Crypto-Assets Regulation Is Healthy Development, Need Clarity: Burniske

don't see it popping anytime soon. Here to talk about this with us is a cryptocurrency investor himself, Chris Berniski, partner of Placeholder. He also is an advisor to our investment management, which does invest in bitcoin, and he joins us here in our eleven three oh studios. So, Chris, would you agree that bitcoin is in a double and yet it won't pop anytime soon so it doesn't matter? There are any number of ways we could approach this question.

On one hand, we could say money is the bubble that never pops and uh as a store of value or or that being one of its use cases for bitcoin, there is a lot of demand within the traditional capital markets for a risk off store value, a disaster hedge, so to speak, just as people use gold. So that's one side of it. Um. Now bitcoin is is off over from its all time highs. Now, there are over a thousand other crypto assets right and many of those

um are near all time highs. They're not off um although today we've had a correction and many of those, I would argue are much more in a bubble um in terms of where their prices relative to where their

actual utility is. Chris, maybe just step back for just a second, because I always like to find out, you know, the definition of these things, like a definition of bitcoin, and I was trying to put it into a context that appeals to my analog brain, and I was thinking of stamps, actual physical paper stamps is a limited number that are issued, and if you go back in time, stamps or even revenue script was something that could be traded and could be used for multiple transactions, and at

each point you could even place a little snip or you could cut away a little piece of paper that would sort of detail who actually used that stamp. Is that a good way to look at what a bitcoin is or what a cryptocurrency, what role it plays. I think that stamps have some properties which relate closely to

to a cryptocurrency, but um, a cryptocurrency like bitcoin. Bitcoin is more broad in its use cases, and so I really would think of it um per the economic definition of a currency being a means of exchange, a store value, and a unit of account. Right now, bitcoin serves as a great store of value, a medio to to to to low value mean medium of exchange, and not a great unit of account outside of the crypto space because it's so volatile. One aspect that has definitely been present

on people's minds is this idea of regulation. And the SEC came out last week and said that initial coin offerings in particular look a lot like securities. In fact, they are securities, but they're not they're not sticking with they're not following securities laws. How much does the sec is apparent interest in cryptocurrencies, Uh, basically cap the potential gains just because this has been a really largely unregulated space,

and that will change. I think, um, it doesn't. It doesn't cap the opportunity to actually expands the opportunity in that we need this space to be better regulated. We need more clarity. The entrepreneurs, the investors, all of the all of us are craving more more clarity, and so regulation is just part of the maturation of this asset class. And and for me, there may be uh temporary jitters um around the sec coming in and enforcement action, but

longer term, I think this is a healthy development. What's the ultimate goal? Is it for a bitcoin to act as basically a gold substitute, a store of value, especially for people in countries where the currency is incredibly volatile? Is it to replace paper currencies and replace national currencies? Where are we heading with this? Well, I'm going to pull it back to the idea of crypto assets, which is what I wrote the book on UM. I think of crypto assets as a new asset class that organizes

human activity. And so the goal, I would argue, more than replacing fiat currencies is replacing equities um as again as a means to to organize and incentivize human activity. UM around information networks. Bitcoin is an information network that transmits currency ETHEREUM is an information network that coordinates compute logic and developers file coins and formation network that stores files.

So we go far beyond the idea of cryptocurrencies, which is why I call them crypto assets into cryptocurrencies, crypto commodities, crypto tokens, and the information networks that they support. Chris, Cryptocurrencies and financial technology fintech seemed to come together, at least in various news reports, particularly when it comes to markets in Asia. And I'm wondering if you could just give us a little insight into what you believe the future will look like in a place that is readily

accepting of cryptocurrencies. I mean, could we have a cryptocurrency, let's say that's even back partly by gold, for example. I think the possibilities are unless I think, um, you brought up Asia. Asia has certainly been um, one of

the hard hottest areas for this space. UM. Something that I've been trying to get to the bottom of is how much of this is entrepreneurs and people building real utility versus how much of this is speculators Because we know, um that some of the Asian nations have a tendency UM or an appetite for speculation. UM. But certainly in countries like Korea or China where digital payments mobile payments

are prolific. I think that there's a high likelihood that they adopt cryptocurrencies on a on a mass scale earlier than we do in the US. Just going back to what you were saying about crypto assets, I'm trying to envision what this means. Does it mean that there could be some kind of crypto tender that could be used within an industry, like a retail cryptocurrency specific or you know, specific to automobiles or something like that, and then you could invest in a sector based uh type of tender?

