#62 Raoul Pal - The Future of Crypto

0 (0s): So currently there's 300 million users of crypto worldwide. It's growing at 185% a year. So that means by next year, you're at 700 million people. And then the year after that, you're at a billion and a half people. 2 (18s): Hello, everybody at you're listening to Chatting with Candice, I'm your host, Candice Horbacz. Before we jump into this week's episode, we're gonna do some shout outs really quick. So I wanted to say thank you to John B for all of those cups of coffee, and thank you so much, Wesley, for all of those copies, I really appreciate it. And all of those resources go directly back into podcasting for advertising and production value. So thank you so much. I couldn't do this without all of your support. So this week I am really excited and nervous. This is another episode in what I'm calling our crypto series. I have the one and only Ralph Paul joining the podcast. 2 (1m 1s): And if you don't know who he is, he's a former hedge fund manager. He's the co-founder of Real Vision, which is a financial media company. And they offer in depth video interviews with some of the biggest names in the world when it comes to investing. So a lot of amazing resources there he is one of the most prominent voices right now when it comes to the web three and crypto space. So we are all very lucky to have this amount of time with him. So please help me welcome without further ado. Well, Paul, well, I first want to start off by just saying thank you so much for joining this podcast. 2 (1m 41s): We're all like, I know you are in stream demand and you're one of the most prominent voices I think in the space right now. So I just want to start off by saying like, I'm very lucky to have you here. And so are my listeners. So thank you. 0 (1m 55s): That's great to be here, really looking forward to this. 2 (1m 57s): So for people that maybe don't know you or your background, do you want to give like a little bit of an intro into your history and your expertise? 0 (2m 6s): Sure. So my background was finance, so I'm 30 odd years in the financial industry. Back in the nineties, I was at Goldman Sachs where I ran a big business there. Then I ran a hedge fund in London for one of the largest hedge fund firms in the world, doing macro investing, which is investing in currencies, commodities, stock markets, all around the world, all sorts of stuff. And then eventually opted out of the rat race, move to the Mediterranean coast of Spain and started writing macro economic research and investment strategy for the world's biggest hedge funds, family offices, pension funds, that kind of stuff. I was in Spain during the financial crisis in 2008, and then the European crisis when we almost lost our entire banking system there in 2012. 0 (2m 50s): And that set me on two separate journeys. I realized that those of us at the center of the financial system knew everything. We also knew the financial system was totally broken and I thought people would come up to me and say, well, why don't we know I was one of the people who predicted both of those events. You know, the people in the film, the big shorts were all clients of mine. And I sat really uncomfortably with me. It's like, what is some people know and others don't and how can I change that? So the two journeys I went on, one was I started Real Vision, the financial media business I run now, which is a kind of long form video where we give people access to the most ridiculous people in, in the whole financial world. 0 (3m 33s): The, and that's been an amazing journey. The other journey was my crypto journey that started at the same time. So I went around the world trying to start the world's safest bank with a bunch of these kinds of wealthy family offices. And it's a slightly hubristic thing to do to think I can go and start the world's safest bank, but I thought I'd give it a go. And it proved pretty hard. You know, we went to Singapore, Switzerland, the U S all over the place trying to do this. And somebody, one of my clients tapped me on the shoulder and said, you know, one of the answers, the entire financial system is Bitcoin, and this was 2012. And I started doing the work on it. And I first invested in it in 2013 and probably wrote the first ever piece on it, the kind of macro economic analysis of Bitcoin and where it could go and how to value it. 0 (4m 24s): And then cut forward. That journey is that those two journeys combined when we launched Real Vision, I think the first video I ever produced was about the role Bitcoin will play in the future financial system. That was 2014. And I kind of been part of that mission ever since is a, the system's broken, be people need to know about it and see here's your solution. So that that's what I've been doing. 2 (4m 48s): Well, it sounds incredible. I feel like I'm late to the party a little bit. It took me a while, I guess, to find interest in like true curiosity and what's happening. And the more that I dive in and the more that I learn, it just seems kind of like the new version of like the Oregon trail, which is like, we're all pioneering and there's some risks. There's a lot of uncertainty, but the amount of this new version of freedom that kind of comes along with it as well as like financial opportunity just seems like I don't want to miss that. So I'm trying to learn as much as possible and just try to spread that information as best I can. 0 (5m 26s): We're all on that same journey. So if anybody tells you, they know what's going on or where it's going, they're lying. We don't, it's all new. It's the fastest adoption of any technology in all human history. So the internet was previously the fastest adoption of any technology. This is growing at twice the speed. So currently there's 300 million users of crypto worldwide. It's growing at 185% a year. So that means by next year, you're at 700 million people. And then the year after that, you're at a billion and a half people. So what's amazing about it is yes, it's amazing the technology and web three and all of the power, it gives back to the individuals and all of the great stuff. 0 (6m 12s): But the big difference here is by owning the tokens, you're being part of the network as well. So you can not only get the benefits of this new system in a social sense, but you get it in an economic sense too, because it goes up in value. It's like, it's like finding Facebook back in 2010 and being given shares in Facebook that everybody who used Facebook had shares, it would have made everybody rich. This is what this is doing because you get the utility of all of this and you get the financial benefits. 