0:00

Back then the idea of disrupting money

0:02

was still you to be laughed out

0:04

of the room. There was only the

0:06

incumbents which were pay pal basically and

0:08

then you had the banks. So that

0:11

picture that you see. There was the

0:13

first Money Twenty Twenty conference which took

0:15

place in May Two thousand and twelve.

0:17

that room was all incumbents. It

0:20

was. No one knew. You. Couldn't disrupt

0:22

money at all. There was no the

0:24

concept of sending money from person to

0:26

person. Didn't. Exist.

0:30

Either. Walk back to another puzzle vampire.

0:32

Ah, this is our. This. Is

0:34

not your typical. Empire Pod

0:36

talking about are you know paralyzing the

0:38

eve yam and the news of the

0:40

heard the topic does your i would

0:43

save the week and or this is

0:45

this is actually look into kind of

0:47

the earlier days of of crypto and

0:49

actually I'm. When. I started get

0:51

into the industry it wasn't really even called

0:53

crypto was just caught was just bitcoin I

0:55

was just I was just interested in bitcoin

0:57

and that was really at answer. We have

1:00

our to add to close friends who have

1:02

been in the industry for wow of Pete

1:04

Rozelle who I'm help build coin desk in

1:06

the early days. And. The you could

1:08

say did build coin desk came into

1:10

the industry and twenty thirteen Rizzo. controversial

1:12

topic I know there but asked at

1:14

or a manager was waters you ask

1:16

for sure exactly exactly. And then we

1:18

have Charlie Sram. I'm. And to

1:20

our Charlie going to the and stream and

1:23

I either twenty ten or twenty eleven billion

1:25

eleven incident which were gonna hear about and

1:27

as he. Went. Off

1:29

to. Jail. Which will eventually

1:31

hear about If you're okay, talk about of

1:33

Charlie than Reza. Well I step in and

1:35

talk about the kind of twenty thirteen, twenty

1:38

fourteen to twenty seven years. So yeah, welcome

1:40

guys! Had severe. Oh

1:42

and we have court. Court. Charlie

1:44

can put the camera on. Court was out. Many.

1:47

She's been through it all since day one, as well

1:49

since been on May Thirteen. A lot of times I

1:52

get we're just sitting in a story the other day.

1:54

And. A half ago we were and

1:56

Corny goes. Member. Who are sitting there

1:58

in the park in the. It was eating

2:01

grass. And I totally

2:03

forgot that. So story alway. Thank.

2:06

You for being there. Could like offer

2:08

the book and everything. I forgot to

2:10

write data. That. Story down

2:12

and everything like that. So know

2:14

yourself when I literally eating grass.

2:17

Yeah, what happened over the situation

2:19

said. Ah, we were a

2:21

he lists the. First

2:24

pad. We are in Australia.

2:27

You're hanging. Out with Knicks fan

2:29

around us and the Decline center.

2:31

When. Decline center with rounds. And

2:36

we're sitting on the ground and waiting for

2:38

the food or something and us to sixteen

2:40

or eating grass and convincing us that say

2:42

yeah he like a graphical story that it

2:44

was set free yeah I call this protein

2:47

like that was used to have the ability

2:49

to zones yes grass and if humans could

2:51

sides as a he got his whole thing.

2:54

If humans can digest grass

2:56

and resources, super power to

2:58

grant his autograph has raised

3:00

theirs everywhere. And. Then how

3:02

can tell Skyn completing the can live

3:04

off of grass? As

3:06

a Grave Attacks or A by the way I

3:08

am and there are many there were my favorite

3:11

aim of us out of there's a phases of

3:13

Metallic. There's like different arrows of metallic by the

3:15

as the This was a nice school boy and

3:17

a big my magazine writer who was just like

3:19

really chipper and and happy to be there. I'm

3:22

I'm I think I'm from correctly I the he

3:24

was the he was a good students. There

3:27

for we can maybe concert there. I

3:29

we can start with like what the

3:31

space looks like in. Charlie. Ah

3:33

throws, When do you like Twenty Eleven to Twenty

3:35

Thirteen like I just picked Paint Paint a picture

3:38

for us Like who are the players like who

3:40

are the people were they located was a San

3:42

Francisco that New York with a New Hampshire of

3:44

the talk show like paint a picture for us

3:46

of like what the industry look like And Twenty

3:49

Eleven and Twenty Twelve a lot of these subtle

3:51

she emails just came out actually which is really

3:53

interesting and I know Pete as I said to

3:55

them a lot more than I have. I

3:57

just read a kind of a few off of your thread so think. for

4:00

constantly putting that out there. And

4:04

so starting with those with this

4:06

Satoshi email days, this was like the era of 2009

4:08

to 2000. I would say I think he disappeared

4:12

in April or like

4:15

March or something like that of 2011. He disappeared April,

4:20

there you go, April 2011. And so

4:22

to give context, I joined the forum. I

4:25

was around lurking but I joined the forum May of 2011,

4:27

like one month after this

4:29

is the Bitcoin talk forum and how many people were so you

4:32

joined two weeks and I live in the top of the 2011

4:34

bubble to follow again, all

4:40

my money originally, I bought

4:42

this one like $30 and it went up to 36. And I

4:45

was like, I found gold, and it dumps

4:47

like $2 and I'm like, all right, I need

4:49

to work in this industry and figure out a way to make this

4:51

price go up. So

4:53

I found this great, great thing

4:56

that you posted December 28 2011, Charlie, you

4:59

said with digital currency like Bitcoin, being

5:02

broke is merely a technical issue. December

5:04

28 2011. So what was um, yeah, well, take me into the

5:09

mind of like, you

5:12

had the pre Satoshi, so you had those like, that's

5:14

kind of like the era like pause point of

5:16

when Satoshi disappeared, everything pre that Satoshi

5:19

was kind of like running the community,

5:21

everyone can everyone was on foreign

5:24

dot bitcoin.org. And it was a website

5:26

that him and they most started and there

5:29

was an IRC network, which

5:32

was like Bitcoin hashtag Bitcoin on a free node,

5:34

hashtag Bitcoin, dev hashtag Bitcoin

5:37

OTC, and then a couple of

5:39

other ones. That's kind of like we're

5:41

more the technical discussion started and that's where

5:43

they still actually take place. And

5:45

that's where originally connected with Bitcoin was in

5:47

the IRC because I was hanging out in

5:50

some different IRC rooms at the time. And that's

5:52

how originally connected to Bitcoin. But um,

5:56

once the doji disappeared, it was

5:59

a very It was a

6:01

society based on what

6:04

contribution, what

6:07

people respect you had within the community on

6:10

the forms of Bitcoin was what contribution

6:12

are you giving.

6:15

It was very anti-rent seekers. So it was like, what

6:17

contribution are you giving towards the larger Bitcoin community. People

6:20

who are buying and selling things

6:22

on the forums, only taking money

6:24

for products in Bitcoin. You

6:27

have people running little websites. There was a little

6:29

GLBSC, which is like a website where you

6:31

can go public of Bitcoin only,

6:34

which is a shape shift and Eric Voorhees

6:36

took, he made a lot of money like

6:38

did it, thousands of Bitcoin and some other

6:40

ones like this guy that she passed

6:42

away was this Romanian guy. He

6:44

kind of ran that too. And there's a lot of

6:46

these little like historical connection points, but there's a lot of

6:48

like mistakes. There's a lot of people who are kind of

6:50

like on the fringes of society in

6:53

some way or another, but who

6:55

are highly technical. And

6:57

there's a word is it meritocracy. Meritocracy

7:01

is very like, was that the right like accurate way

7:03

of describing it where like. Yeah,

7:07

I mean, I can add mostly from my recollection. Well, I

7:09

was in, you know, I joined in 2013. So

7:11

I've kind of mostly know this era from doing

7:14

archival research and things. But yeah, it's very different

7:16

than today. Right. Today you

7:18

have the idea that Bitcoin is this like secure

7:20

investment. It's where you'll keep like long term savings.

7:22

And back then it was the opposite, right? Bitcoin

7:25

was just as Charlie's tweet showed, it was

7:27

like a funny Internet money. And

7:29

people sort of believed that their value that they

7:31

were giving to the network was actually supporting

7:34

it. Right. Like they

7:36

thought that the value of Bitcoin was based on the users number of people accepting it.

7:39

So there's this huge cultural, you know,

7:41

pressure or not for but force to reward

7:43

people who are doing good for the network,

7:45

expanding the number of merchants, convincing people to

7:47

accept Bitcoin, sending Bitcoin. Right. It

7:49

was about going forth and spreading the message. Right. And

7:52

that was the tone. You know, post the Toshi

7:54

leaving as Gavin and recent kind of takes over

7:56

as lead developer. And, you know, he was the

7:58

one who he invented the. a website program

8:00

where you could go and you could just

8:03

claim Bitcoin for free. So he was even

8:05

just giving away Bitcoin. So the culture is

8:07

very different from what you think of today

8:09

where it's more like, oh, you don't want

8:11

to spend your Bitcoin, Bitcoin is super valuable.

8:13

Back then, it was, hey, we need to

8:15

build and get more people into this industry

8:18

by any means necessary. That

8:21

came and incubated a wave of startup businesses that

8:23

by 2013, when I joined and started

8:26

reporting, it felt like a maturing industry.

8:28

It felt like a zeitgeist thing that

8:30

was happening. Because in the early days of

8:32

2010s, Facebook had just gone from a frat house to

8:38

a billion dollar company. Skype had

8:40

gone from a protocol that was

8:42

niche to people were using for

8:44

conversations. You had Google Hangouts. So

8:46

there's this whole tech explosion. Tech

8:48

was eating the whole world.

8:51

Bitcoin was a part of that story.

8:53

So you ask, well, it was just

8:55

a four-year-old currency. Why did everyone have

8:58

such sky-high expectations? It's because, well, that

9:00

was the mode of the times. That

9:03

was really the era where in the late

9:05

stage social media, you could be a

9:07

dorm room company that then was on

9:10

the S&P 500 in two years. So

9:12

there was this, when Bitcoin really crystallized

9:14

in early 2013, early startups like Charlie's,

9:17

they were like a rock band. Bitinstant

9:19

was like, I remember seeing the

9:22

early pictures of Charlie and Eric

9:24

Voorhees and Roger Vare and the

9:26

people, Ira Miller, who was also

9:28

involved. But they looked like T-shirts,

9:31

Gragli Guys, a product that's eating

9:33

hundreds of users, making millions of

9:35

dollars off of nothing. So

9:38

it felt really just like something that was happening. By the time

9:40

I joined in mid 2013, you

9:43

really had Bitcoin as several hundred dollars. Cyprus,

9:47

this country that was the current world

9:49

chains, they conducted a bail-in. So the

9:51

government seized money

9:56

from the populace. This was a big macro

9:58

moment of the time. So you really

10:00

had this idea that Bitcoin was going mainstream. They

10:03

heard something like the whole country's assets. Everyone had

10:05

money in a Cypriot bank

10:07

account, like lost like 10 or 20% of

10:09

all their money. They like did a

10:11

bail-in like you said. It was crazy. And

10:14

Argentina was going through a iceberg. So it was

10:16

mainstream like in the way like where you think

10:19

about today, like you know CNN was talking about,

10:21

like Charlie was on CNN. I remember saying like

10:23

Bloomberg was talking about it. Like it was, you

10:25

know, it permeated internet culture. I don't think it

10:27

was mainstream in the way Bitcoin today is like

10:29

mainstream. It's you know people on Wall Street are

10:31

talking about it. But it was pretty much it

10:33

went from like the fringes, kind of the early

10:35

days where Charlie kind of joy into being

10:38

a part of this internet story, you know, in the 2030

10:40

era. Yeah. It definitely

10:42

like selling to the internet, part of

10:45

the internet history by that time 2013, 2014 for sure. Charlie,

10:49

what about 2012? So when

10:52

I think about 2013, it's a very defining

10:54

year because you have a lot of like

10:56

these YC companies. I think it was blockchain.com.

10:58

You have Coinbase, you have the whole Peter

11:00

Smith and Ryan Armstrong and Fred. And like

11:02

they come into the scene in like 2013.

11:05

But there's like this 2011, 2012 where there's still

11:07

like I found this fundraise

11:10

announcement. Brooklyn based Bitcoin startup Bitinstant

11:13

raises seed round. A startup that

11:15

provides temporary credit in order to

11:17

make Bitcoin transactions faster, raised an

11:19

undisclosed sum of seed funding from an angel

11:21

investor. We sold 15% of our

11:24

company to Roger Ver, CEO of Memory Dealers, which

11:26

is probably the largest used computer part site on

11:28

the West Coast, co-founder of Charlie Shrum. Yeah, that's

11:30

crazy. That's when things got

11:32

real for the first time, because

11:35

I met Roger, and

11:37

he basically forced Eric Voorhees to join the

11:39

company too. Oh, what was Bitinstant? Let's start

11:42

there. Tell me about founding Bitinstant.

11:44

Like what was this company? So prior

11:46

to this article, Bitinstant was a company that

11:48

I founded in my basement with a

11:51

co-investor like this guy I met on the Bitcoin

11:53

talk forums, Gareth Nelson, who was

11:55

an autistic guy, so could a very heavy Welsh

11:57

accent. I never met him in real life. He

12:01

came up with this idea of buying Bitcoin at

12:03

the time was very hard. You have to wire

12:05

money into one of these very

12:07

few exchanges. You have these exchanges modern day

12:09

that we know now you can connect your

12:12

ACH, your debit card, your credit card, or Apple

12:14

Pay, but you couldn't do any of that back

12:16

then. You have to wire money. You'd

12:19

register for an account and they'd give you

12:21

wire details. You have to wire money to

12:23

there and then place a market order and

12:25

it wasn't retail-friendly. We saw a

12:27

way to connect all

12:29

the Bitcoin companies and

12:32

all these exchanges to retail users

12:34

and start a company called Bitinstant.

