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to epicenter rocks / apple. And if you're new to the show, be sure to subscribe on Apple podcast Spotify or wherever you listen. Today we have something special for you. We have a host Roundtable discussion where Brian Federica Sunny mayor?
And I are going to reflect on what happened in the last year and also make some predictions about where we think things could go. From here, this is something that you guys are listeners have asked us to do more frequently and it's been hard to find the time to do these.
These hosts round tables, but I can promise you one thing we're going to do them more often, we're going to try to do them once a quarter and if not at least twice a year because we really like doing it every time we do these, we have a great time and this was no exception. So in case you haven't noticed there's a pretty significant Bull Run happening right now as I record this Bitcoin is somewhere around forty thousand dollars and ether. Is it about 1,200?
So that is going to color a lot of this conversation. And so we're making some predictions which is not something we typically do on the show, but we try to make some informed price predictions, at least and speculate on where things could go from here. But to counterbalance, that we're also talking about what all of this fervor could bring.
Terms of negative attention to crypto and how the system the traditional Finance system and also governments and nation-states, how they could react to this tremendous amount of enthusiasm around crypto? One of the ways that governments could react is by imposing stricter regulations. We're already seeing this in Europe and also in some form in the u.s. there is also the potential for stricter taxation. On crypto assets. So we'll talk about that at length before we go to the interview.
I want to tell you a little bit about one inch. One inch is my go-to decks aggregator. And I actually used one inch yesterday because I need to make a little trade. And I was surprised to find out that they had recently done an airdrop and that I was entitled to receive some when inch tokens, which I claimed, and they're worth a nice chunk of change.
So, if you've been using one, And you used it in the last couple of months, you should definitely go to epicenter, rocks /, 1 inch and have a look and see. Maybe you've got some, maybe you've got a late Christmas gift they're waiting for you. So with that, please enjoy this conversation with all of the epicenter host. So the first area that we're going to be discussing today is on the market cap, or the price of crypto. Currently, unless you haven't noticed the crypto has been in a
pretty significant bull run. These last couple weeks and we have some predictions on. We're where we think things could go from here. Maybe we also be interesting to have just anybody, everybody like share a little bit about like how their last year were also like yeah. Actually. I'd like to start with that. Good. Alright, let's go ahead and run.
Yeah. So you wanted to make an episode today to like look back a little bit the last year and you kind of catch up, you put on those few times in person around conferences, of course. Now we've grown has been a long time since we had a conference and so we kind of doing it remotely and so we want to talk a bit about last year and like all of the things that happened last year and I guess also specially like our own the things we did.
Maybe that kind of impressed us the most and then talk about this here. And you know, what's coming up as we sort of, at the beginning of seems to be, I get another pic. And probably crazy bull market. Yes, I've had a bit of a crazy year. I think, you know, I think someone was asking me about, like, there's like something there was something that, like, you know, a couple months ago, we were like some talk.
I was panel about like, you know what, it's been like working through covid and how is like your work situation changed during that and this was back when I was still a tender moment. And you know, I was like well honestly a lot of changes here but a lot of it wasn't from like covid stuff is more just like other stuff that happened and so you know basically for me personally I Left.
This is probably one of the biggest changes for me because I left my first full-time job that I've ever had. I was at tender meant for three years and, you know, working on launching the cosmos Hub and conscience SDK and all that. And so I left about back in like June or July and then from that, I needed like a temporary break from crypto. So I just started doing a bunch of random stuff, you know, working on some web of trust. Stuff.
Working on some education stuff. I made a Twitter bot of myself and then but you know crypto will always drag you back in. And so I got dragged back in, of course, and just started working on. So me and my co-founder day, we started working on our validator company called sikka, still running validators, but also just working on a bunch of more development projects that we're pretty excited for for launching in 2021. So, last year at Foster's, a lot
a lot. Work on on correspond was kind of the main, the main focus and I think has been like it was really great year. We started with your 70 but we grew it to 12 people and there's the whole staking ecosystems of course like Blossom. This well you know, so many networks launching so much like Innovation happening around that and let's be kind of like very cool to like help. Many of these new networks, getting off the ground. And then we've also done been doing some work around
interoperability. So, we did some work on Cosmos, kind of a relative Cosmos substrate bridge. And then we did some work on other kind of IEC. We dated project. So we doing some work on a sailor Cosmos bridge and kind of exploring like Solana interoperability. So, of course, that's also still very beginning where, you know, it's not yet really affecting you. Not yet, been used but I think in this next phase that's going to become a significant
significant as well. And yeah, this deal only thing. Missing was, of course, like that in person team retreat was work because we always say those, every three months you went somewhere and that was of course. After January, 1 year ago we didn't do any but now next we did them remotely. But now next week we're doing
the first one in person again. So we Going all to buy and well, everyone's coming but about half the company's coming so that's v. D excited that get on a plane again and like travel somewhere because I haven't haven't been on a plane for almost a year now.
So you know like my I'm working with Brian on chorus one and do most of my year was, you know, knee-deep in onboarding some of these networks and last year, was the first year where chorus felt stable where I am like no, no longer worried about the company surviving, it's going to survive for at least the next few years and it took us three years to get to this psychologically complex. Dual point. So if you really happy, I also feel blessed that covid did not
impact our business. Like we grew a lot. Like last year, we on-boarded to be 10 you networks on a personal front like something really interesting happened on the regarding my body and physical well-being. So in the, in the Christmas of 2019, I read this book or lifespan by David Sinclair. I really recommend all the listeners to You read that book. So it's a it's a book is essentially about you know like the signs of aging and how we may be able to control the aging process itself.