2 (6m 45s): Yeah. And I think a lot of hesitation for people that maybe haven't adopted it yet is, is just ignorance. Right? And we kind of run away from things that we don't know cause we don't want to look stupid. So that's why I'm here is to look stupid for everybody, for my audience and just to learn. But I think it starts with understanding like what is money? And I've heard you talk a little bit about this when it comes to like currency debasement because what I was always taught was you just put you save money, you just put it into an account and you watch that number, get bigger. And then hopefully whatever the day comes, if it comes that you don't want to work, that that number will support you for the rest of your later years. 2 (7m 26s): And then the more than I'm learning, I'm like, well, that doesn't sound like a very solid plan. And that's also not. Risk-free like everything comes with risks. So I would love if you could kind of explain, I guess like currency debasement and why maybe investing is a better idea than just hoarding your money in a savings account. 0 (7m 47s): Yeah. So the, I think the best examples of uses for the millennial generation. So anybody's kind of under the age of 35, so 25 to 35. So most millennials are now in their early thirties and in their early thirties, they look at the world and they look at that income and you can't buy a house. And the stock market is expensive. It's an all-time record valuations and the bond market and all of the investment world is incredibly expensive. And so you're stuck where, okay, you start saving a few hundred dollars a month. The problem is, is there's no interest rates on your money, so it doesn't grow. 0 (8m 30s): But meanwhile, the cost of everything gets, goes up more. So you're actually getting poor us. You have to save more and more money and it becomes almost impossible. So what is the factors playing out here? Why is this becoming so difficult? Well, we used to have higher interest rates, but because of this huge baby boom population who are retiring plus the amounts of debt in the system, interest rates have fallen for three decades now to now zero. So nobody gets any interest on their money, but we still have inflation. So the normal cost of goods normally has been running at like 2% a year. Doesn't sound a lot, but over time, you know, over a 10 year period, that ends up being 30% or so of your money, that your purchasing power that you've lost. 0 (9m 18s): So unless your income goes up or you save more and more and more every year, you're kind of behind the game, but then there's a bigger thing. So right now we're seeing high, high inflation. We're seeing inflation, you know, 8%. So then you're really behind the game, unless your salary goes up enough and you can start saving more. So everyone's behind the game. But then there's another crazy thing happened when interest rates hit zero and we got to 2008 that famous financial crisis, the central bank started using something like the federal reserve being the central bank of the United States started using a different way of trying to stimulate economic growth and save the banking system. And that was called quantitative easing, which is a fancy word to say, we're going to print more money. 0 (10m 1s): And when you print more money, you devalue the money. So to put it in layman's terms, if you are really thirsty and somebody says, well, I've got a bottle of water. So let's see for $5, you'll pay $5. If somebody gives you a million bottles, it's worth nothing to you. In fact, you pay somebody to get rid of it because it's cluttered up your entire house. So things that are, if there's too much of something, it becomes valueless or less valuable. So one Mona Lisa is valuable, a million motor leases, not valuable. And that's what's going on with money, the debasing it, which means that they are lowering the value. 0 (10m 41s): Now you don't see it very easily. All you see is that these asset prices keep going up. Every time they do this quantitative easing magic, the price of the stock market goes up and the price of housing goes up and the price of crypto goes up and everyone's like, well, I can buy less of it now suddenly, but my income hasn't gone up. That's debasement so you're now poorer. And he didn't realize how it happened and you don't understand it. And it makes people angry because they don't understand why they can't get ahead. You know, wages over the last 50, 60 years haven't gone up. And the reason being is the millennials are in the workforce with their parents. 0 (11m 23s): So you've got the two biggest cohorts of people ever competing for jobs. And then there's globalization. I, Chinese workers and Indian workers, Mexican workers, and then you've got technology. You've got to beat the robots and the AI who are taking everybody's jobs. So wages don't go up very much, but the cost of all these assets keeps going up because people are devaluing the dollar. So that's why it's so hard to get ahead. And that forced me to look at, okay, how do we get around this? What can we do? That's more sensible than what we were told because our parents were all told, save money, but they were, they had 7%, 8% interest rates. So it adds up pretty quick, but this doesn't work. 0 (12m 7s): So what I did is I started looking at all of these assets and dividing them by the size of the central bank balance sheet. So how many, you know, how basically how much the, the, the fed have printed and what you found is the stock market didn't really do much the normal, the S and P 500, the property market didn't do much. So they were just basically keeping in line with what was going on. So they protected your money, but you didn't make money. You didn't get richer. But when you looked at two things, there were the only things that made the real difference. One was technology stocks, because we live in this technological age of incredible change. 0 (12m 48s): And so those things tend to do well. But the thing that beat them all was crypto crypto did extraordinarily well, because what you've got is some forces at play. One is this digital scarcity, so you can't print more of it. So if something is being printed, more of it goes up in value versus a thing being printed. So that's great. But the blockchain technology was like a call option on the future financial system and the future of the internet. So you've got something that looks like a tech stock with adoption and has the safety of let's say gold. So that became like the holy grail. And then, you know, the speed of adoption, everything else is what's driven, the price rises. 