12:37

It allowed people to walk into the local

12:40

bank, whether it was a Bank of

12:42

America, Wells Fargo, Chase, or walk into

12:44

a 7-Eleven, a Walmart, a CVS, during

12:46

the US and the UK, and a couple

12:50

of other countries. The process

12:52

was a little bit cumbersome. You had to go to the

12:54

website first. We didn't have an app. There was no web

12:56

app. This was the early internet time still. It was like

12:58

2011. Yeah, it

13:00

was really smart. It was all in saturation. Yeah, there

13:02

was no smart, all in saturation. You'd go to the

13:05

website. You'd type in your

13:07

information. You'd get a

13:09

barcode, not even a QR code, like

13:11

a barcode. You'd go

13:13

to the location and then they'd scan it. You'd give them the

13:15

money. This

13:18

was pretty quick. That's what it

13:20

looked like. You'd have the money or

13:22

you can choose to actually buy Bitcoin from

13:24

the website directly. Bitcoin sent to your email

13:27

address. You'd get in 20 minutes,

13:29

you'd get an email saying you have 1.3 Bitcoin for

13:31

your $20 purchase or

13:34

whatever it was. For some people, about

13:36

2,000 Bitcoin for a couple of hundred

13:38

dollars. We also offered

13:40

arbitrage between all the exchanges, which

13:43

I'm surprised isn't a business today.

13:46

No one offers that, like be able to

13:48

hold balances on all the crypto exchanges at once

13:50

and do some sort of arbitrage. I feel like

13:52

that's Heather's business, isn't it? Yeah, I guess you

13:54

can tether in and out of it, but there's

13:56

still like, you know, it takes time. send

14:00

to send transactions and get it confirmed in

14:02

a exchange. You can front run a lot

14:05

of different type of trades if you can have instant balances.

14:07

So Charlie, anyone watching on YouTube, I guess,

14:10

can see this in podcast. People are just

14:12

going to have to listen, but we've got

14:14

the BitInstant website pulled up here. So you

14:16

basically go to the site. You've got pay

14:19

from Mt. Gox coupon, Vowchex coupon, or BTCE

14:21

coupon, pay to Mt. Gox, Bitcoin to email,

14:23

PayPal, it's on here, Bitstamp, Verwax,

14:26

I don't know what that is, or a Bitcoin

14:28

address. So this was basically, BitInstant was essentially the

14:31

best and easiest way to get

14:33

Bitcoin back then. Yeah, most people did the

14:35

cash deposit option and would go to like

14:37

a physical location and famously use

14:39

like a red phone and they'd

14:42

buy you able to buy Bitcoin, it would go into their

14:44

wallet within like 20 minutes. I would just

14:46

add that it was super hard even when I joined

14:48

by May 2013. People were like, oh,

14:50

you know, why didn't you buy Bitcoin? It was $50. It

14:54

was difficult. The only other

14:56

options, I think other than BitInstant was like

14:58

people, you would meet people on the street,

15:01

you go to local Bitcoins, you could find

15:03

some local dealer. I remember going like Bitcoin,

15:05

these are like local meetups where people would

15:07

sell you coins. Coinbase was

15:09

a wallet then, right? They weren't

15:11

even selling Bitcoin until late in 2013. They

15:14

had a wait list. And then

15:16

if you were using one of these exchanges, the

15:18

alternative to BitInstant would have been like, I

15:21

remember funding BTCEs. So like I would

15:23

have gone onto this website, had this

15:25

like sketchy third party Russian payment processor

15:27

and it's like, I'm going to send

15:30

$5,000 to like a website

15:32

that I can't even read and like hope

15:34

that it ends up on a financial exchange

15:36

in Japan so I can buy this internet

15:38

money. Like there's just, you know, I just

15:40

look money on BTC. Who they see is

15:42

it was a crazy exchange that came back

15:44

from that. That's another story. That's a whole

15:46

other thing. But yeah, that was literally an

15:48

exchange where like on the main homepage, there

15:50

was just a chat box where people were

15:52

just like, yeah, the troll box. That's another

15:54

thing that all exchanges had.

15:57

And I really truly miss the

15:59

troll box. Because you can get really

16:01

good training alpha from the troll

16:03

box. Every exchange had it. You have to

16:05

have an account there and people would just

16:07

post and it would just be like

16:09

a rolling chat of like 10,000. I

16:12

mean, it seems janky as all hell like right now,

16:14

like saying it or following it. So

16:16

what were people, okay. So you get the Bitcoin, what

16:18

were people doing with the Bitcoin? Did people want to,

16:21

um, cause I would assume

16:23

there's kind of two buckets of people with the Bitcoin or

16:25

maybe three buckets. There's like, um,

16:28

there's the very technophile people who just like

16:30

want to participate in this like funky network.

16:33

That's kind of taking off. That's one bucket.

16:35

There's another bucket, maybe who could,

16:37

who wanted to do this for an investment

16:39

purpose, and then there's another bucket who wanted

16:41

to actually spend it on, um,

16:44

uh, another bucket of what they want to spend

16:47

it on. Well, there was a big narrative at

16:49

the time. Uh, maybe this did, it digs a

16:51

little bit into the Satoshi emails, right? Where like

16:53

essentially because of the network was small, it was,

16:55

it was free to send transactions were basically free.

16:57

Right. So this idea, this idea really kind of

16:59

took payments were free, right? So that seriously to

17:01

later on. Well, yeah, it's funny actually from the

17:04

emails that came out, the new Satoshi emails, you

17:06

know, you can kind of see him in the

17:08

background and he actually even takes steps to like

17:10

reduce, you know, the presence of fees within the

17:12

app. So, you know, we have this idea now

17:14

that fees are super important for Bitcoin, that they're super

17:16

important for the health of the network. I think that's

17:18

all well reasoned, won't rehash that, but they, you know,

17:21

essentially people thought the network was free

17:23

and you know, there was this idea that Bitcoin

17:25

would be competitive against credit cards. So, you know,

17:27

essentially, uh, you know, whether it was in industries

17:29

like porn or gambling, this idea that like, you

17:31

know, Bitcoin could be electronic cash, right? You could

17:33

go to these websites. Every

17:36

speech I gave, push that narrative. I

17:39

went to all, all the conferences you

17:41

asked what 2012 was traveling to Europe,

17:43

to China, gambling conferences, constantly

17:45

traveling with Eric and Roger and all these different

17:48

people, like you said, Pete, uh, the

17:50

narrative was like, we were going to compete

17:52

with the alternative financial system. Yeah,

17:54

these are master cards. It was free. Bitcoin

17:56

was free. It always was free. It's

17:59

still. For the value that

18:01

you get it's so kind of free because now

18:03

you get a crazy secure network

18:07

Yeah, it's just a different mode of thought right? So like

18:09

the this is like something that I talk a lot about

18:11

and like why I write about the history is I think

18:13

people Who come in as you were saying like we're new

18:15

to Bitcoin or new to crypto You know

18:17

every era sort of has a different flavor, you know

18:19

And I think like as we're learning about Bitcoin and

18:22

cryptocurrencies as a whole What you'll find

18:24

is that every era sort of like has their

18:26

own thesis and like they're kind of right about

18:28

some things They're kind of off about other things

18:30

right and so the 2013 era was really this

18:32

idea that like, you know People

18:35

thought Bitcoin was a payments network. They viewed

18:37

it as essentially being a decentralized PayPal That's

18:39

kind of how it was colloquial referred to

18:41

that wasn't really how Satoshi referred to it

18:43

But again, this was sort of came from

18:45

people using it that way, right? That is

18:47

how people were using it And so the

18:49

culture really was focused on merchant adoption It

18:51

was focused on people buying and selling goods and

18:54

so the bullish things like if you think about

18:56

today like people would retweet like ETFs being bought

18:58

right like that's bullish today You

19:00

know bullish back then would have been like Charlie's

19:02

standing in a Bitcoin booth next to the PayPal

19:05

booth and like kind of giving Them the finger

19:07

because you know, they were being the disruptive

19:09

thing, right? So like there was a whole

19:11

kind of culture around we're gonna outcompete the

19:13

banks. We're gonna outcompete PayPal We're going to

19:15

be the way commerce is conducted on the

19:17

internet and there was a huge other elements

19:19

that would miss which was like The Silk

19:21

Road were essentially like, you know, not even

19:23

like, you know, gray market payments But straight

19:25

up black market payments in a lot of

19:27

respects, you know people Selling

19:30

guns and weed and psychedelics, you know, this

19:32

was really Also the

19:34

era of the internet with like WikiLeaks and you know

19:37

Arab Spring and there was this idea of the internet was

19:39

really kind of like a political force I

19:41

think Silk Road was like oh that was a

19:43

big narrative too great point So there was the

19:46

Arab Spring happened in like it

19:48

started in 2012 I think and

19:50

that was a big part of the narrative too because

19:53

the internet was being targeted By

19:55

the countries and being shut down

19:58

and bloggers were back then Bitcoin

20:00

bloggers were the only way to, you know, bloggers in

20:02

an early version of Twitter was the only way to

20:04

get things out from what was happening in some of

20:06

these places with the protests. They were

20:09

shutting down the internet. The idea

20:11

that Bitcoin couldn't be differentiated from

20:13

any other type of traffic.

20:16

And Pete, it's really good that you brought that up, because

20:18

that was the first time we thought, hey, could

20:20

Bitcoin be used for other things, maybe

20:23

data? Like maybe if

20:25

you can't differentiate Bitcoin traffic,

20:27

maybe you can't differentiate Bitcoin

20:30

data, bit message, something.

20:32

There was like things that were being worked

20:34

on that were trying to like already start

20:37

to use Bitcoin for other things other than money. It

20:39

was still very early. Yeah. And I think

20:41

like you have to remember, like I always like to think about

20:43

like the number of people in the network, right? So like in

20:45

2010, 2009, if you're reading this social

20:47

emails, like there's like 100 people there, right? So by

20:49

the time Charlie's in, like, you know, there's basically Bitcoin's

20:52

like $30 or some businesses, it's

20:54

maybe like 10,000 people. 2013,

20:57

now we're talking about, you know, that doubles

20:59

and triples and you're at probably somewhere in

21:01

the hundreds of thousands of Bitcoin users around

21:03

the globe, right? Whereas today we're in the

21:05

million. So there is this interesting kind of

21:07

effect that I think we still see in

21:09

Bitcoin and crypto, where it's like the number

21:11

of new participants come in and it increases

21:13

above the level, you know, so the new

21:15

people outnumber the old people and

21:17

they come with like a different idea. And

21:19

sometimes they're given a certain message about what

21:21

Bitcoin or cryptocurrency should be. And they sort

21:23

of kind of define the narrative. So there's

21:25

this interesting kind of ying and yang between

21:27

the cultures. And I do think there's always

21:29

like a friction, right? Like there are like

21:31

things that we've learned in different eras and

21:33

it's, you know, that becomes messaging

21:35

and then certain people get stuck on the

21:38

messaging and they don't want to kind of

21:40

learn about how things are progressing. So the

21:42

next thing. Definitely

21:44

a minority now, like what, what

21:47

mattered in the history? And a lot of people don't

21:49

care as much as they used

21:51

to. I think it's still so early, though, man.

21:53

I still think that we're still learning like

21:55

foundational stuff about what's happening. I feel like we're

21:58

only like three or four years in really. when

22:00

you think about the halving cycle being

22:02

like, you know, epochs or

22:04

one year. I don't know. Sometimes

22:06

I think that like, how much

22:08

have we really learned cumulatively? Charlie,

22:11

take me into, I want to bring

22:13

it back to Bit Instance. So Rizzo said, the exciting thing

22:16

would be Charlie kind of giving the bird to

22:18

the PayPal booth. And I found this picture of

22:21

you, I think this is Eric Voorhees

22:24

and Roger Ver with

22:26

your Bit Instance booth right next to

22:28

the PayPal booth. So maybe use this

22:30

picture and tee off a conversation around

22:32

like, okay, so Bit Instance, you started

22:34

with this guy who you've never met

22:37

on the internet. And then somehow there's

22:39

the Winklevoss twins get involved. Back then,

22:41

the idea of disrupting money was still

22:43

you'd be laughed out of the room.

22:46

There was only the incumbents, which

22:48

were PayPal, basically, and then you had

22:50

the banks. So that picture that you

22:53

see there was the first Money 2020

22:55

conference, which took place in May 2012.

22:57

And the idea was like, okay, we're gonna talk

23:00

about what money is going to look like in

23:02

2020, you call it Money 2020. And

23:04

it was just that room was all incumbents.

23:07

It was no one knew you couldn't

23:09

disrupt money at all. There was no

23:11

the concept of sending money from person

23:14

to person didn't exist.

23:16

It was so new, even sending

23:18

wire transfers, sending your

23:20

friends money, you have to register

23:22

for a PayPal account, add money

23:24

to that. And the other friends did too.

23:26

And it was like a week to get money

23:28

on and off that you guys remember. So

23:31

it was like, no one else was disrupting

23:33

money. And I don't even know what PayPal was doing

23:36

there. And the

23:38

idea was, PayPal, I think it just

23:41

cancelled our relationship with them at the

23:43

time they were allowing us to let

23:45

people sell Bitcoin and withdraw into PayPal.

23:48

And we were really pissed off. So

23:51

Roger wrote an email, he said, look at this big money

23:54

conference going on in Las Vegas.

23:57

Let's get a booth. Like let's tell

23:59

them we of booth right next to PayPal. I was

24:02

like, we look at the prices and it was

24:04

like ridiculously expensive. And like,

24:06

no way can we afford this. Roger,

24:08

you're my only investor. So I don't

24:11

think the Winklevoss twins were involved yet at

24:13

that time. I don't remember. I would

24:15

have been like October 2012, probably. So maybe they

24:17

would have just been in the conversation. Yeah.

24:20

And so we could

24:22

kind of like, we're more advocating for, for

24:24

Bitcoin, like you said, all the positive narratives

24:27

that we were advocating for. And

24:29

all we could afford was that little like

24:31

lamp post, as you see, it has no

24:33

chairs, no behind area.

24:36

It was just that little like desk.

24:38

It was like a, like an information

24:40

desk. And then our logo

24:42

Bitinstant was super small, but it was all about

24:44

Bitcoin. But it was cool because

24:46

I remember that day I met Jesse Powell came

24:49

over, who created Kraken. He came

24:51

over. Jen Mikalov came over and

24:53

he sweatpants. I met him

24:55

for the first time. And there were some other people

24:58

actually met the same as lawyer. She's

25:00

very, she's very well

25:02

known and hired all over the Bitcoin

25:05

community. Now she's she came

25:07

over me for the first time because I

25:09

was on stage there and I was very

25:11

firebrand, like Bitcoin's going to take

25:13

over the world and Bitcoin's going

25:15

to like, and, you know, and the Fed and

25:17

we're going to like completely take monetary policy out

25:19

of the hands of the government and put it

25:22

back in the hands of the people, you know,

25:24

and they're obvious like government people on that stage.

25:26

And she came over me and she's like, you

25:28

know, you need to tone down your rhetoric, young

25:31

man. Go to jail. Go

25:34

rhetoric. And she was right. Like I got

25:36

arrested maybe like a year later or something.