And so I read that book and it was a revelation and then I did one of these tests which measure your biological age so how old your body actually is as opposed to a calendar age which is the number of years, you have lived on planet Earth And it turned out that, you know, like, my biological age is 12 years older than my calendar age. So, you know, I'm 32, but biologically, I'm like, 44, and, and like this data is kind of outside the norm, like, at the complete edge of the normal
distribution. So, if you gather like 10,000 people, the stelvio difference, I am probably like I have the greatest difference between my calendar and biological age in a sample of like 10,000 people. So, it was something really odd. I discovered and it, and this kind of observation sent me down a path of exploring, a lot of different things. And so, one of the things I've done is like, I have done some supplements and I'm done a lot of fasting in the, in the
previous year. And what I also discovered on body is like, the way just started dropping off my body. So I lost 20 kilos last year without even trying, just having made some changes. So, I feel much more energetic as well. So, yeah, 2020. Brought me some deeper realizations about about the body I inhabit and how to run it better. So yeah, I'm so thankful to Tucson 24x. Have have you done the second test on your bio doubt? You could H. Now has it changed.
So I had decided I would do like these regular fasting for a year and the supplements for a year and then do the run the test. So hopefully I'll run the test again. In February of this year, I'm not expecting my clock to be very different. Because as far as I can see, we don't know how to influence the clock. The devel today and I am skeptical. My changes would have done it, but let's see. Brian you. Use you recently switched to carnivore e. How is that going?
I was I just wanted to kind of like yeah, jumping because absolutely. Yes. I mean, I've I've always been interested in like diet and passing for a long time and I've been on some sort of like paleo Isha it for, maybe 10 years and, you know, probably like many people. You've seen some of these like carnivore. You know, on Twitter, right? There's quite a quite a few sort of Bitcoin carnivores. And so, yeah, I also saw those and it just seems like an absurd
idea. But then at some point I decided to Actually like learn about it and watched a bunch of videos on YouTube about everything books about it and yes II. Then I tried it out for a while. 2019 and then actually felt really good but been too kind of getting back to normal again. But now I've been basically six months eating 90 is percent carnivore probably but if you seek Anything? So I highly recommend people and try it out. It's I think the biggest difference is I notice is
there's no food cravings. This, you know, you see country full and then you stopped like you can't video we eat and the energy is much more stable. So you'd like kind of what does it mean you don't eat actually vegetables and fruits or grains or you literally just eat meat? Is that it So I eat eggs. I do eat like so I do like some phases where I just eat meat next. Some sometimes I eat some cheese as well and I occasionally eat some fruit.
I don't eat any vegetables. I'm afraid to chase because it like it tastes like I don't notice any it doesn't if I like a little bit of like mango or something like that it does I don't notice it - difference but it just it's such a different flavor and taste that it's kind of you know you miss it. So Brian's officially a Bitcoin maximalist now. Yeah so I had a third kit this year so I'm still on the fish fingers diet in terms of you know, professional staff.
We did a lot of things that gnosis this year. So we launched the gnosis Dow. The gnosis save launch. Gnosis say, if apps there's two and a half billion dollars student in noses faces safes. Now, we launched, the gnosis protocol, which is a new way of separate swapping assets, that kind of uses the blockiness of blockchain to its Advantage. We launched the a product Market framework that a couple of Projects have built upon namely Poli, market and Omen.
We took over open etherium. So basically the the client that used to be the parity client, is now operated and run by noses. It's called open etherium and sadly. We didn't get to hold a conference this year. So we are planning to do a def con this year as well. I'm looking forward to getting back to that last year. Other than that, I did a decent amount of years. Arming and kind of knee-deep in the defy. Yeah. So basically that's that was
more or less my year. There was a lot going on and I don't really see a debating the moment so happy that like the Notions prediction markets, finally launch because I used to joke that gnosis has built half the stuff on a theory, mm except the prediction markets that they were supposed to. And but it's like this year. They finally you guys finally launched prediction Market which is really fun. So basically prediction markets as most of you know is the
regulatory relief wrought topic. So basically You don't want to operate a an unlicensed, friction market. So basically, we tried to get a license for the longest time and basically now that we have a license, it's kind of the ground has changed so much that that a couple of fully decentralized projects were actually able to build on the decentralized
framework that we had built. So, basically, we're not operating license, friction Market at this point, but it feels super good to actually have this framework out there and have people build on it. And I mean, You can actually launch your own prediction markets on ohm and and I think the user experience is actually Way Beyond what anyone could have imagined. You know, interacting with a fully decentralized step would be like in the past.
Yeah, the guy pretty sure I saw, I like Polly Market mentioned in like, mainstream news during like the election this year and I like, wow, that's pretty cool that like funny the person. If a dozen of people don't realize that it's built on noses technology and people go like, oh, but you haven't launched any prediction. A concise. Yeah. But really we have. Yeah. I didn't realize that they're also saw like the headlines about pulling market for the achiever cassette. No idea.
This was built on on the gnosis. Yeah, it's another stack. So we've built a lot of infrastructure. Cool huh. I guess I'll go next. Well this year it's been it's but I think it's been really fascinating. Your lots of really positive things happen. So, on the epicenter side, I think, for me, it was a year Of in some ways, provoked by covid is to make epicenter, much more leaner as a company.
And I think in many ways we've been able to do that and just have the company run on a much more leaner Pace.
But what has occupied a lot of my time this year has been working with a then we had someone put a hoe the president on a couple of months ago then as the association for the development of digital assets here in France and that's been extremely positive on a personal level but also just, you know, the accomplishments that we've been able to achieve their, I think are like really, really great.