0 (13m 32s): So that's why crypto has been such a good savings vehicle. I made a, a video on this several years ago. There's probably had three or 4 million views now on YouTube about the retirement crisis. And back then, I probably did this in 2015 or so I said, you know, if you are a 30 year old, your answer is to start saving in crypto because that is the big opportunity because the upside is so much larger. So yeah, that's the only way I see it, that you can get ahead or start your own business is the other way. 2 (14m 2s): Right? Yeah. And that's so interesting because a lot of the critics, when it comes to crypto, kind of make it seem like it's this giant scam that just hasn't revealed itself yet. But like you said, if you look at what is, what is growing and what seems to be, I guess, like the safer bet when it comes to investing it, you can't really deny you can't deny Bitcoin, right. Or like a theory them as of late. So when it comes to those two coins, because I feel like those are the most popular ones right now. Can you kind of get into like the main differences between Bitcoin and Ethereum as far as like usage and application? 0 (14m 41s): Yeah. So Bitcoin is still the big daddy of the space and it it's the O G it was the first one to launch now because of some very unique attributes, which is that it is, you know, got this very restricted, understandable, knowable, non changeable supply. So, you know, how many Bitcoin are going to come onto the market every year. And when that stops, when we get to 21 million, it's also, the way it's constructed is, is a proof of work mechanism, which means that there's lots of computers around the world, Bitcoin miners, they're called, who have to solve this complicated algorithm and it's expensive and a huge computing power. And that network of miners basically protects the network. 0 (15m 23s): So there's not a single person that validates everything. It's all of these people. So Bitcoin is incredibly secure and robust. So for a system of money, meaning for savings or collateral or things you borrow and lend against, it's amazing because it's, it's so understandable. Knowable, definable. It is slow because it requires all of this computing power and expensive to do things on. So it has not been used as the kind of applications layer is kind of the base layer of the money system, the new digital money system, if there him comes along and it does something uniquely different, it has, it's, it didn't set out to be money while Bitcoin set out to be money. 0 (16m 16s): In some respects, it set out to be an applications layer, a platform of which we could build on blockchain technology. And it's piece of magic was something called the smart contracts. So Bitcoin, there is no nothing smart in it. In fact, it's pretty dumb. It just does what it does, which is why it's so perfect. But a theory, some said, well, if we can make contracts code than almost anything in life has a contract. Me coming on your podcast is essentially a verbal or written contract over email, right? Almost everything in life is a contract. So therefore if we can record all of these contracts and make them transferrable in this new world, then we've created the whole applications layer for money, the internet of value and everything else. 0 (17m 1s): So Bitcoin is more single use case specific, but very powerful. And what it does if theory is like the whole internet. So it's a much broader thing. And so that, so that they're very different and people try and compare them and say, you know, well, one's not the other, and they're not supposed to be, they're both amazing in their own way. 2 (17m 22s): So when it comes to these smart contracts, how does that specifically, or how do you see it affecting like creators and artists in the future? Like is because to me, anyone that's supposed to be getting money off of royalties, for example, and maybe they're not, or if you take more of a, like a predatory industry, like the music industry, where the artists have kind of fallen victim to these large companies, like, do you see, do you see like a theory, them being a solution to some of those problems, 0 (17m 50s): The smart contract is the solution. So what you're able to do is you're able to have a direct relationship. This is what you're hearing. The buzzwords web three. This is what web three is all about. You can have a direct relationship with your community. So you've got a community around your podcast. Now, where do you communicate with them? Maybe it's on Twitter. Maybe it's on Instagram. Maybe it's wherever it is, but you don't own that relationship really. And they get monetized by being on that platform. But other people now in this world, you could have your own Candice token, where that unlocks the benefits of being in your world. And you now have a direct relationship with the people in your community and they will start. 0 (18m 33s): If they now have this investment where culture has become an investment, they want to hang around your culture, what you're building, and they're aligned with you. They want you to succeed because their tokens will go up in value. If the networks thrives, if your community thrives. So they're going to help promote you do all the things for you. So now you've got a much healthier relationship with your audience and you don't need a marketing middleman as much. You don't need to pay for promotion as much. You don't need to do all sorts of things as much, but that's just the start. If you're a music artist, well, right now you have to put your music on Spotify and they give you a very small few cents for millions of downloads. 0 (19m 15s): But in this case, you can find your true fans issue an NFT that gives them either the music itself or some rights for the music or an ability to get the music earlier, whatever you choose and you're giving your fans now benefit direct economic benefit, and they will pay for that. And what you're now not doing is using Facebook or Google or anybody else in the middle, you're doing your, you've got this direct relationship. You're, you're fulfilling. Your fans needs, you are building the needs of the community. And you're trying to all add value together. And that works at so many levels in music tickets. So ticket prices, what you and I pay when we go to a concert is not really reflective of the costs, because there are so many middlemen, whether it's scalpers or whether it's, you know, Ticketmaster themselves, whether it's the venues. 