25:38

So. So, okay.

25:41

So tell me how Eric Voorhees got involved

25:43

with Bitinstant. Roger. Wasn't

25:46

Eric a real estate sales guy in Dubai?

25:48

Yeah, Eric was selling real estate in Dubai.

25:51

He was like this brilliant person that just

25:53

wasn't doing the wrong thing because

25:56

what he was brilliant in wasn't, there was no

25:58

money in it. There's no money in. libertarianism,

26:01

you know, writing back before Bitcoin,

26:03

there were no there was no influencers,

26:06

there were no followers, you know, you couldn't

26:08

really monetize that podcast didn't

26:10

exist yet. So Eric is kind of like

26:12

just out there and Roger

26:15

met on the Roger had his knack of meeting

26:17

of some really brilliant people and bringing

26:19

them all together. And Roger

26:23

told me, you need you need some help

26:25

hire this guy, Eric, and I was like, you

26:29

can't tell me what I can do with my company's

26:31

budget. And he's like, well, I'm going to pay for

26:33

him. And he's going to be the chief marketing officer

26:36

of Bitinstant. So we ended up hiring. So you flew

26:38

to New York. And we instantly became best friends. Like

26:40

instantly, we were more than just people

26:42

that we work together, we were we became

26:44

best friends. He got an apartment in New

26:46

York City. He introduced me to another one

26:48

of his friends, Ira Miller, who became like

26:51

another developer at Bitinstant, like a number two,

26:53

we badly needed. So Roger was really instrumental

26:55

in that. But Eric started

26:58

that pull away from me to Eric and Roger

27:00

used to joke that I was a status. You

27:03

know, because I grew up in a very conservative type

27:05

of Jewish community. And your

27:07

family was you guys grew up

27:09

Orthodox, right? Very Orthodox, very like,

27:11

like, you know, like, in

27:14

that means kind of like, like

27:16

they leave their way of thinking,

27:18

they their way of following the religion is

27:20

the only way anyone who doesn't follow their

27:23

way is kind of like, not

27:25

on their level. It's not really a

27:27

good way to live. Bitcoin, the community was

27:29

like the anti that it was,

27:31

again, going back to like, your contribution to

27:33

the Bitcoin community is what your what

27:36

your status is in the Bitcoin community. And

27:38

so it was very easy to weed out fake people

27:40

and stuff like that. There's actually

27:42

kind of around the same month that I met

27:45

Courtney at EVR. So going

27:47

back to New York City, so now we're in New York City, 2013 is a

27:50

Bitinstant offices. It

27:54

was the only place that that Bitcoin you

27:57

can hang out. Eric was there,

27:59

we had like Bitcoin. poker stuff going on. You

28:02

guys started this club, right? Charlie, you got

28:04

started this. My friends from high school started

28:07

this nightclub, and Eric and I,

28:09

and I think the guy that got my friend

28:11

from high school, Alex, who started it, was looking

28:13

to buy some Bitcoin. So I told them, I'll

28:16

trade you some Bitcoin for like equity in the

28:18

club. And then I made, I struck a good

28:20

deal. And Eric Voorhees was like,

28:22

well, I'll join in on that deal. And Yifu

28:24

Guo, who founded the first ASIC was like, well,

28:26

I'll join in on that deal, too. So we

28:28

all became nightclub owners, like overnight

28:31

of EVR. And the cool thing about it

28:34

was that we got EVR to accept Bitcoin.

28:36

That's, that's probably like in

28:38

another if there's another picture you have of

28:40

the New York Post, there's

28:42

a picture of the New York Post Bitcoin

28:44

accepting an EVR. And that's actually

28:46

Courtney doing the transaction. She

28:48

did the first ever transaction at the end.

28:51

That's how we met. She was doing

28:53

that transaction at EVR right there. Is this

28:55

you, is this you, Court? Yeah. Oh,

28:57

my God. Yeah. So mine, I know I never went

29:00

to EVR. I heard EVR was

29:02

like all the Bitcoiners were hanging out there.

29:04

Fred Wilson from Union Curvatures. David Waxman in

29:06

that picture. Is that

29:08

David Waxman? And that's Pindsey. Pindsey

29:10

is the one that was doing the transaction.

29:13

Wow. So. He

29:16

was watching that info wallet. That was the wallet

29:18

back then. It was only a wallet. Roger was

29:20

like an owner in that wallet. And those were

29:22

kind of like people, like you were saying it

29:24

was this transaction, like people would come

29:26

in and spend like 10,000

29:29

Bitcoin on like a glass, you know, like

29:31

a bottle of champagne. And it was beautiful

29:33

because BitPage facilitated

29:35

that transaction. BitPage took almost

29:37

no fees, like

29:39

less than one percent. And

29:43

then they instantly converted into dollars. But we,

29:46

you know, the club kept the Bitcoin and

29:48

there were no charge backs. Yeah.

29:51

This says the fluctuations don't concern us because we're

29:53

not holding it anyways. We're just using it as

29:55

currency. I still get the same amount of money

29:57

either way. Yeah. Daphne VR use

29:59

tablets to pull. a service called Bitpay,

30:01

which functions like a credit card processor.

30:03

All these people mentioned in this article,

30:06

everyone's converted. That guy, Gabe Stuchenich, I

30:09

don't know if you know Gabe, he still

30:11

works for Iraq Coinapulse, which

30:14

the Bitcoin company, there are some

30:16

of these Bitcoin companies that are dormant now. They just

30:18

have Bitcoin on their balance sheet. That's how

30:20

they survive over the years. Like Bitpay,

30:22

still has a lot of interest. So

30:25

Roger Verinvested, he gets Eric Voorhees to

30:27

come in. Did

30:29

Barry Silver, did you guys ever talk to Barry? Because

30:31

I know Barry was also kind of getting things off

30:33

the ground then. Did Barry ever invest? Did you ever

30:35

talk about that? Yeah, so it's

30:37

like, if you were

30:40

to imagine, like Eric was the

30:42

Jesus, or Roger was

30:44

the Jesus, but Eric was the

30:46

more on the ground in New York. And

30:49

then I was the, this is how you're

30:51

going to make money from it, person. And

30:53

we would just go in orange pill

30:56

these people. Barry Silver,

30:58

the Winklevoss twins, and we

31:00

would hand each other off like in the

31:02

email threads, like they would write these long-winded

31:04

questions. And I was like, Eric, you handle these,

31:06

like, and he would say, Charlie, you handle these, and we would kind

31:09

of tag team it.

31:13

And there were all sorts of questions, and technology

31:15

questions, which, and then the more, he handled more

31:17

the economic questions. And we,

31:19

you know, we have the guys like Matthew Mellon, who

31:22

passed away, he was an early investor

31:24

in Ripple, and board member. And,

31:27

and Barry Silver, never forget, there was

31:29

a coffee shop downstairs from our office

31:31

in Flatiron district, and we would meet

31:33

them, meet them there every week. And

31:37

Barry doesn't, you know, for whatever, like,

31:39

let's put everything that happened, is having

31:41

now a completely aside, because that's crazy

31:44

stuff. But what Barry did back

31:46

then, was really legitimize

31:50

Bitcoin as an investment and asset

31:53

class to a lot of VCs, like first

31:55

mark capital, and a lot of these early,

31:57

like, people he, you know, he had second

31:59

mark. And he was the first

32:01

one doing this like, you know, token like Barry would have

32:04

been a big deal Right, like Barry would have been someone

32:06

who was already on the cover of Bloomberg Yeah,

32:11

he was already like a well-known guy because second

32:13

market was essentially thought going back to like that

32:15

internet Narrative right like his claim to fame was

32:17

he you know, Facebook wasn't a liquid stock for

32:19

a long time He created a market where

32:22

people could essentially sell like employees could sell

32:24

stock on a secondary market So yeah, he

32:26

was already like, you know, he had his

32:28

Bloomberg cover He had his made his millions

32:30

established person right very different than like kind of some of

32:32

the other folks and then and then the

32:34

Winklevoss twins come into this in my understanding is

32:36

Charlie that uh They're on the beach

32:39

in Ibiza. You have like a friend or family friend

32:41

who's a dentist He sees them on the beach in

32:43

Ibiza and he could this is the rumor store. I

32:45

don't know if it's true or not Give

32:50

them his chairs basically he gives them his chairs

32:52

and says but wait I'll give you my chairs

32:54

in Ibiza if you take this call with my

32:57

buddy back in New York Who's gonna tell you

32:59

about this thing called Bitcoin and the Winklevoss twins

33:01

are like I'll I'll take the call cuz I

33:03

want the chairs And Ibiza cuz you can't get

33:05

chairs to be says that that mesrick did not

33:07

have to elaborate on that story One

33:10

bit that is it is exactly the

33:13

truth David literally

33:15

just called me out of the blue one

33:17

day and I knew he was he was already David

33:19

was committed to investing Like in

33:22

at the 1.5 million already along

33:24

with Roger Rogers and a little more money in David's

33:27

dad was my dentist We met

33:30

at some like New York City Tech Fair. So

33:32

it was already like a relationship there You're

33:35

part of the same like Jewish community and like

33:38

a couple of weeks later I mean, he's not a

33:40

time moon in Ibiza like he got married when I

33:42

was honeymoon comments Like why did David calling me? He's

33:45

like Charlie. I remember the Winklevoss like talks

33:48

little Remember the Winklevoss

33:50

twins from from Facebook movie. I'm like,

33:52

yeah, he goes they're here

33:54

with me right now Convincing Bitcoin is the

33:56

future. I was like, all

33:58

right, Eric get fucking office. And

34:01

like I had them on speaker and Eric was right

34:03

there and we like fielded, they

34:06

came with very good questions. I think they

34:08

may have heard about Bitcoin already to be

34:10

honest, or maybe I don't

34:12

remember but they didn't, they're very smart. And

34:17

then you and then you parted with them in New York and then

34:19

they invested. They came to New York. They

34:21

came to New York. We came to

34:23

the office one night. I like

34:25

I was like, I don't know if we'll ever meet them ever

34:27

again. So let's just like

34:29

strategically have them meet us on like a

34:32

Friday night at the office at like five

34:34

o'clock. So maybe we'll like, what are

34:36

they doing on a Friday night? We'll hang out with

34:38

them because they were celebrities. Yeah, they would have been

34:40

in a different position than Barry though, because I think

34:42

like Barry was someone who had legitimacy as well. Whereas

34:44

the linkle boss are really trying to break in, right?

34:46

Like Facebook was a big black eye for them in

34:49

a lot of respects, like they were, you

34:51

know, trying, they were looking for a way to get

34:53

back into the glitz and glamour

34:55

of the VC world, right? Because Mark, they were

34:57

kind of the villains in Mark Zuckerberg story. The

35:00

rift between Barry and Cameron and

35:02

Tyler really started then actually,

35:05

like in the early days, it's going on right now, but

35:07

it's that rift started over

35:10

a bit instant actually, because the Barry and those

35:12

guys wanted to invest and Cameron and Tyler just

35:14

kind of came in at the last minute and

35:16

it was a whole thing. So

35:19

the Winklevoss Barry rift

35:21

started around bit instant. Yeah, it started

35:23

over bit instant probably. Yeah. So what,

35:25

maybe switching gears for a second from

35:27

bit instant, what was the like kind

35:30

of state of mining here? Like

35:33

was there, was there a mining industry? Like

35:35

were there institutes, were there, were there any

35:37

companies doing mining? Like were you guys mining?

35:39

What did, what did this mean? You know

35:42

better, you know better. Yeah,

35:45

mining then was very much like a home

35:47

affair, right? Like most people were mining with,

35:49

they hadn't really made the jump things yet.

35:51

So this would be the specialized hardware that

35:53

you have now. So people were mining with

35:55

GPUs and like there was essentially, you know,

35:58

you have people within their garages, people. who

36:00

had like extra rooms and their apartments. There's

36:02

a great video of like Marshall Long like

36:04

showing you how to make milk crate miners.

36:06

There's a post that I dug up recently

36:08

where like some guy he had so many

36:10

miners in his room that his mom found

36:12

him because like he fainted he had a

36:14

heat stroke like he had to go to

36:16

the hospital. It was so hot in

36:18

his room. There were so many miners and

36:20

he sold all of his equipment on

36:23

the internet. So yeah, it was very much like

36:25

a hobbyist effort. So Yifu Guo who I think,

36:27

you know, I'm glad Charlie brought up because I

36:29

think he's a unfortunately kind of forgotten kind

36:31

of mythic figure from that era.

36:34

You know, he's the first one who commercializes

36:36

the ASIC, right? And so I think Satoshi has

36:38

some writings on this. I think there was always

36:40

foreseen that someone would make a chip

36:42

that was just actually specialized for Bitcoin Hashtag.