So we have like, over 50 members now and what's what's really encouraging is to see this initiative. Now, go to the EU level, as many of you are aware, I'm sure our listeners. I mean, there is crypto regulation coming both in Europe and in the US and at least here in Europe, there is there isn't or there wasn't Strong unified voice representing the entire crypto space, the entirely
European crypto industry. And so this initiative aims to fill that void and to have a more unified voice in you know in the face of these regulations that could be quite damaging to the innovation in the space so that's been really great. It's been great to kind of focus my my time and attention on
other things. I've been really enjoying the work I'm doing there and you know start it started off as the thing that I think I'm more comfortable in which is like structuring you know all the all the things in the organization and everything, all the tools that were using but now is moving more and towards a advising. A lot of the, a lot of the papers that were writing bringing my own sort of Technical and privacy minded touch to the position position papers that the adult is
writing. And a lot of this work is Is also being used for the, for the European initiative. So that's been really great. And I think with covid, I when things started, when things started going remote sometime in March, around that time, it was a really stressful time for me. Like personally it was it was really like it was driving a lot of anxiety, there was a time there. I was like a bag of nerves and especially around the time that
we Has the reset everything. But then, you know, then when things suddenly in the summertime kind of cooled off a bit and it was able to go on vacation and like, take a breather that was it helped kind of take some of that, some of the pressure off. I've really enjoyed this year, being able to spend more time on doing things that I like like
playing electronic music. For example, so you guys can see this here but my desk is full of devices and things that light up and instruments and things like that. I've been spent a lot of time doing that.
And yeah, I'm hoping for 20 21. I want to what I'm hoping to do is to be a little bit more because I've got, you know, my eggs and different baskets is too little to be a little bit more structured and organized and how I spend my time in these different things and so it's like be a little more mindful about about like time spent on different different Endeavors. Oh, other thing to this year that that was really beneficial and I hope to continue doing next.
But also is challenging crypto, because that's where most of the information comes from is like, I really, I really turned down the Twitter. I try to go in Twitter as little as possible because that was also, I think for like it before we were talking about, like, how much the phone brings anxiety that? I think that was one of the
things that helped a lot. I actually tried to decided to start going on Twitter more again because I feel like I so I started like I started this whole like geography thing because I was like there's too much crypto stuff on my Twitter. I need to think that's the thing that I appreciate the most about my Twitter experience is reading your geography treats. Yeah, yeah I know this is all your your Twitter fault is amazing. No not to put her best to me so
it's something else. There's a lot of geography and, and the Twitter bot is so good that sometimes I don't know whether it's the real sunny, or the Twitter, but I was thinking of like making the profile. The profile pictures are different right now for the coup de robotics my like epicenter be like, blocky picture, but I was thinking if I make them the say that'll really confuse some people. Yeah. So you're going more in Twitter.
Yeah, I was like, you know, I feel like, I feel like one thing, I like toned down a little bit of, I've been a little bit less vocal and, like, I feel like I want to get back to being more vocal like, you know, I like sharing my thoughts and on stuff. Like so I have like, you know, and also just like writing more. So, like at the beginning of the year, I was trying to write more like blog posts and stuff and I kind of like paused from that up and then I'm trying to get back
into that. So I have like, you know, after that, after the episode, we did with Martin on circles, I like, have this, like blog post. I've been writing about circles and like, and I have a couple more blog posts, like, in the works that I want to like publish and I feel like using Twitter as a good like, you know, drafting board because I think some of my like better blog post actually came from being like Twitter, tweet storms, that then I turned into
blog posts. And so I don't think I've done those kind of like tweak storms in a while. I think I think what I need to do is just unfollow everybody and then start again from fresh. I think I just I think I just follow the wrong people. That's the problem. You can also keep following them and press show me less of this. Yeah that that also helps perhaps. Maybe you guys need to train me? I coach me on my, on my Twitter
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optimizing, your gas fees. Make it easy on yourself, just use one inch and you can let them know that we sent you by goto epicenter, rocks / 1 inch that's one Inc. H would like to thank one inch for their support of the podcast. Yeah, let's dive into to these predictions. So we all agreed that the first thing that was on, everybody's mind that we would want to talk about is the current bull market.
And so we're going to talk. We're going to give our predictions about where we think the cycle could take us and I think mayor and Brian, you guys had some pretty accurate accurate price, predictions precise, precise number First like big number go up as a thing as I was like, kind of like read them roughly but you know, my here claims that the total aggregate crypto market cap will rise 15, XO approach fifteen trillion with in 2021 followed by a 95% crash at some point in
the following years which is interesting. And then Brian claims that he believes Bitcoin is becoming a recognized asset class and will reach about TK by the end of the year and then he added on. At the end the theater will reach 15K by the end of the year. So I do really want to like go ahead and like give the defense of your prediction to start with This is an irrational Market, it's a mad market and like prices.
I mean there are no fundamentals in crypto so prices cannot really go beyond fundamentals but they have having lived through like to to crypto bull markets. One gets an appreciation of how crazy crypto bull markets get and I think I personally think this is the 2021 is the big one.
We're like this bubble will become bigger than the The what the.com bubble was in 1999. And why, I think this will be bigger than the.com bubble, is that, this is the first post internet technology bubble where the information transmission has been accelerated by the internet and in crypto, the Speculator Trader Market is much much larger than, then the.com market. So it will be a bigger than the.com bubble if you think of the.com bubble.
That's around 10 trillion when adjusted for inflation. Nation. And what I'm claiming here really is that we are going to enter into a bubble. That's larger than the.com bubble. And then once the bubble bursts the calm down is yeah, is going to be as as drastic as the.com bubble. So there I think the app the market lost, 96 percent of the value. I think something similar will happen to crypto. So it's going to be a crazy
ride. So what I have is like, you know, do you think this will, you know, you very specifically said the market cap of crypto rather than like any specific coy. So do you think this will come mostly from like new assets or will it come from a price increase of existing assets or obviously will come from some combination? But what where do you think most of the value will come from? It has to come from a combination, right? So, I mean, I'm saying it's
like, Rising 15 x, right? So Bitcoin will rise, but it won't rise. 15 x. It's going to rise a little less. So, you know, like 9x or 10x if helium, probably will rise like 15 x but then there'll be other coins that will rise 100 x, 150 x and of course, will be completely new coins that will pop out of nowhere and have like five billion dollar market caps. Yeah they'll be a coin that's like 3 months old and has multi billion market cap.