0 (20m 8s): Well, if tickets are NFTs, then they become saveable. Like I've still got my ticket from live aid in 1985. It was like one of the great events in my life. And I've got my ticket. But if I have that on a blockchain, it's proven that it's mine and I can sell it to you because you want to buy it from me. Or that community could have thrived for the next 30 years for anybody held the ticket to say I was there. And then, you know, maybe we get discounts to other events. Maybe we get, you know, all of the artists who are there want to bring us in their communities. So tickets become an obvious thing that goes on the blockchain music. IP goes in, the blockchain art work goes on the blockchain. 0 (20m 51s): It can be pretty much anything. Now, a lot of it is still restricted by so video will go there as well. So whole movies can go that way right now. You can't actually put a movie itself on the blockchain. So you have to kind of point to a location of that movie on a blockchain, but technology is moving forward incredibly fast. So basically this is the entire rails for everything, everything that we did, every relationship that we have, every financial relationship or relationship of value or connection with the communities that we exist in are all going to blockchain. 2 (21m 24s): Hmm. Oh man. So I have a question regarding, I guess like the life cycle of a creator or an artist. So if you're trying to get involved in this web three space and, and figure out how to monetize your community, like what are like the ethical ways to do it and then maybe the not so ethical ways because I've seen, and I know that there are some people will say, NFTs are no fucking thinks. Like that's what people are like the opponents of, of the technology, because they see these rug poles. I think one of the more famous ones was like the squid games, NFT that went belly up. 2 (22m 5s): And then you had this whole community of people that just got scammed. So I guess like the ethical life cycle of a creator to monetize that. And then as the consumer or the fan, like what are some key points to look at to, I guess, invest wisely 0 (22m 21s): As with every contract that you have is, do you trust that person, right? Who was behind the squid games thing? No. You know, you didn't know, you didn't have a relationship. So people were just looking at this looks like a cool idea to throw money at it. Difference is if you say I'm going to create a series of a thousand NFTs for my true fans, and I'm going to give them to you. And those first thousand true fans, anybody who ends up in Ft is going to get a bunch of stuff. You know, I'm going to meet and greets. I'm going to release some special contents. I'm going to, you know, have zoom calls with you. Okay? Now those things have value. You've not monetized anything. You've given it to people, okay. 0 (23m 2s): That's a first good start Because you can monetize later because then once you've got these true fans, the entities now have value and maybe other people want to join the community. So maybe you say, well, the actual size of this is 10,000, but I've given them the first thousand out. Now, suddenly the market will set a price because people will want, if you, if you prove that you're going to add value to the community, then those NFTs will have a value. And suddenly before you know it, they're trading at a thousand dollars. So now you can sell more of the NFTs to give other people access. But again, you have to keep proving that you're adding value. That it's not just an idea. 0 (23m 45s): No, it needs to be utility that we're in this together. We're trying to build something between community member and influencer or artist. Once you do that, once you see that, you know, it's genuine, doesn't mean it's going to work. No, you know, it depends whether the community grows and the benefits of good and it catches on. And if people hear about it, but that's generally how it should be done. Anybody, who's just launching something because it's meme. Sure. If you feel like speculating with a few bucks doing it, cause it's fun by all means, but that's not a, that's not what three, that's just fun. Speculation. Web three is this symbiotic relationship between the creator and the fan. 2 (24m 31s): Yeah. And that makes me really excited because you're getting rid of like these mega the need for these mega corporations. And you're putting the value where I think it should have been this whole time, which is in the creator within the artist and with, within the community. And I've actually seen some like pretty prominent public figures that tried launching NFTs and like social tokens. And for some reason or another, it just like, didn't do as well as they had anticipated. And they got ahead of it. And they were like, you know what, this isn't what I wanted. And I'm still learning too. So if you want, like, here's a refund and if you want to hold, then you can hold and we're in this together. And then I've seen the opposite, which is like, well, it's an investment and they're risky. 2 (25m 11s): So I'll take my cash and leave. And to me I'm like, why would you do that? Because you just killed your brand and you killed all trust and you can't come back from that. 0 (25m 22s): And this is why I love this because in the end it means those that look after their communities can grow the value of their communities. Those are the destroy them can't. So what happens is the communities that look after each other are vibrant and the other ones just fail because as you've said, you've trashed your brand. So nobody trusts you. You've broken that circle of trust. And so, in which case, your ability to grow in this web three world has gone down. So it actually polices bad actors versus good actors. And what happens is, is people get attracted to places where you see that they're doing a good job. You know, a great example of this is bought a yacht club at first, but everyone's like, why the hell monkey JPEGs who cares? 0 (26m 6s): This is stupid. But then they realized that they built a real robust community and then people were building on top of it because they, they allowed the IP rights to be part of the, of the smart contract. So that meant that people like Timberland, the music producer could build APM productions, which is for apes bought apes and he's built music around it. And he's created a record label with NFTs. So now you've created an ecosystem and Alamo co-brands is creating a game around it. And then eventually they dropped the eight token, which was a, because the apes are too expensive for a large community, but there were the statement of intent. This is like, this is what our community stands for. We want people to build amazing stuff. We want to be a kind of a culture media brand. 