36:45

What did Satoshi say about it? So

36:48

there's a post where if you're

36:50

you know, so now we're getting into the

36:52

lore of like the Laszlo's emails where essentially,

36:55

you know, Satoshi, Laszlo was the first one

36:57

to mine with the GPU, right? So he

37:00

figured out that rather than mine with his

37:02

PC, he can actually take a graphics card,

37:04

which is a bit of a higher processing

37:07

capability and then actually retrofit it to mine

37:09

Bitcoin. And at that point, Satoshi reached out

37:11

to Laszlo and said, Hey, you know, glad

37:14

you're doing this. But you know, there's this gentleman's agreement

37:16

now for people that like, you know, we should have

37:18

as many people be able to join the network. So,

37:20

you know, Satoshi kind of put the kibosh on that

37:23

a little bit, or at least like chided him. But

37:26

yeah, that was the first real step advance in

37:28

mining. And then this would have been the next

37:30

step advance, right? So you would have had now

37:32

you had a dedicated machine. And I think I

37:34

tweeted about this machine recently, where was the first

37:37

ASIC ever. And you know, at that point, that

37:39

single machine probably could have mined one Bitcoin

37:41

a day. So sorry, one Bitcoin block. So

37:43

you would have had 25 Bitcoin per

37:45

day that that machine was minting when it was added

37:48

to the network, because that's how powerful was comparable

37:50

to the GPUs, right? Because GPUs are essentially

37:53

chips that were made for video gaming, they

37:55

were made for hash calculations. And

37:57

so, you know, Yifu found himself in

37:59

an interesting I'm actually wondering what color Charlie

38:01

has on this because you know essentially he has the

38:03

most powerful machine in the world for like mining And

38:05

then he had to figure out what to do with

38:07

it Because you know he could have

38:09

just sat there with his one machine and just dominated the

38:12

network But he I think from what

38:14

I recall from talking to him like he wanted to

38:16

decentralize Bitcoin He's kind of felt this pressure to you

38:18

know get these out there before the bad guys

38:21

get them because you know essentially like had There

38:23

been some malicious. You know force that found it

38:25

there could have been something that happened Yeah,

38:28

you who sat in that corner in the office

38:30

every day He grew up like a couple blocks

38:32

away from me in Brooklyn like just so crazy

38:34

coincidence that we shared You know instead

38:36

of taking we should we would take a train to the city to

38:38

the office Every other day,

38:40

but sometimes we would share it like I would drive him

38:42

and that's the only reason I had that first

38:44

a pic that he's showing in that video there is because

38:46

I had a car and He

38:49

I Know what

38:51

a crazy you food in this video Charlie. Yeah, he's right

38:53

there in the beginning of it holding up his Like

38:57

23 at the My

38:59

age exactly the same would have been dropped out

39:01

of college I think to use a NYU maybe

39:03

and what and what happened to him now, so

39:05

he Or

39:08

or we skip Well

39:10

no he did the right thing like I think he was one

39:12

of those guys who like I don't know Charlie Do you want

39:15

to tell the story or I can no no go for it

39:17

cuz I a lot of things happened And a

39:19

lot of ends got closed while I was sitting in prison

39:21

like 2014 doesn't 50 Yeah,

39:24

you flew stayed around and contributed for a long time I'd say

39:26

probably into like 18 or 19 You

39:28

know he helped host the Bitcoin mailing list for

39:30

a long time like he was a you know

39:32

great You know for a while right to what

39:35

you say he worked for you're gonna crack him for a while

39:37

Yeah, yeah, but yeah his so you

39:39

know he basically again. He found he created this

39:41

miner right? It was super powerful and he had to

39:43

figure out how to commercialize it right so we didn't

39:46

know we didn't have the mining model You have

39:48

now where essentially there's companies that make machines They

39:50

sell to other large vendors or they mine with themselves

39:53

So what you had in 2013 and you who

39:55

really started this was the direct consumer Mining

39:58

rig model where you could like? go to

40:00

his website, you would preorder like one to

40:02

10 rigs like how many you wanted.

40:05

And there was this idea that like there would

40:07

be like home mining or garage

40:09

based mining, right? So his goal was to

40:11

decentralize the network and to make a business

40:13

off of that. The model proved absolutely horrible.

40:15

And basically anyone who did it was totally

40:17

destroyed because what would happen would have people,

40:19

you know, when the ASIC went on sale,

40:22

they spent like 75 to 90 Bitcoin like

40:24

on the

40:26

ASIC. And then but they're just preordering

40:28

it. And so now like 2013 happens,

40:30

the price goes from like $10 like

40:32

up to $1,000. And you have people

40:34

waiting for months, like you know, six

40:36

months, seven months. People were pre mining

40:38

on the machines too. People were getting

40:41

the machines in and fucking

40:43

sending up warehouses. The forums were just

40:45

you know, the forums were just you

40:47

talk about like, you know, people want

40:49

crazy shit today. Yeah, like people were

40:51

livid like you had class action lawsuits.

40:53

And this is when it really started

40:55

to get crazy. Scams were a muck

40:57

like you you're if you

40:59

just stuck around, you had credibility if you

41:02

just didn't scam people and

41:04

just had a like a or involved in a

41:06

circular economy of good points. You were a good

41:08

person. Well, here's the thing as a Yifu, like

41:10

I would just add like an addendum on him

41:12

is like so where the other miners sort of

41:14

failed and they went to bankruptcy court because they

41:16

basically tried to like, you know, when

41:19

this once they're failing spread it out for as

41:21

long as possible. Yifu saw it a bit early

41:23

and he ensured that customers were funded, they were

41:25

actually refunded. And it was like such a controversial

41:27

thing that he basically presses other founders like we

41:29

need to give people back their Bitcoin, like not

41:31

their dollars, we need to give them their Bitcoin.

41:33

He refunded the customers. But through that he was

41:35

basically kicked out of Avalon. So like, you know,

41:37

Kanan is now a public company. And he doesn't

41:40

he never got like his share of those stories.

41:42

Yeah, that's the sad part of the story. But

41:44

like, you know, and I think it's interesting where

41:46

it's like he really did the right thing. If

41:48

you think about people who like manage that situation,

41:50

like 23 year old kid,

41:52

huge company, you know, tons of

41:55

irate customers breaks my fucking heart

41:57

because breaks my heart because

42:00

He used to sit in the corner of that office

42:03

and shake his head every VC meeting

42:05

I had. The Winklevoss

42:07

twins, David,

42:09

Barry would come in. All

42:12

these people, our eventual investors,

42:15

everyone except for Roger, loved Roger, loved Eric,

42:18

but anyone who wasn't a true Bitcoiner, he

42:21

could tell the difference. He's

42:23

heavenly hated. He was like, never

42:25

take money from VCs. He's like, never take

42:27

money from VCs. We should never do it.

42:30

We should do it all on our own. He

42:32

loved Eric doing the GLVSC with

42:35

Satoshi. It

42:37

was such an unfortunate thing that doing the good

42:39

thing by refunding people in their Bitcoin, he would

42:41

be forced out of the company and ended up

42:44

in public and give no credit

42:46

for that. It's like a sad story

42:48

because he saw

42:50

it happen. It's the tragedy.

42:53

He saw it happening. He was the most

42:55

powerful Bitcoin miner in the world at that

42:57

point that the photo was taken. He

43:00

would have been single-handedly representing at least 5%

43:02

of the network in terms of hashing capacity.

43:07

He gave these things away for free.

43:09

The first dozen machines, he let us

43:11

mine in the office. He didn't

43:13

charge us for it. Actually, he did.

43:17

I found this email the other day. I was saving it for my

43:19

book. He charged

43:21

us 608 Bitcoin and

43:23

it just covered the shipping cost. Oh my God. I

43:29

guess maybe a little rizzo. Maybe you can pull us into,

43:31

that's like 2011, 2012, 2013. So

43:34

we've got like Peter

43:36

Smith and I still don't fully understand the

43:39

story where like Brian starts Coinbase looking for

43:41

a co-founder. Originally, it's Peter Smith. Hopefully, he

43:43

covers his co-founder. So that would have been

43:45

a different founder. Yeah, Peter Smith was blockchain,

43:47

which was later. This would have been a

43:50

reuse is the main name you're looking for. I

43:53

think we're talking about Peter Vestman. Sorry. No. Okay. So

43:55

take us into 2013. Because when I think about 2013,

43:57

then you've got like, okay. Bitstamp

44:00

was already there for a year, Kraken was

44:02

already there for a year. Then you've got

44:04

Coinbase comes on the market. Yeah,

44:07

Bitpay was already there. Yeah, I

44:09

think you have your first big

44:11

wave of venture

44:15

backed companies as I think of it.

44:17

Because YC does these deals with, I

44:19

think Coinbase and maybe blockchain.com. Yeah, so

44:22

you really have Silicon Valley coming

44:24

in 2013. MIT

44:31

Bitcoin Club. This

44:33

would have been Bitcoin 2013, the

44:36

conference in San Jose. There's this

44:38

big mainstream moment where Bitcoin really

44:40

crosses over into Silicon Valley. It's

44:42

the hot Silicon Valley secret. You

44:45

have like Bellagie, Shurnabhasa, Mark Andreessen,

44:47

Christiksen. People who

44:49

are now associated more with the general

44:51

crypto movement today who start

44:53

getting interested in Bitcoin. And start funding startups

44:56

pretty aggressively. So Bitinstant would have been funded

44:58

at that point, but then CoinDesk comes out

45:00

and makes a $5 million round. And

45:03

then Ripple Labs comes out and gets

45:05

$5 million to take

45:07

Bitcoin's invention even further, quote unquote. I'm using

45:10

quotes there, you can't see. But

45:12

yeah, there would have been essentially this culture clash.

45:14

And it's interesting because I would have joined CoinDesk

45:16

in 2013. CoinDesk was

45:18

itself like a Silicon Valley backed startup. And

45:20

essentially it was the first news

45:23

outlet for, we were then calling

45:25

digital currency. And

45:27

the mode of the time really was,

45:29

and I don't think I've ever really

45:31

maybe talked about this, but there was

45:33

like a tacit like, hey, you should

45:35

cover these new Silicon Valley folks. And

45:38

the old guard libertarian

45:40

type people were

45:42

sort of kind of quieted down a

45:44

bit. Right? Like there was kind of

45:47

this idea that, oh, the ecosystem was

45:49

like moving past this kind of early

45:51

stage of like very heavy libertarianism. Very

45:54

heavy on like the anti-war stuff, very heavy

45:56

on Silk Road and like the VCs were

45:58

sort of coming in, but there was... like

46:00

a bit of a task that's sort of like,

46:02

oh, well, let's, we're going to clean this up,

46:04

right? Like we're now here and we're going to

46:06

take every Yeah, the whole push. Does

46:09

anarchists like VC, like started to

46:11

hit butt heads right there? And

46:14

it's funny, I was just showing a video of

46:18

this Bitcoin 2013. And it's a lot of what's

46:22

striking to me is there's a lot of button down shirts

46:24

in the room and it's okay, so this

46:26

is the Coinbase booth and then the camera is going

46:28

to turn a little so get to the point of

46:30

one. And then the coin. Those

46:33

are the coin desk lanyards because that was the, that

46:35

was the launch of coin desk. Yeah. And

46:38

so Brian's in a suit here. Like, Brian,

46:40

this is not the So

46:42

you see Stefan who started we use coins. He's

46:44

at the, he's at the ripple booth right now.

46:46

I mean that that's who that guy

46:48

is. Right there. Yep.

46:51

Oh yeah. Yeah, Stefan. So

46:53

then the sort of coin desk

46:57

going to mark the start of like coin

46:59

desk, Coinbase, ripple. There's this kind of like

47:01

an incident was there and Cameron and Tyler

47:03

were manning my booth. So they were like

47:05

the celebrities of the of the conference and

47:08

like for six months, my single

47:10

life task was putting on that conference. When you

47:12

don't see is how small it was.

47:15

We only took up like a corner of that whole fucking

47:17

room. It was like the size of a gymnasium. Yeah,

47:20

large swath. It was just like empty. I

47:22

would add one point to that. That's interesting

47:24

now given like the historical revisionism like is

47:26

that there wasn't like a Bitcoin and crypto

47:28

like there wasn't enough people for there to

47:30

be like different cultures like there wasn't enough

47:32

people. Oh my God. Sorry.

47:35

Yeah. Look

47:38

at the tagline. Sorry, I just found

47:40

a tweet that I posted in 2021. That's

47:43

it. Yeah, there was no Bitcoin or crypto because

47:45

everything that you can build on Bitcoin that no

47:47

one really talked about yet. None of those companies

47:49

even coin lab was kind of talking about butter

47:51

coin. It was all. It

47:55

was all like building

47:58

with the blockchain. I

48:00

think I don't even know if I would say

48:03

that yet, but there was this idea that there

48:05

was people doing other experiments. I think peak blockchain

48:07

mania was like 15, late 14,

48:09

because I remember the first time I heard

48:11

someone give a speech about blockchain was Vital

48:14

Gluterin in 14 when he launched Ethereum.

48:17

He was like, no, it's the ball about the blockchain. I

48:19

was like, the blockchain? What is like? Because

48:21

we were writing about Bitcoin for payments, companies

48:23

were writing things. The original model

48:25

for CoinDesk was just like, oh, we're going

48:27

to be TechCrunch for Bitcoin. That's it. There

48:30

wasn't a greater, we're going to analyze

48:33

all these scientific proposals. By

48:36

2017, I was knee deep

48:38

in reading 10 research

48:40

dissertations every fucking week.

48:44

Back then, it was like, no, we're going to have a

48:46

simple model. We're going to be TechCrunch for Bitcoin. We should

48:48

cover Bitcoin startups. That complexity

48:50

to the industry really came later. I think

48:52

2013, Bitcoin was mainstreaming for payments. Some

48:58

other people had interesting experiments, but

49:00

they weren't maligned. You weren't an

49:03

outcast for experimenting with something else. It was

49:05

just that they were around, but they were

49:07

like, you know, like rippling. They were doing

49:09

anything, yeah. They weren't quite sure. They

49:11

had in launch. Yeah, there wasn't really an idea that

49:13

there would be this kind of

49:16

cryptocurrency ecosystem, this whole kind of expansion.

49:18

I think there's two more phases from

49:20

that. It's like the 15 to 16

49:22

private blockchain era. And

49:25

then there's the 2017 crypto

49:27

explosion, where everything is a cryptocurrency

49:29

and everybody in the dog has

49:31

an ICO. I'm trying

49:33

to remember. I'm going to guide

49:36

us back into this story for a second. So

49:38

2013, market runs up from like a six-year epoch

49:40

to like $1,000. It

49:47

was a $1,000. Even Mastercoin

49:49

and Omni wasn't until late

49:51

2013. Yeah, right.

49:53

After that conference. So Ted, like,

49:55

forget Tether, but like the

49:58

first protocol that were colored coins. If

50:00

you have colored coins wasn't even

50:02

proposed till after that that video that you showed like

50:05

that's how early that's the kind of work Yeah,

50:08

so then 24 so 2013

50:10

is a great year right Bitcoin rips

50:12

from like Well,

50:15

there's a tremendous amount of pressure on the industry because

50:17

you know Essentially like this is where like the regulatory

50:19

conversation really enters the floor like so there was a

50:22

little bit in 2011 where you really have Like the

50:24

first kind of lawmakers come out and say like we

50:26

need to regulate this like Silk Road is bad sides

50:28

with the price going up right because so

50:30

the Bitcoin price starts January 2013 at like

50:35

$13 and runs up to thirteen hundred But I would

50:37

say at that point like the industry is sort of

50:39

like overwhelmed and ultimately kind of fails with Mt. Cox

50:41

like Right

50:46

industries overwhelmed like the boat cap

50:48

sizes, right? Because

50:50

what happened was mount gox was

50:53

the was the 99% source

50:55

of liquidity every exchange I

50:58

also get in their equity from mount cox I

51:00

was getting my liquidity from mount gox and

51:02

we were failing and we were our

51:05

website broke down we shut down in in

51:08

May of June of 2013

51:12

because what happened was The

51:14

a couple of things happened since then came out

51:16

with this guidance So the first time the federal

51:18

government a couple of months after that conference Said

51:21

Bitcoin is now not like airline miles or

51:23

gift cards that you guys think it is

51:26

It's now money and you're going

51:28

to govern on your money transmission money

51:30

service businesses This is real now all

51:32

you coinbase that you cannot selling airline

51:34

miles But instant you're you're selling money

51:37

and that fundamentally it's like overnight my lawyers

51:39

You know that were like you got to

51:41

shut down that instant because we were trying

51:43

to like Get the state

51:45

at that point to give us these

51:47

no action letters based on that We

51:49

were selling gift cards type airline miles

51:52

So we were trying to like get the opposite of

51:54

like a money transfer license like a no action letter

51:56

like your your kosher and So

51:59

Not only that, Garth as rehire propagating their

52:01

bitcoin. They were always running out of

52:03

fractional reserve so out of the man

52:05

was growing. Male dogs didn't have enough.