All those things are going to happen and the aggregate Market is going to be like 15 times higher so I don't know how much like value Bitcoin captures versus the other things.
This is interesting actually listening to you because we kind of makes me want to like almost like we think my prediction I mean so I think one of the things that is going on like right now it's just that it's becoming like an asset class right where you have to use like hedge funds that you know, buying a buying trip, do banking coin at the moment and I was listening to this podcast, a few day elected week ago, that I can really brought this point home where this was some normal like
non-fruit. We do financial markets investment podcast and you know, you listen to the conversation and they were talking about the price of gold and about the price of Bitcoin. And you know they said I go-go that Valley Less in the last while because Bitcoin are taking market share from gold, you know. So this is like the first time that I've heard kind of Bitcoin become actually something that's like has a role in kind of the
larger financial markets. And so I think It's like happening, we have been and you see all these hedge fund investors. That's kind of been like the first way. So now I think and then everyone
has to follow, right? I think it would be in their Pension funds, I don't just be an in kind of, I don't know, your 1% 2% 3% or something of like assets and so, I think, I think you have that, and of course, we didn't have that with with the.com bubble, right, where you had this, because this was just Equity. Everyone is owning it Could be anywhere, you know. Maybe it was. So that's I think one thing that's going to drive just like very high and it's going to be like a huge.
This almost Unstoppable shift and then I think if you compare it with the got comfortable, I mean the interesting thing of course, is that when you said adjusted for inflation but like is that inflation is probably not like their actual inflation is the money supply, right? Because if you look at this chart gigantic inflatable, Action or decreasing the total money supply with, you know, covid and, you know, already
financial crisis. And I think that's just going to keep going and crazy Pace, right? If you kinda just for that, and actually, I would think that descriptor bubble should become much larger than the.com bubble or, you know, at least maybe maybe relatively adjusted to the money supply, the same level, but probably that would be a lot more than 60 trillion. So it's kind of actually makes
me rethink this. Like, maybe this is going to be even much more insane than like, yeah, I mean, II think you're right. I agree that like, I feel Bitcoin is actually found like a really solid product Market fit at this point. Like, I think, I think it's inevitable that Bitcoin like, because like, replaces digital gold, and I don't know if told me my replaces goal. I don't know if I'm like one year prediction.
I think it might take two more psych like, in this cycle, plus one more, but I think Bitcoin will flip and gold within the first within the next five years. For sure. Yeah, I think like in the current macro environment, I think that Bitcoin just really has this like product Market fit. It's like, you know, it's this is like thing going, the u.s. well everyone's getting like airdrop money and there's just like crazy inflation or like monetary expansion that's happening. It's like, well.
Okay, now people have the means and the reason to just go buy Bitcoin and I've noticed a lot of, like, a lot of normal people just, like talking about Bitcoins now. So, which is like, it's starting to happen again. On this product Market fit idea. One of the things that I found interesting and listening to, some of these kind of more General macro. Finance podcasts is that exist.
It's really the only exposure that I have to, you know, people in that world and it's to see how Bitcoin always gets grouped with gold. And the sort of institutional financial markets have clearly put Bitcoin in the in the store of value, use case, like no matter what the crypto space. Like Bitcoins use case should be if we should be payments as should be, whatever for traditional Finance markets.
It's, it's clearly, you know, a store of value and I wonder what that means for Bitcoin Bitcoin future and like how the protocol might evolve or like, how that will drive. Maybe like some technical Evolution the protocol. Yeah, I mean, I always hate this term store value. I feel like it doesn't mean anything. I feel like a better, like, more precise term would be something like a like a macro hedge asset, but that's what I guess. That's what we mean. When we say store value and
everything stores value. But I think what it is is, it's like, you know, it's a selling point game, right, where it's like, currently everyone just agrees on gold. As this showing point where like, if you want to bet against the rest of the world economy, you buy gold. And so that After showing point, which naturally, then like moves counter to the rest of the economy. And so I think that's like it just a selling point game that's going to shift from gold to bitcoin.
And I find these are Financial shelling point games really interesting because like one of my friends, he was working at Jane Street in like, during the 2016 election. And he was telling me about how like, you know, during the election night. You know, they had a poker there were playing poker, but on the TV they have this like two
screens open. There was one was the predicted prediction markets and the other was the peso US Dollar exchange rate because essentially all of Wall Street agreed on that market, as the shelling point to play there, like prediction game on who's going to win the election.
And so it's like it's crazy how much of like Financial like markets is just like taking it. Like, you know, acting as pseudo prediction markets, given the lack of like, you know, actual prediction markets available, So can we then make a prediction about the Bitcoin price on gnosis built infrastructure? Absolutely. So I was going to do this tonight, so I was actually going to make. I was actually going to set up ready to Market on all of the
things we talked about. Right now, an omen, we can link to it in the show notes. Speaking of the product Market fit the next prediction I had there was that the flip earning won't happen. I don't think that Ethan is going to flip in Bitcoin, at least this cycle because I still life painting. I stole that Bitcoin has this Good fit. And I still don't know the product Market fit of eat as an asset.
I'm extremely bullish etherium as a platform and I like build on ethereum, but I don't really quite fully, see the role of e in the system over time. Yeah, the narrative isn't as coherent. So basically I think there's different narratives as to what if your room is. And yeah, I think that that's easier for Bitcoin because it's kind of it is a meme and itself like gold.
Yeah, I think for me, I just think the fundamentals of ether just aren't the same, in the sense that like, I think Ron, the premise of eith comes from like, you know, especially as we see IP 1559 Stuff and like you know, I switch to see proof of stake. It's basically like trying to tie the value of eat more directly to the product of a theorem which is like this like decentralized computer.