0 (26m 49s): And then the eight token meant that millions of people can now participate in that. That's really clever. 2 (26m 55s): I didn't know that. See, I'm still learning about the board aid that I'm still kind of on the fence of like, I don't understand why this JPEG is. So 0 (27m 4s): I wrote a, a big tweet thread on this, and it's also a sub stacks and look my name on sub stack. And I wrote that cause I just bought it my board eight only a couple of weeks ago. And I explained why and what UGA labs is up to what this all means, how it all relates. So it's not a, it's not a kind of idiot's guide to NFTs. It's an idiot's guide to how web three works and why this matters. 2 (27m 31s): No, I'll definitely check that out. And honestly, I think the work that you're doing is so incredible, especially with Real Vision and as you've put it like the democratization of information, because I think the big short was one of it's one of my favorite movies. I've seen it a hundred times and every time I'm like, how did no one know, like how come this information isn't just out there. So the fact that you're podcasting so much and you're giving away so much information for free. And then obviously there is some stuff behind a paywall I think is incredible. 0 (27m 60s): Yeah. And look, I'm just passionate about it. I'm passionate about, you know, using what I've learned in my career. And I've been very privileged in the position I've been in to let other people take advantage of themselves. I can see the system's broken. I'm see people are angry and I can see we're driving populism, splintering people left and right. For no reason, but people are just looking to blame somebody for why they're in this mess. So we can talk all day about who's to blame or why it happened. The reality is it is. So then it's about, okay, what is the solution? And the solution is here. It's this web three world it's crypto it's digital assets. It's this is where the potential is for all of us to leave that past behind. 0 (28m 43s): So yeah, I, I'm so passionate about just helping people understand what this is all about, 2 (28m 50s): Right. And it's such a, it's a much more positive take on a solution when it comes to like wealth disparity or inequality of wealth or distribution, which a lot of people are talking about it's instead of trying to take from people that have it's this abundant way of looking at it and it's like, no, you don't have to do that because there is so much out there and YouTube can be abundant and just create more wealth. Like you, it doesn't have to be this finite game. 0 (29m 18s): And also what's really interesting. It is both very left wing and very right-wing in what it does. Well right-wing in terms of economics. So it is pure free market capitalism yet. It's very progressive because it's all about community and how you treat the others around you and how you support that community. Now, this is the, this is bizarre because everybody else is still throwing mud at each other about left versus right. And here is a solution where politics didn't really get into it much. It does a Bitcoin level a bit, but outside of that, it's completely the opposite. So I love the fact here. We've got free market capitalism and progressive values where society matters altogether and nobody gets penalized for it either. 0 (30m 2s): You know, there's the taxation, the method of taxation or whatever it is, is egalitarian. So everybody pays their fees by using the blockchain. And that's it. 2 (30m 12s): Yeah. I mean, it's, it seems like a really beautiful thing. I would say when it comes to like the politics of crypto and this emerging technology, a lot of people are attracted to it because it's being called like this censorship resistant financial tool or investment. But so recently with Canada and Coinbase specifically, we saw them kind of doing something that, to me seemed against the whole like ethos and the whole point of crypto and web three, which is kind of that anonymity and sovereignty that comes with it. So it's like anything over a thousand dollars, you have to like fully disclose both parties and it's being traced and all of that, 0 (30m 56s): All the different view and all of this. 2 (30m 57s): Sure. Yeah. 0 (30m 58s): Go to the bank, take out 10,000 bucks. They ask you where it's going, who it's for In cash, right? So you can't use cash to do a lot of stuff because it is monitored. If you're going to try and put a large amount of money, if you're going to use cash to buy a house, they going to ask you a KYC. AML that's been in place forever. So all of us use credit cards. All of us are on Twitter using Google on Instagram. Every single thing that we do is being monitored by, by numerous parties. And our money is already being monitored and we're restricted in cash. So it is what it is. Again, you know, you can, we can fight against it, but we need to find in this world a space for government too, because if we try and throw out government, then they're going to fight us. 0 (31m 49s): And we've got a bigger fight on our hands. The best thing is to work with them, allow the adoption to happen. And then it becomes so powerful that there's nothing they can do about it. But if you try and have the fight too early, they do what they did in Canada, which is they force people to act in certain ways. But once it's too big, they can't. So, you know, and some people come at this with different philosophies. You know, some people are freedom, absolutists and privacy absolutists, but they will tell you that on Twitter and on the Instagram account and all of that is being monitored, recorded everything. So, you know, it's kind of slightly crazy because that doesn't exist in the world. 0 (32m 31s): And you know, people talk about, well, they're going to know where our money goes. They know every single payment you have ever made in your entire lifetime and the government can request it in seconds as can other third parties from your bank. So, you know, w what are we hiding from now? The movement of money. This gives us a chance of having more ability to escape bad regimes. You know, if the government is oppressive, it gives you that ability, but it's far from guaranteed much like gold gives you that ability, but it's far from guaranteed. So it's better at the margin, but everything on a blockchain is recorded and everybody can track everything, which is why every time anything, a big scam happens, the FBI and NSA track it down almost instantaneously. 