52:08

Real. Bitcoin of people want to. The surgery

52:10

was a. Knock. Off as having

52:12

withdraw delays and people going to get

52:14

the colonies or to withdraw in the

52:16

whole thing imploded. By. I.

52:19

Would say like. Be amid

52:21

swine forty and like for level of your twenty

52:23

four two dogs awesome yeah why would say like

52:25

that one adding saying like those kind of as

52:27

grub down as like there would have been like

52:29

an extreme like lack of confidence even in the

52:31

brick on price I so you went up to

52:33

thirteen hundred within Mac os crashed and of the

52:35

real question I think of the time like how

52:38

much of that trading volume was even a real

52:40

because we learned was essentially them out on a

52:42

on a few waiting their own exchange in order

52:44

to so sexually a story maddox his leg you

52:46

know they were really hacked back and likes why

52:48

eleven there's actually ran this fractional reserve exchange for

52:50

years. and have had this and obvious

52:52

get it from users and that eventually like you

52:54

know they base of the recalled on as they

52:56

had to shut down so he i think it's

52:59

interesting. That

53:01

was really the moment where I think like

53:03

the infrastructure was like so overwhelmed but the

53:05

question was like is because even legit because

53:07

like how can you trust as price history

53:09

how do you trust us Prices every or

53:11

was it all fake right? Was it all

53:13

was as he you know ten people in

53:15

a dog like using a will be was

53:17

bought in Mount God that was buying Bitcoin.

53:20

Buying. Bitcoin on behalf of the

53:22

company. To try to slowly

53:24

recovering the gap. So. And a

53:26

half was like four hundred thousand the i

53:28

was like a significant him how to as

53:30

like the prices it's and drawing asked it

53:32

was also buying up more decline when this

53:35

was the will this is the willie bar

53:37

own called we will he bought or something

53:39

and who uncut was it did sell kiss

53:41

on kind of his yeah now that says

53:43

the guy on covered willie by would have

53:45

been a guy on of Japan was a

53:47

guy like the background research on of again

53:49

I can remember with yeah well yeah A

53:51

i've ryan yeah ryan or that's a he

53:53

did break the mailbox story that is are.

53:56

saying that ryan that i am sweet is mighty

53:58

mighty live a better as us Uh,

54:00

because the way that that story was released has

54:03

also been like kind of like scrubbed out But

54:05

it's like very important understand cuz like Ryan didn't

54:07

break the news right like so what Ryan really

54:09

did is that and I Can we work? I

54:11

was one of the I was one of his

54:13

um certifiers or whatever. Oh, okay Yeah,

54:16

I think I talked to you that night. I think

54:18

yeah, yeah, we did we talked that that was a

54:20

crazy night but anyway, like so what This

54:23

is important to understand cuz I also I often say

54:25

that like the crash was like Ryan's fault like so

54:27

I'm just gonna push this out there. Yeah Like

54:30

it's become he writes a blog

54:32

and then he's any what that blog says is

54:34

like he's like I have evidence So like a

54:36

document of men and I have sold all my

54:38

bitcoins So like so he doesn't publish he doesn't

54:40

publish the actual evidence. Well, he doesn't see just

54:42

was about it So it's like 6 p.m. Am

54:44

I trying to leave for work and I'm like,

54:47

oh my god, like well It's all my faith

54:49

in Bitcoin. I sold all my Bitcoin Yeah,

54:51

he's done And then so then the market just starts

54:53

like teetering and like crashing people like what's going on

54:55

is like this real Whatever and that isn't until like

54:57

I want to say that I was up until like

54:59

1 in the morning Where then he

55:02

posted the real documents and then the documents

55:04

and then there was the reporting so there wasn't

55:06

like there was this like seven hours of just

55:08

like Market and freefall because there wasn't any

55:10

information like it was just like he's like, yeah,

55:12

I found something bad I've sold everything. I'll

55:14

call you like I'm out He's

55:18

wanted to confirm the documents I

55:20

think and but they were

55:22

real and no one can get anyone in mount off

55:24

I Saw that post

55:26

I sent him a tweet cuz he was anonymous

55:29

at the time under them. Yeah, he would to

55:31

be a He

55:33

was publishing under Ryan Golt, I think

55:36

Ryan maybe he was just

55:38

too bit idiot and he was um, That

55:40

was his name stupid idiot and he I sent

55:43

a message I said send me this document

55:45

and I have someone in Mount Gox He sent me

55:47

the document and I I knew

55:50

this guy Gonzaga a bush or a Bag

55:52

is this right? I was like like

55:54

marks number two and he sent me like two words.

55:56

He goes. It's real Oh

56:01

my god yeah I'm not. Basically the market

56:03

is great and I mean I think it

56:05

when backs away four hundred bucks mm that

56:07

maybe a bouncer to like six hundred but

56:09

it was just yeah was pretty much carnage

56:11

from and fourteen when basically just like you

56:13

know regulators basically coming out you have like

56:15

a carpool as as arrested in these like

56:17

paraded in front of Japanese authorities a society

56:20

hasn't publicly apologize a national T V and

56:22

I was a rebroadcast it into the be

56:24

only news alerts but in another the V

56:26

C is basically that point like dropped they

56:28

coin like it was like you know. The

56:30

overnight like there was a satire. The

56:32

room there was like no institutional support

56:34

like you know you are. You guys

56:36

like to Moscow before like you know

56:39

there and and quite as the Ams

56:41

on twitter everyday. just gone and go

56:43

slick. Never heard from again after a

56:45

Rocky Ross got arrested rama time. Yeah

56:47

Ross's. And book Road.

56:50

And on what truly worth Eurosur on

56:52

that time for and plater six months

56:54

later sold anywhere first to die comfortable

56:56

sharing that sort. Yeah, absolutely for by

56:58

the I want. By the time I

57:00

got like the same day I got

57:02

arrested. Was. Also. The

57:05

day that metallic got on stage and announced

57:07

the Syrian for the first time. So we

57:09

give like some historical context. Ah,

57:12

The day you get our asses one a

57:14

theorem announces yeah, another new launcher and stuff

57:16

like a theoretical now for This is what

57:18

we're gonna build over the next couple of

57:20

years. My name is the towel like I'm

57:22

a writer for Bitcoin Magazine. This.

57:24

Is what we're gonna do. type of thing.

57:26

But. That like will be fodder. that was gonna

57:29

start the grass. Getting arrested is so grow

57:31

the. The. Up and implosion

57:33

amount got. The. The government

57:35

funds and thing. Was. Basically effectively

57:37

with a blanket ban. On. All

57:39

American Global because businesses and they have

57:42

China banning the coins were dropping. At

57:44

a time couple months. To that started

57:46

the Bear Market. That was the official start of the

57:48

Bear Market I shut down. but in you it was

57:50

no way to support the sequence right? I think it's

57:53

funny when people as you like how big was a

57:55

back then liking our they've for like there's this kind

57:57

of idea that the new markets are somehow bigger but

57:59

like. think about some of these things. You

58:01

had like geopolitical entry with like Bitcoin and Cyprus

58:03

and the conversation. You had an all-time high that

58:05

was like very obscene, $1,000. You had major market

58:09

failures. Like, Maqox would have been on the par of

58:11

something like a LUNO, just like unthinkable,

58:14

unheard of. So there's a lot

58:16

of analogies here. And especially the

58:18

backlash is very

58:20

similar to like maybe how people were feeling

58:22

like after FTX, right? I think Maqox and

58:24

FTX were always the same feeling. Yeah, there's

58:27

burnout. And you have like a mysterious kind

58:29

of goofy, like, I don't know,

58:31

should he really CEO guy who like doesn't seem

58:33

like he should be doing this as a job,

58:36

you know, and like, and there's sort of like

58:38

the, you know, negative effects that take hold in

58:40

the industry. But it was all consolidated, right? Because

58:42

there was only one Bitcoin, there was only Bitcoin

58:45

really, that was the story, right? And so what

58:47

it did was it reset Bitcoin a little bit

58:49

back into it through Bitcoin back into the crypto

58:51

anarchy area era again. I remember

58:54

traveling like Buenos Aires for a lot of Bitcoin, a

58:56

lot of Bitcoin, which was a huge thing. It kind

58:58

of pushed Bitcoin outside of the US in a way.

59:00

You would have

59:02

a mere talky and like Peter would have

59:04

been like a big force at that time.

59:06

Yeah. London, I'm here talking, I saw

59:09

him in London is a great example. It

59:11

was a lot more like Bitcoin

59:14

positive, like it was hangover.

59:16

It was a hangover. So it was

59:18

a lot like what went wrong? What did we

59:20

do wrong? There was a lot of

59:23

like, Well, and that really starts the block, the block

59:25

size wars really start at the end of 2014 with, you

59:28

know, sort of Gavin kind of trying to, you

59:30

know, Gavin really, I think tries to start like

59:32

a new forward direction for Bitcoin around this idea

59:34

that will scale Bitcoin and will work collaboratively

59:37

to improve the technology. And that, that sort

59:39

of really, I think is the opening guns,

59:42

like the next era. Wait, before we go,

59:44

because that's a really crucial part of this.

59:46

So before we go there, maybe close out

59:48

this last year with Charlie, you're, I'd love

59:51

to hear like, yeah, I mean, someone's your

59:53

house and they knock on your door and they're like, Charlie, so

59:57

Bitcoin, Bitcoin was starting to like.

1:00:00

The price was going down, but there was

1:00:02

still a lot of left over positive media

1:00:04

attention. It was growing.

1:00:06

There were some good metrics.

1:00:09

I got paid a lot of money to

1:00:11

travel to Amsterdam for a Bitcoin conference. Traveling

1:00:14

around, man, it was great. Just doing Bitcoin

1:00:16

Foundation stuff full time. I shut

1:00:19

down BitInstant because the government made

1:00:21

me, but we were trying to get some

1:00:24

money transmitter licenses and trying to get things going

1:00:26

again. And I

1:00:29

felt like there was some positivity

1:00:32

maybe. There was

1:00:34

that first Bitcoin like 2014 conference that

1:00:37

was taking place in early January 2014. So to

1:00:39

start off 2014, just right, we're

1:00:41

in the big Bitcoin conference, the first major

1:00:44

Bitcoin conference in

1:00:46

the US after Bitcoin 2013. So

1:00:49

we were going to travel to that event and everything.

1:00:52

And we were traveling home from Amsterdam

1:00:54

speaking. Courtney and I were just dating actually at the

1:00:56

time. And I got home, I

1:00:59

was doing my customs with my passport,

1:01:01

and then you come back into the

1:01:03

US at JFK airport. And when

1:01:05

I came back, as they were

1:01:08

doing my passport, tons of

1:01:10

federal agents all surrounded me

1:01:12

and everything. And they all

1:01:14

escorted me over to both

1:01:16

of us to a back kind of

1:01:18

jail within the airport. And they put me in

1:01:20

a holding cell and they read me my rights

1:01:22

and everything. And then they gave

1:01:24

me my arrest warrant and I read what I was

1:01:27

being arrested for and it was like pretty like five

1:01:29

charges. It was really crazy stuff, like a lot of

1:01:31

money laundering failure to file, like all

1:01:33

these crazy suspicious activity reports and not

1:01:36

having a money transmitter license. All these

1:01:38

things, they asked Courtney to like check,

1:01:40

go get my bag for me. I had to claim

1:01:42

as long as shots were conveyor belt. Yeah,

1:01:45

they did that. It was crazy. And then,

1:01:47

so I got arrested. I went through like

1:01:49

a couple of days in the same place

1:01:51

that Sam Bing, my friend

1:01:53

was in. I kind of saw that picture, kind

1:01:55

of gave me the heebie jeebies. And then

1:01:58

I did a house arrest. for a couple of months,

1:02:01

actually a couple of months,

1:02:05

like a year, right? Like solid eight

1:02:07

months, almost of house arrest from like

1:02:09

a time to get arrested, the time

1:02:12

that I could actually go to prison.

1:02:14

I pled guilty, but

1:02:18

during the year of house arrest, New York City

1:02:20

was like a Bitcoin Mecca. It

1:02:22

was so awesome. There were so many proof

1:02:24

of stake dinners. There were like things happening.

1:02:26

Like the bear market was still happening, but

1:02:29

there were still things going

1:02:31

on. There were still, you

1:02:34

know, like businesses being built and

1:02:36

investments happening and ripple had launched.

1:02:39

Like by this time, when

1:02:41

I was going to prison, I

1:02:44

didn't think, I really thought that

1:02:46

the Bitcoin markets would come back. But

1:02:48

from the time of my arrest,

1:02:51

and even before, from the time of like Mount

1:02:54

Gox imploding, for the day I walked

1:02:56

into jail, all the price did was just

1:02:58

go down. From the high

1:03:00

of 1200 or 1300 to when I walked in, it was

1:03:02

like $158. Like

1:03:05

it was going to zero when I walked

1:03:07

in. I just about gave up on Bitcoin,

1:03:09

has a future for me walking in

1:03:11

there. I was like, all right, Charlie, just get

1:03:13

through. I actually made life easier in prison. Cause

1:03:16

I was just like, I didn't have to think about Bitcoin on the outside.

