is, is one of those anchoring things. So, just the ability for musicians to now, sell directly and have a direct relationship with their fans via social tokens. And N FTS is literally a game changer. I mean, there is no way on Earth. Snoop Dogg would have been able to sell something in small numbers and make fifty million dollars.
It's just not that big a star because record labels because 80% of all the economics of selling music gets taken by middlemen. So he'd have to sell a huge sum to do that.
Oh, he'd have to go and tour and to make fifty million dollars. That's a big exhausting tour. You know, he's no spring chicken anymore. These things are, you know, it does the music industry economics got destroyed by middlemen and it made the artists have to work harder. Take more risk with capital, which is like having a massive tour. Have to read and Rena's and take these trucks. This changes all of that Dynamic. And the metaverse changed. It one stage further.
Yeah, I think the artist had to create scarcity, which was basically come to my concert. There's only X tickets and that's how you can see me. And then they also created status which was take photos of yourself at this concert post that online and that's a big part of the value that you're going to get out of out of coming to this thing. And then now we have a digital version of that image is. And
so when all these people spoke to each other, the fans, they'd have to go on a Facebook group and Facebook monetizes
them. Right? Right, and
if they want to go on tour, then he's gone.
Facebook and Google and pay everybody. But when you've got millions of token holders, you've sold out 50% at all, you've dearest everything in minutes. It's just it it stops. You having to use middle
mental time and you talk about two different things. There's like the sort of like almost like the Thousand true fans, you know concept were basically an artist can drop something that's rare and exclusive or access to them, or their Community, their fan club and the it gives the whales.
You know, something to go by that. They would you know, that they're they're actually willing to buy for more than just a t-shirt. Now you give them something worth buying and so that's that's one thing that you could do with it. But the other one is which time about buying a stream of rootless, part of the royalty, right? The part of the royalty stream. And so that's where you know, I remember, I don't know. I I remember finding Macklemore the the artist when he had like, you know, whatever 2,000 fans and I was like, this guy's great and like if I had actually been able to bet that this guy's great.
Therefore be a part of his community. He views me as a backer and True Believer and I did I remember I kind of did a Kickstarter with him or whatever. He pre-sold his album and I just gave, you know, 30 bucks because yeah, go use this to help make your album, pay for some studio time, but he didn't know me. I didn't have a relationship and I had nothing to show for being, right? And and so now in this, in a world like this, where the 16 year old kid can say, I think these guys are going to be great. Their price is cheap right now and I could buy, you know, some of their future that's achievable.
Even more magic because that 16 year old kid because he's now financially incentivized to grow the network and make that song success. It also makes for a hundred Tick, Tock videos.
Yeah, exactly. Right.
And if you multiply that, by all of the token holders of those IP rights, they're all marketing free for you because they get paid in the upside. It's genius.
Stop. I mean, think about it. Like, you know, if you doubt what you just said, just think about who you know, who's
Coin CMO, who's here? Who's the chief marketing officer there? How what's their ad budget? And then how much publicity do they, who's our PR person? How much publicity they get, how much chatter, how much, you know, the ticker that's sitting on CNBC all day showing the Bitcoin price, right? Like all of this happened because you had a network of people and incentivize to go shout to the world, how great this thing is, you know, and people hate that about crypto this just people Shilling their thing. Yes, and that is get annoying and you know, you have to filter, you know signal from noise.
At the same time, you have to appreciate what that does is. It turns, every, every believer into a everybody, every
society is the same. So, if we think of everything is the same, so let's assume Bitcoin is a social token, a theorems are social token. Let's assume the u.s. Dollars or social token. And let's assume that religion is a social status token, essentially. So everybody goes the same way to increase the value of that thing. So,
The u.s. Is like, we've got military might and we're the greatest nation. This is the free place and everybody can become a president, right? That's their narrative. But every country has a different narrative to drive its value system, for its Network, because they all require incoming Capital to support the network, including the church, which couldn't have survived without incoming Capital. So they get all these people out to go and tell the word of God. They then spread the Bish around, take money in. It builds the church, it grows the network. They're all the same.
Time. That's humans that the book sapiens color goes through this a lot about how humans need to self-organize.
Yes. I am. Well said, I think that's a perfect zoom out. We can kind of even even pause or stop there. So running worship, where should people follow you on Twitter Urology. Am I, you also have real vision and people should go sign up for that. We know
keeping our interesting Crips. I really easy. I've set up an entire free crypto Channel, which is real Vision crypto.com.
It's all the Great and the good of the entire industry everybody every week. I interview like who I think are the people. I really want to pick the brains of and I go down all these journeys of social tokens and music and macro and all of this stuff. So there's so much there and it's free. Rubbish encrypt
a.com. Awesome. Alright, thank you for coming. I appreciate
it. I really enjoyed it. Thank you.
I feel like I could rule the world. I know, I could be what I want to travel. Never looking back.
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