2 (33m 23s): So I guess there's not really reason to be concerned as far as like, keeping your, which wallet you use, whether it's Coinbase or whether you do, you have like a cold storage as far as I guess, government regulation goes, or because that's another conversation too, right. Is regulation, does the community want it? What does that look like? And I guess, like, what are the consequences of that? 0 (33m 47s): Yeah. So in terms of bullets, there's nothing we can do about that. But while it's, you know, having cold storage wallet makes yours more secure and the ability for you to cross borders. So let's say you don't like the government you're in, let's say you're living in Russia or Ukraine and you have to leave. Well, your wealth becomes instantly transportable. So that is a beauty of this system in terms of regulation, there's going to be some sort of grand compromise. But what we're learning is that the more people adopt this before the regulation happens, the more voters they have to fight against if they're going to be hard on it. And particularly because of the demographic, it's this big millennial group, that's the big users of this. 0 (34m 33s): These are voters who would not really big voters, but now they've got an issue that they would vote for because they have participated in this whole ecosystem. So I think we're going to see a lot of pushback on, on excess regulation. There'll be some regulation, that's fine. That's the compromise. We will have to reach, but we will push back against bad regulation, reg regulation that makes it restrictive. You know, Canada did what it did, probably because it was still early in the adoption, that massive numbers of voters couldn't say, fuck you. And so over time, it becomes harder to do, although we saw that China did it, I mean, they're just huge numbers of users. 0 (35m 14s): They just said, sorry, you can't use this any longer. 2 (35m 17s): Right. And I think that's the terrifying thing, because it's like, well, what happens if that, if that crackdown does happen, 0 (35m 23s): If you store on a cold storage wallet, what we saw is a bunch of Chinese going to Singapore, setting up accounts in Singapore, and they've got the crypto. So you still got it. And it's pretty difficult. Once you leave the borders, you to be stopped being used, unless you're tracked down for criminal offenses, in which case, you know, into Poland, the other kind of globalized way of dealing with crime kicks into place. But if you're just an individual you'll free, 2 (35m 52s): Right. And then that's also been one of the talking points from the people that are pro-regulation is that it's, you know, it's just rampant with all of this criminal activity. And they're just trying to keep the consumer safe, which I've heard is kind of debunked. Like that's not really true that there's still way more criminal behavior with Fiat currency than with cryptocurrency. And then also it's like, well, we, if you really cared about the users or the consumers, finances, like you can go up to your eyeballs and student debt. And no one really cares about that. Or you can have 20 credit cards and no one cares about that. So I'm really not convinced that you care about my financial wellbeing, because there's all of these other indicators that say otherwise. 0 (36m 35s): Yeah, I totally agree. I think it's a sham. And it's disgraceful that, you know, you can go to Vegas, blow all your paycheck, but you can't buy a token it's ludicrous, or you can't invest in the VC. All you need is to tell people this is risky. You can use it, lose your money. And there's a number of ways you can lose your money. But yes, I think it's acceptable for students to have, you know, a hundred thousand dollars, $150,000 of debt. It's crazy. And then not give them a chance to make that money back it's wrong. And it's not just at cryptocurrency level, it's at all investment level. What it does is perpetuate middlemen you, you're not smart enough or rich enough to do this. 0 (37m 15s): So you have to come to me and I will help you do this. And I will charge you a layer of fees to make it possible. That's why it doesn't go away. There's too much vested interest by the financial industry, but you know, it's wrong, it's morally wrong. It's, it's doing the opposite. It's, it's perpetuating the rich poor divide. It's lowering the opportunity set for people who are either younger or less well off. And it's not fair. There has to change. 2 (37m 38s): So because you came from that industry, do you have old colleagues or old people from that space that are like, what are you doing? You're giving out all of our secrets. 0 (37m 46s): No, most people in financial markets are just smart. People who love generally, who, who love to look at the world and looking to assess change and opportunities. And most of them start to see this as a change and an opportunity. I mean, there's not people, most people aren't going around saying, well, we need to stop this. These guys are coming after our jobs. They're like, whoa, shit, this has happened. I need to get into this. Cause if not, I'm not going to have a job, but this is amazing. There are more senior people in the industry at the very top who don't like it cause they it's their business that's being threatened. 0 (38m 28s): But every day I see that changing every day, you know, I recently gave a talk and Jamie diamond was in the front row. Who's the head of JP Morgan and was a very anti Bitcoin person. He was taking notes at the front, leaning forward, taking notes. So the world's changing and people are changing and people are understanding. So we're seeing the investment banks like Goldman Sachs and JP Morgan adopting this. People are saying it's inevitable. So I think that attitude from the financial system from the kind of old guard is slowly going, because they're also seeing a brain drain of people, just leaving the industry, saying we're going to this new parallel future. 