1:03:19

And- Unless I'm telling you it's

1:03:21

$200. So yeah,

1:03:23

so later on as I'm in,

1:03:25

Courtney's like telling me what the

1:03:28

Bitcoin price, I was like keeping updated with all the

1:03:30

news. A lot of people were like printing out the

1:03:32

front page of like our Bitcoin, which was on Reddit,

1:03:34

the place where everyone hung out on Bitcoin. Free block

1:03:36

size war, in the block size war kind

1:03:38

of broke that up. But people

1:03:41

were, there was this guy Max, we're asking to

1:03:44

work for the Wall Street Journal. Thankfully for him,

1:03:46

he'd like mail me like

1:03:48

copies of the Wall Street Journal once a

1:03:50

month, like every past 30 day copies of

1:03:52

every- I didn't know that story. Yeah, cause

1:03:54

a lot of people, like people would send

1:03:56

me money. Like I, you know, cause

1:03:58

in prison you have to live on donations. So

1:04:01

I, contrary to popular belief,

1:04:03

when I left prison, I had almost no money to

1:04:05

my name. I

1:04:07

had like $16,000 worth of Bitcoin the day

1:04:10

I walked out. So I had to restart

1:04:12

from scratch. I had no

1:04:14

money between my lawyers and the

1:04:16

$950,000 civil forfeiture

1:04:18

that I had to pay back to the government, which I

1:04:20

paid, by the way, and then the first two years of

1:04:22

getting out because thanks to the 2017 bull market. But

1:04:25

I had to restart from

1:04:27

scratch, everything again. The prison

1:04:30

was a complete bear market.

1:04:33

But what was interesting was it was like, I still

1:04:35

have a box of stuff and I haven't reopened the box. We

1:04:37

call it my prison box. Pete

1:04:40

helps me write my book, finish this thing, then maybe we

1:04:42

could open the box. But there's

1:04:44

like letters of white papers in there. People wrote

1:04:46

like handwritten stuff like... I remember when you came

1:04:48

out, we did the first interview at Qantas. It

1:04:50

was a little bit off the end. Oh,

1:04:53

so that was, let's go back to you and Ryan. So

1:04:55

you and Ryan were like the first people

1:04:57

that really took me seriously and

1:04:59

gave me a platform to reestablish myself and

1:05:02

restart. What was this? March

1:05:05

2017, I mean. I

1:05:08

think it was earlier than that. I think it was 2015. Really?

1:05:12

I think it was late 20th. It was like I

1:05:14

was just out. So it was like 2016 maybe. 2016.

1:05:17

2016, we moved here. Yeah,

1:05:20

that would have been like New York's coin desk

1:05:22

office. So 16 maybe actually. So you went through

1:05:25

a coin desk bear market too. You were driving

1:05:27

around the van for two years during that time

1:05:29

when I was, you went to your own proverbial

1:05:31

prison kind of. Not

1:05:33

a prison, but yeah, I mean I was, well

1:05:35

that was more of like a work remotely, you

1:05:37

know, I was taking advantage of that. Me and

1:05:39

my buddy bought an RV. We drove around. And

1:05:41

you were keeping coin desks running. Rizzo, how did,

1:05:43

Rizzo, can we hear that story? Like how did,

1:05:46

so everyone, okay, everyone thinks of, today there's

1:05:48

a big media space in crypto and there's

1:05:50

all these podcasts and blockworks and coin desk

1:05:53

and everyone else. But you know, back then

1:05:55

it was really just our

1:05:57

Bitcoin channel and then you guys were, you

1:05:59

know, Yeah, I mean basically the

1:06:01

whole industry like whittled down to nothing like I

1:06:03

mean as Charlie was sort of saying I would

1:06:06

say by 15 it was everyone died Everybody

1:06:11

left or they like did something else So, you

1:06:13

know if you were in Bitcoin in 20 I

1:06:15

always say like the real bear market was like 15 and 16 Yeah,

1:06:19

like if you stuck through that that was the worst

1:06:21

way because it was like you couldn't

1:06:23

even say Bitcoin publicly Like I remember going to

1:06:25

like blockchain events in like New York and like

1:06:27

Patrick Byrne would be the one the CEO of

1:06:29

overstock He's like the one guy who said Bitcoin

1:06:31

It would be like hushed in the room and

1:06:33

like if you were still involved in Bitcoin or

1:06:35

crypto stuff It was like you had

1:06:37

to wonder like what you were doing with your life

1:06:39

Like, you know, it's like there people were there because

1:06:41

like maybe you were still getting paid But it's like,

1:06:43

you know The primary like kind of narrative

1:06:45

the industry was really just like, you know,

1:06:47

you got the block size war start So

1:06:49

like Bitcoin is just contention You

1:06:53

know, it's like all these debates and they're like

1:06:55

super esoteric so you go from like covering, you

1:06:58

know fun stuff like about startups

1:07:00

raising money and it's like parties and

1:07:02

then like, you know nerds

1:07:05

in a room like fighting over

1:07:07

like whether you know Over

1:07:12

the firewall in China means that

1:07:14

the network will be less decentralized and like

1:07:16

the other thing is that like There's

1:07:19

been this like post 17 arrow Washing

1:07:21

around the block size words that it was this

1:07:24

great like a moral controversy But like at the

1:07:26

time it was not fought on moral grounds like

1:07:28

the Bitcoin core developers again We're making arguments about

1:07:30

like oh well internet bandwidth Like is it gonna

1:07:32

be enough and we have to think about bandwidth

1:07:34

and nodes have to be small there wasn't any

1:07:36

of this like stuff that we saw in 17

1:07:39

where there really is kind of like a You

1:07:41

know the UASF and like people running nodes

1:07:44

and they're anti startups There's all these sort of like

1:07:46

political things that are grafting on it Like back then

1:07:48

it's like a boring technical debate like, you know, you're

1:07:50

in a room with like 30 neck beards It

1:07:53

looked like jam. There was no Fanaticism

1:07:56

there was no like sides.

1:07:59

I remember like about in prison, in

1:08:01

a prison email, Roger Vere, who has

1:08:03

keep me updated was like telling me, yeah, I'm going

1:08:05

to Hong Kong about this agreement

1:08:08

that we're going to have now. Like,

1:08:10

I'm like, sounds

1:08:12

great. I know

1:08:14

we had a problem with the tech of

1:08:17

Bitcoin. Bitcoin was growing.

1:08:19

There was no issue yet.

1:08:21

It was like a foresee of an issue

1:08:23

that ended up coming, but it didn't

1:08:25

come yet. Yeah, it

1:08:27

was pretty tough. And like for me, I'd coined

1:08:30

as like, you know, like coin does would have

1:08:32

been like me and another guy, like I said,

1:08:34

like the entire state of like, the US journalism,

1:08:36

it was me and Stan, Mike McSweeney, editor of

1:08:39

the block block works, fine, fine publication. But

1:08:41

yeah, so yeah, it was me and him. And like,

1:08:43

essentially, like I had moved out of

1:08:46

New York, I moved down to like the Caribbean,

1:08:48

basically, like I spent most of 2014 buddy

1:08:51

driving around, I ended up moving

1:08:53

down to like St. Thomas, like this rent is

1:08:55

an apartment, I remember, like being

1:08:57

like, you know, like, essentially,

1:08:59

like the old coin desk entity was shutting down, we

1:09:01

had done consensus, which was a very famous conference, we

1:09:03

went all in on this conference, we were going to

1:09:06

make this big conference, it was going to be like

1:09:08

the blockchain thing, we were going to like bring the

1:09:10

businesses back together, we're going to restart things. We

1:09:12

did it in New York, Juni and Wong, like, you

1:09:14

know, the architect of that, like forced the company to

1:09:16

like, you know, do this big event, we

1:09:19

all went pot committed on it, it was a huge success.

1:09:21

And then we turned around, we're like, oh, fuck, we don't

1:09:23

have the money to keep running coin desk, we have to

1:09:25

shut down. So like, our original founder was this guy

1:09:27

named Shotcon, he was this UK, like VC investor, he

1:09:29

was the one who kind of orange-filled Silicon Valley, got everybody

1:09:31

in, and he's like, look, I don't want to run

1:09:33

it anymore. I'll give it to you guys

1:09:35

if you want to run it, or we can find a buyer, he's

1:09:37

like, if you don't want to continue it, I'll just shut it down.

1:09:40

And I remember market selling, like, like

1:09:42

with my CEO, we like market sold

1:09:45

300 Bitcoin at like 200

1:09:47

bucks, like a disgustingly low price, like a

1:09:50

way liquidated the rest of the Bitcoin that

1:09:52

the company had. And like, yeah, basically, like

1:09:54

I remember being in, you know,

1:09:57

and being St. Thomas, like I was going out and

1:09:59

swimming. in the ocean every morning. I was looking

1:10:01

out of this amazing beach and I remember, you know,

1:10:03

I was writing about like ripple white papers and lightning

1:10:06

white papers and I was like, I can't do this.

1:10:08

I gotta do some of my life. And Ryan Selkis

1:10:10

calls me up and he's like, Hey bud, how you

1:10:12

doing? And I was like, well, not sure about my

1:10:14

life. And he's like, well, look, DCG wants to buy

1:10:16

coin desk. We're going to do it legit. You're going

1:10:19

to come back to New York. I'm

1:10:21

looking at this like beautiful Vista and I'm

1:10:23

like, all right. It's like, it was sort of like, are one of

1:10:25

those, are you in or out or like, you just fade away

1:10:27

and you just end up like on a, you know, being a rum

1:10:30

runner on some like sort of weird Caribbean Island. That

1:10:32

was a fork in the road. So then of course

1:10:34

I went back to New York, you know, I met

1:10:36

with Barry and those guys and like, you know, they

1:10:38

essentially, you know, they wanted to take

1:10:41

over coin desk. They were going to do it legit. You

1:10:43

know, we had a few other

1:10:45

offers. There were other, you know, suitors of

1:10:47

the time, trace mayor as well. But you

1:10:49

know, essentially this was like the recapitalization of

1:10:51

coin desk into something that, you know, that

1:10:53

I haven't heard in a while. Yeah. He's

1:10:55

kind of dropped off,

1:11:03

but yeah, that was, and now, you know, like

1:11:05

the cryptocurrency journals and spaces, you know, vibrant and

1:11:07

thriving and pretty necessary. But I think back then

1:11:09

it was, you know, kept alive by just the

1:11:11

will of a couple of people that continue it.

1:11:14

I mean, it's almost died because of the bear

1:11:16

market because of the event. I mean, it effectively

1:11:18

was in solving. Right. So it did. It did

1:11:20

formally fail. I was like a,

1:11:22

as a business and has

1:11:24

failed since right. And it's recently acquired by

1:11:26

bullish, right? So I think, Oh,

1:11:29

I remember that. Yeah. Yeah. So,

1:11:31

you know, it's been interesting to see it pass through

1:11:33

the ages, but yeah, back then, I mean, coin us

1:11:35

was super necessary, right? I mean, we were like during

1:11:37

the block size wars, one of the focal points for

1:11:39

coverage. Like we were, I remember being in the meeting

1:11:42

where like we had to decide whether we were going

1:11:44

to cover Ethereum. I actually made the argument that we

1:11:46

had people were mailing coin desk articles to me in

1:11:48

prison. I probably have some printed out in that box.

1:11:50

So there might be some for me in there. Yeah.

1:11:53

Get into the block size wars. Can you kind of

1:11:56

tee up this? I have to use the restroom when

1:11:58

you do that up really quick. I'm sorry. It'll

1:12:01

be a nice analogous to what really happened where

1:12:03

Charlie was away for the board. Yeah,

1:12:06

so again, the industry just kind of collapses

1:12:08

and then Silicon Valley just kind of

1:12:10

tunes out. Bitcoin is in, it's

1:12:12

this hot thing, and then it's out. And it's out

1:12:15

in the way that Silicon Valley things are out where

1:12:17

it's like, you're like the segue. You're not

1:12:19

the thing that people talk about anymore. So

1:12:21

I think that the block

1:12:24

size wars are really essentially, I

1:12:26

think, the defining moments of Bitcoin

1:12:28

history. And I think to the extent

1:12:31

that they've pretty much shaped, it's the extent

1:12:33

that you have a novel opinion about Bitcoin or

1:12:35

cryptocurrencies as technologies, it was pretty much shaped

1:12:37

by 2017. And 2017 is probably

1:12:39

the pivotal year, I would say, in the whole story.

1:12:42

Where essentially Bitcoin goes through this great schism. There's

1:12:45

this intense clash about what

1:12:47

Bitcoin should be, how should development should

1:12:49

be prioritized, what is the point and

1:12:52

ethos of Bitcoin, and how should that

1:12:54

be expressed in technology. And then

1:12:56

the other side, you have really the free for

1:12:58

all kind of cryptocurrency explosion, where it is literally

1:13:00

like if you have a cat and a white paper, you

1:13:02

could have raised $100 million. Money

1:13:05

really just is falling from the skies for every

1:13:07

two bit stupid project that you could even imagine.

1:13:10

And that era, I think, is

1:13:14

hard to condense since any

1:13:16

meaningful summary. Other

1:13:20

than to say two pretty expressly different

1:13:22

cultures emerged. There was a group of

1:13:24

people who rallied around Bitcoin, who basically

1:13:26

have this idea that Bitcoin

1:13:28

was launched in a certain way. It had certain

1:13:31

properties by virtue of the way it was created.

1:13:33

And those properties were unlikely to be recreated

1:13:35

in any other cryptocurrencies. And then there was

1:13:38

this other group that just wanted

1:13:40

the freedom of expression and experimentation. And I

1:13:42

said something recently, I don't know if it'll resonate with

1:13:44

anybody, but I'll say it here. It's that I

1:13:46

think it's interesting that the cryptocurrency culture, I

1:13:49

view them more as a culture, but

1:13:51

they're often misunderstood as a technology sort

1:13:53

of revolution. Whereas I think Bitcoin is

1:13:55

more inherently a technology revolution that is

1:13:57

misunderstood as a cultural group. There's

1:14:00

a disconnect there. Like where I think that the genesis

1:14:03

of a lot of cryptocurrency projects, like I'd

1:14:05

say Ethereum, like pretty much in particular, it's

1:14:07

like they really just wanted the space to

1:14:09

do new things. And they didn't really much

1:14:11

care about what those things were. So

1:14:14

like a good example would be that like, you

1:14:16

know, why is Ethereum proof of stake? Well,

1:14:19

Bitcoin was proof of work. So they pick

1:14:21

something else to like experiment on it, right?

1:14:23

There wasn't like a grand hierarchy of like,

1:14:25

you know, sophisticated ideas. Like they were a

1:14:27

cultural group that wanted separation. It

1:14:29

wasn't until later that they even said like proof of stake,

1:14:31

right? It was originally even proof of work for a long

1:14:34

time. I mean, those are in the roadmap that there would

1:14:36

be a switch. But I think

1:14:38

my point was essentially that like the genesis

1:14:40

of the, if you can

1:14:42

think of the modern crypto movement as

1:14:44

essentially this idea to like recreate or

1:14:46

improve Bitcoin, you know, essentially first

1:14:49

established like a cultural separation that happened and

1:14:51

then those two groups like began working on

1:14:53

different technologies. So I don't know, I think

1:14:55

that if there is a Bitcoin and crypto

1:14:57

currently, and though I have serious questions about

1:14:59

that, because I think they're probably going to

1:15:01

converge again in the not too distant future.