But the problem for me is that I mean this will get into a topic we'll get into later in the in the show. But II don't think decentralized compute is a scarce asset. Like I think that like if we want scalability we need decentralized compute to become more Widely available and we're going to see like a massive increase in like layer 2 and like all sorts of things. And so if the essentials compute is not a scarce commodity then I don't see why Ethan is going to
accrue that much value. Yeah. So that's kind of how I see it. The alternative for my view though is I think that there's this narrative that can be played where, you know, Bitcoin is a another way of thinking of it is, it's a fashion statement, right?
It's like if you want to hang out with a certain crowd and you want to like show the certain message about yourself about the type of person, you are, you buy Bitcoin, and you show up, you know, like if you're, if you're really love eating meat, you buy Bitcoin because it just like fixing with your persona, right? I think like eith has the ability to find that sort of fashion statement, where I think A coin is this very like techno
pessimistic worldview, where? It's like, or like it's a techno right-wing libertarian fashion statement. While I think aetherium has the capacity to become a more techno Optimist like left-wing fashion statement. And I think that I think that's like where it might end up going. I love the misuse of the word fashion statement here by the way. So Sunny what do you think about the thesis that Bitcoin will eventually moved etherium for security reasons?
I've had it happen. I the reason I joined Cosmos was to build the application layer for Bitcoin. Bitcoin is going to flow off the Bitcoin blockchain into many, many chains. They that was the original reason I joined Cosmos like three years ago. I mean I'm but I that time I also thought Bitcoin is going to be money. I don't think it's going to be money. I think it's going to be you know, just going to be the financial asset that we already
talked about. So I don't II really think stable coins are really going to also eats lunch and I think a lot of the premise of eith was like hey it's going to be the money of aetherium but I think we're going to see that's not going to be true. I think stable coins are going to be the money of aetherium. I agree. I also have my personal price prediction so it's somewhat in the same vein but I think out of the top Crypto coins by market
cap, I think half of those will no longer be in the top. 10 by end of year and a half that I kind of see dropping out Ripple, not even sure why it's still there, cardano, Stella chain link and the most controversial tether which also has potentially enormous implications for the entire defy ecosystem, and also the use case of crypto as money, because it's the but by Market cap, it's by far the largest the largest silver coin server room. But I think we all talk about
this later. Do you think u.s. DC will take its place? I'm not sure. Maybe I think something centralized will for sure for the moment. So I don't think it's going to be. I don't think it's going to be die or something. Similarly decentralized. But I think it's one of my, my later predictions about Facebook and The dollar and so on. So I'd save it for later.
Well, it's a one of the predictions I have, which is not contradictory to yours is. I said that Litecoin will stay in the top 10. And I brought this up specifically, because when we did our host episode 2 years ago, Brian and I got into a mini debate about this weather. Like when will be like in the same position as it like five years from then, so it hasn't been five years since that's what it's been two years and like going to still number four
on coin market cap. So, And I'm convinced a Litecoin will knock a totally. You've been winning that one. Like I said, it's all about shelling point and memes. And and Dogecoin is like a big rally up, so that means also making some kind of combat. Yeah, I think this this whole like Digital Silver meme is going to be very hard to kill and I think it's gonna always like continue to be there.
Yeah. Okay. So me and maybe I can go to the maybe we have those next thing something I wrote this is basically about that. Okay? Now you have this huge bubble and then what happens. What's kind of like to be Ons from the system. And I I see kind of a bunch of
different stuff. So first of all, now you can have descriptive businesses competing with like traditional businesses and the crypto businesses are going to have like some weird advantages, but also the hitch is going to be different and not really fit into the like, the way things are done. And so I think one big thing will be like trying to reduce regulation to like protect the king company Industries and to make it like like harder for decentralized, social needs to compete.
So I think that's going to be one thing. I think we also of course going to see this huge wealth transfer, right? If this happens, right? There's all these cryptic people going to get very rich and like people with other types of assets, they're going to like, you know, loose and to some extent and it's going to be very visible. But I think a lot of these people like on Twitter and on Instagram and you know you're going to have like the rapper's in there and in the Lambos
already. And so I think it you have all of That like in your face and then maybe traditional businesses that are going like more under attack by crypto. So I think this is going to be this backlash and one Avenue where I could see this playing out will be with like taxes as well, where you know, they did it. So complicated. Love this cup, the stuff that even if you wanted to like perfectly pay your taxes, it's often not totally clear what to do.
So I can see going after I group the people for like tax evasion and like, you may be requiring people to that disclose their addresses to the government and then they run like software to look at like all your transactions and kind of so I can see stuff like that happened. But I just think there's going to be like you know real much deeper kind of Ask to try to add. Can you be a little bit more specific of look? What the type of backlash will be, you will come mostly from
like a government backlash. Or are you saying they'll also be like a social backlash as well? I think there's going to be covenants, backlash, but kind of driven by it will have some public support I think because people will, a lot of people would be alienated by some stuff that's going to happen in equip the space by some people be inspired and love it. Right. But I think this also Don't be big people who live all is of what this is, an artist Insanity here.
It is an, ER, his Casino. So we are already seeing some stuff. I didn't, I think this was also like that this treasury idea that you can't transfer or, you know, you have to identify when you withdraw from her wallet if you have to identify the counterparty and so like, how do you deal with smart? Contracts are right that mean. Anyway, this is like a direct regulatory it. Act that makes it harder for a smart contract to compete with
its additional business. So I think we could see a lot of that. And then, yeah, I mean, imagine if your tax abilities, asks you, hey, don't you have to give them like, all you could do addresses and then you and then they could like I've always thought that taxes will be one of the ways that you know you can go mean. That's how they put out the phone in jail nose like the taxes. But Brian. How do you feel about privacy
enhancing Technologies? Technology because basically in the way you can actually you can build or, you know, you can engineer your way out of this, right? That's I don't know yet, but I think that's going to be kind of one of the battle lines, right? Well, of course people then I'm going to get more privacy Centric stuff and like some people will use it or just phone. So I think that's going to just become one of these big Battlegrounds in that I could see.