Is that? Is that what you'r is that where you're going with this? I think that's one way to look at it. That that would be say sector specific currencies UM, and you could design properties of that currency UM to fit that sector. And there could even be loyalty points baked into it. There's all kinds of things right These UM these protocols are really just software that replaced middlemen, that commoditized middlemen and the functions of middlemen in different areas.

But I just wonder how much a barrier is of having regular consumers wrap their heads around a different form of tender for different types. It's a complicated issue. How do you get enough people on board. Well, that's the currency aspect, right, and I don't necessarily know that we end up having sector specific currencies or more these universal currencies, some like Bitcoin that are really good at storing value, others like z cash which are anonymous, others like light

coin which are a little faster or whatever it may be. UM. But again, to pull us back with this opportunity, it's not only currencies, right, Many of these are commodities UM, creating markets for digital commodities, just as we have markets for physical commodities. So why can't I trade cloud storage futures or bandwidth future um or GPU flop futures, and really what crypto commodities things like file coin or gollum or these things. A lot of those are creating digital

markets for these digital commodities. And in terms of getting the retail or that the average investor, average user on board, UM, I think we're very similar to you know, late eighties, early nineties trying to get people on board with the Internet. Most people had no clue what it was going to be used for, how to be relevant to their lives, And it is built to be relevant into their lives by entrepreneurs and Investors. Thanks very much for being with us.

Chris Berniski is a partner for a Placeholder and advisor to our investment management and he is the author of the book Crypto Assets, The Innovative Investors Guide to Bitcoin and Beyond. We turned our attention now to Joshua Green, our national correspondent for Bloomberg Business. We can be followed on Twitter at Joshua Green. He is also the author of Devil's Bargain, Steve Bannon, Donald Trump, and the Storming

of the Presidency. Josh Green, maybe you want to give us an update, is if there anything that we need to know about the ongoing feud between the Trump White House, Steve Bannon, the Republican Party, all because of this book Fire and Fury by Michael Wolfe. Well, it doesn't seem like it's going to be resold anytime soon. Uh. You know, Bannon put out a statement apologizing to Donald Trump Jr. Who we described as treason as for holding a meeting

with Russian officials in um. Doesn't seem to be much indications in the White House that's doing anything to smooth

the waters. But I've been talking to people in Bannon orbits who say you know, he is determined to get himself back into Trump's good graces, and you know the only way to do that is to keep on a pole, lologizing and trying to ingratiate yourself to Trump, who actually does have a long history of continuing to talk to people he's fired and eventually bringing them back into the fall. So it's unlikely, but not impossible to think that Bannon

could somehow worm his way back into the president's good graces. Josh. One thing that I have struggled to understand is this all unfolds, is what Bannon's political clout really is. Because a lot of people associated him with President Trump's base of supporters. Bright Bart certainly was under his thumb. Bright Bart seems to be distancing themselves from Bannon. So does Bannon really represent at this point the base as so

many people initially believed. Well, that's unclear. But it's also what I think drove the split between Trump and Bannon. You know, Trump obviously thinks that nobody but Trump himself deserves credit for his presidential victory um and Bannon, on the other hand, thought that Trump was a bit on a set of ideas that Trump turned out not really to believe in that much this idea of a kind

of a right wing populist nationalism. So Bennon's project, ever since he left the White House last August, was trying to advance this national movement beyond Trump and he had he had uh spent a lot of time recruiting candidates to run against Republican incumbents Canadas who would work to out sent a majority leader Mitch McConnell, who Bannon's thought was impeding his nationalist project. Um. I think the problem is that that Bannon, Bannon's ego kind of got out

ahead of where maybe it belonged. And what we what we're gonna find out from this latest episode is now that Trump has split with him so publicly and so decisively, is there really a populist movement that's loyal to these ideas that will split off and go with Bennon or is it really more a cult of personality that's likely

to stay loyal to the president. Josh Green, what does this do for a potential legislation regarding infrastructure, welfare reform, more men, even funding for the US Mexico border wall. I don't think it does a whole lot I mean, on the margins, it might make that a little bit easier to pass. Um. It's going to be necessary to

do that in a bipartisan manner. And one of the things that Bannon did it Bryite Barton News, was put a lot of pressure on the right wing of the Republican Party not to come together, not to make deals with Democrats. With that voice silenced or diminished, it ought, in theory be easier for for the President and Republicans and Democrats in Congress to agree on something and move it forward. Josh, what about Bannon's allies in the White

House or former allies. I'm thinking in particular of Steve Miller, does this potentially threaten their fate in the White House? Or as Steve Miller effectively got against Bannon and edified his standing with President Trump. No, Trump made clear you're either with Bannon or you're with me, and Miller is very much with Trump. You know, went on CNN interview Jake Tapper yesterday, Uh basically was abasing himself to Trump, um, you know, behaving like a factotum. In fact, the interview

was cut short in Miller. Miller was apparently marched out of CNN by security, so he's left absolutely no doubt as to where his loyalties lie. They lie with Trump, not Bannon. I think that Jack Tapper at the end of the interview said there's one viewer you're catering to right now, and he was talking, of course, to regarding a president of Trump. Thank you so much for joining us.