1:15:03

Like that was the genesis of the end,

1:15:05

right? Like Bitcoin went one direction, crypto went

1:15:07

the other direction. And

1:15:10

I think since then you've really had a bulk organization.

1:15:12

You have entirely two entirely different groups that don't understand

1:15:14

each other in any real significant way. They are converging

1:15:16

in a really big way faster than you thought, because

1:15:18

there's a huge identity crisis happening with the

1:15:21

Bitcoin VC funds. I work with a

1:15:23

lot of them and they don't even know how, like they

1:15:25

don't even know their line is anymore because there's no such

1:15:27

thing as a Bitcoin only company now. Every,

1:15:29

all these Bitcoin L2s are building for

1:15:31

ways to like scale and do

1:15:33

different things and connect with other EVMs. And, you

1:15:36

know, I look at dozens of pitches a day.

1:15:39

And so the only Bitcoin only cut, like

1:15:41

if you look at some of these Bitcoin

1:15:43

only VC funds, I mean,

1:15:45

Blockstream doesn't do anything. The only only company

1:15:48

just holds Bitcoin on their balance

1:15:50

sheet. That's really the only like Bitcoin only. I

1:15:52

would take the other side of that, Charlie. We're

1:15:54

going to talk more about this with ordinals, but

1:15:56

which will come at the very end. Bitcoin only,

1:15:58

though, because every ordinal project. There's

1:16:06

a crisis happening with crypto what I call

1:16:08

crypto VCs Because a

1:16:10

lot of them refused to invest in Bitcoin things

1:16:14

Yeah Until

1:16:22

till the end of this Rizzo,

1:16:24

can you just like one more piece of info about

1:16:26

the block size wars like Hoover's

1:16:30

who what was the argument? What was like

1:16:32

the argument on both sides? Like why did

1:16:34

what the team the team? I put quotes

1:16:36

around the team. No one why I Don't

1:16:40

know that's tough. I don't think you can do

1:16:42

that. I think attempts to do that are pretty

1:16:44

unhelpful I think that there is

1:16:46

a lot of historical vision revisionism Say

1:16:49

like big blockers or small blockers because the

1:16:52

end result of the block size was was

1:16:54

that the block size was increased like So

1:16:56

they calling the big bloggers like the enemies

1:16:58

of Bitcoin is like rather bizarre There's a

1:17:00

lot of these like very stupid like things

1:17:02

that have like Metastasize who's

1:17:04

are you? What were the two are? There's

1:17:07

nothing to do with even the block because

1:17:09

even the word block size war came

1:17:11

from like Jonathan Beers book Maybe from

1:17:13

you. Okay, if you are an employee like

1:17:17

You've never heard of the block size war. I have

1:17:19

no idea what we're talking about Rizzo. Give us the

1:17:21

context here Well, the context is that you

1:17:23

know since the invention of Bitcoin in 2009 It's

1:17:26

been unclear how Bitcoin would scale

1:17:28

to handle a significant transaction volume

1:17:30

volume And therefore it's unclear that

1:17:32

any that any cryptocurrency can reach

1:17:34

the sufficient scale To essentially

1:17:36

handle like the entire global populace of

1:17:38

transactions, right? So initially like Bitcoin you

1:17:41

go back to reading the first responses to Satoshi like some

1:17:43

of the people are saying like look Interesting

1:17:46

that it works on a small scale, but we actually

1:17:48

can't Scale this up to handle

1:17:50

millions and millions of participants and I would say like

1:17:52

very loosely There was

1:17:54

this one group that kind of wanted to scale

1:17:56

the the end change and continue tinkering with the

1:17:59

base layer of the Bitcoin protocol and there was

1:18:01

this other group that wanted to quote build technologies

1:18:04

that extend Bitcoin in other ways like the Lightning Network,

1:18:06

layer 2 that would be built on top of Bitcoin.

1:18:09

Loosely that was the schism. And

1:18:11

I think it's interesting that you've kind of seen a

1:18:14

lot of the other cryptocurrency projects like

1:18:16

pivot to the same kind of nomenclature. Like I went

1:18:18

to the ethereum.org the other day and I was like,

1:18:21

I read a sentence that like honestly shocked

1:18:23

me. Like I hadn't been an Ethereum in like,

1:18:25

you know, five years. And it was like we

1:18:27

need to like keep the block size, you know,

1:18:29

or keep our network bandwidth small so

1:18:31

that the network can be sufficiently decentralized.

1:18:34

And I honestly I was shocked to

1:18:36

actually even hear that because

1:18:38

everything, every technology choice they have made

1:18:40

should have made that abundantly clear that

1:18:42

like that discussion was had five years

1:18:44

ago by another group. Anyway, there's

1:18:48

this idea that essentially like we as a holistic

1:18:50

group and this is what I think makes the

1:18:52

unity, right? It's like everyone is working on the

1:18:54

same problem. The problem is that none of these

1:18:56

things in our current form scale, the

1:18:58

adequate size. Bitcoin has

1:19:00

different properties in these other cryptocurrencies,

1:19:02

the salon, Ethereum especially. That doesn't

1:19:04

mean it can't have those properties

1:19:07

right now. It doesn't. And

1:19:09

maybe it won't ever. And that's essentially the

1:19:11

current, that is the

1:19:13

current debate. It's like how those things will play

1:19:15

out. I don't know how to summarize it other

1:19:17

than. And who was arguing for? So

1:19:21

basically, okay, so the big blockers

1:19:23

who wanted to modify Bitcoin to tell me

1:19:26

what I get right and what I get

1:19:28

wrong here. The big blockers who wanted to

1:19:30

kind of modify the Bitcoin protocol to increase

1:19:32

block capacity, which would then allow you to

1:19:34

process more transactions. And the theory here is

1:19:36

that they believe that you could essentially have

1:19:38

cheaper and faster transactions, which would make Bitcoin

1:19:40

more scalable and which would basically

1:19:44

allow Bitcoin to compete on a global stage as

1:19:46

maybe like an alternative payment system. And it was

1:19:48

like, again, this payments narrative and stuff like that.

1:19:50

So that was a big blocker. Small blockers wanted

1:19:52

to kind of fight to keep the one,

1:19:55

the one megabyte size

1:19:57

limit to. What I actually.

1:20:00

raised fundamental

1:20:02

principles, right? But that, that, that categories implies

1:20:04

that both sides, one is the same thing,

1:20:06

the same end result, like Pete was saying.

1:20:09

And also there's a lot more to it, multiple

1:20:11

layers. Yeah. I think there was actually three groups.

1:20:13

I actually don't think there was really two. But

1:20:16

wait, the story starts like you were, you were

1:20:18

saying with Gavin. The story

1:20:20

starts with Gavin. The story starts with Gavin. Satoshi,

1:20:25

when he walked, when he left, there

1:20:27

was this alert key that is

1:20:29

not, doesn't have any power over anything, but

1:20:31

it allows people to like, send

1:20:33

an alert, an alert over the

1:20:35

Bitcoin software. You could push a

1:20:38

message to every client. And

1:20:40

also the GitHub, which was the

1:20:43

rep, the place where all the

1:20:45

code was kept at

1:20:47

the time Satoshi maintained all the Bitcoin code and

1:20:49

allowed you to like, Yeah, that was, yeah. And

1:20:53

so like Satoshi allowed Gavin

1:20:55

to like be this maintainer and pass over.

1:20:57

So kind of like, you know, handed the

1:20:59

keys to Gavin, but that should

1:21:01

have never been the way it was

1:21:04

really formulated. And like, the Gavin was like,

1:21:06

there's like accidental.

1:21:09

Maybe I'll, maybe I'll offer something else. Like

1:21:12

open source, like open source development has certain

1:21:14

like cultural mores and expectations, and one of

1:21:16

them is essentially that like, if you're the

1:21:18

leader of an open source project, you can

1:21:20

be like the benevolent dictator. Right. So Linux

1:21:23

was like kind of the original big open

1:21:25

source project and it's led by a single

1:21:27

guy and he directs other developers to

1:21:29

like manager the repos, but essentially what he says goes,

1:21:31

and that's how the project was for. We

1:21:34

modeled it after that. We

1:21:36

modeled it after that. We modeled like the

1:21:38

way, but I would say the interesting, the

1:21:40

question that I think the block size was

1:21:42

really asked is like, is could you be

1:21:44

a non-government currency if there was some form

1:21:46

of formal governance around Bitcoin up to and

1:21:48

including any previous form of governance that has

1:21:50

been established for an open source project? But

1:21:52

that is like probably the closest I could

1:21:55

get to the selling, like what the block

1:21:57

size wars were actually about. They

1:21:59

were less. about anything with technology and more about

1:22:02

how would this thing be governed and how

1:22:04

can you create a non-government money without creating

1:22:06

governments. I think this is still the big

1:22:08

narrative with the other cryptocurrencies where a lot

1:22:11

of them are functioning governments. They've obfuscated in

1:22:13

a lot of ways, but like, you know,

1:22:16

Solana and Ethereum are for all

1:22:18

sets of purposes functioning non-state governmental

1:22:21

entities that have their own. They're all

1:22:23

in the nation. Yeah.

1:22:26

But the, so Gavin, he,

1:22:29

going back to that, there were all these proposals

1:22:32

to like increase. Well going back

1:22:34

to that, so there

1:22:36

was also Craig Wright starting to come into

1:22:38

the mix at this point, trying to convince

1:22:40

everyone that he was Satoshi and he convinced

1:22:42

Gavin that he was Satoshi

1:22:45

falsely, which is another story for another time.

1:22:48

And so Gavin then came out saying that he

1:22:50

was convinced wrong. Out of the time, people

1:22:53

were scared that Gavin was compromised

1:22:56

and they used that as a

1:22:58

reason to remove Gavin's ability

1:23:01

to work on Bitcoin altogether. So

1:23:03

Gavin, who was handed off the

1:23:05

keys, was effectively kicked out. This

1:23:08

happened, kicked out of Bitcoin. He started the

1:23:10

Bitcoin foundation. I'll probably dispute that, but I'll

1:23:12

let you keep. He was the chief scientist

1:23:14

of the foundation, like started the foundation, set

1:23:16

up the whole system in which like bits

1:23:19

were done and like how Bitcoin is

1:23:21

run today, whatever that all

1:23:24

happened. But the more layers to that

1:23:26

was there were the miners in

1:23:28

China that wanted to put ASIC

1:23:30

boosts and some other software to

1:23:32

give themselves an edge. And

1:23:34

they wanted to, what they

1:23:36

saw is was they, if they took

1:23:38

the tap off and if they increased

1:23:40

I don't even know if I believe that story. Do

1:23:42

you believe that story? I don't know. I went, I

1:23:44

was, I spoke to Jihan Wu himself. I

1:23:47

was in the mix. Weren't they just, weren't

1:23:49

they just commercializing like a product where you

1:23:51

could just essentially pay to get like an

1:23:53

extra efficiency from the miner? Like wasn't that

1:23:55

like. They were running ASIC boost and making

1:23:57

sure they wanted to prevent an update that

1:23:59

allowed. anyone to see which miners were

1:24:01

running ASIC boost. They were trying to run

1:24:04

ASIC boost covertly. All we were

1:24:06

trying to do is say we want to

1:24:08

make ASIC boost over and you can research

1:24:10

that part. That's where Bitmain and Gion, it

1:24:12

all fell apart with them. And he was

1:24:14

the leader of the big blockers. There was

1:24:16

a point where Gion, Bitmain, Roger, Craig

1:24:19

Wright, Bitcoin Cash,

1:24:21

Bitcoin as he was one unit running

1:24:24

Bitcoin Cash subreddit as

1:24:27

the team on one side and everyone else on

1:24:29

the other side. And that's where like,

1:24:31

and then they had like, and

1:24:33

their fundamental, there was like a whole battle

1:24:35

of like removing who's running

1:24:37

the access of Bitcoin. And then it

1:24:39

came down to like miners versus nodes.

1:24:41

That's what really the argument was about.

1:24:44

Who's more in charge? Miners

1:24:46

versus nodes. And it came down to

1:24:48

like signaling for SegWit, which was this

1:24:50

whole technology. And there was all this

1:24:52

crazy signaling done like miners started to

1:24:55

signal where they would

1:24:57

go. Big block or this new

1:24:59

technology that allowed for an increase

1:25:01

in block weight instead of

1:25:04

block size. And again, it

1:25:06

was all technology like arguments, but it became

1:25:08

political. And I remember Greg Maxwell perfectly said

1:25:10

to me, Charlie, they're creating a political problem

1:25:12

out of a political solution out

1:25:15

of a technical problem. And it was so

1:25:17

right. It was, it was all

1:25:19

politics and it was like the future

1:25:21

of the governance and perceived power and

1:25:23

control of Bitcoin with miners versus nodes.

1:25:25

Because what happened was everyone

1:25:27

had to plant the flag. Every single

1:25:30

person, every exchange said they're going to

1:25:32

support this Bitcoin or they're going to

1:25:34

support that Bitcoin software. And there was

1:25:36

a coming fork in

1:25:38

the Bitcoin software that people were

1:25:41

signaling for. And it almost like completely

1:25:43

split Bitcoin. But thankfully at the last

1:25:45

minute, everyone came together and it, the

1:25:48

whole thing, it's crazy stuff. There's so much, it's

1:25:50

that story. I think there might be, there

1:25:52

might be too much for this one episode, but

1:25:54

that's Yeah, no, it's so many layers. And I

1:25:57

think it really cuts to just how wild that

1:25:59

time was. And why the cryptocurrency? I

1:26:01

would encourage people to go read about the

1:26:03

block size. I think, is there a book

1:26:05

about the block size? There is. Johnny Beers

1:26:07

written a book called The Block Size Wars.