0 (39m 17s): And it's more exciting. And then the people who move made the move, people like Mike Novogratz and Dan Morehead and all these guys have become extremely rich doing it richer than, you know, the people who are in the financial system. So it's like they figure it out fast. 2 (39m 33s): Yeah. It seems like with any major disruption to any industry, you kind of have two choices, which is either adopt it and learn, or you can hold onto your old ways and die. And like, it makes me think, cause we've been watching super pumped, but it makes me think of like that transition from taxi cabs to Uber's. And I remember during the beginning of it, I was waiting on like a busy corner where cabs would normally stop or at an airport. And I'd be waiting, looking at my phone, waiting for my car. The taxi cab would come up and they'd be like, oh, do you need a ride? I'm like, no, I have an Uber. And you would just get reamed at, by this cab driver. Like you're killing our industry. You're taking my job and like just very, a lot of anger and like heels digging in because they didn't want to just adopt this inevitable change. 2 (40m 18s): They were just trying to like fight and die to keep, keep the old ways. 0 (40m 22s): Yeah. I'm lucky. It's really hard for people right now because there is so much change. We've got the system of money changing, how we transfer store value around the world in ways that most people can't comprehend. You know, your mom's going to be scratching your head going. I don't understand this NFTs. What is this? This is all right. Cause it's fear of change. She knows her checkbook and she knows her credit card. And she knows, you know, that, you know, whatever, certain things that she cherishes her value, she can't get it. Okay, fine. But that's happening at every level from AI to data sciences, to biotechnologies, to EVs and green energy, to cryptocurrencies that it's happening at scale robotics space, it's all happening at a speed of which humans have never gone through before I call it the exponential age. 0 (41m 15s): It's the fastest period of change we will see that mankind has ever lived through. And we're right at the epicenter. When all of these things are going exponential. I mean, just look at the number of electric cars from 10 years ago and where it's and where it will be in another 10 years, we'll be five times where it is here or 10 times, same with the number of satellites going to space where it's now cheap for a, you know, even a university to check up a satellite and monitor climate change, or, you know, AI, how things like Shopify have made it at scale available for people to have con recommendations for stuff, stuff that you know, you and I could never do. You know? Cause you have to be a developer. 0 (41m 55s): You have to find the right team, but it's now happening at scale and factories are just robots. Now, you know, that humans is scary. 2 (42m 4s): It is scary and it's very hard to keep up and it can make you very dizzy if you try to. So I guess when it comes, because I feel like one of your things that you were known for is just like accurately predicting a lot of stuff ahead of time. Like you have a very good track record. So when it comes to the future of Bitcoin and maybe we'll say like the lightning network and the future of a theory, I'm like, where do you see that going in 10 years? 0 (42m 31s): So Bitcoin itself, I think the next phase for Bitcoin is being used as a long-term investment assets for, let's say there's these things called sovereign wealth funds. And they're generally countries that have stuff like oil, that's going to run out. Eventually what they do is save some of the excess money that they make for the future of the country. They're called sovereign wealth funds, Abu Dhabi have them. Singapore has them for different reasons, whole bunch of these countries. Those people are starting to wake up and say, this is a great asset for our future populations wealth. So they buy it and own it. 0 (43m 13s): So that's a trend that will happen. We will see some countries, smaller countries that have problems with their currencies, holding it in their reserves. And we will see borrowing and lending layers. Like we're seeing with Luna right now using the collateral of Bitcoin for their stable coin. So that's what I think about Bitcoin. It'll be that kind of pure vehicle for long-term savings and wealth holding. And that'd be for governments, countries, corporations, people. So the lightning layer allows us to transfer money quickly around. Is that any better or different than using other ones? 0 (43m 55s): I think in 10 years time, we'll have this conversation. You and I will be using all sorts of applications of which we won't even know or care what blockchain they're on. And they'll probably go across six different blockchains. We don't care much. Like I don't know what computer you're using. I don't know what internet provider you're on, what modem you're using. I don't know what software you're running. Nothing doesn't matter. It's called interoperability. You know where this works now digitally. We can connect with each other seamlessly without knowing anything about the underlying. So why should we care about what blockchain is? Yes, we can invest in them much. Like you could invest in Cisco router that you may be using. It's just different things. So, so I think that Bitcoin over time is in 10 years time, it's probably a, you know, $50 trillion asset also. 0 (44m 44s): So that's how, you know, 50 X from here. Maybe it's less, maybe it's $20 trillion, but the whole space, it's going to be $200 trillion. And it's currently $200 trillion. Now, as all of these different things, get built out across all sorts of different ecosystems and they all start interrelating and being interoperable with each other. 2 (45m 5s): So I guess when we're talking long-term I wanted to also touch on what people call as like the volatility. So people get really nervous and I wrote it down. Let me see if we're at the technical terms are again, I'm a learner and I'm here to look stupid for everybody else. 0 (45m 26s): As I said, 2 (45m 27s): It is, I'm just going to ask because I can't find it on my notepad, but it was like the difference between like day trading with Bitcoin and like seeing, like trying to get out before a dip and then trying to buy before a spike. Right? And just like making those kind of gambling bets versus dollar cost average. 0 (45m 48s): So there are some people that I've seen who really skilled at buying and selling stuff. Short-term it is really bloody hard. I hardly know anybody at all of the world's most famous hedge fund managers who use that strategy that that really made wealth. There was some, the real wealth is made by spotting something that is got a long-term secular trend ahead of it and investing in that and then not doing anything, but just keep investing in that one theme. So in this case, let's say it's Bitcoin and Ethereum, we've talked about the role. 0 (46m 31s): They both will play. So in 10 years time, the probability of these being a magnitude higher in price is huge. So what you want to do then is it changed your mindset. You say, well, every time it sells off, like it did, you know, over the last year it's been down 50%. Well, I should be buying it because my expected future return has just gone up because let's say something's at a hundred and you expect it to go to 500. So that goes up five times. If it's, if it's fallen to 50 and it's going to go to 500 and they're going to go 10 times, you make, you make double the amount of money. So you should be really happy to see these selves over time, because it means you can buy more cheap stuff and gives you a higher return for the future. 