It's wonderful to hear your perspective as the expert frankly on Ban and Steve Bannon and giving some color of what we can expect going forward and why this is significant. Josh Green, national correspondent for Bloomberg Business Week. Press one for information about your account, press to to make a payment.

Robert Locacio he joins US now. He is founder and chief executive officer of Live person, which is based in New York and seeks to make that your experience when you call companies, that customer service should be automated with artificial intelligence rather than have a real person on the other line. Robert, your business has sound tremendously well in the past year. Your share prices have surged. Is that

the future? Yeah, you know, I mean, I've been in the business for twenty years and working contact centers and I invented chat and and seeing the change in consumers. But um, the future is really about consumers be able to have a conversation with a human or or a bot or something that's automated. And I think ultimately about conversations will become automated because we want it. We don't want to be on hold, we don't want to make phone calls and these and so our behavior is driving

us to do things differently. What's the price point comparison between having a human being answer the phone call and read off of a computer screen as opposed to having a machine listened to your voice and follow various prompts. So it's six dollars is the average UH cost of a phone call? UM There are about two hundred and eighty billion phone calls that take place every year to contact center, so about one point two trillion dollars is

spent on phone calls. An automated message or or bought UM or even an agent answering through messaging or something like chat is about a dollar fifty, So a dollar fifty versus six dollars, dollar fifty versus six dollars and this and when I go back to this number, It's one point two trillion dollars is spent on phone calls that we as consumers have to make that we don't like, and the agents who answer those calls don't like it, and the company's imagined nobody likes it. It's just hold

on a second. But I think the part of the criticism of automated responders to these phone calls is their efficacy. And you know, is this is this a problem? You know, at what point do you end up on hold at the end of a long automated intro anyway, because your request is so nuanced that you do require a live human being. So in the analog world of voice, when

you try those automated systems, they're horrible. I mean you think about people screaming into the phone no, yeah, and then it's noisy, right, So this was just another bad This is like bad analog with bad analog, like an automated analog system like voice. But when you go to something like we do messaging, where let's say with T Mobile, you can message to a T Mobile rep. We can see the text, so we we can automate a response back.

We can bring a human in when it's appropriate. But when you have text, and you have that over a digital framework like like messaging. Um, you can you can do AI, but you're right, voice analog voice. This just needs to go away. I think it's evil. You know, I've said it for me. Voice calls are evil? Wow? Okay, are are evil? Can can we just I'm totally is it's it's the greatest waste of our time is being on hold. We lose years of our life sitting on hold.

We all know it. It's horrible. Okay, it's horrible. Having said that, I want to go back to sitting on a couch and I key a couch specifically. And I'm wondering if you could tell a story about how you launched your first business and what failure has taught you. Yes, So I started a company out of college in and it was interactive kiosks like touch screens for college campuses

and funded on credit cards. But it went under and in I sort of picked myself up, and uh, I was in Baltimore at the time, moved to New York City and I sub let a loft from a guy who made t shirts. A little space and a loft, and I had only a couch and a computer and I ended up sleeping on that couch for two years and showering at a health club, uh, down the block, down in Tribeca. And that's how I got started with with Live Person. So I mean, what was the lightbulb

moment for you for Live Person? The light bulb moment for me was I remember going onto the internet. Uh, this is and uh And I remember obviously there was stuff being said about at that time although it was just coming especially commerce was just starting. But I didn't see anybody on. There was nobody there. It felt like a very lonely experience to me, and that when I showed up, but like Dell's website at the time, like

there's nobody here. And that drove me to think about how do you bring the human element two the digital element, which was which was the web. But on the failure side, UM, failure for me has always been I've been twenty years, sixteen years of public company CEO. UM. You know you only learned through your failures. So it's it's for me and you just can't quit. I always tell other CEOs or entrepreneurs when you hit the bottom, you just gotta work through it and there's another day. But you can't

quit at the bottom. You've gotta keep going. What's the next iteration of automated response. The first thing we have to do is we are working on right now on what we're creating conversational design that feels very um natural. So we as humans need conversations. We know this now. We need conversations to transact, We need to ask questions and on the other side, to automate them. We need

a way to too create. I call it like a poetic experience that a consumer can ask questioning and something comes back that's empathetic, that seems human um, that doesn't try to fake them out because it isn't human. And so the way we design those conversations are very much I say, it's like because I was English literature major, Like, it's like designing poetry. You know, you want to look at the best conversations from the live agents who had conversations.