They're also being more of a segmentation where you're going to have like no regulated crypto and then I mean we saw that even I think that Sneak a peek over fine for violating sanctions law, even though it's sort of like a nun hosted wallet, it's multisig wallet. So if you are yours is non-host about hosted wallet, but I think they got some fine because it was some people in Iran or some some sanction country using it. And so now they're okay, they have to say oh we have to assert
yourself more. Make sure nobody's touching that And so I could see this sort of segmentation of the industry into a more of a regulated and then more like offshore unregulated part. I totally agree with this prediction and it really overlaps with some of my predictions. I wanted to bring up later on and I think that the regulatory aspect. So a couple things of Taxation aspect I think is is clear and at least here in France, we're already seeing some version of
that. So when you file your taxes in France, you have to declare all Exchange accounts. In fact, you have to declare All Foreign financial institutions where you have an account and so crypto exchanges are usually Part of those and I could definitely see that the way that government has been forging policy here.
I definitely addresses being one of the things that's required to disclose in the next couple of years and then just on the on this idea that you're part of crypto would be regulated in part. May, you know, stay outside of the regulated space. I think the, the mica regulation makes it pretty clear that, that is what could happen in, in the mica regulations, for example, privacy-preserving, Is our are forbidden and so privacy-preserving, Koreans can exist. The, the simply can't exist in a
regulated space. Now, with regard to other coin other types of use cases, like, like, stable coins, Etc. There's also some question there about whether or not those could exist in the regulated space and if indeed, there are some crypto use cases that are regulated and some which are not. There could be sort of this as you describe it, read like the separation or what I call like a schism.
Were part of crypto exist in the traditional sort of linked or somehow tied to the traditional Finance space is regulated there on ramps Etc, but part of crypto exists outside of that. And then there's you know, you can extrapolate from there.
It does that mean that there are companies exist solely in that market and does it create sort of like a sort of Shadow economy where it is all kinds of other businesses and activities happening, but that never interfaces or rarely interfaces or where it's very difficult to interface with the with the traditional Finance space. The shadow side will probably
exist in this case. But do you think it will be a big space or no, because like, the current premise of defies that eventually, this stuff is supposed to interface back with like normal people in the real economy at least in my opinion. But if that if that door is closed, and would you think that like the shadow side will basically like you know, go back to like twenty Thirteen Days like yeah you can use it for darknet stuff but like that's about it.
It. So currently like the wild west of defy has this like at least public State, like view of like a eventually. This stuff is going to be used by normal people but if regulation comes in like clamps that down, will the wild west like disappear or will it continue to like grow despite their? Let me throw the question that I got you. You know, let's let's let's assume that Mica goes through as it is today without any without any modification.
I'm not so familiar with the The with the u.s. crypto regulatory proposal, I've heard that it's a lot more open to Innovation etcetera, but let's let's just let's just presume that like, stable coins are illegal or the staple coins exist outside of the regulated space, then that means that exchanges won't be
able to list them. Then it's really up to interpretation whether or not exchanges can deal with coins that have also interacted on Smart contracts, you know, where the exchanges be able to, to You've liquidity from coins that have went through like the maker smart contracts, for example, or this sort of thing. When you say exchanges, you mean centralized exchanges? Yes, Central exchange regulated
exchanges. So basically in, in a way I think this cut actually comes down to being a philosophical and historical problems. So basically what good are laws that you can't enforce where basically, you cannot make sure that a law is abided by I think those Those are laws that kind of get overturned or repealed by history itself. Well I mean I think the question though is yes.
So like with dex's and stuff you can skirt the law but I guess my question is what percent of the population do we think is going to do that? Well, I think it's a very low percent of the population. I think if like if these things are meant to be, if the vision for defies that defy becomes the the underpinnings for Ensign where markets are able to operate and like, things that we already know, and that already exists, like, Commodities, markets, Etc.
Like just the stock market and all this can exist on defy. At least the way that Mica is worded. It definitely does seem as though they are trying to bring the parts of defy that already resemble and mimic traditional financial markets. Things like you know Securities things like electronic money. They want to bring that into the traditional Finance system and have that be regulated, but all
this other Innovative stuff. I call the all the the D gen stuff, definitely exists outside of of the regulation and there's no room for it in the regulation. And so, I think that and I certainly hope so. And that's the work that we're doing with our initiatives. Is that the regulation leaves room for more Innovation? But as it's currently, drafted, it closes very many doors. So do you think will people be willing to I guess it's like a
cultural thing as well, right? So don't it'll probably change from like country to Country like what one obviously the regulation will change country country but also just the willingness to break rules probably changes from country to country as well. But also the acceptability of breaking rules. Right? So basically I remember when I was a kid and basically content sharing started and you had Napster and, you know, all of
these kind of services. I remember they ran these ad saying, you wouldn't download a car and I know that basically, with my generation this that this didn't resonate because basically, it didn't feel like downloading a song was morally wrong. I mean, look what happened? I mean, people don't Really by entire records anymore.