1:26:09

Yeah. I would encourage people to

1:26:11

go read about the block size wars. If they haven't. All

1:26:13

right. So Rizzo, I'm going to, we're going to skip. We're

1:26:16

going to skip 2017 until 2023 because I think a lot of

1:26:19

people in the industry

1:26:22

have lived through this. And actually

1:26:24

I want Rizzo, you to take us into

1:26:27

the future. Um, starting with

1:26:29

basically your take around ordinals

1:26:32

and, um, ordinals in the

1:26:34

context of like this

1:26:36

division between the Bitcoin crowd and the

1:26:39

crypto crowd. And there's like

1:26:41

two, there's like two divisions here. There's the Bitcoin

1:26:43

crowd and the crypto crowd. Then there's the old

1:26:45

Bitcoin crowd and the new Bitcoin crowd. And

1:26:48

you gave this, I thought beautiful summation of

1:26:50

what's happening on, uh, on

1:26:52

the What Bitcoin Did podcast. I'd love to hear your, I

1:26:55

mean, not to make your... There's

1:26:57

another tough one. Yeah. I mean, I

1:26:59

think for all intents and purposes, there's

1:27:01

currently a divide between Bitcoin and cryptocurrency,

1:27:03

Bitcoin and crypto that is somewhat artificial

1:27:06

and then somewhat rests on somewhat fictitious

1:27:08

premises. Right. And I think that, you

1:27:11

know, the big thing that ordinals and why it was

1:27:13

so significant, and this was a protocol that was released

1:27:15

last January by this developer named Casey Rotomar, but essentially

1:27:17

allowed you to kind of embed arbitrary data, uh, on

1:27:20

Bitcoin in different ways. Um, essentially this multimillion

1:27:22

dollar NFC market spraying up on the Bitcoin

1:27:25

based chain. Uh, I

1:27:27

think that, um, you

1:27:29

know, essentially that exposed, uh, you

1:27:31

know, something that I think the

1:27:33

cryptocurrency post 2017 people really hadn't been

1:27:36

exposed to, which is that Bitcoin, you

1:27:38

know, is a emergent software system. Uh,

1:27:40

while it does have rules, uh, and

1:27:43

those rules are enforced in a certain way,

1:27:45

there's nothing that prohibits you as an individual

1:27:47

from inventing something new that would

1:27:49

basically invalidate how those rules are perceived. Right. So

1:27:51

I think that we've saw this again late last

1:27:54

year and now there's been like kind of a

1:27:56

string of these advances where people who, you know,

1:27:59

maybe are familiar. with what's going on

1:28:01

in cryptocurrency land and they're

1:28:03

finding new creative ways like previously

1:28:05

like thought impossible to do previously

1:28:07

thought impossible things on Bitcoin. And

1:28:10

the two one of those were you know the first one is ordinals

1:28:12

and the second one would be bitvm which is a pretty

1:28:14

new white paper that basically proved

1:28:17

that you know Turing competes

1:28:19

complete smart contracts are possible on the Bitcoin

1:28:21

base layer and then from that the commercial

1:28:23

application seems to be that we're headed towards

1:28:25

this wave of kind of second layer type

1:28:28

roll ups that are going to be built on Bitcoin.

1:28:30

So that's kind of the big VC chase right now

1:28:32

is to commercialize that. But I think the broader thing

1:28:34

here is essentially like we've

1:28:37

kind of schismed into two cultures working on two different

1:28:39

things and I think ordinals

1:28:41

and bitvm combined have sort of ruptured that

1:28:43

and essentially the disturbance in the force here

1:28:45

is that it is really true that you

1:28:48

know anything is possible on Bitcoin provided that you

1:28:50

have enough inventiveness in order to actually achieve it.

1:28:52

So it seems to be the new reality that

1:28:54

people are pricing in and I think there's still

1:28:56

a good amount of people in crypto lands that

1:28:58

have their head in the sand on this and

1:29:00

there's a good amount of people in the Bitcoin

1:29:02

land that want to pretend that it hasn't happened.

1:29:04

I think that's kind of the new behind.

1:29:10

We'll see right. I think that you both are

1:29:12

in the camp of ordinals

1:29:16

L2 on Bitcoin but putting things on

1:29:18

Bitcoin is a good idea. My

1:29:21

VC fund is made. We don't

1:29:23

have any save right. So this is the

1:29:25

thing is like Bitcoin is a permissionless system.

1:29:27

So it is an immaterial like what my

1:29:30

view on it is. All I'm saying is

1:29:32

this is happening. This is reality. It is

1:29:34

actually true that what most Rizzo take I

1:29:36

have ever. I'm really

1:29:39

bullish on it. We made like 17 investments

1:29:41

in the last year and a half. We

1:29:43

started in the day one

1:29:45

bear market realizing that this was the

1:29:48

next narrative was going to be people building

1:29:50

things to connect Bitcoin and crypto back together

1:29:52

very simply. And super bullish on

1:29:54

it. And I think it's really happening in a

1:29:56

positive way. for

1:30:00

listeners' context, when we were, so

1:30:02

COVID hits, 80% of Blockworks' revenue

1:30:04

came from

1:30:08

events and we basically just had

1:30:10

to figure out how to pivot and what to do.

1:30:13

And we realized that there was this missing need in

1:30:15

the market for better news. There's

1:30:18

CoinDesk and the Block and Decrypt, but we thought

1:30:20

we could do it better than any of them

1:30:22

were doing. And so I

1:30:24

called Rizzo. We didn't really know each other

1:30:26

then. And we went on this great hike

1:30:28

in upstate New York and walked me through

1:30:30

how to build a media company in crypto.

1:30:35

And yeah, you kind of laid out

1:30:38

the whole model and you laid out how it works.

1:30:40

But one of the takeaways from that conversation was you

1:30:42

were into all of it. You were very, like when

1:30:44

you were building CoinDesk, you were into all of it

1:30:47

and you got super burned out from

1:30:49

the kind

1:30:51

of VC chase for something

1:30:53

new. And you had like...

1:30:55

There was anybody who left not disgusted with

1:30:57

2017. Like 2017 was just

1:30:59

like a disgusting thing to be a part of.

1:31:01

Like I think if you were in the industry

1:31:04

prior to that, you just watched people who like

1:31:06

priorly had approached this. I

1:31:08

said this this summer, it's like Bitcoin

1:31:11

was a science back then. It was a science. It was

1:31:13

something we were doing, we were trying to learn about. And

1:31:16

then it was just like you had this

1:31:18

great rush of like people who came in

1:31:20

and just like totally used that to exploit

1:31:22

thousands of retail investors on a level that

1:31:24

I think was gross.

1:31:27

Like it was an objectively gross thing.

1:31:29

And I think that there is a lot

1:31:31

of things that are objectively gross about the

1:31:33

crypto apparatus that has sprung out of that,

1:31:35

which is essentially you have VCs that kind

1:31:38

of invest in projects for quick

1:31:40

liquidity on exits and

1:31:42

that they aren't really interested in actually adding

1:31:45

to, as I said, like what is the great mystery

1:31:47

here, which is like how do we create a financial

1:31:50

system that can scale to a billion people out of

1:31:52

the tools that Satoshi left us. And

1:31:54

I do think that there are people within the crypto space who can add to that.

1:31:56

It's just that like, you know, post 17,

1:31:58

it was like the culture was... like, I mean,

1:32:00

again, you had people who like, you

1:32:03

need to be a because you've been telling me

1:32:05

that also for a couple of years. And so

1:32:07

what I did was I went out now like

1:32:09

out of this those 17 investments, only three are

1:32:11

tokens. The rest of them are pick and

1:32:13

shovel, building out the applications

1:32:16

that will further this technology, the

1:32:18

Satoshi roots, like what are the

1:32:20

investments, building up like tons

1:32:23

of different like, well, you go to

1:32:25

druid ventures.com and check out the portfolio,

1:32:27

there's like, they're all they're all listed

1:32:29

there, and everyone can check them all. Only

1:32:31

three are token decentralized, like, like hacker networks

1:32:33

that allow people to do like real time

1:32:36

pen testing. Every question we asked

1:32:38

is are like, for example, you're seeing like

1:32:40

this huge AI narrative, and they're saying, like,

1:32:43

you know, how do we build out technologies using

1:32:46

the Satoshi tools to prevent AI from

1:32:48

getting to centralized and not being

1:32:50

able to like have, for

1:32:52

example, proof of brain, which is so she

1:32:54

talked about proof of human verification, how

1:32:57

do I know that I'm even talking to a human right

1:32:59

now, I could be talking, you could be my an AI

1:33:01

bot. So there's great applications,

1:33:03

we asked ourselves, but you're

1:33:05

right. The only people that can do that

1:33:07

are the purists, people like you and me.

1:33:10

So we have to get back into the saddle

1:33:12

and try to like help making

1:33:14

sure the narratives are being run the right way.

1:33:17

So like writing that writing books,

1:33:19

you're doing everything to make sure

1:33:21

things are being run. I mean, I think

1:33:23

there is something like about the token create

1:33:25

arbitrary token creation, though, that like we went

1:33:27

too far down that path. Like, I think

1:33:30

that and then what you're seeing on the

1:33:32

Ethereum Solana side now, I think, and a

1:33:34

bit of their direction list is like, this

1:33:36

is like, how do you move forward when,

1:33:38

you know, essentially, they aren't constrained by the

1:33:40

same things that Bitcoin is, right? Bitcoin's constraints,

1:33:42

I think have been some of its biggest,

1:33:44

like, you know, its biggest advantages in many

1:33:47

ways, right? You have this base layer that

1:33:49

you know, sound, and now we know is

1:33:51

incorruptible, despite, you know, gross

1:33:53

amounts of like human efforts to change it. You

1:33:56

Don't have that level of assurance with other things. So I Think

1:33:58

when you talk about ordinals or bivvies, The I'm

1:34:00

like it's like okay if you can build on

1:34:02

a theory and more, he can build on the

1:34:04

coin and how it's possible to build on the

1:34:06

final Wish Wish foundation. Are you going to choose

1:34:08

to build on something that he sure as shit

1:34:10

is gonna be there in a thousand years? How

1:34:12

are you going to build on something that you

1:34:15

know maybe in two years are now they decide

1:34:17

to her she's or the model were excited. Yeah

1:34:19

nowadays what you're doing or whatever way they bitcoin

1:34:21

has this is or and qualities that I had

1:34:23

to go now appealing to people in the crypto

1:34:25

space. I think that's exciting. I don't. I get.

1:34:27

I don't know what percentage of the suffer they're

1:34:29

working on. They can be ported over. I like of

1:34:31

there is certainly probably lot of bad ideas that are going

1:34:33

to get ported over, but I think we're. Again,

1:34:36

if you look at it as like this a science were learning

1:34:38

about and I think this is like. Importance

1:34:40

legs thing to happen which is these

1:34:42

two groups coming together again. I

1:34:45

would maybe take a little bit of a

1:34:48

different tack on Charlie. Where are they like

1:34:50

I would like to see like you know

1:34:52

I wouldn't Knowledge of the arbitrary total creation

1:34:54

come back and large volumes like on bitcoin.

1:34:56

I don't know if I can prevent their

1:34:58

that might actually just pass. Not heavy. You're

1:35:00

not gonna see like token grecian on bitcoin

1:35:02

gets to three already are like vivid. get

1:35:04

the you will yeah er visit. Your priorities

1:35:06

are already here we're seeing now you're seeing

1:35:09

like up crazy token projects. that are launching connecting

1:35:11

those things your see are definitely seeing a lot

1:35:13

of that. But. A lot of

1:35:15

that is like short term token crap.

1:35:18

The. The stuff as being built.

1:35:20

Like. With long term Vc investment I think

1:35:22

really is better than that. A. Lot

1:35:24

of that that like short term token crops

1:35:26

A is still there. You're gonna see that

1:35:28

crap like. Prc. Token that

1:35:31

make no no matter, no different.

1:35:33

But. There's some really cool thing that

1:35:36

allow for like revenue sharing tokens

1:35:38

out there. Security token? Potentially the

1:35:40

girl Ethically Huge. Ah if

1:35:42

you look at our W A.

1:35:44

Dot. X y Z. Real.

1:35:46

World as as.x y z already

1:35:48

like. Couple.

1:35:51

Of million dollars is already locked up

1:35:53

in these like universe in bonds, private

1:35:55

credit, Ah, End and Real

1:35:57

Estate. Same. Token eyes on the block chain

1:35:59

and. There's a huge amount of

1:36:01

that, especially private credit. We've invested in a

1:36:03

few different companies that are facilitating like private

1:36:06

credit, token issuance for accredited

1:36:08

investor type things. There's a lot that

1:36:10

you can do there. When

1:36:12

it's, you're right, when it's not like token,

1:36:15

you're talking about that time when like, and it still

1:36:17

happens. I mean, dude, I've seen bonds. Oh, really? Wait,

1:36:19

wait, wait, I mean, it's still. What? I

1:36:22

mean, the, I mean, the, the, the drift is alive

1:36:24

and well. If you go to crypto ranks, you can

1:36:26

see it's, it's criminal. I mean, how many dog coins

1:36:28

like, you know, we're still getting out.

1:36:30

So zooming out, zooming out from this, and we'll start

1:36:32

to kind of tie this whole conversation together and wrap

1:36:34

this up is when you guys think

1:36:36

about, you know, 10, Rosalie,

1:36:38

you've been in the industry for 11 years, it

1:36:40

sounds like, and Charlie for 13 years.

1:36:46

I guess what, like, what are you guys happiest

1:36:49

about? And what do you guys, like, when you

1:36:51

look at how far we've come, it must feel good to just see

1:36:53

how far we've come into a play to roll in that. And

1:36:56

then what do you like, man, like this industry really, really

1:37:00

whiffed on this, on this bucket. You

1:37:04

want to go first or should I go first? No, go

1:37:06

for it. I don't even know my answer. I'm going to

1:37:08

think about my answer. I mean, I think we really whiffed

1:37:10

on the cultural divide. I think that's like something that I'm

1:37:12

pretty adamant about. You know, it's

1:37:14

probably outlived its usefulness, especially at a time. I

1:37:17

think where a lot of people are discovering Bitcoin.

1:37:19

What's the maximalist did that though? It sucks. I

1:37:23

don't know. That's a tough one. What

1:37:27

was the first question? What do I have then? What am

1:37:29

I proud of? I mean, I think I'm glad that we,

1:37:31

well, I don't know. I don't know how much I feel

1:37:33

like a participant in it, right? Like, cause I was essentially

1:37:35

like on the sidelines with a journalist, right? I think that

1:37:39

I'm glad that we didn't ruin what Satoshi

1:37:41

gave us. And I'm hopeful that we will

1:37:43

somehow figure out a way to, you

1:37:46

know, ensure that like the people of

1:37:48

the world can access the system in the way that

1:37:51

he intended. I think that's something we have

1:37:53

to kind of take forward with a good degree

1:37:55

of humility and like aspiration.