You want to look at the brand, the brand expression in the market and bring that into our conversation. But I I can. I I'm gonna make a prediction which people are gonna think I'm a little a little crazy, but I I actually think conversational commerce and messaging and having conversations will replace great parts of the Internet will replace the web. Websites have failed um Outside of Amazon, most businesses don't transact through their websites. Thanks not, there's

an opportunity here. We've got to leave it there, but look forward to having you in the future. Robert low Castio. He is the founder and the chief executive of Live Person and he is indeed live not a robot. Well, there was a rousing speech from oprah Winfree at the Golden Globes, this having to do with the really first major awards ceremony and bringing to the four the me

to moment. And here to help us understand the financial implications is Deborah Cat's founding partner employee rights attorney for Cats, Marshall and Banks, joining us from Washington, d C. Home to Bloomberg ninety nine one and one oh five point seven fm h D two. Debra, thank you very much for being with us. Can you connect the topic of sexual harassment in the workplace with discrimination when it comes to equal pay for equal work? Sure? First of all,

thank you for having me. And this is a topic that is very important and it all too often we siloed the topics of sexual harassment and sex based wage inequities, and yet they're very connected. Sexual harassment is about abuse of power, and often power is abused because you do not have women in the c suite. Only five percent of fortune companies have CEOs in those positions, and because of the great power disparity, you have an environment that's

more likely to allow sexual harassment to continue. Women who face sexual harassment are six and a half times more likely to leave their jobs. And when they leave their jobs, they're not typically trading up. They're usually trying to get out of a very bad situation, and they often have to go to lesser paying jobs and start all over again. They lose equity, they lose title, and ultimately they have a much bigger loss in economics over their entire career

as a result of the sexual harassment experience. So they're very much tied together, Debrah. Can you give us a sense of how prevalent the trend that you're describing really is with people with women leaving their jobs as a result of sexual harassment and thus not able to sort of fulfill their uh their potential in their careers. Sure well, low income workers to be stuck staying in their jobs UM and do not have the luxury and to get

out of some very egregiously harassing situations. But I represent women UH in financial services, doctors, lawyers, who are highly educated, who are being subjected to sexual harassment, who try to navigate the situation, who try to avoid the harass er and maintain and at a certain point they may just

decide that they cannot live with that situation. And sexual harassment UH effects women in law firms, medical practices, financial services, and it's extremely prevalent, and it's underreported, and many women reasonably feel that if they come forward and report their concerns, they're going to be persona non grata, not only at their particular company, but within an industry. So many women choose to just vote with their feet and they leave, and they try to get out of a bad situation

and get somewhere else. And I can't give you a percentage of of women who actually UH go to lesser jobs, but in my experience that's that's not uncommon, and that they wind up landing in less lucrative fields or positions, or they exit their chosen careers altogether. And we're losing tremendous talent as a result of it. How much of the blame lies with HR departments that could potentially respond to this in a way that would keep them, keep

people there, keep women there. The spotlight is clearly on HR departments now, But for I've done this work for over thirty years, and typically HR partner departments carry out the will of management. They're very complicit, and historically we have seen people who harass get away with it because they're perceived as star performers, are the big revenue generators, and HR is there to help them remain in place and manage the people out, manage the women at who

have asserted claims. Now we're in a moment where that type of behavior is less is less tolerable, and we're seeing some very famous and high profile people UH being terminated in very public ways. But HR departments have been complicit in allowing this kind of behavior to go forward for decades and decades, and HRR officials often do not have reporting relationships that allow them to elevate the issues

without themselves having a target on their backs. So we often represent HR people who have tried to do the right thing but have not been given to power, or when they made recommendations to exit real star harassers. Uh they themselves found their careers in jeopardy. So it's a complicated issue. But um, I think we know that without really a tone, it's top It says sexual harassment is not acceptable and will not be tolerated in this company.

Uh h R officials are really not given the power that they need to do what they need to eradicate sexual brassment within their companies. Debor Cats, thank you so much for joining us. We'll have to have you back. Debor Cats founding partner and employee rights attorney with Cats, Marshall and Banks, which is based in Washington, d C. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud,

or whatever podcast platform you prefer. I'm Pim Fox. I'm on Twitter at pim Fox. I'm on Twitter at Lisa abramowits one before the podcast. You can always catch us worldwide on Bloomberg Radio.