People now pay for streaming services and this is how this monetize and through you know, advertising ideas and so on and arguably interacting with privacy-preserving crypto is way less enforceable than punishing. Someone for downloading a song on Napster. So I think in a way the law doesn't stand on its own but it kind of mimics what people feel is, right? And what is wrong. And I think that understanding is just going to change over
time. But anyway, isn't that actually the music piracy is basically dead now, right? Like, I mean, no one, you like Billy? Anyone Pirates was it's all Spotify and you can think of that is sort of like the, you know, you have the traditional music industry with their like selling CDs and you have this like this radical thing of like piracy and then you found some synthesis in like Spotify and so like maybe the everyone that be
what happens here as well. You have the traditional Finance industry than you have this like crazy defy thing and then we're going to find like some synthesis in Like regulated defy. Yeah, I think that's reasonable and very 95 will kill piracy just like Spotify killed the music but but only if regulated defy Isn't So heavily sechrist rated that, you know, it doesn't really qualify as the real
thing. Yeah. Just as with with dismantling of the the music industry but also like the movie industry to some extent like I think that we will come to some Some kind of middle. And but you know where where the cursor stands in terms of what that middle looks like, I think is, is really an unanswered question at the moment. I think like one of the most compelling things for me about defy over traditional Finance is the ux of it. I think the ux of it is like
what's really nice? And I think you could say the same thing about the piracy, like I think the ux of like Digital streaming, it's just way better than going to buy CDs. And so regulated, defy can like provide the ux benefits over traditional Finance, but I think it's an actually follow, you know, through the course of this conversation. I think I've actually been like I'm Now, does need to the music
industry. I really think that like, regulated Defy is gonna probably like wipe like wild west ephi, once it provides aux features too. Like normal people. But only if you have things like stable coins, for instance, I mean basically and privacy preserving coins and so on. So I feel like if the thing that is then called regular times, I don't think normal people care about privacy. I think normal people probably don't care about privacy preserving coins and stable
coins will exist. I mean, it depends on how they exist of all, we'd be more regulated like, you know, maybe it has to be issued by a bank and stuff. But I think that my claim is that normal people don't care whether it's issued by a bank or, by like Circle, you know, they just care. That is Under ux is as nice as like it currently is. I think that's all they care about. I don't think they care about privacy. But I mean, the user experience is pretty okay right now on defying.
It's only going to get better, right? So why would people kind of leave the wild west to start with? Because the regulation will decrease, the ux of wild west defy and make the ux of regulated D5 better because with the pirating, music, you always get those, like, dmca complaint. Every time you pirate, then that's like, that's sort of a, you can think of that as a
negative u x component, right? And so, I'd rather just pay the eight bucks a month to Spotify, get as good of a street of ux, as probably better than pirating music.
Yeah, I'm just questioning how good the ux under Micah would be Yeah. I mean on the topic of stable coins, I think it's worth noting that at least in Europe, the European commission is considering crypto euros and I don't really have well-founded but on this but maybe this is something that we can launch into into some some debate at
some point. But I think that generally there's going to be an opening up of currencies are in the future are no longer monopolized by countries and by like Central That's right. So I think here in this rundown, we're talking about the, the Facebook, Libra and initiatives Etc. And so I think things like Libra are going to exist and they're going to exist alongside things like a digital Euro or crypto Euro.
And that is a power shift that resembles the power shift that we saw with the music industry and the movie industry, you know, 20 years ago where highly centralized power in those. Industries was broken apart and now exists in all these digital startups like Spotify, Etc. We may see a similar, sort of disruption, of the of the power Monopoly around. Currencies to favor, private currencies, like the Libra and others. I don't know if this is something you, you guys have thought about too.
I think government's going to fight tooth and nail to protect their power here and I think will be very hard. I'm not saying that I'm going to fight but yeah, the record labels didn't have power of taxation and a military governments do. And the one thing that they care about above all else, is to maintain their like monetary dominance. And I think that like, they will fight very hard to prevent someone from trying to disrupt that I agree with you sonny and I think in the end, they will
fail. And I think that's in retrospect, that's going to be the pervasive Paradigm Shift of our times. Basically Powers diverted away from nation states and two companies or other collectives. Why do we think this is the case? Like, what, what are the triggers? That's going to make that the case. Like, you know, historically we've seen a continuous increase in like state power. What's gonna be the cause of
this reversal? I mean, it depends on which skate of History you're looking, right? I mean basically the Roman Empire collapsed and very Vino State pie up our very much request. So I don't think that's not possible. Anymore laws are only good if you can enforce them. And this is kind of segueing into our regulation part of the
conversation. But so basically, this was, this was my one prediction on regulation that I actually alluded to earlier, namely that If you look at the way that the Facebook proposal for Libre has moved. So in the beginning it was a basket pegged to babies. Basically it was a coin paektu, a basket of different acids and under us regulatory pressure that has kind of switch to a u.s. he backed stable coin, right?
So I still think that despite the fact that that is probably the best deal that the u.s. can actually get right now. I Think they would still clamp down on this and I think Facebook will lose in this instance and I think Facebook is very much on a path to demise anyways, but in its wake. I think we will see a stable coin that is global and basket packed and that will merge into the mainstream.
And that will be said set up such that it will not have the same regulatory exposure as Facebook and I think this will Herald a couple of This one being the end of the global dominance of the United States because that is in essence, based on controlling the supply of, you know, the world's Reserve currency. But I think this is also in the
widest sense. It's also going to mean that nation-states will become less powerful and I would actually argue that nation-states at Peak power right now. And I think that corporations and possibly later dowels and other sort of of schemes will kind of take that place. I very much agree with that. I think this is like missing parsley, like the cyclical Network effect of the US dollar.
Like it seems like your claim here is that the u.s. power comes from the dominance of the US dollar, which is true. But that also is a feat. The other direction as well. The power of the US dollar comes from the power of the US government. Like the entire petrodollar system is built on that like I do. Of like, you know, the US military will enforce it. And so, you know, the reason, the u.s. dollar is the, like, Global Reserve currencies that you needed to pay for oil.
And when you stop someone from try to, if you try to pay for oil or something else, the US military will come and invade you. And so, it's like, we need to see like, what is the? And you can see what the path is to an alternative. Well, what One path is the decline of the decline. In the demand for oil, let me that's one path. I mean, I do Have a specific information, we have countries like you're wrong, right?