0 (47m 20s): And that's why dollar cost averaging takes the stress of trading away and just says, every month or every week or every quarter, I'm going to stick some money in. And I don't care where the price is because, and I might rush my buys if I think it's really fallen or add a bit extra, because it's a good opportunity. But you just look at the long-term trend and the way to look at these things. Because if you look at the longterm trend on any normal chart, you got to trading viewers. I mean, they all look like this. So it doesn't, it's not easy to look at use. What's called a logarithmic trend where it changes the scale. And then you can see these beautiful long trends emerge and Bitcoin fit perfectly. 0 (47m 60s): Amazon was the same. Google was the same. They're all the same. You just find this. And then when it starts getting down to the bottom of that trend, it's a really interesting place unless something has fundamentally change. And that that particular token is, is, is not as robust or it may be failing because of the community or the utility that it's offering. But with, with ether and Bitcoin is pretty straightforward. And then it takes all the stress away. Because what you're saying is I don't want to access my money for 10 years as opposed to, well, I'm going to buy and sell less and I'm going to buy a watch and you know, I'm going to buy a holiday with this. And, and before you know it, you take too much risks cause you can't afford your holiday. And then you have another bet and then you've lost money and it's a bloody shit show. 0 (48m 43s): What you should do is say, listen, I want to, I want to be able to afford a great house in 10 years time. So my roots to this is by investing in these cryptocurrencies and I'll just do it over time. And I won't even look at how much my money goes up and down. And that's what I do. I don't, I just don't look at my P and L my profit and loss. I just think, you know, can I put more money in? And cause I'm just thinking it's a longterm trade. Doesn't matter. It's like, we don't look at our house price every day. And like, has it gone up, has gone down. What are my neighbors sell for? It's like stupid, you know? Cause you you're in their house for five years, 10 years. And so you think, okay, well over time, hopefully it does. 0 (49m 24s): Okay. 2 (49m 25s): No, I think that's really sound advice because one of my favorite things to do is on either swing. Like if it's extreme is to go on Twitter because the memes and the tweets are just incredible. Like people are losing their minds one way or another. 0 (49m 40s): I mean, you know, when, when Bitcoin was really going up, everyone was putting these laser eyes and counting every thousand in price. I'm like, please don't do this because when this happens, bad things happen. I always say, when you think your shit smells of roses, you're going to get your face rubbed in it. And that was exactly what happens. Right. It collapsed. And the other one is, you know, it's like monkeys throwing poo at each other when the price is down, everyone hates each other. Everyone hates everything. Everyone's an idiot, it's all going to zero can't you see it's ridiculous. But that's what it's human emotion, right? It's, it's, it's, it's kind of an amazing thing to say, cause it's all over Twitter. 2 (50m 16s): And then honestly it gives me a lot more confidence in this space because again, it comes down to the community and the community is extremely invested in it and very vigil. So I think it's a huge indicator of its success. 0 (50m 29s): Yeah. And you need to step back from being sucked in to the extremes of the community. So if everyone's really bearish and they all hate each other and all picking on each other and the Bitcoin guys are picking on the east guys who are picking on the salami guy, you know that it's probably somewhere near the low because everybody's losing their shit. And if everybody's like having laser eyes and saying, it's going to the moon, you probably want to hold off on your dollar cost averaging for a bit because people are overenthusiastic. 2 (50m 59s): No. Yeah, totally agree. This has been amazing. And again, thank you so much for coming on the podcast and sharing all of your knowledge. Do you want to tell the listeners where they can follow you, support you and then any projects you might be working on? 0 (51m 14s): Yeah. I think these are things I'm on Twitter a lot. And I engage with a lot of people. So at Raul, R a O U L G M I so find me there Real Vision. We set up because I'm so passionate about this. We set up Real Vision Crypto, which is free and there's stuff behind the paywall for finances. It's not, it's actually not very expensive and it's got the most amazing stuff in the world, but anybody's interested in crypto Real Vision, Crypto dot com. Just go there, sign up with your email. And that is a treasure trove of all of the most amazing people in the space. All of the learning you could ever want. I do a show every Friday. That's my journey. Like, like you I'm doing the same as you. I just interview people say, well, I just want to learn from you. 0 (51m 55s): And so mine's called Rao's adventures in crypto, comes out every Friday. So all you need to do pop in your email and I promise you it'll change your life. 2 (52m 3s): And I can tell you my husband subscribes to all of that. And he is the biggest fan of your content. So yeah, definitely go check it out everybody. 0 (52m 11s): Fantastic. 2 (52m 12s): Awesome. Thank you again. 0 (52m 14s): Thanks so much really enjoyed it. 2 (52m 15s): That's it for this week's episode of Chatting with Candice, if you enjoyed the podcast, please leave a five star review. Did you know that you can actually do that more than once? So if it's been a while, you can actually do that again. And if you know anyone that would like this content, you can share it with a buddy, maybe two or three. And if you're watching hit that like, and subscribe, I'll see you next time.