That are basically locked out anyway you know there are good you know they can use some help it coin right wing sauce on use there and then I think you have other countries you know like China like we should be a big oil buyer. Like do they care about like protecting US dollar? I'm not sure. But so try those not going to push China going to push the you on, right? Like you know what China is doing right now is they're building like they have a viable strategy.
G2 building a reserve currency. What they're doing is they're going to have a country and like, saying, hey, Will fund your ports as long as all imports and exports from here are denominated in RMB. That's like a viable path. Yes. But I mean that, that actually, that puts pressure on the dollar, right? I mean so basically that that fragments the system even more.
Yeah, exactly. You're going to have a day so you can base it. They say oh, you know get yarn from China or like you can get like maybe do something with Bitcoin with Iran and then definitely will. Be others that are also like like Russia. I'm sure is going to be happy to do deals like outside of the dollar system. So I don't think that they're going to the military is going to be able to sort of like maintained its dominance of the dollar.
I think there is a big selling point around the dollar, right? Where everyone keeps their accounts and Dad and they slowly quiddity in that. And I think that's, of course, going to be more sticky, but in the ain't, I don't know about the dollar I would, Still some ways away until we are going to see two dollar kind of lose its status. I would guess that's not going to happen in like this bull run.
But you know maybe 5-10 years. Maybe I can, I can step in like when I hear all of you talking, I think I would like to actually someday categorize your predictions into, like a framework. So you think of state power, like the, what does the state want State doesn't want. One thing, it wants multiple things, right? So maybe it wants to preserve, its monetary sovereignty over their own population. Meaning US Government wants a optional transaction US dollars, so that's one thing they want.
The second thing they want is tax collection, which is making tax evasion, really hard. We have tiptoe. The third thing they want is which is like preserving the market structure, right? Which which is like the SEC wants that. If there's a crypto coin, there's no information. Asymmetry vis-à-vis, the crypto coin. So they want to preserve Market structure. And then the ID for thing is
they want surveillance. So we'll is comes in move from a law enforcement so it could be that the government wants four. Things four major things. We can identify a different number maybe in the future, they will get some of these things from crypto, but on the others, they will fail to get what they want. So, you know, the you could imagine different Futures. There's one future in which the government gets their surveillance capability. So they're able to surveil everything way.
Better than area, I will today we are crypto, but Lose their monetary power. I mean, the coins being transacted and not US dollars, but they are servile really well. That's one kind of future but the different kind of future is they preserve. The monetary sovereignty would lose their surveillance power.
So, you know, like the future has like different outcomes based on which of these Powers is accentuated for the government and which of the powers is weakened for the state and all of you are like on like different spectrums of some of your advocating for Or a particular thing will be strengthened and another particular thing will be weakened and like that's these are of difference in your predictions. So maybe we can actually like
classify your predictions. Using some model like that right here that I think that's actually really good way of putting it. I think personally that for me, I think the surveillance is something that will be harder for them to enforce, and I think they know that and I think which is why maintaining the monetary dominance is Something that they
can do more easily. It's like surveillance is like this hard problem, where you have to have, like, monitor literally everything but like with monetary dominance, it's not like it's something. You can like kind of enforce Knock by like needing visibility into the entire thing. But just this like larger thing where you like, I don't know how to describe it. Exactly. But yeah, I don't know maybe someone else can bring it. In a way you actually have that now, right?
I mean, so we basically Cassius to a large extent not traceable and you still have monetary dominance as a nation state. So in summary I think what we can say is that with some with some amount of certainty is that crypto markets are going to see a pretty significant increase in prices this year and I think we
all welcome that. And, but at the same time, the attention that will that will bring two crypto, May in fact, cause the space to regress, in terms of its ability to innovate, as freely as it has, you know, The last, like, three years since the last Bull Run. Would you say that that's, would you guys agree that that is sort of the overlying trend that we
should expect in the next year? I do think we will see a large amount of regulatory push back, but I do think, I mean, this is kind of where we disagreed on the episode, right? So, whether whether this will actually mean that a large portion of the ecosystem will become regulatory compliant or whether there will still be a large unregulated part and I think the ecosystem will very much rarely to avoid being. Being regulated in an overly dramatic, transgressive way.
I mean, if you if we bring it back to the just kind of brief just want to briefly bring it back to this analogy, if we bring it back to the, to the, to the piracy and like music, download example, I mean, that's exist. It still exists in massive scale. There are still, you know, Terror like a hundreds of terabytes of day. Probably even thousands of terabytes per day of music and movies being downloaded and that's despite government's trying to stop it.
It just doesn't interface. With any regulated with any regulated entities, I don't know what that, how that overlaps to in the crypto space, but it might be one indication that there are can still be a sort of wild west of crypto. While a lot of the Innovation that's coming the last few years and that will continue to come will be sucked into a regulated space. I mean it really meant it depends on what the regulated alternative looks like, right?
So basically if you think back to iTunes where base you could buy any song for 99 cents, I mean, I don't even know whether that still exists. I haven't seen iTunes in years. So, I assumed that it kind of was probably discontinued because the people didn't like it in our people. It wasn't appealing enough for people to stop pirating, right? Well better Alternatives came around exactly because better
transitive Came around. And so I think unless the regulated open Financial defy space is as attractive as the unregulated one. I think it's not going to happen and people are going to find an engineer ways around it. All right cool. Thanks to all of you and I think
we can. All agree that this is you guys have our audience has really I think over the years like asked for us to do more of these and what we've all agreed on here, I think, is that That will try to do these at least once a quarter because you guys like them and also like we think they're really fun. And we're good guests. So yes, also. So with that happy New Year to everybody and we'll see you on the internet. Thank you for joining us on this week's episode.
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